CPUC Approves Semi-Secret SDG&E Solar Dish Deal

By Published On: January 6, 2006

The California Public Utilities Commission approved a San Diego Gas & Electric contract December 19 that could yield hundreds of megawatts of solar thermal electricity. Some of the contract information remains hidden from the public, including the price of power. Neither a site nor transmission upgrades have been secured. The initial contract with Stirling Energy Systems calls for 300 MW. It could come on line as early as 2008 or as late as 2010. If successful, the project could be expanded to 900 MW. Stirling hopes to nail down one of two potential sites in Imperial County on federal land. The facility would harbor between 12,000 and 36,000 solar dishes. One potential site is 5,200 acres, and the other a 7,000-acre expanse of Bureau of Land Management (BLM) land, said Robert Liden, Stirling executive vice-president and general manager. The company is in the initial stages of conducting environmental assessments required by the county, state, and federal governments. “We don’t see any real issues and will walk through both sites with BLM biologists next week,” Liden said. The project must also win California Energy Commission approval. Liden estimated that requisite permitting could take about two years. If Stirling cannot get the appropriate site and permits, it faces penalties for contract violations. Liden also said that new high-voltage lines were not needed for the first two years of the project’s initial 300 MW build-out. But upgrades would be needed to carry power from an expanded site. SDG&E is just getting public input on its proposed Sunrise PowerLink transmission line, said SDG&E spokesperson Ed Van Herik. That line could carry electricity from the solar facility to load centers in San Diego. The final and alternate routes are not expected to be announced until next June, he added. Although solar power is popular with the public and many policy makers, the city of Chula Vista urged the CPUC to reject the SDG&E-Stirling agreement. It argued unsuccessfully that Stirling and two accompanying small landfill-gas agreements are part of SDG&E’s strategy to overcontract for power to make community-choice aggregation “uneconomical.” The rub for others continues to be that the Stirling contract is yet another procurement deal reviewed behind closed doors by a select few. “I don’t know anything about Stirling. But we continue to lack the information necessary to assess whether deals are good for ratepayers,” said Steven Kelly, Independent Energy Producers policy director. Liden said his company and the utility “mutually agreed” not to reveal the price. Releasing it could allow competitors to undercut Stirling, he said. The per-kilowatt-hour cost is expected to be between 11 cents/kWh and 6 cents/kWh and not require public-goods subsidies, according to Liden. Specifically, the cost is said to be below the CPUC’s market referent price – about 11 cents/kWh for peaking power and about 6 cents/kWh for baseload power. The Stirling deal is set to provide a mix of peaking and baseload power. Some estimates put the price of power in the 7 cents/kWh range (Circuit, Aug. 5, 2005). Last fall, the CPUC approved a deal between Southern California Edison and Stirling for up to 800 MW (Circuit, Oct. 14, 2005). The 1 MW pilot project might be built on utility land in the Mohave desert. Liden added that Stirling is hoping to secure BLM land in that area for an expanded project.

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