DOE Extends Emergency Order for CA
Making himself a domestic energy diplomat moving between
meetings in Washington, DC, and the West, Energy Secretary Bill
Richardson last week supported the need for a western regional
wholesale power price cap as he extended for another week his
earlier emergency order requiring generators and marketers to make
power available to the continuing tight California market to avoid
the threat of rolling blackouts. The order, which was first issued
on Dec. 14, expired Tuesday at midnight. The new order will remain
in effect until Dec. 27, unless modified.
"We continue to carefully monitor the situation in California.
Electricity supplies are tight and the reliability of the grid may
be endangered," Richardson said. "We don't take emergency orders
lightly, but we must be in a position to react quickly and
responsibly." However, "we cannot continue this [practice]
indefinitely --- it is not the true long-term solution as market
forces should dictate price."
The emergency order requires that, if the California Independent
System Operator (Cal-ISO) certifies there is an inadequate supply
of electricity, certain power suppliers would be required to make
power available to the ISO if they have power in excess of the
amount needed to satisfy service to firm customers. Those suppliers
who provided power to the California Power Exchange (Cal-PX) and
the Cal-ISO between Nov.14 and Dec. 14 that have available firm
capacity would be subject to the order.
The Cal-ISO is required to notify each supplier subject to the
order of the amount and type of service requested by 9 p.m. EST on
the day before the requested service. The ISO must allocate the
requests in proportion to the amount of each supplier's available
power. The price for the power will be set by an agreement between
the Cal-ISO and the supplier. If no agreement is reached, FERC will
set a just and reasonable rate at a later date.
Twice last week the Cal-ISO invoked Richardson's emergency order
with reserves dropping due mostly to in-state transmission problems
causing potential shortfalls centered in the northern half of the
state. California already faced the prospect of rolling blackouts
because its reserves dipped below 1.5% at one point earlier this
Lack of sufficient generation in northern California, along with
inability to get more supplies from the Pacific Northwest
"necessitated the action," the Cal-ISO said in a prepared news
announcement. In addition, for almost a week, a major transmission
line carrying power from the south to the north has been overloaded
and unable to carry additional supplies, although they are now
available from generators that have come back on line after planned
and unplanned maintenance.
While conceding he was disappointed that FERC a week earlier had
not imposed a regional wholesale cap, Richardson said that the
"only way to bring sanity to the electricity markets in the
short-term" is through a regional ceiling on bulk power prices.
"This continues to be a dynamic situation that has been
worsening over the last three weeks, and that is particularly true
of hydro-electric resources," said Cal-ISO's COO, Kellan Fluckiger,
who noted that Pacific Northwest sources are already using next
February's water to supply power to California. Some plants are
threatened with running out of water.
Richard Nemec, Los Angeles
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