April 22, 2005
ROSEMEAD, Calif., April 22, 2005—In an effort to attract new electricity generation to the southern part of the state, Southern California Edison (SCE) has issued a competitive Request for Offers (RFO). The RFO solicits bids for power contracts lasting up to 10 years for new generation facilities that could be online between June 1, 2006, and August 1, 2008.
RFO documents, which reflect input SCE received during an April 20 bidder’s conference, are available at www.sce.com/NewGenRFO.
The plan SCE is proposing calls for contracts that benefit all customers served from the California Independent System Operator (Cal-ISO) transmission grid in the area known as “SP-15” (Southern California). SCE anticipates limiting the maximum volume contracted under this RFO to 1,500 megawatts and reserves the right to sign no contracts if bids are unsatisfactory.
“There are growing concerns that this part of the state may not have adequate generating capacity in coming years,” said Alan Fohrer, SCE’s chief executive officer. “We believe an RFO of this type could be an effective transitional measure to help bring new generation to Southern California while state policymakers continue work on a market structure that encourages new power plant construction.”
Some recent assessments by state agencies such as the California Energy Commission and the Cal-ISO indicate that supplies could be tight this summer if extreme conditions* develop in the SP-15 area. These studies predict that supply-and-demand conditions will continue to tighten in the future. In addition to measures already in place or planned — transmission upgrades and customer conservation, energy efficiency and “demand-response” programs — new generating resources will be needed to maintain system reliability. Because the design, siting, permitting, and construction of new power plants can take years, SCE believes it is imperative that steps be taken now to ensure adequate supplies for 2006 and beyond.
As a part of SCE’s RFO plan, the utility will ask the California Public Utilities Commission to support the appropriate allocation of new generation costs among SP-15 customers who would benefit from such projects.
Additionally, SCE expects soon to release a separate RFO for contracts lasting up to five years for existing generation sources to meet the future needs of customers to whom the utility supplies power. SCE currently supplies approximately 60% of the customer “load” in SP-15.
*A regional “heat storm,” higher than expected plant outages, reduced transmission capacity due to wildfires or other outages, and lower-than-expected power imports are assumed in this assessment.
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An Edison International (NYSE:EIX) company, Southern California Edison is one of the nation’s largest electric utilities, serving a population of more than 13 million via 4.6 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.