3. Legal Basis for Commission Authority
to Reinstitute Direct Access

3.1.1. Relevant Provisions of AB1X

As a basis for determining whether, as a matter of law, the Commission has authority to lift the suspension and reinstitute direct access, we examine the governing requirements set forth in AB1X. The direct access suspension must continue until DWR "no longer supplies power" under the provisions of AB1X as codified in Water Code § 80110. The precise language prescribing this condition reads as follows:

"After the passage of such period of time after the effective date of this section as shall be determined by the commission, the right of retail end use customers pursuant to Article 6 (commencing with Section 360) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code to acquire service from other providers shall be suspended until the department [the Department of Water Resources] no longer supplies power hereunder."

3.1.2. Parties' Position

Parties disagree over the analytical framework that the Commission should apply in determining whether the Commission has statutory authority to lift the direct access suspension. AReM and CACES argue that language in AB1X regarding the duration of the direct access suspension is ambiguous, and requires the Commission to exercise discretion to interpret its intended meaning. As possible meanings, CACES suggests that the phrase "no longer supplies power" could refer to the time (1) when DWR no longer contracts to supply power, (2) when DWR no longer operates or administers power supply contracts, or (3) when DWR no longer has financial responsibility for any power contracts to supply electric retail customers.

CACES argues that the Commission has broad discretion to interpret statutes by applying principles of statutory construction, and by considering extrinsic aids, including: the objectives that the Legislature sought to achieve, the evils sought to be remedied, the legislative history, public policy contemporaneous administrative construction of the statute, and the broader statutory scheme of which the relevant statutory provision is a part.5

CACES argues that AB1X was enacted on an emergency basis to deal with the power crisis of 2000-2001, but that such emergency no longer exists. AReM similarly argues that the direct access suspension was intended by the Legislature to be temporary, and that the condition precedent for lifting the direct access suspension has occurred. AReM believes that the status quo that existed prior to the crisis conditions of 2000-2001 has been restored, and that continued suspension of direct access is merely an historical "anachronism."

CACES argues that the Commission has discretion to interpret the suspension on direct access as no longer applicable in the light of changed circumstances since AB1X was enacted. AReM believes that there is no statutory impediment to the Commission's authority to reopen direct access.

The IOUs and TURN dispute the claim that AB1X is ambiguous, but believe that the phrase "until DWR no longer supplies power" is clear on its face. TURN argues that there is no need to look past the "plain language of the statute" to determine whether DWR still supplies power.

3.1.3. Discussion

We first address whether ambiguity exists in the statute's use of the term "no longer supplies power," particularly in view of how DWR's role has changed since the statute was enacted. In order to address the power crisis of 2000-2001, AB1X was passed into law, which required DWR to enter into contracts to purchase electric power on behalf of California's retail end-use customers. AB1X further provided that DWR was not to enter into new power purchase agreements after January 1, 2003. The specific functions performed by DWR under the statutory provisions of AB1X have changed since 2001. Given the novel and unconventional circumstances surrounding DWR's role in resolving the energy crisis of 2000-2001, and the evolving nature of its role under AB1X since then, certain parties claim that DWR is no longer supplying power.

We consider the merits of parties' legal theories underlying their interpretations of AB1X, as a basis to determine whether DWR continues to supply power under the statute. The California Supreme Court has acknowledged this Commission's authority to interpret statutes and has affirmed the Commission's reasonable interpretation of statutes as long as such interpretation bears "a reasonable relation to statutory purposes and language."6 Moreover, the Commission has exercised its authority to interpret statutes on a number of occasions. We have specifically held that § 80110 "requires interpretation" at least in the context of applying switching exemptions.7

Thus, while the Commission has authority to interpret AB1X, the interpretation must be within the bounds of the governing statutory language. The Commission's authority to interpret a statute does not permit disregarding statutory language or making an interpretation that bears no reasonable relation to statutory purposes and language.

Certain parties argue that we should look to the underlying intent behind the direct access suspension, and whether the purposes for which direct access was suspended have been satisfied. A reading of the language of AB1X, however, reveals that the suspension is expressly linked to DWR supplying power. The Legislature imposed this specific condition as a prerequisite for lifting the suspension, but did not authorize the Commission to decide to lift the suspension based upon whether the presumed Legislative intent behind the suspension had been satisfied.

