Southern California Edison and Major Renewable Energy Providers Strike Pricing Agreement

May 10, 2006

May 10, 2006

ROSEMEAD, Calif., May 10, 2006 – Southern California Edison (SCE), the nation’s leading purchaser of renewable energy, and four of its largest renewable power suppliers, today announced an agreement establishing a fixed price for SCE’s wind, solar, biomass, geothermal, and small hydro power purchases through mid-2012.

SCE’s agreements with Caithness Energy, Colmac, Ormat, and FPL Energy establish a five-year price of 6.15 cents per kilowatt-hour that increases 1% annually starting in the second year.  Renewable facilities participating in the agreement supply approximately 45% of the renewable energy SCE buys for its customers.

"The agreement secures significant value for our customers," said SCE Chief Executive Officer Alan Fohrer.  "The new price we have negotiated is attractive and the agreement helps protect customers from price volatility in natural gas markets."

“This agreement represents yet another example of SCE’s leadership in the renewable energy field,” said Les Gelber, president of Caithness, SCE’s largest supplier of renewable energy.  “The pricing plan provides revenue certainty for existing plants and will help to attract investment for new renewable projects for SCE customers.”

For the next 10 days, SCE is offering the same fixed-price amendment to most of the renewable projects currently under contract with the utility.  Contract holders wishing to accept the amendment can learn more at www.sce.com/AboutSCE/Regulatory/qualifyingfacilities/fixedprcamend.htm.  The amendment offer expires at 5 p.m. (Pacific time) on May 19, 2006. 

“This pricing plan reflects an even stronger working relationship between our company and independent, renewable power producers,” said SCE Senior Vice President of Power Procurement Pedro Pizarro.  “It will strengthen current renewable projects and provide our customers with stable energy costs.”

If approved by the California Public Utilities Commission (CPUC), the power contract amendments would take effect in May 2007.

Related Facts

  • Approximately 70% of the power SCE provides to its customers comes from independent power producers.  SCE does not profit from acquiring electricity for its customers.  It provides this service at cost.
  • SCE leads the nation in renewable power delivery, procuring approximately 13 billion kilowatt-hours of renewable energy in 2005, more than any U.S. utility or state except for California, enough energy to serve approximately 800,000 homes in SCE’s service territory.   
  • SCE's current renewable portfolio can deliver 2,588 megawatts (MW) of electricity
             - 1,021 MW from wind
             - 892 MW from geothermal
             - 354 MW from solar
             - 226 MW from biomass
             - 95 MW from small hydro
    (A megawatt equals one million watts)
  • Included among eight new renewable project contracts signed by SCE in 2005 and approved by the CPUC was a promising new central-station solar facility with the potential to generate 500 to 850 MW of electricity—more than all existing U.S. solar projects combined.   
  • More than 150 independent renewable power projects are under contract with SCE. 
  • SCE expects to conclude its current competitive solicitation of new renewable contracts within the next several weeks and issue yet another request for contract proposals this summer.

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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.