Pacific Gas and Electric Co. (PG&E) fuel and power-buying for 2007 was both “reasonable and prudent” the five-member California Public Utilities Commission (CPUC) concluded Thursday in closing its annual review of that part of the combination utility’s operations.

The CPUC action responded to a March 24 protest from the commission’s independent consumer unit, the Division of Ratepayer Advocates (DRA). By mid-year, however, the DRA informed the regulatory panel that after further review it had no concerns about the request from the utility for approval of its energy resource account set up to track costs of its power procurement and buying programs.

After touring the Calpine Corp. geothermal installation, The Geysers, in Northern California, of which PG&E is the major buyer of power, DRA reviewed the utilities major outages and found that since they had no forced outages for the period, the consumer unit would not question any of the utility costs for replacement power. DRA “found PG&E gas and fuel procurement activities reasonable and its utility-operated generation operations satisfactory,” the consumer unit said.

“The [DRA] team found that PG&E’s average gas price was consistently lower than the average [indexed] price during the period [Jan. 1-Dec. 31, 2007]. Furthermore, as a member of the procurement review group, DRA is aware of PG&E’s efforts to minimize gas and fuel costs. DRA, thus, does not oppose PG&E’s gas expenditures during the record period [2007].”

On its track record in dispatching generation, PG&E was found to be conducting its business along the lines of the IntercontinentalExchange (ICE) and California Independent System Operator (CAISO), transacting in the day-ahead and hour-ahead markets in 2007 consistent with the ICE and CAISO prices, the DRA told the CPUC.

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