SVP and Palo Alto Work to Fill WAPA Power Void

By Published On: June 18, 2005

Silicon Valley Power broke the proverbial champagne bottle on its new 146 MW power plant June 15. The facility was constructed to keep the muni from capsizing in the wake of the huge supply loss when its contract with the Western Area Power Administration expired. The power plant ?supports the city of Santa Clara?s long-standing goal of providing a highly reliable and independent source of energy at low, stable rates,? said Junona Jonas, Silicon Valley Power director. In addition to its new power project, which faced no public opposition during the 11-month permitting process, Silicon Valley Power is increasing its renewables supplies to help it meet its 400 MW load. Geothermal, wind power, and small hydro make up 24 percent of the muni?s portfolio, said Larry Owens, Silicon Valley Power spokesperson. Silicon Valley Power?s neighboring muni, the city of Palo Alto, was also left with a huge supply gap when the WAPA deal ended at the beginning of this year. Palo Alto lost 500 GWh of energy deliveries. The loss of hydro supplies ?was a big deal for us,? said Girish Balachandran, city assistant utility director. Unlike Silicon Valley Power, it is very unlikely that Palo Alto would be able to build a large power plant because of public opposition. Silicon Valley Power?s customer base is largely industrial. Because of load growth by 2010, ?we will be in the hole,? Balachandran said. Thus, the muni will try to build a plant just under 50 MW to help meet demand. It also signed power deals with Duke, Shell Trading, BP, and Sempra. To cover the cost of replacing WAPA?s supplies, Palo Alto will raise its electric rates by 11.5 percent and its gas rates by 15 percent July 1. The loading order the California Public Utilities Commission developed for investor-owned utilities?which gives top billing to energy efficiency, followed by investments in renewables and demand-side response?was also adopted by Palo Alto. It signed a deal with the Rocky Mountain Institute for the development of a plan on conserving electricity and gas. In addition, Palo Alto?s large energy users participate in a voluntary load-reduction program, cutting 4 MW off a 200 MW load, Balachandran said. The companies, however, fought moves to make the interruptible deal mandatory. Palo Alto expects to meet the state?s 20 percent renewables portfolio standard, which only investor-owned utilities are currently required to meet, in 2008. Over at Silicon Valley Power, the new plant will be ramped down when power is cheaper on the market to keep rates from rising. ?This has happened a lot in the last few weeks with the snow melting quickly and the relative abundance of hydro resources at good prices,? Owens said. Under the former WAPA agreement, which integrated transmission and generation arrangements among WAPA, Pacific Gas & Electric, and 75 customers, Silicon Valley Power received 1,000 GWh a year. When the contract ended at the beginning of the year, Silicon Valley Power lost firm power deliveries?a guarantee from WAPA that it would supply substitute power when federal hydropower supplies dropped because of drought. Roseville Electric, Lodi, and Lassen were among the customers also affected by the expiration of the WAPA deals, but far less than Silicon Valley Power and Palo Alto because of the smaller amount of federal power they received. Back in 2001, Roseville signed power deals with Morgan Stanley for peak power. It will receive 50 MW this year and 100 MW through 2010. In addition, Roseville broke ground this month on its 160 MW power project permitted by the California Energy Commission, which will help it meet the continual growth in demand.

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