Powering California green

You’d think population growth, limited water supplies and soaring gas prices would hinder California’s largest utilities from delivering 20 percent renewables by 2010.

Not so, say the utilities.

Rosemead, Calif.-based Southern California Edison (SCE) and San Francisco-based Pacific Gas & Electric (PG&E) say they’re on board to deliver over 20 percent of their portfolio with renewable energy.

At least on paper, that is.

In an effort to meet the 2010 deadline, today SCE said the California Public Utilities Commission (CPUC) approved two renewable energy contracts for wind and solar PV—the the Granite Wind project (up to 81 MW) and the FSE Blythe project (up to 21 MW).

According to the Edison International (NYSE: EIX) subsidiary, these projects are expected to be online by December 2009.

Last year SCE said it delivered nearly 17 percent renewable energy from its power portfolio, while this year at 2,680 MW, the company said it is delivering closer to 16 percent.

“Load growth factors into the number,” explained SCE’s manager of origination for the renewable and alternative power group, Mike Marelli.

“We’ve had load growth and we’ve been active in the marketplace, but it takes a while to bring these projects online.”

Alternatively, PG&E, Northern California’s utility giant, said it expects to deliver 13 percent renewables for 2008, which is slightly lower than the 14 percent it was aiming for earlier this year.

According to PG&E’s environmental news representative, Jennifer Zerwer, the percent drop is due to lower energy production from its small hydroelectric projects.

“Over the last 30 years, because of California’s aggressive energy policies, per capita demand has remained flat, while the rest of the nation has jumped 50 percent,” countered Zewer.

“At the same time, California’s economic output has increased 40 percent, versus 8 percent for the rest of the country,” she continued.

At 2,839 MW and counting, Zerwer said PG&E is planning for an increase in California’s population and demand for energy.

“We do keep to California’s loading order—energy efficiency and demand response, renewable energy, and once exhausted, fossil fuels,” listed Zewer.

Zewer said PG&E, which serves 17 million northern and central California customers, currently has renewable contracts for over 21 percent of its portfolio.

“We’ve actually queued sufficient renewable energy contracts and expect to achieve 20 percent renewable deliverables in the 2012 time frame.”

Marelli pointed out that while SCE is currently at the 16 percent mark, the current contracts in place could help the company exceed the 20 percent mark.

“It’s a competitive marketplace and we’re trying to find the best projects for our customers,” continued Marelli.

“We’re doing everything we can, as quickly as we can, to bring more renewables into our portfolio. Best case scenario, and all the projects come through, we’ll be well beyond 20 percent.”

But according to Marelli, that best case scenario is more likely a long shot.

The CPUC’s Renewables Portfolio Standard program, one of the most ambitious renewable energy standards in the country, requires investor owned utilities, energy service providers, and community choice aggregators operating in California to obtain 20 percent of their retail sales from renewable energy sources by 2010.

Under the flexible compliance provision of state law, the utilities are only required to have the contracts in place, and do not have to actually be delivering the all of the energy.

According to both utilities, this is largely due to transmission limitations.

“Always keep in mind that there are several developmental hurdles to get through,” reminded Marelli.

Today’s approved contracts from the Southern California utility—the Granite Wind project and the FSE Blythe project—are expected to initially deliver 42 MW and 7.5 MW respectively.

According to SCE, the Granite Wind project is being co-developed by Renewable Energy Systems Americas Development, RENEWergy LLC, and G.H. Energy Limited.

The FSE Blythe project, which is to be developed by First Solar, is expected be a 7.5 MW thin film facility with the potential to expand to 21 MW.

For SCE, the FSE project marks its first utility-scale thin film solar project in California.

PG&E has yet to add utility scale thin film to its power mix.

While financial terms of the deals were not disclosed, SCE said the CPUC determined both projects to be at or below the Commission’s market pricing benchmark.

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