7. Allocation of Benefits and Costs and Cost Recovery

As described earlier in the decision, D.06-07-029 and D.07-09-044 established a cost allocation methodology and energy auction protocols for new generation long-term contracts whereby the capacity is shared with all benefitting customers in an IOU's service territory and the energy rights are auctioned. The price benefitting customers pay for the capacity is the net of the contract price minus the energy auction proceeds.

SCE asks that the Commission find that the four new long-term contracts, CPV, El Segundo, Walnut Creek and Wellhead, are all eligible for the cost allocation methodology and energy auction procedures established by the Commission, and allow cost recovery for these four contracts in accordance with D.06-07-029 and D.07-09-044.

We find that the four contracts are needed for SCE's service territory, and therefore the contracts are eligible for the cost recovery mechanism and energy auction as established in D.06-07-029 and D.07-09-044.