Deals Provide Reliable Power
to Customers at Reasonable Prices
SAN FRANCISCO - Pacific
Gas and Electric Company has signed five-year agreements with 131
of its qualifying facilities (QFs), ensuring the utility and its
customers receive a reliable supply of electricity at an average
energy price of 5.37 cents per kilowatt-hour.
Under the terms of the agreements,
Pacific Gas and Electric Company will assume the QF contracts. The
company will pay the pre-petition debt on these 131 QF contracts
- totaling $740 million - on the effective date of the plan of reorganization.
The total amount the company owed to QFs when it filed for Chapter
11 was approximately $1 billion.
For certain of these QFs,
if the effective date has not occurred by July 15, 2003, the company
will pay 2% of the principal amount of the pre-petition debt per
month until the effective date of the plan of reorganization or
until July 15, 2005, when it will pay the remaining pre-petition
debt.
By locking into the average
fixed cost, Pacific Gas and Electric Company will help protect its
customers from the price fluctuations in the wholesale market. A
recent CPUC decision (D.01-06-015) allowed QFs to enter into long-term
contracts at an average energy price of 5.37 cents per kilowatt-hour.
"We are pleased to have
reached agreements with more than 130 of our small power producers,"
said Joe Henri, Pacific Gas and Electric Company's director of electric
portfolio management. "This will help bring stability to the market
and allow our customers to receive reliable power at reasonable
costs."
The 131 QF contracts represent
nameplate capacity of 2,950 megawatts compared to PG&E's total QF
contract nameplate capacity of 4,400 megawatts. On an average annual
basis, the company receives approximately 2,400 megawatts from all
of its QFs, and the 131 QFs represent approximately 1600 megawatts
of the total amount.
Each of the agreements requires
formal approval from the U.S Bankruptcy Court. Several of the agreements
have already been approved, and the company will be making filings
for the remainder in the near future.
Attached is a list of the projects.