SDG&E Power Purchase Tolling Agreements

Background

SDG&E seeks CPUC approval of three long-term PPTAs for 450 MWs of electricity, estimated cost of just below $2 billion, to service their local service area.  The PPTAs, if approved, are expected to be online by June 1, 2014. 

Power Purchase Tolling Agreements ("PPTAs") are contracts to purchase power wherein the utility pays the seller a periodic payment for capacity for the length of the contract. The utility is responsible for the procurement and delivery of the fuel (e.g., natural gas) to the seller’s power plant generating units, and the scheduling of the generating units under contract. Hence, utility customers take all the upside and downside risks of fuel price volatility. 

DRA's Policy Position

On May 18, 2012, DRA submitted testimony recommending that the CPUC reject the PPTAs because SDG&E did not demonstrate the need for 450 MWs for the 2011-2020 electricity procurement planning period.

• SDG&E’s request, which relies on CAISO studies, is based on overly conservative assumptions.
• They do not adequately recognize preferred resources such as energy efficiency, demand response and distributed generation.
• Above all, the studies assume that once-through-cooling (OTC) generating units will retire despite the evidence that they could possibly be repowered.

See DRA's July 13, 2012 Opening Brief.
See DRA's July 27, 2012 Reply Brief.

Current Proceeding Status

A CPUC proposed decision is expected by the end of 2012.

• See the proceeding docket.