Subject of the Advice Letter. PG&E requests that the Commission issue a resolution no later than February 2012, approving the PPA and the QF Modifications in their entirety, all payments to be made by PG&E under the PPA, the Amended QF Agreement, and the Extended QF Agreement, and containing the findings required by the definition of CPUC Approval adopted by Decision (“D.”) 00-00-000 and D.08-04-009.1 This requested timing is needed for the project to begin and complete construction in order to qualify for the cash grant (“Treasury Grant”) in lieu of the Federal Investment Tax Credit (“ITC”) from the U.S. Department of the Treasury under Section 1603 of Division B of the American Recovery and Reinvestment Act (“ARRA”). As discussed in more detail below and in the confidential appendices, the PPA has a high valuation, competitive contract price, high viability, and is a moderate portfolio fit. PG&E found from its least-cost, best-fit (“LCBF”) analysis that the PPA is reasonable, and the Project meets PG&E’s current renewable resource needs. The Project is located 1 As provided by D.00-00-000 and D.00-00-000, the Commission must approve the PPA and payments to be made there under, and find that the procurement will count toward PG&E’s RPS procurement obligations. Advice 3893-E - 3 - August 18, 2011 in a known wind resource area and is being developed by a viable counterparty. The Project will help PG&E achieve compliance with the RPS requirements at a competitive market price. Furthermore, the Project is in-state, located within PG&E’s service territory, and interconnected directly to the California Independent System Operator (“CAISO”) grid. The PPA is a result of bilateral negotiations. Consistent with the protocol used for review of RPS contracts resulting from the 2009 RPS Request for Offers (“RFO”), PG&E has included Confidential Appendices A through G and Public Appendix H, which demonstrate the reasonableness of the PPA. As discussed below, PG&E requests confidential treatment for the information contained in Appendices A through G.
Subject of the Advice Letter. PG&E requests that the Commission issue a resolution no later than mid-February 2012, approving the PPA in its entirety, all payments to be made by PG&E under the PPA, and containing the findings required by the definition of CPUC Approval adopted by Decision (“D.”) 00-00-000 and D.08-04-009.2 As discussed in more detail below and in the confidential appendices, the PPA has a high valuation, highly competitive contract price, high viability, and a moderate portfolio fit. The PPA price is below the 2009 Market Price Referent (“MPR”). PG&E determined from its least-cost, best-fit 1 North Sky River Energy, LLC is a wholly-owned subsidiary of NextEra Energy Resources, LLC. 2 As provided by D.00-00-000 and D.00-00-000, the Commission must approve the PPA and payments to be made there under, and find that the procurement will count toward PG&E’s RPS procurement obligations. Advice 3885-E - 2 - August 5, 2011 (“LCBF”) analysis that the PPA is reasonable, and that the Project meets PG&E’s current renewable resource needs. The Project is located in a known wind resource area and is being developed by a viable counterparty. The Project will help PG&E achieve compliance with the RPS requirements at a competitive market price. Furthermore, the Project is located in-state and is interconnected directly to the California Independent System Operator (“CAISO”) grid. The PPA is a result of bilateral negotiations. PG&E has included Confidential Appendices A through G and Public Appendix H, which demonstrate the reasonableness of the PPA. As discussed below, PG&E requests confidential treatment for the information contained in Appendices A through G.
Subject of the Advice Letter. The existing PPA is a 30-year Interim Standard Offer 4 contract that expires September 15, 2019. HL Power has delivered electricity generated by the Facility under the PPA since the Facility began operations and started providing firm capacity in September 1989. The Facility xxxxx biomass for its fuel. The continued operation of the biomass- fueled facilities prevents open burning or decomposition of the wood waste used for fuel, which would generate higher levels greenhouse gas emissions and other air borne pollutants if not consumed as fuel; and in some instances results in the diversion of wood waste from landfills. In 2010, HL Power indicated to PG&E that it had become uneconomic for HL Power to operate the Facility under the PPA’s terms and conditions. On September 12, 2011, PG&E and HL Power executed the Second Amendment, a three-year amendment with a modified contract price and performance obligations. Initially, the Second Amendment also provided PG&E two options to extend the amendment term, each for an additional year. On September 28, 2011, PG&E and HL Power executed a letter agreement changing the term of the second option extension from one year to eleven months. If approved, the Second Amendment will enable the Facility to continue deliveries of RPS-eligible energy to PG&E at a reasonable price for a minimum of three years and up to four years and eleven months.4 The Second Amendment provides the Facility with a higher price for delivered energy in exchange for stricter performance incentives and other beneficial terms and conditions. The Facility is expected to deliver an average of approximately 172 gigawatt-hours (“GWh”) of RPS-eligible power to PG&E each year during the term of the Second Amendment. The Second Amendment will maintain an existing supply of RPS-eligible energy at a reasonable price and will improve the value of the PPA to PG&E customer’s in non-price terms.
