II. Background

In Decision (D.) 04-06-011, the Commission approved the ten-year Otay Mesa PPA, for the output of a yet-to-be completed 573 megawatt (MW) facility, along with several other electric procurement contracts solicited by SDG&E in a request for proposal (RFP) to meet the utility's grid reliability needs. The Utility Reform Network (TURN) and Utility Consumers Action Network (UCAN) jointly filed an Application for Rehearing to D.04-06-011, alleging that the decision was in error in determining that the Otay Mesa PPA should be approved as a "winning bidder" in the RFP. In D.05-06-062, the Commission granted limited rehearing only as to the Otay Mesa PPA, and the remaining electric resource contracts approved in D.04-06-011 remained confirmed. The scope of this rehearing phase is to determine whether or not the Otay Mesa PPA, when viewed as a bilateral contract, is reasonable and provides benefits to SDG&E's ratepayers.

Testimony was submitted by SDG&E, TURN, UCAN, Office of Ratepayer Advocates (ORA), Calpine and the City Of Chula Vista (Chula Vista). Evidentiary hearings (EH) were held October 31 through November 2, 2005. Post-hearing opening and reply briefs were received from SDG&E, Chula Vista, TURN/UCAN, Calpine, and ORA.