QF/CHP Settlement

R.04-04-003 / R.04-04-025 /R.06-02-013/R.99-11-022/ A.08-11-001 Final Decision 10-12-035 , modified by D.11-07-010 __________ The Office of Ratepayer Advocates weighed in on the petition of the California Cogeneration Council filed Dec 16 (see Dec 20 post below). ORA proposes that the Commission deny this petition, and instead issue a ruling on a matter pending from last summer, when ALJ Gamson issued a "Ruling Seeking Comment on CHP Issues in R. 13-12-010," in which question #6 is the same as the petition, ORA says. The three IOUs also filed a joint response to CCC's petition Jan 15, also suggesting that the Commission deny the petition. The IOUs contend that the relief requested in CCC's petition would inappropriately modify the QF Settlement Agreement, and is unnecessary, would increase costs, and would not further the state's GHG goals, as CCC claims. __________ Jan 5, 2015 post: Jan 5 SDG&E filed an Application for Rehearing of Resolution E-4698. The resolution approved the restructuring of a QF contract, but denied SDG&E a shareholder incentive. Since the Commission had earlier approved a PG&E contract that was similar, and included a shareholder incentive, SDG&E's Application claims the Commission's action in their case was arbitrary, capricious, unduly discriminatory, committed errors of law and fact, and was devoid of reasoned decisionmaking. One wonders how they really feel. __________ Dec 20, 2014 post: The California Cogeneration Council petitioned the Commission Dec 16 for Modification of Decision 10-12-035, to extend the current July 1, 2015 expiration of the transition power purchase agreements (“PPAs”) to account for delays due to other litigation. The new date for expiration of the Transition PPAs which the CCC is proposing would be the later of the end of the Initial Program Period or, for CHP facilities that are successful in the investor-owned utilities (“IOU”) requests for offers, at such time that the PPAs associated with those RFOs are approved by the CPUC and come into full force and effect. On December 17, 2014, SCE filed Advice 3151-E with the Commission entitled: "Submission of Agreement Between Southern California Edison Company and Watson Cogeneration Company." Watson is currently delivering energy and capacity to SCE under a Transition PPA that expires at the end of the CHP Settlement Transition Period (July 1, 2015). SCE executed the new Watson Agreement on November 14, 2014 and seeks Commission approval. Watson is an existing 275 MW combined cycle turbine project at the Tesoro Refinery in Carson CA. __________ Dec 5, 2014 post: SDG&E filed Advice Letter 2674-E Nov 21 seeking Commission approval of San Diego Gas & Electric Amended and Restated Power Purchase Agreement with Yuma Cogeneration Associates (YCA). The amendment modifies and restates an existing Qualifying Facility (“QF”) contract such that the generator becomes a Utility Prescheduled Facility. The existing QF contract is for energy and capacity deliveries from the Yuma Cogeneration facility is a 53 MW cogeneration facility. __________ Oct 20, 2014 post: SCE gave notice Oct 16 that it will not meet Target B established by Term Sheet Section 5.1.2. Term Sheet Section 5.1.2 established a Target B of 378 MW for SCE. In SCE’s second CHP Request For Offers (“CHP RFO 2”), SCE sought up to 392 MW in order to meet Target B and to account for a minor shortfall from Target A. SCE signed contracts totaling 529 MW (through the CHP RFO 2 and bilateral agreements). Two projects did not meet the terms of their respective power purchase agreement (“PPA”). SCE terminated each of these PPAs in compliance with its terms. Due to these terminations, SCE retains 348 MW procured during CHP RFO 2. SCE filed Advice 3114-E on Oct 7: "Submission of Agreement for Termination and Shut-Down Between Southern California Edison Company and ACE Cogeneration Company." The agreement for which SCE seeks Commission approval will: (1) terminate an existing power purchase agreement for the purchase of energy, capacity and all related products between SCE and ACE, and (2) permanently shut down a coal-fired cogenerating facility owned by ACE. This will shut down the 108 MW plant and terminate the contract 11 months early. __________ Oct 5, 2014 post: The Commission notified parties Oct 3 of its final decision ( D.14-10-001 ) signed at its Oct 2 Business Meeting to deny the EPUC petition (see posts below back as far as Feb 20). __________ Sept 20, 2014 post: SCE and the Energy Producers & Users Coalition filed comments Sept 10 on the Proposed Decision of ALJ Yacknin (see Sept 5 post below). SCE recommends adopting the decision without modification, perhaps unsurprisingly as it supports the SCE position, and EPUC says the PD makes various errors that, if corrected, would provide the basis