V. Request for Supplemental Briefing
On September 15, 2000, the ALJ requested further briefing on the issue of why the Commission should approve as reasonable the PG&E/QF settlements presented in this application in light of California's current need for capacity. Subsumed in this issue is the question of whether or not the ALJ should recommend to the Commission that it reject the settlements without prejudice to the settling parties negotiating an outcome that can provide additional power to address California's current needs.9
PG&E, AES, Aglet, Kenetech, the Office of Ratepayer Advocates (ORA), and Zond filed briefs in response to the ALJ ruling. (ORA remains neutral on the application.) The parties were uniform in their conclusion that the Commission should not abandon consideration of the current settlements, and should not require PG&E and the other settling parties to renegotiate their Update settlements as set forth in the ALJ ruling.10 The parties were in general agreement that requiring PG&E and the settling bidders to renegotiate the settlements will not remedy the current supply shortage. This issue is discussed in more detail below.
9 In her ruling, the ALJ explained that currently new generation is needed to serve California. The July ACR did not limit the settlement options to buyouts, nor is this the only option contemplated by the statutes providing for restructuring of the electric industry enacted after the ACR issued. For instance, Cal. Pub. Util. Code § 367 (a)(3) provides that utilities may collect costs associated with contracts approved by the Commission to settle issues associated with the Update under certain conditions. 10 Aglet continues to advocate that the AES settlement should only be approved if the Commission disallows or excludes from rates a portion of the settlement.
