The IOUs have jointly filed the Market Offer ("MO") process proposal. Opening comments are due June 6, 2022.
The following is a brief summary of the joint IOUs' Market Offer ("MO") Process proposal:
MO Process Proposals:
Market Offer sales will only occur through one competitive solicitation.
Sales will be limited to the competitive solicitation and no bilateral contracts will be allowed.
Each Joint IOU has an option to participate in the Market Offer Process subject to adherence to the IOU’s Market Offer Code of Conduct.
The Joint IOUs propose to limit sales through the Market Offer process to only those RECs that were rejected by the PCIA-eligible LSEs through the Voluntary Allocation process. PG&E and SCE will offer these RECs to the market for short-term sales limited to the remaining years of Compliance Period4 (2023-2024) only. SDG&E will offer RECs to the market for short-term sales limited to the remaining years of Compliance Period 4 (2023-2024) and may offer long-term REC sales, which will last through the end of the term of the longest contract in its PCIA-eligible RPS energy portfolio.
There will not be a fixed amount of RECs provided to buyers; instead, they will purchase a slice of each IOU’s RPS portfolio that remains following the Voluntary Allocation, and will accept whatever output the eligible portfolio generates associated with the procured slice, but not a fixed number of RECs.
The sale of a slice of the IOU’s portfolio will also be subject to on-going portfolio optimization by the IOU.
The sales volume limit will be forecasted as the amount of PCIA-eligible RPS energy and/or RECs eligible remaining after the Voluntary Allocation elections, instead of through a confidential sales volume limit.
Market Offer sales will be treated as re-sales, thus PCC 0 RECs will change to PCC 2 or 3 upon sale.
Allocation of Sales Revenue:
The Joint IOUs propose to apply revenues from third party Market Offer REC sales pro rata across all applicable PCIA customer vintages.
Where an IOU is selected to purchase through the MO process, the IOUs recommend that, consistent with D. 21-05-030’s determination of ratemaking for IOU Voluntary Allocation transactions, the IOU pays any Market Offer award as a debit from the ERRA balancing account at the transacted price, and a credit to applicable PABA customer vintages.
The IOUs state that they will not likely have MO transaction information to inform 2023 ratemaking. For the purposes of the IOUs’ 2023 ERRA Forecast Fall Update, the Joint IOUs propose to forecast 2023 Market Offer transactions based upon the forecast 2023 RPS Market Price Benchmark.
In subsequent ERRA Forecast Applications where Market Offer transactions are known, the IOUs propose to allocate forecast sales revenues using executed transaction prices and to continue to apply sales revenues to the applicable PABA vintage subaccount.
Collateral Requirements:
SCE requires no collateral posting from Buyers, while SDG&E reserves the right to determine credit-worthiness. PG&E does not specifically address collateral requirements.
SDG&E requires a credit application to be included with bids.
Quantitative Criteria:
For Proposals, SCE will consider price and quantity as the sole quantitative criteria. PG&E will consider price offered as the sole quantitative criterion.
SDG&E’s quantitative valuation of an Offer takes into account SDG&E’s RPS position and any opportunity costs associated with each transaction. “A bid that minimizes overall cost to SDG&E’s customers and satisfies all volumetric and timing constraints will be selected.”
