California settles decade-old power crisis case with NRG Energy

Independent power producer NRG Energy has resolved ten-year-old claims against a subsidiary of Dynegy Inc., then a co-owner with NRG of a portfolio of power generating plants currently owned by NRG in California, for costs of long-term power contracts signed in March 2001.

California Gov. Jerry Brown joined with the California Public Utilities Commission (CPUC) on March 23 to announce a $120m settlement with NRG Energy that will fund the construction of a statewide network of charging stations for zero-emission vehicles (ZEVs). The settlement stems from California’s energy crisis of a decade ago.

The governor also announced that he has signed an executive order laying the foundation for 1.5 million zero-emission vehicles on California’s roadways by 2025. “This executive order strengthens California’s position as a national leader in zero-emission vehicles,” said Brown, “and the settlement will dramatically expand California’s electric vehicle infrastructure, helping to clean our air and reduce our dependence on foreign oil.”

NRG Energy assumed full responsibility for resolving this matter in 2006 when NRG acquired Dynegy’s 50% interest in the generating assets, the Brown announcement said. From the settlement, $100m will fund the fast-charging stations and the installation of the plug-in units and electrical upgrades, at no cost to taxpayers. The remaining $20m will be directed to ratepayer relief. The network of charging stations funded by the settlement will be installed in the San Francisco Bay Area, the San Joaquin Valley, the Los Angeles Basin and San Diego County.

“The settlement will launch a virtuous circle in which ever more Californians will feel comfortable driving EVs [electric vehicles], and growing EV sales will in turn attract ever more investment in charging infrastructure to our state,” said CPUC President Michael Peevey. “It will create jobs in California, help clean our air, and support attainment of our greenhouse gas reduction goals.”

Brown’s executive order sets various targets, including:

• By 2015, all major cities in California will have adequate infrastructure and be “zero-emission vehicle ready”;

• By 2020, the state will have established adequate infrastructure to support 1 million zero-emission vehicles in California;

• By 2025, there will be 1.5 million zero-emission vehicles on the road in California; and

• By 2050, virtually all personal transportation in the state will be based on zero-emission vehicles, and greenhouse gas emissions from the transportation sector will be reduced by 80 percent below 1990 levels.

Last year, Gov. Brown signed SB X1-2, which directed the California Air Resources Board to adopt regulations setting a 33% renewable energy target.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.