VI. Other Comments

Pursuant to Commission Rules of Practice and Procedure, Rule 51.4, parties to the proceedings had an opportunity to comment on the Settlement Agreement and comments were received from Modesto Irrigation District (MID), the California Cogeneration Council (CCC) and the Cogeneration Association of California and Energy Producers and Users Coalition (CAC/EPUC). PG&E and IEP filed a joint reply to the comments.

In summary, except for the comments by CCC, the other non-settling QFs do not oppose the Settlement Agreement, per se, but are unanimously adamant that the Commission not view the Settlement as precedential or in any way binding on the Commission's future decisions in the proceeding. As these QFs argue, the Settlement is an voluntary, negotiated agreement, that does not reflect the record from the evidentiary hearings, nor does it necessarily serve the interests of the non-settling parties. The main plea from CAC/EPUC is that the Commission not apply any of the settlement terms and conditions to the QFs that did not sign the Settlement Agreement. MID is primarily concerned with a stipulation MID and PG&E entered into concerning an ongoing competition transition charge (OCTC) and seek confirmation from the Commission that it is not addressing recovery through the OCTC of the costs of any of the QF contracts subject to the Settlement. We agree and will not decide in this decision adopting the Settlement Agreement recovery of the OCTC.

CCC, on the other hand, opposes the settlement on the grounds that the settled terms benefit renewable QFs and a small percentage of gas-fired QFs, but would be unreasonable and unduly discriminatory if it was applied to most gas-fired cogenerators, particularly cogeneration QFs that operate in a baseload fashion. While the CCC does not take issue with the right of individual QFs to execute voluntary amendments with PG&E, CCC does have a problem with the Settlement Agreement as a whole since if imposed on non-settling parties, it would negatively impact more than three quarters of the natural gas-fired cogeneration QFs that have contracts with PG&E and have not signed the Settlement Agreement. In fact, CCC argues that the Settlement Agreement, because it is so discriminatory to its QF members, does not meet the "reasonable in light of the whole record, consistent with law, or in the public interest" test of Rule 51.

In their joint reply, PG&E and IEP reiterate that the Settlement Agreement is only applicable to the parties willing to voluntarily sign the amendments, and clearly does not pertain to the non-settling QFs.

The Commission is cognizant of the totality of the package negotiated between PG&E and the settling QFs, and understands that the terms and conditions therein are not acceptable to the non-settling parties. That is especially true if one focuses on the individual terms, rather than the aggregate of the agreement. This Settlement Agreement is not precedential,⁷ nor will we allow it to prejudice our future decision making. We will also factor into our analysis of the Settlement Agreement the fact that it is a voluntary agreement that was acceptable to primarily renewable QFs. We know the issues that remain to be decided involve all non-settling QFs, renewable as well as gas-fired, and that the terms and conditions in the Settlement Agreement were not acceptable to them. The record developed in the proceeding will be the cornerstone of the final decision, for non-settling parties not the Settlement Agreements.

⁷ Rules of Practice and Procedure, Rule 51.8.