March 21 California utility regulators denied
two of three power purchase agreements sought by San Diego Gas &
Electric (SDG&E) on Thursday, sparking criticism from the
company that the uncertainty over the future operation of the
damaged San Onofre nuclear station should have been taken into
San Onofre has been shut for more than a year.
The California Public Utility Commission (PUC) approved one
request from SDG&E, a unit of Sempra Energy, to enter a
25-year contract with the Escondido Energy Center, a 45-megawatt
The PUC denied SDG&E's request to enter similar purchase
power contracts with the Pio Pico Energy Center and Quail Brush
Power, citing a mismatch between the 2014 starting dates for the
contracts and the utility's lack of demonstrated need for
additional power before 2018.
SDG&E said it was disappointed with the PUC decision. "Both
were local peaking facility projects that resulted from a
competitive solicitation process and are needed to provide local
reliability," it said in a statement.
"Peaking" power plants can start up quickly to supply power
during periods of high demand or to back-stop renewable power
from solar and wind facilities.
SDG&E said the commission recognized its need for local
generation, but disagreed with the timing.
"The uncertainty surrounding the operation of the San Onofre
Nuclear Generating facility suggests that an earlier start date
of these facilities would provide added power supply insurance
for the region," SDG&E said.
The utility said it identified a need for up to 450 Mw of
peaking power in May 2011, eight months before the San Onofre
nuclear units shut. The PUC has reduced that amount to about 350
MW with Thursday's action.
"The evidence supporting the need for Pio Pico and Quail
Brush is inconclusive, and SDG&E's customers should not be made
to pay until it is conclusive," commissioner Mike Florio said.
On Wednesday, the California grid operator warned that the
ongoing San Onofre outage will make it more difficult to avoid
rolling outages this summer than last.
Grid officials said they will need to rely heavily on
voluntary conservation by electric customers in south Orange
County and San Diego to keep the lights on.
The San Diego area has limited local generation and relies
on imports of electricity from outside the state, officials have
The utility said its effort to meet California's 33 percent
renewable mandate by 2020 requires back-up generation to operate
when solar and wind resources are not available.
SDG&E said just over 20 percent of its retail sales came
from renewable resources in 2012, up from 11.9 percent the
The PUC directed SDG&E to issue new solicitations for an
additional 298 MW, submit a revised request with a 2018 timeline
or demonstrate a need for the contracts that were denied.
The PUC said it approved the Escondido contract due to the
project's relative low cost, small size and the environmental