Safeguards Needed to Ensure Judge?s Independence, Says IEP

By Published On: April 23, 2005

Rules should be established that specify the role and responsibilities of the person hired to independently evaluate power project bids proposed by utilities, the Independent Energy Producers urged in a letter to California Public Utilities Commission president Mike Peevey. The organization also asked the commission to address, through a formal proceeding, the method for choosing the independent evaluator (IE) and bring to light criteria used by the investor-owned utilities to select bids, as required by the commission?s long-term procurement decision. ?Affording [utilities] the role of selecting/hiring the IE raises concerns of potential bias,? Jan Smutny-Jones, IEP executive director, wrote in an April 15 letter to Peevey. Smutny-Jones added that independent power producers also ?remain in the dark as to what criteria will be used for comparing disparate projects on a least-cost/best fit basis.? Last December, the CPUC ruled that utilities? new power supplies should be selected in an open and transparent process, with merchant generators being given fair bidding opportunities (<i>Circuit</i>, Dec. 16, 2004). This week, IEP attempted without success to exclude from the general rate case Southern California Edison?s proposal to recover $5 million in rates for new power project development. IEP said allowing ratepayer subsidies of utility-sponsored and turnkey projects outside the bidding process would skew the process. The administrative law judge ruled that ?absent the commission?s development of a specific framework to consider the desirability of having utilities construct new generation subject to cost-of-service ratemaking,? the issue remains in the rate case.

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