Edison: State concerned about power shortage
 
Jul 25, 2006 - The Press-Enterprise, Riverside, Calif.
Author(s): Leslie Berkman

Jul. 25--Southern California Edison Co. said it soon will be seeking companies to sign long-term power-purchase contracts to help construct power plants in Southern California.

 

The utility said that within the next several weeks it will ask independent power producers to bid on contracts lasting up to 10 years to produce 1,500 megawatts of power. These contracts will make it possible to construct power plants in Southern California.

 

Gary Ackerman, executive director of the Western Power Forum, a group that represents independent power producers and traders, said the power that is produced by these future generators will be marketed to the highest bidder, which could be Edison or another company. Those details have yet to be finalized.

 

Power producers long have complained that they need long-term contracts to obtain financing for new power plants. Edison's deals can offer that kind of financing.

 

Friday, Edison posted sample contracts on its Web site so potential bidders can start weighing their options.

 

Southern California Edison said its action was prompted by the Public Utilities Commission's approval last week of a plan that would require Edison ratepayers and any municipalities who later break away from Edison to continue helping pay for the cost of buying the new power.

 

The utility successfully argued it would not be fair for remaining ratepayers to be saddled with long-term contracts that might produce more power generation than needed if large customers abandoned Edison to buy cheaper power elsewhere.

 

Last September, Edison withdrew a solicitation for long-term power contracts to support more generation after the PUC denied the utility's proposal to allocate costs for the new power plants throughout the entire Southern California grid system.

 

Edison's former plan would have required San Diego Gas and Electric also to take financial responsibility for the new power contracts.

 

Edison contends the placement of additional power plants in Southern California would improve the reliability of power delivery in the region and reduce the potential for rolling blackouts.

 

In a prepared statement, the utility said it was acting quickly to solicit these contracts because it will take years to find locations for new generators, get the needed permits and build them.

 

Edison also noted that state agencies have issued warnings that a power crunch -- similar to the one that caused blackouts five years ago -- could develop in Southern California unless more power plants are built.

 

It is uncertain who would market or buy the power produced by power plants resulting from the new contracts.

 

 


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