2. Scope of Issues

The assigned Commissioner's December 3, 2010, scoping memo and ruling identified the following issues to be determined in the proceeding:

1. Are the PPAs just and reasonable? In deciding this overarching issue, we will consider the following factors:

a. Will the PPAs reduce customer costs by providing better market value?

b. Will the PPAs provide operational benefits?

c. Will the PPAs result in reduced greenhouse gas (GHG) emissions?

d. Will procurement under the PPAs satisfy the Emissions Performance Standard adopted by D.07-01-039?

e. Will procurement under the PPAs serve to meet PG&E's MW targets and GHG emissions reductions under the QF/CHP Settlement? This issue encompasses consideration of whether procurement under the PPAs should count toward the MW and GHG emissions reduction targets.

f. Will procurement under the PPAs serve the Commission's policy preference for the utilities to maintain their current level of QF capacity, as provided in D.07-12-052? This issue encompasses consideration of whether procurement under the PPAs should count toward PG&E's obligation to maintain its current level of QF capacity.

g. Do the PPAs satisfy PG&E's obligations with respect to sellers under Section 3.4.4 of the QF/CHP Settlement Term Sheet?

2. Should PG&E be authorized to recover the costs of the PPAs through the Electric Revenue Recovery Account (ERRA) and allocate stranded costs consistent with Section 13.1 of the QF/CHP Settlement Term Sheet? This issue encompasses consideration of whether PG&E's cost allocation proposal is consistent with the QF/CHP Settlement.