California Utility Strikes Long-term Renewables Pricing Agreement

Southern California Edison (SCE), one of the nation’s leading purchasers of renewable energy, and four of its largest renewable power suppliers, announced an agreement establishing a fixed price for SCE’s wind, solar, biomass, geothermal, and small hydro power purchases through mid-2012.

SCE’s agreements with Caithness Energy, Colmac, Ormat, and FPL Energy establish a five-year price of 6.15 cents per kilowatt-hour (kWh) that increases 1% annually starting in the second year. Renewable facilities participating in the agreement supply approximately 45% of the renewable energy SCE buys for its customers. Les Gelber, president of Caithness, SCE’s largest supplier of renewable energy, said the pricing plan provides revenue certainty for existing plants and will help to attract investment for new renewable projects for SCE. For the next 10 days, SCE is offering the same fixed-price amendment to most of the renewable projects currently under contract with the utility. “This pricing plan reflects an even stronger working relationship between our company and independent, renewable power producers,” said SCE Senior Vice President of Power Procurement Pedro Pizarro. “It will strengthen current renewable projects and provide our customers with stable energy costs.” If approved by the California Public Utilities Commission (CPUC), the power contract amendments would take effect in May 2007.

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