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PG&E facilities valued

The Association of California Water Agencies (ACWA) has released a report on the value of Pacific Gas and Electric (PG&E) hydroelectric facilities. Last year PG&E announced plans to sell the 68 power plants, which ACWA values at US$3-4B.

The ACWA report, Valuation of PG&E hydroelectric facilities based upon primary function, identifies three concerns relative to the divestiture: market power, water management, and the resultant valuation of the facilities. The report also identifies facilities that provide the opportunity for environmental enhancements.

The report notes the following conclusions:

•The Helms pumped storage plant could be operated under the state’s Independent System Operator in order to maximise ratepayer benefits.

•Water agencies must get operational guarantees before divesting PG&E water management facilities that could impact water operations.

•The remaining PG&E facilities can be transferred without significant water supply impact.

Using the valuation report as a starting point, ACWA hopes that the California Public Utilities Commission and the state legislature can consider the overall divestiture while still mindful of the individual operating characteristics and value of different hydroelectric facilities.

The report cautions policymakers that a ‘one size fits all’ treatment of the PG&E facilities does not recognise important differences. The report was presented to key legislators, and is being distributed to facilitate divestiture proceedings which could take place soon.