XV. UCAN EVIDENTIARY AND MISCELLANEOUS CHALLENGES

UCAN alleges that several of the findings in the Decision are not supported by the record or rely on improper evidence. We have reviewed each and every argument UCAN raises in its rehearing application regarding evidentiary support for the findings of the Decision and are of the opinion that modifications, as described below, are warranted to: (1) clarify the costs subtracted from the All-Source Generation Alternative to address the solar photovoltaic ("PV") already paid for in the California Solar Initiative ("CSI") program; and (2) clarify the statement that the higher ranked alternatives are not estimated to facilitate half of the renewable development as Sunrise. We find that the other contentions in UCAN's rehearing application regarding the evidence in the record lack merit.

Several of UCAN's allegations do not specify a ground for legal error as required pursuant to Public Utilities Code section 1732 and Rule 16.1(c) of the Commission's Rules of Practice and Procedure. (See e.g., UCAN Rehrg. App., at p. 37 (allegations regarding GridView modeling); pp. 37-38 (allegations regarding San Luis Rey Substation proposal); p. 38 (allegations regarding CAISO's modeling of reliability benefits); pp. 40-41 and 44-45 (allegations regarding findings in ALJ's PD); pp. 43-44 (allegations regarding net benefits of Sunrise); p. 43 (allegations regarding Bull Moose Biomass Facility Contract); p. 43 (allegations regarding Miramar II Peaker).) Several of UCAN's allegations regarding the evidentiary record do not demonstrate any legal error in the Decision but rather attempt to relitigate issues in the proceeding and ask the Commission to reweigh the evidence in the record. (See e.g., UCAN Rehrg. App., at pp. 54-58.) In many instances, UCAN does not deny that certain findings in the Decision are supported by record evidence but rather asserts that the Decision errs because it ignores evidence presented by UCAN or Powers Engineering. (See e.g., UCAN Rehrg. App., at p. 31 and 41 (allegations regarding energy efficiency assumptions); pp. 31-32 (allegations regarding operating and maintenance costs); p. 34 (allegations regarding Otay Mesa and Palomar designations); pp. 38 and 55 (allegations regarding CAISO modeling of reliability benefits).)

The fact that there may be evidence in the record that conflicts with the findings of the Decision does not constitute legal error. Given the volume of the evidentiary record in this proceeding, the evidentiary record in this case is replete with positions and facts that are conflicting. Where there is conflicting evidence in the record, it necessarily holds true that some of the evidence in the record will conflict with whatever conclusion the Commission reaches. It is for the Commission to weigh the evidence and come to a reasonable determination based on evidence in the record. (Eden Hospital Dist. v. Belshe (1998) 65 Cal.App.4th 908, 915.) There is no legal error where there is substantial evidence supporting the Commission's determinations. (Pub. Util. Code, § 1757(a)(4); see also Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874.) UCAN's allegations challenging the Commission's findings on evidentiary grounds do not demonstrate a lack of evidence supporting the Commission's determinations and therefore do not demonstrate any legal error.

Furthermore, although UCAN repeatedly alleges that the Decision ignores its evidence, the fact that the Decision does not discuss certain record evidence does not demonstrate that there is legal error. There is no legal requirement that every piece of evidence in the record be mentioned in the Decision. (See Toward Utility Rate Normalization v. Public Utilities Com. (1978) 22 Cal.3d 529, 540.)

A. Subtraction from Cost of All-Source Generation Alternative to Account for Solar PV in CSI Program

UCAN contends that the Decision's finding that SDG&E's firm capacity will be 70 MW under the CSI program diverges from the record. (UCAN Rehrg. App., at p. 29.) UCAN also alleges that subtracting $367 million from the assumed capital cost of the All-Source Generation Alternative to address the 37 MW of the solar PV already paid for in the CSI program is not based on the record. (UCAN Rehrg. App., at pp. 30 and 43.)

UCAN's contention that the Decision's finding regarding SDG&E's firm capacity under the CSI diverges from the record lacks merit. The record supports the Decision's finding that SDG&E's firm capacity will be 70 MW under the CSI. There is evidence in the record that the Commission has allocated CSI funds such that SDG&E will receive enough funding to acquire 180.3 MW (nameplate). (SDG&E Exhibit SD-27, p. 6; see also D.06-12-033, Appendix B, Table 11.) There is evidence in the record that based on historic data, firm peak delivery from those solar PV units will be 39% of nameplate. (SDG&E Exhibit SD-27, p. 6.) 39% of 180.3 MW is 70 MW. Therefore, the Commission properly relied on the record and made the finding that SDG&E's firm capacity under the CSI will be 70 MW.

The Analytical Baseline had originally assumed that SDG&E's installed capacity under the CSI would be 33 MW by 2016. Therefore, the Decision makes the finding that 37 MW (70 MW-33MW) should not be attributable to the All-Source Generation Alternative. To account for the 37 MW that the Decision determines should not be attributable to the All-Source Generation Alternative, the Decision relies on CAISO's Center for Resource Solutions ("CRS") Renewable Costs for solar PV for use in its Analytical Baseline. (Decision, at p. 157, fn. 447.) Using CAISO's CRS Renewable Costs for solar PV, the Decision determines that $367 million per year should be subtracted from the assumed capital cost of the All-Source Generation Alternative. (Decision, at p. 157.)

