Payment of QFs Going Forward

Energy from QFs is an essential part of the state's electric supply. The Commission is aware that ongoing disputes between utilities and their suppliers and creditors has resulted in QFs not being paid, in some cases for months. In view of the other actions we take today regarding increased utility revenues, the utilities have no reason to continue to withhold payment from QFs making energy deliveries to the utilities.

Beginning on the effective date of this order and until further order of the Commission, utilities shall pay QFs for energy delivered on or after that date within 15 days of the end of the billing period. QFs shall be permitted to establish a 15-day billing period. Prompt payment by the utilities for energy delivery by the QFs given current conditions is key and critical to maintaining energy reliability. Therefore, if the utilities fail to transmit payment to the QFs within 15 days of the energy deliveries, they shall be subject to a penalty equal to the amount of the payment owed.

Because of the immediate need of QFs for revenues to continue production, we establish a different payment approach for the month of April for SCE and PG&E. For April only, SCE and PG&E shall have the option to either (1) make payment for April no later than April 16 based on an estimate of April production using historical April production or (2) make payments for actual April production within two days of the end of the 15-day billing period.