CPUC OKs Edison and TrueSolar Contract Despite Controversy

A project whose cost soars above that of high-priced renewable energy, at $0.42/kWh, was approved by the California Public Utilities Commission. The bulk of the cost, $0.356/kWh, of the Southern California Edison?TrueSolar Solutions agreement may come out of a ratepayer-funded California Energy Commission (CEC) pot for small business and residential photovoltaic installations. ?Yes, it is an expensive project. [Photovoltaic energy] is expensive. That is the fact of the matter,? said commissioner Carl Wood, who wrote the resolution supporting the recently revealed agreement between Edison and TrueSolar. ?If you reject solar out of hand, we won?t play a role in developing the technology,? Wood added. Passage of his resolution also included the price of the deal being made public. It passed December 4 only after commission president Mike Peevey switched from abstaining to voting in favor of it. TrueSolar is Peevey?s former company. He was also Edison?s president in the early 1990?s. ?The price is eye-popping,? said Matt Freedman, attorney with The Utility Reform Network. He said it is far south of reasonable and contrary to CPUC protocol. According to the CPUC, the deal involves Edison paying $0.045/kWh for energy and $95/kW-year for capacity, with the rest of the cost, $0.375/kWh, potentially coming out of a solar buy-down program at the CEC. TURN?s preliminary estimates show the total price at nearly $0.44/kWh, with Edison?s responsibility about $0.0625/kWh for 15 years. Solar energy representatives urged the commission to reject the agreement on the grounds that the 5 MW photovoltaic project would undermine the fledgling industry by draining CEC funds allocated to small distributed-generation systems. The emerging renewables program at issue is considered responsible for the boom in the solar industry the last six years. The number of PV companies has risen from 25 to close to 500 firms, said Howard Wenger, executive vice president of PowerLight, a solar power company based in Berkeley. Approving the contract, he said, ?would have a devastating impact on thousands of jobs? in the surging PV retail business. The Edison-TrueSolar proposal was submitted to the CPUC last January via a sealed advice letter, and many of its terms were made public only in mid-November. The committee that reviewed the deal along with the CPUC Energy Division opposed it because of its high costs and its attempt to tap into CEC public-goods money. In addition, the Independent Energy Producers opposed it because of the secrecy surrounding the project. PowerLight, among others, did not submit bids to Edison when it sought renewables proposals more than a year ago because the utility stated it wanted ?least cost? and a fixed-price deal for 10 years or less. Lars Bergmann, Edison director of qualifying facilities, said the failure to submit proposals was poor business judgment. ?Everybody submits nonconforming bids,? he said. Wood stated that the issue of funding for the TrueSolar deal was not a CPUC determination but one that will be decided by the CEC. The commissioner approved the deal according to its procurement criteria, Wood said, but the CEC must decide how its pot of public-goods money will be spent. Bergmann said he is confident the CEC will approve its use of emerging renewables program money. ?It is economy of scale.? The installed cost of the centralized project near Barstow will be less than half that of rooftop PV systems and double their capacity, he added.

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CPUC OKs Edison and TrueSolar Contract Despite Controversy

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