Simplifying Policy Management

elimination of bridge contracts as a compliance mechanism. The following is a sampling of parties’ positions on key topics raised in the comments.

Elimination of Bridge Contracts as a Compliance Option

• SCE opposes the elimination of the MTR bridge contract option, arguing it is unfair to LSEs facing delays beyond their control and that requiring long-term contracts for short-term delays is duplicative and costly for customers.
• SDG&E contends that removing bridge contracts increases compliance risks and costs, potentially leading to over-procurement and higher rates, and supports retaining bridge procurement as a voluntary tool.
• PG&E asserts that eliminating bridge contracts undermines viable compliance pathways for LSEs and could increase risks and costs for customers.
• Hydrostor, Inc. raises concerns that the removal of bridge contracts, combined with stricter procurement obligations, may discourage investment in LLT projects and increase costs for ratepayers.
• Green Power Institute (GPI) supports the PD’s elimination of bridge contracts, stating it will prevent unnecessary contracts with carbon-emitting resources and align with emission reduction goals.

Requirements for Long-Term Contracts and Alternative Compliance

• SCE recommends that LSEs should not be required to procure long-term replacement capacity for minor delays if they have executed long-term contracts and met month-ahead system resource adequacy (RA) requirements.
• CalCCA urges the CPUC to remove the requirement for LSEs to cover LLT resource delays with long-term contracts and to allow generic long-term contracts to cover LLT obligation shortfalls between 2028 and 2031, with alternative compliance paths to be explored later.
• Hydrostor, Inc. recommends exempting LSEs from procuring additional generic capacity if they have already contracted for delayed LLT resources, to avoid unnecessary financial burdens.
• PG&E calls for a clear alternative compliance mechanism that allows LSEs to demonstrate compliance through long-term contracts or meeting RA requirements, and supports including the LLT category in this mechanism.
• Alliance for Retail Energy Markets (AReM) recommends that RA compliance remain an alternative mechanism alongside bridging provisions and seeks clarification that long-term contracts should count toward interim requirements without double-counting.

Penalty Relief, Waivers, and Good Faith Efforts

• CalCCA recommends that LSEs should not be deemed out of compliance if they have delayed resources under contract or are actively working to replace terminated contracts, provided they meet RA requirements, and emphasizes the need for a structured waiver process for penalties.
• SDG&E suggests conditional exemptions from penalties for LSEs that demonstrate good-faith efforts to fulfill long-term obligations.
• AReM expresses concern about potential cancellations of long-term contracts and requests that alternative compliance mechanisms remain available, allowing LSEs to replace canceled contracts with new ones that achieve commercial operation by June 1, 2031.

Clarity, Flexibility, and Market Considerations

• SCE calls for flexibility and clarity in procurement requirements to prevent unnecessary costs and ensure viable compliance paths for LSEs facing project delays.
• CalCCA urges the CPUC to clearly define the “good faith efforts” standard and to consider market realities, such as capacity constraints and high RA prices, to maintain affordability for ratepayers.
• WPTF requests clarification on whether the PD affects bridging for delayed Diablo Canyon replacement resources and recommends withdrawing the current PD for revision to clarify the Commission’s intentions.
• AReM seeks clarification on the status of the Diablo Replacement capacity bridging mechanism and recommends corrections to typographical errors in the PD.
• GPI recommends that the PD explicitly nullify prior conclusions of law regarding bridge contracts for Diablo Canyon replacement resources and establish a clear policy against their use for pending procurements.