Consistency With Commission Guidelines for Bilateral Contracting. PG&E and SGS negotiated the PPA on a bilateral basis. PG&E proceeded with bilateral negotiations for this project because it has an attractive value, high viability, and provides for deliveries during the flexible compliance period. Additionally, bilateral negotiations were pursued because the timing of the Project online date is directly related to execution and approval of the PPA. If PG&E had required SGS to bid into its RPS Solicitation, and then pursue negotiations and CPUC approval, the RPS-eligible deliveries would have been delayed from the Project. To address the issue of bilateral contracting, the Commission developed guidelines pursuant to which utilities may enter into bilateral RPS contracts. In D.00-00-000, the Commission authorized entry into bilateral RPS contracts, provided that such contracts 2 Pub. Util. Code § 399.14(a)(3). did not require Public Goods Charge funds and were “prudent.”3 Later, in D.00-00-000, the Commission again held that bilateral contracts were permissible provided that they were at least one month in duration, and also found that such contracts must be reasonable and submitted for Commission approval by advice letter.4 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.5 Based on D.00-00-000 and D.00-00-000, the Commission set forth the following four requirements for approval of bilateral contracts in a Resolution approving a bilateral RPS contract executed by PG&E: (1) the contract is submitted for approval by advice letter;
Consistency With Commission Guidelines for Bilateral Contracting. PG&E negotiated the PPA on a bilateral basis because of the timing of negotiations. Bilateral negotiations started after the end of the 2009 RPS Solicitation in August 2009. By beginning negotiations rather than waiting until the following Solicitation, PG&E was able to secure a PPA for a highly viable project that provides for deliveries of RPS- eligible power by 2012. The Commission has developed guidelines for how the utilities may enter into bilateral RPS contracts. In D.00-00-000, the Commission authorized entry into bilateral RPS contracts provided that such contracts did not require Public Goods Charge funds and were “prudent.”2 Later, in D.00-00-000, the Commission again held that bilateral contracts were permissible provided that they were at least one month in duration, and also found that such contracts must be reasonable and submitted for Commission approval by advice letter.3 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.4
Consistency With Commission Guidelines for Bilateral Contracting. The PPA is a result of the 2007 RPS Solicitation; this section is not applicable.
Consistency With Commission Guidelines for Bilateral Contracting. The Commission has developed guidelines for how the IOUs may enter into bilateral RPS contracts. In D.00-00-000, the Commission authorized entry into bilateral RPS contracts provided that such contracts did not require Public Goods Charge funds and were “prudent.”5 In D.00-00-000, the Commission again held that bilateral contracts were permissible provided that they were at least one month in duration, and also found that such contracts must be reasonable and submitted for Commission approval by advice letter.6 In addition, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.7 Similarly, the Commission required that bilateral contracts be: (1) submitted for Commission approval; (2) longer than one month in duration; (3) do not receive above-market funds (“AMFs”); and (4) are deemed reasonable by the Commission.8 Finally, in D.00-00-000, the Commission determined that bilateral contracts should be reviewed using the same standards as contracts resulting from RPS solicitations.9 The Amended PPA satisfies the four requirements listed above and the requirements of D.00-00-000. The Original PPA was approved by the Commission in Resolution E-4340 on July 29, 2010, and the Amended PPA is being submitted for approval through this Advice Letter. The Amended PPA is not eligible for AMFs because it resulted from bilateral negotiations. The Amended PPA has a 25-year term, and is therefore longer than one month in duration. Finally, as PG&E explains in attached Confidential Appendix D, the terms and conditions in the Amended PPA do not materially change the economics of the Project for PG&E as compared to the Original PPA. In Resolution E- 4340, the Commission concluded that: “[t]he total all-in costs of the Rice Solar Energy, LLC power purchase agreement are reasonable based on their relation to bids received in response to Pacific Gas & Electric Company’s 2009 solicitation for renewable resources.”10 5 D.00-00-000 at pp. 57-58. 6 D.00-00-000 at p. 29. 7 Id. at p. 31. 8 Resolution E-4216 at p. 5. 9 D.00-00-000 at p. 29. 10 Resolution E-4340, Findings and Conclusions No.7.
Consistency With Commission Guidelines for Bilateral Contracting. The parties have an existing QF contract, and discussions pursuant to that QF contract led both parties to explore an alternative contract structure with different terms and conditions that would extend the relationship. The Commission has developed guidelines 4 Pub. Util. Code § 399.14(a)(3). 5 D.00-00-000 at 73. pursuant to which the utilities may enter into bilateral RPS contracts. In D.00-00-000, the Commission authorized entry into bilateral RPS contracts provided that such contracts did not require Public Goods Charge funds and were “prudent.”6 Later, in D.00-00-000, the Commission again held that bilateral contracts were permissible provided that they were at least one month in duration, and also found that such contracts must be reasonable and submitted for Commission approval by advice letter.7 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.8
Consistency With Commission Guidelines for Bilateral Contracting. PG&E and TransAlta negotiated the PSA on a bilateral basis in 2009 prior to the Commission authorizing the solicitation of REC-only transactions in the annual RPS Solicitations. On October 29, 2009, PG&E filed Application A.00-00-000 seeking Commission approval of the PSA with TransAlta. In a Ruling dated April 22, 2010, XXX Xxxxx ordered PG&E to seek approval of the contracts in A.00-00-000 using a Tier 3 advice letter process for RPS contracts and present the information required by D.10-03- 021 for advice letters seeking approval of contracts for procurement of RECs only. On May 12, 2010, the Commission issued D.00-00-000 that stayed D.00-00-000. Finally, on January 14, 2011, the Commission issued D.00-00-000 that modified D.00-00-000 and lifted the stay of D.00-00-000 imposed by D.00-00-000. PG&E negotiated the First Amendment to the original agreement with TransAlta in order to comply with additional Commission requirements in D.00-00-000 as amended by 3 Pub. Util. Code § 399.14(a)(3).
