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.
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| 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]
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| 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]
[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.
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