10. Reopener Provision

We have adopted the PX day-ahead market clearing price as the short-run avoided cost of energy. We have done so because the PX price clearly complies with Section 390(c), and because more than 90% of utility purchases are made in the day-ahead market. If significant percentages of utility purchases move to other markets, it makes sense to revisit whether the PX day-ahead price continues to properly represent utility avoided cost. The record does not provide specific guidance regarding the level at which purchases outside of the day-ahead market should be considered grounds for revisiting or modifying our selection of the PX day-ahead price. In addition, in a workably competitive market, prices for similar products should converge (CCC Ex. 3, 13:11-14), so the PX day-ahead price may still represent a reasonable approximation of utility avoided cost even if large amounts of energy are purchased outside the day-ahead market. Instead of adopting a specific reopener provision we direct the utilities to alert us, through a filing in this docket or other appropriate docket if this proceeding is closed, when on average, more than 50% of their purchases are outside of the PX day-ahead market over the prior six months. The filing should include an assessment of whether the PX day-ahead price continues to represent the utility's avoided cost or whether a new PX-based price should be considered. Other parties may also make a filing in this, or other appropriate docket, if they believe the functioning property criteria are no longer met.