However, based on a review of the record evidence, we find that $367 million per year does not accurately reflect the cost of 37 MW based on CAISO's CRS PV costs. Based on CAISO's CRS PV Costs, we find that $368 million (2010$) should be subtracted from the assumed capital cost of the All-Source Generation Alternative to address the 37 MW of the solar PV that the Decision determines was already paid for in the CSI program. The $368 million is based on evidence in the record.⁷ We modify the Decision, as set forth in the ordering paragraphs below, to accurately reflect the costs of 37 MW of solar PV based on CAISO's CRS Renewable Costs for solar PV.

UCAN also alleges that the Commission's adoption of 70 MW of CSI adopts the lower end of SDG&E's Phase 2 estimate of 70 MW to 150 MW and ignores SDG&E's Phase 1 estimate of 150 MW, thus requiring SDG&E to pay for 80 MW of Combustion Turbines ("CT") to replace the 80 MW of PV. (UCAN Rehrg. App., at p. 30.) This allegation lacks merit. We did not "remove" 80 MW of CSI. Rather, we relied on a different assumption for PV in the Decision than the parties presented in Phase 1. There is no reason to add back in CT costs since those costs are already reflected.

B. Statement that higher ranked alternatives will not facilitate half of the renewable development as Sunrise

UCAN alleges that the Decision's statement that the higher ranked alternatives are not estimated to facilitate half of the renewable development as Sunrise is contradicted by the record. (UCAN Rehrg. App., at p. 39.)

The record supports that the higher ranked alternatives are not estimated to facilitate as much renewable development as Sunrise. We found that Sunrise would facilitate the development of over 1,900 MW of Imperial Valley renewables between 2011 and 2015.⁸ We found that the higher ranked alternatives: the All-Source Generation Alternative, the In-Area Renewable Alternative, and the LEAPS Transmission-Only Alternative, would not facilitate as much development of renewables as Sunrise. (Decision, at pp. 255-256.) The All-Source Generation Alternative proposed the development of 203 MW of solar PV in San Diego's service area. (Decision, at p. 255.) The In-Area Renewable Alternative proposed the development of a total of 1,000 MW of renewable resources in San Diego's service area, 900 MW of which were intermittent solar and wind resources. (Decision, at p. 255.) The LEAPS Transmission-Only Alternative was not projected to increase the development of renewables. (Decision, at p. 256.)

Since Sunrise is projected to facilitate the development of 1,900 MW of renewables and the In-Area Renewable Alternative is projected to facilitate the development of 1,000 MW of renewables, UCAN is correct that Sunrise is not estimated to facilitate more than half of the renewable development as all of the higher ranked alternatives. Therefore, we modify the Decision, as set forth in the ordering paragraphs below, to delete language that the three top ranked alternatives would not facilitate even half the amount of renewable development as Sunrise.

⁷ The $368 million (2010$) is derived as follows: (1) Calculate the cost of PV in the CSI program (70 MW by 2016, added from 2007-2016 in 7 MW increments at a cost of $9,140 per installed firm kW (2006$)). The cost of PV of $9,140 per installed firm kW (2006$) is based on PV costs of $19,330 per installed firm kW (2006$) multiplied by (200 $/MWh / 423 $/MWh) in order to scale the costs to reflect CAISO's CRS levelized costs for PV. Per Exhibit Compliance 1, SDG&E's levelized costs for PV were 423 $/MWh and CAISO's CRS levelized costs for PV were 200 $/MWh. $19,330 $/kW (firm installed 2006$) is based on the following: $2,197,000,000 (2010 $) (from Exhibit Compliance 1) * (1.02 ^ (2006 - 2010)(to convert 2010 $ to 2006 $) / (210 MW (installed capacity from Exhibit Compliance 1) * 50% (firm capacity associated with PV divided by installed capacity from SDG&E Exhbit SD-6, p. IV-14)). Installed costs per firm kW are escalated at 2% per year per CAISO, Exhibit I-12, p. 7. Thus, installed costs of the CSI for the period from 2007-2016 equals $643 million (NPV 2010$) using a discount rate of 8.13% per Exhibit Compliance 1; (2) Calculate the cost of PV in the Analytical Baseline (30 MW firm by 2015, added from 2006 at 3 MW per year (i.e., 33 MW by 2016), using the same costs as those assumed in (1). Thus, the installed costs of the PV in the Analytical Baseline equals $276 million (NPV 2010$). Therefore, the "sunk costs" of the CSI program equals the difference between the costs calculated in steps (1) and (2) above (i.e., $643 million - $276 million). Thus, the sunk costs equal $368 million (NPV 2010$) ($368 million rather than $367 million due to rounding). The net cost of the All-Source Generation Alternative is the difference between the costs calculated in step (1) above and the "sunk costs" previously discussed. (All references to Exhibit Compliance 1 in this footnote are references to Exhibit Compliance 1, Section_4_Workpapers-Rebuttal (Modified for DEIR)_Final_v3, "DEIR Renewable Costs" Tab.)

⁸ During the proceedings, CAISO presented testimony that if Sunrise is developed, 900 MW of solar thermal and 1,000 MW of geothermal resources would come on line by 2015, which would result in an additional 9,900 GWh of renewable generation from the Imperial Valley. (See Exh. I-2, Table 4.3, Table 4.6, and Table 4.7; Compliance Exhibit 1, Section_4_Workpapers-Rebuttal (Modified for DEIR)_Final_v3, "Table 4.3" Tab.) CAISO assumed that absent Sunrise, this incremental 1,900 MW of renewable generation does not come online in the Imperial Valley. (See Exh. I-2, Table 4.6 and Table 4.7.)