The head of California’s beleaguered utility regulatorycommission (CPUC) Thursday encouraged the state’s major electricutilities to more fully use existing authority to do short-termforward market hedging deals for power, noting that she wanted toclarify continuing perceptions that the state regulatory body isblocking more utility hedging.

She did not refer to a number long-term deals that both PacificGas and Electric Co. and Southern California Edison Co. havesubmitted to the CPUC in recent weeks, all of which are stillawaiting approvals.

“This commission has already given the utilities authority toengage in bilateral contracting,” Lynch said during the CPUC’sregular business meeting in San Francisco. “That applied to bothinside and outside of the (state) power exchange. In a variety ofresolutions issued over the past year and a half, some before Iarrived at the commission, the CPUC has provided the utilities theability to contract in the forward markets, and to date theutilities have not used all of their contract authority. Forexample, PG&E has used about 33 percent and Edison about 59percent.

“I would encourage the use of short-term contracts and I see noreason for the utilities to delay these contracts”

In other action by the CPUC, San Diego Gas and Electric Co. wasgiven the authority to offer its largest customers a fixed 6.5cents/kWh rate that is already available through state law to itsresidential and small business customers as a stopgap measureagainst last summer’s price spikes.

Richard Nemec, Los Angeles

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