3. SDG&E's Request

SDG&E seeks authorization to exercise the El Dorado Option and thereby acquire the El Dorado plant for SDG&E's bundled customers. SDG&E maintains that (1) based on the results of the recently concluded competitive solicitation for needed resources in the 2010-2012 timeframe, the El Dorado Option continues to be the least cost, best fit option to fill a portion of SDG&E's bundled customers' future needs; (2) resolving the El Dorado Option by the end of this year provides certainty and stability to SDG&E's procurement portfolio, which benefits all stakeholders, who will have better clarity regarding SDG&E's future needs; and (3) there is value in procuring SDG&E's future needs gradually and over time, thus diversifying SDG&E's purchased price of energy and capacity.

SDG&E proposes to use its existing balancing accounts to recover all of the costs associated with this resource from bundled customers.

There were no protests or other responses to the application.

Due to the time constraints imposed by the Settlement Agreement and the status of the current LTPP, SDG&E's decision to file its application prior to a Phase II decision in R.06-02-013 is reasonable. Our evaluation of SDG&E's need for the El Dorado plant or similar resource, SDG&E's selection of El Dorado as best alternative, and SDG&E's proposed cost recovery framework follows.