for approving the EPUC petition. __________ Sept 5, 2014 post: ALJ Yacknin issued a Proposed Decision Aug 21, proposing to deny the EPUC Petition for Modification (see Feb 20 and following posts below). Badger Creek Ltd, one of the projects referred to by PG&E in its Aug 18 comments on Draft Resolution E-4662 (see Aug 20 post below), felt compelled to file a correction to PG&E's comments on Aug 20. PG&E had stated that Badger Creek was not in compliance with efficiency standards required to maintain Qualifying Facility status, but Badger Creek states that it definitely is. __________ Aug 20, 2014 post: PG&E filed a response Aug 18 to Draft Resolution E-4662 with the Commission. The Draft Resolution proposes to approve PG&E's Power Purchase Agreements with the ArcLight Facilities, which PG&E of course supports (see Aug 5 post, below). PG&E is only making some technical corrections to the wording of the Resolution to better describe the ArcLight deals. __________ Aug 5, 2014 post: Energy Producers and Users Coalition, as well as the three IOUs jointly, filed responses to ALJ Yacknin's Ruling (see Jul 20 post below). In short, the arguments in the two filings are diametrically opposite. EPUC says being subject to FERC regulation or even the threat of it increases costs, reduces willingness of companies to participate, and increases risk, while the joint utilities say it does not. We'll leave it to the judge to sort out the legal arguments. The Commission filed Draft Resolution E-4662, which addresses PG&E’s power purchase agreement with the ArcLight Facilities. Draft Resolution E-4662 is currently scheduled to appear on the agenda for the August 28, 2014 Commission Meeting. Comments may be filed by Aug 18. These five CHP Facilities, collectively known as the ArcLight Facilities, are currently under contract with PG&E to deliver baseload power. Under the new PPAs, each facility will be converted to a dispatchable Utility Prescheduled Facility under the QF/CHP Settlement. As existing cogeneration facilities converting to Utility Prescheduled Facilities, the ArcLight facilities were eligible to participate in the request for offers.This Resolution finds that the costs of the PPAs are reasonable, and PG&E is authorized to recover these costs. The PPAs will count for a total of 240.45 MW and 154,186 MT of emissions reductions towards PG&E’s targets. __________ Jul 20, 2014 post: ALJ Hallie Yacknin filed on Jul 15 a Ruling Soliciting Further Information (see Feb 20, Mar 20, and Apr 5 posts below). The Ruling relates to the Petition for Modification filed in February by the Energy Producers and Users Coalition seeking a determination that the Commission made decisions based on its authority under PURPA. The ALJ seeks answers as to what the ramifications of this determination would be. Specifically, she asks: 1. How, if at all, would this determination affect the ability of QFs/CHPs to enter into these PPAs? Would a denial of the petition limit the ability of QFs/CHPs to enter into these PPAs? Would a grant of the petition enhance the ability of QFs/CHPs to enter into these PPAs? 2. How, if at all, would this determination affect the contracting parties’ respective rights and obligations under these PPAs? Would a denial of the petition reduce payments to QFs/CHPs under these PPAs? Would a grant of the petition increase payments to QFs/CHPS, or enhance their ability to make deliveries, under these PPAs? Would a denial of the petition allow the Investor-owned Utilities to refuse deliveries under these PPAs? 3. How, if at all, would this determination affect the QFs/CHPs’ rights and obligations apart from the PPAs? How, if at all, would a denial of the petition increase QFs/CHPs’ costs or a grant of the petition decrease their costs? 4. How, if at all, would this determination affect ratepayer costs and benefits? Parties have until July 25 to provide answers. __________ Jul 5, 2014 post: On June 20, 2014, SCE filed Advice 3061-E with the Commission - "Submission of Agreement Between Southern California Edison Company and Native American Energy Resources." Edison is seeking approval of an agreement for the purchase of energy, capacity, and all related products between themselves and Native American Energy Resources from Dry Creek Unit 1-B. The agreement was executed as part of SCE’s 2013 Combined Heat and Power (CHP) Request for Offers (RFO). It is a new project and SCE is contracting for 48 of 69.8 MW nameplate for 12 years. __________ Jun 20, 2014 post: On June 9 SCE filed for approval of its agreement for the purchase of energy and capacity from Berry Petroleum. The agreement term is 7 years, and the plant is 38 MW. On June 12 SCE made a similar filing requesting approval for the Elk Hills Power project, a 5-year contract for 200 of the project's 550 MW capacity. Likewise, June 