Clean energy: Costs rising for California consumers

Mike Florio, the lone CPUC commissioner who voted against the contract, said the new plant was not needed to meet the state's renewable energy goals, and would squander ratepayers' money on an outdated project that would not generate enough solar energy for the price. He also said it will saddle ratepayers with $1.25 billion in above market costs, which will be passed on to PG&E customers.

"I cannot in good conscience vote for such an expensive — really expensive — renewable project," Florio said. "Frankly, I think we would be better off if we simply paid the developer the $70 million that they've invested and put an end to this project."

A PG&E spokeswoman said Friday the company considered the project highly viable, given the federal loan guarantee.

"We're really committed to trying to achieve the state's goals in a cost effective way," said PG&E spokeswoman Lynsey Paulo. "If we were to cancel all previous contracts because prices have now come down, there is a likelihood that we would miss these statutory and regulatory deadlines."

Abengoa representatives did not directly address the concerns about rate hikes.

"We fully support the professional work carried out by PG&E, the DOE and the CPUC to ensure that California and the USA are at the forefront of non-polluting energies and are not reliant on external energy sources," company spokeswoman Patricia Malodemolina said in a statement Friday.

The watchdog unit also raised concerns that another PG&E power purchase agreement approved last month was overpriced. That solar panel plant, being built for an undisclosed price by North Star Solar LLC near the farming town of Mendota in Fresno County, is planned to generate enough electricity for about 12,000 homes.

Company officials disagreed that the North Star project is overpriced. The contract the company signed with PG&E was written when solar panel prices were higher, leading to a higher contract price, but has since been adjusted to reflect falling costs, the company said.

"There has been a significant drop in (solar) module prices since North Star entered into the (contract) with PG&E," said Dana Zentz, managing director of NorthLight Power, LLC, the project's developer.

"This is the primary reason we went back to PG&E and renegotiated a more than 20-percent drop in the price of our original contract price. North Star Solar provides a strong economic value to ratepayers as well as preserving the economics of the project," he said.

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