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Enron Mail |
Calif. power resources will be 3,752 Mw short in 2001
By David Feliciano, BridgeNews Scottsdale, Ariz.--Dec. 7--California resources and reserves for electricity will be 3,752 megawatts short of the anticipated load in 2001, California Independent System Operator (ISO) President and CEO Terry Winter said Thursday at the annual Western Systems Coordinating Council meeting. "I'm concerned about supply," Winter said. "Without sufficient supply, markets will set socially and politically unacceptable price levels (for wholesale power)" Winter said California power resources will total 46,679 Mw in 2001, but load is expected to reach well over 50,000 Mw. Over 17,000 Mw of new generation is planned for the state, but most new power plants are not expected to begin service until 2002 and beyond. Not helping California's cause, Winter said, are reduced imports of power this year from neighboring states, down from 7,500 Mw in November of 1999 to 3,900 Mw this November. Winter also pointed to the affect of a soaring natural gas market. "You can build generation, but in California, natural gas and emissions are the next problems. Natural gas is running into the same problem electricity has...there is a shortage." Due in part to the above California wholesale power prices have skyrocketed since May, leading to rolling blackouts in San Francisco in June and a series of conservation emergencies since that time. The state has been under a power conservation warning much of this week. As tools to solve California power woes, Winter suggested the ISO file for an extension of price cap authority for power until markets are demonstrated to be workably competitive. The ISO's authority to set price caps, which currently stands at $250 per Mw/hour expired Nov. 15. The Federal Energy Regulatory Commission on Nov. 1 proposed caps of $150 Mw/hour, but has yet to officially rule on the matter. Winter also called for the California Public Utilities Commission to allow full peak requirements to be forward contracted and hedged by load. End ********************************* California ISO Files Emergency Action With FERC to Deal With Electricity Supply Crisis FOLSOM, Calif.--(BUSINESS WIRE)--Dec. 8, 2000 via NewsEdge Corporation - While grappling with another Stage Two Emergency today, the California Independent System Operator (California ISO) is taking swift action to deal with a critical shortage of bids in the ISO market as well as serious underscheduling of electricity in the forward markets. The proposed market changes create the incentive to sell power in existing markets and allow the ISO to compete better for regional energy, which is in short supply throughout the western United States. This afternoon, the ISO filed an emergency tariff Amendment 33 filing with the Federal Energy Regulatory Commission (FERC). Commencing at 3:00 p.m. today Friday, December 8, 2000, the California ISO will implement a $250 "soft cap" on the ISO's Real-Time Energy Market similar to that proposed by FERC in its November 1 Order Proposing Remedies for California Wholesale Electric Markets (93 FERC 61,121). Analogous to the soft cap proposed by FERC, Energy bids prices in excess of $250/MWh will no longer be rejected by the ISO's computerized scheduling system but, instead, will be evaluated in price merit order. The California ISO has recently been placed in the position of having to negotiate prices for power in real-time and is finding it increasingly difficult to manage these negotiations while at the same time balancing supply and demand; causing significant risk to the California ISO's ability to maintain reliable control of the power grid. The ISO will no longer negotiate prices in real-time. To the extent the ISO issues dispatch instructions to Scheduling Coordinators (market participants) for energy bid prices in excess of the $250 soft cap, then settlement will be as-bid, subject to refund, if the costs cannot be verified. Market participants will be required to submit cost documentation to the FERC, with informational filings to the ISO and the state, supporting any Energy payments priced in excess of the soft cap. The current $250 price cap in Ancillary Service capacity bids is unaffected. Also, the market clearing prices for Ancillary Services and Imbalance Energy will continue to be calculated and posted up to the $250 soft cap. Amendment 33 proposes three key elements: 1. Implement a "soft cap" of $250/MWh for Imbalance Energy. This soft cap would limit market clearing prices to $250/MWh, but would allow market participants to submit bids over $250 if they submit verifiable costs. 2. Allocate the costs for energy purchases above the soft cap to Scheduling Coordinators who rely on the ISO's real-time energy purchases to meet their loads, rather than buying their own supplies in the forward markets; and 3. Impose penalties on Participating Generators that fail to comply with ISO dispatch instructions. Amendment 33 is posted on the ISO's website at www.caiso.com under FERC FILINGS on the home page. The ISO has seen a dramatic increase in costs for the power it buys in real time. For the first five days of December we averaged approximately $5 million per day. However, on December 5th we paid $36 million, December 7th $81 million. Failure to take action now would have the local utilities and ultimately their customers continue to face these extraordinary costs. The California ISO is charged with managing the flow of electricity along the