Common use of Consistency With Commission Guidelines for Bilateral Contracting Clause in Contracts

Consistency With Commission Guidelines for Bilateral Contracting. PG&E negotiated the PPA on a bilateral basis because the offer was at a favorable price (i.e. below the 2009 MPR) with acceptable terms and conditions, and because there was a high probability that, if the offer had been deferred to PG&E’s 2011 RPS solicitation, the Project’s online date could have been significantly delayed. By negotiating this transaction on a bilateral basis, rather than through the 2011 RPS Solicitation, PG&E will be able to secure deliveries of RPS-eligible power from the PPA beginning in late 2012 (assuming Commission approval in 2011) to enhance its 20% RPS compliance position through 2013. 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 did not require Public Goods Charge funds and were “prudent.”9 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.10 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.11 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 the offer was at a favorable price (i.e. below the 2009 MPR) with acceptable terms and conditions, and because there was a high probability that, if the offer had been deferred to PG&E’s 2011 RPS solicitation, the Project’s online date could have been significantly delayeddelayed and the project would be unable to qualify for the Treasury Grant, which is integral to Project’s economics. By negotiating this transaction on a bilateral basis, rather than through the 2011 RPS Solicitation, PG&E will be able to secure deliveries of RPS-eligible power from the PPA beginning in late 2012 (assuming Commission approval in 2011) to enhance its 20% RPS compliance position through 2013, as well as its long term compliance position. 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 did not require Public Goods Charge funds and were “prudent.”9 ”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.10 letter.4 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.11 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 and SGS negotiated the PPA on a bilateral basis 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 offer was at a favorable price (i.e. below timing of the 2009 MPR) with acceptable terms and conditions, and because there was a high probability that, if the offer had been deferred to PG&E’s 2011 RPS solicitation, the Project’s Project online date could have been significantly delayedis directly related to execution and approval of the PPA. By negotiating this transaction on a bilateral basis, rather than through the 2011 If PG&E had required SGS to bid into its RPS Solicitation, PG&E will be able to secure deliveries of and then pursue negotiations and CPUC approval, the RPS-eligible power deliveries would have been delayed from the PPA beginning in late 2012 (assuming Commission approval in 2011) to enhance its 20% RPS compliance position through 2013Project. 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.”9 ”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 duration, and also found that such contracts must be reasonable and submitted for Commission approval by advice letter.10 letter.4 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.11 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 the offer was at a favorable price (i.e. i.e., below the 2009 MPR) with acceptable terms and conditions, and because there was a high probability that, if the offer had been deferred to PG&E’s 2011 RPS solicitation, the Project’s online date could have been significantly delayed. By negotiating this transaction on a bilateral basis, rather than through under the 2011 RPS Solicitation, PG&E will be able to secure deliveries of RPS-eligible power from the PPA beginning in late 2012 (assuming Commission approval in 2011) to enhance its 20% RPS compliance position through 2013. 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 did not require Public Goods Charge funds and were “prudent.”9 ”5 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.10 letter.6 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.11 payments.7 4 Pub. Util. Code § 399.14(a)(3). 5 D.00-00-000 at 57-58. 6 D.00-00-000 at 29. 7 Id. at 31. 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 the offer was at a favorable price (i.e. i.e., below the 2009 MPR) with acceptable terms and conditions, and because there was a high probability that, if the offer had been deferred to PG&E’s 2011 RPS solicitation, the Project’s online date could have been significantly delayed. By negotiating this transaction on a bilateral basis, rather than through under the 2011 RPS Solicitation, PG&E will be able to secure deliveries of RPS-eligible power from the PPA beginning in late by the end of 2012 (assuming Commission approval in 2011) to enhance its 20% RPS compliance position through 2013. 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 did not require Public Goods Charge funds and were “prudent.”9 ”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.10 letter.4 Also in that decision, the Commission stated that bilateral contracts were not eligible for supplemental energy payments.11 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;