CEC Hands Unused Peak Reduction Funds Back to State

By Published On: January 24, 2004

More than $10 million earmarked to help reduce energy load during times of high demand will soon be heading into the state?s profoundly depleted general fund. Members of the California Energy Commission this week approved the transfer at the request of the Department of Finance. During the CEC?s regular business meeting January 21, commission chair Bill Keese described the action as largely administrative. ?These are funds that were not spent, or the contracts came in under budget or have run out,? he said. The $10.3 million is to be drawn from the agency?s peak load reduction program, which was established in response to the energy crisis in 2000 and 2001. ?It?s something we would have eventually done anyway,? said CEC spokesperson Claudia Chandler. ?It?s a formality to unencumber the money. Those funds have been dormant for quite a while.? Had the commission let the cash sit, it would have made its way back to the general fund?but it would have taken up to two years. According to Chandler, the peak load reduction initiatives are the only projects under CEC budgeting supported by the general fund. The finance office asked the commission in December whether any such programs were in operation. As a result of this week?s action, the peak load program is out of money. Commissioners approved the measure, which returned funds from nine peak reduction accounts, by a vote of 4-0. In other commission meeting news, the CEC approved a bid by the city of Redding to allow its 73 MW peaking facility to operate with fewer production restrictions. The gas-fired plant will be limited to producing 238 GWh per year. According to staff, the amendment will include the permanent surrender of air-emission credits and will not cause any adverse impacts to the local environment. Two Calpine peaking facilities, one in Tracy and the other in Kings County, will now be allowed to install slightly larger generation turbines as a result of CEC votes this week. Emergency diesel engines rated at 250 kW will be replaced by 300 kW units. According to CEC staff, emissions of sulfur oxide and nitrogen oxide will increase as a result of the change, but effects on surrounding air are supposed to be ?completely mitigated.? The commission also approved changes to air-emission requirements governing Duke Energy?s Moss Landing power plant. The facility will now be able to increase its emissions during a cold start-up or when tuning up its combustion units. As with the other power plant measures before the CEC this week, the Moss Landing operation change is not expected to cause any effects to the environment.

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