pg&e’s oakley application (a.12-03-026) yuliya shmidt, lead selena huang, analyst candace...
TRANSCRIPT
PG&E’s Oakley Application
(A.12-03-026)
Yuliya Shmidt, leadSelena Huang,
analystCandace Morey,
attorney
May 23, 2012Image of proposed Oakley plant from California Energy Commission: www.energy.ca.gov/2011publications/CEC-800-2011-002/CEC-800-2011-002-CMF.pdf
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Oakley (Contra Costa) Power Plant
New combined cycle natural gas-fired facility in Contra Costa County
584 megawatts (MW)
Heat rate of 6,752 British Thermal Units per kilowatt-hour (BTU/kWh)
Total cost of approximately $1.15 billion
Alleged to be efficient (low fuel consumption and GHG emissions) and fast-ramping
Bid into PG&E’s 2008 Long-Term Request for Offers (LTRFO)
Was shortlisted
PG&E executed a power and sale agreement (PSA) for the facility in 2009
Fully permitted (although CEC permit is being challenged in the courts) and began construction in June 2011
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Procedural Background
In 2007, the Long-Term Procurement Plan proceeding found a need of 800-1,200 MW of new generation for PG&E (D.07-12-052)
PG&E filled that need in 2008 and 2009 with two projects which have been approved (Mariposa and Mirant Marsh Landing)
To fill the last of its need, PG&E proposed three facilities simultaneously in 2009:
Oakley Plant (utility-owned generation, A.09-09-021): 584 MW
GWF Tracy (PPA, A.09-10-022): 145 MW
Calpine Los Esteros (PPA, A.09-10-034):109 MW
DRA recommended that the Commission approve either Oakley or GWF Tracy and Calpine Los Esteros
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Procedural Background
The Commission conditionally approved the GWF Tracy and Calpine Los
Esteros plants if Oakley were denied (D.10-07-042)
The Commission then rejected Oakley citing a lack of need for the plant
but allowing it to be resubmitted if one of three events occurred (D.10-07-
045):
a project fails creating an open need
PG&E is able to retire a Once Through Cooling plant ahead of schedule
The CAISO Renewable Integration Study demonstrates that there are reliability risks from integrating the 33% RPS
Since Oakley was denied, GWF Tracy and Calpine Los Esteros were
approved
Continued…
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Procedural Background
PG&E immediately filed a Petition for Modification (PFM) of the Oakley decision Changed the online date from 2014 to 2016 to better fit with PG&E’s need
All other aspects of the Application remained the same
Procedurally, the CPUC could not approve the facility as a PFM The Commission, sua sponte, converted the PFM to an Application
The Application for PG&E to purchase and operate the Oakley facility with a 2016 online date was approved in 2010 (D.10-12-050)
TURN challenged D.10-12-050 in the California Court of Appeal In March 2012, the Court annulled the Decision because did not follow
“proper procedures” (TURN v. California Public Utilities Commission, Case No. A132439)
Continued…
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Updated Application
PG&E immediately filed a new Application to purchase and operate the Oakley plant with the 2016 online date (A.12-03-026) Proposal is identical to previous Application
Leaves open the possibility that the plant comes online in 2014 and operates as a merchant until purchase date of 2016
PG&E claims this is unlikely
PG&E did not filed Testimony with its Application but alleged that its Testimony will be filed on May 16
Eight parties, including DRA, filed protests
Two parties – CARE and Independent Energy Producers – filed Motions to Dismiss
Administrative Law Judge Rulings set a Prehearing Conference for May 22, directed parties to immediately begin discovery, and shortened PG&E’s time to reply to protests
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DRA’s Protest PG&E has no authority nor outstanding need to procure this plant
PG&E has not met any of the three requirements for resubmitting Oakley
Need for new generation being determined in the LTPP (R.12-03-014) That proceeding is ongoing with a Decision expected by the end of 2012
It is the appropriate venue for a need determination
Application does not comply with requirements for filing a UOG proposal, new
rules require a Certificate of Public Convenience and Necessity (D.12-04-046)
The previous proceeding’s partial settlement on cost recovery – to which DRA is
a signatory – is no longer in effect
The plant may no longer be competitive and its value, as a potentially-used
plant, is not the same as a brand-new facility
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Follow-up Actions
At Pre-Hearing Conference on May 22 emphasized that: PG&E does not have authority for this plant
PG&E has not satisfied the requirements for submitting this Application
Challenge PG&E’s extremely aggressive proposed schedule
Request more time for discovery and intervenor testimony
Reserve right to hearings
Supported Independent Energy Producer’s Motion to Dismiss