Would contingency contracts unfairly influence the next RFO? For example, if a contract is terminated after site preparation and permitting have already been completed, it may be more likely that this site will be selected in the next RFO. In its testimony, SCE states "Second, the availability of Preferred Resources typically cannot be assured until much closer to the time of resource need. There is no assurance these Preferred Resources will ultimately be available to meet needs related to OTC closures because it is unlikely that customers will commit in 2014 that they will implement EE or DR in 2021." If the preferred resources ultimately come online as expected, how will SCE avoid paying for both preferred resources and the contingency GFG contract, in light of SCE’s assumed EE and DR procurement timeline? If SCE does not know if the preferred resources will perform until much closer to the time of delivery, on what grounds would SCE ever terminate a GFG option contract? Would contingency contracts, in practical terms, make it much more likely that there would be additional, unnecessary GFG procurement? What potential costs (direct, indirect or stranded) will ratepayers be exposed to if these contracts are pursued? SCE may propose contingency contracts in its upcoming procurement application, expected in late 2014 or in a separate application. SDG&E may also propose similar contracts in its procurement application stemming from this decision or in a separate application. In either case, the utility must provide clear and full answers to the questions above before we will consider approving such contracts.
Would contingency contracts unfairly influence the next RFO? For example, if a contract is terminated after site preparation and permitting have already been completed, it may be more likely that this site will be selected in the next RFO. In its testimony, SCE states "Second, the availability of Preferred Resources typically cannot be assured until much closer to the time of resource need. There is no assurance these Preferred Resources will ultimately be available to meet needs related to OTC closures because it is unlikely that customers will commit in 2014 that they will implement EE or DR in 2021." If the preferred resources ultimately come online as expected, how will SCE avoid paying for both preferred resources and the contingency GFG contract, in light of SCE’s assumed EE and DR procurement timeline? If SCE does not know if the preferred resources will perform until much closer to the time of delivery, on what grounds would SCE ever terminate a GFG option contract? Would contingency contracts, in practical terms, make it much more likely that there would be additional, unnecessary GFG procurement? What potential costs (direct, indirect or stranded) will ratepayers be exposed to if these contracts are pursued? SCE may propose contingency contracts in its upcoming procurement application, expected in late 2014 or in a separate application. SDG&E may also propose similar contracts in its procurement application stemming from this decision or in a separate application. In either case, the utility must provide clear and full answers to the questions above before we will consider approving such contracts.