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UNITED STATES OF AMERICA BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Southern California Edison Company ) Docket No. EC06-___-000
APPLICATION SEEKING AUTHORIZATION FOR A TRANSFER OF CONTROL OF JURISDICTIONAL FACILITIES
March 13, 2006
UNITED STATES OF AMERICA BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Southern California Edison Company ) Docket No. EC06-___-000
APPLICATION SEEKING AUTHORIZATION FOR A TRANSFER OF CONTROL OF JURISDICTIONAL FACILITIES
I. INTRODUCTION
Pursuant to section 203 of the Federal Power Act (“FPA”), 16 U.S.C. § 824b (2000), and
Part 33 of the Federal Energy Regulatory Commission’s (“Commission”) Regulations, 18 C.F.R.
Pt. 33 (2005), Southern California Edison Company (“SCE”) hereby submits this application
(“Application”) seeking Commission authorization for SCE to acquire from the City of
Anaheim, California (“Anaheim”) 3.16 percent undivided interests as tenants in common in
Units 2 and 3 of the San Onofre Nuclear Generating Station (“SONGS”), a nuclear power plant
with a total capacity of 2,150 MW located in San Diego County, California (the “Transaction”).1
Anaheim’s interest in SONGS represents 68 MW.
II. STATEMENT OF ISSUES
1. Does the Transaction satisfy the standards for approval under FPA section 203
and the Commission’s rules and regulations implementing section 203?
Yes. The Transaction does not raise any concerns about adverse effects on competition,
rates, or regulation. Further, the Transaction will not result in the cross-subsidization of a non-
utility associate company or the pledge or encumbrance of utility assets for the benefit of an
1 As used herein, “SONGS” refers only to Units 2 and 3 of the San Onofre Generating
Plant.
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associate company. Accordingly, the Transaction is consistent with the public interest, satisfies
the standards for approval under FPA section 203, and should be approved.2
III. BACKGROUND
A. Description of the Parties
1. Southern California Edison Company
SCE is a California corporation engaged in the generation, transmission, and distribution
of electricity. It is a “public utility” within the meaning of the California Public Utilities Code
and the FPA and is regulated by the California Public Utilities Commission (“CPUC”) and this
Commission. SCE is also regulated by the United States Nuclear Regulatory Commission
(“NRC”) with respect to its ownership and operation of nuclear power plants (including
SONGS). SCE is a Participating Transmission Owner (“PTO”) in the California Independent
System Operator (“CAISO”), having relinquished control of its transmission system to the
CAISO in 1998. SCE provides retail electric service to approximately 13 million customers in a
50,000 square-mile area of central, coastal, and southern California, excluding the City of Los
Angeles and certain other cities.
2. City of Anaheim, California
Anaheim is a municipal corporation in the State of California. Anaheim provides retail
electric services to customers in Orange County, California through Anaheim Public Utilities, a
2 See FPA section 203(a), 16 U.S.C. § 824b(a); 18 C.F.R. Pt. 33; Inquiry Concerning the
Commission’s Merger Policy Under the Federal Power Act: Policy Statement, Order No. 592, 1996-2000 FERC Stats. & Regs., Regs. Preambles ¶ 31,044 (1996) (“Merger Policy Statement”), reconsideration denied, Order No. 592-A, 79 FERC ¶ 61,321 (1997) (codified at 18 C.F.R. § 2.26); Revised Filing Requirements Under Part 33 of the Commission’s Regulations, Order No. 642, 1996-2000 FERC Stats. & Regs., Regs. Preambles ¶ 31,111 at 31,902 (2000) (“Order No. 642”), order on reh’g, Order No. 642-A, 94 FERC ¶ 61,289 (2001); Transactions Subject to FPA Section 203, Order No. 669, IV FERC Stats. & Regs., Regs. Preambles ¶ 32,589 (2005) (“Order No. 669”).
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municipal electric utility. Anaheim is generally not subject to regulation as a “public utility”
under Part II of the FPA because it is a “political subdivision of a State” within the meaning of
FPA section 201(f), 16 U.S.C. § 824a(f). Anaheim has been a PTO in the CAISO since 2003.
B. Description of the Facilities
The San Onofre Nuclear Generating Station is a nuclear power plant located on the
California coastline between Los Angeles and San Diego. The plant contains two operating
nuclear reactors. Units 2 and 3 are currently in use; they have a total capacity of 2,150 MW.
Unit 1 was retired in 1992 and is now being decommissioned.3 SONGS is a CAISO must-take
resource. Anaheim’s interest in SONGS extends only to Units 2 and 3 and represents 68 MW.
Anaheim has no interest in the switchyard facilities located at SONGS; these facilities are jointly
owned by SCE and SDG&E. In other words, no transmission facilities are included in the
Transaction.
C. Description of the Transaction
SONGS is currently jointly owned by SCE (75.05%), Anaheim (3.16%), SDG&E (20%),
and City of Riverside (“Riverside”) (1.79%). SCE is the Operating Agent of SONGS. This
Application requests Commission authorization for the acquisition by SCE of Anaheim’s 3.16%
undivided interest in SONGS. After the Transaction closes, SCE will own a 78.21% undivided
interest in SONGS, and SDG&E and Riverside will retain their existing interests. The interests
that will transfer from Anaheim to SCE under the Transaction represent a de minimis amount of
generating capacity -- about 68 MW -- particularly when compared to the 55,000 MW of
capacity in the CAISO market.
3 SCE and San Diego Gas & Electric Company (“SDG&E”) own undivided interests as
tenants in common in Unit 1 of 80% and 20%, respectively.
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In 2004, SCE, as Operating Agent of SONGS, declared an operating impairment
associated with steam generator tube degradation, which required replacement of the steam
generators at SONGS. The SONGS Operating Agreement permits a co-owner to opt out of
paying its share of the costs associated with resolving an operating impairment (such as steam
generator replacement) in exchange for a reduction in its ownership share. Anaheim elected to
opt out and have its ownership share reduced. Under the terms of the Operating Agreement,
electing this option would have resulted in Anaheim owning a zero percent interest in SONGS
after completion of the steam generator replacement project.
Anaheim is also interested in reducing its ownership share to zero at an earlier date in
order to make room in its generation portfolio for more renewable resources, which has been
mandated by the State of California. Therefore, in order to help Anaheim meet this renewables
mandate and to resolve issues surrounding the steam generator replacement project, Anaheim
agreed to sell to SCE, and SCE agreed to purchase from Anaheim, all of Anaheim’s participation
interests in SONGS.4 The consideration for the Transaction will be the payment, in cash, by
SCE to Anaheim of the purchase price and the assumption by SCE of certain liabilities. The
terms and conditions governing the transfer to SCE of Anaheim’s 3.16% interest in SONGS are
set forth in the Settlement Agreement Relating to San Onofre Nuclear Generating Station By and
Between Southern California Edison Company and City of Anaheim, dated as of December 20,
2005 (“Settlement Agreement”). Exhibit I contains the Settlement Agreement.
4 Under the SONGS Participation Agreement, the co-owners of SONGS do not have a
right of first refusal with respect to the transfer of any co-owner’s interests in SONGS to another co-owner. That being said, the co-owners of SONGS do have a right of first refusal with respect to a sale to a third party by any co-owner of the co-owner’s interests in SONGS.
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IV. THE TRANSACTION IS CONSISTENT WITH THE PUBLIC INTEREST
FPA section 203(a)(1) provides in pertinent part that “No public utility shall, without first
having secured an order of the Commission authorizing it to do so -- (D) purchase, lease, or
otherwise acquire an existing generation facility -- (i) that has a value in excess of $10,000,000;
and (ii) that is used for interstate wholesale sales and over which the Commission has
jurisdiction for ratemaking purposes.” 16 U.S.C. § 824b(a)(1)(D). Anaheim’s interest in
SONGS has a value in excess of $10 million (as shown by the purchase price agreed by SCE and
Anaheim), and SONGS is used for interstate wholesale sales over which the Commission has
jurisdiction for ratemaking purposes. Accordingly, SCE is seeking an order of the Commission
authorizing the Transaction pursuant to FPA section 203(a)(1)(D).
FPA section 203(a)(4), 16 U.S.C. § 824b(a)(4), provides that the Commission “shall
approve” a proposed transaction if it finds that the transaction “will be consistent with the public
interest, and will not result in cross-subsidization of a non-utility associate company or the
pledge or encumbrance of utility assets for the benefit of an associate company, unless the
Commission determines that the cross-subsidization, pledge, or encumbrance will be consistent
with the public interest.” In its Merger Policy Statement, the Commission adopted a three-
pronged test for determining whether a transaction is consistent with the public interest. Under
this test, the Commission examines whether the transaction will adversely affect (1) competition
in the relevant markets; (2) wholesale rates; or (3) the ability of the Commission and pertinent
state commissions to effectively regulate the applicant.5 If the transaction will not have an
5 Merger Policy Statement at 30,111 (1996). The Commission reaffirmed the three-part
test for evaluating applications under FPA section 203 in Revised Filing Requirements Under Part 33 of the Commission’s Regulations, Order No. 642 at 31,873.
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adverse effect on any of these three factors, the Commission must find that the transaction is
consistent with the public interest.6
As shown in Sections IV.A, B, and C, below, the Transaction satisfies the three-part test
set forth in the Merger Policy Statement for determining whether a transaction is in the public
interest because it (1) will not have an adverse effect on competition; (2) will not harm any
customers under existing wholesale contracts; and (3) will not impair federal or state regulation.
Therefore, it is consistent with the public interest. Also, as shown in Section IV.D, below, and in
Exhibit M hereto, the Transaction will not cause any improper cross-subsidization or any pledge
or encumbrance of utility assets.
A. The Transaction Will Not Have an Adverse Effect on Competition
1. Anaheim’s Share of SONGS Represents a De Minimis Amount of Generating Capacity and the Transaction Demonstrably Will Not Violate the Commission’s Horizontal Market Power Screening Criteria The Commission generally requires merger applicants under FPA section 203 to prepare
a horizontal competitive screen analysis as set forth in Appendix A to the Merger Policy
Statement to determine whether a proposed transaction will adversely affect competition.7 In
Order No. 642, the Commission made clear that not all section 203 applicants are required to file
an Appendix A analysis: “There are mergers where the filing of a full-fledged horizontal screen
or vertical competitive analysis is not warranted because it is relatively easy to determine that
they will not harm competition.”8 The Commission explained that a section 203 applicant need
6 Applicants are not required to show that a proposed transaction affirmatively benefits
the public interest. Pacific Power & Light v. FPC, 111 F.2d 1014, 1016-17 (9th Cir. 1940); Kansas Power & Light Co., 54 FERC ¶ 61,077 at 61,251-52 (1991).
7 See also 18 C.F.R. § 33.3. 8 Order No. 642 at 31,901.
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not provide the full Appendix A competitive screen analysis if “the applicant demonstrates that
the merging entities do not currently operate in the same geographic markets, or if they do, that
the extent of such overlapping operation is de minimis.”9 Because the amount of generation that
SCE will acquire under the Transaction is de minimis, the Transaction is just such an instance
where it is relatively easy to determine that there will be no harm to competition and where a
full-blown horizontal screen analysis is not necessary.
The Transaction is not a merger but instead involves the sale of a small share of SONGS
generating capacity -- only 68 MW. Thus, the Transaction on its face involves the transfer of a
de minimis share of the 55,000 MW capacity in the CAISO market -- about one-tenth of one
percent (0.12%).
In the attached Affidavit, Dr. Fox-Penner evaluates the competitive effects of the
Transaction, and demonstrates that it will not harm competition. Dr. Fox-Penner explains that it
is not necessary, in this instance, to perform a full-blown Appendix A analysis to assess the
impact of the Transaction on market concentration. He calculates the change in the Herfindahl-
Hirschman Index (“HHI”) resulting from the Transaction by updating the Appendix A analysis
he performed and the Commission recently accepted in Docket No. EC05-132, the Nevada-
Silverhawk transaction.10
At pages 8-17 of his Affidavit, Dr. Fox-Penner demonstrates that the change in HHI
resulting from this Transaction would be well within the Commission’s safe harbor thresholds.
Under the Merger Policy Statement, a transaction that causes an HHI change of 50 points or less
9 Id. at 31,902. See also 18 C.F.R. § 33.3(a)(2)(i) (providing that an applicant need not
file a horizontal competitive screen analysis if it “[a]ffirmatively demonstrates that the merging entities do not currently conduct business in the same geographic markets or that the extent of the business transactions in the same geographic markets is de minimis”).
10 Nevada Power Co.,113 FERC ¶ 61,265 (2005).
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is deemed unlikely to harm competition even where the market is highly concentrated.11 Dr.
Fox-Penner’s analysis shows that, even using highly conservative assumptions, the change in the
HHI resulting from the Transaction would be less than 30 points for Economic Capacity and less
than 36 points for Available Economic Capacity during any time period. Moreover, the market
in which SCE operates is generally much larger than the geographic market used in the Nevada-
Silverhawk Appendix A analysis case, which focused on the SP-15 zone of the CAISO. At page
11 of the Affidavit, Dr. Fox-Penner explains that: “The Commission can be confident that if the
HHI changes for the SCE-Anaheim transaction are within safe harbor levels when this narrow
market is used for the purposes of my analysis, the transaction causes even smaller impacts on
competition if the market is defined more broadly.” In short, the Transaction involves a de
minimis amount of the generation in the market and will not adversely affect competition.
In similar circumstances, the Commission has concluded that the proposed transaction
raises no horizontal market power concerns and that the applicants need not prepare and submit a
full-blown Appendix A analysis. See Tucson Elec. Power Co., 103 FERC ¶ 62,100 (2003)
(approving transfer without a full-fledged Appendix A analysis where affidavit of economist
demonstrated that, under any reasonable set of assumptions, the increase in HHI would be 35
points or less).12 Because Dr. Fox-Penner concludes that the Transaction would not result in a
market screen failure under any reasonable set of assumptions, no further horizontal market
power analysis should be required to show that the Transaction will not have an adverse effect on
competition.
11 Merger Policy Statement at 30,119-20 & n.33. See also id. at 30,129, 30,133-34.
12 See also Virginia Elec. and Power Co., 108 FERC ¶ 61,136 (2004); PG&E Dispersed Power Corp., 98 FERC 62,134 (2002); San Gorgonio Power Corp., 95 FERC ¶ 62,097 (2001); San Gorgonio Power Corp., 94 FERC ¶ 62,200 (2001).
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Dr. Fox-Penner also gives other reasons to support his conclusion that the Transaction
will not harm competition. At pages 6 through 8 of the Affidavit, he explains that nuclear plants
like SONGS generally cannot be ramped quickly and therefore cannot be withheld. Further,
SONGS is a CAISO must-take resource; as Operating Agent for SONGS, SCE is required to
schedule all available output from SONGS every day. In addition, the CPUC reviews California
investor-owned utilities such as SCE to ensure that they meet their electric load obligations in the
least-cost manner. Dr. Fox-Penner also notes that changes in transmission flows resulting from
the Transaction will be extremely minor, making it very unlikely that the Transaction would
have any impact on transmission congestion. Finally, Dr. Fox-Penner explains that SCE’s
supply portfolio is characterized by an unusually large proportion of must-take energy.
2. The Transaction Does Not Raise Any Vertical Market Power Concerns Dr. Fox-Penner explains at page 17 of the Affidavit that the Transaction will have no
effect with respect to vertical market power. SCE’s transmission system is controlled and
operated by the CAISO. Moreover, SCE and its affiliates do not control enough generation sites
or otherwise have the ability to impose generation entry barriers. This observation is supported
by the fact that a number of independent power plants have been built during the last several
years within areas served by SCE or an SCE affiliate. Additionally, the CPUC encourages new
plant construction.
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B. The Transaction Will Not Have an Adverse Effect on Rates
Under this prong, the Commission focuses on the protection of “wholesale ratepayers and
transmission customers.”13 In this regard, the Commission evaluates whether the applicants
propose to raise wholesale rates.14 The Transaction will not have an adverse impact on rates
charged to any current SCE wholesale customers. SCE has no wholesale requirements
customers. In addition, none of its cost-based wholesale power sales contracts contains a cost-
of-generation component that embraces SONGS, a formula rate that would permit the pass-
through of any capacity costs related to the generation being acquired under the Transaction, or a
fuel adjustment clause that would automatically track SONGS fuel costs. All other wholesale
customers of SCE are served under market-based rate arrangements, and the Commission has
held that such sales do not raise concerns about the adverse impact that a transaction might have
on rates.15 Finally, the Transaction will have no effect on wholesale transmission rates because
Anaheim has no interest in any transmission facilities associated with SONGS; therefore, the
Transaction will not affect SCE’s transmission-related fixed costs.
