With California\u2019s first carbon cap-and-trade program auction looming in November, some independent generators are pressing the California Public Utilities Commission to resolve the so-called \u201clegacy\u201d power purchase agreement issue. In a motion earlier this month, Panoche Energy Center asked the commission to expand its greenhouse gas proceeding to cover how independent producers with power purchase agreements executed before the state passed its climate change law, AB 32, in 2006 can recover the cost of complying with the statute. Those deals often are referred to as \u201clegacy\u201d contracts. Panoche told the commission that its power purchase agreement with Pacific Gas & Electric does not provide compensation for the costs it faces buying greenhouse gas emissions allowances needed to comply with cap-and-trade mandates. To meet those requirements, generators must purchase allowances for each ton of greenhouse gases they emit. Panoche attorney David Huard wrote that unless the company can recover its costs for buying allowances it will face \u201cunjust and significant financial harm.\u201d The company wants the commission to order PG&E to pass the costs onto its ratepayers and then pass along the money to Panoche and others with contracts predating the 2006 law. Attempts so far by the commission and the California Air Resources Board to get utilities like PG&E to renegotiate the legacy contracts have failed to bear fruit. The Air Board is in charge of enforcing cap-and-trade. Now all eyes are on the upcoming auction. Generators then will have to start bearing the expense of complying with the cap-and-trade program. \u201cGiven the short time between now and the first auction,\u201d wrote Western Power Trading Forum attorney Dan Douglass to the commission July 13, \u201cit is imperative for the commission to take up this matter with urgency to ensure that independent generators can recoup their [greenhouse gas] compliance costs.\u201d Wellhead Electric attorney Doug Kerner pointed out that the Air Board is giving utilities free emissions allowances to cover all the power they purchase regardless of whether the purchase agreements allow generators to pass on the cost of purchasing greenhouse gas allowances. He argued to regulators that if the issue can\u2019t be resolved, the Air Board should amend its cap-and-trade program to take away the allowances from the utilities for the legacy contract power and give them to the generators of that electricity. Commission administrative law judge Melissa Semcer ruled that the commission will address Panoche\u2019s concern at an unspecified date. * * * * * What was once billed as the \u201cthe cleanest and most efficient fossil fuel-fired plant in the world,\u201d has become little more than a failed project that\u2019s placing \u201ca heavy long-term debt burden\u201d on the city of Victorville, the San Bernardino County Grand Jury found earlier this month. The so-called 570 MW Victorville 2 Hybrid Power Project--which was being developed by the city of Victorville--never has been completed despite that the city invested $76 million, $50 million of which was lost, according to the grand jury\u2019s June 29 report, made public earlier this month. Apparently star struck by the promise of a solar-natural gas hybrid plant to serve what it hoped would be a growing base of industrial customers near its airport, Victorville officials agreed in 2005 to fund the power plant based on \u201crecommendations from contractors who have had an interest in the projects,\u201d according to the grand jury. One contractor was Inland Energy, Inc., which was to build and operate the plant. City officials did not \u201ctransparently\u201d present information concerning the project to the public, noted the panel. Inland Energy swung a similar deal with the city of Palmdale to build a carbon copy hybrid plant. It too has yet to be built.