Calif Regulators Approve Sempra Unit's Contract With EnerNOC

California regulators on Thursday approved a contract that Sempra Energy's (SRE) electric utility signed with a unit of EnerNOC Inc. (ENOC) to provide backup power generation from diesel generators.

San Diego Gas & Electric has a contract with EnerNOC to provide 25 megawatts of power by coordinating generation from several small diesel back-up generators. The output from the generators is considered "peaking power," or electricity that is only called into service during times of high demand when extra generation resources are needed.

The value of the contract was kept confidential, but Commissioner John Bohn said "it will save ratepayers millions of dollars over the life of the contract" and is important for SDG&E's resource adequacy.

Two of the five CPUC commissioners opposed the contract over concern that conservation should be utilities' top choice for meeting peak power demand, not diesel-fueled power generators, which generally produce more greenhouse-gas emissions than other resources such as natural gas-fueled generators.

But Bohn and two other commissioners prevailed, arguing that the diesel generators, which are located close to densely populated areas of San Diego, will be rarely used but will be valuable resources when they are needed.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; [e-mail]