Edison Wants $8.7M Project Development Fund

Independent power producers are trying to stop a Southern California Edison proposal to have ratepayers underwrite a new division within the utility supported by an $8.7 million budget in 2006. Buried in Edison?s 2006 general rate case application is a proposal for a new organization, the Project Development Division, which would ?analyze, develop, and propose for commission approval, cost-effective, utility-owned generation opportunities consistent with Edison?s long-term procurement plan.? The division would also provide data on construction costs and economics to the utility?s resource planning and strategy organization. ?We believe providing the commission with utility generation options contributes a healthy discipline to energy markets, requiring independent generators to compete with potential cost-based projects,? stated Edison spokesperson Gil Alexander. Specifically, the utility says the new division will help ratepayers by allowing Edison to ?more fully contribute? to the commission?s goals of having in-state plants, including ones in brownfield developments. It was also touted as reducing Edison?s reliance on forward and spot markets. It would also provide a ?benchmark during competitive solicitations for third-party power, regardless of whether or not such projects are constructed,? according to the utility?s filings. It is ?a wolf in sheep?s clothing that is designed to cull out independently developed projects from a pool of utility procurement options, leaving a sickly herd of less competitive projects that have been developed at ratepayer expense, with the profits going to Edison?s shareholders,? stated the Western Power Trading Forum in testimony. WPTF also notes that the CPUC?s December long-term procurement decision allows utilities to recover costs equivalent to a generator?s bid?sans the development costs. Thus, generators claim, the new Edison proposal could skew the playing field if approved.

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Edison Wants $8.7M Project Development Fund

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