CPUC Adopts Mountainview Changes, Opens DG Rulemaking

The California Public Utilities Commission ratified the Federal Energy Regulatory Commission?s February conditional approval of the Mountainview power plant. FERC approved the controversial deal with the hitch that Edison change its power-purchase agreement; thus the CPUC-adopted revisions. Edison committed to buying the plant March 1. Adopting changes is ?largely a formality? since Edison is well on its way to securing financing for the plant, said commission president Michael Peevey on March 16 before commissioner Loretta Lynch cast the lone dissenting vote. Edison said this week that it had closed the purchase and had given the word to the general contractor, Bechtel Power, to start construction of the partially built 1,054 MW plant. Edison expects it to be up and running in the summer of 2006. Bechtel is co-owner of InterGen, the company that sold Mountainview to Edison. Instead of basing operation and maintenance costs on forecasts and truing them up later, FERC required Edison to pass through actual costs. This amounts to a minimal increase to ratepayers?between $1 million and $1.5 million, according to the CPUC?out of $142 million estimated for the first year of operation. Overall, the expected price tag of Mountainview at its completion in 2006 is $703 million. Edison plans to spend $630 million this year on construction, most of which is going toward Mountainview completion, according to utility spokesperson Gil Alexander?but that does not include operations costs. In other CPUC action, distributed generation (DG) could get a closer look as a result of a new rulemaking on the matter. The new proceeding aims to develop cost-benefit analyses for DG and net metering, examine DG incentives, and develop policy guidelines on use of DG for private utilities. If the CPUC follows through on its intentions, the effort ?will put California [in a position of] national leadership? on DG, said commissioner Carl Wood. Regulators also gave the nod to Pacific Gas & Electric to sell electric distribution facilities to the Modesto Irrigation District (MID) and to lease space on PG&E?s transmission poles to MID. In January 2001, MID started serving customers in a San Joaquin?based planned community whose numbers are expected to grow to 16,000. As of January 2001, when Modesto became responsible for distribution in the area, it had no distribution lines to serve load. PG&E?s profits from the transactions with Modesto were put off until an upcoming gain-on-sale rulemaking. Also at the meeting, Peevey?s picks for ?public? positions on a nonprofit board that will oversee use of 140,000 acres of PG&E?s hydroelectric lands were approved. The creation of the nonprofit Stewardship Council board was a result of PG&E?s bankruptcy settlement. Lynch wanted to ensure that members of the board would not be employed by, or on the board of, any organization that takes money from PG&E?an idea that Peevey called ?ridiculous on its face.? Lynch later cast a partial yes, partial no vote on the board picks. The new public members join another 17 members picked by PG&E and other entities. They are Luis Arteaga, executive director of the Latino Issues Forum; Assemblymember Hannah-Beth Jackson; and Alfred Smith, Jr., senior pastor of the Antioch Baptist Church. While Jackson has environmentalist support, none of the members is associated with environmental organizations. Commissioner Geoffery Brown was also appointed, with executive director Bill Ahern as alternate member.

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CPUC Adopts Mountainview Changes, Opens DG Rulemaking

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