An Administrative Law Judge (ALJ) with the California PublicUtilities Commission (CPUC) has recommended the Commission approvean emergency motion by Southern California Edison to freeze theformula for avoided cost payments to qualifying facilities at theAugust rate of $4.5133/MMBtu, rather than post the September rateof $6.4567.
The rate is based on an average of natural gas bidweek prices atthe Southern California border as reported by three publications,(including NGI). SoCalEd said the higher September average wouldresult in some $29 million in additional costs. It requested theCommission investigate the possibility of market power abuse,collusion and affiliate self-dealing of out-of-state gas suppliersand merchants.
The ALJ recommended the August rate be used for an interimperiod of no more than six months while the CPUC conducts itsinvestigation, since the rules do not allow downward adjustments orrefunds. Comments on the ALJ’s draft order are to be submitted bySept. 13, with reply comments by Sept. 18. The Commission isexpected to rule on the ALJ’s draft order at its Sept. 21 meeting.
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