On December 21 all wind bids under the BRPU were put on hold by the California Public Utilities Commission (CPUC), although non wind contracts were allowed to go ahead (Windpower Monthly, post press insert, January 1995). But the SCE is continuing to challenge the auction and is asking federal regulators in Washington to step in. The regulators recently decided that a New England state cannot order utilities to buy power at a higher price than avoided cost.
The CPUC was expected to hold a pre-hearing conference on the wind bids on January 30. SCE asked the Federal Energy Regulatory Commission (FERC) on January 9 to block the auction on the basis that its "stranded cost" will jump to $4 billion in nominal dollars. SCE has also claimed the BRPU bids will cost it an extra $1 billion in high-priced power between 1997 and 2003.
It is not clear if the FERC will consider the appeal. Yet the federal commission may feel pressure from the incoming conservative Congress to protect a utility from such a state-mandated purchase. SCE is specifically arguing that the BRPU decision violates the Public Utility Regulatory Policies Act (PURPA), which some also believe the new and anti-government Congress may attempt to gut.
There is little precedent for the BRPU. But the FERC recently decided that the state of Connecticut cannot order utilities to pay higher than avoided cost -- -which begs the question of what are California utilities' avoided costs. Pacific Gas & Electric (PG&E) and San Diego Gas & Electric (SDG&E) are not challenging the BRPU outcome, but have not objected to SCE doing so. The CPUC has ordered the utilities to proceed with 1200 MW in contracts awarded to independent producers, but to hold all wind bids. The December decision has been seen as a blow to wind. The CPUC's limited rehearing will determine if any wind bids should be disqualified. Limited re-bidding would then be held to reallocate any capacity disqualified.