July 21, 2006
Utility applauds regulatory decision making possible such agreements with independent generators
ROSEMEAD, Calif., July 21, 2006—Southern California Edison (SCE) today began the process of soliciting long-term power purchase contract offers by independent power producers (IPP) willing to invest in new power plants to serve Southern California.
The utility posted draft Request For Offers (RFO) documents on its Web site and informed members of the IPP industry of its intention to solicit contracts lasting up to 10 years for new generating facilities that could come online within the next several years.
The utility’s action follows approval yesterday by the California Public Utilities Commission (CPUC) of a plan based on a proposal by SCE and other market participants. The plan calls for the benefits and costs of new generation contracts to be allocated to all customers within a utility’s service territory who would benefit. SCE anticipates soliciting up to 1,500 megawatts (MW) of generation.
“The commission has taken an important step in support of Southern California’s urgent need for additional generation,” said Pedro Pizarro, SCE senior vice president of power procurement. “Although a number of details remain to be defined in future proceedings, the commission has provided essential cost recovery assurance needed by utilities if we are to offer long-term contracts for new generating capacity supporting systemwide reliability.”
SCE is moving quickly to issue its RFO because the design, siting, permitting process, and construction of new power plants take several years. Recent assessments by state agencies such as the California Energy Commission and the California Independent System Operator indicate that power supplies could be tight as early as 2007 if extreme conditions develop, and that supply-and-demand conditions will continue to tighten in the future.
SCE will hold a bidder’s conference call on Thursday, July 27, to discuss anticipated RFO requirements and answer questions from prospective bidders. Further information on this call and draft RFO requirements are available for download at http://www.sce.com/EnergyProcurement.
- Parties who supported the initial proposal on which the CPUC based its plan included SCE, Pacific Gas and Electric Company, NRG Energy, AES Corporation, The Utility Reform Network, the Coalition of California Utility Employees, and California Unions for Reliable Energy.
- Forecasts by state agencies suggest that Southern California will need 1,500 MW or more of additional generating capacity by 2011. Forecasts of supplies and demand under adverse conditions suggest the region could face shortages as early as 2007.
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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.