Conclusion

QFs have never received exactly the same price as other generators in the marketplace. In fact, historically, QFs have frequently received payments in excess of prevailing market prices. Differences between QF payments and market rates have always occurred and adoption of a cap does nothing to modify this relationship. The Consumer Transition Price we have established is fully consistent with PURPA's requirements that QF payments reflect the utility's full-avoided cost. It reflects the long-term price paid by CDWR for its portfolio and is generally at a level that FERC has previously identified as reasonable for utility purchases. It is consistent with PURPA's command that QF prices be just and reasonable to the electric consumer.

Given the current status of the electricity market in California, it is not clear how, in the long run, the statutory requirement to base the energy portion of payments on gas prices alone must be modified, consistent with PURPA's command that prices be just and reasonable to the electric consumer. Many QFs do not use gas as a fuel. Others use fuel to both provide electricity and steam or other useful thermal output. We invite the Legislature to provide policy guidance and the procedural flexibility to carry out the policy and adapt it to changing circumstances.