Therefore, we reject the argument that to determine whether the statutory conditions for lifting the direct access suspension have been met, we need merely confirm that the underlying purposes for the suspension have been satisfied. In this regard, CACES identifies the following as purposes cited by the Commission for suspending direct access:8

· Assuring a stable customer base from which DWR could recover its bond-related costs, thereby facilitating the bonds being issued at investment-grade ratings;

· Assuring a stable customer base from which DWR could recover its ongoing procurement-related costs of power, and

· Preventing DWR procurement costs from being shifted from direct access to bundled IOU customers

CACES also points to language in a subsequent Legislative committee bill analysis which cited these factors as reasons for suspending direct access.9 In any event, CACES argues that because the original purposes for the direct access suspension have now been addressed, the Commission has discretion to interpret the requirement for suspension as being no longer applicable.

We acknowledge that the underlying concerns previously identified by the Commission as reasons for the suspension of direct access have been addressed in other proceedings. For example, DWR bonds were issued at investment grade, and the Commission established non-bypassable charges for recovery of DWR bond costs. The Commission has also established cost recovery mechanisms for DWR to be reimbursed for its power costs from both bundled and direct access customers. California energy markets have become more stable and the Commission has adopted various policy reforms to eliminate the conditions that prompted the energy crisis of 2000-2001.

Nonetheless, the disposition of such underlying factors is not determinative of whether the suspension can be lifted. Pursuant to the statutory language, the suspension must continue until DWR is no longer supplying power under AB1X, irrespective of whether other conditions arising out of the 2000-2001 energy crisis may have been resolved. We cannot ignore the statutory language even if the reasons that led to the inclusion of that language in the statute no longer exist.

The California Supreme Court has held that "if the statutory language is clear and unambiguous, there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature."10 Regarding the extent of inquiry required to ascertain the meaning of statutory language, "if the language is unambiguous, then the language controls and the inquiry is over."11

Given the range of divergent views concerning how to interpret the meaning of the condition that DWR "no longer supplies power," we acknowledge the need to render an interpretation of whether DWR continues to supply power under AB1X, and if so, what conditions would be sufficient to relieve DWR of the responsibility to supply power. Accordingly, in the following section, we render a statutory interpretation of whether, under current conditions, DWR still supplies power under AB1X. In doing so, we must look to the statutory language to discern whether or when AB1X no longer requires suspension of direct access.

Parties disagree as to the interpretation of what is meant by the term "no longer supplies power" under AB1X. Based upon these differing interpretations, parties disagree as to whether DWR is still supplying power under AB1X. As long as DWR is supplying power, the statute requires that the suspension continue in effect. Once DWR "no longer supplies power" under AB1X, however, the Commission will then have the legal discretion to lift the suspension.

AReM and CACES argue that the phrase "supplies power" should be interpreted to refer to DWR's role in contracting to supply power. DWR's authority to contract for the procurement of power supplies under AB1X ended on January 1, 2003. In this regard, Water Code § 80260 provides that:

On and after January 1, 2003, the department shall not contract under this division for the purchase of electrical power. This section does not affect the authority of the department to administer contracts entered into prior to that date or the department's authority to sell electricity.

AReM argues that the legislative history relating to AB1X supports the interpretation that the suspension of direct access was linked to DWR's authority to contract for the procurement of power. AReM points to the Enrolled Bill Report signed by then-Commissioner Loretta Lynch, which construed AB1X to "suspend the ability of retail customers from selecting alternative providers of electricity until such time as DWR ceases procuring power for retail customers."12

While DWR's authority to enter into new contracts for power expired on January 1, 2003, power continues to be sold to retail customers under DWR contracts executed prior to that date (Water Code § 80260). DWR retains legal title to the power sold under such DWR contracts and is financially responsible for paying all contract-related bills. (Water Code, § 80110.)

Constellation argues, however, that DWR is not supplying the power that continues to be sold to IOU retail customers under existing DWR contracts. Constellation argues that since the responsibility for scheduling, dispatching and delivering power under such contracts was transferred from DWR to the IOUs after January 2003, DWR no longer supplies such power.

Up until January 1, 2003, a two-tiered system had existed whereby DWR and the IOUs each separately dispatched power. This process was described in D.02-09-053:

". . . under the [then-]existing two-tiered procurement system in California, the utilities dispatch their own generating assets and contracts first to determine their net short position, and DWR dispatches its contracts and procures additional resources as necessary to meet the combined net short of all three utilities. (D.02-09-053 at 37.)

