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COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION IN SUPPORT OF THE CALIFORNIA COGENERATION COUNCIL MOTION FOR EMERGENCY RELIEF AND MOTION TO INTERVENE AND COMMENTS IN SUPPORT OF THE CALIFORNIA COGENERATION COUNCIL PETITION FOR PURPA ENFORCEMENT-Removin

1. Docket No. EL01-47-000

The Electric Power Supply Association (EPSA) hereby files these comments in support of CCC’s Motion. As pointed out by CCC, QFs in California have not been paid for several months. Pacific Gas & Electric Company (PG&E) recently filed a petition for bankruptcy; Southern California Edison Company (SCE) announced that it is unable to pay its debts; San Diego Gas & Electric Company (SDG&E) is now facing a difficult financial situation; and the California Independent System Operator (ISO) publicly announced that it cannot meet its financial obligations without payment from the utilities.

While the California Public Utilities Commission has ordered the utilities to resume QF payments prospectively, it has not addressed the critical issue of the past due payments due to the QFs for power delivered for the past three months. Until those arrears are paid, prospective relief will be insufficient to alleviate the severe financial strains now facing QFs. In addition, with respect to PG&E, that order is now stayed. And, as if credit problems weren’t enough, the CCC Motion documents the actions of the California utilities to deny QFs access to the transmission grid through existing interconnection and/or the denial of transmission service.

In total, QFs in California are capable of providing more than 9,500 MWs of power to the ISO-controlled transmission grid. According to a recent California ISO News Release, approximately 3,000 MWs of QF power is currently unable to come online due to financial distress. Actions which undermine the ability of QFs to sell much needed power to entities such as the California Department of Water Resources are greatly endangering the area’s reliability, increasing the probability for blackouts, and reducing the overall power supply, which in turn elevates market prices.

As noted in EPSA’s initial comments in this docket, EPSA applauds the Commission’s efforts to address the energy problems in the West. With respect to QF issues, we urged the Commission in March 22nd Comments to allow QFs to provide power to the market at market-based rates, without additional FERC rate filings. In addition, EPSA urged the Commission to:

  • allow QF sales at negotiated rates with third-party buyers under existing interconnection arrangements;


  • preclude utilities from requiring QFs to resubmit interconnection requests and/or agreements and associated studies unless there is an associated material increase in the QFs’ output;


  • ensure that existing power purchase agreements (PPA) remain in full force and effect, and not allow any sales pursuant to Commission emergency relief orders to be grounds for breach of the PPA;


  • subject to mitigation, not permit revenues a QF receives under a third-party sale to affect utility obligations under existing PPAs; and


  • grant waivers of otherwise applicable tariff requirements.


    • Clearly, it is not in the public’s best interest to deny the California market, and in turn the region as a whole, the so drastically needed power that can be provided by entities such as the QFs. The immediate issue presented by the CCC Motion will play an important role in bringing additional and much-needed power onto the system in the near term. Therefore, for the reasons stated therein, EPSA urges the Commission to promptly act on CCC’s request and ensure that QF power is available to alleviate supply constraints in California.