Discussion
In D.01-06-015, the Commission approved an excess energy payment provision similar to the one adopted for the year 2000. On June 26 2001, SCE filed a Motion Submitting for Commission Approval of Additional QF Contract Amendments and Revised "Excess Energy" Amendments, and for Additional Commission Findings Re Previously Submitted Form and Executed QF Agreements (the "June 26 Motion"). The Commission approved SCE's motion in D.01-07-031, with the exception of SCE's proposed excess energy amendments, which are addressed herein.
In its motion, SCE proposes two different excess energy amendments, one similar to that adopted by the Commission in D.01-06-015, the Above-Baseline Sales Amendment, and a second that is designed to work with a proposal by the Federal Energy Regulatory Commission (FERC) for a market-based excess energy price, the Excess Power Amendment.
The Commission has not endorsed the approach advocated by FERC to allow QFs under contract with utilities to sell power at market rather than contract prices. We do not today approve SCE's proposed Excess Power Amendment that reflects that FERC proposal.
However, the Above-Baseline Sales Amendment proposed by SCE is consistent with the provisions adopted in 2000 and again in D.01-06-015 for excess generation. In this amendment, SCE proposes to pay QFs up to 200% of the SRAC price during certain hours as an incentive to produce as much power as possible when that power is most needed. We find that SCE's proposal is reasonable, and consistent with our prior decisions.
Need for Expedited Consideration
Rule 77.7(f)(9) of the Commission's Rules of Practice and Procedure provides in relevant part that:
"...the Commission may reduce or waive the period for public comment under this rule...for a decision where the Commission determines, on the motion of the party or on its own motion, that public necessity requires reduction or waiver of the 30-day period for public review and comment. For purposes of this subsection, "public necessity" refers to circumstances in which the public interest in the Commission adopting a decision before expiration of the 30-day review and comment period clearly outweighs the public interest in having the full 30-day period for review and comment. "Public necessity" includes, without limitation, circumstances where failure to adopt a decision before expiration of the 30-day review and comment period...would cause significant harm to public health or welfare. When acting pursuant to this subsection, the Commission will provide such reduced period for public review and comment as is consistent with the public necessity requiring reduction or waiver."
We balance the public interest in quickly resolving QF pricing and payment issues against the public interest in having a full 30-day comment cycle on the proposed amendment. We conclude that the former outweighs the latter. We must respond quickly to provide additional assurance that as much QF generation is available as possible this summer. Parties may submit comments on this decision by July 31, 2001. In addition, comments should also be provided to Commissioner Lynch's office by e-mail at gig@cpuc.ca.gov, no later than July 31, 2001. No provision is made for reply comments.
Findings of Fact
1. The Commission has a long-standing policy of supporting beneficial non-standard contract provisions.
2. SCE presented proposed contract amendments to encourage QFs to provide additional generation above their historic levels during key hours this summer.
3. The terms of SCE's Above-Baseline Sales Amendment taken together are reasonable.
4. SCE's entry into the Above-Baseline Sales Amendment is reasonable and prudent.
5. All terms and conditions of the Above-Baseline Sales Amendment as to which Commission approval is required, as defined in such agreements, are reasonable and prudent for all purposes, including recovery through rates of any payments made pursuant to such terms, subject only to review for reasonableness of SCE's administration of the submitted agreements.
6. The terms and conditions of the Above-Baseline Sales Amendment will supersede any prior decision, ruling or order of the Commission pertaining to the subject matter of such agreements, and that no further Commission order, decision or ruling will alter, amend or increase the obligations and corresponding benefits created by such terms and conditions.
7. Insofar as terms and conditions of the Above-Baseline Sales Amendment do not expressly require Commission approval, as defined in those agreements or otherwise, such agreements are nevertheless in all respects prudent and reasonable, and any payments made pursuant to such agreements shall be fully recoverable in rates, subject only to review (unless otherwise noted above) for reasonableness of administration of such agreements.
8. The Excess Power Amendment reflects a proposal by the Federal Energy Regulatory Commission which the Commission has not endorsed.
9. The terms of the Excess Power Amendment are not reasonable.
Conclusion of Law
SCE should be authorized to recover all costs associated with payments made under the approved contract amendments, subject only to Commission review of the reasonableness of future administration of the amendments.
Therefore, IT IS ORDERED that:
1. The Above-Baseline Sales non-standard contract amendment specified herein, submitted by Southern California Edison Company (SCE) is approved, in its entirety, as reasonable.
2. SCE shall be authorized to recover all payments made under the Above-Baseline Sales amendments subject to Commission review of the reasonableness of future administration of the amendments.
This order is effective today.
Dated ____________________, at San Francisco, California.
