2.1. Overview

The preliminary scoping memo included in the Order Instituting Rulemaking (OIR) identified six major issue categories for the proceeding:

A. Long-term procurement plans

B. Resource adequacy

C. Confidential information

D. Procurement incentives

E. Long-term policy for expiring QF contracts

F. Management audits

These are the major issue categories to be addressed in this proceeding. In addition, the California Department of Water Resources (DWR) request to allocate for operational and administrative purposes two DWR power purchase agreements will be considered in this proceeding. (See Administrative Law Judge's Ruling Confirming and Clarifying Bench Ruling, dated May 4, 2004.) The first two categories - long-term procurement plans and resource adequacy - are critical path issues and will be addressed first. Issue C - confidential information - will be addressed by ruling issued separately in this proceeding. On Issue D, I expect to consider procurement incentives generically for SCE, SDG&E, and PG&E. Until generic incentive issues are resolved in this proceeding, I do not expect the Commission will take up individual utility requests for procurement incentives in separate proceedings. On Issue E, pricing-related issues are being addressed in the separate avoided cost rulemaking (R.04-04-002). Meanwhile, the utilities should include QF resources as part of their long-term plans, as further specified in Appendix A. Finally, Issue F, the management audits, will be deferred to a later phase of this proceeding. Further rulings will address these matters. The following discussion provides further guidance on how the two critical-path issue categories will be considered.