BPA agrees to price cut on California contract

By the OGJ Online Staff

HOUSTON, Dec. 14 -- The California Department of Water Resources said the Bonneville Power Authority has agreed to reduce what it charges for electricity under a long-term contract signed earlier this year.

The average price of power for the 18 Mw contract was cut to $29/Mw-hr from $55/Mw-hr, the DWR said. The contract expires Apr. 31, 2002. Following a sharp decline in electricity prices, consumer groups and state lawmakers have stepped up criticism of high-priced contracts the California agency signed at the height of last winter's power crisis.

State lawmakers put the DWR in charge of buying electricity on behalf of the state's utilities after an unprecedented increase in wholesale prices outstripped the ability of the utilities to pay the bills. A retail rate freeze kept the utilities from passing the higher costs on to consumers.

A DWR spokesman declined to say if the agency is attempting to renegotiate other deals, but at least two companies have said they are in talks with the DWR. Independent power producer Calpine Corp. has said the DWR asked to redo its contract but has been closed mouthed about the details.

Calpine Corp. has three contracts to sell the DWR 2,500 Mw of power for about $13 billion over 10-20 years. The company also committed to spend $4 billion in 4 years to build power plants in California. Analysts estimated the deals were worth $70-$80/Mw-hr.

Officials with NRG Energy Inc. said during a conference call Friday DWR has approached them about renegotiating a contract, but CEO Dave Peterson said the company hasn't made any commitment. He said the NRG might be willing to accept a price reduction to existing market levels of about $30/Mw-hr in exchange for an extension of the contract.

"We could give them price flexibility without affecting our position," he said. NRG owns a net stake in 1,569 Mw of power plants in California.

DWR also reported it has signed a new 2-year, 200 Mw contract with Intercom Energy Inc. for peaking power for $45/Mw-hr. A DWR spokesman said two additional long-term power deals are still under negotiation.

DWR has signed 56 long-term power purchase deals with 29 counterparties. The contracts, including those still under negotiation, are worth an estimated $42 billion. DWR said these costs were accounted for in its revenue requirement filed with the California Public Utilities Commission in November.

Related Articles

API relaunches 'Vote4Energy' program leading up to 2016 elections

06/29/2015 The American Petroleum Institute wants US voters to elect candidates in the 2016 elections who support broader development of the nation's abundant...

Shell gets state's okay for US Appalachian ethylene plant plan

06/29/2015 Pennsylvania's Department of Environmental Protection (DEP) has approved a permit allowing Royal Dutch Shell PLC subsidiary Shell Chemical LP to pr...

Eagle Ford briefs

06/11/2015

ETP provides details on Revolution pipeline, processing project

06/08/2015 Energy Transfer Partners LP (ETP), Dallas, has released details on its Revolution project for the Marcellus and Upper Devonian areas of western Pen...

Litigation trends

06/08/2015 Oil & Gas Journal's "General Interest" section includes stories about economics, government, health, safety, and the environment, com...

Petroperu advances Talara refinery modernization

06/08/2015 State-owned Petroleos del Peru SA (Petroperu), through a contractor, has let a contract to Flowserve Corp., Irving, Tex., for the supply of pumping...

Oil-demand curve's flattening adds to pressure on OPEC

06/05/2015 When leaders of the Organization of Petroleum Exporting Countries meet in Vienna on June 5, they should heed a stern signal from the oil market.

Coast Guard cadets summoned to battle climatological foe

06/01/2015 Confusion evident in President Barack Obama's commencement address at the Coast Guard Academy raises a question bearing on American foreign policy:...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected