Regulators Approve 500MW California Solar Plan

The California Public Utilities Commission (CPUC) Thursday authorized a five-year solar photovoltaic program to develop up to 500 megawatts (MW) of solar PV facilities in the range of 1 to 20 MW in Pacific Gas and Electric Company’s (PG&E)(NYSE: PCG) service area.

The PV program allows for development of solar facilities owned by PG&E and also owned by third parties. Under the utility-owned portion of the PV program, PG&E is authorized to install up to 250 MW of PV facilities from 1 to 20 MW in size in its service area at a rate of 50 MW per year. Similarly, under the third-party owned portion of the program, PG&E can solicit energy from 250 MW of PV facilities from 1 to 20 MW in size located in its service area, also at a rate of 50 MW a year.

The CPUC authorized expenditures of up to $1.454 billion for the capital
costs associated with the utility owned portion of the PV program.

If PG&E develops fewer than 250 MW over the five year duration of
the PV program, this amount will be adjusted based on the number of
megawatts PG&E does develop. Pricing under the third-party owned PV
will be based on competitive solicitations, with the successful bidders
entering into a 20-year power purchase agreement with PG&E.

The program essentially mirrors Southern California Edison’s (NYSE: EIX) distributed-generation solar program. And it reflects a recent trend in solar development, focusing on smaller utility-scale projects in the short-term, while siting and permitting issues are resolved for the massive 100+MW arrays that have proposed for the California desert.

"Smaller scale projects can avoid many of the pitfalls that have plagued larger renewable projects in California, including permitting and transmission challenges," CPUC President Michael R. Peevey said. "Because of this, programs targeting these resources can serve as a valuable complement to the existing Renewables Portfolio Standard program."

Additionally, yesterday’s decision authorizes PG&E to recover the costs of a 2-MW pilot project the utility built to demonstrate the viability of this program. That facility is online and operating in Vacaville, California.

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