CPUC Adopts Edison?s Orphan Mountainview

Not one California Public Utilities Commission member wanted it this way, yet Southern California Edison?s proposal to build the Mountainview power plant—to be owned by a new utility affiliate—was approved December 18. The 4-1 vote reflected commissioners? desire to facilitate the building of new generation, although all said they?d rather have the utility construct and own it directly. Commissioners made clear that Edison?s plan will be an exception, not a precedent. ?It?s this project and this project alone,? said CPUC president Mike Peevey. He added that ?no one? wants to make this ownership structure a template. The 1,000 MW plant near Redlands would ultimately be regulated by the Federal Energy Regulatory Commission rather than the CPUC because of the plant?s nonutility ownership. FERC approval is now necessary. Without direct regulation, commissioner Loretta Lynch said, the decision ?sets up a system where we?re pleading with utilities to do the right thing.? Edison has admitted it has the cash flow to buy the Mountainview plant outright but prefers the arm?s-length approach because, utility officials say, it looks better to investors. The facility will cost $703 million, according to documents filed this week by Edison. Total annual charges to ratepayers will start at $110 million in 2006 and reach a high of $133 million in 2008. The charges will then decline until 2035, when there is expected to be a large payment of $145 million due to operation and maintenance charges. ?The savings we realize would be passed on to consumers,? said Bob Foster, Edison president.

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CPUC Adopts Edison?s Orphan Mountainview

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