SAN FRANCISCO -- A proposed wave energy project off Northern California was dealt a potentially crippling blow last week when regulators here rejected a power purchase agreement between Pacific Gas & Electric Co. and Finavera Renewables.
The California Public Utilities Commission refused a 15-year agreement under which Finavera would have run the 2-megawatt offshore buoy system in Humboldt County, Calif., to provide power to the investor-owned utility PG&E.
The PUC said the project is not currently viable and noted that a prototype Finavera buoy deployed off the Oregon coast in 2007 sank within six weeks.
"The wave energy industry is in a nascent stage," the PUC said in its ruling, arguing that PG&E had failed to demonstrate enough advancement to justify a power purchase agreement. "There is significant uncertainty surrounding wave technology viability."
Also rejected was a bid for $6 million to fund PG&E's proposed WaveConnect projects. The projects are meant to confirm the feasibility of extracting power from ocean waves, but the utility did not "provide a sufficient showing that the technology will be able to perform," the ruling said.
In response, PG&E and Finavera officials said they intend to continue pressing their case. PG&E said the rate request and 15-year agreement were reasonable because the project is small and unlikely to affect ratepayers if it never comes through.
"A failure to approve the project could negatively affect wave power development in California," said PG&E in a statement responding to the PUC action.
For their part, Finavera executives have started looking for alternative funding sources for the research and development stage of the project. The company is currently looking at forming a private consortium, according to a joint statement with PG&E.
Finavera's 2-MW project in Humboldt County was projected to come online on Dec. 1, 2012. It is not clear how the ruling will affect that projection.
Click here to see the PUC ruling.