IV. The Petition

Edison filed this petition for modification on July 28, 2000, requesting that the Commission confirm that, in approving Edison's standard SO2 and ISO4 contracts, it did not intend that Operating Options I and II above of those standard offers would permit "simultaneous buy-sell". Rather, Edison requests that the Commission confirm that Operating Options I and II only permit a QF to sell its output, less station use, to the utility at avoided cost prices. Edison believes that the contrary interpretation advocated by the QFs is unreasonable, contrary to PURPA's policies, and has a potential cost impact to ratepayers of $23 million.

The Office of Ratepayer Advocates (ORA), PG&E, Commerce Refuse to Energy Authority (Commerce),⁸ and the Independent Energy Producer's Association (IEP) filed responses to Edison's petition. ORA and PG&E support the petition, while Commerce and IEP oppose it. IEP primarily argues that the Commission should limit its response to the petition to policy issues, and not involve itself in contract interpretation. Commerce believes that the Commission should defer addressing the issues to the Superior Court, and also opposes the petition on the merits.

Commerce believes that Operating Options I and II of the SO2 and ISO4 contract permit a QF to sell to Edison its gross output, including its station use, at the contract price (which historically has been above-market energy and capacity prices), while buying back from the utility power required for its station use at what has historically been a lower tariffed rate.