California Commission Delays Vote on Planned San Diego County Power Plants

The San Diego Union-Tribune --May 28

May 28--The California Public Utilities Commission yesterday postponed a highly anticipated vote on a San Diego Gas & Electric plan for two new power plants in the county.

Granting a request for further study by Commissioner Carl Wood, the PUC rescheduled a vote on the utility's plan for its June 9 meeting. The matter had appeared on yesterday's agenda, but the PUC typically reschedules items if requested by any of its five members.

Unaware that the vote would be postponed, an array of speakers came before the commission yesterday in San Francisco to comment on the plan.

The Greater San Diego Chamber of Commerce, the San Diego Economic Development Corp. and Macy's department stores were among those who spoke in support of the proposal, which would allow SDG&E to buy a power plant under construction by a sister Sempra Energy company in Escondido and contract for electricity from a new power plant on Otay Mesa to be built by Calpine Corp.

The SDG&E plan also includes proposals for conservation, renewable energy and a small plant to provide power at times of maximum demand. The utility says the proposals emerged from a competitive bidding process and represent the best and cheapest ways to satisfy growing regional electricity demand.

Two of three proposed decisions before the commission largely support the SDG&E plan, while a third proposed decision -- authored by Wood -- would reject the Otay Mesa project unless it emerged as the winner from a second competitive bid.

SDG&E's plans for major plants in Escondido and on Otay Mesa, along with its process in selecting the proposals, have sparked opposition from consumer groups, including the Utility Consumers Action Network in San Diego and The Utility Reform Network in San Francisco.

The consumer groups argue that at least one of these natural gas-fueled plants isn't needed. They also say that approval of SDG&E's plan to acquire the Escondido plant from a sister Sempra company should be conditional on Sempra offering discounts from a long-term electricity supply contract it holds with the state of California.

State officials have complained the agreement is overpriced and inflexible but have been unable to reach agreement with Sempra on new terms.

An effort by UCAN and TURN to have Commission President Michael Peevey recused from voting on the SDG&E plan suffered a setback this week when Peevey rejected a motion for his recusal. In ruling, Peevey said it was "entirely appropriate" for him to intervene in the bidding process.

The consumer groups have alleged that Peevey overstepped his authority and pressured Sempra to contract for electricity from the Calpine project. They also have raised the prospect of a legal challenge to any PUC action on the SDG&E proposal in which Peevey's vote proves decisive.

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