SAN DIEGO, May 14, 2007 (PRIME NEWSWIRE) -- San Diego Gas & Electric (SDG&E) today announced it has selected bids and signed power-purchase agreements with two companies to supply nearly 130 megawatts (MW) of quick-start generation to be brought online by 2008. The winning bidders, J-POWER USA Development Co. Ltd ("J-Power") and Wellhead Power Margarita, LLC ("Wellhead Power"), will build "peaker" plants -- small, efficient power plants used only during high-demand periods of electricity usage -- to help SDG&E meet the region's reliability and energy needs.
J-Power and Wellhead Power responded to a Request for Offers SDG&E issued in October 2006 for up to 250MW of new, in-basin peaker generating units. SDG&E initiated the competitive bid process in part in response to the record-high electricity use during last summer's heat wave.
"As the demand for electricity in the region continues to grow, SDG&E's role is to plan ahead to procure the resources to meet our customers' energy needs," said Debbie L. Reed, president and chief executive officer for SDG&E. "These contracts will help us in our task of ensuring future energy reliability in the San Diego region as part of our long-term procurement plan. In addition, these companies use peak generation technology that is efficient and cleaner burning to meet our goal of delivering energy in an environmentally sensitive manner."
SDG&E's Procurement Review Group, comprised of California Public Utilities Commission (CPUC) staff, consumer advocates and other non-market participants, and an independent evaluator reviewed the bids prior to SDG&E making the final selection. Out of the nearly 30 bids received and evaluated, SDG&E selected resources based on least-cost, best-fit procurement criteria. Each of the proposed contracts is for a 25-year period.
* J-Power will build two simple-cycle, gas-fired peaking plants with a total capacity of 86.5MW on SDG&E-owned property at the utility's Pala substation in northern San Diego County.
* Wellhead Power will develop a single 46.5MW simple-cycle, gas-fired turbine adjacent to an SDG&E-owned substation in southern Orange County.
At the end of the term of their power-purchase agreements, each of these projects will transfer ownership of the peaker units to SDG&E.
SDG&E has filed with the CPUC for approval of the contracts. A commission decision is expected by October 2007.
SDG&E currently serves 3.4 million consumers through 1.4 million electric meters and more than 830,000 natural gas meters. The utility's service area spans 4,100 square miles and serves customers in more than 125 communities from Southern Orange County to the Mexican border. SDG&E is a regulated subsidiary of Sempra Energy (NYSE:SRE). Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company. To learn more, go to www.sdge.com