2. Background
Southern California Edison Company (SCE) seeks approval for a series of transactions related to the renewable energy output of the Mountain View Power Partners, LLP (MVPP) facility, a 66.6 megawatt (MW) wind project located in Palm Springs, California. The transactions involved eight agreements, for which SCE originally sought our approval. SCE now seeks approval of only six agreements. A brief history is helpful to put the agreements in context, along with SCE's current request for Commission approval of only some of the agreements.
2.1. Brief History
In January 2001, the legislature passed emergency legislation in response to the 2000/2001 California energy crisis.1 That legislation authorized the California Department of Water Resources (DWR) to make electricity purchases for investor-owned utility (IOU) retail customers. This was necessary because IOUs were not financially able at the time to make those purchases.
In September 2002, we allocated the energy and capacity benefits of
41 DWR power purchase contracts to IOU customers. (Decision (D.) 02-09-053, Ordering Paragraph (OP) 1.) One such contract was between DWR and MVPP (referred to herein as the DWR Contract). We apportioned the benefits and costs of the DWR Contract to the customers of SCE. The DWR Contract conveyed energy and capacity to DWR, but did not include the renewable energy credits (RECs) associated with the electricity generated by the MVPP facility.2 Upon further development of the state's renewables program, MVPP entered into separate agreements with third parties to sell the future rights to a portion of the RECs.
On January 1, 2003, the RPS program became effective.3 The RPS program requires that retail sellers of electricity procure increasing quantities of electricity generated by facilities using renewable resources, reaching 33% by 2020.
In August 2008, we defined and specified the attributes of an REC for compliance with the RPS program. While at that time, retail sellers could only procure bundled RPS contracts (for energy and RECs from an RPS-eligible facility), we also indicated that we would later decide whether to authorize the use of unbundled and/or tradable RECs (TRECs) for RPS compliance.
(D.08-08-028.)
In March 2010, we authorized the use of TRECs for RPS compliance.
(D.10-03-021.) In May 2010, we stayed D.10-03-021 pending resolution of two petitions for modification. (D.10-05-018.)
In December 2011, we implemented new Section 399.16, related to RPS portfolio content categories and the procurement of unbundled RECs.
(D.11-12-052.)
2.2. History of this Proceeding
On September 22, 2009, SCE sought approval in this application for a series of eight transactions related to the renewable energy output of the MVPP facility. The transactions involved the buy-out of the RECs sold by MVPP to other entities, the rebundling of those RECs with the electricity generated by the MVPP plant, and the novation of the DWR Contract.4 In combination, we call these the MVPP Transactions.
On May 14, 2010, the Administrative Law Judge (ALJ) stayed this proceeding given our stay of D.10-03-021. The stay was ordered here because this application combined novation with TREC transactions. As a result, the requested relief could not be granted, and no action could be taken here until we again authorized the use of TRECs for RPS compliance.
In January 2011, we lifted the stay of D.10-03-021 and authorized the use of TRECs created on or after January 1, 2008. (D.11-01-025.) On January 24, 2011, the ALJ lifted the stay of this proceeding, with parties ordered to provide updated information. On February 24, 2011, a Scoping Memo and Ruling of the Assigned Commissioner was filed and served, identifying the issues and setting a schedule.
On April 27, 2011, all parties jointly moved for receipt of testimony into evidence, based on an agreement reached during an all-party settlement conference that no evidentiary hearing would be needed. By Ruling dated
May 16, 2011, the proposed testimonies and corrected data of SCE, plus the proposed testimony of the Division of Ratepayer Advocates (DRA), were received as evidence, and a briefing schedule was set.
On May 31, 2011, briefs were filed and served by SCE, DRA and Californians for Renewable Energy (CARE). On June 9, 2011, CARE filed and served its reply brief, and on June 13, 2011, SCE filed and served its reply brief. DRA does not oppose SCE's requests, with limited clarifications and conditions. CARE opposes the transactions, and recommends denial of the requests.
On January 13, 2012, SCE, with permission of the ALJ, filed a Status Report. In that report, SCE requests approval of only six of the eight agreements and, according to SCE, those agreements should be approved for all the reasons stated in the application, testimony and briefs. No party sought to file comments on the Status Report.
1 Assembly Bill 1, First Extraordinary Session (Keeley, Stat. 2001, ch. 4).
2 RECs are defined by Pub. Util. Code § 399.12(h) and D.08-08-028. RECs are used to demonstrate compliance with the renewables portfolio standard (RPS) program.
All subsequent code section references are to the Public Utilities Code unless noted otherwise.
3 Senate Bill (SB) 1078 (Sher, Stats. 2002, ch. 516, codified as §§ 399.11, et seq.) began the RPS program. Most recently, SB2 (1X) (Simitian), Stats. 2011, ch.1, revised and expanded the RPS program.
4 Novation is the substitution of a new obligation for an old one by the mutual agreement of all parties.
