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Recent Activity on QF Issues

    QF power is expected to be relatively stable over the next 5 years because many QFs opted to sell power to PG&E, Edison, and SDG&E at a five-year fixed energy price.  For all three utilities (PG&E, Edison, and SDG&E), about 68% of the total QF nameplate capacity, a.k.a. total design capacity of 6,280 MW, estimated at roughly 3,500 MW of dependable QF capacity, is now priced at a fixed-rate of 5.37 cents/kWh from 2001-2006; the remaining QFs are priced at Short-Run Avoided Cost (SRAC).*

    QFs were allowed to enter into any one of three voluntary contract amendments per D.01-06-015 as modified.  The contract amendments allowed were (a) supplemental payments for one year to QFs demonstrating immediate need for such funds in order to continue operations, (b) fixed energy prices for five-years at 5.37 cents/kilowatt-hour (kWh), and (c) incentive payments to QFs for energy produced above normal operating levels.*  Not surprisingly, 335 of all 578 QFs opted for the 5.37 cent/kWh rate, only two QFs signed up for supplemental payments, and no QFs opted for incentive payments for additional generation. As confirmed in D.01-10-069, these amendments would have been deemed reasonable if made prior to July 31, 2001, the Safe Harbor Date.

    Review of Post-Safe Harbor Date Applications.  A number of contract amendments were finalized after the July 31, 2001, Safe Harbor Date and were submitted for approval via application.  Thirty contracts were filed in seven applications.  Thirteen contracts have been approved:  NP Cogen with Edison in D.02-04-014; Minnesota Methane (3 contracts) with SDG&E in D.02-06-062; seven Landfill Gas QFs with Edison in D.02-06-068; one contract between the County of LA (Pitchess Honor Ranch) and Edison in D.02-06-074 and D.02-07-003, one contract by PG&E with Oildale in D.02-08-068, and one contract by PG&E with Gaylord in D.02-09-047.   

    Nine contracts have been withdrawn by Edison, and seven contracts remain under review in A.02-01-035 by Edison for approval of Sixteen QF Contracts (9 withdrawn, 7 left).   

    Changes to Edison's Incremental Energy Rate (IER) and Operational and Maintenance (O&M) adder, both of which are used in the company's Short-Run Avoided Cost (SRAC) transition formula, are being considered in R.99-11-022.


      * Some Edison-QF contract amendments were executed that differ slightly from the monthly SRAC rate, as approved in D.01-07-031

    For more information on QF issues, see the QF Issues Homepage, or contact Wade McCartney, Energy Division, CPUC at 916-324-9010 or


    Last Modified: 1/10/2008

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