C. The Transaction Will Not Impair the Effectiveness of Regulation
Under this prong, the Commission focuses on whether the proposed transaction could
impair regulation by the Commission or by affected states.16 Neither of these concerns is
implicated by the Transaction. The Transaction will not impair or diminish the Commission’s
13 Merger Policy Statement at 30,123.
14 See Cinergy Servs., Inc., 108 FERC ¶ 61,250 at P 13 (2004). See also NEP, 82 FERC ¶ 61,179 at 61,659 (1998) (The Commission’s primary concern under this element of its analysis is “the protection of wholesale ratepayers and transmission customers.”).
15 See, e.g., Destec Energy, Inc., 79 FERC ¶ 61,373 at 62,574-75 (1997).
16 Merger Policy Statement at 30,124-25.
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jurisdiction or regulatory authority in any way. Indeed, the transfer to SCE of Anaheim’s
interests in SONGS will effect a transfer of generation facilities from an entity that is generally
exempt from regulation as a public utility under FPA section 201(f) to an entity that is regulated
by the Commission as a public utility under Part II of the FPA.
State regulatory authority likewise will not be impaired. The Transaction will effect a
transfer from a non-jurisdictional entity (i.e., Anaheim) to a jurisdictional one (i.e., SCE). As
explained in Exhibit L hereto, CPUC approval of the Transaction is not required because
Anaheim is not subject to CPUC jurisdiction. Nonetheless, SCE is subject to CPUC jurisdiction
and is filing with the CPUC an application to establish ratemaking for the SONGS share
represented by Anaheim’s interests.
D. The Transaction Will Not Result in Any Improper Cross-Subsidization or the Pledge or Encumbrance of Utility Assets for the Benefit of an Associate Company The Transaction will not result in any improper cross-subsidization of a non-utility
associate company or a pledge or encumbrance of SCE’s utility assets for the benefit of an
associate company. SCE verifies that the Transaction will not, at the time of Transaction or in
the future, result in: (1) any transfer of facilities between SCE and an associate company; (2) any
new issuance of securities by SCE for the benefit of an associate company; (3) any new pledge
or encumbrance of assets of SCE for the benefit of an associate company; or (4) any new affiliate
contract between SCE and non-utility associate companies, other than non-power goods and
services agreements subject to review under Sections 205 and 206 of the FPA.17 Accordingly,
17 See Order No. 669 at P 169; see also Exhibit M to this Application.
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there is no need for the Commission to engage in a detailed examination of cross-subsidization
and encumbrance issues with respect to the Transaction.18
V. REQUIRED INFORMATION UNDER PART 33 OF THE COMMISSION’S REGULATIONS
SCE is submitting the following information pursuant to the filing requirements in 18
C.F.R. Pt. 33. In Order No. 642, the Commission stated that applicants may request waiver of
specific information requirements.19 The Commission grants such a waiver when the
Application contains “sufficient information to evaluate the proposed transaction.”20 SCE
requests that the Commission waive certain information requirements under Part 33, as indicated
below.
A. Section 33.2 -- General Information Requirements
1. Exact Name and Principal Business Address of Applicant
Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA 91770
2. Person Authorized to Receive Notices and Communications
Carol Schmid-Frazee Douglas Porter Southern California Edison Company 2244 Walnut Grove Avenue Rosemead, CA 91770 Phone: (626) 302-1337 Fax: (626) 302-1935 Email: [email protected] [email protected]
Douglas G. Green* Carol Gosain Steptoe & Johnson LLP 1330 Connecticut Avenue, N.W. Washington, D.C. 20036 Phone: (202) 429-6212 Fax: (202) 429-3902 Email: [email protected] [email protected]
18 Id.
19 Order No. 642 at 31,877.
20 PSI Energy, Inc., 60 FERC ¶ 62,131 at 63,342 (1992); Citizens Utils. Co., 41 FERC ¶ 62,064 at 63,180 (1987).
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*Person designated for service
3. Description of the Applicant a. Business Activities
A description of SCE is provided in Section III.A.1 of this Application. As a party to the
Transaction, Anaheim is also described in Section III.A.2. A further description of SCE’s
business activities is provided in Exhibit A hereto.
b. Energy Affiliates and Subsidiaries
Exhibit B contains a list of all SCE energy subsidiaries and affiliates.
c. Organizational Charts
SCE requests waiver under 18 C.F.R. § 33.2(c)(3) of the requirement to provide
organizational charts as Exhibit C because the proposed transaction does not affect the corporate
structure of any party to the transaction.
d. Business Arrangements
Exhibit D describes SCE joint ventures, strategic alliances, tolling arrangements and
other business arrangements, none of which is affected by the Transaction.
e. Common Officers or Directors
As provided in Exhibit E hereto, SCE and its affiliates or subsidiaries share no common
directors or officers with Anaheim and its affiliates or subsidiaries.
f. Description of Wholesale Customers
SCE seeks waiver of the requirement to provide a list of wholesale power sales and
transmission services customers as Exhibit F. The information is available in SCE’s electric
quarterly reports and, as discussed in Section IV.B, above, the Transaction will not affect
wholesale power sales or transmission services rates for any of these customers.
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4. Description of Jurisdictional Facilities SCE’s jurisdictional facilities are described in Section III.B and Exhibit G of this
Application.
5. Narrative Description of the Proposed Transaction See Section III.C above.
6. Agreements Related to the Proposed Transaction
The Settlement Agreement is attached as Exhibit I hereto.
7. Statement of Public Interest
See Section IV above.
8. Map Showing Physical Property SCE requests waiver of the requirement to provide a map of the physical property on the
following grounds: (i) security; and (ii) the Transaction will not affect the physical property.
9. Regulatory Actions Necessary to Complete the Transaction See Exhibit L attached hereto.
10. Verification That the Proposed Transaction Will Not Result in Cross-Subsidization or Pledge or Encumbrance of Utility Assets
See Exhibit M attached hereto.
B. Sections 33.3 and 33.4 -- Competitive Analyses
See Section IV.A, above, and the Fox-Penner Affidavit (Attachment 1).
C. Section 33.5 -- Proposed Accounting Entries
The proposed accounting treatment for SCE is provided in Exhibit N. Anaheim is not
required to maintain its books of account in accordance with the Commission’s Uniform System
of Accounts in 18 C.F.R. Pt. 101, and thus is not required to submit proposed accounting entries
under Section 33.5.
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D. Section 33.6 -- Form of Notice
A Form of Notice suitable for publication in the Federal Register is included as
Attachment 2 hereto. An electronic version of the Form of Notice on diskette is also included.
E. Section 33.7 -- Verification
The signed verification of Brian Katz, Vice President, Nuclear Oversight and Regulatory
Affairs of SCE, is attached as Attachment 4 hereto.
F. Section 33.9 -- Proposed Protective Order
Pursuant to section 388.12 of the Commission’s regulations, 18 C.F.R. § 388.112, SCE
requests privileged, non-public treatment of Exhibit No. SCE-2 Panel A to the Fox-Penner
Affidavit. Exhibit No. SCE-2 Panel A contains information on SCE’s 2006 generation resources
which is proprietary, confidential and commercially-sensitive, and the disclosure of which would
cause competitive harm to SCE. The Commission has determined that privileged, non-public
treatment of commercially-sensitive information submitted to the Commission to support a
section 203 application is appropriate.21
Pursuant to 18 C.F.R. § 33.9, SCE has attached as Attachment 3 hereto a proposed
protective order, under which the non-public version of the Application would be designated as
Protected Materials. The attached proposed protective order is modeled on both the Chief
Administrative Law Judge’s Proposed Order (amended to reflect the fact that the Commission,
not an Administrative Law Judge, would issue the order) and the Protective Order adopted in
Docket No. EL00-95-045. Due to the commercially-sensitive nature of the privileged material at
issue here, SCE is requesting that the Commission adopt a protective order that prohibits
Competitive Duty Personnel from being Reviewing Representatives. As is typical of such
21 See Order No. 642 at 31,902 n.78.
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protective orders, exceptions may be requested by parties that claim that they would be
prejudiced if they were unable to rely on particular personnel that engage in Competitive Duties
as Reviewing Representatives.22 As for non-Competitive Duty Personnel and entities that have
no Competitive Duty personnel, SCE is willing to provide the privileged material pursuant to the
attached proposed protective order upon the execution of a Non-Disclosure Certificate.
SCE’s position on the need to restrict access to the privileged material is shaped by its
experience during the energy crisis and is well supported by economic analysis. SCE is
concerned that any disclosure of information concerning its resource position can have severely
adverse impacts on its native load, as SCE continues to engage in procurement activity over the
next several years. In early 2004, due to concerns that the CPUC would require the disclosure of
data on SCE’s procurement activities, SCE requested that economist Dr. Charles R. Plott from
the California Institute of Technology prepare a detailed scientific study to asses the effect of
disclosure of procurement-related data. His analysis concluded that the release of information
that gives sellers a clearer understanding of a buyer’s demand curve will adversely impact buyers
by raising prices.23
SCE has thus endeavored in every relevant forum -- before this Commission, the CPUC,
and the California Energy Commission -- to protect information concerning its resources and
bundled retail load. The extent of SCE’s concern was evidenced by SCE’s willingness to sue the
CEC in an effort to prevent if from releasing SCE load data. In SCE’s view, there is simply no
reason to subject the ratepayers of California to the risks associated with public disclosure of
information regarding these matters, particularly to Competitive Duty Personnel.
22 A special form of Non-Disclosure Certificate is attached for such personnel.
23 Dr. Plott’s analysis was filed March 1, 2004 at the CPUC in Docket No. 01-10-024.
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SCE designates the following persons as the individuals to be contacted regarding the
request for confidential, non-public treatment of the non-public version of the Application and
access to the confidential, non-public information subject to the protective order:
Douglas G. Green Carol Gosain Steptoe & Johnson LLP 1330 Connecticut Avenue, N.W. Washington, D.C. 20036 Phone: (202) 429-6212 Fax: (202) 429-3092 Email: [email protected] [email protected]
ATTACHMENT 1
AFFIDAVIT OF DR. PETER FOX-PENNER
UNITED STATES OF AMERICA
BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION
Southern California Edison ) Docket No. EC06-___-000 City of Anaheim )
AFFIDAVIT
OF
PETER FOX-PENNER
I. INTRODUCTION, PURPOSE, AND SUMMARY
1.
2.
My name is Peter Fox-Penner. I am a Principal and Chairman of The Brattle Group,
an economic and management consulting firm with offices in Cambridge, MA,
Washington, D.C., San Francisco, CA and London, England. I received a Ph.D. in
Economics from the Graduate School of Business, University of Chicago, as well as
an M.S. in Mechanical Engineering and a B.S. in Electrical Engineering from the
University of Illinois. I am an economist and manager with two decades of
experience in government and consulting, primarily in the area of regulated utilities.
My statement of qualifications, including testimony I have given over the past four
years, is attached as Exhibit No. SCE-1.
I have been asked by Southern California Edison (SCE or Applicant) to analyze the
competitive effects of SCE’s acquisition of City of Anaheim’s (Anaheim’s) 3.16
percent ownership interests of San Onofre Nuclear Generating Station Units 2 and 3
(SONGS) on wholesale competition in the California Independent System Operator
(CAISO) market.
Page 1 of 17
3.
Based on the following factors, I conclude that the proposed transaction has no
adverse impact on competition. I have drawn this conclusion from the following
analysis:
• De-Minimis: The size of the proposed transaction is about 68 MW.1
This is a relatively insignificant amount of generation when compared
to approximately 55,000 MW of total capacity in the CAISO market.
• Must-Take Status: Although SCE is a majority owner of SONGS
and currently operates SONGS, the resource is must-take capacity,
giving SCE no ability to withhold its output.
• Use of Silverhawk Delivered Price Test (DPT): I have calculated
the impact of the proposed transaction on market concentration using
the recently accepted Silverhawk DPT post-transaction results from
Nevada Power Company’s section 203 filing in Docket No. EC05-
132. The impact of the proposed transaction, measured by the change
in Herfindahl-Hirschman Index (HHI), can be calculated by using a
universally accepted formula, involving the pre-existing market share
of SCE and the pre-transaction market share of Anaheim’s 68 MW of
SONGS.
The results of my analysis indicate that the change in market concentration (HHI)
does not exceed 36 points in any time period for Economic Capacity (EC) and
Available Economic Capacity (AEC) measures. This is well within the
Commission’s safe harbor threshold for this type of market of 50 points. Section
33.3 of Order 642 exempts a section 203 applicant from submitting a full DPT
analysis if the applicant can demonstrate that the merging entities do not operate in
the same geographic market, or if they do, that the extent of such overlapping
1 The capacity number reported here is maximum dependable capacity rating.
Page 2 of 17
operation is de minimis.2 In this instance, Applicant is submitting a simplified
equivalent of DPT to ensure that the de minimis conditions of Section 33.3 apply.
4.
5.
6.
7.
The next section of my affidavit describes SCE’s businesses and its obligations along
with the proposed transaction. I discuss factors that greatly reduce the impact of the
transaction in Section III, and explain the framework of the analysis, including main
assumptions used in the Silverhawk DPT analysis and adjustments made to these
assumptions in Section IV. The entire Silverhawk filing, which was originally filed
without any confidentiality restrictions, is attached to and refiled as Exhibit SCE-3
with this affidavit. The results of the analysis and a vertical competitive issue are
discussed in Section V.
II. DESCRIPTION OF SOUTHERN CALIFORNIA EDISON AND THE TRANSACTION
SCE is a partially integrated investor-owned utility that primarily serves retail
customers in Southern California. In addition to matters subject to the jurisdiction of
the Commission, nearly all its other electric power industry operations are subject to
regulation and oversight by the California Public Utilities Commission (CPUC).
In 1998 SCE relinquished operational control over its transmission facilities to the
CAISO. In addition to the removal of any real control over transmission access, and
thus any concerns over transmission market power, the CAISO imposes many
Commission-approved rules and procedures on SCE’s and other market participants’
generating resources within the CAISO footprint.
In 1998 SCE also divested many of its previously owned generation facilities. As a
result, SCE buys approximately three-quarters of its power. SCE’s resource
planning and acquisition is subject to extensive CPUC oversight, and all long-term
power purchase contracts require CPUC pre-approval.3 The CPUC requires that
2 Order No. 642, 93 FERC ¶ 61,164 at Section V.H. p.74. 3 Order Instituting Rulemaking to Establish Policies and Cost Recovery Mechanisms for Generation
Procurement and Renewable Resource Development, (Interim Opinion), CPUC Decision 02-10-062, October 24, 2002, modified in Decisions 02-12-069, 02-12-074, 03-06-076 and 05-01-054.
Page 3 of 17
most long-term purchases be procured via competitive solicitations.4 More
significantly, the CPUC recently adopted a “resource adequacy” requirement (RAR)
that requires SCE, the other California IOUs, and all other CPUC-jurisdictional load
serving entities (LSEs) to have capacity, under either ownership or suitable contract,
sufficient to provide a 15 to 17 reserve margin above estimated peak load in each
month.5 According to the CPUC rule, 90 percent of the required capacity must be
owned or purchased at least nine months in advance of the next May-to-September
period. This is often accomplished in the form of quarterly or annual contracts.
Each LSE and IOU must, at some later date, demonstrate that it has filled out the
remaining 10 percent of its requirement.
8.
9.
Because SCE considers the complete list of capacity it owns and controls to be
confidential, I am filing a complete list of SCE’s 2006 owned and controlled
generation resources used in my calculations as a privileged exhibit in Exhibit SCE-2
Panel A. I have used this timely and accurate data on SCE’s resources in place of
the public data on SCE’s resources contained in the Silverhawk filing.
SCE’s affiliate, EME, also jointly owns through subsidiaries, a power plant and QFs
in Washington State and California. EME’s ownership share of capacity from these
projects totals 1,018 MW. Exhibit SCE-2 Panel B lists generating facilities that are
partially owned by EME in the Western Interconnection. Of this, 273 MW is from
EME’s 50 percent interest in Sunrise Power LLC, which owns a 545 MW combined
cycle gas-fired facility in California (Sunrise). Power production from Sunrise,
however, is fully committed under a California Department of Water Resource
(CDWR) contract that is allocated to San Diego Gas and Electric Company (SDGE).
