Southern California Edison

128 Cal. App. 4th 1, 2005 Cal. PUC LEXIS 520 (April 4, 2005)

The Court of Appeal (Second District, Division 7) affirmed a Commission decision extending Edison’s obligation to enter into QF contracts (specifically, Standard Offer 1) even though the Commission did not concurrently revisit and determine short-run avoided costs (“SRAC”).  The Court concluded that the Commission was not required to determine SRAC at the time it extended Edison’s obligation to enter into SO1 contracts since the Commission was already conducting a separate proceeding (R. 04‑04‑025) in which SRAC levels were being addressed.  While the Commission decision was affirmed, however, the court stated its expectation that if the Commission modified the SRAC formula, any resulting lower levels would be applied retroactively.  Indeed, the court stated that in order to meet the intent of Congress, it would be “the Commission’s duty to apply it retroactively.”  (See Para. 31, infra, for the genesis of this requirement.)

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