CA Regulators Tire of Emergency Requests
Showing some tiredness with the continuing round of "emergency"
declarations swirling throughout California's energy markets, state
regulators Thursday refused to consider an eleventh-hour request by
Southern California Edison Co. to modify a legislatively-set
pricing formula for renewable energy and qualifying facilities (QF)
from which it buys power in lieu of the current unprecedented
natural gas prices. The payment formula is based on price indices
for gas at the California-Arizona border, which saw spot prices at
the $36 to $41/Mcf level earlier this week.
The California Public Utilities Commission agreed the gas
prices' impact on the QF power costs needed to be dealt with
"expeditiously," but the five members weren't swayed by Edison's
contention they should deal with the issue now to avoid what Edison
estimates will be $115 million in added power costs for December.
The CPUC has covered the issue earlier in the year and there is
an ongoing state proceeding examining it.
Specifically saying she did not want to "add an emergency to our
agenda," CPUC President Loretta Lynch said her opposition to
considering the issue on an emergency basis does not mean she
thinks the current formula for QF payments is "correct," because
she thinks it is "flawed because it does not represent the
utility's avoided costs and is subject to market manipulation," but
she is not convinced it can't be resolved on an expedited basis
later in the month.
She said an "adequate record" should be developed on an
expedited basis to allow the formula to be changed for prices in
Former CPUC President Richard Bilas said he agreed, noting that
two years ago while heading the commission he testified to FERC on
the issue of gas prices at the California border, "and so far, they
have done nothing."
Richard Nemec, Los Angeles
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