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ALJ/BWM/sid Date of Issuance 11/19/2007

Decision 07-11-025 November 16, 2007

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Implement the California Renewables Portfolio Standard Program.

Rulemaking 04-04-026
(Filed April 22, 2004)

OPINION ON AMENDED PETITION FOR MODIFICATION OF
DECISION 04-06-014 REGARDING STANDARD TERMS AND CONDITIONS

TABLE OF CONTENTS

Title Page

OPINION ON AMENDED PETITION FOR MODIFICATION OF DECISION 04-06-014 REGARDING STANDARD TERMS AND CONDITIONS 2 2

2. Procedural Background 3 3

3. Timeliness of Petition 3 3

4. Development of STCs and Changes to STCs 4 4

4.1. Initial Work in 2003 and 2004 5 5

4.2. Extending STCs to All Contracts 7 7

4.3. Changes to STCs Due to Senate Bill 107 9 9

4.4. Future Modifications to STCs 9 9

5. Requested Relief 10 10

5.1. Reduce Non-Modifiable STCs 11 11

5.1.1. STC 1: CPUC Approval 12 12

5.1.2. STC 2: RECS and Green Attributes 13 13

5.1.2.1. Part 1: Definition 13 13

5.1.2.2. Part 2: REC Conveyance 14 14

5.1.3. STC 6: Eligibility 16 16

5.1.4. STC 17: Applicable Law 18 18

5.2. Convert Remaning Non-Modifiable STCs to Modifiable 19 19

5.2.1. Decline Elimination of All Other STCs 20 20

5.2.2. Convert Remaining Non-Modifiable to Modifiable STC 21 21

5.3. Process for Reviewing Changes to STCs 24 24

5.3.1. Universal Changes in Non-Modifiable STCs 24 24

5.3.2. Updates and Changes to Modifiable STC 27 27

5.3.3. Continuing Effect of D.07-02-011 28 28

5.4. No Retroactive Changes 28 28

5.5. Context of Changes 29 29

6. Comments on Proposed Decision 30 30

7. Assignment of Proceeding 31 31

Findings of Fact 31 31

Conclusions of Law 33 33

ATTACHMENT A - Adopted Language for Standard Terms and Conditions

OPINION ON AMENDED PETITION FOR MODIFICATION OF
DECISION 04-06-014 REGARDING STANDARD TERMS AND CONDITIONS

1. Summary

In 2004, the Commission adopted 14 standard terms and conditions (STCs) to be used in contracts executed to procure electricity pursuant to the California Renewables Portfolio Standard (RPS) Program. (Decision (D.) 04-06-014.) We specified that the adopted language with respect to five STCs may be modified by parties, but the adopted language with respect to nine STCs may not be modified by parties, or may be modified only in part.

Two parties jointly file a petition for modification of D.04-06-014, and a subsequent amended petition for modification. As amended, petitioners seek: (a) reduction in the number of non-modifiable STCs, (b) elimination of all other STCs or, in the alternative, elimination of the current modifiable STCs and conversion of the remaining non-modifiable STCs to modifiable STCs, and (c) a clear and expedited process for reviewing subsequent changes to the remaining STCs.

The relief requested in the amended petition is granted in substantial part, and denied in all other respects. In particular: (a) the number of STCs which are non-modifiable is reduced, (b) remaining non-modifiable STCs are converted to modifiable STCs but current modifiable STCs are not eliminated, and (c) the expedited process for review of subsequent changes to STCs is adopted as recommended by parties, with some clarification regarding the preferred approach in the limited case of universal changes to non-modifiable STCs.