Edison Policy May Pose Renewables Roadblocks

By Published On: September 11, 2004

The state?s renewables goals may be undermined by Southern California Edison?s decision not to participate in the recent renewables portfolio standard (RPS) solicitation. ?We need to get Edison back in the game,? said California Energy Commission member John Geesman during a September 8 joint meeting of the California Public Utilities Commission, the CEC, and the California Power Authority. ?It?s the strongest horse in the barn,? he said, adding that between 70 percent and 80 percent of the state?s renewables potential lies in the utility?s territory. Agency officials met this week to review their Energy Action Plan accomplishments and shortcomings for a report update expected to be released in late October. Instead of participating in the CPUC renewables solicitation earlier this summer, Edison pursued an interim renewables solicitation because ?we wanted to get an early start on the renewables market,? said Manuel Alvarez, Edison director of policy and regulation. The CPUC agreed to allow Edison to bow out of the July renewables bidding process because the utility was flush with renewable supplies. Some regulators and generators are upset because Edison helped draft the complex language of the renewables portfolio standard bill but does not have to play by its rules. ?The rest of the market is struggling with implementing the draconian policy, which Edison has avoided entirely,? fumed Steven Kelly, Independent Energy Producers policy director. Thus, only Pacific Gas & Electric and San Diego Gas & Electric solicited bids publicly, and a short list is expected to be released in mid-October. Edison has yet to announce its winning bidders. Edison?s interim solicitation deals were reached behind closed doors, with the terms reviewed only by a select committee made up of stakeholders. The state renewables standard requires that one-fifth of investor-owned utilities? power portfolios be green by 2017, and the joint agency plan urges that the goal be advanced to 2010, which could be achieved if a bill on the governor?s desk is signed. Public power agencies are supposed to come up with a plan for meeting the green target. The energy commission calls for the green goal to be imposed on all energy providers and be boosted beyond 20 percent after 2010 (<i>Circuit</i>, August 13, 2004). Geesman also expressed concerns about renewables prospects because Edison might not renew up to half of its deals with qualifying facilities (QFs), which are set to expire over the next five years. ?We have to make sure the capacity continues to exist on the system,? he said. Gary Schoonyan, Edison director of regulatory policy, said all QF contracts may be renewed, adding that he agreed with the goal set by energy agency staff to neither overpay nor underpay QFs. The utility has complained for years that it paid too much for the contracts, and the fight has been and will continue to be over the short-run avoided costs, which will depend on the cost of gas. Policy makers questioned the Los Angeles Department of Water & Power about its commitment to the state renewables portfolio standard. State law, which covers only regulated utilities and not municipals, does not count hydropower over 30 MW as part of the portfolio. LADWP is committed to growing its renewable resources by 1 percent a year, said John Schumann, LADWP director of system planning and projects. He added that the department considers hydro facilities along its aqueduct that are greater than 30 MW to be eligible green power, since the same water feeds the hydro plants on the system?whether they are less than 30 MW or greater. The day after the meeting, the benefits of increasing renewables were highlighted, including reducing CO2 emissions. California?s greenhouse gases are predominantly from automobiles and other transportation vehicles, but ?electricity generation worldwide is fingered as one of the major contributors to greenhouse gases,? noted CEC member Jim Boyd. In a September 9 workshop on climate change, he added that the populous state uses huge amounts of power, as evidenced by the recent series of record-breaking peak demand this summer, and said that ?electric generation and the consumption of gas needs to be addressed.?

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