However, this two-tiered procurement system ended as the utilities resumed control of all dispatch functions effective January 1, 2003. At that time, the DWR contracts were placed within the IOUs' resource portfolios, under procedures adopted in D.02-09-053. Although DWR continued to hold legal title to the electricity sold under existing DWR contracts, responsibility for dispatching such power was assigned to the IOUs beginning in January 2003. D.02-09-053 directed the three major IOUs to integrate the DWR contracts into their respective generation resource portfolios, using a least-cost dispatch for the integrated portfolio, and to assume all operational, dispatch, and administrative functions for the DWR Contracts. As stated in D.02-09-053:

"The utilities can now move forward with their procurement planning knowing exactly what DWR contracts they will need to integrate into their resource portfolios. Today's decision eliminates the current two-tier procurement system in California that was put in place on a temporary basis, and only under emergency circumstances, until the utilities could resume their procurement role. As described in this decision, the utilities will now perform all of the day-to-day scheduling, dispatch and administrative functions for the DWR contracts allocated to their portfolios, just as they will perform those functions for their existing resources and new procurements. Legal title, financial reporting and responsibility for the payment of contract-related bills will remain with DWR." (D.02-09-053 at 5.)

Constellation argues that while DWR still sells power in that it holds legal title to power dispatched under existing contracts, DWR is not supplying such power given the termination of its responsibilities for day-to-day scheduling, dispatch, and administrative functions for the power sold under DWR contracts. Constellation argues that the "common understanding" of the terms "supplying" and "selling" are different, and that if the Legislature wished to have direct access suspended while DWR was "selling" power, it could have easily said so. Constellation argues that the Legislature used the terms "delivery," "transmits," or "sells," when describing DWR's retail sales functions. Constellation claims that there is no basis to equate the term "supplies" with DWR's retail sales function. Accordingly, AReM, CACES, and Constellation believe that there is no statutory impediment to the Commission's authority to reopen direct access.

Opposing parties argue, however, that DWR is currently supplying power, by virtue of having an ownership interest in the power sold under the DWR power contracts. TURN argues that the Commission has repeatedly characterized DWR as supplying power, as the owner and seller of the power that is delivered to retail customers under DWR contracts.13 TURN argues that even though the utilities assumed responsibility for DWR contract administration after January 1, 2003, the Commission still referred to "energy supplied by DWR to the utility" in describing how the DWR energy payment was to be allocated after January 1, 2003.14 TURN thus argues that DWR continued to supply power after January 1, 2003, based upon how the Commission has applied that terminology.

TURN further argues that DWR, itself, has characterized its function as that of supplying power in its own published annual "Revenue Requirements Determinations." For 2007, DWR identified the level of energy "projected to be supplied on behalf of the retail electric customers of the IOUs through [DWR's] long term power contracts." DWR also stated that if one or more of DWR's contracts are terminated, energy "no longer supplied by DWR" would need to be replaced.15 TURN points to such statements as further confirmation that DWR still supplies power to retail customers under AB1X. TURN thus argues that direct access suspension must continue as long as DWR has an ownership interest in any DWR power contract.

3.2.1. Discussion

As a basis to discern whether the statutory requirement that DWR "no longer supplies power" under AB 1X has been satisfied, we consider the alternative interpretations offered by parties of the statutory language. As described above, parties have presented essentially three possible interpretations of AB 1X. Briefly, these interpretations equate DWR's supplying of power with one of the following:

We reject the interpretation that presumes that DWR no longer supplied power once its authority to enter into new power contracts ended on January 1, 2003. The loss of authority to enter into new contracts to procure power is distinctly different from the supplying of power by sales to retail customers. Execution of contracts for the procurement of power was merely a means for DWR to secure contractual rights to sources of power supply to provide for ultimate sale to retail customers. Power is supplied, however, when it is sold to the retail end user. Even though DWR ceased to contract for new sources of power supply after January 1, 2003, power has continued to be supplied through the scheduling, dispatch and delivery of power sold to retail customers under existing DWR contracts executed prior to 2003.

The term "power" in this regard is defined as "electric power and energy, including but not limited to, capacity and output or any of them." (Water Code § 80010(f).) Based on its legal rights under existing contracts, DWR still owns the power supplies that continue to be delivered to retail customers from existing contracts.

