SAN JOSE — PG&E clients may confront greater month-to-month payments underneath a regulatory scheme that directs PG&E to hunt new sources, together with batteries, to exchange three crops — together with one in San Jose.
The crops concerned are the Metcalf Power Middle in south San Jose, together with Northern California’s Feather River Power Middle and the Yuba Metropolis Power Middle. All three now function on fossil fuels.
“The declare for all these crops is that they’re not financial to function” at present electrical energy costs, in accordance with a proposal ready by the employees of the state Public Utilities Fee.
The proposal, which is because of be thought-about by the PUC commissioners in January, would oblige PG&E to hunt various power sources, similar to batteries, to switch the electrical energy produced by the three crops, which all are owned by Calpine.
The Metcalf Power Middle is powered by pure fuel and is able to producing 605 megawatts of electrical energy, sufficient energy for roughly 454,000 houses. San Jose has about 328,000 residential models.
This proposal additionally might pit PG&E and the PUC towards Calpine and the California Unbiased System Operator, or CAISO, which operates most of California’s electrical energy system and markets. Calpine and CAISO search to to designate all three crops as “should-run” for reliability functions, the PUC said.
“Deteriorating market dynamics and substantial capital required to take care of availability” have prompted Calpine to evaluate the retirement of the Metcalf Power Middle, Mark Smith, Calpine’s vice chairman of governmental and regulatory affairs, said in a June 2017 letter to CAISO.
Calpine additionally said that Metcalf, regardless of first logging on in 2005, should quickly bear in depth upgrades and upkeep to modernize the complicated.
“Metcalf’s key producing elements, every ofthe two fuel generators and the steam turbine, are all anticipated to require main upkeep, which is presently deliberate for the spring of 2018,” Smith wrote to CAISO.
Upgrades to Metcalf are anticipated to value $20 million.
“It might be economically irrational for Calpine to undertake that funding with no clear line-of-sight to compensation that yields capital restoration,” Smith said within the letter. That compensation isn’t on the horizon, Smith asserted. “Prevailing electrical energy market costs won’t help continued operation of Metcalf,” Smith said within the letter.
San Francisco-based mostly PG&E and the PUC are alarmed by the prospect of Calpine being ordered to function all or any three of the crops as should-run amenities that should stay on-line to offer dependable 24-hour or peak-interval electrical energy service. The Metcalf, Yuba Metropolis and Feather River power facilities are close to the top of contracts with CAISO to provie energy.
“The crops would receives a commission to function on an costly value of service contract,” PUC spokeswoman Terrie Prosper stated Wednesday. “The PUC and PG&E have opposed this, partially as a result of a scarcity of competitors can result in market distortions and unjust charges for energy. The PUC believes there are higher options, together with battery storage.”
Nevertheless, PG&E clients may wind up paying the tab anyway even beneath a battery plan. PG&E wouldn’t be obliged underneath this proposal to signal contracts for brand spanking new energy sources, however solely to scout for such various suppliers.
“This proposal is predicted to end in further contracts, which might result in elevated ratepayer prices,” the PUC said within the proposal.
Even worse, the Metcalf Power Middle won’t be the one Bay Space energy complicated which may want alternative.
“Different amenities on this space might be shortly dealing with comparable choice factors” as the top of their respective contracts approaches, Smith, the Calpine government wrote. These are the one hundred twenty-megawatt Gilroy Congeneration Plant, the one hundred thirty five-megawatt Gilroy Power Middle and the 28-megaeatt Agnews Energy Plant in north San Jose.