Published Thursday, October 5, 2000

200 mobile generators may ease power crunch Concerns are raised over cost, effectiveness and long-term environmental effects of such an increase By Andrew LaMar TIMES STAFF WRITER

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SACRAMENTO -- Worried about a looming power shortage next summer that could dwarf the troubles of the past three months, energy authorities moved ahead Wednesday with contracts for 200 mobile generators -- despite concerns about their cost, efficiency and potential environmental impacts.

The generators to be used during peak demand on the state's electrical supply could produce 2,045 megawatts, which would help cover a 5,500-megawatt projected shortage. But it will come at a cost -- perhaps as much as $255 million a year over the next three years that could be entirely forced upon consumers.

Even with more power coming on line, several members of the board governing the California Independent System Operator, which oversees the state's power grid, offered gloomy forecasts for the upcoming summer. Many said the state faces a situation where rolling blackouts, employed when energy demand reaches total available supply, could become the norm.

"Even doing everything possible, there is still a high, high likelihood this is going to occur," said board member Terry Winter, who implored the board to start negotiating contracts for extra generators immediately.

Several ISO board members endorsed Winter's concerns and said delaying the decision any longer would make it difficult for companies to get the permit approvals they need to put the generators in place by June 1. The agency requested bids in August and received 79 proposals from 24 companies by last week's deadline.

"The decision has to be made today, or we don't have this stuff next summer," said Carolyn Kehrein, a Dixon energy consultant who serves on the ISO board.

But Jim Hendy, a board member who works at the California Public Utilities Commission, criticized the ISO for failing to include public comment on something that most certainly would be funded by ratepayers. He said the proposal to contract for peak generators was "thrown together" and required more study.

"The job of this agency is to keep the lights on," shot back Jan Smutney-Jones, the chairman of the ISO board. "We don't have the time to sit around and wait, and that's my whole point."

Hendy, however, was not the only one to complain. Gary Heath, executive director of the state's Electricity Oversight Board, told the ISO board that it had a responsibility to know the exact cost of entering into the contracts before approving them.

Wednesday's board vote provided guidelines for negotiating the contracts but left it up to its staff to work out the details, including whether to sign longer term agreements of five years or more.

The board's decision plays into the hands of power generators, said Eric Woychik, who represents consumers' interests on the board. He said it isn't feasible to expect the ISO staff to negotiate scores of contracts in two or three weeks with power generators that, he said, have "a gun to our heads."

"How are we going to have the ability to cut good deals?" Woychik asked. "I do not understand how we can cut good deals in that context."

A state energy crisis unfolded over the summer as hot weather exacerbated short electrical supplies across the western United States. On several occasions, state authorities came close to shutting down service to some areas.

http://www.contracostatimes.com/news/california/stories/power_20001005.htm

-- Martin Thompson (mthom1927@aol.com), October 05, 2000