We disagree with Constellation's contention that the selling of power does not constitute the supplying of power. Power clearly continues to be dispatched and sold to retail customers under DWR contracts that have continued in effect since January 1, 2003. From the retail customer's perspective, it makes no difference that the power being supplied to them is dispatched and sold pursuant to DWR contracts that were executed prior to 2003. These contracts are still in effect. Power is still being supplied to retail customers pursuant to DWR contracts.

The statutory language does not permit the direct access suspension to be lifted merely because DWR no longer has authority to enter into new contracts. If the Legislature had intended to lift the direct access suspension once DWR no longer had authority to enter into new contracts, the Legislature could have simply specified the date of January 1, 2003 for the lifting of the suspension, or it could have referred to the time when DWR was no longer entering into new contracts. As the Legislature failed to use such language, we reject this first proffered interpretation of the language "no longer supplies power."

We likewise find no support for the second proposed interpretation that statutory requirement was satisfied once the responsibility for day-to-day dispatch and scheduling functions for power sold under DWR contracts was transferred to the IOUs. Certainly, the IOU is now responsible for scheduling and dispatch of the DWR power, and in that capacity is instrumental in delivering the DWR power to retail customers. DWR is no longer performing operational functions associated with the day-to-day scheduling, dispatch and delivery of DWR power to retail customers as it previously performed prior to 2003.

Nonetheless, the transfer of such operational functions from DWR to the IOUs on January 1, 2003 did not terminate DWR's role as supplier of power under AB1X. Such operational functions were not identified in the statutory language that requires that direct access remain suspended until DWR "no longer supplies power." Just because the responsibility for these operational functions was transferred from DWR to the IOUs, DWR did not thereby cease to supply power under AB1X.

Indeed, if we look at the reasons for the suspension of direct access mentioned above, we find that this interpretation of the term "supplies power" would not bear "a reasonable relation to statutory purposes." The purposes for requiring a suspension of direct access previously mentioned include: assuring a stable customer base for the recovery of bond and power costs, facilitating the bonds being issued at investment-grade ratings; and preventing cost shifting. The transfer of operational functions to the IOUs did not particularly assure a stable customer base for paying DWR costs, assure that the bonds would be issued at investment-grade ratings, or prevent cost shifting. These concerns have been addressed by other mechanisms, including the imposition of the "Cost Responsibility Surcharge." The transfer of operational functions to the IOUs did not obviate the concerns that apparently led to the direct access suspension. Therefore, it would be inconsistent with the statutory purposes to conclude that the legislature meant - when it said that the suspension of direct access could be lifted when DWR "no longer supplies power" - that the suspension could be lifted just because the IOUs had taken over the dispatch and scheduling functions for DWR power.

We conclude that the third possible condition identified above as a basis for interpreting the point where DWR no longer supplies power is the correct one, namely, where DWR no longer has any ownership interest in the power that is sold to retail customers. This interpretation is the only one that bears a reasonable relation to the statutory purposes and language. Consistent with this interpretation, the DWR power continues to be "supplied" by the entity that legally "owns" and "sells" the power. That entity is DWR.

The legal responsibilities that still apply to DWR in supplying power are described in D.02-09-053, as follows:

Legal title to the contracts resides with DWR. Financial reporting responsibilities, including those associated with the DWR revenue requirements proceeding and Trust indenture reporting requirements, will also remain with DWR. In addition, DWR will be financially responsible for paying all contract-related bills. ....

As financial obligor under the allocated contracts, DWR will also need to monitor performance of the generators under the contracts to enable DWR as the contract counter party to make decisions related to actions to be taken in the event of performance issues with generators, contract disputes, defaults, or to defend DWR in the event of counterparty claims against DWR. In undertaking these actions, DWR should work in concert with the utilities through provisions to be incorporated into the operating agreements. (D.02-09-053 at 46.)

Although the IOU performs the operational functions associated with DWR power supplies, DWR retains the role of owner and seller of the power to retail customers. Water Code § 80002.5 states that "[i]t is the intent of the Legislature that power acquired under this division shall be sold to all retail end use customers served by electrical corporations, ...."

