Calif ISO: Qualifying Facils Capable Of 1,800 MW Off-Line
Dow Jones Newswires
NEW YORK -- Small, independent power plants in California that are capable of generating 1,800 megawatts of power are shut down because their owners haven't been paid by the state's two main utilities, the California Independent System Operator said Tuesday.
The decline in small-plant output has contributed to the state's power-supply problems the past two months. Partnerships involving El Paso Corp. (EPG), for example, shut down 350-MW of generation this weekend due to nonpayment, the company said Tuesday.
Edison International's (EIX) Southern California Edison hasn't paid the owners of the smaller generators, known as "qualifying facilities," since early December, which means the generators are still owed for electric production in October. PG&E Corp. (PCG) has paid only a small percentage of its qualifying facility bills since its last full payment in early January.
Almost all of the closed generators are fueled by natural gas. Many of the companies haven't been able to pay their gas suppliers and have been cut off from their gas supply.
The California Senate Energy Committee plans to vote on legislation to create a new pricing system for all qualifying facilities this week. The plants, one-third of which are powered by renewable sources like wind and solar power, meet almost 30% of California's electricity needs.
The proposed bill would cut the prices to qualifying facilities from about 17 cents a kilowatt-hour the past eight months to about 8 cents/kwh, depending on the price of five-year natural gas contracts the generators can sign. The plants that run on renewable resources would be paid 5.37 cents/kwh.
In addition, the utilities would continue to pay qualifying facility owners for some of their fixed costs. The bill, if enacted, would also require the utilities to pay all past-due bills by June 1.
To take effect immediately as an emergency act, the bill requires approval by two-thirds of both the state's Senate and Assembly. If the bill is passed, a process for quickly determining the five-year gas price would begin.
PG&E and Sempra Energy's (SRE) San Diego Gas & Electric support the bill, while Southern California Edison opposes it, said sources with the utilities and qualifying facility companies. |
