Utility Problems Affect Green Power Generators

Millions of dollars from green power generators in California are at risk as a result of the power crisis in that state.

SACRAMENTO, California, US, 2001-03-20 <SolarAccess.com> Five green power suppliers will be unable to make the first multi-million-dollar property tax payments to schools and local government because of the crisis, and millions more are at risk after that, says the Renewable Energy Creditors Committee. Members of the committee generate 3,000 MW and employ 900 workers in facilities that generate power from wind, solar, geothermal, biomass and landfill gas. The group formed after Edison stopped paying for power generated last November. CalEnergy Operating Corporation and FPL Energy L.L.C. will not make $4 million in payments on April 10 in Imperial County because of the failure of Southern California Edison to pay them for electricity they have generated for four months. Unless the situation is resolved quickly, the five companies say they will not have funds to make their next round of payments in eight other California counties because of lack of payment by Edison and PG&E. The next round totals $7 million on top of the $4 million in non-payments in Imperial County. Counties affected are Alameda, Contra Costa, Inyo, Kern, Riverside, San Bernardino, San Joaquin and Solano. “We did not want to miss the payments, especially because of the impact on local services,” says Vincent Signorotti of CalEnergy. “But the failure of Edison to make payments — while Edison collects millions every day from ratepayers — unfortunately leaves us no choice.” “We have already delayed payments to suppliers and vendors, and we have suspended payments to local landowners,” he adds. “We also have made every effort possible to reduce our internal costs. Now we have been forced into non-payment of property taxes.” CalEnergy operates a geothermal complex in Imperial County that is the largest taxpayer and largest private employer. It provides 72 percent of the property taxes collected by the local Calipatria school district. It says Edison owes it more than $100 million, and the April payments it will miss total $3.9 million. Members of the group say they regret the impact on schools and local services, but they are running out of money to continue making payroll and operating their facilities. They complain that the California government continues to fund billions for large, out-of-state fossil-fuel generators, but has done nothing for in- state renewable energy generators. FPL Energy generates geothermal energy in Imperial County, and wind and solar power in six other counties, has $3.5 million due in six California counties over several months that it cannot pay because of utility non-payment. More than $3 million is due in Kern County alone. “We’re distressed by this, because we are painfully aware of the impact on our communities,” explains Carol Clawson of FPL Energy. “However, we have now been providing our electricity for months without payment and that has a severe impact on our facilities. Each of our projects has to stand on its own, and if we do not receive payment then they do not have cash for their obligations.” The five companies made their announcement to provide time for local governments to prepare for the non-payments. The predict that other renewable generators would likely be forced to take similar steps. The other three companies that have warned of non-payment are Caithness Energy which has $3 million due in Inyo County for its geothermal plants, wind energy company Coram Energy Group which will owe $18,000 to Kern County, and EnXco, a wind generator with $390,000 due in five counties, half in Riverside County. Other counties affected are Alameda, Contra Costa, Kern and San Joaquin. “This is the terrible domino effect from the failure by Edison and PG&E to pay, and from the failure of the legislature and the governor to address our problems,” says Kelly Lloyd of enXco. “California taxpayers have paid $3 billion on the spot market to fossil-fuel generators, and the governor has completed contracts worth tens of billions more with these generators — all at prices higher than renewables have agreed to accept. Yet nothing has been done for in-state green energy.” Renewable companies generate 12 percent of the power in California, enough for five million homes. In total, Edison and PG&E owe them more than $500 million, they claim. The creditors committee has called on the legislature and the governor to promptly pass SB47X, which would set their prices for five years at less than half current pricing, and below the prices being paid in long-term contracts to out-of-state fossil-fuel generators. SB47X would save taxpayers $4.5 billion over the next five years. Additionally, the renewables need the governor to complete his negotiations with the utilities aimed at making them solvent so they will have funds to pay renewables.


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