CPUC Narrowly Approves Backup Diesel DG Deal

By Published On: October 16, 2009

Breaking from its usual unanimous voting pattern, the California Public Utilities Commission on a 3-2 vote approved a San Diego Gas & Electric contract for 25 MW of peaking power from a cluster of diesel-powered generating units. This matter was the sole energy item on this week’s agenda. “Frankly, this is a non starter,” insisted Mike Peevey, commission president, before the vote. He warned that the contract put diesel-powered energy dispatch ahead of demand-response and is contrary to regulators’ approved loading order. Commissioner Dian Grueneich also voted against the agreement. Efficiency, conservation (including demand-response actions between utilities and consumers), and renewable energy sources are supposed to take precedence Despite Peevy and Grueneich’s opposition, the contract between San Diego Gas & Electric and Celerity Energy Partners for up to 25 MW of peaking hours from existing diesel power plants was approved. Those units are set to be retrofitted to serve nearby load pockets at times of high power demand. The decision states the units are likely to be used less than the allowed 210 hours a year, mostly likely between just 50 and 99 hours. The deal “will save millions of dollars over the life of contract, and there are additional ratepayer protections,” commissioner John Bohn, the author of the approved alternate decision, said October 15. He pointed out the scattered small diesel power units are to be retrofitted with filters to slash particulate and carbon monoxide emissions. He conceded that the units would emit more carbon dioxide emissions than efficient combustion turbines. The back-up units are expected to be “less polluting on a kWh basis than some other peaking contracts we have approved, such as the Long Beach peaker,” according to Bohn. In addition, the utility will only pay for output that meets state regulators’ and the grid operator’s resource adequacy requirements, according to the decision. Resource adequacy is a cushion of power that utilities are required to have on hand. The use of these units, which are connected to distribution lines, was backed by the Sierra Club on grounds the power was less costly and more environmentally sound than alternatives. Rejecting the deal would discourage the use of distributed generation to meet peaking needs and instead promote centralized stations that need costly transmission lines, according to a Club member representing the San Diego area. The terms of the contract, including the price and length of the agreement, were deemed confidential.

Share this story

Not a member yet?

Subscribe Now