CPUC Embraces PG&E’s Oakley Plant

In a decision that allows Pacific Gas & Electric to develop its Oakley power plant, but avoids immediate ratepayer requirements, the California Public Utilities Commission voted 4-1 to approve proceeding with the power plant. The caveat inserted by commissioner John Bohn is that no ratepayer funds are to be used for plant until 2016. That makes it a risk on the utility to run it as a merchant power plant until that date. PG&E has too much generation available, noted commissioner Dian Grueneich. “PG&E has a 69 percent reserve margin without Oakley in 2020,” she declared. The power plant is expected to cost $1.25 billion or $1.6 billion, depending on which CPUC analysis is invoked. Some commissioners made much of the planned efficiency of Oakley’s turbines as a reason to approve the facility. The efficiency of the power plant would “push less efficient plants out of the dispatch stack,” said commissioner Nancy Ryan. Approving the 586 MW fossil-fueled plant marks a reversal of the commission’s July 29 decision to deny PG&E rate recovery for the facility. At the time, regulators allowed several other developments to proceed, but carved out Oakley questioning the need for its output and its expense. This move overturned an administrative law judge’s proposed decision. That decision would have denied PG&E’s new plan for building Oakley, largely because the utility failed to meet procedural and technical requirements. Bohn found the utility met those requirements.

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CPUC Embraces PG&E’s Oakley Plant

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