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 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. 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. The Commission’s approval of the Amendment would enable DG Fairhaven to continue to generate and sell Renewables Portfolio Standard (“RPS”)-eligible power from its existing 17.25 megawatt (“MW”) facility (“Facility”) located near Eureka, California.2 1 See D.00-00-000 at 7. 2 The Facility’s nameplate is officially 17.25 MW; however the firm capacity level is 16 MW. Advice 3843-E - 2 - May 10, 2011 Since 1987, the Facility has supplied power to PG&E primarily by burning fuel derived from woody biomass.3 The Facility has also been a steady employer in the Humboldt County area. The remaining term of the PPA is approximately five years and nine months. On February 28, 2011, PG&E and DG Xxxxxxxxx executed the Amendment. A letter agreement that limits the maximum term of the Amendment to four years and eleven months and clarifies that the legal name of the Seller is “DG Fairhaven Power LLC” was executed on April 1, 2011. The Amendment preserves PG&E’s existing supply of RPS- eligible energy at a reasonable price while DG Fairhaven seeks a long-term delivery option. The Amendment is appended as Confidential Appendix A. It provides DG Fairhaven with a price adjustment for delivered energy. In exchange, DG Fairhaven is subject to stricter performance obligations, such as a requirement to provide PG&E with advance notice so that the Facility’s generation can be scheduled more effectively into the California Independent System Operator (“CAISO”) markets. DG Fairhaven is expected to deliver approximately 106 gigawatt-hours (“GWh”) of RPS-eligible power to PG&E each year during the term of the Amendment. PG&E expects that under the amended PPA, customers should receive more RPS-eligible power on a more reliable basis than they would under the current PPA. Confidential Appendix B provides an analysis of DG Fairhaven’s financial situation, an explanation of how Amendment terms will encourage DG Fairhaven to provide increased deliveries on a reliable, year-round basis, and PG&E’s reasonableness showing. Information provided by DG Xxxxxxxxx’s treasurer is appended.4 PG&E also compared the amended PPA to other relevant transactions. Based on DG Fairhaven’s cost and revenue projections, and the terms of contracts or amendments that PG&E has recently executed with other biomass generators, PG&E concludes that the price and performance terms of the amended PPA are reasonable. The Amendment becomes effective upon Commission Approval. The Parties agreed that upon CPUC Approval, ...
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 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. 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
