CPUC Flirts with No-Bid Renewables Contract

Despite launching a landmark solicitation for renewables contracts last month, the California Public Utilities Commission August 19 came close to approving a no-bid 51 MW wind contract recently negotiated by San Diego Gas & Electric. Though the deal was defeated, the close vote exposed regulators' tensions over the limits of their own policies calling for transparent, competitive bidding. SDG&E and the CPUC have declined to disclose the name of the wind developer. The commission's line in the sand-stopping utilities from signing power contracts that are not only noncompetitive but secret-keeps shifting. Commissioners Geoffrey Brown and Loretta Lynch said they were fed up with the commission treating competitive bidding lightly. Brown and Lynch voted against the contested deal, along with commissioner Carl Wood. "We keep moving the line. First we said Mountainview [was the last one], then Palomar," Lynch said of SDG&E's proposal. Edison's no-bid acquisition of Mountainview, to be built by an unregulated subsidiary of Edison International, was given the go-ahead in December, while SDG&E's purchase of the Palomar plant, developed by an unregulated Sempra subsidiary, was approved in June. Commission president Mike Peevey supported SDG&E's bilateral deal. He claimed it would help the utility meet its renewables goals because the project can be on line next year. Utilities are required to have 20 percent of their power portfolios in renewables by 2017. In an unusual move, Energy Division director Paul Clanon cautioned that approving this type of contract outside the RPS "sends the wrong message" because it goes against the intent of established policy that bidding should be transparent. The Energy Division suggested that SDG&E reopen its renewables solicitation, which closed on August 12, and consider the deal as part of that process. That drew a tepid response from Ed Van Herik, SDG&E spokesperson, who said, "We will take that under consideration." Circumventing the competitive bid process, SDG&E filed an advice letter in June seeking approval for the wind contract. The Procurement Review Group-a body of nonmarket participants that is privy to secret data withheld from the public-reviewed it the same month. Regulators have not yet delivered on their repeated promise to sunshine utility procurement proceedings, following wide-ranging criticisms that secrecy rules stifle participation in commission proceedings. In fact, a majority of regulators, along with investor-owned utilities, applied pressure on a state legislator to back down on legislation reforming confidentiality rules ( Circuit , July 30, 2004). While the commission so far hasn't fulfilled its confidentiality pledge, wholesale generators could face increased pressure to divulge secret data if a resolution set for a commission vote next month is adopted. Among other things, these suppliers would need to support any request for confidential treatment by a law prohibiting disclosure of such data. "The generating asset owner bears the burden of proving why any particular document, or portion of a document, must or should be withheld from public disclosure," concludes the resolution. Recent No-Bid, CPUC-Approved Contracts The following details regarding CPUC-approved pacts come from the commission's Energy Divison. December 18, 2003: Mountainview, 1,054 MW combined-cycle natural gas facility acquired by Southern California Edison as an unregulated subsidiary of Edison International. December 4, 2003: TrueSolar, 5 MW photovoltaic contract with Edison. This May, the CPUC overturned its approval of this contract. May 27, 2004: Rancho Pe?asquitos, 4.5 MW hydro contract with San Diego Gas & Electric developed by the San Diego Water Authority. June 9, 2004: Buena Vista, contract with Pacific Gas & Electric to repower existing 37.5 MW wind facility in Altamont Pass. July 8, 2004: Madera Power, 25 MW extension of renewables contract with PG&E. July 8, 2004: Community Renewable Energy Services, 12 MW, extension of renewables contract with PG&E. July 8, 2004: Sierra Power, 7 MW, renewables contract extension with PG&E.

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CPUC Flirts with No-Bid Renewables Contract

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