Regulators should stop playing the greed card

摘要

In early February, Western GeoPower (WGP) announced its termination of a 20-year geothermal power purchase agreement (PPA) with Pacific Gas and Electric Co. (PG&E). A WGP press release explains that the company terminated the agreement because a regulatory approval condition had not been obtained within a 180-day time period stipulated in the PPA. WGP's CEO, Kenneth MacLeod, acknowledged in California Energy Markets, an energy trade publication, that increased prices for renewable power had made the PPA "less attractive" and that the ability to execute a new PPA at a higher price was in the company's best economic interest. In the same article, a spokesperson for the California Public Utilities Commission (CPUC) characterized WGP as motivated by "greed." The CPUC spokesperson was also quoted as saying that, while "legal," WGP's conduct was "a clear example of a seller using market power." What are the policy implications of this episode? Should it be, as the CPUC intimates, chalked up as an abuse by a "greedy" generator, or does it highlight a "major disconnect" in the pursuit of renewable power?