Solar Plant Proposal Advances

Regulators on Thursday approved Southern California Edison Co.’s plan to build the world’s largest solar power plant despite concerns that the facility could soak up all the money that subsidizes small alternative energy projects in the state.

The California Public Utilities Commission voted 3 to 1 to support the 40-acre solar facility in Daggett, near Barstow, which would provide power for nearly 4,000 homes. PUC President Michael Peevey, who founded the company that would build the facility, cast the deciding vote after initially abstaining.

The plan next goes to the California Energy Commission, which must decide whether to give the state’s limited financial incentives for renewable energy to a few big projects or to many little applicants -- primarily homeowners and businesses.

“I believe the project is worthwhile and deserving of the PUC’s approval,” Commissioner Carl Wood said during a PUC meeting in San Francisco. “If we reject solar photovoltaics out of hand because it’s expensive, we are not going to play a role in the development of that technology.”

At the meeting, nearly a dozen homeowners and small-business owners complained that if the Edison deal moved forward, there would be no money left to subsidize rooftop solar panels and similar projects now bankrolled from a $30-million annual “public goods” fund.

Those critics were joined by environmentalists, renewable-energy firms and the staffs of the California Energy Commission and the PUC -- groups that typically provide strong support for renewable-energy projects.

Staff members of both agencies said the power would be too expensive, costing much more than a benchmark price of 5.37 cents per kilowatt-hour that the commission established as a guide for utilities and bidders interested in supplying renewable power.

The cost of building the plant -- and of subsidizing the purchase of its power -- has not been disclosed, under a commission decision to keep secret the cost of all of the electricity contracts signed by Edison, PG&E; Corp.’s Pacific Gas & Electric Co. and Sempra Energy’s San Diego Gas & Electric Co.

The $30-million public goods fund for emerging renewable-energy sources is financed by a surcharge on ratepayer bills. Similar funds set up by municipal utilities such as the Los Angeles Department of Water and Power would not be affected.

Edison lauded the project as “part of our long-standing commitment to renewable-energy resources that offer California important environmental and economic benefits.”

Edison executive Lars Bergmann disputed the contention that the Daggett project would hog all the alternative-energy money, saying that only a fraction of the program’s annual funding would be tapped.

Critics have privately questioned ties between the plant builder, TrueSolar Solutions Inc., and Peevey, a former top Edison executive.

Peevey founded TrueSolar’s parent company, TruePricing Inc., and his former colleagues still run the company. Peevey severed his ties to the firm when he joined the PUC in 2002.

Neither Peevey nor TruePricing Chief Executive Lisa Bicker returned calls seeking comment.

At first, Peevey abstained from voting on the contract. Commissioner Loretta Lynch abstained throughout; she later said she thought the panel needed to study the matter further.

Peevey switched to voting yes after being told by a PUC lawyer that the contract would need three votes to pass. Commissioner Geoffrey F. Brown cast the sole no vote.

With the PUC racing against tight deadlines to render several major decisions, including a settlement that would release PG&E; from bankruptcy, nerves were stretched thin Thursday.

The tension spilled over into a hallway, where Peevey excoriated consumer advocacy lawyer Matt Freedman for suggesting to an energy newsletter that involvement of TrueSolar was troubling, according to people present.

Freedman said the possible conflict was not the key issue, noting that the TrueSolar proposal was the most expensive of the 52 bids to supply renewable energy that Edison received.

“This is all about the merits,” Freedman, a lawyer with San Francisco-based the Utility Reform Network, said later.

V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies, called it a “dark day” for renewable energy.

The state Legislature last year mandated that the investor-owned utilities increase their buying of renewable energy by at least 1% of retail sales a year to a target of 20% by the end of 2017, White said. Edison’s plan would comply with the law but wouldn’t nurture grass-roots efforts to develop alternative power.

Whether the California Energy Commission would accept the Edison solar proposal for funding by its renewable program is open to question.

Assistant Director Claudia Chandler said the program required applicants to generate the power at the site where it would be consumed and focused on small projects, and any change might require legislative approval.

The utility plans to present the proposal to the Energy Commission early next year.

At 5 megawatts and 1.1 million square feet of photovoltaic panels, the project would be the world’s largest solar plant, Edison said. It would be as large as 7 1/2 football fields.