Common use of CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION Clause in Contracts

CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION. The CPUC first mandated a requirement for an independent, third-party evaluator to participate in competitive solicitations for utility power procurement in its Decision 04-12- 048 on December 16, 2004 (Findings of Fact 94-95, Ordering Paragraph 28). In that Decision, which addressed the approval of three utilities’ long-term procurement plans, the CPUC required the use of an IE when Participants in a competitive procurement solicitation include affiliates of investor-owned utilities (IOUs), IOU-built projects, or IOU-turnkey projects. The Decision envisaged that establishing a role for an IE would serve as a safeguard in the process of evaluating IOU-built or IOU-affiliated projects competing against Power Purchase Agreements (PPAs) with independent power developers, a safeguard to protect consumers from any anti-competitive conduct between utilities and their corporate affiliates or from anti-competitive conduct by utilities developing their own generation. Later, in approving the IOUs’ 2006 RPS procurement plans and solicitation protocols, the CPUC issued Decision 00-00-000 on May 25, 2006. In that Decision, the CPUC expanded its requirement, ordering that each IOU use an IE to evaluate and report on the entire solicitation, evaluation, and selection process, for the 2006 RPS RFO and all future competitive solicitations. This requirement to employ an IE now applies whether or not IOU-owned or IOU-affiliate generation participates in the solicitation (Finding of Fact 20, Conclusion of Law 3, and Ordering Paragraph 8). This requirement, among others, was intended by the CPUC to increase the fairness and transparency of the proposal selection process. Subsequently, as part of Rulemaking 00-00-000 to continue implementation of the RPS program, the CPUC issued Decision 00-00-000 on June 19, 2009. In that decision, the Commission concluded that short-term bilaterally negotiated contracts (e.g. those with term of less than ten years) should be governed by the same contract review processes and standards as contracts that arise through competitive solicitations, including review by an independent evaluator.

CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION. The CPUC first mandated a requirement for an independent, third-party evaluator to participate in competitive solicitations for utility power procurement in its Decision 04-12- 048 on December 16, 2004 (Findings of Fact 94-95, Ordering Paragraph 28). In that Decision, which addressed the approval of three utilities’ long-term procurement plans, the CPUC required the use of an IE when Participants in a competitive procurement solicitation include affiliates of investor-owned utilities (IOUs), IOU-built projects, or IOU-turnkey projects. The Decision envisaged that establishing a role for an IE would serve as a safeguard in the process of evaluating IOU-built or IOU-affiliated projects competing against Power Purchase Agreements (PPAs) with independent power developers, a safeguard to protect consumers from any anti-competitive conduct between utilities and their corporate affiliates or from anti-competitive conduct by utilities developing their own generation. Later, in approving the IOUs’ 2006 RPS procurement plans and solicitation protocols, the CPUC issued Decision 00-00-000 on May 25, 2006. In that Decision, the CPUC expanded its requirement, ordering that each IOU use an IE to evaluate and report on the entire solicitation, evaluation, and selection process, for the 2006 RPS RFO and all future competitive solicitations. This requirement to employ an IE now applies whether or not IOU-owned or IOU-affiliate generation participates in the solicitation (Finding of Fact 20, Conclusion of Law 3, and Ordering Paragraph 8). This requirement, among others, was intended by the CPUC to increase the fairness and transparency of the proposal selection process. Subsequently, as part of Rulemaking 00-00-000 to continue implementation of the RPS program, the CPUC issued Decision 00-00-000 on June 19, 2009. In that decision, the Commission concluded that shortlong-term bilaterally negotiated contracts (e.g. those with term of less than ten years) should be governed by the same contract review processes and standards as contracts that arise through competitive solicitations, including review by an independent evaluator.

CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION. The CPUC first mandated a requirement for an independent, third-party evaluator to participate in competitive solicitations for utility power procurement in its Decision 04-12- 048 on December 16, 2004 (Findings of Fact 94-95, Ordering Paragraph 28). In that Decision, which addressed the approval of three utilities’ long-term procurement plans, the CPUC required the use of an IE when Participants in a competitive procurement solicitation include affiliates of investor-owned utilities (IOUs), IOU-built projects, or IOU-turnkey projects. The Decision envisaged that establishing a role for an IE would serve as a safeguard in the process of evaluating IOU-built or IOU-affiliated projects competing against Power Purchase Agreements (PPAs) with independent power developers, a safeguard to protect consumers from any anti-competitive conduct between utilities and their corporate affiliates or from anti-competitive conduct by utilities developing their own generation. Later, in approving the IOUs’ 2006 RPS procurement plans and solicitation protocols, the CPUC issued Decision 00-00-000 on May 25, 2006. In that Decision, the CPUC expanded its requirement, ordering that each IOU use an IE to evaluate and report on the entire solicitation, evaluation, and selection process, for the 2006 RPS RFO and all future competitive solicitations. This requirement to employ an IE now applies , whether or not IOUa utility affiliate or utility-owned or IOU-affiliate generation participates in the solicitation (Finding of Fact 20, Conclusion of Law 3, and Ordering Paragraph 8)is involved. This requirement, among others, was intended by the CPUC to increase the fairness and transparency of the proposal selection processThe ERP contract amendment did not arise from a competitive solicitation. Subsequently, as part of Rulemaking 00-00-000 to continue implementation of the RPS program, the CPUC issued Decision 00-00-000 on June 19, 2009. In that decision, the Commission concluded that short-term bilaterally negotiated RPS contracts (e.g. those with term of less than ten yearsyears but more than one month) should be governed by the same contract review processes and standards as contracts that arise through competitive solicitations, including review by an independent evaluatorIE. Xxxxxx perceives there to a spectrum between (1) a minimally amended 1980s-style Standard Offer contract with a renewable QF (e.g. one in which, say, the delivery point is altered by amendment but all other terms and conditions are unchanged) and (2) a fully renegotiated agreement with a renewable QF that closely follows PG&E’s 2011 RPS Form Agreement and for which price, delivery term, and most terms and conditions are altered from 1980s’ language to 2011 language. Xxxxxx would speculate that (2) would likely meet the intent of Decision 00-00-000 and clearly require an accompanying IE report, while (1) might not. Xxxxxx perceives the amendment to the ERP QF agreement to be closer to (1) than to (2) and appears to fall into a gray area where it is unclear whether an IE report is formally required. The Energy Division has directed the utility to provide an accompanying IE reports with its advice letters for amendments to biomass-fueled QF agreements.

CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION. The CPUC first mandated a requirement for an independent, third-party evaluator to participate in competitive solicitations for utility power procurement in its Decision 0400-12- 048 00-000 on December 16, 2004 (Findings of Fact 94-95, Ordering Paragraph 28). In that Decision, which addressed the approval of three utilities’ long-term procurement plans, the The CPUC required the use of an IE when Participants in a competitive procurement solicitation include affiliates of investor-owned utilities (IOUs), IOU-built projects, or IOU-turnkey projects. The Decision envisaged that establishing a role for an IE role would serve as a safeguard against anti- competitive conduct in the process of evaluating IOU-built or IOU-affiliated projects competing against Power Purchase Agreements (PPAs) with independent power developers, a safeguard to protect consumers from any anti-competitive conduct between utilities and their corporate affiliates or from anti-competitive conduct by utilities developing their own generation. Later, in In approving the IOUs’ 2006 RPS procurement plans and solicitation protocolsplans, the CPUC issued Decision 0006-00-000 05- 039 on May 25, 2006. In that Decision, This Decision expanded the CPUC expanded its requirementCPUC’s requirements, ordering that each IOU use an IE to evaluate and report on the entire solicitation, evaluation, and selection process, for the 2006 RPS RFO and all future competitive solicitations. This requirement to employ an IE now applies whether or not IOU-owned or IOU-affiliate generation participates in the solicitation (Finding of Fact 20, Conclusion of Law 3, and Ordering Paragraph 8). This requirement, among others, was intended by the CPUC to increase the fairness and transparency of the proposal Offer selection process. Subsequently, as part of Rulemaking 00-00-000 to continue implementation of the RPS program, the CPUC issued Decision 00-00-000 required the IE to report separately from the utility on June 19the bid solicitation, 2009evaluation, and selection process. In Based on that decisionDecision, the Commission concluded that short-term bilaterally negotiated IE should provide a preliminary report along with the IOU submitting its short list, and a final report with the advice letter or letters for approval of contracts (e.g. those with term of less than ten years) should be governed by the same contract review processes and standards as contracts that arise through competitive solicitations, including review by an independent evaluatorselected Offers.

CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION. The CPUC first mandated a requirement for an independent, third-party evaluator to participate in competitive solicitations for utility power procurement in its Decision 04-12- 048 on December 16, 2004 (Findings of Fact 94-95, Ordering Paragraph 28). In that Decision, which addressed the approval of three utilities’ long-term procurement plans, the CPUC required the use of an IE when Participants in a competitive procurement solicitation include affiliates of investor-owned utilities (IOUs), IOU-built projects, or IOU-turnkey projects. The Decision envisaged that establishing a role for an IE would serve as a safeguard in the process of evaluating IOU-built or IOU-affiliated projects competing against Power Purchase Agreements (PPAs) with independent power developers, a safeguard to protect consumers from any anti-competitive conduct between utilities and their corporate affiliates or from anti-competitive conduct by utilities developing their own generation. Later, in approving the IOUs’ 2006 RPS procurement plans and solicitation protocols, the CPUC issued Decision 00-00-000 on May 25, 2006. In that Decision, the CPUC expanded its requirement, ordering that each IOU use an IE to evaluate and report on the entire solicitation, evaluation, and selection process, for the 2006 RPS RFO and all future competitive solicitations. This requirement to employ an IE now applies whether or not IOU-owned or IOU-affiliate generation participates in the solicitation (Finding of Fact 20, Conclusion of Law 3, and Ordering Paragraph 8). This requirement, among others, was intended by the CPUC to increase the fairness and transparency of the proposal Offer selection process. Subsequently, as part of Rulemaking 00-00-000 to continue implementation of the RPS program, the CPUC issued Decision 00-00-000 required the IOU’s IE to report separately from the utility on June 19the bid solicitation, 2009evaluation, and selection process. In Based on that decisionDecision, the Commission concluded IE should provide a preliminary report along with the IOU submitting its short list. This document represents that short-term bilaterally negotiated contracts (e.g. those with term of less than ten years) should be governed by listing report for the same contract review processes and standards as contracts that arise through competitive solicitations, including review by an independent evaluator2009 renewable solicitation.

CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION. The CPUC first mandated a requirement for an independent, third-party evaluator to participate in competitive solicitations for utility power procurement in its Decision 04-12- 048 on December 16, 2004 (Findings of Fact 94-95, Ordering Paragraph 28). In that Decision, which addressed the approval of three utilities’ long-term procurement plans, the CPUC required the use of an IE when Participants in a competitive procurement solicitation include affiliates of investor-owned utilities (IOUs), IOU-built projects, or IOU-turnkey projects. The Decision envisaged that establishing a role for an IE would serve as a safeguard in the process of evaluating IOU-built or IOU-affiliated projects competing against Power Purchase Agreements (PPAs) with independent power developers, a safeguard to protect consumers from any anti-competitive conduct between utilities and their corporate affiliates or from anti-competitive conduct by utilities developing their own generation. Later, in approving the IOUs’ 2006 RPS procurement plans and solicitation protocols, the CPUC issued Decision 00-00-000 on May 25, 2006. In that Decision, the CPUC expanded its requirement, ordering that each IOU use an IE to evaluate and report on the entire solicitation, evaluation, and selection process, for the 2006 RPS RFO and all future competitive solicitations. This requirement to employ an IE now applies , whether or not IOUa utility affiliate or utility-owned or IOU-affiliate generation participates in the solicitation (Finding of Fact 20, Conclusion of Law 3, and Ordering Paragraph 8)is involved. This requirement, among others, was intended by the CPUC to increase the fairness and transparency of the proposal selection processThe HLP contract amendment did not arise from a competitive solicitation. Subsequently, as part of Rulemaking 00-00-000 to continue implementation of the RPS program, the CPUC issued Decision 00-00-000 on June 19, 2009. In that decision, the Commission concluded that short-term bilaterally negotiated RPS contracts (e.g. those with term of less than ten yearsyears but more than one month) should be governed by the same contract review processes and standards as contracts that arise through competitive solicitations, including review by an independent evaluatorIE. Xxxxxx perceives there to a spectrum between (1) a minimally amended 1980s-style Standard Offer contract with a renewable QF (e.g. one in which, say, the delivery point is altered by amendment but all other terms and conditions are unchanged) and (2) a fully renegotiated agreement with a renewable QF that closely follows PG&E’s 2011 RPS Form Agreement and for which price, delivery term, and most terms and conditions are altered from 1980s’ language to 2011 language. Xxxxxx would speculate that (2) would likely meet the intent of Decision 00-00-000 and clearly require an accompanying IE report, while (1) might not. Xxxxxx perceives the amendment to the HLP QF agreement to be closer to (1) than to (2) and appears to fall into a gray area where it is unclear whether an IE report is formally required. The Energy Division has directed the utility to provide an accompanying IE reports with its advice letters for amendments to biomass-fueled QF agreements.

