6. Position of CPA Prior to Settlement

6.1. System Resource Deficiency

With respect to the CPSD assertion that CPA's 2008 year-ahead system RA compliance filing submitted on October 31, 2007 included procurement from an expired LD contract for the months of July, August and September causing a total system deficiency of 70.37 MW, CPA argues that the LD contract at issue did not expire as alleged by CPSD and there were no total system deficiencies. CPA asserts that at no time was it non-compliant or otherwise had a procurement deficiency in its 2008 year-ahead system RA obligation. Although it is CPA's position the LD contract could have been used to satisfy its 2008 year-ahead system RA compliance obligation for July, August and September, CPA believed that the most efficient way to timely respond to Energy Division was to use additional unit-specific resources for RA compliance purposes.⁶

CPA also states that, consistent with Decision 06-06-064, it believed it was working cooperatively with Energy Division to address the issue.⁷ CPA states that it had no reason to believe that resolving this issue in the way that it did would create any confusion or be perceived as non-compliance. When CPA filed its supplemental 2008 year-ahead system RA compliance on December 21, 2007, it believed it had fully resolved this issue with Energy Division.

6.2. Local Area Resource Deficiency

CPA acknowledges that it did not use the August DR resource allocations for each of the 12 months of the year. However, CPA does not believe penalties should be imposed, because, based on the 2008 RA Filing Guide and other information related to the year-ahead local RA compliance filing, it believed it was correct to use DR numbers applicable to each month at the time of the compliance filing. According to CPA, the section in the 2008 RA Filing Guide that specifically addressed DR and the instructions which accompanied the 2008 year-ahead local RA filing did not instruct CPA to use the August DR value for all months. Also, CPA believes that changes made to the 2009 RA Filing Guide supports the position that the instructions in the 2008 Guide regarding local DR allocations were confusing and needed clarification.

CPA also states that there was excess capacity available to CES to provide to CPA for RA compliance purposes. Thus, there was no motive for it to purposely under-report DR allocation information in its 2008 year-ahead filing. Moreover, CPA states that once the error was brought to its attention, it was corrected. As was the case with the alleged year-ahead system RA violation, CPA believed that by correcting the error in its supplemental year-ahead compliance filing, CPA had fully resolved the local RA compliance issue.

⁶ CPA indicates that excess capacity was available through Calpine Energy Service (CES).

⁷ D.06-06-064 at 62, refers to the informal resolution of alleged RA non-compliance issues with Energy Division.