Discussion

In the PPA as approved by this Commission, the Fixed and Variable O&M charges would be forecasted and billed at a fixed amount over the term of the first three-to-four year overhaul cycle. Following this cycle term, the Fixed and Variable O&M charges would be prospectively reset for the upcoming cycle period to reflect actual costs recorded during the previous cycle term. Instead of following this mechanism, FERC required a straight pass-through of actual costs.

We believe this change has only a minimal timing impact on rates and that this Commission should accept FERC's conditions to the California Public Utilities Commission approved PPA.