17. Assignment of Proceeding
Michael R. Peevey is the Assigned Commissioner and David K. Fukutome is the assigned ALJ for this proceeding.
1. SCE is required to demonstrate cost optimization of its overall supply portfolio.
2. Least-cost dispatch is an up-front standard that is included in the SCE's procurement plan. Any subsequent review of dispatch in SCE's ERRA filings merely ensures that SCE has complied with the approved procurement plan.
3. Review of least-cost dispatch includes all of SCE's dispatched resources and surplus energy sales.
4. For least-cost dispatch review, it is reasonable to include SCE's decisions to dispatch the resources under its control in the daily, hourly and real-time markets.
5. The standard of review for SOC 4 is compliance.
6. Least-cost dispatch is not evaluated in the quarterly compliance advice letter process.
7. Imposing a compliance review process for least-cost dispatch under SOC 4 rather than a reasonableness review process does not diminish the Commission's ability to ensure just and reasonable rates.
8. It is reasonable to continue to address dispatch of spot market transactions in the ERRA and all other aspects of spot market transactions in the quarterly compliance advice letter process.
9. SCE's least-cost dispatch activities during the record period were reasonable.
10. SCE's contract administration and costs during the record period were reasonable.
11. SCE's cogeneration QFs and renewable contract administration and costs were reasonable during the record period.
12. The hydro spill contract provisions that enforce the hydro savings price for affected QFs are outdated.
13. Specific information for future ERRA filings is more appropriately obtained through a master data request process, rather than through an order in this decision.
14. The master data request has been used successfully in the past and is an efficient tool that allows ORA to more quickly focus on issues and frame the scope of its review and analysis.
15. SCE's accounting for the CDWR settlement payment is reasonable.
16. ORA's recommendation to exclude $2.85 million in ISO related costs that were booked to the ERRA, is reasonable.
17. ORA's recommendation that SCE amortize transaction fees over the life of the loans that SCE acquired to refinance procurement liabilities is consistent with GAAP.
18. The SCE and ORA agreement that the ERRA should be credited in the amount of $9.398 million to reflect the unamortized transaction fees as of July 31, 2003, and debited in the amount of $9.367 million to reflect the amount of fees amortized during the remaining life of the loans, August 1, 2003 through December 19, 2003, is reasonable.
19. The SCE and ORA proposal to only include 50% of the disputed retraining costs, or $0.693 million, in rates is reasonable.
20. SCE's hydroelectric, coal and Catalina generation operations were reasonable during the record period.
21. SCE's administration of special contracts was reasonable during the record period.
22. Letter of credit commission fees, letter of credit issuance fees, letter of credit commitment and participation fees and ISO escrow fees were required for SCE to post collateral to transact for power, and were reasonably incurred during the record period.
23. ISO-related costs incurred during the record period are reasonable.
24. The monthly fuel oil inventory costs recorded during the record period are reasonable.
25. SCE expenditures for electric vehicle costs incurred during the seventh review period August 1, 2001 through May 21, 2003 are reasonable.
26. At the request of SCE, Exhibits 9, 10, 13, 14, 19, 22, 23, 24 and 25 were identified and received under seal.
27. At the request of ORA, Exhibit 27 was identified and received under seal.
1. In the ERRA, consistent with SOC 4, SCE must demonstrate that it has prudently administered all contracts, including CDWR contracts and generation resources and dispatched its energy in a least-cost manner.
2. Least-cost dispatch review in the ERRA should include SCE's decisions to dispatch the resources under its control in the daily, hourly and real-time markets.
3. SCE's request to combine review of spot market transactions in one forum rather than in both the ERRA and quarterly compliance advice letter process should be denied.
4. SCE should seek resolution of problems associated with implementing outdated hydro spill provisions in R.04-04-025.
5. As specified in the body of this decision, SCE and ORA should develop and implement a master data request process to be used in SCE's 2005 ERRA filing.
6. SCE should make the proper accounting adjustments to reflect the ORA/SCE recommended audit adjustments related to ISO costs, amortization of refinancing transaction fees, and employee retraining costs.
7. Information placed under seal should remain sealed for the limited period of time specified herein; if disclosed, it would put SCE at a competitive disadvantage.
8. Today's order should be made effective immediately.
IT IS ORDERED that:
1. Southern California Edison's (SCE's) request to combine review of spot market transactions in one forum rather than in both the Energy Resource Recovery Account (ERRA) proceeding and the quarterly compliance advice letter process is denied.
2. As specified in the body of this decision, SCE and ORA shall develop and implement a master data request process to be used in SCE's 2005 ERRA filing.
3. SCE shall make the proper accounting adjustments to reflect the ORA/SCE recommended audit adjustments related to Independent System Operator costs, amortization of refinancing transaction fees, and employee retraining costs, as detailed in the body of this decision.
4. All information placed under seal shall remain sealed for a period of one-year from the effective date of this decision, unless the Commission decides otherwise. If SCE believes that further protection of sealed information is needed beyond this time, it may file a motion stating the justification for further withholding of the sealed information from public inspection, or for such other relief as the Commission may provide. This motion shall be filed no later than 30 days before the expiration of this ordering paragraph.
5. SCE's request for oral argument on the scope of review for least-cost dispatch is denied.
6. Application 03-10-022 is closed.
This order is effective today.
Dated 1/27/2005, at San Francisco, California.
MICHAEL R. PEEVEY
President
GEOFFREY F. BROWN
SUSAN P. KENNEDY
Commissioners
Comr. Grueneich recused herself
from this agenda item and was not
part of the quorum in its consideration.
