12/15/2019

PG&E customers face higher bills under PUC battery plan

SAN JOSE — PG&E customers might confront higher monthly bills under a regulatory plan that directs the utility to seek new electricity sources, such as batteries, to replace three power plants — including one in San Jose.

The power plants involved are the Metcalf Energy Center in south San Jose, along with Northern California’s Feather River Energy Center and the Yuba City Energy Center. All three now operate on fossil fuels.

“The claim for all these plants is that they are no longer economic to operate” at current electricity prices, according to a proposal prepared by staff of the state Public Utilities Commission, or PUC.

PUC commissioners are scheduled to consider the proposal in January. It would oblige PG&E to seek alternative energy sources, including batteries, to replace the electricity produced by the three Calpine-owned plants.

San Jose’s Metcalf Energy Center is powered by natural gas and is capable of producing 605 megawatts of electricity, enough for roughly 454,000 homes. San Jose has about 328,000 housing units.

This proposal also could pit PG&E and the PUC against Calpine and the California Independent System Operator, or CAISO, which operates most of California’s electricity system and markets. Calpine and CAISO seek to to designate all three plants as “must-run” for reliability purposes, the PUC stated. 

“Deteriorating market dynamics and substantial capital required to maintain availability” have prompted Calpine to assess the future of the Metcalf Energy Center, Mark Smith, Calpine’s vice president of governmental and regulatory affairs, stated in a June 2017 letter to CAISO.

Calpine also stated that Metcalf, despite first going online in 2005, must soon undergo extensive upgrades and maintenance to modernize the complex.

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