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PG&E Resumes Bidding Process for Long-Term Power Supplies

Pacific Gas and Electric Co. (PG&E) last week said that it is resuming its long-term procurement process after a temporary delay that began in January. PG&E expects to issue updated request for offers (RFOs) in March, with a submission deadline for initial offers in April. Offers will continue to be solicited for both facility ownership and power purchase alternatives.

As part of the resumed RFO process, PG&E is also notifying prospective bidders that it is seeking offers that would allow the utility to replace the 135 MW fossil generation facilities at its Humboldt Bay Power Plant (HBPP) in Eureka, CA. This plant is needed for local area reliability, and replacement proposals will be required to satisfy specific operational requirements, and must be located in the Humboldt area. PG&E will consider offers for power purchase agreements and for turnkey projects that would be owned and operated by PG&E, including offers for turnkey projects that would be located on-site at the plant.

The utility expects to continue to operate the existing HBPP units, until replacement capacity is available. The capacity required to replace the HBPP will be in addition to the capacity requested under the original long-term RFOs.

PG&E has modified the bid review process to conform to new requirements included in the California Public Utilities Commission's (CPUC) long term procurement decision that was issued in December 2004. Most of the changes resulting from the CPUC decision are expected to relate to the requirements to use an independent evaluator, the utility noted.

In July 2004, PG&E submitted its long-term resource plan with the CPUC. In that filing, the utility outlined how it proposed to meet the long-term energy needs of its customers, which included a proposal for issuing two RFOs.

PG&E originally issued two RFOs on Nov. 2, 2004 -- one for long-term power contracts and the other for utility-owned generation facilities -- for approximately 2,200 MW of power between 2008 and 2010. The initial bids were requested by Jan. 14, 2005, along with offer deposits.

However, on Dec. 16, 2004, the CPUC issued a decision that, though endorsing the planned procurement of long-term resources, required PG&E to make modifications to its RFO process. As a result, on Jan. 7, 2005, PG&E notified potential bidders that it was temporarily postponing the deadline for receipt of initial bids and deposits, so that the utility could complete its evaluation of these new requirements and modify the RFO process as needed.

Any interested party may view PG&E's announcement regarding the resumption of the RFO process on the utility's Website, at: www.pge.com/suppliers_purchasing.

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