California PUC reviews Southern California Ed power deal for 101-MW solar project

The California Public Utilities Commission at its Nov. 5 meeting will look at approving a resolution that grants Southern California Edison‘s (SCE) request for approval of a renewables portfolio standard (RPS) eligible, 20-year power purchase agreement with Mesquite Solar 2 LLC.

The Mesquite Project is located in Tonopah, Arizona, and is being developed by Sempra U.S. Gas & Power LLC. The Mesquite Project will interconnect with the California Independent System Operator-controlled grid at the Hassayampa Substation.

The PPA resulted from SCE’s 2014 RPS solicitation (2014 RPS RFO) and was executed in June. The Mesquite facility has a capacity of approximately 101 MW.

The California RPS program was established by Senate Bill (SB) 1078, and has been subsequently modified. The RPS program administered by the commission requires each retail seller to procure eligible renewable energy resources so that the amount of electricity generated from eligible renewable resources is an amount that equals an average of 20% of the total electricity sold to retail customers in California for compliance period 2011-2013; 25% of retail sales by Dec. 31, 2016; and 33% of retail sales by Dec. 31, 2020.

This PPA was protested by the Imperial Irrigation District (IID) on August 20. IID argued that it is premature for SCE to receive commission approval for any PPAs including the Mesquite PPA resulting from its 2014 RPS procurement shortlist. SCE’s 2014 RPS shortlist is still pending Draft Resolution E-4726 (Shortlist Resolution). The Shortlist Resolution directs SCE to re-evaluate the IID-interconnected offers. Therefore, IID asserted that projects on the shortlist may be added or removed as a consequence of SCE’s re-evaluation.

SCE responded to IID’s protest on Aug. 27. SCE contended that IID’s protest is without merit and this application for approval of the PPA should not be suspended. SCE argued that the Shortlist Resolution concludes that the shortlist is reasonable and consistent with its approved 2014 Procurement Plan.

SCE argued for timely approval of the PPA since the Mesquite Project is expected to take advantage of the current 30% Federal Business Energy Investment Tax Credit, which is available for eligible energy systems placed in service on or before Dec. 31, 2016. Pursuant to the Mesquite PPA, SCE is to begin purchasing generation from Mesquite beginning Jan. 1, 2017. The expected annual generation to be purchased from the project is 283 Gigawatt-hours (GWh). This generation could count towards SCE’s RPS requirements in Compliance Period 2017-2020.

Said the resolution up for review at the Nov. 5 commission meeting: “The IID’s protest is without merit. … SCE’s re-evaluation of the shortlist as directed by the Shortlist Resolution resulted in changes to its 2014 RPS shortlist. However, SCE’s proposed shortlist modifications did not result in removal of the Mesquite Project from the shortlist.”

The Mesquite project will use solar photovoltaic panels that have been technically proven on utility-scale generation projects. The Mesquite facility will share existing interconnection facilities with its affiliates, including Mesquite Solar 1 LLC, which has a 165-MW CAISO Large Generation Interconnection Agreement (LGIA) for deliveries to Pacific Gas and Electric.

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.