Under that CDWR contract, SDGE has the right to schedule and dispatch the full
output of the unit. Thus, there is no uncommitted capacity from this unit available to
SCE.6
4 Interim Opinion, pp.30-31. 5 CPUC, Opinion on Resource Adequacy Requirements, Decision 05-10-042, October 27, 2005. 6 I explained in my affidavit, which was filed on behalf of Sunrise Power Company in Docket ER01-2217-
002 on November 9, 2004, that under its long-term contracts, Sunrise has no control over the output of its plant and no incentive to withhold output.
Page 4 of 17
10.
11.
12.
EME jointly owns a 50 percent interest in March Point Cogeneration Company,
which operates a 146 MW QF in the Puget Sound control area. March Point’s output
is fully committed to Puget Sound Energy (PSE) through 2011. EME also owns a 50
percent share of 136 MW of several QFs (Coalinga, Mid-Set, Salinas River, and
Sargent Canyon) that are fully committed to Pacific Gas and Electric Company
(PG&E) at least through early 2007.7 I do not allocate these plants to SCE in this
market analysis.
Three EME QFs in the CAISO control area (Kern River Cogeneration Company
(KRCC), Sycamore and Watson) have long-term power purchase agreements with
SCE, which include the output owned by EME’s partners.8 EME also jointly owns
Midway Sunset Cogeneration Company, which operates the 219-MW Midway
Sunset Facility. A portion of the output of Midway Sunset is committed to SCE
while the remainder of the output is committed to PG&E. Finally, Mountainview
Power Company, LLC (MVL), an Exempt Wholesale Generator and SCE’s affiliate,
owns a 1,056-MW natural gas combined cycle power plant in Southern California.
The plant has been on-line since December 2005. The total output of the plant is
under a long-term power purchase contract with SCE at cost-based rates.9 All of the
capacity owned by EME and sold under contract to SCE (shown in Column [16] of
Exhibit SCE-2 Panel B) is fully reflected in my data on SCE’s total generation
capacity in my analysis. All of EME’s remaining capacity is subject to long-term
contracts committed to other buyers and thus is not attributable to SCE for the
purpose of this analysis.
SONGS is a nuclear baseload power plant with a total net dependable capacity of
2,150 MW. Anaheim owns 3.16 percent interest in SONGS 2&3, while SDGE owns
20 percent, the City of Riverside owns 1.79 percent, and SCE owns 75.05 percent.
7 I am informed that Mid-Set’s long-term power purchase agreement with PG&E expired, and it is currently selling to PG&E under a standard offer contract.
8 A twenty-year PPA between KRCC and SCE expired in August 2005, and KRCC is currently selling power to SCE under a five-year standard offer contract.
9 SCE’s long-term purchase contract from MVL has been approved by FERC. 106 FERC¶ 61,183, February 25, 2004.
Page 5 of 17
III. CONSIDERATIONS THAT GREATLY REDUCE TRANSACTION IMPACTS
A. SCE AND ISO SCHEDULING PROTOCOLS
13.
14.
15.
16.
As a general matter, nuclear plants like SONGS cannot be ramped quickly and
therefore cannot be withheld. They can profit from other withholding but cannot be
the source of withholding themselves.
SCE is currently the Operating Agent of SONGS. However, SONGS is an ISO
must-take resource. The scheduling rules for these resources require that SCE
schedule all available output from SONGS every day.
Additionally, in 2002 the CPUC Standard of Conduct 4 (SOC 4) was adopted,
requiring each IOU in California to dispatch its portfolio of existing resources,
allocated CDWR contracts, and new purchases to meet its electric load obligations in
a least-cost manner. To ensure that IOUs’ dispatch and procurement practices are in
compliance with SOC 4, the CPUC conducts a review process known as the Energy
Resource Recovery Account (ERRA) mechanism.10 In ERRA proceedings each IOU
must demonstrate that its dispatch results in the most cost effective mix of total
resources, thereby minimizing the cost of delivering power to customers. SCE’s
least-cost dispatch activities have recently been found to be reasonable and prudent
by the CPUC.11
B. TRANSMISSION FLOWS UNLIKELY TO CHANGE
Anaheim undoubtedly has scheduled its share of SONGS to serve its load. SONGS
has the lowest dispatch cost of all of the plants in Anaheim’s generation portfolio,
which includes jointly-owned coal power plants (Palo Verde, San Juan, and the
Intermountain Project), a jointly-owned natural gas combined cycle plant
(Magnolia), and a peaking gas power plant (Anaheim GT).
10 Interim Opinion, p. 63. 11 Decision 06-01-007, CPUC, January 12, 2006.
Page 6 of 17
17.
18.
19.
20.
21.
Because all of SONGS was scheduled to load in Southern California, the total net
imports into Southern California equal the total demand less total supply in Southern
California.
If Anaheim no longer takes 68 MW baseload power from SONGS and SCE takes 68
MW more, the changes in transmission flows in Southern California will be
extremely minor. SCE will purchase 68 MW less shaped power from the market –
almost certainly imports – but Anaheim will have to purchase about 68 MW more
baseload. The net effect on units inside Southern California or on import flows is
likely to be quite small, as Anaheim’s new imports will nearly match SCE’s old
ones.
This greatly reduces the possibility that this transaction will create opportunities for
strategic transmission congestion or will change congestion patterns so as to create
new submarkets that should be analyzed separately, or will otherwise exacerbate
congestion in Southern California.
C. SCE’S RESOURCES ARE HEAVILY MUST-TAKE AND CAPACITY OPTION CONTRACTS
SCE’s evolving supply portfolio is marked by the fact that it owns or has under
contract an unusually large proportion of “must take” energy. This is due to
California’s past implementation of PURPA (which led to extensive purchases from
Qualifying Facilities (QFs)), a large amount of long-term power purchased by
CDWR that are allocated to SCE, and SCE’s continued ownership of baseload
nuclear and coal plants.
In addition, some of SCE's contracts are capacity option contracts that give SCE a
limited right to schedule power from unaffiliated suppliers' units one day in advance.
If SCE does not exercise this right, the ability to sell this power in hour-ahead
markets reverts to the owner of the unit. As I explained in detail in my testimony in
Docket No. ER02-2263-004 (SCE's application for Triennial Market-Based Rates),
contracts of this nature do not confer the ability to withhold the optioned capacity
Page 7 of 17
from the market. Including the full capacity of these contracts in market share
calculations overstates the impact of these contracts on the instant transaction's
competitive impact. Nevertheless, as shown below, even if all of these contracts are
included in the DPT calculations, this transaction fully satisfies the Commission’s
screening criteria.
IV. FRAMEWORK FOR THE ANALYSIS
A. FERC’S MARKET POWER FRAMEWORK
22.
23.
24.
The Commission requires that a transfer of jurisdictional assets be consistent with
the public interest, and in particular, that it not adversely competition.
To examine the competitive effects of a transaction, the Commission’s Merger
Guidelines require the application of an analytic screen known as a DPT.12 The DPT
determines how much output each potential supplier can deliver into a destination
market at a cost less than or equal to 105% of the prevailing market price for each
generation product. The DPT “is intended to provide a standard, generally
conservative check to allow the Commission, applicants, and intervenors to quickly
identify mergers that are unlikely to present competitive problems.”13
There are several steps involved in the DPT, including (1) identifying the relevant
products and markets that might be affected by the transaction, (2) assessing market
concentration or HHI, and (3) evaluating future entry conditions. Transactions that
pass the screen are usually not scrutinized further, while transactions that fail the
screen are customarily examined in more detail and/or altered to no longer fail the
screens.
12 The Federal Energy Regulatory Commission, Merger Policy Statement Order 592, December 1996 and
Order 642, November 15, 2000. 13 Order No. 642, FERC Stats. & Regs ¶ 31,111 at 31,879.
Page 8 of 17
25.
26.
27.
28.
29.
The Commission also requires that asset transfers not enhance vertical market power,
or market power whose exercise is enabled by the ownership of more than one stage
of production.
Part 33 of the Commission’s Rules and Regulations, as revised by Order 642,
establishes an exemption from filing a full DPT analysis if the applicant can
demonstrate that the merging parties do not currently operate in the same geographic
markets or that the extent of the business transactions in the same geographic market
is de minimis.
In this instance, the proposed transaction is 68 MW. This is a relatively insignificant
amount of generation when compared to 55,000 MW of total capacity in the CAISO
market. Thus, there is no need to perform a full DPT analysis. However, to firmly
establish the absence of significant impacts, I calculate the change in market
concentration resulting from this transaction based on a recently approved DPT
analysis and using a very conservatively defined geographic market.
My analysis is based on my recent DPT analysis in submission of the Silverhawk
Power Plant acquisition for Nevada Power Company and GenWest LLC (the
Nevada-Silverhawk transaction) in Docket No. EC05-132. FERC approved the
transaction on December 15, 2005.14 I refer to this DPT analysis as “the Silverhawk
DPT analysis.” The Silverhawk DPT analysis was conducted in accordance with the
procedures for competitive studies mandated under Federal Power Act Section 203
and set forth in Order No. 592, and updated in Order Nos. 642 and 642-A.15 Exhibit
SCE-3 presents my affidavit, exhibits, and workpapers submitted in the Nevada-
Silverhawk filing.
I calculated the impact of the Nevada-Silverhawk transaction by measuring changes
in HHIs for EC and AEC measures, as required by the Commission’s Section 203
guidelines. Briefly, EC is the total amount of capacity adjusted for long-term firm
capacity commitments that a supplier can deliver to a destination market at a price no
14 113 FERC ¶ 61,265 (2005). 15 Inquiry Concerning the Commission’s Merger Policy Federal Power Act: Policy Statement, Order No.
592, 77 FERC ¶ 61,263 (December 18, 1996). Revised Filing Requirements Under Part 33 of the Commission’s Regulations, Order 642, 93 FERC ¶ 61,164 (November 15, 2000).
Page 9 of 17
greater than 5 percent above prevailing prices. The EC measure does not take into
account the supplier’s native load commitments. The AEC measure is derived in the
same manner, except that each supplier’s capacity is reduced by that supplier’s
existing native load obligation.
30.
31.
I calculate the impact of this transaction (i.e., SCE-SONGS) for the same two
products (AEC and EC) and 14 time periods as I used in the Nevada-Silverhawk
analysis. For each market (AEC or EC, time period) my calculation begins with
SCE’s share in this defined market as computed in the Nevada-Silverhawk DPT
analysis. I then increase SCE’s market share by adding Anaheim’s 68 MW of
SONGS to SCE’s market share and reducing Anaheim’s market share by the same
amount. As explained below, I also add capacity to SCE’s market share very
conservatively to simulate SCE’s acquisition of added capacity resources it will need
to meet state resource adequacy requirements. I then recompute the HHI to reflect
these changes.16
The change in HHI that results from a particular transaction can be calculated by
using a universally accepted 2AB formula, where A, in this instance, is the existing
market share of SCE, and B is the market share of Anaheim’s 68 MW of SONGS.17
The formula is derived mathematically from the difference between HHIs before and
after a transaction, where an HHI is calculated by squaring market shares of each
supplier competing in the market and summing the results across all suppliers. By
squaring market shares, the index weighs more heavily on large firms than smaller
firms. Thus, an HHI after transaction could become larger if both merging firms are
competing in the same geographic market, stay the same if not, or be lower if a
16 As explained below, I employ an algebraic shortcut to determine the change in HHI from all of these
adjustments. Because it is the change in HHI that triggers the Commission’s thresholds, there is no need to compute actual market shares and other intermediate results in this instance.
17 U.S. Department of Justice/Federal Trade Commission Guidelines, 4 Trade Reg. Rep. ¶ 13,104 at § 1.51 n.18.
Page 10 of 17
transaction caused market shares of a larger firm to become smaller. This impact can
be estimated using the 2AB formula.18
32.
33.
34.
Under the DPT and the Department of Justice/Federal Trade Commission Merger
Guidelines, a transaction that causes an HHI change of 50 points or less is deemed
unlikely to harm competition even where the market is highly concentrated.
B. DATA AND ASSUMPTIONS OF THE SILVERHAWK DPT ANALYSIS
In the Silverhawk DPT analysis, I evaluated the effect of the Nevada Silverhawk
transaction on competition in the SP-15 zone of the CAISO, which I conservatively
labelled “the SP-15 market.” As I explained at length in my testimony in Docket No.
ER02-2263-004 (SCE’s MBR filing), the market in which SCE operates is generally
much larger than SP-15. Therefore it likely is extremely conservative to use SP-15
as the relevant market for the purposes of analyzing the SCE-Anaheim transaction.
The Commission can be confident that if the HHI changes for the SCE-Anaheim
transaction are within safe harbor levels when this narrow market is used for the
purposes of my analysis, the transaction causes even smaller impacts on competition
if the market is defined more broadly This destination market was broken down into
14 distinct time periods, from summer super-peak hours to off peak hours in the four
traditional seasons.19
The test year for the Silverhawk DPT analysis was 2006. This is appropriate for
analyzing the competitive impact of SCE’s SONGS transaction as I am informed that
the transaction is expected to close during this year.
18 For a merger of Firms A and B, HHI∆ = HHI after - HHI before = ( ) 22 ... NBA MSMSMS +++ -
= 2MS222 ... NBA MSMSMS −−− A·MSB. For Firm A’s acquisition of Firm B’s power plant Y, HHI∆ = 2MSY·*(MSA-MSB-Y) where MSY is a market share of power plant Y and MSB-Y is a market share of Firm B’s remaining assets. I conservatively do not estimate the second term of the change HHI (a.k.a. 2MSY·MSB-Y.). This term is greater than or equal to zero, thus causing the change in HHI to be smaller.
19 I defined two super-peak periods for each summer and winter and one super-peak period for spring and fall. Super Peak_50 represents the highest 50 hours of hourly load/prices likely to be observed in a destination market in each season while Super Peak_100 is the next 100 hours of hourly load/prices likely to be observed.
Page 11 of 17
35.
36.
37.
38.
The database underlying the Silverhawk DPT analysis was constructed for 2006.
The dispatch costs data were generally based on the 2004 historical data but were
escalated to 2006. For instance, my 2006 coal prices were based upon plant-specific
fuel prices taken from 2003-2004 Monthly FERC Form 423 and escalated based on
GDP Deflator. For gas prices, I calculate historical seasonal hub-specific gas price
using day-ahead gas prices reported by Gas Daily and then escalate them to 2006
using the percentage change in prices between historical Henry Hub gas price and
the NYMEX 2006 Henry Hub future gas prices as of April 6, 2005.20
Potential suppliers’ hourly loads taken from 2004 FERC Form 714 for the 2003
data21 were calculated according to the 14 time period definitions and then escalated
from 2003 to 2006 levels using the WECC projected load growth for each sub-region
from the WECC’s most recent supply adequacy projection.22 For SCE and other
suppliers in CAISO, their loads were grown using the CAISO projected load growth
with an average annual load growth of 2.5 percent.23 All of these loads were then
adjusted to account for the assumed operating reserves requirement of 7 percent.24
The 2006 generation data were obtained from the NERC Electricity Supply and
Demand (ES&D) database, FERC Form 714 for existing generation, and CAISO
2005 Summer Assessment as well as the California Energy Commission Facility
Status Database for new capacity additions in 2005 and 2006.25
Long-term purchases and sales were primarily gathered from the 2004 FERC Form 1
and California Department of Water Resources for the CDWR contracts.26 SCE’s
contracts were also based on these two public sources. To ensure that I accurately
represent SCE’s long-term contracts in this analysis, I modify the data for the use of
this analysis. The changes are explained in the next section.
20 See my affidavit in the Nevada-Silverhawk filing (Exhibit SCE-3), P. 40. 21 The most recent FERC Form 714 available at the time of my analysis is for the 2003 hourly load data. 22 WECC, NERC Reliability Assessment 2003-2012, pp. 84 and 85. 23 See Table 2, Workpaper PFP-Load Memo, Exhibit SCE-3. 24 Western Electricity Coordinating Council, Minimum Operating Reliability Criteria, April 6, 2005, p. 2. 25 http://www.energy.ca.gov/database/index.html#powerplants, as of May, 2005. 26 See Exhibit SCE-3, Workpaper PFP-LT Contracts Memo-Public.
Page 12 of 17
39.
40.
41.
