PG&E Seeks Additional Summer Power from IPPs
Pacific Gas and Electric Co. and California's independent power
producers with qualifying facility (QF) contracts have cut a deal
to free up excess power from the merchant generators to help handle
demand spikes anticipated during this summer's heat waves. The
California Independent Energy Producers (IEP) expect to have an
advice letter filing with state regulators by the end or April to
free up as much as 1,000 MW of power in the summer. Thin ancillary
services supplies last summer caused record price spikes.
Under an enabling agreement approved in mid-April, the IEP
members will be free to sell surplus electricity above their
contract commitments to PG&E's utility to third parties,
including the nonprofit, state-chartered Independent System
Operator running the transmission grid.
"We're pretty excited about it," said IEP executive director Jan
Smutny-Jones. "We think it is a good first step and we are hoping
this will get everyone more familiar with QFs going into the
market. It is a pretty significant development."
Smutny-Jones noted that the utility and power producers hope the
extra electricity helps the ancillary services market, compared to
last year. He calls it a "market means" of creating more depth in
those markets. The 1,000 MW surplus estimate is a maximum figure,
he said, noting it should at minimum provide several hundred
megawatts of extra power. The generally smaller QF producers
operate a variety of power plants, using natural gas, cogeneration,
biomass, geothermal, solar and wind.
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