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CA Regulators Tire of Emergency Requests

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 January 2001.

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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