PG&E Asks for $5M for Failed Tesla Project

By Published On: June 12, 2009

Pacific Gas & Electric seeks to recover $5 million it spent in its failed pursuit to build, own, and fold into its rate base the 560 MW Tesla project. The California Public Utilities Commission dismissed PG&E’s application seeking approval for the project in Eastern Alameda County after independent generators cried foul, accusing the utility of violating the hybrid market endorsed by the commission. In its cost recovery application to the CPUC last week, the utility stated it plans to seek recovery of $4.9 million for “[abandoned project] cost recovery” in its 2011 General Rate Case. “PG&E’s request is contrary to the CPUC’s existing procurement policy, anti-competitive, and greedy,” said Gary Ackerman, Western Power Trading Forum Association executive director. “Utilities are able to recover their reasonable costs through rates. The up-front costs associated with the Tesla plant meet the CPUC’s definition of reasonableness,” the utility said in a statement. The utility versus independently-owned generation debate came to a head when PG&E proposed building and owning the Tesla project. The Independent Energy Producers urged state regulators last August to investigate whether the power buying practices of PG&E and the other two private utilities violated commission policy.

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