17 SCE asked approval for their agreement with US Borax, for a 7-year agreement for 28 MW of the project's 45 MW capacity, and for a 7-year contract for 14 MW of New-Indy Ontario's 25 MW. These Agreements were executed as part of SCE’s 2013 Combined Heat and Power Request for Offers. Similarly, PG&E requested permission June 10 for the sale of 50,000 MWh to Tenaska Power Services Co of bundled renewable energy and green attributes in a contract that only lasts through October of this year. PG&E will be selling the power from a variety of assets within the State of California. PG&E and Chevron both filed comments June 16 in support of Resolution E-4648 (see May 20 post below) with technical, substantive corrections to the draft Resolution. The draft Resolution would approve the agreement. __________ June 5, 2014 post: The Office of Ratepayer Advocates filed a protest on May 28 of SDG&E's Advice Letter 2600-E (see May 20 post below). ORA did not object to the underlying QF contract, but rather the provision that SDG&E wanted to retain 10% of the ratepayer benefits as a shareholder incentive. ORA recommends that the Commission deny SDG&E's request and require it instead to apply the Cost Allocation Mechanism (CAM). SDG&E responded June 4, saying in short that ORA was wrong in its assessment, and that the utility is entitled to the 10% incentive as well as using the Competition Transition Charge as its cost recovery mechanism instead of the CAM. __________ May 20, 2014 post: The Commission filed Draft Resolution (DR) E-4648 on May 19,and it is currently scheduled to appear on the agenda for the June 26 th , 2014 Commission Meeting. The DR proposes to approve PG&E's request for a Power Purchase Agreement for As-Available Energy and Capacity with Chevron USA at its Richmond Refinery site. PG&E states that Chevron intends to build one 17.85 MW steam turbine, one 8.02 MW solar facility, and up to 10 MW of bottoming cycle generators. Parties may comment by June 16. SDG&E filed Advice Letter 2600-E May 8 requesting that the Commission approve the Amendment and Restatement of Agreement for Power Purchase With a Firm Capacity Qualifying Facility (Oceanside Refrigeration, Inc.) with Goal Line, L.P. that modifies an existing Qualifying Facility contract. The Goal Line facility is a 49.9 MW cogeneration facility located in Escondido, CA. __________ May 5, 2014 post: SDG&E withdrew its Advice Letters 2501-E and 2501-E-A on Apr 24. The ALs requested approval of power purchase and sale agreements for combined heat and power energy and capacity from Jasmin Power III, and was filed in Dec 2012. By this late date, the PPA has expired by its own terms. Because of the termination of this 56 MW PPA, SDG&E gave notice Apr 29 that it would fall short of its commitment in the CHP Settlement for its cumulative MW Targets A and B. SDG&E expects to rollover approximately 60 MW into its 3rd RFO in the Initial Program Period (solicitation expected in Q2-Q3 2015), although such amount could be significantly reduced as a result of pending negotiations. __________ Apr 5, 2014 post: The Energy Producers and Users Coalition filed a rebuttal to the responses noted in the Mar 20 post below to EPUC's Petition for Modification. The rebuttal says that CCC misunderstands the EPUC motion, suggesting that it looks for a Commission ruling on CHP agreements reached under a Request for Offers, which EPUC is not. They say the utilities describe their Petition as seeking a declaratory order or advisory opinion, which, EPUC says, it is not. __________ Mar 20, 2014 post: Two responses were filed Mar 17 to the EPUC Petition for Modification (see Feb 20 post below) - a joint response from the three IOUs and one from the CA Cogeneration Council (CCC). Predictably, the IOUs call for a complete rejection of the Petition in this decades-old dispute over state v. federal jurisdiction, while CCC offers a more nuanced suggestion. CCC suggests a Solomon solution whereby those contracts in the Settlement that had mandated SRAC pricing be deemed by the Commission to be part of their implementation of PURPA, with the result that these projects do not need to have Market Based Rate Authority from FERC. For contracts that resulted from either RFOs or bilateral negotiations, and that are larger than 20 MW, CCC supports a finding by the Commission that these PPAs are not part of its PURPA implementation efforts, hence these projects would need to acquire Market Based Rate Authority from FERC. PG&E filed a response Mar 5 to the Commission's draft Resolution E-4627 Approving the Proposed Amendment to PG&E’s Power Purchase Agreement with Chevron U.S.A., Inc. to include the Cymric Demonstration Project. The draft Resolution would approve, without modification, the agreement between PG&E and Chevron, so naturally PG&E