11. Implementation Issues

Today SRAC energy prices are posted monthly. Upon determination that Section 390(c) has been satisfied, QFs (with the exception of wind and run-of-river hydro) will be paid on the basis of an hourly price. Parties did not address the procedures for posting hourly prices (or monthly prices for wind and run-of-river hydro) using the PX price or GMMs. Parties should address posting procedures in Phase 2. Likewise, parties did not address whether revisions to any accounting procedures are required by the move to a PX-based price. Parties should be prepared to address this issue at the Phase 2 prehearing conference.

During the proceeding there was some discussion of the cost associated with implementing various options. Because we adopt a pricing approach that relies on publicly available information sources, there is no incremental cost for the inputs to the pricing formula. Because of the move from a monthly posting to payments based on hourly prices, there may be some additional cost associated with administering the QF contracts. Implementation costs will be evaluated for reasonableness in the Annual Transition Cost Proceeding where QF contract administration is already considered.

In R.99-11-022 we indicated that the price we adopt in this decision will serve as the basis for the true-up for one-time switcher adopted in D.99-11-025. The PX-based price, adjusted consistent with Section 390(d), that we adopt today is the same price we adopted in D.99-11-025. The record in this proceeding is clear that the value of capacity, as defined by Section 390(d), has been zero since D.99-11-025 was issued. For that reason, no true-up is required and payments made subject to the one time switch should be considered final.

Some QF parties have proposed that we require utilities allow QFs the option to bid their output into the market rather than have the utilities schedule the power. This subject was not within the scope of the proceeding. However, we note that QFs are free to engage in discussions with utilities to modify the terms of their contracts in this manner at any time. We will not require the utilities to offer such an option at this time.