PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Item #7
ID #11038
ENERGY DIVISION RESOLUTION E-4455
March 8, 2012
RESOLUTION
Resolution E-4455. Pacific Gas and Electric Company ("PG&E") requests approval of an amendment to five Qualifying Facility ("QF") Standard Offer Power Purchase Agreements (collectively, the "Amendments") that PG&E has executed with Covanta Mendota, L.P. ("Mendota"), Rio Bravo Fresno ("Fresno"), Rio Bravo Rocklin ("Rocklin"), Wheelabrator Shasta Energy Company, Inc. ("Shasta") , and Pacific-Ultrapower Chinese Station ("Chinese Station"), collectively ("the Five Facilities"), for delivery of Renewable Portfolio Standard ("RPS")-eligible power from these five separate Biomass facilities located throughout California. The amendment will take effect on September 1, 2011. All facilities except for the Mendota Facility (namely the Fresno, Rocklin, Shasta and Chinese Station facilities) will have an amendment term of 4 years and 11 months expiring on July 31, 2016. The Mendota facility's PPA will be amended for approximately 3 years and 4 months due to the original ISO4 contract of the facility expiring on January 14, 2015.
PROPOSED OUTCOME: This Resolution approves the Proposed Amendment of the existing QF contracts between Covanta Mendota, L.P.; Rio Bravo Fresno; Rio Bravo Rocklin; Pacific-Ultrapower Chinese Station; and Wheelabrator Shasta Energy Company, Inc.; and PG&E without modifications.
ESTIMATED COST: Actual costs are confidential at this time.
By Advice Letter 3921-E filed on October 6, 2011, as amended by supplemental Advice Letter 3921-E-A filed on October 14, 2011.
SUMMARY
Pacific Gas and Electric Company's ("PG&E's") Proposed Amendments to the existing Qualifying Facility ("QF") contracts with Covanta Mendota, L.P. ("Mendota"), Rio Bravo Fresno ("Fresno"), Rio Bravo Rocklin ("Rocklin"), and Wheelabrator Shasta Energy Company, Inc. ("Shasta"), and Pacific-Ultrapower Chinese Station ("Chinese Station"), collectively ("Five Facilities"), comply with QF contract extension provisions, and is approved without modifications.
On October 6, 2011, PG&E filed Advice Letter ("AL") 3921-E, as amended by supplemental Advice Letter 3921-E-A filed on October 14, 2011, requesting Commission approval of a three-year and four months PPA amendment for the Mendota facility and a four-year eleven month amendment for the remaining four facilities, namely the Fresno, Rocklin, Shasta and Chinese Station facilities with ranging capacities, generation, terms and expiration dates (see table 1 below for detailed information). If approved this resolution would take effect starting September 1, 2011.
Table 1. Basic Information regarding the Five Biomass Facilities
Mendota
The Mendota generating facility is an existing 25-MW biomass-fueled generator located within the city limits of Mendota, in western Fresno County. The facility began operations in 1989 under a prior owner and an ISO 4 QF contract with PG&E. During calendar years 2007, 2008 and 2009, the Mendota facility averaged annual energy deliveries of approximately 177 GWh. In 2010, the facility delivered approximately 174 GWh to PG&E.
Fresno
Fresno is an existing 26.5-MW facility located about 5 miles southeast of downtown Fresno, outside the city limits in an industrial area abutting the unincorporated community of Malaga. The plant began operations in July 1988 under an ISO 4 QF contract with PG&E. During calendar years 2007, 2008 and 2009, the Fresno facility averaged annual energy deliveries of approximately 160 GWh. In 2010, the facility delivered approximately 180 GWh to PG&E.
Rocklin
Rio Bravo Rocklin is an existing 25-MW facility located about a half mile west of the city limits of Rocklin in southwestern Placer County, in an industrial area. The plant began operations in June 1989 under an ISO 4 QF contract with PG&E. During calendar years 2007, 2008 and 2009, the Rocklin facility averaged annual energy deliveries of approximately 162 GWh. In 2010, the facility delivered approximately 174 GWh to PG&E.
Shasta
This 54.9-MW facility is located about 2 miles southeast of the city of Anderson in unincorporated land in southern Shasta County. The facility began operation in October 1987 under an ISO 4 QF contract with PG&E. During calendar years 2007, 2008 and 2009, the Shasta facility averaged annual energy deliveries of approximately 391 GWh. In 2010, the facility delivered approximately 398 GWh to PG&E.
Chinese Station
The Chinese Station facility is an existing 22-MW facility located a few miles west of the unincorporated community of Chinese Camp in western Tuolumne County. The facility started operation under prior owners in June 1986 and has been under an ISO 4 QF contract with PG&E. During calendar years 2007, 2008 and 2009, the Chinese Station facility averaged annual energy deliveries of approximately 123 GWh. In 2010, the facility delivered approximately 113 GWh to PG&E.
For each of the Five Facilities, the Proposed Amendment modifies the existing contract price in exchange for stricter performance obligations. This price adjustment allows the Five Biomass Facilities to recover costs for energy deliveries for the period beginning September 1, 2011 until the Proposed Amendment expiration date. The PPA amendment for the Mendota facility would be approximately three-years and four months due to the original ISO4 contract of the facility expiring on January 14, 2015. The PPA amendment for the remaining four facilities, namely the Fresno, Rocklin, Shasta and Chinese Station facilities would be four-years and eleven months as these four facilities original PPAs do not expire before the amendment expiration date of July 31, 2016- 4 years 11 months from the proposed amendments September 1, 2011 effective date.
The Proposed Amendments to the Five Facilities are intended to preserve the economic viability of each facility over the next several years and in so doing secure renewable energy deliveries that can contribute toward PG&E's near term renewable procurement obligations pursuant to the Renewables Portfolio Standard. As described in more detail in the Confidential Appendix, the price included in the Proposed Amendment appears reasonable when compared to the prices reflected in PG&E 2011 Renewable Shortlist.
