Background

On December 18, 2003, this Commission issued D.03-12-059 granting Edison's application to acquire MVL either as a wholly-owned subsidiary and to enter into a PPA with MVL for electricity from Mountainview, or as a utility-owned generation facility.

Edison chose to pursue the PPA and that avenue required Edison to seek FERC approval for the project before Edison could exercise the option agreement to acquire MVL. D.03-12-059 required Edison to seek approval of this Commission if FERC proposed any modifications to the PPA that had potential rate impacts. Specifically, Ordering Paragraph #2 states "[I]f FERC proposes any modifications with potential rate impacts, Edison must seek the approval of this Commission prior to accepting any modifications that have potential rate impacts." ¹

On February 25, 2004, FERC issued order 106 FERC ¶ 61, 183 conditionally accepting the PPA, subject to Edison submitting a compliance filing that reflected the FERC ordered changes to the PPA. All but one of these modifications should have no potential rate impact for Edison ratepayers. However, one FERC modification arguably could affect the rates paid by Edison customers because it changes the mechanism of the fixed and variable Operations & Maintenance (O&M) charges.