Palomar by the Numbers

Now that the regulatory glare has faded from San Diego Gas & Electric?s controversial Otay Mesa and Palomar plant acquisitions, unredacted numbers for the Sempra subsidiary?s Palomar plant, which SDG&E will purchase, have been released for public review. According to an October 2003 memorandum of agreement between SDG&E and Palomar?s developer, a sister subsidiary, Palomar?s price tag is $410 million. This compares with Palomar?s original price of $415.5 million. As an incentive to design and complete the facility to meet expected performance, the agreement ?provides for certain increases to the purchase price for performance bonuses.? For instance, it includes a $400/kW increase in the base purchase price for each kilowatt over the plant?s base electric output?rated at 495 MW. The agreement ?contemplates a Sempra Energy guaranty, a subordinated lien on the facility, and ?step-in? rights.? SDG&E will ?hold back from payment $40 million at the time it ?steps in,? when it must pay Palomar for costs incurred to date.? This means SDG&E can withhold $40 million of the purchase price payment if the utility needs to take over construction of the plant, according to Ed Van Herik, SDG&E spokesperson. The Utility Reform Network disputed Palomar?s financial details, saying the plant?s actual cost is at minimum $446 million, including financing costs paid to Sempra.

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Palomar by the Numbers

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