The California Public Utilities Commission will be looking at its Dec. 4 meeting at whether to approve the first phase of an application from Golden State Water Co. for approval of four purchase deals.
Golden State Water, on behalf of its Bear Valley Electric Service Division (BVES), filed an application for pre-approval of four proposed Power Purchase Agreements (PPAs) with EDF Trading North America LLC and Shell Energy North America (US) LP. The application also requested approval of an executed, enabling Master Agreement with EDF. BVES also requested authority to submit final, executed agreements by Advice Letter utilizing a price benchmark methodology to determine price reasonableness.
BVES in June 2013 requested that the commission create a two phase proceeding, said a draft approval order filed with the commission on Dec. 2. Phase 1 would consider pre-approval requests for the EDF and Shell proposed PPA terms and conditions approval of an executed EDF Master Agreement, a confidential benchmark price methodology and a memorandum account to track unrealized gains and losses. Phase 2 would consider a proposed alternative approval process for future PPAs, except those for Renewable Portfolio Standard products. BVES’ application was unopposed. This draft Dec. 4 decision grants BVES’ Phase 1 requests on a one-time, non-precedential basis and orders initiation of Phase 2.
BVES’ existing power resource system is comprised of: an 8.4 MW, natural gas-fired, peaking plant, called the Bear Valley Power Plant, consisting of seven 1.2-MW internal combustion engines; 205 miles of overhead lines; 54 miles of underground lines, and 13 substations. In addition to facilities it owns and operates, BVES’ energy resources include purchased power. BVES currently has a master power purchase contract with Shell and confirmation agreements for energy products which have been approved by the commission. Beginning in 1996, BVES began purchasing its energy requirements in the unregulated wholesale market. Since that time, BVES has secured energy primarily through long-term PPAs from third party providers, plus spot and California Independent System Operator (CAISO) market purchases.
BVES negotiated three agreements with EDF: the terms and conditions in an Edison Electric Institute (EEI) Master Power Purchase and Sale Agreement, as amended, with EDF which acts as an enabling agreement and is fully executed; terms and conditions (excluding price) of a confirmation for annual baseload energy (EDF Annual Baseload Confirmation); and terms and conditions (excluding price of a confirmation for a daily physical call option with EDF (EDF Call Option Confirmation.)
BVES also negotiated terms and conditions for two agreements with Shell: terms and conditions (excluding price) of a confirmation for seasonal baseload energy (Shell Seasonal Baseload Confirmation); and terms and conditions (excluding price) of a confirmation for RA capacity (Shell RA Capacity Confirmation) under an existing master Power Purchase and Sale Agreement with Shell. BVES refers to these “confirmations” collectively as PPAs throughout its application.