U.S. Department of Energy - Energy Efficiency and Renewable Energy
Federal Energy Management Program
California Lays Down the Welcome Mat for Renewable Energy Projects
June 21, 2006
A number of recent actions by California regulators, transmission
system operators, and utilities are effectively rolling out the red
carpet for renewable energy projects. On June 15th, the California Public
Utilities Commission (CPUC) assured utilities that they can recover
their investments in new transmission lines to access known renewable
energy resources. The CPUC noted that the Tehachapi area in Southern
California could produce more than 4,000 megawatts of wind power, but
new transmission lines to access that resource could cost as much as
$1 billion. The CPUC decision gives utilities confidence in pursuing
such projects, since they can recover their costs in customer rates.
See the CPUC press release.
Meanwhile, the California Independent System Operator (ISO), which
manages the flow of power on the state's power grid, has established a
four-point program to assure that the grid can accommodate new
renewable power plants. The plan includes considering renewable power
growth when evaluating proposed transmission projects, avoiding
financial disincentives for renewable energy in power marketing, using
forecasting and management tools to effectively integrate renewable
power into grid operations, and upgrading an existing program that
aims to remove barriers for intermittent renewable energy sources. See
the California ISO press release
(PDF 117 KB).
Download Adobe Reader.
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The Leathers geothermal plant in the Imperial Valley is one of many power generators that have agreed to sell their power at a new rate. Credit: Warren Gretz |
Finally, Southern California Edison (SCE) announced in May that it has
reached an agreement with its four largest renewable energy suppliers
to establish a fixed price through 2012 for its purchases of small
hydropower and wind, solar, biomass, and geothermal power. The
agreement establishes a price of 6.15 cents per kilowatt-hour,
increasing by 1 percent per year, and eliminates any tie to natural
gas prices, which had previously caused prices to vary widely. The
agreement was reached with Caithness Energy, LLC, which owns wind and
geothermal plants; Colmac Energy Inc., which owns a 47-megawatt
biomass power plant on the Cabazon Indian Reservation near Mecca;
Ormat Technologies, Inc., which owns three geothermal plants in the
Imperial Valley; and FPL Energy, which owns wind and solar thermal
power plants. In June, six subsidiaries of CE Generation, LLC, all of
which own geothermal plants, also signed onto the deal. See the press
releases from
Edison International (SCE's parent company),
Ormat, and
CE Generation.
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