7. RA Background

7.1. The Commission issued D.02-10-062 authorizing the Investor Owned Utilities (IOUs) to re-enter the Process of Procurement

In D.02-10-062, the Commission ordered the IOUs to recommence procurement and to facilitate more long-term planning. The decision set January 1, 2003 for the recommencement of IOU driven procurement, and for implementation of Assembly Bill 57. This decision approved short-term procurement plans, but maintained the flexibility for the Commission to create more structure later. It also authorized the IOUs to enter into agreements of less than five years in duration, and authorized a list of procurement products and transactions into which the IOUs can enter. Preparation and approval of LTPPs were left until a later decision.

7.2. D.04-12-048 found Reasonable and approved LTPPs for the Three IOUs.

D.04-12-048 extended the procurement authority of IOUs to ten years, and maintained the requirement to consult with the PRG. Specifically the decision found reasonable SCE's net short position and resource scenarios and found its bottom up approach with respect to the Loading Order to be in compliance. This decision updated and reiterated the findings of D.02-10-062. In closing its net open position, SCE is restricted to a set of authorized products, including RA capacity, and types of transactions, including some restricted use of bilateral transactions, authorized in its LTPP.

7.3. The CPUC has established System RA Requirements as well as a Local RA Obligation.

The RA Program established by D.05-10-042 requires all LSEs under CPUC jurisdiction to submit annual and monthly compliance filings to demonstrate procurement of sufficient capacity to meet their forecasted peak load plus a planning reserve margin.

The CPUC has also established a Local RA obligation that requires LSEs to procure capacity resources within certain transmission constrained Local Areas. D.07-06-029 established the Local RA obligation in the Big Creek/Ventura (BC/V) Local Area.

The California Independent System Operator (CAISO) performs an annual study to determine the amount and location of capacity needed to satisfy minimum operating reliability criteria (LCR study). This obligation is allocated out to the LSEs each year with a Year Ahead compliance filing currently due in October of each year. The CAISO lists resources such as the Pastoria Energy Facility that are able to provide BC/V Local capacity.