Conclusions of Law
1. The Settlement Agreement, as modified to include a 10-year NBC, meets the requirements of Rule 51.1 of the Commission's Rules of Practice and Procedure, and is adopted by the Commission.
2. The Settlement Agreement, with a 30-year NBC, is not reasonable in light of the record, is not consistent with law, and is not in the public interest.
3. Based on Legislative direction, the Public Resources Code, the Public Utilities Code, the Commission's Rules of Practice and Procedure, and Commission decisional precedent, we determine that we do not have concurrent responsibility with the CEC to conduct a CEQA review of the project.
O R D E R
IT IS ORDERED that:
1. The Settlement Agreement, with Paragraph 11 modified to impose a 10-year nonbypassable charge for departing load customers, is adopted.
2. Pacific Gas and Electric Company is granted a Certificate of Public Convenience and Necessity for the acquisition, completion, and operation of the Contra Costa 8 facility, including the cost recovery and ratemaking mechanisms related thereto, under the terms set forth in the attached Settlement Agreement, as modified by today's decision.
3. Californians for Renewable Energy, Inc.'s motion for the Commission to conduct a supplemental Environmental Impact Report under the California Environmental Quality Act is denied.
4. Application 05-06-029 is closed.
This order is effective today.
Dated , at San Francisco, California.
ATTACHMENT A
SETTLEMENT AGREEMENT
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company for Approval of an Agreement Concerning Certain Generation Assets Known As "Contra Costa 8" Pursuant to A Settlement and Release of Claims Agreement Approved by the Commission on January 14, 2005, for Authority to Recommence Construction, and for Adoption of Cost Recovery and Ratemaking Mechanisms Related to the Acquisition, Completion, and Operation of the Assets. (U 39 E) |
Application 05-06-029 |
SETTLEMENT AGREEMENT AMONG PACIFIC GAS AND ELECTRIC COMPANY, OFFICE OF RATEPAYER ADVOCATES, CALIFORNIA UNIONS FOR RELIABLE ENERGY, AND THE UTILITY REFORM NETWORK
In accordance with Rule 51.1 of the California Public Utilities Commission's (Commission) Rules of Practice and Procedure, Pacific Gas and Electric Company (PG&E), the Office of Ratepayer Advocates (ORA), California Unions for Reliable Energy (CURE), and The Utility Reform Network (TURN), hereby enter into this Settlement Agreement in order to resolve all issues associated with PG&E's Application for Approval of An Agreement Concerning Certain Generation Assets Known as "Contra Costa 8" Pursuant to a Settlement and Release of Claims Agreement Approved By the Commission on January 14, 2005, for Authority to Recommence Construction, and for Adoption of Cost Recovery and Ratemaking Mechanisms Related to the Acquisition, Completion, and Operation of the Assets.
1. On May 30, 2001, the California Energy Commission (CEC) issued a decision approving Mirant Delta LLC's proposed 530 megawatt (MW) Contra Costa 8 generation project near Antioch, California ("CC8" or "the project"), together with conditions to mitigate environmental and community impacts. The CEC is the lead agency for CEQA review of new thermal powerplants with more than 50 MW of generating capacity. The CEC conducted an environmental review of the project, and has continuing jurisdiction over compliance with the conditions of its decision.
2. On January 14, 2005, the Commission approved and signed a Settlement and Release of Claims Agreement, resolving matters and claims raised in proceedings that were initiated with respect to events in the California Independent System Operator Corporation and California Power Exchange (CalPX) energy and ancillary services markets during the period from June 1, 2000 through June 20, 2001 as they relate to Mirant. Among other things the Settlement and Release of Claims Agreement constituted authorization for PG&E to either acquire and take ownership of the CC8 assets and to effect the other ancillary transactions included or intended to be addressed in the Asset Transfer Agreement and ancillary agreements, and required PG&E, Delta and Mirant Special Procurement, Inc. to use good faith, commercially reasonable efforts to negotiate and execute an Asset Transfer Agreement for CC8 that transfers and assigns the CC8 assets to PG&E or its designee. If CPUC does not approve the CC8 Asset Transfer Agreement and the transactions contemplated therein without material changes, modifications or conditions to PG&E's Application by December 31, 2006, or rejects the CC8 Asset Transfer Agreement or the transactions contemplated therein in whole or in material part, or the CC8 Closing Date has not occurred for any reason by June 20, 2008, or for other reasons stated in the Settlement and Release of Claims Agreement or Asset Transfer Agreement, PG&E may receive alternative consideration in the form of an allowed, prepetition, non-priority general unsecured claim against Delta in its Bankruptcy Proceedings that will result in a total aggregate distribution to PG&E of $70 million in cash and/or securities. The Federal Energy Regulatory Commission approved the Settlement and Release of Claims Agreement on April 13, 2003 (111 FERC 61,017). The PG&E Bankruptcy Court and Mirant Bankruptcy Court also approved it.
3. On June 17, 2005, PG&E filed an application for approval of the terms and conditions of the Asset Transfer Agreement referred to in the Settlement and Release of Claims Agreement, including all ancillary documents and agreements, concerning the CC8 assets (i.e., the CEC-approved, partially constructed facility owned by the Mirant parties), together with ratemaking and cost recovery provisions designed to allow the plant to be completed and operated on a cost-of-service basis for 30 years, and a certificate of public convenience and necessity to complete construction of the plant as its developer.
4. Timely protests to PG&E's application were filed by ORA, the Independent Energy Producers Association, the City and County of San Francisco (CCSF), and Modesto and Merced Irrigation Districts (MID). PG&E filed a response to these protests on July 28, 2005. A prehearing conference was held on August 11, 2005, with all of these parties, plus TURN, CURE, and Californians for Renewable Energy (CARE), in attendance. On August 16, 2005, the Commission issued a scoping memo that limited the scope of the proceeding to certain issues identified by PG&E and other parties who protested the application, and directed PG&E to begin collaborative meetings before August 26, 2005. PG&E initiated settlement discussions, with notice to all parties on the service list. Opening testimony was filed on October 14 by CCSF, MID, ORA, and Californians for Renewable Energy (CARE). Rebuttal testimony was filed by PG&E on November 18, 2005. On November 28, 2005, pursuant to Rule 51.1 of the Commission's rules, PG&E provided notice to all parties of a conference for the purpose of discussing this Settlement Agreement.
(END OF ATTACHMENT A)