The 2004 actual spot energy market prices for the SP-15 trading area were obtained
from Intercontinental Exchange (ICE) daily indices for the SP-15 hub. Prices for all
peak periods were escalated to 2006 using the same escalators as those of my gas
prices while off-peak prices were grown by the GDP Deflator. The SP-15 prices
utilized in the analysis therefore range from $38.01 per MWh in the Fall Off-Peak
(OP) period to $92.59 per MWh in the Winter_50 period.27
The Silverhawk DPT analysis limited the transfer capability into the SP-15
destination market based on Southern California Import Transmission Nomogram
(SCIT), transfer capabilities between SP-15 and neighbouring areas inside SCIT,
(i.e., Los Angeles Department of Water and Power (LADWP), Comisi\n Federal de
Electricidad (CFE), and Imperial Irrigation District (IID)), as well as transfer
capabilities around Arizona, Nevada, and Utah.28 The 2006 total simultaneous
import limits (SIL) for SP-15 range from 15,408 MW to 16,611 MW, depending on
seasons and time periods. The SIL from SCIT into SP-15 was estimated to be in the
range of 9,220 MW to 10,108 MW while the transfer capabilities into SP-15 from
CFE, LADWP, and IID were 400 MW, 4,056 MW, and up to 2,252, respectively.29
C. ADJUSTMENTS TO THE SILVERHAWK DPT ANALYSIS FOR SCE’S SONGS ACQUISITION
The Silverhawk DPT analysis utilized historical public data for SCE’s long-term
contracts. To comply with the CPUC RAR, SCE has already made long-term
purchases as well as the call option contracts discussed in Section III to cover 90
percent of its monthly peak load requirement.30 SCE views the information as
confidential. I therefore have conservatively made adjustments in the Silverhawk
27 The Winter_50 period was defined as the highest 50 hours of hourly spot prices likely to be observed in a
destination market in Winter. 28 Exhibit SCE-3, PP. 49-57 and Workpaper PFP-Trans Ownership Calculation.pdf. 29 Workpaper PFP-Trans Ownership Calculation.pdf, pp 6-11. 30 Triennial MBR filing for Southern California Edison, Docket No. ER02-2263-004, August 29, 2005.
Notice of Change in Status for Southern California Edison Company, Docket No. ER02-2263-005, November 2, 2005.
Page 13 of 17
DPT post-transaction results by assuming that SCE purchases enough long-term
capacity to satisfy its RAR.31
42.
43.
In this analysis I assume that SCE makes additional purchases that equal the amount
conservatively needed to satisfy the RAR in each examined seasonal period. Exhibit
SCE-4 presents my adjustments to SCE’s economic capacity as listed in the
Silverhawk DPT analysis for each of the 14 time periods. Column [1] of the exhibit
reflects SCE’s total owned and controlled economic capacity from generating units
or contracts inside and outside SP-15 as reported in the Silverhawk data and that
have their variable costs (marginal cost plus wheeling and losses) less than or equal
to 105% of the prevailing SP-15 market price for each of the 14 time periods. SCE’s
unadjusted economic capacity in this column ranges from 5,995 MW in Fall_OP to
12,061 MW in Summer_50 and Summer_100 periods. Column [2] shows SCE’s
estimated 2006 load plus 7 percent operating reserves obligations. The maximum
load including 7 percent operating reserves for each season, as reported in the
Silverhawk data and also shown in column [3], ranges from 14,156 MW for winter
to 20,186 MW for summer. Because the RAR rules require that SCE have resources
equal to 90 percent of its load plus 15 percent reserves, SCE would need a maximum
of 19,525 MW of capacity during summer.32
Since these resources are procured to satisfy monthly peak demand, it is reasonable
to assume that they are not economic during off-peak periods, i.e., their marginal
costs are above 105% of the prevailing SP-15 off-peak market prices. I therefore
increase SCE’s resources as presented in the Silverhawk DPT analysis by the
amounts shown in Column [5] during on-peak periods only to reflect purchases that I
believe SCE must make to meet CPUC rules for this year. This approach is very
conservative because CPUC rules do not require that all 90% of peak use be
purchased under contracts one year or more in duration. If, for example, SCE
chooses to fulfil its RAR by purchasing power on a quarterly basis, Commission
31 I made a similar adjustment in SCE’s recent triennial MBR filing before the Commission. See Exh. No. SCE-1, Docket No. ER02-2263-004, August 29, 2005.
32 19,525 = [(20,186)/(1.07)]*1.15*.90. I exclude the 7 percent of operating reserves from seasonal maximum load reported in column [3] before I adjust SCE’s resource need to comply with the CPUC RAR.
Page 14 of 17
rules would call for omitting this contracted capacity from SCE’s market share.
However, to be very conservative I assume all SCE purchases are one year or more
and therefore include all of them in my estimated market shares. Figure 1 illustrates
the additional SCE economic capacity I add to reflect purchases to be made for 2006
RAR compliance for each time period under this analysis.
Figure 1 Additions to SCE’s Economic Capacity to Reflect
SCE’s Expected 2006 Resource Adequacy Purchases Adjustment to SCE's 2006 Resources to Satisfy California RAR by Season
-
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
22,500
SPR_100
SPR_PK
SPR_OP
SUM_50
SUM_100
SUM_PK
SUM_OP
FALL_100
FALL_PK
FALL_OP
WIN
_50
WIN
_100
WIN
_PK
WIN
_OPDPT Time period
SCE
's A
djus
ted
Res
ourc
es (M
W)
SCE 2006 Economic Capacity in Silverhawk DPT Additional Assumed Purchases To Comply with CPUC RAR
44. This adjustment is highly conservative for several reasons. First, I assume that all of
SCE’s estimated additional capacities are economic during on-peak periods even
though prices of these long-term power purchase contracts could vary and exceed the
prevailing market prices plus 5 percent. Second, in practice these contracts are likely
to be customized or shaped according to load variations and would not necessarily be
delivered as block resources throughout each season. Third, as discussed in Section
IIIC, some of SCE’s capacity purchases are in the form of call options, which under
this Commission’s criteria and basic principles of economics do not count as fully
Page 15 of 17
controlled capacity,33 but my adjustments to SCE’s economic capacity to satisfy the
CPUC RAR requirement treat all contracts as if they were fully controlled capacity.
V. DISCUSSION OF RESULTS
45.
46.
47.
48.
Exhibit SCE-5 Panel A presents changes in HHI indices due to the transaction for the
2006 SP-15 market under the EC measure. As explained and also shown in Column
[2] of Exhibit SCE-5 Panel A, I add 2,000 MW to 9,000 MW of additional purchases
as SCE’s economic capacity. I assume that SCE purchases this from existing
capacity in the market. Thus, EC market sizes, which are taken from the post
transaction of the Silverhawk DPT analysis and reported on Column [5], do not
change.
Anaheim’s share of SONGS represents only a small fraction of the SP-15 EC
market, less than 0.4 percent. Consequently, the change in HHI resulting from this
transaction is less than 30 points in all periods for EC. This is shown in the right
most column on Exhibit SCE-5 Panel A.
For AEC, SCE is a net on-peak buyer and therefore has no AEC in majority of the
periods despite an increase in SCE’s resources by 2,000 MW to 9,000 MW due to
assumed RAR purchases. During any period in which SCE has zero AEC, the
acquisition of 68 MW of SONGS does not create an HHI change. This is due to
SCE’s native load obligation. As a result, the changes in HHI resulting from this
transaction for AEC is generally zero, except for some on peak periods. The results
shown in Column [11] of Exhibit SCE-5 Panel B show that the highest change in
HHI is only about 35 points, well below the Commission threshold of either 50 or
100 points, depending upon the degree of post-transaction market concentration.
Overall, I conclude that SCE’s acquisition of 68 MW will have a de minimis effect
on market concentration and the proposed transaction will not harm competition.
33 Affidavit of Peter Fox-Penner, Exh. No. SCE-1, Docket No. ER02-2263-004, August 29, 2005, p.3.
Page 16 of 17
49.
50.
In addition, no increase in market power via “vertical” channels arises from this
small transaction. SCE’s transmission system is controlled and operated by the
CAISO. Furthermore, SCE and its affiliates plainly do not control sufficient
numbers of generation sites or have the ability to impose other generation entry
barriers within or outside of their retail service areas. Within their areas, a number of
independent power plants have been built in the last several years. The CPUC also
encourages new plant construction.
This completes my affidavit.
Page 17 of 17
I, Peter Fox-Penner, being duly sworn, do hereby state that the foregoing Affidavitwas prepared by me or under my supervision, and that the statements contained thereinare true, accurate, and complete to the best of my knowledge, information and belief.
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PETER S. FOX-PENNER Exhibit SCE-1 Principal and Chairman of the Board Peter Fox-Penner is an economist with an engineering education and more than 25 years of experience in regulated industries, energy policy, and environmental issues. In a career that has spanned consulting, senior government service, and academia, he has assisted numerous public and private clients in settings that include expert testimony, publications and speeches, and advice to senior management and boards. He is the author of numerous publications and books and a frequent speaker at conferences and meetings. Dr. Fox-Penner’s recent area of specialization has been electricity market deregulation and oversight. He has advised most major U.S. energy companies and grid operators, and government agencies, as well as a number of international clients, on electric policy issues. He is the author of the Electric Utility Restructuring: A Guide to The Competitive Era, a best-selling 1997 work on the subject, and many other publications in electric and energy policy. He served as the lead expert in the prosecution of market manipulation during the California energy crisis of 2000-2001. His work was widely cited by federal authorities as the basis for federal market remedies. As chairman of the firm, Dr. Fox-Penner directs the firm’s external strategy formulation and execution. Since assuming his role in 2001, he has led the firm through three consecutive years of record growth and acquisitions. Dr. Fox-Penner received his B.S. in Electrical Engineering (1976) and his M.S. in Mechanical Engineering (Energy Policy, 1978) from the University of Illinois, and his Ph.D. in Economics from the Graduate School of Business, University of Chicago (1989). REPRESENTATIVE EXPERIENCE Regulated Industries and Electric Restructuring
• Electric utility restructuring • Antitrust, market power, and merger-related issues in regulated industries • Network and transmission pricing, access rules, and governance • Utility convergence and retail utility strategic issues • Economic and policy issues in public interest utility programs • Load and sales forecasting, pricing, and new product analysis • Utility telecommunications regulatory issues and strategy
Energy, Environmental, and Technology Policy
• Energy security policies and transportation energy use • Technology and Market Evaluations • Public Policies Towards New Technologies and R& D • Energy conservation—economics and policy
PETER S. FOX-PENNER Principal and Chairman of the Board 2
EMPLOYMENT HISTORY 2001-Present: Chairman, The Brattle Group, Washington, DC 1996-Present: Principal and Director, The Brattle Group, Washington, DC 1993-1996: Principal Deputy Assistant Secretary for Energy Efficiency and Renewable
Energy, United States Department of Energy
Senior Advisor for Technology Policy, Office of Science and Technology Policy, Executive Office of the President
Assistant to the Deputy Secretary of Energy 1989-1993: Vice President, Charles River Associates, Boston, MA 1991-1993: Professorial Lecturer, Center for Energy and Environmental Studies, Boston University 1987-1989: Senior Associate, Charles River Associates 1980-1983: Research Engineer and Chief Research Engineer, Illinois Governor’s Office of Consumer Service, Chicago, IL 1977-1980: Research Assistant and Research Engineer, Office of Vice Chancellor for Energy
Research, University of Illinois, Urbana, IL REFEREED PUBLICATIONS With James Bohn, Romkaew Broehm, and Gary Taylor. “The Regulation of Competition in
Wholesale Electric Power Markets.” Energy Law Journal 23, No. 2 (2002): 281-348. With Gregory N. Basheda, Darrell B. Chodorow, Jason A. Hicks, Eric Hirst, James K. Mitchell,
Dean M. Murphy and Joseph B. Wharton. “The FERC, Stranded Cost Recovery, and Municipalization.” Energy Law Journal 19 (1998): 351-386
“Efficiency and the Public Interest: QF Transmission and the Energy Policy Act of 1992.”
Energy Law Journal 14 (1993): 51-73. With Karen Palmer, David Simpson, and Michael Toman. “Electricity Fuel Contracting:
Relationships with Coal and Gas Suppliers.” Energy Policy, October, 1993: 1045-1054.
PETER S. FOX-PENNER Principal and Chairman of the Board 3
With Franklin M. Fisher, Joen Greenwood, William G. Moss, and Almarin Phillips. “Due Diligence and the Demand for Electricity: A Cautionary Tale.” Journal of Industrial Organization, 1992.
“Cogeneration After PURPA: Energy Conservation and Industry Structure.” Journal of Law and
Economics 33 (October 1990): 517-552. “Regulating Independent Power Producers: Lessons of the PURPA Approach.” Resources and
Energy 12 (1990): 117-141. “A Dynamic Input-Output Analysis of Net Energy Effects in Single Fuel Economics.” Energy
Systems and Policy 5, no. 2 (1981). With Bruce M. Hannon and Robert Herendeen. “An Energy Conservation Tax: Impacts and
Policy Implications.” Energy Systems and Policy 5, no. 2 (1981). With R.S. Chambers, R.A. Herendeen, and J.J. Joyce. “Gasohol: Does It or Doesn't It . . .
Produce Positive Net Energy?” Science 206, no. 4420 (November 1979): 789-795. “Considerations of Energy Cost and Versatility in Choosing Optimal Stockpile Forms.”
Resources Policy 5, no. 2 (June 1979): 414-448. “The Acoustic Specification and Design of a Modern Recording Studio.” Journal of the Audio
Engineering Society (June 1979). With R.A. Herendeen and T. Milke. “New Hybrid 1971 Energy Intensities.” Energy 4 (1979):
469-473. “Cynics, Martyrs, and the Value of Energy Conservation.” Science and Public Policy 5 (1978):
105-110. With Clark Bullard and David Pilati. “Energy Analysis: Handbook for Combining Process and
Input-Output Analysis.” Resources and Energy (June 1979). Also published by the Energy Research and Development Administration, Washington, DC, ERDA 77-61).
“Energy Intensity of Electric Commuter Railways.” Center for Advanced Computation
Technical Memo 24, June 1974, Reprinted as "Total Energy and Labor Requirements for an Electric Commuter Railroad." Energy 3 (1978): 539-542.
PETER S. FOX-PENNER Principal and Chairman of the Board 4
MONOGRAPHS AND BOOKS With Karen Palmer, David Simpson, and Michael Toman. “Power Plant Fuel Supply Contracts:
The Changing Nature of the Long-Term Supply Relationship.” Arlington, VA: Public Utility Reports, 1992.
Electric Power Transmission and Wheeling: A Technical Primer. Washington, DC: The
Edison Electric Institute, 1990. Electric Utility Restructuring: A Guide to the Competitive Era. Vienna, VA: Public Utility
Reports, 1997 BOOK CHAPTERS With Diana Moss. Network Access, Regulation and Antitrust. Introduction, forthcoming from
Routledge (London), 8th Vol. in series: “Economics of Legal Relationships.” With Romkaew Broehm. "Price-Responsive Electric Demand: A National Necessity, Not an
Option, chapter 10 in "Electricity Pricing in Transition", ed. Ahmad Faruqui and B. Kelly Eakin," Kluwer Academic Publishers, 2002.
With Ellen Craig and Adam Schumacher. “Value Drivers in the Utility Industry of 2002.” PUR
Analysis of The Nation’s Largest Investor-Owned Electric and Gas Utilities, December 2001 Edition, Public Utilities Reports.
“Energy Policy: Today's View from the Federal Government,” in The Energy Crisis: Unresolved
Issues and Enduring Legacies, David Feldman, ed., Johns Hopkins University Press, 1996.
“What Role Should the Federal Government Play in Energy Efficiency?” in Policy Evolution:
Energy Conservation to Energy Efficiency. Douglas A. Decker and Alan Berolzheimer, eds. Liburn, GA: The Fairmount Press, 1997.
