Pacific Gas and Electric Co. and California’s independent powerproducers with qualifying facility (QF) contracts have cut a dealto free up excess power from the merchant generators to help handledemand spikes anticipated during this summer’s heat waves. TheCalifornia Independent Energy Producers (IEP) expect to have anadvice letter filing with state regulators by the end or April tofree up as much as 1,000 MW of power in the summer. Thin ancillaryservices supplies last summer caused record price spikes.

Under an enabling agreement approved in mid-April, the IEPmembers will be free to sell surplus electricity above theircontract commitments to PG&E’s utility to third parties,including the nonprofit, state-chartered Independent SystemOperator running the transmission grid.

“We’re pretty excited about it,” said IEP executive director JanSmutny-Jones. “We think it is a good first step and we are hopingthis will get everyone more familiar with QFs going into themarket. It is a pretty significant development.”

Smutny-Jones noted that the utility and power producers hope theextra electricity helps the ancillary services market, compared tolast year. He calls it a “market means” of creating more depth inthose markets. The 1,000 MW surplus estimate is a maximum figure,he said, noting it should at minimum provide several hundredmegawatts of extra power. The generally smaller QF producersoperate a variety of power plants, using natural gas, cogeneration,biomass, geothermal, solar and wind.

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