July 14, 2006
Utility sees progress, challenges meeting California’s renewable portfolio standard
ROSEMEAD, Calif., July 14, 2006—Edison International (NYSE:EIX) subsidiary Southern California Edison (SCE), the nation’s leading purchaser of renewable energy, today launched its fourth solicitation for renewable power contracts since 2002.
“To meet our customers’ future energy needs, we are again in the market offering long-term contracts to companies developing cost-effective, renewable power projects,” said Pedro Pizarro, SCE senior vice president of power procurement. “This solicitation reflects our continuing commitment to environmental stewardship, to reduced reliance on fossil fuels, and to hedging against volatile natural gas prices.”
SCE is soliciting 10-, 15-, or 20-year contracts from all interested developers of renewable energy projects – those using solar, wind, biomass, geothermal, and small hydro energy. Proposals will be due to SCE by Friday, September 22, 2006. Interested parties can download details of the request for offers at www.sce.com/renewrfp. To answer bidders’ questions, SCE will host a proposal conference on August 10, 2006, at a location to be announced on this Web site.
While continuing to pursue new renewable energy sources, SCE also is working with state officials to remove barriers renewable project owners face in developing their projects. SCE believes a recent California Public Utilities Commission (CPUC) decision represents an important step in linking new projects to California’s electrical grid. The new policy state regulators adopted at their June 15 meeting addresses one of the most significant obstacles to renewable project development in California – how to pay for expensive connections between new major renewable resource areas and distant utility high-voltage power grids.
Current transmission cost recovery rules, established by the Federal Energy Regulatory Commission (FERC), require renewable project developers to pay fully for transmission connections to utility high-voltage grids, even if theirs is the first of several projects that eventually will use such connections. As a result, many smaller projects remain on the drawing boards waiting for others to fund the transmission projects.
The new CPUC decision authorizes utilities to initially pay for the needed transmission projects, charge renewable generators for transmission service for their share of the costs under rates approved by FERC, and recover the reasonable remaining costs from customers.
“While some of the details of this new policy remain to be worked out, we believe it is a step in the right direction,” said SCE Senior Vice President of Transmission and Distribution Ron Litzinger. “This decision will help resolve transmission funding issues and remove a major impediment to the interconnection of renewable generators to the grid”.
SCE informed the CPUC in a filing in Dec. 2005 that transmission issues were among the primary obstacles California utilities face attempting to reach the commission’s renewable energy goals. The utility continues to work with the commission and other market participants to find ways to speed up renewable energy development in California.
- Last year, SCE purchased and delivered to customers more than 13 billion kilowatt-hours of electricity generated with renewable energy, more than any U.S. utility.
- SCE estimates that more than 16% of the power it delivers this year will come from renewable sources.
- Previous SCE renewable energy solicitations resulted in 13 new contracts with 1,674 MW of potential generating capacity.
- SCE’s renewable portfolio includes:
- 1,021 MW from wind
- 892 MW from geothermal
- 354 MW from solar
- 221 MW from biomass
- 128 MW from SCE-owned small hydro*
- 95 MW from independently owned small hydro.
*Six of the 36 hydroelectric projects SCE operates today have generated power for more than a century.
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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 4.7 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.