SELECTED ADDITIONAL PUBLICATIONS “Heard Around Town: Focus on Energy Policy and the Energy Efficiency Market.” The
NAESCO Newsletter, November 2005. “A Welcome Truce in the Electricity Wars.” Public Utilities Fortnightly, October 2005. “Rethinking the Grid – Avoiding More Blackouts and Modernizing the Power Grid Will Be
PETER S. FOX-PENNER Principal and Chairman of the Board 5
Harder than You Think.” Electricity Journal, March 2005. “U.S. Needs a Plan to Keep the Lights On.” The Plain Dealer, August 26, 2004. “A Year Later, Lessons from the Blackout.” The New York Times, August 15, 2004. With Romkaew Broehm. "Deregulated Electricity Pricing in the U.S.: Dramatic New Rules From
the FERC," The Brattle Group, April 25, 2004. “Will Federal Legislation Fix the Grid?” Progressive Policy Institute, October 7, 2003. With Greg Basheda. "State Involvement in the Regional Transmission Planning Process," The
Edison Electric Institute, October 2003. With William G. Moss. “Geographic Market Definition in Electric Power Markets.” The Brattle
Group, August 30, 2000, Revised & Submitted January 2002. “Easing Gridlock on the Grid: Electric Planning and Siting Compacts.” The Electricity Journal,
November 2001. “Clean Growth: A Balanced Energy Policy for the 21st Century.” Progressive Policy Institute’s
Policy Report, October 2001. With Greg Basheda. “A Short Honeymoon for Utility Deregulation.” Issues in Science and
Technology, Spring 2001. “What not to learn from the California Crisis.” (Op-ed) The Providence Journal, March 3, 2001. “Epitaph for Electric Deregulation.” Prepared for the National Council on Competition and the
Electric Industry, December 2000 meeting, October 2000. With Frank Graves. “Monopoly Power After Reform? A Time for Soul-Searching.” Public
Utilities Fortnightly, May 2000. “Federal Restructuring Legislation: Any Chance in This Congressional Session?” Energy
Efficiency Journal, March 2000. “Electric Power Deregulation: Blessings and Blemishes, A Non-Technical Review of the Issues
Associated with Competition in Today’s Electric Power Industry.” Prepared for the National Council on Competition and the Electric Industry, March 14, 2000.
With Johannes P. Pfeifenberger. “Transmission Access, Episode II: FERC’s Journey.” Public
Utilities Fortnightly, August 1999.
PETER S. FOX-PENNER Principal and Chairman of the Board 6
With J.P. Pfeifenberger, P.Q Hanser, and G.N. Basheda. “In What Shape is Your ISO?” The Electricity Journal, July 1998.
“Transco vs. ISO: A Sideshow?” Public Utilities Fortnightly, June 1, 1998. With Matt O’Loughlin. “Fostering Market Center Development and Integration of the Natural
Gas Grid Through Improved Pipeline Ratemaking.” Prepared for NorAm Gas Transmission Company, May 1998.
“An Open Letter to the President” The Electricity Journal, March 1997. With Philip Q Hanser and Joseph B. Wharton. “Real-Time Pricing: Restructuring’s Big Bang?”
Public Utilities Fortnightly, March 1997. “Critical Trends in State Utility Regulation.” Natural Resources and Environment 8 (Winter
1994): 17-20. “Electricity in A Competitive Environment: The Real Issue is Not Retail Wheeling.” Edison
Times IRP Quarterly, Fall 1994. With Chris Fitzgerald. “A Proposal for Design-Based Auto Industry Environmental
Regulation.” Total Quality Environmental Management 2 (Spring 1993): pp. 323-327. “The Private DSM Industry - A Gleam in Whose Eye?” The Electricity Journal 4 (December
1991), 21-25. With Paul D. O'Rourke and Peter J. Spinney. Competitive Procurement of Electric Utility
Resources (EPRI CU-6898s). Palo Alto, CA: Electric Power Research Institute, July 1990.
With Mark Horton and Peter Spinney. “Bidding Update.” Cogeneration & Resource Recovery
9, no. 7 (November/December 1990): pp. 6–11. With Edward Kee. “Bid Policies Overhauled.” Cogeneration & Resource Recovery 9, no. 7
(November/December 1990): pp. 14–15. Comments on Notice of Proposed Rulemaking Concerning Avoided Costs. Before the Federal
Energy Regulatory Commission, Docket RM88-4, June, 1988. “Allowing for Regulation in Forecasting Load and Financial Performance.” Public Utilities
Fortnightly, January 7, 1988. “Price Formula Issues Associated with SPR Release Programs.” Prepared for the Office of
Energy Emergencies, U.S. Department of Energy, 1988.
PETER S. FOX-PENNER Principal and Chairman of the Board 7
“The Immediate Consequences of an Oil Supply Emergency for the Financial Markets and Major
User Groups.” Prepared for the Office of Energy Emergencies, U.S. Department of Energy, 1988.
With others. “Independent Load Forecast for the Commonwealth Edison Service Territory.”
Governor's Office of Consumer Services, Chicago, June 1981. ICC Docket No. 80-0706. “The Norwegian Power Planning Process.” Institute for Environmental Studies, University of
Oslo, Norway, 1981. With R. Herendeen. “A 1972 Energy and Labor Commodity-Commodity Input-Output Model.”
Energy Research Group, University of Illinois, Urbana, IL, March 1980. “Correspondence Between the EDIO Input-Output Model and the ERG-90 and 360-Order Input-
Output Model.” Energy Research Group, University of Illinois, Urbana, IL, March 1980. With J. Kurish. “Energy and Labor Cost of Alternative Coal-Electric Fuel Cycles.” Energy
Research Group, University of Illinois, Urbana, IL, February 1980. “Handbook of Research Techniques.” Energy Research Group Technical Memo 123. Revised
December 1979. “A Structure of the Electric Utility Industry, 1990.” Energy Research Group Technical Memo
121, November 1979. With B. Hannon and R. Herendeen. “Calculation of Alpha in the Determination of Primary
Energy.” Energy Research Group, University of Illinois, Urbana, IL, November 1979. “Notes of the Bechtel ESPM/ERG I/O Bridge for Operating (Annual) and Capital (Investment)
Costs, Purchasers Prices, 1978.” Energy Research Group Technical Memo 119, August 1979.
“Transformation of Brookhaven National Laboratories 110-Order I/O Data into ERG-Usable
Form.” Energy Research Group Technical Memo 118, July 1979. “1967-1977 Price Indices for Use with the Energy Research Group Energy Input-Output Policy
Models.” Energy Research Group Technical Memo 117, June 1979. “Direct Energy Transactions Matrix for 1971.” Energy Research Group, University of Illinois,
Urbana, IL, June 1979. With Jack Joyce. “Background Energy Cost Calculations for ACR Gasohol Production.” Report
to ACR Processes, Inc., November 1977.
PETER S. FOX-PENNER Principal and Chairman of the Board 8
With Clark Bullard and Donna Amado. “Net Energy Effects and Resource Depletion: An All-
Nuclear Economy.” Center for Advanced Computation Document 238, September 1977. “Taking Appropriate Technology to Task.” WIN 13: (April 7, 1977):8-10. With Donna Amado. “Net Energy Effects and Resource Depletion: An All-Oil Economy.”
Center for Advanced Computation Document 231, April 1977. “Standardization of Energy Accounting Techniques.” Center for Advanced Computation
Technical Memo 83, January 1977. With Jaap Spek. “Stockpile Optimization and Versatility Consideration for Strategic and Critical
Materials.” Center for Advanced Computation Document 217, May 1976. “Energy Requirements and Aerosol and Alternative Packaging: A Case Study.” Center for
Advanced Computation Document 204, February 1976. 2nd revision, July 1976. With Bruce Hannon. “The Energy Research Group Resource Energy-Employment Model and Its
Uses in Stockpile Policymaking.” Report to the Office of Preparedness, General Services Administration, July 1975.
“The Coal Future: Capital and Fuel Cycle Energy Costs of a 1000 MW Nuclear Reactor.”
Appendix B to Michael Rieber's Center for Advanced Computation Document 163, May 1975.
“Summary of Techniques Used for Calculating the Energy Costs of Constructing a Commercial
Nuclear Reactor.” Center for Advanced Computation Technical Memo, April 1975. “The Dollar, Energy and Labor Impact of 1971 Regular Route Intercity Bus Transportation.”
Center for Advanced Computation Technical Memo 31, July 1974. “Energy Intensity of Motorcycle Travel.” Center for Advanced Computation Technical Memo
30, July 1974. SELECTED CONFERENCE/WORKSHOP PARTICIPATION “Renewable Energy and the Oil/Gas Price Shock.” Presented at ACORE’s Renewable Energy in
America: Policies for Phase II, Washington, DC, October 17, 2005. “The Global Power Industry: Is it Really Back to the Future?” Presented at The Discover
Showcase, Toronto, Canada, October 25, 2004.
PETER S. FOX-PENNER Principal and Chairman of the Board 9
“Natural Gas - Electric Issues in New England.” By Peter Fox-Penner and Greg Basheda. Presented at Edison Electric Institute’s New England CEO Dialogue, Manchester, New Hampshire, April 27, 2004.
“Efficient Grid Expansion and Participant Funding.” By Peter Fox-Penner. Presented at the
Harvard Electric Policy Group meeting, December 11, 2003. “The Role of an Expert Witness in Testimony and Litigation Support: What We Teach Our
Own.” By Peter Fox-Penner and Lynda Borucki. Presented at the Energy Bar Association’s Mid Year Meeting, December 5, 2003.
“The Role of Alternative Energy in the US Supply.” By Peter Fox-Penner and Adam
Schumacher. Presented to the 54th Annual Program on Oil and Gas Law, Houston, Texas, February 20-21, 2003.
“Market Measurement and The Delivered Price Test Under Standard Market Design.” By Peter
Fox-Penner, Gary Taylor, Romkaew Broehm and Metin Celebi. Presented to the Staff of the Federal Energy Regulatory Commission, November 15, 2002.
“Enron and Electricity Deregulation.” Presented at Le Centre Francais sure les Etats-Unis
(CFE), May 15, 2002. “At the Crossroads or on the Brink? U.S. Electric Industry Trends in Early 2002.” Presented at
Cooperative Finance Corporation’s CEO Conference, April 10, 2002. “Revenues, Regulations and ITC Business Models,” Presented at the Executive Transmission
Forum, January 29, 2002. “A ‘Securities’ Versus ‘Antitrust’ of the Competitive Power Industry and its Implication for
RTO Market Monitoring.” Remarks before the American Antitrust Institute Conference on Electricity Market Monitoring, December 11, 2001.
“What Does the California Experience Tell Us About Fixing the Rest of America’s Power
Markets?” By Peter Fox-Penner and Joseph B. Wharton. Presented at the National Association Business Economics Regional/Utility Roundtable, April 24, 2001.
“Taming the Lions in America’s Electric Markets: Five Major Challenge.” Presented at National
Governors’ Association Center for Best Practices, Executive Policy Forum on Energy, “Is Electricity Restructuring in Jeopardy?” Washington, DC, April 5, 2001.
“The Challenge to Co-operatives in the Electric Power Industry of the 21st Century.” NRECA’s
30th Annual CEO Leadership Conference. Keystone, CO, August 2, 2000. “Price-Responsive Electric Demand: A National Priority.” The Electric Power Research
PETER S. FOX-PENNER Principal and Chairman of the Board 10
Institute’s International Energy Pricing Conference. Washington, DC, July 26, 2000. “Incentives, Regulation and Transmission Companies: One Practioner’s View.” Presented to The
Federal Energy Regulatory Commission’s RTO Staff. Washington, DC, July 16, 1999. “ISOs, Transcos, Gridcos, and Long-Run Power Industry Efficiency.” Federal Energy Bar
Association’s Mid-Year Meeting. Washington, DC, December 4, 1998. “Market Power Issues in Restructured Electric Power Markets.” American Bar Association’s
Satellite Seminar, “Critical Federal and State Practice Issues in Electricity Deregulation.” Washington, DC, December 3, 1998
“SAVIOR OR BUREAUCRAT? ISOs, Competition, and Independent Transmission
Companies.” Winning with Retail Competition, 2nd Annual PUR Conference, Arlington, VA, June 22, 1998.
“The Evolution of the Energy Services Industry.” Have it Your Way: Buying and Saving Energy
in the Age of Customer Choice, Annual Meeting of Energy Management Consortium and the Northeast Energy Efficiency Council, Boston, MA, September 18, 1997.
“Volatility and Stability in the Deregulated Generation Marketplace.” Restructuring and
Convergence, Successful Strategies in the Energy Services Marketplace, Arlington, VA, May 22, 1997.
“Progress and Promise: The Clinton Administration’s Efforts in Fostering Sustainable
Development.” Global Accords for Sustainable Development: Enabling Technologies and Links to Finance and Legal Institutions Conference, M.I.T., Cambridge, MA, September 5, 1996.
Invited Speaker, Fourth Biennial Conference of the International Society for Ecological
Economics, Boston, MA, August 7, 1996. “Linking Energy, Environment, and Technology to the Economy.” Globalcon Energy and
Environment Exposition, April 3, 1996. 21st Annual Illinois Energy Conference, November 1996. Civil Engineering Research Foundation, Washington meeting, October 12, 1995. “Technology and Economic Growth: The Government's Role.” M.I.T. Club of Washington, DC,
October 10, 1995. “The Impact of Government Budget Changes and Restructuring on Engineering.” ASME and
the Public Lecture Series, Washington, DC, September 21, 1995.
PETER S. FOX-PENNER Principal and Chairman of the Board 11
“Energy - Environment - Technology: Two Visions, Two Directions.” Proceedings of the 1995
International Energy and Environment Congress. Association of Energy Engineers, Richmond, VA, 1995.
“The Federal Role in Energy Efficiency.” Eighth Biannual DSM Evaluation Conference,
Chicago, IL, August 24, 1995. Invited Speaker, Seventh National DOE/EPRI Demand-Side Management Conference, Dallas,
TX, June 28, 1995. “Utility Restructuring and Regulatory Reform.” Invited Presentation, National Association of
Regulatory Utility Commissioners Attorneys' Conference, Tucson, AZ, May 18, 1995. Invited Speaker, Conservation Committee, Semi-Annual Meetings of the National Association of
Regulatory Utility Commissioners, 1994 and 1995. Invited Panelist, OECD Seminar on Sustainable Production and Consumption, Massachusetts
Institute of Technology, December 19, 1994. “Electric Utilities and the Environment: Restructuring Need Not Mean Retreat.” Invited
Presentation, “Brave New World - Managing Externalities in a Competitive Electric Utility Industry.” University of Illinois Center for Regulatory Studies, Chicago, IL, November 17, 1994.
Invited Speaker, International Ground Source Heat Pump Association, Hershey, PA, October 17,
1994. Invited Speaker, “Washington: Business and Public Policy,” Brookings Institution Seminar,
October 18, 1994. “Federal Climate Change Management Programs and Climate-Wise,” Businesses for Social
Responsibility 1994 Environment Conference, Boston, MA, October 13, 1994. Invited Speaker, National Association of State Energy Officials, Asheville, NC, August 31, 1984. Invited Speaker, Annual Meeting of the California Institute for Energy Efficiency, Berkeley, CA,
July 25, 1994. “Voluntary Greenhouse Gas Reporting Under the Energy Policy Act of 1992.” Invited
Presentation, International Conference on Global Climate Change, Center for Environmental Information, Washington, DC, February 1993.
PETER S. FOX-PENNER Principal and Chairman of the Board 12
Panel Moderator, Natural Gas Procurement Strategies, Association of Energy Engineers Annual Conference, Boston, MA, June1992.
Panel Moderator, Alternative Fuel Vehicles Conference, the Management Exchange,
Washington, DC, April 1992. Invited Presenter, American Water Works Association. Conservation Committee Workshop,
Austin, TX, January 1992. “The Future History of DSM.” Plenary presentation, 5th National Demand–Side Management
Conference, Boston, MA, August 1, 1991. “Visibility of the Buy Strategy — Bulk Power Transfers: Solution or Fatal Attraction?” The
Management Exchange “The Buy vs. Build Decision” Conference, Washington, DC, March 22, 1991.
BOARDS AND OTHER PROFESSIONAL ACTIVITIES Member of the Board, Global Energy Group, 2002 - 2003 Co-Founder and Steering Committee Chair, Patriot’s Energy Pledge 2001 - Advisor, Progressive Policy Institute, Washington, DC, 2000 - Present Advisor Center for National Policy, Washington, DC, 1993-present Advisory Board, Massachusetts Institute of Technology Energy Laboratory, 1993-1996 Nominator, Heniz Foundation Awards, 1995-1996 Member, Illinois Solar Energy Advisory Board, 1980 HONORS AND AWARDS Who's Who in the East (1991, 1992) Fellow, Center for the Study of Economy and the State, University of Chicago, 1986 NSF Travel Fellow, Dec. 1981 MIT Institute Fellowship, 1978 Earle C. Anthony Fellowship, 1978 Union Carbide Fellow, 1977-78 Michigan Annual Giving Scholarship, 1976 Illinois State Scholar, 1976
PETER S. FOX-PENNER Principal and Chairman of the Board 13
National Merit Scholar, 1976 Sigma Tau Beta Phi Kappa Phi Eta Kappa Nu
12/6/2005
PUBLIC VERSION - PRIVILEGED INFORMATION REDACTED
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--E
lect
ric%
20R
esou
rces
.[1
6]: C
alcu
late
d as
[6] x
[13]
for S
CE
con
tract
s; s
et e
qual
to z
ero
for o
ther
con
tract
s.[1
7][e
]: C
PU
C D
ecis
ion
03-1
2-05
9, D
ecem
ber 2
3, 2
003,
p.5
.
