Commission Approves Energy Purchase Agreement Between SDG&E and Nearby Pio Pico Energy Center

The state Public Utilities Commission gave its unanimous blessing today to an energy purchase agreement that clears the way for construction of a 305-megawatt power plant in Otay Mesa.

The 5-0 vote by the CPUC approves a 25-year deal between San Diego Gas & Electric and the Pio Pico Energy Center.

Terms calls for the plant to be functional by Sept. 1 next year, with the flow of electricity to SDG&E starting in 2017. Until then, Pio Pico will be considered a merchant generator,  selling on the wholesale market, CPUC President Michael Peevey said.

Peevey said the plant was "a critical piece to the puzzle" of replacing the retired San Onofre Nuclear Generating Station.

"The main point here is that this plant will provide 305 megawatts of needed capacity to one of the local areas impacted by the SONGS closure," Peevey said. "Our state needs this capacity to ensure public safety and economic prosperity."

A previous purchase agreement between the utility and power plant operators, with different terms, was rejected by the commission. Peevey said he urged them to return with a plan that fit the need to fill the nuclear void.

Environmentalists opposed the plant, contending the loss of supply from San Onofre should be filled by renewable sources.

"Now, SDG&E ratepayers in San Diego face financial and environmental burdens for at least the next 25 years, and all Californians will feel this ripple effect on our climate, our health and our economy," said San Ysidro resident Roddy Jerome, in a statement put out by the Environmental Health Coalition. "The worst part is, it doesn't have to be this way."

According to the coalition, the plant will create more pollution in the South Bay, put ratepayers on the hook for at least $1.6 billion and have a detrimental impact on climate change.