III. Standard Contract Terms and Conditions
While the parties have not managed to fully resolve all outstanding issues regarding the adoption of standard contract terms and conditions, they have made significant progress. Most notably, a number of initially disparate parties have come together to make joint proposals. As mentioned above, those joint proposals have been presented by the "CEERT Parties" (described above) and the "CalWEA Parties" (consisting of the CalWEA, the CBEA, and Vulcan).
The CEERT Parties' proposal is particularly noteworthy, as it garnered support from groups that include renewable generators and consumers, as well as two major electric utilities. This broad-based support would, by itself, be enough for us to give serious consideration to the proposal of the CEERT Parties. The other proposals presented by the parties, while often thoughtful and carefully prepared, generally were less broadly representative (i.e. they clearly favored one contracting party), or were less complete than the CEERT Parties' proposal.
While we generally adopt the CEERT Parties' proposal, it is not only because of the range of the parties supporting the proposal. We do not blindly adopt proposals, even ones with support as broad as the CEERT Parties' proposal. This Commission has an obligation to ensure that its decisions are supported by the record and in the public interest. Accordingly, in this proceeding we have examined and considered each and every term and condition proposed by the CEERT Parties, and compared them with the specific terms and conditions proposed by the other parties, and we have also considered the more general policy-focused comments made by the parties. The result of this analysis confirms that the standard contract terms and conditions proposed by the CEERT Parties are both reasonable and the best of those presented to this Commission.4
In addition, the proposal of the CEERT Parties is an integrated one, where the contract terms and conditions are intended to work together. In general, such an approach is preferable to an agglomeration of disparate terms and conditions selected in a mix-and-match fashion from a range of parties, which can sometimes result in confusion or inconsistency.
At the same time, we believe that some minor modifications to the CEERT Parties' proposal are necessary. Specifically, subsections 1 and 4 under "CPUC Approval" are too broad, and may improperly limit the Commission's authority. For example, these subsections could be construed to prevent the CPUC from taking appropriate action even if a particular solicitation or agreement is subsequently determined to be fraudulent or otherwise illegal or improper. Accordingly, subsection (1) is modified to read: "(1) Approves this Agreement in its entirety, including payments to be made by the Buyer, subject to CPUC review of the Buyer's administration of the Agreement." In addition, subsection (4) is eliminated.
We also make some minor modifications to the language under SEP Awards, Contingencies to ensure that the contract language corresponds with the California Energy Commission's (CEC) administrative processes on this topic. Finally, pursuant to recommendations from Green Power, we make clarifying modifications to the CEERT Parties' proposed definition of a Renewable Energy Credit (REC).
As modified from the CEERT Parties' proposal, the standard contract terms and conditions that we adopt are attached as Appendix A. As stated in the March 8 Joint Ruling (in R.01-10-024), our purpose here is to develop a "year one" contract to enable the RPS solicitation to move forward, and we expect that the contract language will become more refined as the parties and the Commission gain further experience.
