PUC Strikes Compromise in Electric Power Resource Plan

To mixed cheers and grumbling from environmentalists, renewable energy producers and the state’s electric utilities, the California Public Utilities Commission decided Wednesday how utilities will obtain power over coming years.

Each group had heavily lobbied the commission recently in a tug-of-war over how to meet the PUC’s goal--that utilities buy some additional power from environmentally sensitive sources, but at economically competitive prices.

Geothermal, wind power and other renewable energy producers had worried that cost assumptions set by the PUC would restrict their chance to successfully bid for part of the utilities’ business.

The investor-owned utilities--Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric--all worried that high, 2-year-old natural gas prices would be incorporated into the PUC’s formulas, unnaturally inflating energy costs. They also objected to proposed environmental provisions that would have made out-of-state coal-fired plants less competitive.

In the end, the PUC decided to use more current, lower natural gas prices and to modify the out-of-state requirements.

Edison spokeswoman Kathleen Flanagan said these adjustments could save the Rosemead-based utility’s customers as much as $310 million. But the utility still objects to the PUC’s requirement that it increase capacity by what it estimates at $2 billion in capital expenditures.