PG&E Renews Oakley Project Effort

By Published On: October 15, 2010

Pacific Gas & Electric urged regulators to reconsider their decision denying rate recovery for the utility’s planned investment in the 586 MW Oakley power project. PG&E renegotiated the contract with the developer to push back the facility’s online date from June 2014 to June 2016. PG&E argues that the California Public Utilities Commission decision can be altered when there are changed circumstances. The project is now viable, it contends, although the commission decided otherwise in July. “Here, the modification of the Oakley Project guaranteed commercial availability date in the amendment constitutes a significant change in circumstances,” asserts PG&E. It also states in a recently filed petition for modification to the CPUC that the fossil fuel project would be efficient and would help fill in any gap from intermittent wind and solar energy supplies. “It is suited perfectly for the renewable generation we are shooting for,” said Brian Swanson, PG&E spokesperson. He added that after the utility reaches the state’s 20 percent alternative power mandate it will continue to procure renewable energy supplies. On July 29, the CPUC unanimously rejected adding Oakley to PG&E’s fossil-fueled generator portfolio. The project would cost an estimated $1.6 billion, according to the Division of Ratepayer Advocates. PG&E’s Swanson said DRA’s cost estimate “significantly overestimates the cost,” adding PG&E’s figure was confidential. Nevertheless, the CPUC in denying cost recovery for the plant last summer pointed to the economic downturn and drop in power demand, PG&E’s solar rooftop program, as well as estimated energy savings from its approved efficiency program. The CPUC did, however, allow PG&E in the same decision to invest in 1,000 MW from other fossil-fueled projects. That includes cost recovery for building the 719 MW Marsh Landing power project. That facility is expected to replace the aging once-through cooled units at the Contra Costa facility. Other projects allowed PG&E by regulators this summer are Midway Sunset, 129 MW of cogeneration peaking capacity, Los Esteros, a partnership with Calpine that increases the capacity at that facility by 109 MW, and Tracy/GWF, a repower project adding 145 MW. Consumer advocates and independent generators largely refuted the utility’s claim that Oakley is required to meet customer load. In addition, the “needs assessment” relied upon in the proceeding was criticized for using outdated information that failed to factor in the economic downturn. DRA estimates the amount of capacity that would be provided by Oakley wouldn’t be needed until 2018. The output from Oakley would flow directly to PG&E’s Contra Costa substation, and be distributed throughout the Bay Area, according to Swanson.

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