ALJ/MSW/avs Date of Issuance 6/27/2008

Decision 08-06-031 June 26, 2008

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Consider Annual Revisions to Local Procurement Obligations and Refinements to the Resource Adequacy Program.

Rulemaking 08-01-025
(Filed January 31, 2008)

DECISION ADOPTING LOCAL PROCUREMENT OBLIGATIONS FOR 2009 AND REFINEMENTS TO THE RESOURCE ADEQUACY PROGRAM

TABLE OF CONTENTS

Title Page

DECISION ADOPTING LOCAL PROCUREMENT OBLIGATIONS FOR 2009 AND REFINEMENTS TO THE RESOURCE ADEQUACY PROGRAM 2 2

1. Summary 2 2

2. Procedural Background 2 2

3. Local RA for 2009 5 5

3.1. 2009 LCR Study 5 5

3.2. Local Procurement Obligations for 2009 8 8

3.2.1. Continuation of the Local RA Program 8 8

3.2.2. Reliability Options 8 8

3.2.3. Aggregation of Local Areas 10 10

3.2.4. Local Area Resource Deficiencies 10 10

3.2.5. Coordination With CAISO Backstop Procurement 11 11

4. RA Program Refinements 12 12

4.1. Outage Counting Rules 12 12

4.2. New Resources 13 13

4.2.1. CAISO's Proposal 14 14

4.2.2. SDG&E's Proposal 15 15

4.2.3. PG&E's Proposal 16 16

4.3. QF Resources 17 17

4.4. RA Compliance Reporting 18 18

4.5. Allocation of CAM-Related RA Credits 21 21

5. Comments on Proposed Decision 22 22

6. Assignment of Proceeding 23 23

Findings of Fact 23 23

Conclusions of Law 24 24

ORDER 25 25

DECISION ADOPTING LOCAL PROCUREMENT OBLIGATIONS FOR 2009 AND REFINEMENTS TO THE RESOURCE ADEQUACY PROGRAM

1. Summary

This decision adopts local procurement obligations for 2009 applicable to Commission-jurisdictional electric load-serving entities (LSEs). These procurement obligations are based on a study of local capacity requirements (LCRs) for 2009 performed by the California Independent System Operator (CAISO). Even though peak loads are expected to increase in all but one of the defined local areas, the total LCR for all such areas combined has declined slightly, from 28,106 megawatts (MW) in 2008 to 27,915 MW in 2009.

In addition, we approve and adopt certain proposed resource adequacy (RA) program refinements. We simplify the rule for counting the capacity of a new resource by focusing on the resource's commercial operation date, approve an interim rule for new resources for 2009, and approve proposed clarifications and modifications to the rules for counting the capacity of Qualifying Facility (QF) resources. We also approve and adopt modifications to the RA compliance reporting procedure that include a provision for electronic compliance reporting.