Edison?s Pricey TrueSolar Proposal Targets CEC?s PV Rebates

The California Public Utilities Commission will vote this week on a controversial 15-year photovoltaic deal that Southern California Edison signed with CPUC president Michael Peevey?s former business colleagues. The agreement with TrueSolar Solutions for 5 MW from the Barstow area is said to be the highest-priced renewables deal to date. Its price, however, remains hidden to all but a select few. The deal is an attempt by Edison to deviate from the rules of the procurement game?in both the interim and renewables solicitations?according to critics. The agreement ?breaks all the rules and would set a very ominous precedent for the implementation of California?s renewable portfolio standards,? wrote The Utility Reform Network (TURN) and the Natural Resources Defense Council (NRDC) December 1. Representatives from the two organizations sit on the closed-door ?procurement review group? that studied the Edison-TrueSolar proposal. TrueSolar is a subsidiary of TruePricing, cofounded and previously run by Peevey. The CPUC president did not cast a vote last month when the commission dealt with the proposal?s secrecy issues. Still, ?the linkage to Peevey is very troubling,? said Matt Freedman, TURN attorney. Whether Peevey will vote on the resolutions on December 4 remains to be seen. ?He has reached a point where he has neither a legal problem nor an appearance concern,? said Pete Arth, Peevey?s adviser. It has been more than 12 months since the CPUC president received any income from TrueSolar or TruePricing, he added. Thus, Peevey is no longer bound by legal conflict-of-interest constraints. Unlike the case with other semisecret deals, such as Edison?s proposal to buy the output from the 1,054 MW Mountainview project from an affiliate, for months virtually nothing was known about the TrueSolar agreement. Until the CPUC voted November 18 to reveal many of the troubling deal?s terms, the name of the company offering the solar power, the amount of power, and the length of the deal were all kept dark. Legislators and policy makers, along with consumer and generator advocates, also contend that the Edison-TrueSolar contract highlights the pitfalls of the CPUC?s confidential procurement arrangements with utilities. ?This is a deal-oriented process, and that is not what the legislature intended,? said Senator Debra Bowen (D-Redondo Beach). She noted that AB 57 set power procurement parameters, which are supposed to be transparent. ?Why is the CPUC going along with the confidentiality, and what is it going to do to open up the process?? asked Senator Byron Sher (D-Palo Alto). ?In the final analysis, it is the commission?s responsibility to make decisions in the light of day,? state two draft resolutions pending before the commission. Both measures supported revealing many of the proposal?s terms. Commissioner Carl Wood?s pending decision approves the TrueSolar agreement. The other resolution, drafted by the CPUC?s Energy Division and backed by a wide assortment of interests, rejects the project. The CPUC?s two competing resolutions note that the deal does not meet the least-cost, best-fit criteria. In addition, it would not come on line this year, as required. The drafts note Edison?s claim that the proposal is good for ratepayers and asserts this deal should be viewed ?differently? than other proposed traditional renewables power contracts. Edison declined to comment on the matter prior to the upcoming vote. TURN and the NRDC, along with the Office of Ratepayer Advocates, the California Energy Commission, and generators, upped the ante and strongly object to Edison?s move to tap into public-goods money earmarked for offsetting the costs of small photovoltaic systems to help pay for the high-priced TrueSolar contract. ?It will waste scarce, fixed funds on an inefficient project,? said Janice Lin, vice president of business development for PowerLight, a large PV system manufacturer. She added that the TrueSolar proposal is contrary to the request for proposals (RFP) Edison issued months back for low-cost renewables projects that would run for 10 years or less. ?The RFP on their Web site was very inconsistent with their choice,? she noted. Steven Kelly, policy director for the Independent Energy Producers, added that allowing a bid via a secret deal with changed terms violates the principle of transparency and will result ?in a sham [bidding] process.? The Edison-TrueSolar agreement aims to meet the CPUC interim procurement rule that requires utilities to boost their renewables supplies by 1 percent a year. There is a separate renewables procurement process under way, which, among other things, would establish a benchmark price at which a renewables proposal would be considered reasonable per se. That pending benchmark, set at $0.0537/kWh, and its specifics have not been finalized. Green power contracts that exceed that figure could use certain CEC funds to cover the costs above that amount. Project opponents have sought clarification from Edison as to where it will draw the reasonableness line and how much of the cost would be taken from the CEC?s residential buy-down program. The law requiring utilities to boost their renewables supplies to one-fifth of their energy portfolios allows private utilities to use other CEC funds to help pay for green power?even though that power is on the expensive side. Public-goods money is available to cover power costs that exceed the benchmark price. Opponents point out that Edison?s attempt to tap into the energy commission?s emerging renewables program funds, allocated for small businesses and residences that use less than 30 kW, not only would drain money from the program but also violates the program?s purpose. ?The [CEC] subsidy is meant for on-site load and is not meant to support merchant generation load exported on the grid,? Freedman said. The amount of money at issue, if continued to be dedicated to installing small PV systems, would produce more power. In place of TrueSolar?s 5 MW, it ?would yield between 18.9 MW and 33.8 MW capacity at the end of the decade,? according to TURN and NRDC. The IEP?s Steven Kelly urged the commission to use ?its office to ensure that generation procurements, whether it is renewable or otherwise, achieve the necessary standard of openness, competition, and transparency.? Sealed Advice Letters Months ago, the CPUC agreed to allow utilities to expedite secret bids via advice letters. The rule was geared for renewables deals that would be backed by the Department of Water Resources? creditworthiness. However, the TrueSolar agreement entered the commission procurement process by means of a sealed advice letter in January, although it is not backed by DWR credit. The confidentiality results in the release of two CPUC proposed and final decisions?an informative private one and a limited, blacked-out public one. It also keeps commissioners? tongues tied as they cannot lay out their reasons for reaching a decision, critics warn.

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Edison?s Pricey TrueSolar Proposal Targets CEC?s PV Rebates

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