Utility to Pay Renewable Energy Suppliers in California

Southern California Edison says it has reached agreement to pay past-due obligations to renewable energy generators in the state of California.

ROSEMEAD, California, US, 2001-12-18 [SolarAccess.com] The plan amends an agreement reached last June with qualifying facilities (QF) by adopting new payment terms to accommodate SCE’s financial dilemma represented by the procurement settlement that SCE reached in October with the California Public Utilities Commission. “We appreciate the large number of QFs who have supported our effort to deal fairly and equitably with all creditors and not to single out one group for preferential payments,” says Stephen Frank of SCE. “We reaffirm our effort to pay all of our past-due obligations with interest during the first quarter of 2002.” SCE suspended payments to QFs earlier this year after retail rates prevented the utility from recovering wholesale electricity costs for several months. It resume forward payments in March and, in June, reached an agreement with most QFs on the payment of past-due amounts. That agreement included an immediate 10 percent payment, with the balance to be paid following adoption of a plan to restore SCE’s creditworthiness. “We believe this revised payment plan represents a positive outcome for CalEnergy and other QFs as we seek to recover payments for power delivered at the end of last year and earlier this year,” says Doug Anderson of MidAmerican Energy Holdings, the parent company of CalEnergy. CalEnergy dropped litigation it recently filed against SCE, choosing instead to accept the new payment arrangement. QFs are small renewable and natural gas-fired power plants that provide one-third of the electricity needed by SCE customers. CalEnergy provided electricity from geothermal facilities in the state. The amended plan provides for renewable power purchases at a fixed price of 5.37 cents/kWh over the next five years, eliminating some of the price volatility in California’s energy market during the energy crisis. Negotiations continue with some QFs who have not agreed to the new payment plan. A subsidiary of Edison International, SCE is one of the largest electric utilities in the United States, serving 4.3 million customer accounts in a 50,000 square mile service area within central, coastal and Southern California.
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