VIII. Responses to CCC's Comments
on Remand Period Energy Prices
PG&E contends it properly responded to the ALJ's Ruling for energy information and that PG&E's energy price information specifically excludes DWR's costs as these are "irrelevant," since such costs are not PG&E's costs. PG&E argues that manipulated spot market prices bore no relationship to the underlying cost of energy, and were declared unjust and unreasonable by FERC; and that as a result, FERC established "just and reasonable" rates by calculating an MMCP. PG&E adds that even the MMCP is a cap, and that actual prices will be equal to or less than the MMCP. PG&E further argues that the Commission also determined not to use unreasonable market costs in SRAC determinations53 and therefore CCC's observation that SRAC prices were less than manipulated spot market prices is irrelevant. PG&E believes that the MMCP may be too high, but it is the most appropriate measure of avoided costs. PG&E concludes that the Commission must reduce posted SRAC prices during the Remand Period to comply with PURPA and the Court's order.
Edison also argues that unjust and unreasonable rates represented by prices charged in the PX and ISO markets cannot be used to measure avoided costs. Edison explains that the MMCP set a threshold above which the "just and reasonable" standard was violated, and thus is a maximum measure of avoided costs, and that the load power provided by QFs is better represented, not by spot market purchases, but by the price blocks of purchased DWR power. Finally, Edison contends PURPA requires that rates for QF purchases be calculated based on avoided costs at the time of delivery, and not whether SRAC prices are an approximation of avoided costs over time.
SDG&E states it did not include any DWR costs in its energy price data as those cost were the direct obligation of SDG&E's customers to DWR, and "SDG&E did not purchase the energy - DWR did."54
IEP supports CCC's comments and contends the utilities' energy price data is incomplete and erroneous. IEP also argues there were no hours during the Remand Period in which there were any capacity values in the reported PX prices.
53 See, D.96-07-026, 66 CPUC 2d 780, pp. 783-4, excluding Transwestern pipeline capacity costs from avoided cost calculations. 54 SDG&E cites D.02-09-053 as confirming the allocation of DWR contracts among IOUs for operational administration as opposed to a direct assignment of the contracts.
