D0406014/R0404026 Adopted Standard Contract and Settlements

V. Annual Procurement Target

Some parties agreed with the methodology that the OIR used to calculate the 2004 APT, while others disagreed with the Commission's approach, arguing that the Commission should not have adjusted the baseline figures to reflect renewable generation procured between the date of enactment of the RPS legislation and the issuance of the OIR. According to this argument,¹⁰ the relevant statute (Pub. Util. Code § 399.15(a)(3)) requires the OIR to use eligible renewable resource figures for 2001, not 2003, in determining the 2003 RPS renewable baseline. The statute, however, requires that the baseline be adjusted going forward as new eligible renewables are added to the utility's portfolio. (Id.) The baseline is thus a dynamic, not a static, calculation, and 2001 is simply the first point of reference in what will be an ongoing evaluation of each utility's progress towards the RPS goals. Adding the eligible amount of generation from the interim renewables solicitation to the baseline is thus both necessary and appropriate, and the approach taken in the OIR is consistent with the statute.¹¹

However, the manner in which the OIR used the interim renewable generation in calculating the baseline resulted in some confusion as to whether the utilities would be able to bank excess procurement from the 2002-2003 interim renewable solicitations. Placing all of the interim generation in the category of "baseline" gave the impression that none of this power would be creditable towards future RPS targets. Since this Commission previously stated (D.02-10-062, p. 24) that interim renewable procurement conducted pursuant to D.02-08-071 would count towards future RPS requirements, we clarify that the utilities will be able to bank eligible renewable procurement in excess of the targets set in D.02-08-071 towards future RPS compliance. The revised IPT and baseline numbers are set forth in more detail in Appendix B.

¹⁰ Raised by CEERT, SDG&E, SCE, and TURN. ¹¹ TURN also argued that the OIR did not identify the portion of 2003 renewable procurement eligible to satisfy the IPT for each utility, focusing primarily on SCE and PG&E's agreements to purchase existing geothermal output from Calpine's Geysers facility. Under D.03-06-076 PG&E and SCE may use their interim procurement geothermal contracts to satisfy certain aspects of their RPS procurement requirements. The extent to which this interim procurement can be banked forward to satisfy future IPTs is subject to determination by the CEC. (Id. p. 36.)