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The Kings River Conservation District has successfully negotiated the Electric Supply Agreement with Citigroup Energy Inc. to supply and manage energy delivery to the San Joaquin Valley Power Authority's Community Choice customers. The key features of the agreement include:
The Electric Supply Agreement fixes the power cost at levels that meet the San Joaquin Valley Power Authority's financial objectives to set Community Choice generation rates 5 percent below the current generation rates of Pacific Gas and Electric Company (PG&E) and Southern California Edison (SCE) and establish a fixed price escalation for the cost of that power at 2 percent per year through 2015. These specific conditions meet the requirements set forth by the San Joaquin Valley Power Authority before the Community Choice program can begin. The Electric Supply Agreement also contains several features that manage risk for the Community Choice customer. Price commitments set forth in the contract are fully backed by the financial guarantee of Citigroup Inc., the parent company of Citigroup Energy Inc. Unlike PG&E and SCE, who pass along additional power costs to the customer when contracts they enter into are unable to guarantee price, Citigroup Inc. has pledged its financial strength to guarantee power costs under the Electric Supply Agreement. The Electric Supply Agreement also sets a fixed price for minimum and maximum quantities of power supply each month based on estimated customer participation and load growth. This methodology, referred to as "banding," allows for daily variations in energy use without price risk to the customer and provides price protection within reasonable variations in monthly energy use. The agreement achieves the state's clean energy and greenhouse gas reduction goals. It also supports investments in local generation, such as KRCD's proposed natural gas-fired power plant and solar generation farm. The KRCD board of directors has approved the Electric Supply Agreement as to form and has offered the agreement to the San Joaquin Valley Power Authority board of directors for review. Authority legal counsel have provided comments during negotiation of this agreement. The Authority board will conduct workshops and public meetings on the Electric Supply Agreement through February and March before authorizing KRCD to proceed with signing the agreement. This authorization will require a finding by the Authority that the agreement meets the financial objectives of the Community Choice program. California ISO Study Warns Low Hydro Could Hurt Reliability
A recent study published by the California Independent System Operator (CAISO) on January 23, 2008, "Planning for Second Dry Year Operation Reliability Study," identifies the potential effects that multi-year drought conditions could have on the northern California power system and considers related hydroelectric generation issues in the Fresno area. In a multi-year drought cycle, the water levels at major reservoirs can drop to less than half of their normal capacity. This would lead to progressively lower hydroelectric generation capacity as well as lower energy production that are available during peak and partial peak loading periods, the CAISO's study states. Cause for Concern With low-level hydroelectric generation, the northern California power grid would be stretched to and beyond its limits. Using 2008 summer base cases, studies have shown that overloads would occur on 12 transmission lines and one transformer even if there are no plant or transmission failures. There would be little additional generation resources available to relieve the congestion. Local Solutions According to the CAISO, both transmission and generation are part of the solution to reliable electric service in the Fresno area. Various short-term and long-term solutions were identified in the study. PG&E committed to finding a long-term solution to alleviate the overload conditions on the Gates-McCall-Gregg transmission corridor that will be able to meet both load growth and to allow for 3-pump operations at the Helms Pumped Storage hydroelectric facility. Under current transmission limitations, PG&E's Helms facility can only utilize two of its three pumps. As stated in the study's action plan, the CAISO committed to working with PG&E to develop emergency operating procedures and to determine potential sizes and locations for new generation in northern California. The Kings River Conservation District is dedicated to being part of that solution with the proposed KRCD Community Power Plant, a 565-megawatt, base-load power plant that entered the California Energy Commission's permitting process last fall (see related story on upcoming workshop). Construction is expected to start in 2009 with completion in 2011. The KRCD Community Power Plant will be the first sizable plant built in the central San Joaquin Valley since the commissioning of PG&E's Helms plant in 1984. In addition to the proposed Community Power Plant, KRCD's two existing power plants continue to provide energy to the local grid. During this winter, the KRCD Malaga Peaking Plant was dispatched by PG&E to operate a high number of days for a plant designed to produce electricity during peak load times. The peaking plant ran 23 consecutive days in December and 20 out of 31 days in January to provide generation supply for PG&E customers in the Fresno area. The KRCD Malaga Peaking Plant has 100 percent starting reliability and is available to run 99.5 percent of the time. The KRCD Jeff L. Taylor Pine Flat Power Plant generates power when water is released from Pine Flat Dam for irrigation and flood control purposes. The 165-megawatt hydroelectric plant is expected to start up again in March and operate through the summer. KRCD is dedicated to improving the reliability and stability of the electrical system in the central San Joaquin Valley by adding generation capacity to the local grid, encouraging local involvement and reducing electricity costs for customers.
On Thursday, March 6, 2008, the California Energy Commission (CEC) will conduct a Data Response & Issue Resolution Workshop for the proposed KRCD Community Power Plant. The purpose of this workshop is to allow KRCD the opportunity to respond to CEC staff data requests and to work toward resolving outstanding issues. The following technical areas will be covered: air quality, biological resources, cultural resources, hazardous materials, land use, socioeconomics, soil and water resources, transmission system engineering, visual resources, and waste management. The workshop will be held at the Kearney Research & Extension Center in Parlier and will begin at 3:00 p.m. Immediately following the workshop, at approximately 5:30 p.m., questions or comments that are not directly related to data requests will be heard. The next step in the 12-month permitting process is for the staff to analyze and consider the comments it receives and, if necessary, submit a second round of data requests. In addition, a Preliminary Staff Assessment containing a preliminary analysis of issues and recommendations for mitigation and conditions of certification will be published. More information on the KRCD Community Power Plant is available on the CEC's website at: http://www.energy.ca.gov/sitingcases/communitypower/ and on KRCD's website: http://www.krcd.org/power/community_power/ |
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