October 6, 2006
ROSEMEAD, Calif., Oct. 4, 2006—Southern California Edison (SCE) is proposing a significant expansion of long-term power contract offers it will accept from independent power producers willing to invest in new power plants to serve Southern California.
The utility informed potential bidders today that, in addition to soliciting contracts for up to 10 years and as much as 1,500 megawatts (MW) of new generation capacity, as announced under the utility’s Aug. 14, 2006, new generation Request For Offers (RFO), SCE also will consider entering into contracts of up to 20 years for an additional 500 MW of new capacity in the standard track of this RFO. Initial contract offers are due Jan. 10, 2007, in this standard track for Southern California projects that can come online by Aug. 1, 2013.
“Potential bidders have suggested that longer-term contracts might lower the future costs our customers pay for power from new plants resulting from this solicitation,” said Pedro Pizarro, SCE senior vice president of power procurement. “With the California Public Utilities Commission’s (CPUC) support, we are willing to allow bids for longer-term contracts to widen the pool of offers to meet the need for new generation.”
These modifications depend on the CPUC expanding the authorization it granted to SCE on July 20, 2006 to sign contracts for the benefit of all customers served on the SCE power delivery system. SCE today will file a request with the CPUC seeking approval for the expanded offering.
“Electricity use continues to grow across Southern California and, with few exceptions, new plants are not being built without long-term contracts with creditworthy buyers,” said Pizarro. “We are seeking to do our part to help address the region’s need and do so in a way that minimizes costs to our customers.”
Even prior to last summer’s record heat and electricity use, supply forecasts indicated that Southern California could need as much as 1,900 MW of new generation by 2011. This need could increase after 2011 as demand for electricity continues to grow and older plants are retired.
SCE already has received initial bids and is in the process of contract negotiations for the 2007 and fast tracks of its new generation RFO. As a result, it is too late to modify these tracks to allow bids to allow for longer-term contracts. These tracks are for projects that can come online by Aug. 1, 2007, and Aug. 1, 2010, respectively.
Updated RFO documents are being developed and will be posted in the next several days at http://www.sce.com/EnergyProcurement.
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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.