Southern California Utility Reaches Deals to Ensure Power Supply

Southern California Edison has signed more than 80 contracts to ensure a steady supply of power, but many are questioning the contracts made with a company with close ties to the governor's office.

by Jeff McDonald, The San Diego Union-Tribune / November 20, 2015

(TNS) -- The California Public Utilities Commission approved a series of purchasing agreements for Southern California Edison on Thursday that includes contracts with a San Francisco startup founded by a former commission member.

On a unanimous vote, the commission adopted a plan Edison submitted in response to commission orders to procure up to 2,500 megawatts of new power.

Four of the 80 or so contracts are with limited-liability companies owned by Advanced Microgrid Solutions, a firm opened by former Commissioner Susan Kennedy. Kennedy formerly worked as chief of staff to Gov. Arnold Schwarzenegger and a top aide to Gov. Gray Davis.

“It has been a long trek, but I’m very happy we’ve got some contracts now,” Commissioner Michel Florio said moments before the approval.

The utility proposed more than 80 contracts that include electricity from solar sources, gas-fired plants and the technology being marketed by Kennedy’s company, energy storage.

The price Edison is paying will not be made public for up to three years, although industry estimates have pegged the Advanced Microgrid share around $100 million.

Edison said the array of contracts will ensure a more reliable power supply for years to come. It said each of the bids were evaluated strictly on their merit and not connections with former utility regulators or political officials.

“The process was competitive and rigorous and ensured a level playing field for all bidders,” the company said.

Kennedy and Advanced Microgrid Solutions did not respond to a request for comment. The company said earlier this year that it did not receive any special treatment in securing contracts.

Energy consultant Bill Powers filed a request in June urging the commission to reject the contracts proposed by Edison because they are too reliant on fossil fuels and appear to favor industry insiders like Kennedy.

“It’s pretty clear that the incumbent power players won this round,” Powers said Thursday. “All of the big players that already had their belly up at the bar got their drinks.”

Powers said regulators should be approving more energy from renewable sources rather than gas-fired plants, especially given the emphasis by people like Gov. Jerry Brown on grappling with climate change.

“This decision is almost diametrically opposite of what you would expect procurement to look like in 2015,” Powers said. “This could be a 1975 procurement package. It really is stunning that despite all the rhetoric, the state would allow this kind of status quo.”

The San Diego Union-Tribune reported earlier this year that Kennedy had undisclosed communications with commission President Michael Picker, talking up the benefits of energy storage. The commission said the email exchange did not need to be reported under commission rules because it did not urge any particular action by Picker.

©2015 The San Diego Union-Tribune Distributed by Tribune Content Agency, LLC.

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