Water Code § 80104 explains that "[u]pon the delivery of power to them, the retail end use customers shall be deemed to have purchased that power from [DWR]. Payment for any sale shall be a direct obligation of the retail end use customer to the department." Customers are supplied with power at the point of purchase. In turn, the purchase occurs "upon the delivery of power" pursuant to Water Code § 80104. Therefore, DWR "supplies power" under the statute upon the sale of the DWR power to retail end use customers. In this regard, Water Code § 80110 provides in relevant part:

[DWR] shall retain title to all power sold by it to the retail end use customers. [DWR] shall be entitled to recover, as a revenue requirement, amounts and at the times necessary to enable it to comply with Section 80134, and shall advise the commission as the department determines to be appropriate.

Although the IOU performs billing and collection functions associated with DWR power sales, the revenues associated with the sale of the power belong to DWR.16 We therefore conclude that under AB1X, DWR continues to supply power since it (a) owns the power that is produced under existing DWR contracts, and (b) sells such power to retail customers upon delivery to them. This conclusion is consistent with the use of the term supplying power in the prior Commission decisions in the context of AB1X. In D.01-03-081, for example, we began to develop a method for remitting funds to DWR for energy delivered to retail customers pursuant to DWR contracts. In that decision, we stated that remittances to DWR should occur "no later than 45 days after DWR supplies power to the utilities' retail end-use customers." (Emphasis added.)17 This reference to supplying power necessarily means the actual delivery and sale of the power to retail customer marks is the time when power is supplied.

In summary, although DWR ceased to contract for new supplies of contract power after January 1, 2003, DWR continues to "sell" power to retail customers under contracts executed prior to January 1, 2003. By virtue of holding legal title to the power and selling it to retail customers, DWR-not the IOUs -- supplies the power under AB1X. Therefore, the Commission cannot lift the direct access suspension at this time because the suspension can only be lifted when DWR "no longer supplies power." (Water Code § 80110.) Such is not the case at present time.

One way to satisfy the statutory condition that DWR no longer supplies power, however, is through the expiration of existing DWR contracts. After the contracts have expired, DWR will no longer supply power under AB1X since it will no longer have any ownership interest in power that is sold to retail customers. As explained in Section 4, however, we will consider the merits of possible alternative approaches to satisfy the statutory condition so as to allow the suspension to be lifted on a more expedited basis.

As part of Phase I, we also consider whether AB1X can be interpreted to permit the suspension of direct access to be phased out in stages as individual DWR contracts expire.18 We solicited parties' legal arguments in Phase I as to whether such an interpretation is legally supportable under the provisions of AB1X, whereby the statutory restriction that DWR no longer supply power would be construed on a contract-by-contract basis.

3.3. Parties' Positions

Certain parties suggest that even if the statute is interpreted to refer to power supplied under existing DWR contracts, direct access could still be reinstituted on a partial basis prior to 2017, as contracts expire. The DWR contracts do not expire simultaneously, but expire in gradual increments over a period of years. Some DWR contract quantities are exclusively subject to must-take clauses, some quantities are dispatchable on a least-cost basis, and others include a combination of both must-take and dispatchable purchases.

According to a DWR report issued in March 2006,19 the number of active DWR contracts as of that date had been reduced from 59 to 33, with the cost of the portfolio reduced from $42.5 billion to $24.8 billion. By 2010, the cost of the remaining portfolio is expected to be $6.1 billion, or about one-seventh of the original liability. In 2001, DWR contracts covered 35% of the IOU's peak demand and energy requirements. By 2010, the remaining long-term contracts will cover only 15% of the IOU requirements.20 The vast majority of DWR contracts are scheduled to expire by 2011.21

AReM denies that the term "supplies power" requires direct access suspension until the very last DWR contract expires. AReM argues that such an interpretation is unreasonably extreme and would preclude resumption of direct access even if just one contract remained for one Megawatt (MW).

CACES likewise argues that if the suspension were deemed legally binding until the very last DWR contract has expired, then the Commission's Constitutional authority could be undercut by private parties that could extend their DWR contracts for any time period. CACES argues that such an action would constitute a usurping of the Commission's decision-making authority. CACES argues, however, that California courts have held that the Commission's constitutional and regulatory authority cannot be limited by private contracts, especially where potential discriminatory results may occur. CACES argues that continued suspension of direct access based upon such action by private parties would unduly prolong the current restrictions on customer choice, which CACES characterizes as discriminatory.

Specifically, parties suggest that additional capacity might be opened up to direct access corresponding to the capacity in each respective DWR contract as it expires. CACES suggests that while the specific mechanics of a gradual lifting of the suspension between 2010 and 2015 could be addressed in Phase II of the proceeding, the Commission can confirm in Phase I that a partial lifting would be consistent with Water Code § 80110 and within the Commission's jurisdiction.

