Comments on Draft Decision
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 period for review and comment. We are convinced that the motion of SDG&E falls under Rule 77.7(f)(9), and for that reason, we established a shortened period for comments on the draft decision.
Comments were filed on September 5, 2000 by SDG&E, PG&E, TURN, PX, and WPTF. We have taken comments into account, as appropriate, in finalizing this order.
1. Bilateral contracts provide additional flexibility to respond to volatile market prices.
2. I.00-08-002 will explore SDG&E's role as default procurement provider.
3. Entering into bilateral contracts that extend to the end of 2005 creates the potential for stranded costs should SDG&E's procurement role change.
4. SDG&E is put on notice that its purchasing decisions must meet the standards adopted herein.
1. It is reasonable to authorize SDG&E to enter into bilateral contracts that expire on or before December 31, 2005.
2. Today's decision should not be considered to be precedential as to future proceedings.
3. SDG&E should be limited to the purchase limits already approved for forward energy products, including capacity products.
4. The Commission should continue to oversee SDG&E's procurement practices.
5. If the average price of SDG&E's near-term bilateral transactions, delivered or requiring delivery, over the course of an annual period exceeds the average price of SDG&E's corresponding portfolio of transactions, delivered or requiring deliver over the same period, by more than 5%, then the Commission should initiate a reasonableness review. Reasonableness reviews, to the extent needed, should take place as part of SDG&E's Annual Transition Cost Proceeding.
6. SDG&E must make prudent decisions to buy or not buy through medium-term bilateral contracts without prior reasonableness protections. SDG&E should not refuse to enter into medium-term bilateral contracts because there is no per se reasonableness standard attached to them.
7. SDG&E's request for an exemption from Affiliate Rule III B should be denied.
8. SDG&E should disclose all bilateral transactions to the Energy Division on a confidential basis in a monthly report.
9. It is reasonable to approve a Bilateral Contract Memorandum Account for SDG&E. Costs incurred for participation in bilateral contracts will be recorded in this account. SDG&E should file an Advice Letter to establish this memorandum account.
10. We should adopt the adjustments to Schedule PX as set forth in the proposed tariffs excluding Special Condition 9. SDG&E should file an Advice Letter to revise Schedule PX.
11. To the extent that reasonableness reviews reveal imprudent procurement activities, rates should be subject to refund.
12. Pursuant to Rule 77.7(f)(9), public necessity requires a shortened public review and comment period.
Therefore, IT IS ORDERED that:
1. The Emergency Motion of San Diego Gas & Electric Company (SDG&E) is granted as modified herein.
2. SDG&E is authorized to enter into bilateral contracts that expire on or before December 31, 2005. We shall hold SDG&E to the purchase limits already approved for forward energy products, including capacity products.
3. Reasonableness reviews shall be conducted consistent with the standards described herein.
4. To the extent that reasonableness reviews reveal imprudent procurement activities, rates are subject to refund.
5. Within five days of the effective date of this decision, SDG&E shall file and serve a compliance advice letter to establish a Bilateral Contract Memorandum Account consistent with this decision. Costs incurred for participation in the bilateral options shall be recorded in these accounts. The advice letter shall be effective on filing subject to Energy Division determining that it is in compliance with this Order.
6. Within five days of the effective date of this decision SDG&E shall file and serve a compliance advice letter to revise Schedule PX, consistent with this decision. The advice letter shall be effective on filing subject to Energy Division determining that it is in compliance with this Order.
7. SDG&E shall disclose all bilateral transactions to the Energy Division on a confidential basis in a monthly report. The Energy Division shall monitor SDG&E's purchasing practices and report to the Commission on a quarterly basis.
8. Within five days of the effective date of this decision, SDG&E shall file and serve a compliance advice letter to inform the Commission of any markets in which its affiliates or subsidiaries operate and in which it intends to procure electricity or ancillary services.
9.
The Executive Director shall serve this decision on parties of record in A.99-01-016 et al.
This order is effective today.
Dated , at San Francisco, California.
