SDG&E Seeks Authorization to Acquire El Cajon Energy Facility

San Diego Gas & Electric applied at the California PUC for authority to acquire the El Cajon Energy Facility from CalPeak Power for a total purchase price of $16.8 million, to be recovered in rates with an annual revenue requirement of $4.4 million in 2012 (A. 11-01-004).

While the El Cajon Energy Facility was not selected through a Request for Offers process, SDG&E said that it represents a "unique opportunity" to acquire a resource at an, "extremely low cost that will provide significant benefits to SDG&E ratepayers."

A current contract between CalPeak Power and the Department of Water Resources governing the facility's output expires January 1, 2012, and SDG&E ownership would commence after the expiration of the contract.

SDG&E said that ownership of the plant would be consistent with its long-term procurement planning process, since the LTPP has identified a need for existing units that meet local and system resource adequacy (RA) requirements, and a need for certain ancillary services, including quick start natural gas-fired resources to back up intermittent resources such as renewable resources.

The El Cajon Energy Facility is currently utilized by SDG&E to meet existing bundled customer local and system RA need. "Acquisition of ECEF will help SDG&E meet its continuing need for bundled customer local and system RA requirements," SDG&E said.

SDG&E estimated that the remaining life of the facility is at least 15 years.