Dynegy-Sempra Spar Over Power Plant Outages

Dynegy last Friday clarified its squabble with Sempra Energy's San Diego utility unit, contending that it never asked for 18 smaller power plants to be shut down, regardless of orders from the California Independent System Operator (Cal-ISO) to produce electricity during peak demand hours.

A letter from Dynegy President/COO Stephen Bergstrom to Sempra CEO Steve Baum was made public, clarifying that the merchant power producer "did not instruct [the San Diego utility] to shut down generating units, nor did [it] suggest that [it] would not make power available to creditworthy buyers."

Last Thursday, the state's third major investor-owned utility, San Diego Gas and Electric Co., clashed with Dynegy Power Corp., refusing what it characterized as Dynegy's request to shut down 18 small power plants spread around San Diego County that total about 267 MW. SDG&E still operates the plants under a two-year contract that expires May 22, 2001.

"Given the energy crisis currently gripping our state, we are appalled that you would even consider such an action," wrote SDG&E President Debra Reed to Dynegy's COO Stephen Bergstrom, who reportedly told SDG&E to shut down the plants after the state grid operator ordered the plants to continue running during peak-demand times. (These are so-called RMR, "reliability must-run," plants.)

While criticizing Reed for releasing "selective quoting" from her letter to news media even before he read the letter, Dynegy's Bergstrom offered to discuss SDG&E's concerns with Baum, noting that Dynegy "continues to believe that the best way to address California's energy situation is to resist the urge to sensationalize normal business proceedings."

And if that wasn't enough to throw in the increasingly boiling pot, a San Diego-based consumer watchdog group proposed in a report that a "buyers cartel" be established with the states of Washington and Oregon as part of preparation for public takeover of power plants this summer. The proposal is part of a joint report by the Utility Consumer Action Network (UCAN) in San Diego and a University of California, Irvine, economist, Peter Navarro.

It was just another day in what used to be "Paradise," but now is known more for electricity shortage alerts.

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