3. Application for CPV
SCE filed an application on February 28, 2007, seeking the following findings:
¬ That SCE's conduct in respect to the fast-track RFO was reasonable; and
¬ That the CPV PPA is needed to preserve system reliability; that the contract is reasonable and prudent; that the CPV payments are recoverable in full through rates or other Commission authorized cost recovery mechanism, subject only to SCE's prudent administration of the contract; and that SCE is to allocate the costs and benefits of the CPV contract to all benefiting customers in accordance with D.06-07-029.
A prehearing conference (PHC) was held on March 27, 2007. On April 2, 2007, the Division of Ratepayer Advocates (DRA) was the only party that filed a protest. Based on the limited issues raised in the protest, one day of evidentiary hearing was scheduled for May 30, 2007.
DRA served intervenor testimony, as did Californians for Renewable Energy (CARE). CARE, DRA and SCE participated in the evidentiary hearings; CARE, DRA and SCE filed post-hearing opening briefs; and DRA and SCE filed reply briefs.
3.1. Intervenors
DRA
DRA, from the filing of its protest forward, has argued that the energy from the CPV PPA is not needed until 2011. Therefore, the Commission should not approve the contract with an on-line date of August 1, 2010. DRA alleges that if the start date of the resource can be postponed until 2011, ratepayers will save millions of dollars. In summary, DRA does not address whether or not the CPV PPA was an appropriate choice from the RFO, but only whether the resource is needed in 2010 when it is scheduled to come on-line.
DRA argues that the Commission's directive in D.06-07-029 to SCE to solicit up to 1,500 MW of new generation was not a pre-approval of SCE's need for more resources. SCE still has to justify its need numbers going forward, and DRA claims SCE did not meet that burden. DRA argues that SCE presented "no fewer than four (4) sets of projected need numbers between the time of the filing of the Application [February 28, 2007] and the time of this brief [June 20, 2007]."7 From DRA's perspective, the use of different forecast numbers by SCE makes it difficult for anyone to do a thoughtful analysis of what SCE's need actually is at any particular point in time. DRA argues that the different need tables are not easily comparable because they use varying imputs for planning and operating reserves, and present need numbers assuming a "worst-case scenario." In some tables, the projected retirement numbers are different, and in other tables SCE cuts its forecast for demand response programs. DRA cross-examined SCE's witness Minick on the differing forecast numbers, and Minick suggested "split the difference."8
DRA recommends that SCE use the more substantiated California Energy Commission (CEC) forecast for demand beyond 2007 that indicates a demand of 28,511 MW total for South of Path 15, instead of SCE's own forecast that shows a need of 29,062 MW. DRA argues that SCE should not rely on its own forecast when that forecast is so significantly different from the CEC forecast, and SCE failed to present adequate justification for the difference. When DRA develops its own forecast for South of Path 15, using the CEC forecast, DRA finds that "SCE posts a robust 2,073 MW of excess capacity in 2010."9
Therefore, based on this forecast, DRA urges the Commission to deny the application for the CPV resource because ratepayers will save many millions of dollars if the PPA is delayed until SCE actually has a need for the resource.
CARE
CARE also questions whether the CPV resource is needed. From CARE's analysis of SCE's data, SCE fails to present any empirical basis for its assumptions about plant retirements. Therefore, CARE argues that SCE has no evidentiary record to support building new facilities. CARE's primary concern, however, is with the Blythe facility and we are deferring any discussion of that facility at this time.
7 DRA Opening Brief, June 20, 2007, p. 5.
8 Id., p. 6, citing RT, p. 53.
9 Id., p. 10.
