(The following press release from the California Public Utilities
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FOR IMMEDIATE 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,
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
For more information on the CPUC, please visit
Media Contact: Terrie Prosper, 415.703.1366, firstname.lastname@example.org
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