9. Minor Implementation Issues

9.1. Rounding Convention

D.06-06-064 adopted the following provision for rounding RA requirements:

"LSEs should be exempted from procurement obligations of less than 1 MW in a particular local area. In addition, RARs of 0.5 and greater should be rounded up to the next highest MW and RARs of 0.49 or lower should be rounded down to the prior MW; provided, however, that this rounding convention does not supersede the local area exemption of less than 1 MW." (D.06-06-064, Conclusion of Law 13, p. 84.)

The Energy Division implemented the rounding convention for Local RAR but not for System RAR. Finding a need to clarify the rounding convention, the Energy Division proposed such a clarification for workshop discussion. Based on preliminary workshop discussions, Energy Division proposed the following rounding convention, which received consensus approval in a subsequent workshop:

· Local RAR rounding unchanged.

· For System RAR round at the level of RAR, after DR has been deducted and 15 percent PRM has been added.

· 1 MW minimum RAR, no LSE gets rounded down to 0 RAR.

· Grandfather existing LSEs with less than 1 MW RAR. They will not be rounded up.

We approve this uncontested proposal for clarification of the RA rounding convention. To the extent, if any, that this clarified rounding convention differs from or conflicts with D.06-06-064, it shall supersede that decision's provisions for rounding.

9.2. Wind Units With Less Than 3 Years Data

The monthly QC values used in RA for wind units are based on monthly historic performance during Standard Offer 1 (SO1) Peak hours from Noon to 6:00pm using a three year rolling average. This method was developed by participants in previous RA workshops and adopted in D.04-10-035 and D.05-10-042. The adopted methodology does not address wind units with less than three years of performance data. To address such units, the Energy Division developed a proposal for discussion in the workshops. The workshop participants reached consensus supporting the proposal, which is set forth below.

For new units:

The average wind production factor of all units within the Transmission Access Charge (TAC) area where the unit is located will be used. For example, for a new unit in if the average wind unit production as a percent of net dependable capacity (NDC) in the TAC area during June of year 1 was 23%, yr 2 was 22%, and yr 3 was 24%, the new unit's QC for June would be based on 23% of its NDC (23 + 22 + 24 / 3 = 23%).

For units with some operating experience, but less than 2 years of data:

The average wind production factor of all units within the TAC area where the unit is located will be used in place of the missing data in the 3 year formula. For example, if the average wind unit production in the TAC area as a percent of NDC during June of yr 1 was 23%, yr 2 was 22%, and yr 3 was 24%, and the new unit production for June was 21% of NDC for yr 3, the unit's QC for June would be 22% of its NDC (23 + 22 + 21 / 3 = 22%).

For units with at least 2 years of operating experience, but less than 3 years of data:

The unit's actual operating experience will be used. In some months the QC value will be based on 2 years of data rather than 3 years of data as established in the counting convention.

The post-workshop comments confirm this is a consensus proposal that should be approved by the Commission. As PG&E notes, establishing a counting convention for new resources should facilitate developers' efforts in qualifying the new RA capacity with the CAISO and create certainty regarding the QC amounts that buyers and sellers may expect from the projects. Energy Division, in consultation with the CEC and the CAISO as appropriate, should compute average wind values annually and publish the results for each TAC area by June 30 of each year.

PG&E believes that this proposal for wind resources may be appropriate for other as-available renewable resources such as solar, biomass, and small hydro. PG&E suggests that a portion of Track 2 be reserved for consideration and development of such proposals. We recognize that resource counting conventions developed in the past several years will need to be updated from time-to-time, and we therefore believe that PG&E's suggestion has merit. At the same time, we are mindful of resource constraints faced by parties as well as the Commission, and that Track 2 already has a heavy agenda. Rather than order this to be undertaken, we commend to the discretion of the Assigned Commissioner and the ALJ, in consultation with the Energy Division, the determination of whether it would be appropriate to expand Track 2 to consider this topic.