4. Application for Approval of a RPS-eligible Gas Purchase Contract

As discussed above, the Commission requires GSWC, pursuant to
D.08-05-029, to seek approval of any contract for the procurement of RPS eligible energy by application rather than by advice letter, as long as any cap on GSWC's electricity charge remains in effect. The current cap is $77 per MWh.

Each year, GSWC prepares a five-year Integrated Resource Plan (IRP), which it uses to plan, evaluate, and acquire generation resources to meet its forecasted customer energy requirements. GSWC states that its request for authority to acquire renewable energy resources in the current application is consistent with its IRP issued in June 2009.

In this application, GSWC requests approval of the gas purchase contract (GPA) between GSWC and BioEnergy. The contract has a 10-year term and provides for the delivery of biogas¹² produced from dairy cow manure from the Vintage Dairy in Fresno County. The biogas would be used to fuel GSWC' Bear Valley Power Plant (BVPP), located in the City of Big Bear Lake, to produce electricity for use by its customers. The California Energy Commission (CEC) pre-certified BVPP as RPS-eligible in February 2009.¹³ BVPP, which is GSWC's only power plant, operates seven natural-gas fired generators that can use either natural gas or biogas. The biogas provided by BioEnergy would be delivered to GSWC via gas transportation service from Pacific Gas and Electric Company (PG&E), to Southern California Gas Company (SoCalGas), and then to Southwest Gas Corporation (Southwest Gas), which is GSWC's local distribution company.

¹² Biogas is identified as an RPS eligible fuel in the California Energy Commissions publication Renewables Portfolio Standard Eligibility, issued January 2011. http://www.energy.ca.gov/2010publications/CEC-300-2010-007/CEC-300-2010-007-CMF.PDF.

¹³ The CEC is responsible for determining the eligibility of renewable resources and certifying individual facilities as RPS eligible. The CEC pre-certification of GSWC's BVPP as RPS-eligible means that power generated using renewable resources at the BVPP may be used by GSWC to satisfy its RPS procurement requirements.