supports it, but offers some corrections regarding the description of the nature of the contract. __________ Feb 20, 2014 post: The Energy Producers and Users Coalition filed for Modification of Decision 10-12-035, which approved the QF Settlement Agreement. EPUC, which consists of Aera Energy LLC, Chevron U.S.A. Inc., ExxonMobil Power and Gas Services Inc., Phillips 66 Company, Shell Oil Products US, Tesoro Refining & Marketing Company LLC, THUMS Long Beach Company, and Occidental of Elk Hills, Inc., seeks clarification from the Commission that the Decision was based on its authority under the federal Public Utilities Regulatory Policies Act of 1978 (PURPA). This would exempt CHP facilities from most provisions of the Federal Power Act, especially that a QF is not required to maintain Market Based Rate Authority under FERC regulations, but rather the state ensures the reasonableness of wholesale power prices. __________ Jul 5, 2012 post: In the approved QF/CHP settlement some of the language regarding Power Purchase Agreements (PPAs) was not sufficiently clear and detailed, so CPUC Executive Director Paul Clanon provided clarification by a letter to the Energy Division. The language in Section 4.10 of the Settlement is confusing and incomplete, in that it does not affirmatively account for all possible permutations of the Pro Forma PPAs attached to the Settlement (e.g., Amendment to Legacy PPA, Transition PPA, Request for Offer PPA, PURPA ≤20 MW PPA, Optional As-Available PPA; existing, new, or repowering facilities; with or without price terms pre-approved by the Commission; with or without material modifications; and terms of less than five years or five years or more). Moreover, Section 4.10 might be open to an interpretation that does not refl ect the intention of the Settlement parties. The following chart illustrates the approval process for the Pro Forma PPAs: CHP RFO Pro Forma PPA Existing Facilitv New Facility Repowering Facility With Material Modification Tier 3 Advice Letter Tier 3 Tier 3 Without Material Modification Tier 2 Advice Letter Tier 3 Tier 3 PURPA ≤20MW and As-Available Contracts Existing Facilitv New Facility Repowering Facility With Material Modification Tier 3 Advice Letter Tier 3 Tier 3 Without Material Modification No Advice Letter required No Advice Letter required No Advice Letter required ______________ June 5, 2012 post: The Commission filed Draft Resolution E4490 for June 21 Meeting, which would approve a request by Southern California Edison to enter into fixed energy price agreements, which will temporarily amend the energy price terms of existing agreements, with eight existing renewable energy qualifying facilities and to recover in rates all payments made under such agreements. This Resolution approves fixed energy price agreements (FEPAs) between Southern California Edison Company (SCE) and eight existing renewable energy Qualifying Facilities (QFs); these FEPAs will amend the energy price terms of existing QF Power Purchase Agreements from Short Run Avoided Cost (SRAC) to fixed prices. SCE conducted a solicitation to identify the most competitive fixed price offers, at or below Edison’s estimate of the SRAC pricing the facilities would otherwise receive under their existing contracts over the relevant time period. Eight renewable QFs offered competitive bids for Fixed Energy Price Agreements under SCE Fixed Energy Price Request for Offers (RFOs). The winning projects will provide SCE renewable energy over the term of the fixed energy price period offered for this solicitation (May 1, 2012 through December 31, 2015). The payments to these facilities under the FEPA are anticipated to provide modest savings to ratepayers relative to SCE’s estimate of what these QFs would have otherwise been paid under their existing contracts. In addition to providing modest savings to ratepayers, the eight FEPAs hedge against the volatility of natural gas during the length of the Agreements. _________________ Feb 20, 2012 post: ALJ Amy Yip-Kikugawa filed a Proposed Decision (PD) Feb 6: ORDER GRANTING VARIOUS MOTIONS AND CLOSING PROCEEDINGS. The PD grants motions filed by the Settling Parties (Southern California Edison Company, Pacific Gas and Electric Company, San Diego Gas & Electric Company, The Utility Reform Network, the California Cogeneration Council, the Independent Energy Producers Association, the Cogeneration Association of California, the Energy Producers and Users Coalition, and the Division of Ratepayer Advocates) to withdraw various petitions for modification and to close Application 08-11-001, Rulemaking (R.) 99-11-022, R.04-04-003, R.04-04-025 and R.06-02-013. ________________ Jan 20, 2012 post: On Jan 18 ALJ Amy Yip-Kikugawa notified parties of her consideration of closing docket R.06-02-013, in addition to dockets