10. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and David K. Fukutome is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. There were no protests to this application.

2. The Commission is reluctant to approve procurement that has not been authorized via an approved LTPP. However, due to the time constraints imposed by the Settlement Agreement and the status of R.06-02-013, it is appropriate to make an exception under these circumstances, and we find that SDG&E's decision to file its application prior to a Phase II decision on its LTPP in R.06-02-013 is reasonable.

3. Due to the upcoming expiration of the CDWR contracts, SDG&E's LTPP shows a bundled customer resource need in the 2010 - 2016 timeframe.

4. SDG&E's proposal to procure approximately 500 MW of power for 2012 from a fully dispatchable, baseload facility is consistent with its LTPP that is currently being evaluated by the Commission in R.06-02-013. The amount of power at issue is well within SDG&E's bundled customers' needs for that timeframe.

5. For the purposes of this application, we find that SDG&E has adequately demonstrated a need for the El Dorado plant or similar resource.

6. For purposes of this application, we find that SDG&E has reasonably determined that the El Dorado Option is the least cost, best fit alternative to fulfill the associated resource need identified by SDG&E in its LTPP.

7. SDG&E's selection of the El Dorado Option for Product 3 of the 2010 - 2012 RFO is reasonable.

8. It is in the interest of SDG&E's bundled ratepayers for SDG&E to exercise its option to purchase the El Dorado plant.

9. SDG&E's proposed cost recovery framework is reasonable.

10. SDG&E did not identify the rate base and O&M costs for the first year of operation of the El Dorado plant. These costs must be identified and supported to ensure that only reasonable forecasted costs will be included for recovery in rates.

Conclusions of Law

1. SDG&E's request for approval of its election to exercise the El Dorado Option should be approved.

2. The bundled customer procurement authority SDG&E requests in its 2006 LTPP should be reduced by the 480 MW of generation it is procuring by exercising the El Dorado Option.

3. SDG&E should fully justify and support its rate base and non-fuel O&M expense forecasts and provide the associated revenue requirement calculations at the time it includes the forecasted 2011 revenue requirement in its annual NGBA advice letter filing.

4. SDG&E's October 3, 2007 motion to offer its testimony into evidence is consistent with the provisions of Rule 13.8(d) of the Rules of Practice and Procedure and should be granted.

5. SDG&E's October 3, 2007 motion to seal the evidentiary record is consistent with the provisions of D.06-06-066 and should be granted as set forth in the order below.

6. This decision should be made effective immediately.

ORDER

IT IS ORDERED that:

1. San Diego Gas & Electric Company's (SDG&E) request for approval of its election to exercise an option to purchase a power plant located in Nevada and owned by El Dorado Energy LLC, a Sempra affiliate, is granted.

2. SDG&E's cost recovery proposal for fixed revenue requirement, variable operation and maintenance and non-fuel costs, and fuel costs is approved.

3. SDG&E shall fully justify and support its rate base and non-fuel operation and maintenance expense forecasts and provide the associated revenue requirement calculations at the time it includes the forecasted 2011 revenue requirement in its annual Non-Fuel Generation Balancing Account advice letter filing.

4. SDG&E's October 3, 2007 motion to offer testimony into evidence is granted. As described in the body of this decision, the pieces of SDG&E's testimony are identified as Exhibits 1, 2, 3 and 4 and are received into evidence.

5. SDG&E's October 3, 2007 motion to seal portions of the evidentiary record is granted. Exhibit 1 shall be placed under seal and shall remain sealed for a period of three years from the effective date of this decision.

6. Application 07-08-006 is closed.

This order is effective today.

Dated November 16, 2007, at San Francisco, California.

Previous PageTop Of PageGo To First Page