Western states concerned California may ban selling power to neoghbors

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Western states concerned California may ban selling power to neighbors Monday, March 12, 2001

Knight Ridder

SAN JOSE, Calif. -- To the concern of some of its Western neighbors, California appears to be getting more serious about the idea of banning its electricity generators from selling to other states on days when power supplies here are critically short.

A draft proposal to prohibit such exports was being circulated late last week by the California Independent System Operator, which oversees most of the state's power grid. Although officials there could not be reached for comment, the proposal said the agency plans to seek approval for the ban from the Federal Energy Regulatory Commission, which supervises power wholesalers.

The proposal would require California generators "to make full capacity available" to this state when electricity reserves dip below 7 percent, a condition that results in a Stage 1 emergency. Rolling blackouts can result after a Stage 3 emergency, when reserves fall below 1.5 percent.

California Gov. Gray Davis and other state officials have been mulling the idea of such a ban for months. They are deeply concerned about California's power being shipped elsewhere, particularly when the state is scrambling to find enough electricity to keep the lights on.

A San Jose Mercury News analysis in December found that thousands of California- generated megawatts -- enough to supply several million homes -- was routinely being sold to other states during hours when power here was critically short.

In addition, the draft proposal said banning exports could help prevent generators from engaging in "megawatt laundering," where they artificially inflate the price of their power by selling it out of state to an affiliate or an associate and then back into California just before it is needed.

While in-state power suppliers are somewhat limited in what they can charge, no such constraints apply to power sold into California from elsewhere during electrical emergencies.

But because California is highly dependent on electricity imports, some experts fear that banning energy exports could backfire. They said other states that periodically rely on power from California might retaliate by barring their generators from selling power here.

"Steps that would essentially balkanize the intertie could be counterproductive," said David Danner, energy policy adviser to Washington Gov. Gary Locke, in reference to the major high-voltage line known as the intertie that links California to the Pacific Northwest.

Danner praised Davis's recent efforts to solve California's energy problems. Even so, he said, any restriction on the flow of that electricity could provoke anger in Washington state, where record- low rainfall has hurt the ability of the region's hydroelectric dams to make power and where some residents have seen their utility bills soar.

"I get calls every day from people ... who say, "why should I sit in the dark when all the power gets shipped to California?"' said Danner, noting that Washington residents have been asked to drastically cut back on their electricity this year. "There is some resentment."

Roy Hemmingway, an energy specialist in the office of Oregon Gov. John Kitzhaber, expressed concerns that the proposed ban would hinder what he called "the mutually advantageous exchange of power between the Pacific Northwest and California.

http://www1.standard.net/stories/local/03-2001/FTP0138@local@12calpower@Ogden.asp

-- Martin Thompson (mthom1927@aol.com), March 13, 2001


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