8. Comments on Proposed Decision

The proposed decision of the ALJ in this matter was mailed to the parties in accordance with Section 311 of the Public Utilities Code and comments were allowed under Rule 14.3 of the Commission's Rules of Practice and Procedure. Comments were filed on February 20, 2008 by AREM, SCE, NAPP, DRA, EnerNOC and EnergyConnect, Alternative Energy Resources, and Energy Curtailment Specialists, and reply comments were filed on February 25, 2008 by DRA, SCE and EnerNOC.

In Reply Comments, DRA supports the proposed decision. DRA believes the proposed decision committed factual and legal error by excluding provisions to make the approved contracts more reliable and cost-effective. Other commentors believe the proposed decision should be modified to approve more than two of the eight proposed contracts. SCE suggests the Commission should consider approving a portfolio approach to cost-effectiveness, and recommends approval of all contracts that, as a portfolio, still meet the benefit/cost ratio of 1.0. NAPP claims the proposed decision errs because its findings of fact that the contracts are not cost-effective as a whole, and there is no immediate need for the contracts for reliability purposes, conflict with Commission policies and decision, concerning the need for price-responsive demand response program. EnerNOC makes similar claims. EnergyConnect claims all of the eight contracts are cost-effective, when measured against current construction costs for new generating capacity. AREM seeks modification of the proposed decision to specify that there will be an equitable allocation of the resource adequacy impacts associated with approved contracts.

We have received the comments. We find no legal error. We have modified the proposed decision to adopt SCE's proposal to approve all contracts that are cost-effective on a portfolio basis, based upon date contained in SCE's Confidential Appendix D of its testimony. We also modify the proposed decision to clarify the discussion of reliability as it relates to demand response, and make other clarifications. We decline to make other suggested changes.