Suppliers Say SDG&E Generation Proposals Competitive

By Published On: February 17, 2004

Independent electricity suppliers who are still fuming over the absence of competitive bidding in Southern California Edison?s Mountainview project give another utility, San Diego Gas & Electric, good marks on its recent solicitation for generation proposals. The California Public Utilities Commission approved an unregulated Edison subsidiary to own the 1,054 MW plant instead of requiring competing generators to vie for the new megawatts. In line with policies favoring reregulation, the CPUC last summer encouraged SDG&E to pick proposals emphasizing utility-owned generation. Last October, SDG&E selected a 10-year power purchase agreement with Calpine?s long-stalled 485 MW Otay Mesa plant as part of a package of proposals. Its parent company?s 555 MW Palomar plant is also part of the package, as well as several smaller deals. A decision on these proposals is expected this spring. Generators think that SDG&E?s solicitation was ?open, fair, and competitive,? said Gary Ackerman, executive director of the Western Power Trading Forum of his members? reaction to SDG&E?s bidding process. The Independent Energy Producers expressed similar sentiments. Contract terms for Otay Mesa are available to the public, in contrast to the dearth of public information on Mountainview, noted Joe Ronan, Calpine?s senior vice president of government and regulatory affairs. He questioned, however, whether the CPUC?s reregulation bent will, in the long haul, allow competitive markets to survive. While many suppliers have no qualms about the project, Otay Mesa still has its share of opponents. Intergen, which is awaiting Federal Energy Regulatory Commission approval of plans to sell its Mountainview plant to Southern California Edison, has asserted that its La Rosita plant could supply energy at lower cost than Otay Mesa. Intergen is owned by Bechtel and Shell. The Utility Reform Network has filed testimony on Mountainview at the Federal Energy Regulatory Commission asserting that the project is more cost-effective than Otay Mesa. But Calpine?s Ronan and other independent suppliers have slammed TURN, saying that the group was privy to secret information in the Mountainview case and is unfairly applying it to another proceeding. TURN is a member of the procurement review group, a body composed of non-market participants who reviewed confidential procurement data. A CPUC document, however, revealed the cost of the Mountainview plant to be $703 million. ?TURN used to be a utility watchdog, but it?s become a utility lapdog,? said Ronan. All the data TURN relied on were publicly available, countered Matt Freedman, TURN attorney. ?If parties think it is confidential, it?s because they haven?t read the commission decision,? he added.

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