2. Background
On July 20, 2006, the Commission issued D.06-07-029 which directed SCE to issue a Request for Offers (RFO) seeking up to 1,500 MW of long-term contracts for New Generation (New Gen) resources. D.06-07-029 also established a cost-sharing mechanism to encourage the development of New Gen. Each investor-owned utility (IOU) was designated as the procurer of New Gen for its respective service territory. Once an IOU signs a PPA for New Gen, D.06-07-029 provides that the capacity is to be allocated to all benefitting customers in the service territory for their resource adequacy (RA) requirements, and the cost of the capacity is determined as a net of the total cost of the PPA minus the energy revenues from an energy auction. The particulars of the energy auction were established in D.07-09-044.
From the 1,500 MW authorized in D.06-07-029, SCE obtained 1,205 MW from its summer and fast track RFOs. That left 295 MW residual from D.06-07-029. In D.07-12-052, the Commission authorized SCE to procure 1,200 to 1,700 MW. This equals a residual range of 1,505 MW to 2,005 MW. When the 1,350.30 MW that are the subject of this application are subtracted from the residual, it leaves a range of 145 MW to 644 MW of unmet residual procurement authority. This accounting is based on need authorization plus approved resources and does not address any contingencies associated with any approved projects.
In accordance with D.06-07-029, on August 14, 2006, SCE issued an RFO seeking up to 1,500 MW of long-term PPAs for new generation that could come on-line on or before August 1, 2013.1 As SCE sets forth in its application and in the accompanying testimony, SCE received 29 offers of resources that could meet the on-line target of 2013. Based on the final bid prices, SCE accepted the following offers:
CPV Sentinel, LLC
1. 273 MW of expected capacity and associated energy from three General Electric LMS 100 gas turbines to be located in Riverside County, California, for delivery from May 1, 2012 through April 30, 2022, from CPV Sentinel, LLC (CPV), a special purpose entity and joint venture between GEL Funding, Inc. and CPV Power Development, Inc.;
El Segundo Energy Center LLC
2. Up to 500 MW of expected capacity and associated energy from El Segundo Energy Center LLC (El Segundo), a wholly owned subsidiary of NRG Energy, Inc., from the El Segundo Energy Center Facility located in El Segundo, California, which will consist of two One-on-One Siemens SGT6-5000F combined-cycle gas turbines featuring dry cooling technology and supporting generation equipment, with an expected initial delivery date of June 1, 2011, and the term expiring May 31, 2021;
Walnut Creek Energy, LLC
3. Up to 478.80 MW of expected contract capacity and associated energy from five General Electric LMS 100 gas turbines to be located in Industry, California, from Walnut Creek Energy, LLC (Walnut Creek), a wholly owned subsidiary of Edison Mission Energy, with a contract delivery period from June 1, 2013 through May 31, 2023; and
Wellhead Power Delano, LLC
4. Up to 48.5 MW of expected contract capacity and associated energy from one General Electric LM6000 Sprint simple cycle gas turbine and supporting equipment to be located in Delano, California, from Wellhead Delano, LLC (Wellhead), a special purpose entity and affiliate of Wellhead Electric Company, with a contract delivery period from June 1, 2012 through May 31, 2022.
SCE represents that the California Independent System Operator (CAISO) recently conducted the 2007 Q3 Generation Deliverability Study to assess the deliverability of all existing and proposed generation projects in the CAISO queue and that all four projects described above are deliverable under the study's conditions.
1 In addition to the "Standard Track" RFO, SCE also initiated a Summer 2007 RFO and a Fast Track RFO for resources that could be on-line by August 1, 2010. This application and decision only address new generation resources from the Standard Track RFO.
