Volume I. Part I - California Public Utilities Commission

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Subsequently, in October 2002, the Commission adopted each IOU’s May 1, 2002
plan, as modified by Commission order. 8 In D.02-10-062, the Commission adopted a
framework to enable the IOUs to resume full procurement responsibilities and
authorized the IOUs to procure a variety of products summarized in Table 1 of the
decision. 9
The Commission recognized that the authority it granted in D.02-08-071 may
not have been sufficient to enable the IOUs to procure their actual RNS needs and that
“there is not enough time between the issuance of this decision and January 1, 2003
for the utilities to present thoughtful and realistic long-term procurement plans and
have them approved by the Commission before beginning procurement…” 10
Accordingly, the Commission ordered the IOUs to file a “short-term procurement
plan” on November 12, 2002 that was “to cover each utility’s updated RNS needs”
and “to cover only plans for activities to procure electricity in 2003 (though the actual
power bought or contracted for in 2003 may cover needs for up to five years).” 11
PG&E submitted its 2003 STPP on November 12, 2002, which the
Commission approved with modifications in D.02-12-074. The specific products the
Commission authorized PG&E to procure included: (1) real-time energy and
ancillary services transactions in the California Independent System Operator’s
(“CAISO”) markets; (2) day-ahead and hour-ahead spot energy and gas purchases and
sales, and gas and electric transmission rights; (3) forward contracts for electric and
gas purchases and sales, and gas and electric transmission rights; (4) the purchase and
sale of electricity and gas options and financial swaps, such as firm transmission
rights (“FTR”); and (5) inter-utility peak for off-peak seasonal exchanges or other,
similar exchanges.
3. The 2004 Short-Term Procurement Plan
In D.03-12-062, the Commission approved PG&E’s 2004 STPP. 12 The
procurement products the Commission approved appear on pages 21-23 of the
decision. The Commission also authorized the IOUs “to enter into contracts of up to
8 D.02-10-062 at 70, Conclusion of Law No. 1.
9 Id. at 37-38. See also Volume 1, Section III.A.3.a and b for a list of the products approved
by various Commission decisions.
10 Id. at 45.
11 Id. at 46.
12 D.03-12-062 at 87, Ordering Paragraph 1.
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