Subject of the Advice Letter. The Commission’s approval of the North Star Solar PPA will authorize PG&E to accept deliveries of RPS-eligible energy from a California solar photovoltaic (“PV”) generator within PG&E’s service territory. The Commission should approve the North Star Solar PPA. The “least-cost, best-fit” (“LCBF”) analysis indicates that this PPA meets the needs of PG&E’s portfolio. As discussed above, the Project is located within PG&E’s service territory in a known solar resource area and is being developed by a viable counterparty. Summit has developed or been involved in the development of over 6,000 MW of wind and natural gas power plants, and REC is one of the premiere crystalline solar PV manufacturers in the world, with 550 MW of commercially operational panels globally. Moreover, the counterparty has site control for the Project, and the Project is not contingent upon tax incentives. Not only is the project highly viable and competitively priced but the Project also has an expected Commercial Operation Date (“COD”) of June 30, 2013, and will deliver directly to the California Independent System Operator (“CAISO”)-controlled grid for 20 years. As a result, the Project will contribute to PG&E’s 20 percent-by-2010 RPS goals through flexible compliance. The PPA resulted from the 2009 RPS Solicitation. Consistent with the protocol used for review of RPS contracts resulting from the 2009 RPS Solicitation, PG&E has included Confidential Appendices A through G and public Appendix H, which provide further details demonstrating the reasonableness of the PPA. As discussed below, PG&E requests confidential treatment for the information contained in Appendices A through G.
Subject of the Advice Letter. The existing PPA is a Standard Offer 1 (“SO1”) contract that only delivers as-delivered capacity and energy and remains in effect until terminated by Seller. Eel River has delivered electricity generated by the Facility under the PPA since the Facility began operations and started delivering energy in 1986. The Facility xxxxx biomass for its fuel. The continued operation of biomass-fueled facilities prevents open burning or decomposition of the wood waste used for fuel, which would generate higher levels of greenhouse gas emissions and other air borne pollutants if not consumed as fuel; and in some instances results in the diversion wood waste from landfills. In 2007, PG&E and Eel River’s predecessor, the Pacific Lumber Company (“PALCO”), executed the Third Amendment to the PPA which set a fixed price for energy and eliminated the Seller’s termination right until March 31, 2016 (the “2007 Amendment”). The 2007 Amendment was filed with the Commission on January 11, 2008, in Advice Letter 3193-E, and approved on November 21, 2008, by Resolution 4212-E. After Xxxxxxxxx acquired the Facility in November 2010, Eel River and PG&E began discussions regarding an amendment to the PPA with pricing terms that would support the Facility’s continued operation. As a result, PG&E and Eel River negotiated and executed the Fourth Amendment, which is attached as Confidential Appendix A, on September 21, 2011. If approved, the Fourth Amendment will enable the Facility to continue deliveries of RPS-eligible energy to PG&E at a reasonable price for a minimum of 3 years and up to March 31, 2016, which is the expiration date of the 2007 Amendment. The Fourth Amendment provides the Facility with a higher price for delivered energy and capacity payments in exchange for stricter performance obligations and other beneficial terms and conditions. The Facility is expected to deliver approximately 97 gigawatt-hours (“GWh”) of RPS-eligible power to PG&E each year during the term of the Fourth Amendment. The Fourth Amendment will maintain an existing supply of RPS-eligible energy at a reasonable price and will improve the value of the PPA to PG&E’s customers in non-price terms. 2 See D.00-00-000 at 7. Advice 3944-E - 3 - November 14, 2011 PG&E negotiated the Fourth Amendment to maintain the contribution of this biomass resource to its existing RPS portfolio. Additionally, the Facility is already built and interconnected to the electric grid, and will not pose any of the environmental con...
Subject of the Advice Letter
Subject of the Advice Letter
