A grid operation simulation that took place last week in California will help provide assurances to the California Independent System Operator (CAISO) that power that has been contracted by electric utilities in the state will actually be able to be delivered to the California grid this summer, Anjali Sheffrin, CAISO's market analysis director, said last Wednesday.

Utilities in the state "are saying 'we're fully contracted, we have our 115% of load,'" Sheffrin noted in an appearance at FERC's latest open meeting. News of the grid simulation was first announced by CAISO on Tuesday. "We're running a peak day summer assessment, because we are concerned that load can be met when everyone says we're fully resourced, but we're concerned about the deliverability issue," Sheffrin said.

She added, "If everybody's contracted, we want to see how that's going to be delivered to load and see, if in fact, all those contracts mean the energy can get to the load in California."

She said that the simulation will be completed by Friday, "but it will take some more weeks to analyze the results of that and after we've done that, we'll certainly be sharing that with the Commission."

"Have we actually seen the contracts?" FERC Commissioner Nora Brownell asked.

"I have not seen the specific liquidated damages contract and what their terms and conditions are," Sheffrin responded. "But we have explored with some of the parties who have entered into that, what is the obligation, and what we've heard is the obligation is that as long as the power is delivered and accepted in the congestion management scheme that we have -- just day-ahead zonal -- that meets their obligation."

"We do have our folks on the ground that have been sitting in on the simulation, so we should be getting a full report in the next few days," said Dan Larcamp, director of FERC's Office of Markets, Tariffs and Rates.

Meanwhile, Sheffrin said she hopes that the Los Angeles Department of Water and Power (LADWP) and Southern California Edison Co. will ultimately be able to resolve a growing dispute over whether LADWP or the utility will build and operate a new transmission line from Palo Verde in Arizona into California. The new line is expected to be in operation by 2009.

"We're hoping since both parties want it built, that someone will build it," Sheffrin said in response to a question from FERC Chairman Patrick Wood. "Right now, Edison is claiming that they have the contractual authority, but we're hoping the lawyers work that out," she added.

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