Reporter's crib notes from PG&E about QF's and PG&E Talking Points-
Mar 21, 2001 (BUSINESS WIRE) --
TO: California Energy Crisis Reporters
FROM: John Nelson, Director of the News Department
Pacific Gas and Electric Company
RE: Observations and Clarifications on Current Events in
California's Energy Crisis
Given the speed at which events are breaking this week, I thought it might be helpful to provide a few useful facts and figures, just to have handy.
Qualifying Facilities -- Basic Information
-- There are two categories of QFs -- natural gas fired
cogeneration and non-gas renewable. Nearly two-thirds of the QF generation we have under contract (61% of capacity) is of the gas-fired variety. Non-gas renewables (including small hydro, wind, solar, biomass, waste-to-energy, etc.) comprise the remaining 39%.
-- The 292 QFs under contract with PG&E range in size from less than 1 mW up to 260 mW; most are in the 30-50 mW range.
-- The combined "nameplate capacity" of these QFs is 4373 mW, although the amount they actually deliver is approximately 2400-2500 mW (this is the most accurate number to use).
Qualifying Facilities -- Shutdowns for Non-Pay
-- Not to be a contrarian, but the facts don't really support the claim that this week's rotating outages were caused by QFs halting generation for non-payment reasons. In fact, there were more megawatts of QF generation on-line Monday during the Stage 3 outages than there were last week, when the state wasn't even in a Stage 1.
-- On March 9, 2001, just over 1,058 megawatts of QF gen was not in operation, purportedly for non-payment. On March 19, that total was just 932 megawatts.
-- Also note that 568 megawatts of QF gen is currently down for scheduled maintenance, planned well in advance. Some "experts" have included these with those shutdown for non-pay -- perhaps to bump up the numbers.
-- Also of interest: Of the 21 QFs shutdown as of March 19, all but two burn natural gas, and more than half (11) were owned by either of two national energy companies El Paso and Ridgewood Power Corp. A few others are owned by multinational oil & gas and forest products concerns. Not really the small, independent, alternative energy facilities that have been highlighted in the past few days.
-- Certainly, the loss of QF generation over the last several weeks accounts for a portion of the current tight supply picture. But that loss pales in comparison to the more than 13,000 megawatts of other generation that was offline this week, for planned and unplanned maintenance.
-- In fact, if you compare Friday, March 16 (a day of no power emergencies) to Monday, March 19 (a day of statewide outages) the single biggest difference is the loss of 1,400 megawatts of generation because of a fire at the Mohave plant. Had that plant been operating, the state would not have needed to order the 500 to 1,000 megawatts of outages on Monday and Tuesday.
-- 'QF-shutdown-causes-outages' may make a good story, but it's not an accurate one.
On Being Part of the Solution
-- There was quite a bit of talk last night during the Governor's press conference about QFs being the only ones willing to make a financial sacrifice during this crisis.
-- Overlooked was the fact that back in November, Pacific Gas and Electric Company first offered to provide its native generation at cost-plus-based rates. The company has never backed away from that commitment, and that pledge will clearly be part of the ultimate solution to California's energy crisis. No QF, and certainly no merchant power generator, has even come close to matching this offer.
-- Equally as significant, PG&E has been negotiating with QFs in good faith for months, and have been paying them what we can, based on what we receive in rates. We also offered last week to prepay them in full, going forward, to help these facilities stay on-line and generating power in California.
Who Gets Paid Out of Frozen Rates?
-- An emphatic point was made during the Governor's press
conference last night that the state (DWR) will be paid first out of the existing frozen rate structure, before QFs, bilaterals, utility-retained generation, or the ISO.
-- This appears to run counter to state law (AB1x), which clearly states (as excerpted below) that DWR is to be paid out of what remains after other generation costs are paid:
360.5. The commission shall determine that portion of each
existing electrical corporation's retail rate effective on
January 5, 2001, that is equal to the difference between the generation related component of the retail rate and the sum of the costs of the utility's own generation, qualifying facility contracts, existing bilateral contracts, and ancillary services. That portion of the retail rate shall be known as the California Procurement
Adjustment. The commission shall further determine the amount of the California Procurement Adjustment that is allocable to the power sold by the department.
CONTACT: Pacific Gas and Electric Company
News Department, 415/973-5930 |
