Discussion
Monsanto's petition seeks to add language to D.96-10-036 that supports its interpretation of the USO1 contract language. At its heart, Monsanto's petition argues that SDG&E improperly implemented D.96-10-036 by modifying its USO1 contract to require contract holders to bid into and be paid by the PX. Monsanto's proposed modifications to D.96-10-036 would limit applicability of Section 30 of the USO1 contract until such time as the Commission makes a finding that the PX is functioning properly under Section 390.
A clear reading of D.96-10-036 and the executed USO1 contract does not support Monsanto's contention. D.96-10-036 states:
"New QFs will be, as soon as the restructured market begins operation, "subject to the same protocols and prices regarding transmission access and treatment of transmission congestion." (D.95-12-063, p. 34.) They will clear the power exchange if they bid low enough relative to all other sources to clear the market. n22 [footnote omitted].
"Severable from the issues associated with changes to avoided cost pricing proposed or required by law, such QFs will have to bid directly into the power exchange, and clear the market at their bid price in order to run. They will have no right to be included in the local distribution company's (LDC's) submitted schedule as a must-take resource, although they may use the LDC as a schedule coordinator to submit bids to the power exchange (not on a must-take basis) if they choose." (68 CPUC2d 434, 454-455.)
Monsanto argues that the phrase "[s]everable from the issues associated with changes to avoided cost pricing proposed or required by law," as quoted above, links changes to USO1 pricing to implementation of Section 390 and a determination that the PX is functioning properly. Because the Commission has not made the required finding under Section 390, Monsanto argues that SDG&E could not modify its USO1 to require as-available energy production to be sold at PX prices. Monsanto also argues that Section 30 of the contract cannot govern payments to Monsanto because it was "unilaterally drafted by SDG&E" and does not conform to Public Utilities Code Section 390.3
However, Finding of Fact 1 states: "Until 1998, it is reasonable to continue making the uniform standard offer one and standard offer three agreements available to QFs to sign provided that prices and advantages relative to the restructured market are eliminated." (68 CPUC2d 434, 456, emphasis supplied.) By this language, it is evident that D.96-10-036 was intended to eliminate price advantages of new USO1 contracts, not just deal with dispatch of power, despite the severability discussion in the dicta.
Further support for SDG&E's interpretation of D.96-10-036 comes from reviewing PG&E's modified USO1 contract. (See PG&E response, Attachment (A.) PG&E's contract contains a greater level of detail in its Section 30, but with the same outcome as SDG&E's-holders of new USO1 contracts must bid into and receive payments from the PX. To our knowledge, no complaints regarding improper implementation of D.96-10-036 have been filed with the Commission.
Monsanto's petition to modify should be denied.
3 We note that despite the protestations in its petition, Monsanto signed the USO1 contract and did not raise concerns about whether SDG&E had improperly implemented the decision until almost a year later in its petition.