R.04-04-003 and R.04-04-025. She is proposing to reduce the time for public review and comment to 5 business days for comments and 3 business days for reply comments. She is in the process of writing a proposed decision to address the various motions for withdrawal of pending motions, and wishes to expedite the process. Parties are to advise her by Jan 20 if there is any objection. _________________ Dec 20, 2011 post: On Dec 6, the Settling Parties (SCE, PG&E, SDG&E, TURN, DRA, IEP, CCC, CAC, and EPUC) added to the collection of withdrawn motions, petitions, etc., listed in the Dec 5 post below by making a Motion to Withdraw their pending Petitions for Modification and to close dockets R.04-04-003 and R.04-04-025. On Dec 16, the Joint IOU Parties (PG&E, SCE, and SDG&E) made a motion to withdraw their Joint Petition for Modification of Decision (D.)07-12-052, dated December 17, 2008. _________________ Dec 5, 2011 post: Following a series of legal steps, the Settlement Effective Date for the Settlement occurred on November 23, 2011. Parties to the settlement have been standing down in droves. Per the terms of the settlement agreement, and conditions placed by the Commission, parties are withdrawing various applications for rehearing, advice letters, petitions, motions, etc. So far we note: on December 2, the Joint Parties (SCE, PG&E, SDG&E and TURN) Request to Withdraw Application for Rehearing of D.09-04-034; Southern California Edison Company requested withdrawal of Advice 2200-E-B; Pacific Gas and Electric Company requested withdrawal of its advice letters 3197-E, 3197-E-A, and 3197-E-B; SCE, PG&E, and SDG&E moved to withdraw their joint petition for modification of D.07-12-052; San Diego Gas & Electric Company requested withdrawal of Advice Letters 1958-E, 1958-E-A, and 1958-E-B; the Independent Energy Producers Association requested to withdraw their Application for Rehearing of D.09-04-032; SCE moved to withdraw all retroactive claims for energy and capacity price adjustments that it made in the Application 08-11-001 docket and to close the docket (which is the docket for considering the settlement); the California Cogeneration Council withdrew its motion in R.04-04-003 and R.04-04-025 entitled "Motion for an Order Implementing the Prospective Contract Options Adopted in Decision 07-09-040;" the Joint Parties moved to withdraw pending motions and petitions for modifications in Rulemaking 99-11-022 and to close the docket; and on December 5, the Cogeneration Association of California and the Energy Producers and Users Coalition withdrew their pending applications for rehearing of D.09-04-032 and D.09-04-034. ___________________ Oct 20, 2011 post: At its October 6, 2011 Commission Meeting, the Commission approved Decision 11-10-016 Re Granting, in Part, Petition to Modify Decision 11-07-010 and Request to Establish a Settlement Agreement Effective Date and Grant Motion for Closure . The decision grants the request to modify Decision 11-07-010 and to establish a Settlement Agreement Effective Date. The decision also grants the separately-filed motion for expedited consideration. The proceeding remains open. ____________________ Sept 20, 2011 post: Assigned Commissioner Mark Ferron issued an Alternate Proposed Decision (APD) in response to ALJ Amy Yip-Kikugawa's Proposed Decision. The Decision will appear on the Commission's Oct 6 agenda, and may or may not be acted upon then. Comments on the APD are due Sept 28, replies due a week later. The proposed decision (ALJ Kikugawa) in this matter denies the Petition to Modify Decision (D.) 11-07-010. The alternate proposed decision (Commr. Ferron) grants the Petition to Modify D.11-07-010. The APD concludes that the timing of the Settlement Periods and the corresponding contract term lengths in the Qualifying Facility and Combined Heat and Power Program (as adopted in D.10-12-035) are such that there is no possibility of cost-shifting amongst customers. The APD also grants the request to establish a Settlement Agreement Effective Date. _____________________________ Jul 20, 2011 post: At its July 14, 2011 meeting, the CPUC issued Decision 11-07-010 approving the petition for modification filed jointly by California Municipal Utilities Association, Southern California Edison Company, Pacific Gas and Electric Company, San Diego Gas & Electric Company, The Utility Reform Network, the California Cogeneration Council, the Independent Energy Producers Association, the Cogeneration Association of California, the Energy Producers and Users Coalition, and the Division of Ratepayer Advocates to modify Decision 10-12-035. The decision settles issues related to Municipal Departing Load, and corresponding responsibility for Non-Bypassable charges. It also responds to a response to the Petition filed by the Marin Energy Authority, the