ALJ/JMH/avs Mailed 7/12/2004

Decision 04-07-029 July 8, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Implement the California Renewables Portfolio Standard Program.

Rulemaking 04-04-026
(Filed April 22, 2004)

OPINION ADOPTING CRITERIA FOR THE SELECTION
LEAST-COST AND BEST-FIT RENEWABLE RESOURCES

TABLE OF CONTENTS

Title Page

OPINION ADOPTING CRITERIA FOR THE SELECTION OF LEAST-COST AND BEST-FIT RENEWABLE RESOURCES 2

I. Summary 2

II. Background 2

III. Least-Cost and Best-Fit Evaluation Criteria 4

1. Sequencing of RFOs 4

2. Bidding Requirements 7

3. RPS Solicitation - Contract Approval Schedule 9

4. Integration Costs 12

5. SEP Award Issues 14

6. Capacity Values 20

7. Bid Evaluation Process Issues 23

a) Applying the MPR to RPS Bids 23

b) Qualitative & Quantitative Factors Used in Bid Evaluation 28

c) Proposed Utility Approaches 32

8. PRG Review Issues 37

IV. Assignment of Proceeding 39

V. Shortening the Public Review Period of the Draft Decision 39

Findings of Fact 41

Conclusions of Law 44

ORDER 46

OPINION ADOPTING CRITERIA FOR THE SELECTION
OF LEAST-COST AND BEST-FIT RENEWABLE RESOURCES

I. Summary

This decision addresses the requirement in Pub. Util. Code § 399.14(a)(2)(b), which provides that the Commission must adopt a process that provides criteria for the rank ordering and selection of least-cost and best-fit renewable resources on a total cost basis to comply with the California Renewables Portfolio Standard (RPS) Program.¹ Today's order adopts least-cost, best-fit evaluation criteria for use in the 2004 RPS solicitation and directs the utilities to issue revised Requests for Offers (RFOs) for eligible renewable resources consistent with this decision and their approved renewable procurement plans. Since this is the initial RPS solicitation in a multi-year program of renewable energy development, we will revisit aspects of the adopted criteria as we gain more experience with the program, and as the renewable generation industry continues to evolve.

¹ See, Pub. Util. Code §§ 399.11 through 399.16.