Sempra’s Cross-Border Wind Project Put On Hold Temporarily Due to High Cost of Electricity to Consumers

Click on image for larger version to read.

California PUC Puts Off Decision Until Thursday, March 22nd

SEMPRA’s controversial plan for a large-scale wind farm in Baja, Mexico, has been placed on the back burner – but only temporarily – by state regulators because of a question that utility customers – that’s us – would pay too much for the electricity.

This is the same cross-border project that has come under intense criticism as it would send 15,000 green jobs to Mexico.   SDG&E and Sempra – its parent – have been pushing this project, the Energia Sierra Juarez project, for 5 years with claims that it would supply power to an estimated 65,000 homes.  Sempra has reportedly leased sufficient lands in Mexico to eventually install turbines along a hundred-mile stretch atop the Sierra Juarez.

State laws that regulate negotiations between corporate affiliates – here, SDG&E and Sempra U.S. Gas & Power are both subsidiaries of the San Diego-based  Sempra Energy – require public disclosure of the terms of the proposed 20-year power purchase agreement with the Baja company before it is approved by state regulators, the California Public Utilities Commission.

At their public meeting in San Francisco, the California PUC had questions whether the pricetag of an estimated $820 million was really competitive. SDG&E customers have to pay that amount over the life of the contract.   Commissioner Mike Florio raised the issue, which delayed a vote on the contract until this Thursday, March 22nd.  Florio had previously worked as lead attorney for a utility watchdog organization. Florio stated:

“It’s still higher than what we could do. If we’re going to be successful with our renewable energy initiative, we have to prove to the world not just that we can do it — but that we can do it with reasonable cost to consumers.”

Energia Sierra Juarez would charge $106.50 per megawatt hour,  which is more than double the price of the most cost-efficient wind farms in the United States, like in Texas and the Midwest, according to Mark Bolinger, a research scientist at Lawrence Berkeley National Laboratory.

The main objections to Sempra’s project – besides the costs to consumers – has been the issue of the exportation of green jobs south of the border if the project is approved. The installation still must get approval for a cross-border tie-in to transmission lines in California that requires a presidential permit from the Department of Energy.  Environmental groups on both sides of the border have also raised serious objections to the project for numerous reasons.

California legislators passed a resolution condemning or opposing the project.  On September 9, 2011, both houses passed SJR 13 which calls on the Secretary of the U.S. Department of Energy to reject Sempra Energy’s application for the presidential permit to construct the trans-border transmission line between Mexico and San Diego County.

But by the tone of the debate on the PUC, it appears the project will get approved – unless there is a last minute groundswell of grassroots opposition.

Here is the U-T San Diego report from March 20.