Alliance for Retail Energy Markets, Shell Energy North America (US) L.P and the Direct Access Customer Coalition (jointly, Joint Respondents). Joint Respondents did not object to the Petition, so long as the proposed changes do not create the potential for cost shifting to Community Choice Aggregators and Direct Access (DA) Customers. The commission did not feel that there was a valid concern for cost shifting among the CCA and DA customers, and did not extend the modifications of the decision to them. _________________ July 5 post: The Joint Parties filed a status report June 21 on the Settlement Agreement. The Settlement Agreement will not become effective until after the Federal Energy Regulatory Commission (“FERC”) issues an order that is final and non-appealable approving an application by the investor-owned utilities (“IOUs”) to terminate their obligation pursuant to the Public Utility Regulatory Policies Act to purchase from qualifying facilities greater than 20 MW. (Settlement Agreement Term Sheet, Section 16.2.1.) The IOUs filed their Application at FERC on March 18, 2011. On June 16, 2011, FERC issued its Order Granting Application to Terminate Purchase Obligation (“FERC Order”), which approved the IOUs’ Joint Application. The FERC Order will become final and non-appealable on July 18, 2011 unless an application for rehearing of the FERC Order is filed by that date. (16 U.S. C. § 825 l (b).) After the FERC Order becomes final and non-appealable, the final condition precedent to the effectiveness of the Settlement Agreement will have been met. The Joint Parties promptly will file a motion for closure in these consolidated proceedings pursuant to D. 10-12-035, Ordering Paragraph 6, which also will request the Commission to establish the Settlement Effective Date. _____________________ June 14, 2011 post: On June 14, ALJ Yip-Kikugawa issued a Proposed Decision to grant the motion of CMUA et al for modification of Decision 10-12-035. Comments are due July 4, Replies July 11 (expect this to change). ______________________ April 5, 2011 post: March 21, 2011 status report: Five parties filed Applications for Rehearing of the Decision on January 18 and 20, 2011. These parties are the California Municipal Utilities Association (“CMUA”), the City and County of San Francisco, the Alliance for Retail Energy Markets, the Marin Energy Authority, and the Direct Access Customer Coalition. On the date the Commission issues a decision on the Applications for Rehearing, the Decision will become final; however, it must also be nonappealable. (Settlement Agreement Term Sheet, Section 16.2.2.) Parties have 30 days from the date of a Commission decision on the applications for rehearing to petition for a writ of review. (Pub Util. Code § 1756 (a).) In addition, the Settlement Agreement will not become effective until after the Federal Energy Regulatory Commission (“FERC”) issues an order that is final and non-appealable approving an application by the investor-owned utilities (“IOUs”) to terminate their obligation pursuant to the Public Utility Regulatory Policies Act (“PURPA”) to enter into new agreements to purchase from qualifying facilities greater than 20 MW. (Settlement Agreement Term Sheet, Section 16.2.1.) The IOUs filed their joint application at FERC on March 18, 2011. FERC is required by regulations implementing the Energy Policy Act of 2005 to issue a final decision within 90 days of the date the Application is filed. (18 C.F.R. § 292.310 (a).) The IOUs’ Application requests that the termination of the PURPA purchase requirement be delayed until the parties to the Settlement Agreement receive a final and non-appealable decision from this Commission approving the Settlement Agreement, so that the termination of the PURPA purchase obligation will occur simultaneously with the effective date of the Settlement Agreement. _______________ end of April 5, 2011 post. Older posts: The CA Municipal Utilities Association (CMUA) filed a Motion for Abeyance to allow time for them to complete ongoing negotiations with the settlement parties. CMUA objects to elements of the Settlement that would cause new non-bypassable charges to be incurred by Municipal Departing Load. They asked for, and were granted, a shortened response time to their Motion, such that comments were due Mar 21. The City and County of San Francisco and CMUA filed an Application for Rehearing Jan 18, requesting that the Commission should grant rehearing and modify the Decision D.10-12-035 to remove from the Settlement Agreement those provisions that impose requirements on CCAs, ESPs, and MDLs, who were not represented in the negotiations. The Marin Energy Authority (“MEA”), the Alliance for Retail Energy Markets (“AReM”), and the Direct Access Customer Coalition (“DACC”) (collectively the CCA/Direct