A number of suppliers of renewable energy power in California have announced they will suspend deliveries to South California Edison as a result of the utility’s default payments.
LOS ANGELES, California – About 500 MW of green power is delivered to SCE by Cameron Ridge, Luz Solar Partners VIII, Luz Solar Partners IX, Windpower Partners 1991, Victory Garden Phase IV Partnership, Sky River Partnership, Ridgetop Energy, Ormesa Geothermal and Ormesa Geothermal II. The suppliers are designed as Qualified Facilities that provide energy generated from solar, wind or geothermal power. The companies have provided electricity for a decade but have not sold to the open market in favour of maintaining sales directly to SCE under long-term purchase contracts. Since June, these contracts have been a fraction of the cost of out-of-state generation. The companies claim that SCE is in default to each of them under the purchase agreements, and that SCE has failed to respond to requests for assurances that they will be paid. In their letters notifying SCE of the suspensions, the suppliers indicated regret that they had been forced to take this step and that it remained open to any proposals that SCE may have to resolve the situation. “Edison’s failure to honor its contractual obligations may cause serious financial injury to producers of clean energy under long term contracts,” says legal counsel Ken Klee. “The ripple effect of Edison’s financial situation could be catastrophic unless the state provides credit enhancements to protect valuable supply contracts.” The companies have tried to find a solution but they claim that SCE and other parties have not responded to efforts to assure payment. They remain committed to selling electricity to the California market provided they receive assurances that they will be paid by the Department of Water Resources or other entity. “This is unfortunate given the important role that suppliers of clean energy play in protecting the environment,” adds Klee. The 500 MW of delivered electricity is sufficient for 500,000 homes in the state.