Closed-Door Bidding Wedged Open

A dialogue among generators, regulators, and investor-owned utilities recently opened over one of the most contentious post deregulation issues: closed-door bidding. As a condition of bidding in the state-mandated procurement process for new electricity supplies, Independent Energy Producers (IEP) executive director Jan Smutny-Jones proposes requiring open bids. "We've got a ball game," said Sean Gallagher, California Public Utilities Commission attorney. While it is far from clear what the potential parameters of publicly available bidding information for utility solicitations would be, and whether it would include winning and losing bidders, Pacific Gas & Electric vice president of gas and electric supplies Roy Kuga noted, "At least there's a dialogue." It's one he expects to continue. Kuga said during the IEP's annual conference held September 27-29 that if the winning bidder is willing to release specific information, then PG&E is game to let light shine on the process. However, that does not necessarily include price disclosure. Southern California Edison is not ready to embrace Smutny-Jones's proposal either, remaining concerned that generators could game the market by signaling each other in an open process. Pedro Pizarro, Edison vice president of power procurement, insists that redacted bidding information is needed to protect ratepayers' interests, adding that the airing of solicitations would create a baseline for subsequent bids. Smutny-Jones called Pizarro's concerns "hooey." He added that bids have a limited shelf life because of changing conditions-including gas prices and air-quality regulations. He pointed to the last decade's third-party procurement process, the Biennial Resource Plan Update (BRPU), which allowed bidding generators to see who won and who lost, adding that public power agencies' requests for proposals are along those lines. Merchant generators, with IEP at the helm, have long called for "open, transparent bidding," particularly since utilities have reengaged in the business of building their own power plants. Independent generators' cries reached a feverish pitch earlier this year when the California Public Utilities Commission approved a 30-year deal Edison reached with an affiliate behind closed doors to build the Mountainview project. All agree that contracts are the linchpin for financing needed supplies, but stakeholders have a long way to go before reaching consensus on the terms of deals, a key issue being contract length. "We don't want short-term contacts as a substitute for new resources coming online," California Energy Commission member John Geesman said during the IEP conference. He urged completion of the yet-unbuilt 8,000 MW of projects approved by the commission. In order to do that, generators insist that multiyear contracts are essential. However, investor-owned utilities say they can't commit to long-term agreements because of the potential for their customer base to shrink if direct access is rekindled. "It is very hard to come by a 10-year power-purchase agreement," said Mike Florio, senior attorney with The Utility Reform Network. And he doubts that a decade-long contract is of sufficient length to spread out the costs, adding, "You can't compare a 10-year power-purchase agreement with a 30-year contract." -Elizabeth McCarthy

Over 11K Stories!

| Independently Powered Energy News

Closed-Door Bidding Wedged Open

vdharadmin

Related Posts

Op-Ed: Before and After Net Energy Metering 3, A Thought Experiment

Auld Lang Zine

CPUC Chops Solar Rooftop Payments & Adds Battery Incentives, Few are Happy

Capacity Market: Door to More Supplies or Pandora?s Box?