Access Parties) filed on Feb 4 in support of San Francisco's Application for Rehearing of D. 10-12-035, citing a lack of Commission jurisdiction over Community Choice Aggregators, use of an incorrect methodology for cost recovery in that the Commission directed them to procure CHP power, and that due process was not allowed for parties excluded from the QF/CHP negotiations, but affected by the outcome. The Joint Parties, those who were party to the negotiated Settlement (PG&E, SCE, SDG&E, IEP, TURN, DRA, CCC, CAC, EPUC) also filed a response Feb 4 to San Francisco and the CMUA's Application, finding their arguments flawed, meritless and/or irrelevant. Final Decision 10-12-035 was approved at the CPUC's December 16, 2010 meeting, approving the Settlement. The Settlement is comprehensive. It resolves numerous outstanding QF issues involving disputes in several Commission, and provides for an orderly transition from the existing QF program to a new QF/Combined Heat and Power (CHP) program. After more than a year and a half of intensive negotiations, three investor owned utilities, four representatives of qualifying facilities (QFs), and two ratepayer advocacy groups developed, their “Qualifying Facility and Combined Heat and Power Program Settlement Agreement” (the Settlement). This new program is designed to preserve resource diversity, fuel efficiency, greenhouse gas (GHG) emissions reductions, and other benefits and contributions of CHP. The Settlement is also designed to promote new, lower GHG-emitting CHP facilities and encourage the repowering, operational changes through utility-pre-scheduling, or retirement of existing, higher GHG-emitting CHP facilities. Additionally, the Commission found that the Settlement provides for an appropriate allocation of the costs of the QF/CHP program to all customers in California who benefit from the CHP portfolio. The Settlement is comprehensive, but it does not resolve issues in numerous Commission proceedings implementing recent statutory requirements that pertain to QFs of 20 MW or less, such as new CHP systems under Assembly Bill 1613, except to acknowledge that the megawatt (MW) and GHG reductions will count toward the investor-owned utilities’ MW and GHG reduction targets. While the Settlement is the result of compromise and agreement among representatives of diverse interests, several parties strongly object to aspects of it. Foremost among their concerns is the Settlement’s establishment of procurement and reporting requirements for community choice aggregators and electric service providers. The Commission reviewed the opponents’ arguments for either rejecting the Settlement or approving it only with modifications. They concluded that the Settlement meets the Commission’s standards for approval of settlements – it is reasonable in light of the record, consistent with the law, and in the public interest. In approving the Settlement, they set in motion a series of steps that should lead to eventual closure of each of the captioned proceedings. However, the proceedings will remain open at this time. Oct 8th the Joint Parties filed a Joint Motion For Approval of Qualifying Facility and Combined Heat and Power Program Settlement Agreement (“Joint Motion”). The Settlement agreement and eleven exhibits were posted to each utility's websites: SCE: http://www3.sce.com/law/cpucproceedings.nsf/frmMainPage?ReadForm SDG&E: http://www.sdge.com/regulatory/QFglobal.shtml PG&E: http://www.pge.com/b2b/energysupply/qualifyingfacilities/settlement/ They also filed a motion requesting expedited approval of the settlement agreement. Oct 11 ALJ Wetzell issued a Ruling shortening the time to comment on the Qualifying Facility and Combined Heat and Power Program Settlement Agreement such that comments were due 10/25/2010 and reply comments were due 11/1/2010. On Oct 19, Commr. Peevey and ALJ Wetzell issued a Joint Ruling and Amended Scoping Memo for Consolidated Proceedings. This ruling and amended scoping memo confirms the schedule for consideration of the October 8, 2010 “Joint Motion for Approval of Qualifying Facility and Combined Heat and Power Program Settlement Agreement” (Joint Motion) in these consolidated proceedings, determines the scope of such consideration, and addresses other procedural matters. The issues to be addressed in this proceeding are: 1. Whether the Proposed Settlement is reasonable in light of the whole record of these proceedings; 2. Whether the Proposed Settlement is consistent with the law; 3. Whether the Proposed Settlement is in the public interest; and 4. Whether the Proposed Settlement should be approved, and if so whether it should be approved in its entirety without change.

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QF/CHP Settlement

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