ALJ/MLC/tcg DRAFT 6

12/7/00

Decision DRAFT DECISION OF ALJ COOKE (Mailed 12/1/2000)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking into Implementation of Pub. Util. Code § 390.

Rulemaking 99-11-022 (Filed November 18, 1999)

INTERIM OPINION ESTABLISHING A PROXY PRICE FLOOR FOR

PURPOSES OF POSTING QUALIFYING FACILITY AVOIDED COSTS

This decision denies the relief sought in Southern California Edison Company's (SCE) November 28, 2000 emergency motion but establishes a proxy price floor for California border prices while the merits of proposed modifications to Decision (D.) 96-12-028 are considered.

Procedural Background

The avoided cost posting is based on the Transition Formula adopted in D.96-12-028 which incorporates various border price indices. D.96-12-028 governs avoided cost postings made by SCE, San Diego Gas & Electric Company (SDG&E), and Pacific Gas and Electric Company (PG&E). D.97-05-021 establishes the timing when each utility files its avoided cost posting. Each utility was scheduled to file its December avoided cost posting on December 5, 2000. By ruling on December 1, 2000, the avoided cost posting requirements adopted in D.97-05-021 were suspended until December 7, 2000 to allow the full Commission to address SCE's motion.¹ We affirm this procedural action and address the substance of the motion in this order.

On July 28, 2000, SCE filed a petition to modify D.96-12-028 to revise its Transition Formula. On August 28, 2000, the Office of Ratepayer Advocates (ORA) recommended that the Commission review the border gas indices used in SCE's Transition Formula on an emergency basis. In addition, ORA referenced a complaint filed by this Commission at the Federal Energy Regulatory Commission that seeks recession of certain contracts that the Commission contends have permitted natural gas suppliers and their affiliates to increase prices through the withholding of capacity. On September 1, 2000, the Assigned Administrative Law Judge (ALJ) issued a ruling adding the question of the reliability and validity of the border prices to the issues raised in SCE's petition to modify D.96-12-028. Comments on additional options for border prices were solicited by ruling on December 1, 2000. Comments are due December 11, 2000.

On August 31, 2000, SCE filed an emergency motion seeking authorization for a provisional qualifying facility avoided cost posting for September 2000 and future months while the underlying petition was pending. That motion was denied in D.00-10-030.

On November 28, 2000, SCE filed a second emergency motion, this time seeking an order modifying D.96-12-028 in several respects and requesting an expedited schedule for Commission action on the underlying petition. Because this issue came to our attention after mailing of the Commission's December 7, 2000 agenda, the Commission voted to add this item pursuant to Government Code § 11125.3(a)(2).

Rule 81 of the Commission's Rules of Practice and Procedure provide that an "unforeseen emergency situation" is a matter that requires action or a decision more quickly than would be permitted if advance publication were made on the regular meeting agenda. Under Rule 81(f) an unforeseen emergency situation includes "[r]equests for relief based on extraordinary conditions in which time is of the essence." Rule 81(h) includes "unusual matters that cannot be disposed on by normal procedures if the duties of the Commission are to be fulfilled." Because this issue was brought to our attention after the December 7, 2000 agenda was mailed and because of the inability to make downward adjustments to the prices at issue, we believe that the emergency motion meets these requirements.