Common use of RESOURCE DIVERSITY Clause in Contracts

RESOURCE DIVERSITY. Another component of the RFO Goals evaluation criterion is resource diversity. Attachment K of PG&E’s 2011 solicitation protocol cited “Resource Diversity benefits” as a non-quantitative factor identified in CPUC Decision 00-00-000 that could be considered in Offer selection. PG&E made an effort to increase the resource diversity of its energy mix by altering the value cutoff point below which it rejected Offers. For example, the PG&E team chose to accept baseload generation Offers that were valued below proposals for intermittent generation that were rejected. In a sense, the team chose to create a short list that is quite diverse in resource type (rather than, say, one technology) by applying the valuation criterion differently for different resources, rather than selecting only the highest-valued proposals that had acceptable viability. This will likely result in PG&E contracting with a diverse mix of baseload and peaking, and firm and intermittent resources, at a higher cost to ratepayers than only contracting disproportionately with one type of resource at lower cost.