XIII. Assignment of Proceeding
Michael R. Peevey is the Assigned Commissioner and Michael J. Galvin is the assigned ALJ in this proceeding.
1. The application was filed on April 1, 2005, and appeared in the Commission's Daily Calendar on April 8, 2005.
2. SCE provided detailed exhibits and testimony on its administration of power purchase agreements, least-cost dispatch activities, and procurement-related revenue and expenses recorded in its ERRA for the Record Period.
3. DRA provided testimony on the results of its independent examination of SCE's administration of power purchase agreements, least-cost dispatch activities, ERRA, and other balancing accounts.
4. DRA scrutinized the source of entries recorded in SCE's ERRA through its review of contract administration and least-cost dispatch activities during the Record Period.
5. Exhibits 1 through 6 and Sealed Exhibits A through D provided detailed support for transactions recorded in SCE's ERRA during the Record Period.
6. Hour-ahead sales and purchases are impacted by demand, availability of product types, delivery points, volatility of minute-to-minute changes in natural gas prices, transmission conditions, and load or resource forecasts.
7. There is no hour-ahead sale or purchase market.
8. There is no established method to determine whether the hour-ahead sales and purchases of SCE were made in the most cost-effective manner.
9. NUIP provides incentive rewards for those nuclear units that perform above an 80% capacity factor.
10. DRA took no exception to SCE's NUIP reward calculation.
11. DRA took no exception to the costs recorded in SCE's EETAMA.
12. DRA took no exception to the December 31, 2004 balances in SCE's non-ERRA balancing and memorandum accounts identified in the body of this order.
13. Information that would place SCE in a competitive disadvantage if disclosed was placed under seal.
1. SCE's administration of its ERRA contracts during the Record Period was reasonable and prudent.
2. Least-cost dispatch activities during the Record Period were prudently performed and complied with SOC 4 in SCE's approved procurement plan.
3. SCE's $171.9 million undercollected ERRA balance at December 31, 2004 is reasonable and recoverable.
4. SCE's $12.6 million May 22, 2003 NUIP reward applicable to its Palo Verde Unit 3 is reasonable and recoverable.
5. SCE's $6.7 million December 31, 2004 EETAMA balance is reasonable and recoverable.
6. The December 31, 2004 LCTA balance of $3.9 million and ESMA balance of $103.9 million were reasonable.
7. December 31, 2004 non-ERRA balancing account amounts identified in the body of this order are reasonable and recoverable.
8. SCE's revenue requirement proposal is reasonable and should be adopted.
9. Information placed under seal should remain sealed.
10. This decision should be effective today, in order to allow the docket to be closed expeditiously.
IT IS ORDERED that:
1. Southern California Edison Company's (SCE) administration of its power purchase agreements and its least-cost dispatch activities for the period beginning January 1, 2004 and ending December 31, 2004 was reasonable and prudent.
2. SCE's $171.9 million undercollected Energy Resource Recovery Account (ERRA) balance at December 31, 2004 and its procurement-related revenue and expenses recorded in its ERRA in that Record Period were reasonable and prudent.
3. SCE and the Division of Ratepayer Advocates shall work jointly in establishing a standard to satisfy the "most cost-effective" standard of SCE's hour-ahead activities.
4. A Nuclear Unit Incentive Procedure (NUIP) reward of $12.6 million applicable to SCE's Palo Verde was reasonable and is recoverable.
5. Electric Energy Transaction Administration (EETA) costs recorded in SCE's EETA memorandum account during the January 1, 2003 through December 31, 2004 period, resulting in a $6.4 million undercollected balance, reasonable and recoverable.
6. SCE is authorized to transfer its NUIP and EETA approved balances to the appropriate balancing accounts for consolidation in its rate change to be adopted in the January 1, 2006 ERRA forecast proceeding.
7. All information placed under seal shall remain sealed until the Commission issues a decision in Rulemaking 05-06-040 that establishes a consistent treatment of confidential procurement information for the major energy utilities. Upon the issuance of such a decision in the rulemaking proceeding, the sealed information in this proceeding shall be treated in conformance to the requirements of that decision.
8. Application 05-04-004 is closed.
This order is effective today.
Dated January 12, 2006, at San Francisco, California.
MICHAEL R. PEEVEY
President
GEOFFREY F. BROWN
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
Commissioners
