PG&E

I. INTRODUCTION

This case involves a long-running dispute between Panoche Energy Center, LLC (Panoche), a producer of electricity, and Pacific Gas and Electric Company (PG&E), a utility that purchases electricity from Panoche, over which of them should bear the costs of complying with a legislatively mandated program to reduce greenhouse gas (GHG) emissions pursuant to the California Global Warming Solutions Act of 2006 (Health & Saf. Code, § 38500 et seq.; Assem. Bill No. 32 (2005-2006 Reg. Sess.) (Assembly Bill 32).

In an effort to resolve the matter, PG&E invoked the arbitration clause in its power purchase and sale agreement (PPA) with Panoche, seeking an arbitral declaration of Panoche’s obligations under the PPA. Panoche resisted the arbitration, moving to dismiss or stay it on grounds the controversy was not ripe for resolution because of ongoing regulatory proceedings at California’s Air Resources Board (CARB) and the Public Utilities Commission (CPUC). These proceedings, Panoche argued, would at least provide guidance in the arbitration and could render the proceeding unnecessary.

The arbitration panel denied Panoche’s motion, and after a five-day hearing…