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CPUC DIRECTS SDG&E TO PROCURE UP TO 298 MW OF LOCAL GENERATION

     (The following press release from the California Public Utilities 
Commission was received by e-mail and was reformatted. The sender verified the 
statement.) 
FOR IMMEDIATE RELEASE                                                           
PRESS RELEASE
Docket #: A.11-05-023 
CPUC ACTS TO ENSURE RELIABLE ENERGY FOR SAN DIEGO 
SAN FRANCISCO, March 21, 2013 - The California Public Utilities Commission 
(CPUC), in its ongoing mission to ensure safe, reliable, and affordable utility 
service to customers, today directed San Diego Gas & Electric (SDG&E) to 
procure up to 298 megawatts (MW) of local generation beginning in 2018, and 
authorized the utility to enter into a purchase power tolling agreement with 
Escondido Energy Center. 
SDG&E's contract with Escondido Energy Center is a repowering of an existing 35 
MW facility with a contract term of 25 years. After repowering is complete, the 
facility will be expanded to a total of 45 MW. The CPUC approved the contract 
due to the project's relative low cost, small size increase, high viability, 
and environmental benefits resulting from a repower. 
The CPUC declined to allow SDG&E to enter into similar purchase power tolling 
agreements with Pio Pico Energy Center and Quail Brush Power. The agreements 
were denied, in part, because they were scheduled to come online in 2014, but 
the evidence demonstrated that there is no need for incremental local capacity 
until 2018, four years into the 20 year terms of the contracts. The CPUC found 
the timing mismatch ultimately to be unreasonable to ratepayers.  In order to 
meet the remainder of the 298 MW need, the CPUC directed SDG&E to either issue 
new Requests for Offers or to submit for CPUC consideration a renewed 
application that better matches the timing issue or demonstrates a different 
showing of need for either Pio Pico and/or Quail Brush. 
Said Commissioner Mark J. Ferron, the author of today's decision, "My goal is 
simple: to ensure that SDG&E can best meet the future needs of its customers 
while avoiding a situation where ratepayers pay needlessly for new generation." 
 With respect to the Pio Pico and Quail Brush projects, Commissioner Ferron 
added, "It is only natural to look at these projects and conclude that they 
might help address not-yet-defined future problems. However, as tempting as it 
may be, I think this is the wrong approach. We run the risk of paying for new 
generation twice-once now and a second time if we have different, conflicting, 
future information." 
Said CPUC President Michael R. Peevey, "If SDG&E is able to amend the contracts 
we declined and bring them back to us, we will consider them. San Diego is 
going to need plants with flexible operating qualities in the very near future." 
Added Commissioner Mike Florio, "At present, the evidence supporting the need 
for Pio Pico and Quail Brush is inconclusive and SDG&E's customers should not 
be made to pay until it is conclusive.  Going forward SDG&E will continue to 
monitor system reliability in its service territory. If circumstances change 
and new evidence comes to light supporting the need for these or other 
resources, the CPUC will stand ready to meet its obligation to ensure safe, 
reliable, and affordable service." 
Today's decision was made as part of the CPUC's Long-Term Procurement Planning 
process, which established the need for additional energy supplies for the San 
Diego area beginning in 2018. 
The proposal voted on today is available at 
http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M060/K898/60898567.PDF. 
For more information on the CPUC, please visit 
www.cpuc.ca.gov<http://www.cpuc.ca.gov/>. 
Media Contact: Terrie Prosper, 415.703.1366, news@cpuc.ca.gov                    
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