ALJ/XJV/tcg Date of Issuance 10/15/2010
Decision 10-10-017 October 14, 2010
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Joint Application of Sierra Pacific Power Company (U903E) and California Pacific Electric Company, LLC for Transfer of Control and Additional Requests Relating to Proposed Transaction. |
Application 09-10-028 (Filed October 16, 2009) |
And Related Matters. |
Application 10-04-032 (Filed April 30, 2010) |
DECISION CONDITIONALLY APPROVING
CONSOLIDATED APPLICATIONS
TABLE OF CONTENTS
Title Page
DECISION CONDITIONALLY APPROVING CONSOLIDATED APPLICATIONS 11
2. Identification of Parties 33
3. Summary of Authority Sought 99
5. The Transfer Application: Discussion 1717
5.1. Reason for the Transfer 1717
5.4. Impact on the Financial Condition of the California Utility 3333
5.4.1. Capital and Debt Guarantees; Ring-Fencing 3434
5.4.2. Emera Minimum Hold Condition; Internal Transfer
Approval 4141
5.5. Impact on Quality of Management 4444
5.6. Impact on Utility Employees 4444
5.7. Impact on California and Local Communities 4545
5.8. Impact on Commission Jurisdiction 4545
5.9. Impact on Competition 4646
5.10. Other Operating Agreements 4646
6. Ancillary Agreements to the TDPUD Settlement: Discussion 4949
6.2. Reliability Support Agreement 5050
7. Compliance with the California Environmental Quality Act 5151
LIST OF APPENDICES
Appendix 1 - List of Abbreviations and Acronyms
Appendix 2 - CalPeco Ownership Structure
Appendix 3 - Regulatory Commitments
Appendix 4 - Excerpt from Joint Application of Joint Applicants' Analysis of FERC "Seven Factor Test" Demonstrating that Distribution Capacity Agreement is Subject to this Commission's Jurisdiction
DECISION CONDITIONALLY APPROVING
CONSOLIDATED APPLICATIONS
1. Summary
Subject to the following conditions, we approve the transfer to California Pacific Electric Company, LLC (CalPeco) of the California electric distribution facilities and the Kings Beach Generating Station owned by Sierra Pacific Power Company (Sierra):
· Power from Sierra's Valmy Power Plant may be included in the supply provided under the Power Purchase Agreement and any additional power purchase agreement which Sierra and CalPeco may enter upon the expiration of the initial five-year agreement as long a Sierra makes no new ownership investment in Valmy, within the context of the Emissions Performance Standard rules adopted in Decision 07-01-039 and any relevant, subsequent modifications of that decision;
· The Internal Transfer Authority is not approved and any change of ownership affecting CalPeco's upstream owners must be sought by application filed pursuant to Public Utilities Code Section 854;
· CalPeco and its upstream owners must expressly recognize the Commission's legal right to call their officers and employees to testify in California regarding matters pertinent to CalPeco, consistent with established principles of due process and fundamental fairness.
In all other respects we approve the authority sought in the transfer application, as amended in the course of this proceeding and as conditioned by the Regulatory Commitments attached to this decision as Appendix 3. Joint Applicants have established that the transfer will not harm ratepayers; in fact, certain service improvements are likely in the near term, at no cost to ratepayers.
We also approve the two ancillary agreements involving Sierra, CalPeco and Truckee-Donner Public Utility District in order to permit the continued cooperation that permits cost-effective, reliable service to customers in both of these contiguous, small service territories.
