SoCal Edison Power Purchase Draws Fire

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Southern California Edison s plans to establish a power-purchase agreement with a wholly-owned subsidiary, Mountainview Power Company(MPC), faces challenges by an assortment of rival generators and consumer watchdogs. SCE has signed an option agreement with Sequoia Generating LLC, a subsidiary of InterGen, to acquire MPC s 1,000 MW state-of-the-art power plant being developed in Redlands, Ca. Under the terms of the deal, as reported by The Los Angeles Times, MPC would sell electricity to Edison for 30 years.

SCE needs California Public Utilities Commission approval for the project and costs. In addition, because of the “wholesale” relationship between MPC and SCE, Federal Energy Regulatory Commission approval is needed for the cost-based contract. SCE hopes to secure both approvals by Feb. 29, 2004, the date the option expires.

John E. Bryson, Edison CEO, said, “State agencies and Edison are both concerned there will be insufficient new generation to meet growing power demands. The Mountainview project would add much-needed power generation for California consumers and at significantly less cost than it would take to site a plant from scratch.”

Meanwhile, Doug Heller of the Foundation for Taxpayer and Consumer Rights told the Times, “The notion of some 30-year deal, signed-off on by FERC, is totally insufficient,” adding “[W]e don t like this structure, and we will be watching this.”

The newspaper also reported that Jan Smutny-Jones, Independent Energy Producers Association executive director, said, “I don’t think it’s a good deal for ratepayers. It seems to me that every step of the way it’s the ratepayer that is bearing the risk.”

Consumer Watchdog
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