AREM and CACES thus argue that even if the Commission decides that a full lifting of the suspension is statutorily precluded at this time, then a partial lifting of the suspension should be considered to be legally permissible as individual DWR contracts expire. In the event that the Commission elected to lift the suspension based on such a legal interpretation, AREM proposes that an initial increment of direct access be authorized up to the amount of MW capacity of terminated or expired DWR contracts as of the time of the order, with additional increases in allowable direct access transactions each year thereafter based on the amount of additional DWR contract amounts that expired or terminated in the preceding year. CACES believes that the specific mechanics of how such increased allowances would be allocated could addressed in Phase III of this proceeding.

TURN disagrees with the claim that there is any legal basis for a partial lifting of the suspension. TURN argues that there is no reference in the statute linking or relating the duration of the direct access suspension to the magnitude of annual quantities of power supplied by DWR. TURN argues that the notion that the suspension could be partially lifted based on annual fluctuations in DWR-delivered energy is at odds with the plain language of AB1X as well as the reasonable expectations held by legislators at the time. TURN believes that the Commission has no legal authority to lift the direct access suspension until the last DWR contract expires, currently due to occur in 2017.

TURN attached, as Appendix B of its comments, a copy of a letter dated May 23, 2007, authored by four members of the California Legislature to Commissioner Michael R. Peevey. In the letter, the authors stated the following in reference to AB1X:

"There is nothing in this language to suggest that the legislature intended to allow the suspension to be lifted as individual DWR contracts expire. When AB1X was enacted, the legislature could not have known the quantity or duration of the contracts that DWR would execute. Accordingly the statute provides no indication that the length of the suspension could be linked to the duration of a subset of the DWR contracts. The suspension can only be lifted once DWR no longer supplies any power at all."

TURN thus argues that this letter from legislators supports the view that AB1X requires that the direct access suspension continue until DWR no longer supplies any power at all, which would only occur when the last DWR power contract expires.

3.3.1. Discussion

We decline to make a finding on this question at present. As discussed below, we choose for both policy and legal reasons to proceed with Phase II of this proceeding in which we will consider the merits of possible alternative approaches to satisfy the statutory condition so as to allow the suspension to be lifted on a more expedited basis. Because a partial lifting of the ban on direct access would not entirely remove DWR from its role as a power supplier, we decline to consider this approach.

5 AREM Comments at 7, citing Golden State Homebuilding Ass'n v. City of Modesto, (1999) 26 Cal. App. 4th 601, 608.

6 See e.g., Greyhound Lines, Inc. v. Public Utilities Commission, 68 Cal. 2d 406, 410 (1968).

7 D.03-06-035, mimeo., pp. 4-5.

8 See D.01-09-060, pp. 4, 5, and 8.

9 CACES cites to Senate Energy Committee Analysis of AB 428, dated July 8, 2003. However, AB 428 was from a subsequent legislative session and was never enacted into law. Thus the citation to this legislative history has limited value for purposes of interpreting AB 1X requirements.

10 Lungren v. Deukmejian, (1988) 45 Cal. 3d 727, 735.

11 See D.04-04-029 on p. 4.

12 AReM Petition at 24 (emphasis added).

13 See D.02-12-069, which refers to DWR supplying power by providing electricity for delivery to retail customers, even though the IOUs would be scheduling and dispatching power.

14 D.02-12-069, Appendix C, pp. 6-7.

15 TURN Brief, page 10, citing DWR 2007 Revenue Requirements Determination, pp. 21 and 24.

16 See D.02-12-069 and D.02-02-051 which adopted the "Rate Agreement." The central feature of the Rate Agreement was the irrevocable commitment by the Commission under Pub. Util. Code § 840 et seq., to set charges for electricity sold by DWR that would recover DWR's power-related and bond-related costs.

17 D.01-03-081, Conclusion of Law 9.

18 2017 is the year the last DWR contract is scheduled to expire.

19 See CACES Comments at 18, citing web site reference at http://wwwcers.water.ca.gov/energy_contracts.cfm.

20 Id. at 18.

21 See the DWR Revenue Requirement Determination for 2007, submitted to the Commission on August 2, 2006, pursuant to Sec. 80110 and 80134 of the Water Code, pp. 22-24, TABLE D-5 LONG-TERM POWER CONTRACT LISTING.

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