CPUC's Lynch Encourages Utility Hedging
The head of California's beleaguered utility regulatory
commission (CPUC) Thursday encouraged the state's major electric
utilities to more fully use existing authority to do short-term
forward market hedging deals for power, noting that she wanted to
clarify continuing perceptions that the state regulatory body is
blocking more utility hedging.
She did not refer to a number long-term deals that both Pacific
Gas and Electric Co. and Southern California Edison Co. have
submitted to the CPUC in recent weeks, all of which are still
"This commission has already given the utilities authority to
engage in bilateral contracting," Lynch said during the CPUC's
regular business meeting in San Francisco. "That applied to both
inside and outside of the (state) power exchange. In a variety of
resolutions issued over the past year and a half, some before I
arrived at the commission, the CPUC has provided the utilities the
ability to contract in the forward markets, and to date the
utilities have not used all of their contract authority. For
example, PG&E has used about 33 percent and Edison about 59
"I would encourage the use of short-term contracts and I see no
reason for the utilities to delay these contracts"
In other action by the CPUC, San Diego Gas and Electric Co. was
given the authority to offer its largest customers a fixed 6.5
cents/kWh rate that is already available through state law to its
residential and small business customers as a stopgap measure
against last summer's price spikes.
Richard Nemec, Los Angeles
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