[a]
[b]
SCE
Affi
liate
's S
hare
(MW
)
Exhibit SCE-3 (See attached CD containing Exhibit SCE-3.)
Mar
ket_
Tim
e P
erio
dE
cono
mic
Cap
acity
Bef
ore
Pro
-rat
aLo
adS
easo
nal M
axim
um
Load
SC
E's
RA
RE
stim
ated
Add
ition
al
Res
ourc
es[1
][2
][3
][4
][5
]
SP
15_W
IN_5
011
,728
14,1
5614
,156
13,6
931,
965
SP
15_W
IN_1
0011
,594
13,3
8014
,156
13,6
932,
099
SP
15_W
IN_P
K9,
745
11,8
8114
,156
13,6
933,
947
SP
15_W
IN_O
P6,
009
9,26
114
,156
6,00
90
SP
15_S
PR
_100
11,2
6015
,440
15,4
4014
,935
3,67
5S
P15
_SP
R_P
K11
,063
11,9
5915
,440
14,9
353,
872
SP
15_S
PR
_OP
6,24
69,
270
15,4
406,
246
0S
P15
_SU
M_5
012
,061
20,1
8620
,186
19,5
257,
465
SP
15_S
UM
_100
12,0
6119
,020
20,1
8619
,525
7,46
5S
P15
_SU
M_P
K10
,558
14,6
3420
,186
19,5
258,
967
SP
15_S
UM
_OP
6,67
811
,184
20,1
866,
678
0S
P15
_FA
LL_1
0011
,601
18,1
8618
,186
17,5
925,
991
SP
15_F
ALL
_PK
9,80
713
,450
18,1
8617
,592
7,78
4S
P15
_FA
LL_O
P5,
995
10,2
3418
,186
5,99
50
Sou
rces
and
Not
es:
[1]:
SC
E B
efor
e P
ro-r
ata
Eco
nom
ic C
apac
ity.
See
Exh
ibit
SC
E-3
\FE
RC
CD
1_P
FP -
Pub
lic_S
ilver
haw
k\D
PT
Res
ults
\EC
Sum
mar
y_ot
her m
arke
ts.x
ls[2
]: S
CE
Loa
d +
7% o
pera
ting
rese
rve.
See
Exh
ibit
SC
E-3
\FE
RC
CD
1_P
FP -
Pub
lic_S
ilver
haw
k\W
orkp
aper
s\Lo
adW
orkp
aper
PFP
-Loa
d.xl
s, T
able
9[3
]: S
easo
nal M
axim
um L
oad,
take
n fro
m [2
].[4
]: ( 0
.9 x
( ( [
3] /
1.07
) x
1.15
) ) f
or a
ll on
-pea
k pe
riods
. O
ther
wis
e =
[1].
[5]:
[4] -
[1].
Pos
t - T
rans
actio
n S
ilver
haw
k D
PT
Filin
g
Exhi
bit S
CE-
4SC
E Ec
onom
ic C
apac
ity R
esou
rces
Sout
hern
Cal
iforn
ia E
diso
n
Bef
ore
and
Afte
r Pur
chas
es A
ssum
ed M
ade
To S
atis
fy S
tate
Res
ourc
e A
dequ
acy
Req
uire
men
ts
Mar
ket_
Tim
e P
erio
d
Silv
erha
wk
SC
E B
efor
e P
rora
taE
C
SC
E's
A
dditi
onal
R
esou
rces
A
ssum
ed T
o M
eet R
AR
SC
E's
A
djus
ted
Eco
nom
ic
Cap
acity
Ana
heim
's
SO
NG
S
Mar
ket S
ize
SC
E S
hare
(A)
Ana
heim
S
hare
of
SO
NG
S(B
)
Cha
nge
in
HH
I
(MW
)(M
W)
(MW
)(M
W)
(MW
)(M
W)
(MW
)[1
][2
][3
][4
][5
][6
][7
][8
]S
P15
_WIN
_50
11,7
281,
965
13,6
9361
32,0
9642
.66
0.18
916
.1S
P15
_WIN
_100
11,5
942,
099
13,6
9361
29,1
3746
.99
0.20
819
.5S
P15
_WIN
_PK
9,74
53,
947
13,6
9361
28,4
0348
.21
0.21
320
.5S
P15
_WIN
_OP
6,00
90
6,00
961
18,0
8333
.23
0.33
522
.2S
P15
_SP
R_1
0011
,260
3,67
514
,935
5831
,152
47.9
40.
186
17.8
SP
15_S
PR
_PK
11,0
633,
872
14,9
3558
30,9
2148
.30
0.18
818
.1S
P15
_SP
R_O
P6,
246
06,
246
5815
,587
40.0
70.
372
29.8
SP
15_S
UM
_50
12,0
617,
465
19,5
2561
31,0
3062
.92
0.19
524
.5S
P15
_SU
M_1
0012
,061
7,46
519
,525
6130
,730
63.5
40.
197
25.0
SP
15_S
UM
_PK
10,5
588,
967
19,5
2561
28,9
9267
.35
0.20
928
.1S
P15
_SU
M_O
P6,
678
06,
678
6116
,878
39.5
70.
359
28.4
SP
15_F
ALL
_100
11,6
015,
991
17,5
9258
31,8
6055
.21
0.18
220
.1S
P15
_FA
LL_P
K9,
807
7,78
417
,592
5826
,952
65.2
70.
215
28.1
SP
15_F
ALL
_OP
5,99
50
5,99
558
15,3
8038
.98
0.37
729
.4
Tota
l Num
ber o
f Scr
eens
Exc
eedi
ng F
ER
C T
hres
hold
Lev
els
0
Sou
rces
and
Not
es:
[1]:
See
Exh
ibit
SC
E-4
, Col
umn
[1].
[2]:
See
Exh
ibit
SC
E-4
, Col
umn
[5].
[3]:
[1] +
[2].
[4]:
Der
ated
cap
acity
of A
nahe
im's
SO
NG
S.
[5]:
The
data
wer
e ta
ken
from
the
post
-tran
sact
ion
of th
e S
ilver
haw
k - D
PT
filin
g. S
ee E
xhib
it N
o. P
FP -
8 P
anel
B
in E
xhib
it S
CE
-3\F
ER
C C
D 1
_PFP
- P
ublic
_Silv
erha
wk\
Exh
ibits
\Exh
ibit
PFP
8 P
anel
B.p
df[6
]: [3
] / [5
] x 1
00.
[7]:
[4] /
[5] x
100
.[8
]: 2
x [6
] x [7
].
SCE'
s C
apac
ity A
djus
ted
to S
atis
fy R
AR
by
Seas
onSC
E's
Acq
uisi
tion
of A
nahe
im's
Sha
re o
f the
SO
NG
S U
nits
Exhi
bit S
CE-
5 Pa
nel A
Sum
mar
y R
esul
ts 2
006
- SP1
5 M
arke
tEc
onom
ic C
apac
ity: C
hang
e in
HH
I Ind
ices
Mar
ket_
Tim
e P
erio
d
Silv
erha
wk
SC
E
Bef
ore
Pro
rata
EC
SC
E's
A
dditi
onal
R
esou
rces
A
ssum
ed T
o M
eet R
AR
SC
E's
Adj
uste
d E
cono
mic
C
apac
ityS
CE
Loa
dA
djus
ted
S
CE
AE
C
Ana
heim
S
hare
of
SO
NG
S
Silv
erha
wk
AE
C M
arke
t S
ize
Adj
uste
d A
EC
Mar
ket
Siz
e
SC
E S
hare
(A)
Ana
heim
S
hare
of
SO
NG
S(B
)
Cha
nge
in
HH
I
(MW
)(M
W)
(MW
)(M
W)
(MW
)(M
W)
(MW
)(M
W)
(%)
(%)
[1]
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
SP
15_W
IN_5
011
,728
1,96
513
,693
14,1
560
6118
,883
16,9
190.
000.
360.
0S
P15
_WIN
_100
11,5
942,
099
13,6
9313
,380
313
6116
,305
14,5
182.
150.
421.
8S
P15
_WIN
_PK
9,74
53,
947
13,6
9311
,881
1,81
261
18,2
5716
,121
11.2
40.
388.
4S
P15
_WIN
_OP
6,00
90
6,00
99,
261
061
1,86
01,
860
0.00
3.25
0.0
SP
15_S
PR
_100
11,2
603,
675
14,9
3515
,440
058
17,3
6313
,688
0.00
0.42
0.0
SP
15_S
PR
_PK
11,0
633,
872
14,9
3511
,959
2,97
658
19,0
1118
,115
16.4
30.
3210
.5S
P15
_SP
R_O
P6,
246
06,
246
9,27
00
581,
775
1,77
50.
003.
270.
0S
P15
_SU
M_5
012
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7,46
519
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20,1
860
6116
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9,28
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650.
0S
P15
_SU
M_1
0012
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7,46
519
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19,0
2050
561
16,8
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877
5.12
0.61
6.3
SP
15_S
UM
_PK
10,5
588,
967
19,5
2514
,634
4,89
261
17,6
3513
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36.0
70.
4532
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P15
_SU
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P6,
678
06,
678
11,1
840
611,
580
1,58
00.
003.
830.
0S
P15
_FA
LL_1
0011
,601
5,99
117
,592
18,1
860
5816
,654
10,6
630.
000.
540.
0S
P15
_FA
LL_P
K9,
807
7,78
417
,592
13,4
504,
141
5815
,340
11,6
9735
.40
0.50
35.1
SP
15_F
ALL
_OP
5,99
50
5,99
510
,234
058
1,47
61,
476
0.00
3.93
0.0
Tota
l Num
ber o
f Scr
eens
Exc
eedi
ng F
ER
C T
hres
hold
Lev
els
0
Sou
rces
and
Not
es:
[1]:
See
Exh
ibit
SC
E-4
, Col
umn
[1].
[2]:
See
Exh
ibit
SC
E-4
, Col
umn
[5].
[3]:
[1] +
[2].
[4]:
See
Exh
ibit
SC
E-4
, Col
umn
[2].
[5]:
Max
[ 0,
[3] -
[4] ]
.[6
]: D
erat
ed c
apac
ity o
f Ana
heim
's S
ON
GS
.[7
]: Th
e da
ta w
ere
take
n fro
m th
e po
st-tr
ansa
ctio
n of
the
Silv
erha
wk
- DP
T fil
ing.
See
Exh
ibit
PFP
-7 P
anel
B (F
ER
C C
D 1
_PFP
- P
ublic
\Exh
ibits
\Exh
ibit
PFP
7 P
anel
B.p
df)
[8]:
[7] -
[2] +
[5].
[9]:
[5] /
[8] x
100
.[1
0]: [
6] /
[8] x
100
.[1
1]: 2
x [9
] x [1
0].
SCE'
s C
apac
ity A
djus
ted
to S
atis
fy R
AR
by
Seas
onSC
E's
Acq
uisi
tion
of A
nahe
im's
Sha
re o
f the
SO
NG
S U
nits
Exhi
bit S
CE-
5 Pa
nel B
Sum
mar
y R
esul
ts 2
006
- SP1
5 M
arke
tA
vaila
ble
Econ
omic
Cap
acity
: HH
I Ind
ices
ATTACHMENT 2
FORM OF NOTICE
UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION
Southern California Edison Company
) Docket No. EC06-___-000
NOTICE OF APPLICATION TO AUTHORIZE DISPOSITION OF JURISDICTIONAL FACILITIES
(March __, 2006)
On March 10, 2006, Southern California Edison Company (“SCE”) submitted an application pursuant to Section 203 of the Federal Power Act for authorization of the purchase by SCE from the City of Anaheim, California (“Anaheim”) of Anaheim’s 3.16 percent undivided interests as tenants in common in Units 2 and 3 of the San Onofre Nuclear Generating Station (“SONGS”), a nuclear power plant with a total capacity of 2,150 MW located in San Diego County, California. Anaheim’s interest in SONGS represents 68 MW.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission’s Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission encourages electronic submission of protests and interventions in lieu
of paper using the “eFiling” link at http://www.ferc.gov. Persons unable to file electronically should submit an original and 14 copies of the protest or intervention to the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426.
This filing is accessible on-line at http://www.ferc.gov, using the “eLibrary” link and is
available for review in the Commission’s Public Reference Room in Washington, D.C. There is an “eSubscription” link on the web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email [email protected], or call (866) 208-3676 (toll free). For TTY, call (202) 502-8659. Comment Date: 5:00 pm Eastern Time on ________________.
Magalie R. Salas
Secretary
ATTACHMENT 3
PROPOSED PROTECTIVE ORDER
UNITED STATES OF AMERICA BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Southern California Edison Company ) Docket No. EC06-___-000
PROTECTIVE ORDER
(March __, 2006)
1. This Protective Order shall govern the use of all Protected Materials produced by, or on behalf of, any Participant. Notwithstanding any order terminating this proceeding, this Protective Order shall remain in effect until specifically modified or terminated by the Federal Energy Regulatory Commission (“Commission”).
2. This Protective Order applies to the following categories of materials: (A) A Participant may designate as protected those materials which customarily are treated by that Participant as sensitive or proprietary, which are not available to the public, and which, if disclosed freely, would subject that Participant or its customers to risk of competitive disadvantage or other business injury; and (B) A Participant shall designate as protected those materials which contain critical energy infrastructure information, as defined in 18 CFR § 388.113(c)(1) (“Critical Energy Infrastructure Information”).
3. Definitions -- for purposes of this Order:
(a) The term “Participant” shall mean a Participant as defined in 18 C.F.R. § 385.102(b).
(b)(1) The term “Protected Materials” means (A) materials (including depositions) provided by a Participant in response to discovery requests and designated by such Participant as protected; (B) any information contained in or obtained from such designated materials; (C) any other materials which are made subject to this Protective Order by the Commission, by any court or other body having appropriate authority, or by agreement of the Participants; (D) notes of Protected Materials; and (E) copies of Protected Materials. The Participants producing the Protected Materials shall physically mark them on each page as “PROTECTED MATERIALS” or with words of similar import as long as the term “Protected Materials” is included in that designation to indicate that they are Protected Materials. If the Protected Materials contain Critical Energy Infrastructure Information, the Participant producing such information shall additionally mark on each page containing such information the words “Contains Critical Energy Infrastructure Information - Do Not Release.”
(2) The term “Notes of Protected Materials” means memoranda, handwritten notes, or any other form of information (including electronic form) which copies or discloses materials described in Paragraph 3(b)(1). Notes of Protected Materials are subject to the same
-2-
restrictions provided in this order for Protected Materials except as specifically provided in this order.
(3) Protected Materials shall not include (A) any information or document contained in the files of the Commission, or any other federal or state agency, or any federal or state court, unless the information or document has been determined to be protected by such agency or court, (B) information that is public knowledge, or which becomes public knowledge, other than through disclosure in violation of this Protective Order, or (C) any information or document labeled as “Non-Internet Public” by a Participant, in accordance with Paragraph 30 of FERC Order No. 630, FERC Stats. & Regs. ¶ 31,140. Protected Materials do include any information or document contained in the files of the Commission that has been designated as Critical Energy Infrastructure Information.
(c) The term “Non-Disclosure Certificate” shall mean the certificates annexed hereto by which Participants who have been granted access to Protected Materials shall certify their understanding that such access to Protected Materials is provided pursuant to the terms and restrictions of this Protective Order, and that such Participants have read the Protective Order and agree to be bound by it. All Non-Disclosure Certificates shall be served on all parties on the official service list maintained by the Secretary in this proceeding.
(d) The term “Reviewing Representative” shall mean a person who has signed a Non-Disclosure Certificate and who is:
(1) Staff of the Commission (“Staff”);
(2) an attorney who has made an appearance in this proceeding for a Participant;
(3) attorneys, paralegals, and other employees associated for purposes of this case with an attorney described in Paragraph 3(d)(2);
(4) an expert or an employee of an expert retained by a Participant for the purpose of advising, preparing for or testifying in this proceeding;
(5) a person designated as a Reviewing Representative by order of the Commission; or
(6) employees or other representatives of Participants appearing in this proceeding with significant responsibility for these dockets.
