III. Contract Administration

SCE's contract administration process consists of several activities, including exercising contract options in a prudent manner; verifying that the other party is complying with the contract terms, including credit support and collateral requirements; verifying that billing and payments are accurate and consistent with the terms of the contract; reviewing interruptions of service and force majeure events; renegotiating contract provisions due to changed circumstances or conditions; resolving disputes; purchasing natural gas fuel under certain types of contracts; and assigning, renewing or terminating contracts.

The Division of Ratepayer Advocates (DRA), formerly the Office of Ratepayer Advocates, conducted an independent review and analysis of SCE's application, testimony, workpapers, data responses, and written description of SCE's contract administration procedures, including confidential information placed under seal. DRA concluded from its review and analysis that SCE prudently and diligently administered its qualified facilities (QF), non-QF, and Department of Water Resources (DWR) allocated contracts. Based on this independent analysis and conclusion, we find that SCE's administration of its power purchase contracts during the Record Period was reasonable and prudent.