Discussion

On January 31, 2001, the PX day-ahead market ceased operation. Functionally, QFs can no longer switch to PX pricing because the PX no longer exists. The marketplace has already accomplished suspension of that option. However, we take this opportunity to affirm the ruling by Assigned Commissioner Wood implementing a moratorium on this option on January 11, 2001.

Next, QFs who exercised their one-time option to switch to PX pricing prior to January 11, 2001, cannot be paid as set forth in D.99-11-025 from January 31, 2001 forward, as the PX day-ahead market no longer exists. In addition, effective January 19, 2001, the PX notified PG&E that it would no longer be able to trade in the PX day-ahead market without posting collateral. Prior to exercising the one time switch option, such QFs were paid pursuant to the Transition Formula adopted in D.96-12-028. Since the PX day-ahead market is no longer operational, all QFs paid short-run avoided costs should once again receive payments based on the Transition Formula adopted in D.96-12-028, or as modified. Although this decision might once have been controversial, cessation of PX day-ahead market operations makes this a logical outcome and we adopt it, effective January 19, 2001.

Comments on Draft Decision

The draft decision of ALJ Cooke in this matter was mailed to the parties in accordance with Section 311(g)(1) of the Public Utilities Code and Rule 77.7 of the Rules of Practice and Procedure. Rule 77.7(f)(9) provides for reduction or waiver of the 30-day period for public review and comment when public necessity requires such reduction. We must balance whether the public necessity of adopting an order outweighs the public interest in having the full 30-day review and comment. We are convinced that this draft decision falls under Rule 77.7(f)(9), and for that reason, we established a shortened period for comments on the draft decision.

Finding of Fact

1. The PX notified PG&E that it would no longer be able to trade in the PX day-ahead market without posting collateral effective January 19, 2001.

2. The PX ceased day-ahead market operations effective January 31, 2001.

3. QFs who exercised their one-time option to switch to PX pricing prior to January 11, 2001, cannot be paid as set forth in D.99-11-025 from January 31, 2001 forward, as the PX day-ahead market no longer exists.

Conclusions of Law

1. QFs should not be able to switch to PX pricing under § 390(c) effective January 11, 2001.

2. QFs who exercised their one-time option to switch to PX pricing prior to January 11, 2001, should be paid for their output after January 19, 2001 under the Transition Formula adopted in D.96-12-028, or as subsequently modified.

INTERIM ORDER

IT IS ORDERED that effective January 19, 2001, Pacific Gas and Electric Company shall pay Qualifying Facilities who exercised their right to switch to Power Exchange pricing based on the formula adopted in Decision 96-12-028, or as subsequently modified.

This order is effective today.

Dated , at San Francisco, California.