4. Protected Materials shall be made available under the terms of this Protective Order only to Participants and only through their Reviewing Representatives as provided in Paragraphs 7-9 and 22-24.
5. Protected Materials shall remain available to Participants until the later of the date that an order terminating this proceeding becomes no longer subject to judicial review, or the date that any other Commission proceeding relating to the Protected Material is concluded and no longer subject to judicial review. If requested to do so in writing after that date, the Participants shall, within fifteen days of such request, return the Protected Materials (excluding Notes of Protected Materials) to the Participant that produced them, or shall destroy the materials, except that copies of filings, official transcripts and exhibits in this proceeding that contain Protected Materials, and Notes of Protected Materials may be retained, if they are maintained in accordance with Paragraph 6, below. Within such time period each Participant, if requested to do so, shall also
-3-
submit to the producing Participant an affidavit stating that, to the best of its knowledge, all Protected Materials and all Notes of Protected Materials have been returned or have been destroyed or will be maintained in accordance with Paragraphs 6. To the extent Protected Materials are not returned or destroyed, they shall remain subject to the Protective Order.
6. All Protected Materials shall be maintained by the Participant in a secure place. Access to those materials shall be limited to those Reviewing Representatives specifically authorized pursuant to Paragraphs 8-9 and 23. The Secretary shall place any Protected Materials filed with the Commission in a non-public file. By placing such documents in a non-public file, the Commission is not making a determination of any claim of privilege. The Commission retains the right to make determinations regarding any claim of privilege and the discretion to release information necessary to carry out its jurisdictional responsibilities. For documents submitted to Commission Litigation Staff (“Staff”), Staff shall follow the notification procedures of 18 C.F.R. § 388.112 before making public any Protected Materials.
7. Protected Materials shall be treated as confidential by each Participant and by the Reviewing Representative in accordance with the certificate executed pursuant to Paragraph 9 or 23. Protected Materials shall not be used except as necessary for the conduct of this proceeding, nor shall they be disclosed in any manner to any person except a Reviewing Representative who is engaged in the conduct of this proceeding and who needs to know the information in order to carry out that person’s responsibilities in this proceeding. Reviewing Representatives may make copies of Protected Materials, but such copies become Protected Materials. Reviewing Representatives may make notes of Protected Materials, which shall be treated as Notes of Protected Materials if they disclose the contents of Protected Materials.
8.(a) If a Reviewing Representative’s scope of employment includes the marketing of energy, the direct supervision of any employee or employees whose duties include the marketing of energy, the provision of consulting services to any person whose duties include the marketing of energy, or the direct supervision of any employee or employees whose duties include the marketing of energy, such Reviewing Representatives may not use information contained in any Protected Materials obtained through this proceeding to give any Participant or any competitor of any Participant a commercial advantage.
(b) In the event that a Participant wishes to designate as a Reviewing Representative a person not described in Paragraph 3(d) above, the Participant shall seek agreement from the Participant providing the Protected Materials. If an agreement is reached that person shall be a Reviewing Representative pursuant to Paragraph 3(d) above with respect to those materials. If no agreement is reached, the Participant shall submit the disputed designation to the Commission for resolution.
9.(a) A Reviewing Representative shall not be permitted to inspect, participate in discussions regarding, or otherwise be permitted access to Protected Materials pursuant to this Protective Order unless that Reviewing Representative has first executed a Non-Disclosure Certificate provided that if an attorney qualified as a Reviewing Representative has executed such a certificate, the paralegals, secretarial and clerical personnel under the attorney’s instruction, supervision or control need not do so. A Reviewing Representative Competitive Duty Personnel A copy of each Non-Disclosure Certificate shall be provided to counsel for the Participant asserting confidentiality prior to disclosure of any Protected Material to that Reviewing Representative.
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(b) Attorneys qualified as Reviewing Representatives are responsible for ensuring that persons under their supervision or control comply with this order.
10. Any Reviewing Representative may disclose Protected Materials to any other Reviewing Representative as long as the disclosing Reviewing Representative and the receiving Reviewing Representative both have executed a Non-Disclosure Certificate. In the event that any Reviewing Representative to whom the Protected Materials are disclosed ceases to be engaged in this proceeding, or is employed or retained for a position whose occupant is not qualified to be a Reviewing Representative under Paragraph 3(d), access to Protected Materials by that person shall be terminated. Even if no longer engaged in this proceeding, every person who has executed a Non-Disclosure Certificate shall continue to be bound by the provisions of this Protective Order and the certification.
11. Subject to Paragraph 18, the Commission shall resolve any disputes arising under this Protective Order. Prior to presenting any dispute under this Protective Order to the Commission, the parties to the dispute shall use their best effects to resolve it. Any Participant that contests the designation of materials as protected shall notify the party that provided the Protected Materials by specifying in writing the materials whose designation is contested. This Protective Order shall automatically cease to apply to such materials five (5) business days after the notification is made unless the designator, within said 5-day period, files a motion with the Commission, with supporting affidavits, demonstrating that the materials should continue to be protected. In any challenge to the designation of materials as protected, the burden of proof shall be on the Participant seeking protection. If the Commission finds that the materials at issue are not entitled to protection, the procedures of Paragraph 18 shall apply. The procedures described above shall not apply to protected materials designated by a Participant as Critical Energy Infrastructure Information. Materials so designated shall remain protected and subject to the provisions of this Protective Order, unless a Participant requests and obtains a determination from the Commission’s Critical Energy Infrastructure Information Coordinator that such material need not remain protected.
12. All copies of all documents reflecting Protected Materials, including the portion of the hearing testimony, exhibits, transcripts, briefs and other documents which refer to Protected Materials shall be filed and served in sealed envelopes or other appropriate containers endorsed to the effect that they are sealed pursuant to this Protective Order. Such documents shall be marked “PROTECTED MATERIALS” and shall be filed under seal and served under seal upon the Commission and all Reviewing Representatives who are on the service list. Such documents containing Critical Energy Infrastructure Information shall be additionally marked “Contains Critical Energy Infrastructure Information - Do Not Release.” For anything filed under seal, redacted versions or, where an entire document is protected, a letter indicating such, will also be filed with the Commission and served on all parties on the service list. Counsel for the producing Participant shall provide to all Participants who request the same, a list of Reviewing Representatives who are entitled to receive such material. Counsel shall take all reasonable precautions necessary to assure that Protected Materials are not distributed to unauthorized persons.
13. If any Participant desires to include, utilize or refer to any Protected Materials or information derived therefrom in testimony or exhibits during the hearing in this proceeding in such a manner that might require disclosure of such material to persons other than Reviewing Representatives, such Participant shall first notify both Counsel for the disclosing Participant and
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the Commission of such desire, identifying with particularity each of the Protected Materials. Thereafter, use of such Protected Material will be governed by procedures determined by the Commission.
14. Nothing in this Protective Order shall be construed as precluding any Participant from objecting to the use of Protected Materials on any legal grounds.
15. Nothing in this Protective Order shall preclude any Participant from requesting the Commission, or any other body having appropriate authority, to find that this Protective Order should not apply to all or any materials previously designated as Protected Materials pursuant to this Protective Order. The Commission may alter or amend this Protective Order as circumstances warrant at any time during the course of this proceeding.
16. Each party governed by this Protective Order has the right to seek changes in it as appropriate from the Commission.
17. All Protected Materials filed with the Commission, or any other judicial or administrative body, in support of, or as a part of, a motion, other pleading, brief, or other document, shall be filed and served in sealed envelopes or other appropriate containers bearing prominent markings indicating that the contents include Protected Materials subject to this Protective Order. Such documents containing Critical Energy Infrastructure Information shall be additionally marked “Contains Critical Energy Infrastructure Information - Do Not Release.”
18. If the Commission finds at any time in the course of this proceeding that all or part of the Protected Materials need not be protected, those materials shall, nevertheless, be subject to the protection afforded by this Protective Order for three (3) business days from the date of issuance of the Commission’s decision, and if the Participant seeking protection files an interlocutory appeal or requests that the issue be certified by the Commission, for an additional seven (7) business days. None of the Participants waives its rights to seek additional administrative or judicial remedies after the Commission’s decision respecting Protected Materials or Reviewing Representatives. The provisions of 18 C.F.R. § 388.112 shall apply to any requests for Protected Materials in the files of the Commission under the Freedom of Information Act. (5 U.S.C. § 552).
19. Nothing in this Protective Order shall be deemed to preclude any Participant from independently seeking through discovery in any other administrative or judicial proceeding information or materials produced in this proceeding under this Protective Order.
20. None of the Participants waives the right to pursue any other legal or equitable remedies that may be available in the event of actual or anticipated disclosure of Protected Materials.
21. The contents of Protected Materials or any other form of information that copies or discloses Protected Materials shall not be disclosed to anyone other than in accordance with this Protective Order and shall be used only in connection with (this) these proceeding(s). Any violation of this Protective Order and any Non-Disclosure Certificate executed hereunder shall constitute a violation of an order of the Commission.
22. The disclosing Participant shall physically mark those Protected Materials that the disclosing Participant believes in good faith contains market sensitive information, public disclosure of which would competitively harm the Participant, with the words “Not Available to Competitive Duty Personnel.” Protected Materials shall only be marked with the words “Not Available to Competitive Duty Personnel” if any Participant asserts in good faith that the
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disclosure of requested data might be inappropriate for review by Competitive Duty Personnel, as defined in Paragraph 23. Any challenge to such designations may be made as provided in this Protective Order for challenges to designations of materials.
23. Solely with respect to Protected Materials that have been marked “Not Available to Competitive Duty Personnel” (and information derived therefrom), a Reviewing Representative may not include any person whose duties include (i) the marketing or sale of electric power at wholesale, (ii) the purchase or sale of electric power at wholesale, (iii) the direct supervision of any employee with such responsibilities, or (iv) the provision of electricity marketing consulting services to entities engaged in the sale or purchase of electric power at wholesale (collectively, “Competitive Duties”). If any person who has been a Reviewing Representative subsequently is assigned to perform any Competitive Duties, of if previously available Protected Materials are changed to “Not Available to Competitive Duty Personnel,” with the exception of the Reviewing Representative’s own data, such person shall have no such access to materials marked “Not Available to Competitive Duty Personnel” (and information derived therefrom) and shall dispose of such Materials, and shall continue to comply with the requirements set forth in the Non-Disclosure Certificate and this Protective Order with respect to any Protected Materials to which such person previously had access. Notwithstanding the foregoing, persons who otherwise would be disqualified as Competitive Duty Personnel may serve as a Reviewing Representative, subject to the following conditions: (i) the Participant who employs or has retained that person certifies in writing to the affected Producing Party that its ability to effectively participate in this proceeding would be prejudiced if it was unable to rely on the assistance of the particular Reviewing Representative; (ii) the party claiming such prejudice must identify by name and job title the particular Reviewing Representative required; (iii) the party claiming such prejudice must acknowledge in writing to the affected Producing Party that access to the Protected Materials which are Not Available to Competitive Duty Personnel shall be restricted only to purposes of the litigation of this proceeding, absent prior written consent of the Producing Party or authorization of a decisional body (the Commission with opportunity for the Producing Party to seek review of such decision as provided in this order); (iv) such party acknowledges that any other use shall constitute a violation of an order of the Federal Energy Regulatory Commission; and (v) the Competitive Duty Personnel acting as a Reviewing Representative has provided a declaration or affidavit acknowledging his or her familiarity with the contents of this order and the particular restrictions set forth in this paragraph in the form attached as Non-Disclosure Certificate of Competitive Duty Personnel. Once materials are clearly and correctly labeled, compliance shall be the responsibility of the Reviewing Party. Materials marked as “Not Available to Competitive Duty Personnel” shall be returned or destroyed at the conclusion of proceedings as otherwise provided for herein.
24. If a Participant believes that Protected Materials previously distributed to Reviewing Representatives contain market sensitive information, public disclosure of which would competitively harm the Participant, and should be treated as if it had been labeled “Not Available to Competitive Duty Personnel”, the Participant must specifically state which documents contain such data, make an informal showing as to why such data should be subject to the restrictions applicable to documents labeled “Not Available to Competitive Duty Personnel”, and seek their consent to such treatment, and such consent shall not be unreasonably withheld. If no agreement is reached concerning the designation of previously distributed material as “Not Available to Competitive Duty Personnel, distributed material is subsequently designated as “Not Available
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to Competitive Duty Personnel”, it will be the responsibility of the Reviewing Party to ensure compliance with this order thereafter – the Producing Party will not be responsible for redistributing or re-labeling the documents or data.
UNITED STATES OF AMERICA BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Southern California Edison Company ) Docket No. EC06-___-000
NON-DISCLOSURE CERTIFICATE (NON-COMPETITIVE DUTY PERSONNEL)
I hereby certify my understanding that access to Protected Materials is provided to me pursuant to the terms and restrictions of the Protective Order in this proceeding, that I have been given a copy of and have read the Protective Order, and that I agree to be bound by it. I understand that the contents of the Protected Materials, any notes or other memoranda, or any other form of information that copies or discloses Protected Materials shall not be disclosed to anyone other than in accordance with that Protective Order. I acknowledge that a violation of this certificate constitutes a violation of an order of the Federal Energy Regulatory Commission.
By: _____________________________
Title: ____________________________
Representing: ______________________
Date: _____________________________
UNITED STATES OF AMERICA BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Southern California Edison Company ) Docket No. EC06-___-000
NON-DISCLOSURE CERTIFICATE OF COMPETITIVE DUTY PERSONNEL
I hereby certify my understanding that access to Protected Materials identified as
“Not Available to Competitive Duty Personnel” is provided to me pursuant to the terms and restrictions of the amended Protective Order in this proceeding, that I have been given a copy of and have read the amended Protective Order, and that I agree to be bound by it. I understand that the contents of such Protected Materials, any notes or other memoranda, or any other form of information that copies or discloses Protected Materials shall not be disclosed to anyone other than in accordance with that Protective Order. I further understand that access to Protected Materials identified as Not Available to Competitive Duty Personnel shall be restricted only to purposes of the litigation of this proceeding. I acknowledge that a violation of this certificate constitutes a violation of an order of the Federal Energy Regulatory Commission.
By: _____________________________
Title: ____________________________
Representing: ______________________
Date: _____________________________
ATTACHMENT 4
VERIFICATION
EXHIBIT A
BUSINESS ACTIVITIES OF APPLICANT
SCE is a public utility organized under the laws of California with its principal place of
business in Rosemead, California. It is engaged in the business of generating and transmitting
electric energy in Arizona, California, Nevada, and New Mexico. It is further engaged in the
business of distributing such energy in California. SCE serves approximately 13 million
customers in a 50,000 square-mile area of central, coastal, and southern California, excluding the
City of Los Angeles and certain other cities. The business activities of SCE are also described in
Section III.A.1 of the Application.
EXHIBIT B
DESCRIPTION OF ENERGY SUBSIDIARIES AND AFFILIATES
A list of SCE’s energy subsidiaries and affiliates is attached.
Southern California Edison Company Energy Affiliates Energy Subsidiaries and Energy Affiliates
Percentage of Ownership Interest
Description of Primary Business
Aguila Energy Company 100% Owns 49.5% of American Bituminous Power Partners, L.P.
ALP Wind, LLC 50% of 99% Operates wind-driven electric generation facility
American Bituminous Power Partners, L.P.
49.5% by Aguila; 0.5% by Pleasant
Owns and operates a power generation facility in West Virginia
Anacapa Energy Company 100% Owns 50% of Salinas River Cogeneration Company
Athens Funding, L.L.C. 100% Restructuring power contracts in connection with non-utility generating facilities
Bendwind, LLC 99% Operates wind-driven electric generation facility
Bisson Windfarm, LLC 95% Operates wind-driven electric generation facility
Boeve Windfarm, LLC 99% Operates wind-driven electric generation facility
Camino Energy Company 100% Owns 49% of Watson Cogeneration Company
CG Windfarm, LLC 99% Operates wind-driven electric generation facility
Carstensen Wind LLC 99% Operates wind-driven electric generation facility
Chestnut Ridge Energy Company 100% Owns 99%LP interest in EME Homer City Generation L.P.
