X. Do Section 390 Requirements
Apply to the Court's Remand?
Parties recommending refunds have argued that SRAC prices during the Remand Period were incorrect under § 390. These parties argue that gas prices at Topock were not robust and therefore did not meet the requirements of D.96-12-028. In D.01-12-025 we stated that we might consider whether this lack of robustness resulted in prior SRAC price postings that did not meet the requirements of § 390.55 Subsequently, we determined that gas prices at the California border were manipulated, and we advocated this fact before FERC.56
While we believe gas border prices during the Remand Period were not robust, the issue before us is whether this lack of robustness means that we should retroactively apply the modified formula, or similar pricing mechanism, to the Remand Period and determine new SRAC prices. We note that new evidence indicates this lack of robustness also applies to Malin gas prices that were also manipulated during the Remand Period.57 This evidence is one reason why no party now recommends that the modified transition formula be applied retroactively. However, despite the gas manipulation at both Topock and Malin, the Court did not direct us to determine new SRAC pricing methods. As noted by CCC,58 the Court addresses only the modified formula adopted in D.01-03-067. Furthermore, the Court did not ask us to resolve conflicts between § 390 and PURPA. Edison addresses this potential conflict in responding to the question, "In a non-robust market situation, does § 390 conflict with PURPA regarding the determination of avoided cost? If so, how should the Commission address this?" Edison asserts that "...in the case of a direct conflict between PURPA and Pub. Util. Code § 390(b), PURPA controls, as the Court of Appeal plainly decided in Edison."59 Clearly, the Court in remanding this matter to the Commission did not remand based on the SRAC transitional formula, the gas prices in the formula, the robustness of gas prices, or the requirements of § 390. The Court's Remand does not ask whether we should determine if gas prices were manipulated, or if gas prices were correct. Instead, the Court addressed whether there was record evidence to support a determination that SRAC prices were correct during the Remand Period and that the Commission complied with the Congressional mandate that public utilities not pay QFs more than avoided costs under PURPA. Therefore, we consider the following matter.
55 D.01-12-025, p. 4. 56 Opening Comments of PG&E/ORA/TURN filed February 17, 2004, pp. 8-13. 57 See Edison Comments, Feb. 17, 2004, p.10-11; and, Staff Final Report on Price Manipulation in Western Markets, Docket No. PA02-2-000 (March 2003), pp. IV-4 to IV-8. 58 Comments of the CCC, Feb. 7, 2003, pp. 23-24. 59 See Opening Brief of Edison, February 17, 2004, pp. 13-14.