long-distance, high-voltage power lines that make up the bulk of California's transmission system. The not-for-profit public-benefit corporation assumed the responsibility in March, 1998, when California opened its energy markets to competition and the state's investor-owned utilities turned their private transmission power lines over to the California ISO to manage. The mission of the California ISO is to safeguard the reliable delivery of electricity, facilitate markets and ensure equal access to a 12,500 circuit mile "electron highway." *********************************** Federal Agencies Gear Up Hydro System to Meet Demand PORTLAND, Ore., Dec. 8 /PRNewswire/ via NewsEdge Corporation - Due to an impending power shortage, federal agencies will increase generation at nearly all of the federal dams. This may cause some projects to operate outside the limits of the biological opinion under the Endangered Species Act as additional water is released for generation from upstream reservoirs, the Bonneville Power Administration said today. The announcement came following a call by the Regional Emergency Response Team and Northwest governors for conservation of electricity when arctic air invades the Northwest beginning this weekend. The team comprises Northwest utilities, the Northwest Power Planning Council and representatives of the four Northwest states. BPA officials said that this step must be taken in order to ensure that heavy demand for electricity can be met in the region through next week. Forecasters are predicting freezing temperatures on both sides of the Cascades. BPA supplies about 40 percent of the region's electricity, most of it generated at dams in the Columbia River Basin. "Utilities in the region have assessed their generating inventories and determined that the region is clearly short of energy and in an emergency status," Delwiche said. "The BPA and other utilities must take extraordinary steps immediately to avoid potentially severe shortages next week." Water is stored in reservoirs behind upstream dams and released in the spring to assist downstream migration of juvenile salmon. BPA manages the storage to ensure that enough water is available to both meet electrical generating requirements and flows for salmon. BPA has the authority to exceed guidelines of the biological opinion under emergency conditions. "It is very important that everyone - residential and commercial consumers and industries -- do what they can to cut back on their use of electricity during this cold snap," said Greg Delwiche, BPA's vice president for generation supply. "Every kilowatt hour saved now means less need to draw water from the reservoirs." SOURCE Bonneville Power Administration CONTACT: Ed Mosey, Bonneville Power Administration, 503-230-5359 Web site: http://www.bpa.gov **************************** Calif. Restarts Dirty Power Plants By JENNIFER COLEMAN Associated Press Writer SACRAMENTO, Calif. (AP) via NewsEdge Corporation - Hoping to ease the state's electricity crisis, air-quality regulators Friday allowed the restart of several power plants in Southern California that had been shut down because they had reached air pollution limits. The move came a day after California encountered an unprecedented power crunch, with electricity supplies for the state's 34 million people so perilously low that California only narrowly avoided blackouts. The power crunch has been blamed on cold weather in the Northwest, the shutdown of some generating plants for repairs or other reasons, and the effects of utility deregulation in California. On Thursday, during the emergency, power plants capable of producing 2,400 megawatts were off-line because they had exceeded their pollution limits. One megawatt is sufficient to power about 1,000 homes. On Friday, the South Coast Air Quality Management District agreed to let some of those polluting power plants return to operation and restore about half of that lost generating capacity. However, those plants will have to pay daily fines. Restarting the over-polluting plants should provide a cushion for state, said Stephanie McCorkle, a spokeswoman for the California Independent System Operator, which runs the state's power grid. In addition, hundreds of companies voluntarily cut consumption Friday to avoid imposed outages. ``We're still encouraging conservation efforts,'' said Lori O'Donley, spokeswoman for the ISO. ``We're optimistic that we won't have to'' impose shutdowns on commercial customers. Federal energy regulators are working with the state to find power that can be diverted to California during the crunch, moves that could include increasing hydroelectric generation out of state. The power grid's managers were able to avoid blackouts Thursday by shutting down the enormous state and federal pumps that push water from Northern California to central and southern regions. The phased-in deregulation of California's $20 billion electrical power industry was supposed to lower prices by creating greater competition. But demand for electricity has outstripped supply, in part because of a growing population and a booming high-tech economy. Electricity is also in short supply because energy companies held off building new power plants while deregulation was in the planning stages. In addition, deregulation has forced utilities to sell off their power-generating assets, such as dams and plants, and import electricity from neighboring states, where power demand is high right now because of a cold snap.
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