CPUC DECISIONS REQUIRING INDEPENDENT EVALUATOR PARTICIPATION. The CPUC first mandated a requirement for an independent, third-party evaluator to participate in competitive solicitations for utility power procurement in its Decision 04-12- 048 on December 16, 2004 (Findings of Fact 94-95, Ordering Paragraph 28). In that Decision, which addressed the approval of three utilities’ long-term procurement plans, the CPUC required the use of an IE when Participants in a competitive procurement solicitation include affiliates of investor-owned utilities (IOUs), IOU-built projects, or IOU-turnkey projects. The Decision envisaged that establishing a role for an IE would serve as a safeguard in the process of evaluating IOU-built or IOU-affiliated projects competing against Power Purchase Agreements (PPAs) with independent power developers, a safeguard to protect consumers from any anti-competitive conduct between utilities and their corporate affiliates or from anti-competitive conduct by utilities developing their own generation. Later, in approving the IOUs’ 2006 RPS procurement plans and solicitation protocols, the CPUC issued Decision 00-00-000 on May 25, 2006. In that Decision, the CPUC expanded its requirement, ordering that each IOU use an IE to evaluate and report on the entire solicitation, evaluation, and selection process, for the 2006 RPS RFO and all future competitive solicitations. This requirement to employ an IE now applies , whether or not IOUa utility affiliate or utility-owned or IOU-affiliate generation participates in the solicitation (Finding of Fact 20, Conclusion of Law 3, and Ordering Paragraph 8)is involved. This requirement, among others, was intended by the CPUC to increase the fairness and transparency of the proposal selection processThe DG Fairhaven contract amendment did not arise from a competitive solicitation. Subsequently, as part of Rulemaking 00-00-000 to continue implementation of the RPS program, the CPUC issued Decision 00-00-000 on June 19, 2009. In that decision, the Commission concluded that short-term bilaterally negotiated RPS contracts (e.g. those with term of less than ten yearsyears but more than one month) should be governed by the same contract review processes and standards as contracts that arise through competitive solicitations, including review by an independent evaluatorIE. Xxxxxx perceives there to a spectrum between (1) a minimally amended 1980s-style Standard Offer contract with a renewable QF (e.g. one in which, say, the delivery point is altered by amendment but all other terms and conditions are unchanged) and (2) a fully renegotiated agreement with a renewable QF that closely follows PG&E’s 2010 RPS Form Agreement and for which price, delivery term, and most terms and conditions are altered from 1980s’ language to 2011 language. Xxxxxx would speculate that (2) would likely meet the intent of Decision 00-00-000 and clearly require an accompanying IE report, while (1) might not. Xxxxxx perceives the amendment to the DG Fairhaven QF agreement to be closer to (1) than to (2) and appears to fall into a gray area where it is unclear whether an IE report is formally required.