California Commission Quashes 2 San Diego Gas Plants

The California Public Utilities Commission (CPUC) has likely made some San Diego County residents very happy today with a decision not to allow San Diego Gas & Electric (SDG&E) to buy power from the controversial proposed Pio Pico Energy Center and Quail Brush Power gas-fired power plants.

The plants were slammed earlier this month by the Sierra Club, which rated the pair of proposals as the second-most wasteful utility projects in the state. If both had been built, according to the Sierra Club, the state's ratepayers would have seen a cumulative $2 billion added to their power bills.

According to a CPUC press release issued Thursday, the CPUC denied the power purchase agreements because it decided SDG&E customers wouldn't need the new power until four years into the contracts, thus causing an unnecessary financial burden on ratepayers for those first four years.

The CPUC also cited reduced flexibility in planning as a reason to turn down the agreements. "It is only natural to look at these projects and conclude that they might help address not-yet-defined future problems," said CPUC Commissioner Mark Ferron in the press release. "However, as tempting as it may be, I think this is the wrong approach. We run the risk of paying for new generation twice-once now and a second time if we have different, conflicting, future information."

Which means that the plants aren't dead, but merely resting. As CPUC President Michael Peevey added, "If SDG&E is able to amend the contracts we declined and bring them back to us, we will consider them. San Diego is going to need plants with flexible operating qualities in the very near future."

Still, it's got to be gratifying to those who opposed the plants to hear the CPUC deny the power purchase agreements in language remarkably similar to that opponents had used.

The Pio Pico Plant near Otay would have had a generating capacity of 305 megawatts. Quail Brush would have maxed out at 100 megawatts. SDG&E did get a consolation prize: the CPUC approved a power purchase agreement between the utility and an upgraded Escondido Energy Center, a relatively uncontroversial measure.