California power crunch spurs many questions

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State power crunch spurs many questions

December 9, 2000

-------------------------------------------------------------------------------- CALL US Are you a business on Southern California Edison's interruptible program? Are you being hit with high premiums? The Orange County Register would like to talk to you about how the energy crisis is affecting you. Please call Kate Berry at (714) 796-2235 or Tony Saavedra at (714) 796-6930.

-------------------------------------------------------------------------------- Related story: • Federal officials jump into state electric crisis

-------------------------------------------------------------------------------- By KATE BERRY, PAT BRENNAN and TONY SAAVEDRA The Orange County Register

For days, California has been on the verge of temporarily shutting off power to parts of the state in "rolling blackouts" because of an electricity shortage. The crisis in California is expected to deepen next week as temperatures continue to drop in the Pacific Northwest. Meanwhile, California is spending many timeswhat it usually pays to generating companies for electricity. Here are some questions and answers on the crisis:

Q: How did we get into this mess in the first place?

A: When California deregulated its electricity market in 1998, the state's electric utilities, which own the transmission lines, were supposed to separate themselves from the generators, which own the power plants.

As a result, the state's three largest electric utilities - Southern California Edison, San Diego Gas & Electric, and Pacific Gas & Electric - sold off most of their power plants. Many of the plants were bought by out-of-state power producers, including AES Corp. in Arlington, Va., Duke Energy in Dallas, Dynegy Inc. in Houston, Reliant Energy in Houston, and Southern Co. in Atlanta. These are all publicly traded, for-profit corporations. No new energy plants have been built to keep up with California's burgeoning demand.

Q: Who decides if we have a power alert and whether to pay millions to import electricity from out of state?

A: The California Independent System Operator, a quasi-governmental agency, was created by legislation in 1996 as part of the move to deregulate the market. The agency, with 400 employees and a start-up budget of nearly $300 million, manages 75 percent of the state's power grid. If the state's reserve of electricity dips below 1.5 percent of daily demand, then a Stage 3 alert is called, which could mean rolling blackouts. The ISO has averted blackouts in recent days by buying power from out-of-state plants at higher prices.

Q: How much of the power generated in California by out-of-state plant owners is staying here?

A: That's a difficult question. For-profit generators are not regulated and don't have to divulge how much, to whom, or at what price they sell power. The California Public Utilities Commission has repeatedly requested information to determine if the generators are creating a false shortage. But the generators are not obliged to provide that information and have refused to do so.

Q: Does anyone have the authority to force California power plants to sell their power here?

There is no way to restrict the unregulated power generators.

Gov. Gray Davis suggested in a proposal this month to the Federal Energy Regulatory Commission that in-state generators be required to sell power only in California. But that would violate federal interstate-commerce laws, experts say.

Q: How is this affecting our electricity bills?

A: Rates for customers of Southern California Edison and the state's other investor-owned utilities are capped at 6.5 cents a kilowatt-hour, so the crisis isn't currently affecting customer bills.

However, the utilities are lobbying to pass along their higher costs - more than $6 billion this year - to customers.

Do you have a question about the electricity crisis? Call Register InfoLine at (714) 550-4636, category 7251. Or e-mail to: ocbiz@link.freedom.com, ATT: ELECTRICITY. Or fax to: (714) 796-3681, ATT: ELECTRICITY.

http://www.ocregister.com/news/energy0s1209cci3.shtml

-- Martin Thompson (mthom1927@aol.com), December 09, 2000


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