Thursday, April 2, 2015

Catalina Island Electricity

Southern California Edison (SCE) owns and operates the Pebbly Beach Generating Station, a 9 megawatt diesel-fueled electricity generating plant located in Avalon. The diesel fuel is shipped in by barge from the Port of Los Angeles.  The net book value of the Pebbly Beach Generating Station generation-related assets as of August 31, 2000, was $11.217 million.[1]    See Attachments 1 and 4 for electricity rates.  See Attachment 5 for a utility rate map.  See Attachment 6 for an explanation of baseline electricity service and an example of how to calculate electricity bills.

Pebbly Beach Generating Station

             Pebbly Beach Generation Station – Catalina Island Forecasting Method. SCE’s TY 2009 forecast for Pebbly Beach Generation Station[2] O&M expense was $5.38 million (constant 2006$). SCE decided on a forecast for labor and non-labor expenses.  SCE used 2006 recorded expenses to forecast labor and anticipated that the staffing would remain constant at 2006 levels in TY 2009.  SCE used a 3-year average of 2003-2006 expenses to forecast labor, because SCE found this method to accurately reflect current and future staffing levels. The Public Utilities Commission (PUC) reviewed SCE’s request and found SCE’s forecast methodology to be appropriate.  The PUC found SCE’s TY 2009 forecast for Pebbly Beach Generation Station O&M expense of $5.38 million reasonable.[3]

            SCE forecasts $24.085 million of capital expenditures on Pebbly Beach generating station capital projects.  SCE’s micro turbine project involves installing up to 25 micro turbines providing 60 kW to Pebbly Beach customers. These micro turbines will be located on land adjacent to the current Pebbly Beach Generating Plant. Although this land is owned by the Catalina Island Company (Island Catalina) and is being used by a tenant for a container storage facility, SCE has the right to request that Island Catalina provide the land to SCE for electric utility purposes pursuant to a memorandum agreement between SCE and Island Catalina. As a condition for use of the site, Island Catalina requires SCE to design and improve a new site. SCE has included $0.62 million in its capital expenditures for the relocation of the existing container storage facility at this site. Although SCE will not retain any assets from relocating the tenant’s containers, the cost is a necessary component of SCE’s ability to place its micro turbines on the land. The PUC recommended that this relocation cost should be capitalized as land rights as long as the land parcel is being used for utility purposes.[4]

Pebbly Beach Generating Station

             During the Record Period (January 1 through December 31, 2008), SCE purchased 57,806 barrels of diesel fuel and burned approximately 55,000 barrels of diesel for electric generation at Santa Catalina Island. The average total cost per barrel was $146.39 [annual cost of $8,051,450]. SCE purchased fuel from a major supplier, Southern Counties Oil Company (Orange, CA), under a long-term (3 year) contract. SCE states considering the contract structure, which is the lowest competitive pricing available, and the integrity of the supply, its diesel purchases should be found reasonable. SCE contracts with Catalina Freight Lines to provide the truck and barge transportation from the refinery to the generating facility. SCE indicates that the bulk wholesale rate is less than the tariff rate normally charged for deliveries to the island and should be found reasonable.  In its testimony, the DRA  generally agreed with SCE’s assertions and did not find the costs to be unreasonable. DRA also indicated that it reviewed the one forced outage during the Record Period, which lasted longer than 24 hours and did not find the outage to be unreasonable. Based on the testimonies of SCE and DRA, the California Public Utilities Commission (CPUC)  concluded that SCE’s Catalina diesel operations during the Record Period were reasonable.[5]

[1] Rocky Mountain Insurance Information Association (RMIIA).
[2] On May 10, 2007, a major fire started at Catalina Island, north of the city of Avalon near a radio transmission facility. The cause of the fire is still under investigation. Over 4,750 acres were burned and the fire destroyed much of the electrical infrastructure that delivered power from SCE’s Pebbly Beach Generating Station to Catalina’s inland communities.
[3] Application of SOUTHERN CALIFORNIA EDISON COMPANY for Authority to, Among Other Things, Increase Its Authorized Revenues For Electric Service in 2009, And to Reflect That Increase In Rates, before the PUC of the State of California, Date of Issuance March 17, 2009, p. 43.
[4] Ibid, p. 196-197.
[5] Application of Southern California Edison Company (U338E) for a Commission finding that its Procurement-Related and Other Operations for the Record Period January 1 through December 31, 2008 complied with its Adopted Procurement Plan, Application 09-04-002 (Filed April 1, 2009), p. 27-28.

1 comment:

  1. If you use electricity off-peak, you get charged a significantly lower rate. This is fine if you can cook dinner after 9pm for those with electric stoves. I resisted and really thought it would be a hindrance.
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