Under the agreement, PG&E will receive energy from a solar farm being built by North Star Solar, a joint venture of the Norwegian REC and US-based Summit Power Group Inc., about 40 miles west of Fresno, Calif.
PG&E’s application to regulators asks them not only to approve the agreement, but to allow the utility to recover the as-yet undisclosed cost of the deal from consumers.
Prices for such contracts are typically kept confidential, however PG&E has indicated the power price in the contract will exceed the CPUC's benchmark price of 10.2 cents a kilowatt-hour, plus additional fees for power generated during high-demand daytime hours.
Under California’s Global Warming Solutions Act of 2006 PG&E and other utilities in the state are required to use solar, wind or other renewable sources to generate one-third of the power they sell by 2020.
The Act itself survived a ballot challenge earlier this month when an attempt to void it, Proposition 23, was defeated by voters by a 21 percent margin.
Proposition 23 would have suspended the state’s efforts to address climate change until California’s unemployment rate drops below 5.5 percent. It currently stands at 12.4 percent.
Gov. Arnold Schwarzenegger and others argued passage of the proposition would have derailed efforts to reduce greenhouse emissions in the state to their 1990 level by 2020, or about 15 percent below where they stand today.
That history is one reason regulators are expected to look favourably on PG&E application. However, the North Star solar power plant itself – a facility that will be constructed with solar PV modules manufactured by REC – still has a way to go in the approval and planning process.
Among other things, the project is still awaiting the approval of the California Public Utilities Commission, completion of CAISO interconnection studies, and receipt of certain environmental and other permits related to the site in Fresno County, California.
It also requires that external equity and debt financing be secured on behalf of North Star Solar, as it is not REC’s intention to act as equity owner of the project.
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