ALJ/HSY/avs Date of Issuance 2/29/2008
Decision 08-02-019 February 28, 2008
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Application of Pacific Gas and Electric Company for Expedited Issuance of a Certificate of Public Convenience and Necessity for the Colusa Power Project. (U39E) |
Application 07-11-009 (Filed November 14, 2007) |
INTERIM OPINION GRANTING CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY FOR THE COLUSA POWER PROJECT
Summary
Today's interim opinion grants a certificate of public convenience and necessity (CPCN) for Pacific Gas and Electric Company (PG&E) to construct the Colusa Power Project (Colusa Project), a new 657 megawatt (MW) combined cycle generating facility to be located in unincorporated Colusa County, contingent on its environmental certification by the California Energy Commission (CEC) and the Commission's consideration of that certification.
In Decision (D.) 04-12-048, the Commission adopted a long-term procurement plan for PG&E, among other utilities, which provided direction on the procurement of resources over a 10-year horizon through 2014. Pursuant to that plan, D.04-12-048 identified a need for 2,200 MW of new generation in northern California by 2010, and directed PG&E to initiate an all-source solicitation to secure these resources. In D.06-11-048, the Commission approved PG&E's conduct of its 2004 long-term request for offer (LTRFO), and approved its resulting projects, including the Colusa Project, finding them to be needed and cost-effective.
As initially approved, the Colusa Project was to be developed and built by E&L Westcoast Holdings, LLC and E&L Westcoast, LLC (collectively, E&L) under a purchase and sale agreement (PSA) and, once completed and performance-tested, delivered to PG&E for PG&E to own and operate as a utility asset subject to cost of service ratemaking and a cap on recoverable capital costs. As D.04-12-048 requires for all utility-owned generation (turn-key, utility-built or buy-outs) selected through the RFO process, D.06-11-048 prohibits PG&E from seeking recovery of additional costs in excess of the project bid price (other than additional capital costs that PG&E may incur as a result of operational enhancements to the project), and requires PG&E to share any savings relative to the initial capital cost on a 50/50 basis between ratepayers and shareholders.
E&L has now informed PG&E that it does not intend to proceed with the Colusa Project and will exercise its contractual rights to terminate the PSA. Rather than allow the project to fail, PG&E has executed an agreement with E&L to acquire the assets and permitting related to the Colusa Project. By this application, PG&E requests a CPCN to construct the Colusa Project. PG&E does not seek to change, in any respect, the previously adopted ratemaking.
So long as the project rate impact remains identical to that of the project as originally approved in D.06-11-048, the change in builder from E&L to PG&E does not materially change the project. For all the reasons that we originally approved the Colusa Project, and subject to conditions that we adopt today to ensure that the project rate impact remains the same, we grant PG&E a CPCN to construct it.
