Despite questioning the effect on consumers of a confluence of state energy plans, the California Public Utilities Commission Oct. 20 approved 4-to-1 a solar contract for Pacific Gas & Electric. Without policy and rate pressures, the North Star contract for a 60 MW photovoltaic installation near Mendota would likely have been rubber stamped. Almost all alternative power deals with utilities have been approved without discussion. However, this contract ignited policy discussion that affects several areas of the state’s ongoing renewable energy principles--consumer price, renewables market stability, and contract secrecy. “We need stable, transparent, and predictable markets,” said commissioner Catherine Sandoval. She endorsed the contract with reservations. Commission president Mike Peevey echoed her--only without reservations--saying there should be “reasonable certainty” in California’s renewable energy business climate. “The contract is simply not competitive,” countered commissioner Mike Florio, the lone dissenter. “It may not be fair to North Star, but doubly unfair to ratepayers.” The project was called out as more expensive than the going solar installation cost to ratepayers--but the public has no idea how much more expensive due to confidentiality restrictions on the contract. Concerned about “unfairness” if they turned down the contract--as well as that it would send a negative message about the state’s “business climate”--regulators voted for the remarkably “expensive” contract. Yet, all of the commissioners expressed discomfort at the state’s policy for a 33 percent renewables portfolio standard and that the multiple commission policies to enhance that transformation clash with concern about incessant rate hikes. Regulators found no resolution for the high cost of state strategies for consumers, but begged the question for further review. “Public sticker shock risks policy reversal,” said commissioner Mark Ferron. In another attempt to clarify state policy, the commission opened a docket to explore resource adequacy. With more renewables required under state law--and their attendant fossil fuel generation support for the grid, as well as new storage needs to support alternative energy--the commission decided to update its five-year-old resource adequacy plan. Regulators noted that with new policies, including distributed generation, renewables auctions, combined heat and power tariffs, and rules on interconnecting new sources to the grid, that its 2006 program should be revisited.
