California approves two of five BrightSource, SCE contracts

LOS ANGELES Oct 25 (Reuters) - California regulators on Thursday approved two power purchase contracts between solar thermal power plant developer BrightSource Energy and utility Southern California Edison but rejected three others.

The approvals allow BrightSource to sell power to SCE from one solar tower at its Rio Mesa site and from another at its Sonoran West site, both in Riverside County, California.

BrightSource and SCE had submitted two power purchase agreements for approval at Rio Mesa, but California Public Utilities Commission staff said "the projects compare poorly on price and value relative to other solar thermal projects."

The commission nonetheless approved one of the projects, because BrightSource said it would need to demonstrate that technology before it would be able to finance and build a plant that utilizes energy storage technology.

BrightSource's Sonoran West project will be the first to use molten salt storage, and the CPUC said that contract compared favorably on price relative to other solar thermal projects.

BrightSource is nearly finished building its first major solar thermal plant, Ivanpah, in the California desert. It is expected to enter service in 2013.

"The approval of these contracts allows us to build on the technology innovations deployed at our Ivanpah project, and continue driving down costs and improving efficiencies in our next generation plants, while incorporating storage into our power tower systems," BrightSource Chief Executive John Woolard said in a statement.

Two other projects utilizing energy storage, Siberia 1 and Siberia 2, were also considered cost-competitive. They were rejected by the commission, however, due to uncertainty regarding transmission availability.

BrightSource, which is based in Oakland, California, on Wednesday said it raised $80 million in a new financing round.

SCE is a unit of Edison International.