PG&E Oakley Power Plant

Background  

PG&E filed the first Oakley application in 2009, which the CPUC denied in 2010 because PG&E had no need for new capacity in 2014, when Oakley was scheduled to start operations. PG&E instead requested the plant begin operations in 2016, which was then approved by the CPUC in 2010. That decision was overturned by the Superior Court of California in March 2012 because it violated proper procedure. In the same month, PG&E resubmitted the Oakley project to the CPUC in the proper Application process to begin operations in 2016.  

In its application, PG&E proposed to use ratepayer funds to build a new combined cycle natural gas-fired facility of 586 MW in Contra Costa County which would incur over $1.54 billion in capital costs for just the first eight years of operations. 

Evidentiary Hearings were held August 15-17 at the CPUC in San Francisco.

In December 2012, the CPUC adopted the Alternate Proposed Decision of President Michael Peevey granting PG&E’s request to fund the Oakley power plant.

On February 5, 2014 the California Court of Appeals overturned the CPUC’s December 2012 decision approving the Oakley Power Plant finding that need for the plant is unsupported by evidence since the CPUC relied solely on uncorroborated hearsay to support its decision.

 

 

ORA's Policy Position 

ORA is pleased with the appellate court's finding to overturn the CPUC's 2012 decision as it supported the ALJ’s Proposed Decision denying PG&E’s request for ratepayers to fund the Oakley Power Plant, and opposed the Alternate Proposed Decision because it would shift the risk of cost overruns, typically borne by a developer, onto ratepayers.  ORA found that:

  • PG&E did not demonstrate need for the Oakley project, nor is Oakley the appropriate method to fill any perceived need.  
  • The proposed project is not competitive and PG&E uses outdated Request for Offer (RFO) results.  
  • PG&E's cost recovery proposal is unreasonable given that and that the settlement from the previous Oakley application is no longer in effect. 
  • The Oakley plant would be approved outside of the CPUC’s Long-Term Procurement Planning (LTPP) proceeding, which is the CPUC’s established process for determining need for such projects. 

 See ORA’s September 17, 2012 Opening Brief.

 See ORA’s July 23, 2012 Testimony.

 See ORA’s May 25, 2012 Response in support of Motion to dismiss the Oakley application.

 See ORA’s May 11, 2012 Protest to the Oakley application. 

 

Current Proceeding Status

See the proceeding docket. 

 

Other Resources

See ORA's presentation on PG&E's Oakley Project.