L.A. Utility to Seek Bids for 250 Megawatts of Solar Power

Los Angeles’s power utility, which serves about 1.5 million customers, will seek bids from developers for 250 megawatts of solar power to comply with a California requirement to get 25 percent of its energy from renewable sources by the end of 2016.

The Los Angeles Department of Water & Power plans to issue a request for proposals in June, Anh Wood, who manages three of the utility’s solar development programs, said today by telephone. Its board may approve contracts in the first quarter of 2014, she said.

The four biggest planned installations, totaling 200 megawatts of capacity, will be built on parcels at the utility’s Beacon project in Kern County, California, purchased in December for $31.5 million. The previous owner NextEra Energy Inc. (NEE) had proposed in 2008 developing a 250-megawatt solar-thermal power plant on the site, according to data compiled by Bloomberg.

The utility now plans to build a 50-megawatt segment and to use photovoltaic panels, while developers that plan to build the remaining four segments must bid for 25-year power sales contracts at no more than 8.5 cents a kilowatt-hour, she said.

“We’ll get good pricing from the sheer fact that this property already comes with all the environmental work that’s already done,” Wood said. “A lot of the liability that comes from project development is already taken care of.”

Bids for the larger sites will be bundled with proposals to build 50 megawatts of rooftop systems on buildings in the Los Angeles area, as the final component of the utility’s 150-megawatt feed-in tariff program, Wood said. The price for those 20-year contracts will be capped at 14 cents a kilowatt-hour, and it’s possible one company could get all the deals, she said.

“Even though we have four contracts that we can sign, potentially there could be one winner.”

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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