San Diego Gas & Electric wants to switch Yuma from ‘must-take’ to dispatchable

Up for review at the Sept. 17 meeting of the California Public Utilities Commission is a resolution that would approve a San Diego Gas and Electric request for an amendment and restatement of its power purchase agreement with Yuma Cogeneration Associates.

“This Resolution approves, without modification, the amended Power Purchase Agreement (PPA) executed between San Diego Gas and Electric Company (SDG&E) and Yuma Cogeneration Associates (YCA), a combined heat and power (CHP) facility with which the utility has had an existing PPA since 1990. The amended PPA, filed via Advice Letter (AL) 2674-E, was executed in August 2014 as a result of bilateral negotiations beginning in April 2013.

“The YCA facility is currently under contract with SDG&E to deliver ‘must-take’ power. Under the amended PPA approved herein, the facility will be converted to a dispatchable Utility Prescheduled Facility (UPF) under the QF/CHP Settlement. The amended PPA also provides energy and other cost savings. SDG&E also requests a shareholder incentive of $670,800, equal to 10% of the amendment’s expected savings of $6,708,000. This Resolution finds that the costs of the amended PPA are reasonable, and SDG&E is authorized to recover these costs. The amended PPA will contribute 14,114 metric tons (MT) of greenhouse gas (GHG) reductions and 53 megawatts (MW) towards SDG&E’s respective targets in those areas. This Resolution rejects the requested shareholder incentive.

“SDG&E and YCA currently have an in-effect agreement based on the Standard Offer 2 (SO2) that expires May 27, 2024. Negotiations leading to the currently proposed amended PPA began in April 2013 and the parties finalized the terms and conditions between January 2014 and August 2014. SDG&E provided reports on the status of the negotiations as part of its regular CHP program updates to the Procurement Review Group (PRG) at the Commission. The amended PPA was executed by SDG&E on August 14, 2014 and by YCA on August 18, 2014.

“The amended PPA does not change the existing expiration date. In addition to changing the facility to a UPF, the amended PPA changes fuel terms, contract pricing, and other terms.

“YCA is located in Yuma, AZ and has operated as a Qualifying Facility (QF) supplying electricity to SDG&E (and steam to its host, Shaw Industries Yarn Mill) since the 1990s. The facility consists of a natural gas-fired combustion turbine and a heat recovery steam generator (HRSG). HRSG-generated steam powers a 20.6 MW steam turbine generator, used by the host for manufacturing and maintenance. An auxiliary boiler provides steam when the cogenerator is not dispatched or operating.”

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.