9. Contract Language Clean Up
The Joint Utilities request in their Petition for Modification that certain language in the standard contracts adopted in D.09-12-042 be "cleaned-up" to correct internal inconsistencies. They claim that there are errors in the contracts, including references and defined terms that require clarification in order for the contracts to be administered. The Joint Utilities further claim that the requested modifications do not materially change the contracts or alter the intent of the D.09-12-042, but merely correct errors. The language the Joint Utilities propose to "clean-up" is shown in Attachment A to this decision.
TURN and DRA support the Joint Utilities proposed "clean-up" of contract language. FCE does not oppose most of Joint Utilities' proposed
"clean-up" of the contract language but argues that some of the proposed
"clean-up" would, in fact, alter the negotiated terms and intended meaning of the CHP contracts adopted by D.09-12-042. Similarly, CCDC is concerned that the Joint Utilities are unilaterally proposing changes to mutually agreed upon terms of the simplified AB 1613 contract without discussing them with CCDC first. CCDC does not object to legitimate "clean-up" changes but believes there are certain changes that would materially change agreed upon terms.
San Joaquin contends that these changes should not be addressed in a petition to modify but should be proposed through the compliance advice letter in which the Commission will give final approval to the AB 1613 contracts.
9.1. Discussion
The contracts adopted in D.09-12-042 primarily represent negotiated terms and conditions submitted by parties in this proceeding. When parties submitted these proposed contract terms and conditions, there were several issues left unresolved. In D.09-12-042, the Commission decided these unresolved issues.
Contract terms and conditions are critically important for successful contract execution. Where errors were made in drafting the final contracts, we agree with Joint Utilities that these errors should be fixed. However, based on parties' responses to the Petition, it appears that some of the contract "clean-up" proposed by Joint Utilities goes beyond merely fixing errors. Therefore, we adopt only those contract changes that do not materially change the contracts and changes that were not opposed by any other parties. Where there was disagreement among parties, the contracts shall remain as they were adopted in D.09-12-042.
On June 21, 2010, the IOUs filed advice letters implementing the standard contract and simplified contract adopted in D.09-12-042.24 The IOUs shall file advice letters with updated tariffs reflecting revisions to the contracts adopted in this decision. Attachment A to this decision describes the proposed revisions requested by the Joint Utilities and provides the Commission's resolution for each proposal, whether they were adopted or rejected. The utilities are directed to modify the contracts in accordance to this table (in addition to making the changes to contract provisions discussed in other sections of this Decision).
Notwithstanding the above paragraphs, the IOUs are encouraged to work with individual CHP customers and developers to ensure the success of this program. Toward that end, if there are contract modifications that contracting parties can agree to, and which do not contravene the Commission's Orders, IOUs may work with CHP customers to make those modifications to the contracts before the contracts are submitted for final approval. For instance, we note that there is no clear definition of a repowered CHP facility included in the contract, an omission that IOUs and CHP customers may want to rectify. Another example would be using a clearer definition of "Eligible CHP Facility," as commented on by parties on the proposed decision. However, no
filing-extensions will be granted for any such efforts.
24 See PG&E Advice Letter 3696-E, SCE Advice Letter 2485-E, and SDG&E Advice Letter 2179-E.
