Here's the answer to your question about paragraphs 42 and 44 of Duke's 
complaint.  Although CDWR is technically the SC for the UDCs in the short 
term bilateral market and the ISO, as a practical matter, if CDWR does not 
like the prices offered in the bilateral market, it waits to buy the power 
from the ISO.  Then  CDWR reviews the price of the ISO's purchases and 
(according to an article in Megawatt daily) it "does not authorize the 
payment at prices it deems unreasonable."