IOU LEAST COST-BEST FIT (LCBF): ALIGN WITH RPS CALCULATOR? 1

Overview of LCBF Alignment Panel Discussion Purpose: – Understand IOUs’ perspective on how the issues discussed during the workshop might inform the 2015 LCBF revisit and the determination of need in RPS procurement plans going forward Out of Scope: – Panel discussion is not about how the RPS calculator can be used to rank RPS RFO bids or supplant the IOUs’ LCBF methodology Panel format: – IOU presentations on current LCBF methodology – IOU panel discussion regarding possible changes to LCBF – Facilitated Q&A with stakeholders 2

What is LCBF? 2003: CPUC defines LCBF and establishes LCBF ranking process – Methodology used by IOUs to rank offers in RPS annual RFO : CPUC makes incremental improvements to LCBF 2012: CPUC requires standardized variables in IOUs’ net market value calculation (NMV), which is part of LCBF – NMV: (energy value + capacity value) – (post-TOD adjusted PPA price + transmission network upgrade costs + congestion costs + integration costs) + ancillary services value 3