2. Regulatory and Procedural Background

Pacific Gas and Electric Company (PG&E) was authorized by Decision (D.) 07-12-052 to procure 800 to 1,200 megawatts (MW) of new generation capacity by 2015. This was later increased to 1,112-1,512 MW to adjust for projects that failed after D.07-12-052 was issued.¹ To obtain the new capacity by 2015, PG&E held a competitive solicitation and signed five contracts for 1,743 MW of new capacity from gas-fired combustion turbines. These five contracts are summarized below:

As shown in the above table, there were three contracts in the first rank with a total of 1,489 MW of new capacity (i.e., the Mariposa, Marsh Landing, and Oakley Projects), and two contracts in the second rank with a total of 254 MW of new capacity (i.e., the Tracy and LECEF Projects).

In D.10-07-042, the Commission determined that PG&E sought approval of more new capacity through 2015 than authorized by D.07-12-052. Therefore, D.10-07-042 granted PG&E permission to proceed with the second-ranked Tracy Project and LECEF Project only if future circumstances created an unfilled need for the new capacity authorized by D.07-12-052. Of relevance to today's decision, D.10-07-042 directed PG&E to proceed immediately with both the Tracy Project and the LECEF Project by filing a Tier 1 compliance advice letter if the first-ranked Oakley Project were rejected by the Commission.²

The Commission rejected the Oakley Project in D.10-07-045.³ Therefore, as required by D.10-07-042, PG&E filed Advice Letter 3711-E on August 4, 2010, to proceed immediately with the Tracy Project and the LECEF Project. The Tier 1 advice letter was approved by the Energy Division on September 1, 2010.

Meanwhile, on August 23, 2010, PG&E filed a petition to modify D.10-07-045 in which PG&E requested approval of the Oakley Project with a new online date of 2016. The original on-line date was 2014. The Commission approved the Oakley Project in D.10-12-050, for the period 2016 and beyond.⁴

On January 17, 2011, CAlifornians for Renewable Energy (CARE) filed a petition to modify D.10-07-042 pursuant to Rule 16.4 of the Commission's Rules of Practice and Procedures. On February 17, 2011, a joint response to the petition was filed by PG&E, Calpine Corporation, and GWF Energy LLC (GWF)⁵ (collectively, "the Joint Parties").

¹ D.07-12-052 at 300, Ordering Paragraph 4, and D.10-07-042 at 17.

² D.10-07-042, Ordering Paragraph (OP) 2.

³ D.10-07-045 at 55, OP 3. D.10-07-045 also approved the March Landing Project and lowered PG&E's authorized new capacity from 800-1,200 MW to 950-1,000 MW, plus 312 MW to replace failed projects (D.10-07-045 at 4-5, 33, 40-41, 42, 52 (Finding of Fact 12), 53 (Conclusion of Law 3), and 55 (OP 5).

⁴ D.10-12-050 denied PG&E's petition to modify D.10-07-045, but treated, sua sponte, the petition as an application and approved the Oakley Project for the period of 2016 and beyond. In D.11-05-049, the Commission modified D.10-12-050 and denied rehearing of D.10-12-050, as modified. Several typographical and clerical errors in D.11-05-049 were corrected by D.11-06-003.

⁵ Calpine Corporation owns the LECEF Project. GWF owns the Tracy Project.