By the OGJ Online Staff
HOUSTON, Feb. 19�Eight natural gas-fired electricity generators supplying 340 Mw of power under long-term qualifying facility contracts to Southern California Edison Co. have formed the Southern California Edison Qualified Facility creditors committee.
Berry Petroleum Co.; O.L.S. Energy�Chino and O.L.S. Energy�Camarillo; Carson Cogeneration Co.; Mojave Cogeneration Co.; Procter & Gamble Paper Products Co., a unit of Procter & Gamble Corp.; Sithe Energies Inc., US Borax Inc., and Willamette Industries Inc. said they are evaluating their options with respect to SCE's alleged failure to pay for power supplied to SCE, a unit of Edison International, under qualifying facility long-term contracts.
The group is the third SCE creditors' committee formed in the past 2 weeks. Earlier, a group of renewable energy suppliers and a group of independent generators reported forming similar organizations.
Committee members claim since November 2000, SCE has failed to pay more than $100 million for energy provided to SCE and its customers, a material breach of SCE's contractual obligations. Nonetheless, members said, they have continued to provide power without payment and without any reasonable assurances of payment by SCE.
The 1978 Public Utility Regulatory Policies Act provided incentives for construction of cogeneration plants�or qualifying facilities�through long-term power purchase agreements between generators and utilities. The price per megawatt paid to these facilities is linked to SCE's avoided cost of energy, and is not based on the spot market.
Committee members said they are currently evaluating options, noting their own creditors and suppliers are demanding payment and no comprehensive solution has been proposed to date to remedy the situation.
The committee said it believes a solution needs to address the concerns of qualifying generators and permit them to continue operating. Already, some have ceased generating because they have not been able to secure fuel, the companies said.