Citizens Power Holdings One, LLC 100% Holding company for power sales restructuring activities
CL Power Sales One, L.L.C. 25% Restructuring power contracts in connection with non-utility generating facilities
CL Power Sales Two, L.L.C. 25% Restructuring power contracts in connection with non-utility generating facilities
CL Power Sales Seven, L.L.C. 25% Restructuring power contracts in connection with non-utility generating facilities
CL Power Sales Eight L.L.C. 25% Restructuring power contracts in connection with non-utility generating facilities
CL Power Sales Ten, L.L.C. 25% Restructuring power contracts in connection with non-utility generating facilities
Coalinga Cogeneration Company 50% Owns and operates a power generation facility in California
CP Power Sales Twelve, L.L.C. 100% Restructuring power contracts in connection with non-utility generating facilities
CP Power Sales Seventeen, L.L.C. 100% Restructuring power contracts in connection with non-utility generating facilities
DanMar Transmission LLC 100% total split by various Wind LLCs
Owns and operates transmission and substation facilities
DeGreeffpa, LLC 99% Operates wind-driven electric generation facility
Del Mar Energy Company 100% Owns 50% of Mid-Set Cogeneration Company
East Ridge Transmission LLC 100% total split by various Wind LLCs
Owns and operates transmission and substation facilities
Edison Capital 100% Holding company providing capital and financial services in energy and infrastructure projects
Edison Mission Energy 100% Holding company for non-utility energy-related companies
Edison Mission Energy Fuel 100% Holding company for fuel-related interests
Edison Mission Energy Fuel Services, LLC
100% Fuel services for power generation facilities in Illinois
Edison Mission Energy Funding Corp. 1% Issued securities related to the Big 4 144A refinancing
Edison Mission Energy Petroleum 100% Joint Venture: party in two gas-related contracts with Texaco Gas Marketing, Inc.
Edison Mission Energy Services, Inc. 100% Fuel services for Homer City power generation facility in Pennsylvania
Edison Mission Fuel Resources, Inc. 100% Fuel services for power generation facilities in Illinois
Edison Mission Finance Co. 100% Loans related to Homer City power generation project in Pennsylvania
Edison Mission Fuel Transportation, Inc.
100% Fuel transportation services for power generation facilities in Illinois
Edison Mission Group Inc. 100% Holding company for nonutility companies; owns 100% of Mission Energy Holding Company
Edison Mission Holdings Co. 100% Holding company for interests in Homer City facility in Pennsylvania: owns 100% of Chestnut Ridge Energy Co., Edison Mission Finance Co. and Mission Energy Westside, Inc.
Edison Mission Marketing & Trading, Inc.
100% Performs price risk management and trading activities related to power, fuel and emission credits. Owns 100% of Midwest Generation Energy Services, LLC
Edison Mission Midwest Holdings Co. 100% Holding company for interests in Illinois power generation facilities: owns 100% of Edison Mission Energy Fuel Services, LLC and Midwest Generation, LLC
Edison Mission Midwest, Inc. 100% Holding company for wind-related interests
Edison Mission Wind, Inc. 100% Holding company for wind-related interests
EME Homer City Generation L.P. 99% by Chestnut; 1% by Mission
Energy Westside
Owns and operates a power generation facility in Pennsylvania
Energy Supply & Management A division of SCE Internal marketing affiliate Fey Windfarm, LLC 99% Operates wind-driven electric
generation facility Greenback Energy LLC 99% Operates wind-driven electric
generation facility Groen Wind, LLC 99% Operates wind-driven electric
generation facility Hillcrest Wind, LLC 99% Operates wind-driven electric
generation facility HyperGen, LLC 50% of 99% Operates wind-driven electric
generation facility JMC Wind, LLC 50% of 99% Operates wind-driven electric
generation facility K-Brink Windfarm, L.L.C. 99% Operates wind-driven electric
generation facility Kern River Cogeneration Company 50% Owns and operates a power generation
facility in California Lakota Ridge, L.L.C. 75% Operates wind-driven electric
generation facility Larswind, LLC 99% Operates wind-driven electric
generation facility LimiEnergy, LLC 50% of 99% Operates wind-driven electric
generation facility Lucky Wind LLC 99% Operates wind-driven electric
generation facility Maiden Winds, LLC 50% of 99% Operates wind-driven electric
generation facility March Point Cogeneration Company 50% Owns and operates a power generation
facility in Washington MD&E Wind, LLC 50% of 99% Operates wind-driven electric
generation facility Mid-Set Cogeneration Company 50% Owns and operates a power generation
facility in California Midway-Sunset Cogeneration Company
50% Owns and operates a power generation facility in California
Midwest Generation EME, LLC 100% Owns 100% of Edison Mission Midwest Holdings Co.
Midwest Generation Energy Services, LLC
100% Formed to undertake retail sales of power, currently in process of obtaining license
Midwest Generation, LLC 100% Owns and operates power generation facilities in Illinois
Midwest Peaker Holdings, Inc. 100% Financing of Midwest Generation project
Mission Bingham Lake Wind LLC 50% Holding company for wind-related interests
Mission de las Estrellas 50% of 50% Purchasing company Mission Energy Holding Company 100% Owns 100% of Edison Mission Energy Mission Energy Westside, Inc. 100% Owns 99%LP interest in EME Homer
City Generation L.P. Mission Iowa Wind Company 50% Holding company for wind-related
interests Mission Minnesota Wind LLC 100% Holding company for wind-related
interests Mission Wind Maine, Inc. 100% Holding company for wind-related
interests Mission Wind New Mexico, Inc. 100% Holding company for wind related
interests Mission Wind Pennsylvania, Inc. 100% Holding company for wind-related
interests Mission Wind Texas, Inc. 100% Holding company for wind-related
interests Mission Wind Wildorado, Inc. 100% Holding company for wind-related
interests Mountainview Power Company LLC 100% Owns and operates an electric
generating power plant in Redlands, California
Northern Lights Wind LLC 99% Operates wind-driven electric generation facility
Pleasant Valley Energy Company 100% Owns 49.5% of American Bituminous Power Partners, L.P.
Power Beyond, LLC 50% of 99% Operates wind-driven electric generation facility
Power Blades Windfarm, LLC 50% of 99% Operates wind-driven electric generation facility
Salinas River Cogeneration Company 50% Owns power generation facility in California
San Joaquin Energy Company 100% Owns 50% interest in Midway-Sunset Cogeneration Company
San Juan Energy Company 100% Owns 50% interest in March Point Cogeneration Company
San Juan Mesa Wind Project, LLC 100% Operates wind-driven electric generation facility
San Juan Mesa Investments, LLC 100% Financing wind-driven electric generation facility
Sargent Canyon Cogeneration Company
50% Owns and operates a power generation facility in California
Shaokatan Hills, L.L.C. 75% Operates wind-driven electric generation facility
Sierra Wind, LLC 99% Operates wind-driven electric generation facility
Silverado Energy Company 100% Owns 50% interest in Coalinga Cogeneration Company
Southern Sierra Energy Company 100% Owns 50% in Kern River Cogeneration Company
Stahl Wind Energy LLC 99% Operates wind-driven electric generation facility
Stony Hills Wind Farm, LLC 50% of 99% Operates wind-driven electric generation facility
Storm Lake Power Partners I, LLC. 99% Operates wind-driven electric generation facility
Sunrise Power Company, LLC 50% Owns and operates power generation facility in California; owns 50% of Mission de las Estrellas LLC
Sycamore Cogeneration Company 50% Owns and operates a power generation facility in California
TAIR Windfarm, LLC 99% Operates wind-driven electric generation facility
TG Windfarm, LLC 99% Operates wind-driven electric generation facility
Tofteland Windfarm, LLC 91% Operates wind-driven electric generation facility
Tower of Power, LLC 50% of 99% Operates wind-driven electric generation facility
Valle Del Sol Energy, LLC 100% Formed to own and operate a power generation facility in California in the future
Viejo Energy Company 100% Owns 50% of Sargent Canyon Cogeneration Company
Walnut Creek Energy, LLC 100% Formed to own and operate a power generation facility in California in the future
Watson Cogeneration Company 49% Owns and operates a power generation facility in California
West Pipestone Transmission LLC 100% total split by various Wind LLCs
Owns and operates transmission and substation facilities
Western Sierra Energy Company 100% Owns 50% of Sycamore Cogeneration Company
Westridge Windfarm, LLC 92% Operates wind-driven electric generation facility
Windcurrent Farms, LLC 99% Operates wind-driven electric generation facility
Windom Transmission LLC 100% total split by various Wind LLCs
Owns and operates transmission and substation facilities
Whispering Wind Acres, LLC 50% of 99% Operates wind-driven electric generation facility
White Caps Windfarm, LLC 50% of 99% Operates wind-driven electric generation facility
Woodstock Hills, L.L.C. 75% Operates wind-driven electric generation facility
EXHIBIT C
ORGANIZATIONAL CHARTS
The Transaction will not affect the corporate structure of any party to the Transaction;
accordingly, organizational charts are not required under 18 C.F.R. § 33.2(c)(3).
EXHIBIT D
DESCRIPTION OF JOINT VENTURES, STRATEGIC ALLIANCES, AND RTO PROPOSALS
SCE has transferred operational control of its transmission facilities to the CAISO, which
began operating the system on April 1, 1998. In addition, SCE has partnered with a number of
public entities to promote energy efficiency. These partnership programs include the following:
Bakersfield & Kern County Energy Watch Program; the Energy Coalition; County of Los
Angeles, SCE and SoCalGas Partnership; City of Pomona Partnership Program; South Bay
Energy Savings Center; University of California/California State University and Investor-Owed
Utility Energy Efficiency Partnership; and Ventura Regional Energy Alliance. The Transaction
will not affect these arrangements or any other of SCE’s business interests or those of its parent
companies, subsidiaries, affiliates, or associate companies.
EXHIBIT E
COMMON OFFICERS AND DIRECTORS
SCE and Anaheim share no common officers and directors.
EXHIBIT F
LIST OF WHOLESALE CUSTOMERS
As indicated in Section V.A.3.f of the Application, SCE seeks waiver of the requirement
to provide a list of wholesale power and transmission customers. The information is available in
SCE’s electric quarterly reports and, as discussed in Section IV.B of the Application, the
Transaction will not affect wholesale power sales or transmission services rates for any of these
customers.
EXHIBIT G
DESCRIPTION OF JURISDICTIONAL FACILITIES
SCE owns an extensive interconnected transmission system consisting of about 3,500
circuit miles of 220 kV lines (all located in California), 1,238 circuit miles of 500 kV lines (1040
miles in California, 86 miles in Nevada, and 112 miles in Arizona), 851 substations, and other
lower-voltage transmission facilities. SCE transferred operational control of its transmission
facilities to the CAISO effective April 1, 1998.
SCE divested most of its generating facilities in the late 1990s pursuant to California
restructuring initiatives. As a result, SCE is a net purchaser of power and all of the generating
facilities currently owned by SCE are used to serve native load. As stated in Section III.C of the
Application, SCE owns an undivided 75.05% interest in SONGS. It owns and operates 36
hydroelectric plants (1,153 MW) located in California, three of which (2.7 MW) are no longer
operational and will be decommissioned, and a diesel-fueled generating plant (9 MW) located on
Santa Catalina island off the southern California coast. It holds an undivided 56% interest (885
MW) in the Mohave Generating Station (“Mohave”), a coal-fired generating plant in Nevada.
Mohave ceased operating on December 31, 2005, and has no definite return to service date. SCE
also owns a 48% undivided interest (710 MW) in Units 4 and 5 of the Four Corners Generating
Station in New Mexico and a 15.8% share (601 MW) of the Palo Verde Nuclear Generating
Station in Arizona; neither of these plants is operated by SCE. An SCE subsidiary,
Mountainview Power Company, LLC, an Exempt Wholesale Generator, owns a 1,054 MW
natural gas combined cycle power plant in southern California. Another SCE affiliate, Edison
Mission Energy (“EME”), indirectly owns shares in a power plant and qualifying facilities
located in Washington and California. EME is further described in the Affidavit of Dr. Peter
Fox-Penner, provided as Attachment 1 to the Application.
A general description of the jurisdictional facilities owned, operated, or controlled by
SCE is also provided at Section III.A.1 of the Application, and the facilities subject to this
Application are discussed in Section III.B.
EXHIBIT H
DESCRIPTION OF THE PROPOSED TRANSACTION
A description of the Transaction is provided in Section III.C of the Application.
EXHIBIT I
CONTRACTS RELATED TO THE PROPOSED TRANSACTION
The Settlement Agreement is attached.
EXHIBIT J
FACTS RELIED UPON TO DEMONSTRATE THE PROPOSED TRANSACTION IS CONSISTENT WITH THE PUBLIC INTEREST
The relevant facts demonstrating that the Transaction is consistent with the public interest
are provided in Sections III and IV of this Application and in the attached Affidavit of Dr. Peter
Fox-Penner (Attachment 1).
EXHIBIT K
MAP OF PHYSICAL PROPERTY
SCE requests a waiver of this requirement on the following grounds: (i) security; and (ii)
the Transaction will not affect the physical property.
EXHIBIT L
REGULATORY APPROVALS
A. CPUC
SCE is filing an application at the CPUC to establish ratemaking for Anaheim’s share of
SONGS. In that application, SCE requests the CPUC (1) to find that SCE’s ratepayers will
benefit from an early transfer of Anaheim’s share of SONGS to SCE; (2) to add $24.070 million
to SCE’s revenue requirement to provide rate recovery for Anaheim’s share of SONGS operating
and decommissioning costs; and (3) to reduce SCE’s revenue requirement for electricity
procurement. The early transfer of Anaheim’s share of SONGS is not itself subject to CPUC
review and approval, because Anaheim is not subject to CPUC jurisdiction. As such, California
Public Utilities Code Section 851 does not apply to this transfer. Nonetheless, CPUC approval
of rate recovery for SONGS operating and decommissioning costs associated with Anaheim’s
former share of SONGS is a required regulatory approval.
B. NRC
SCE is filing an application with the NRC requesting approval of the transfer to SCE of
Anaheim’s interest in SONGS, pursuant to Section 184 of the Atomic Energy Act of 1954, as
amended, and 10 C.F.R. § 50.80.
C. California State Lands Commission
SCE plans to request approval from the California State Lands Commission (“CSLC”) of
the transfer to SCE of Anaheim’s interest in SONGS.
If the CPUC, NRC, or CSLC issues an order pertaining to the Transaction during the
pendency of this Application, SCE will supplement the Application promptly with a copy of
such order.
EXHIBIT M
VERIFICATION THAT THE PROPOSED TRANSACTION WILL NOT RESULT IN CROSS-SUBSIDIZATION OR PLEDGE OR ENCUMBRANCE OF UTILITY ASSETS
SCE hereby incorporates by reference the explanations and verifications provided in
Section IV.D of the Application, which provide assurances, as required by 18 C.F.R. § 33.2(j),
that the Transaction will not result in cross-subsidization of a non-utility associate company or
pledge or encumbrance of utility assets for the benefit of an associate company.
SCE verifies that the Transaction does not at the time of the Transaction, and will not in
the future, result in (1) any transfer of facilities between a traditional utility associate company
with wholesale or retail customers served under cost-based regulation and an associate company;
(2) any new issuance of securities by a traditional utility associate company with wholesale or
retail customers served under cost-based regulation for the benefit of an associate company; (3)
any new pledge or encumbrance of assets of a traditional utility associate company with
wholesale or retail customers served under cost-based regulation for the benefit of an associate
company; or (4) any new affiliate contract between a non-utility associate company and a
traditional utility associate company with wholesale or retail customers served under cost-based
regulation, other than non-power goods and services agreements subject to review under sections
205 and 206 of the FPA.
EXHIBIT N
PROPOSED ACCOUNTING TREATMENT
Attached is a document describing SCE’s proposed accounting treatment. Anaheim is
not required to maintain its books of account in accordance with the Commission’s Uniform
System of Accounts in 18 C.F.R. Pt. 101, and thus it is not required to submit proposed
accounting entries under Section 33.5.
Proposed Accounting Treatment
SCE Purchase of Assets Note: Entries per Electric Plant Instruction No. 5. Acct. No. Acct. Desc. Debit Credit Note 102 Electric Plant Purchased of Sold $XX.XX 120 Nuclear Fuel $XX.XX 154 Plant Materials and Operating Supplies $XX.XX 253 Other Deferred Credits $XX.XX 1 131 Cash $XX.XX To Record the Purchase 101 Electric Plant in Service $XX.XX 102 Electric Plant Purchased or Sold $XX.XX To Clear Account 102
Note 1: Paid to limit marine mitigation exposure