Mirant Challenges CPUC, Cal-ISO To Prove Outage Assertions

Fending off accusations that it intentionally withheld power from the California market in March and April of this year, Mirant Corp. is challenging the California Public Utilities Commission (CPUC) and the California Independent System Operator (Cal-ISO) to cough up evidence that would substantiate these charges.

"We have operational data that show our equipment ran non-stop, the only exception being when units had to be offline for scheduled or emergency maintenance," said Randy Harrison, CEO of Mirant's western U.S. operations. "It takes on average 24 hours to bring online or offline any of the Mirant units, so it is unrealistic to believe that our units were taken down quickly or frequently," he said. "It's time to put the political rhetoric aside and speak to the facts."

Harrison said that state officials have been to Mirant's facilities 65 times since the start of the year and have found in every instance that the company is in full compliance. He further pointed out that Mirant has also honored several requests from Cal-ISO to put off maintenance of the company's aging equipment and continue operating.

According to Mirant, data available to both the CPUC and Cal-ISO confirm these facts and show that Mirant's California units currently are on schedule to generate twice the amount of megawatts that they produced during all of 2000. Mirant said that the only reason the company has taken a unit offline is to address safety or environmental concerns and noted that all outages have been coordinated with Cal-ISO. "We absolutely will not jeopardize the health or safety of our employees by running unsafe equipment," Harrison said. "We encourage all lawmakers, state officials and members of the news media to tour our plant sites to gain better perspective on this issue and see for themselves how ridiculous these claims are."

Meanwhile, Mirant said that figures recently released by the California State Controllers Office show that the company is going the extra mile to deliver power to California. Data indicate that Mirant subsidiaries generated 1.377 million MWh of power in April 2001, but sold 2.077 million MWh during the same time period, the difference occurring as the company's energy marketing operation bought from other generators to sell to California. Mirant's records show that at least 276,000 MWh came from these "helping hand" transactions, the company said. Mirant bought this electricity at an average price of $405/MWh and sold it to the state Department of Water Resources (DWR) at an average price of $455/MWh. Records also show that Mirant sold all of its April power at an average price of $256.87/MWh, an amount the company said is well below the April proxy price of $318 set by the Federal Energy Regulatory Commission.

"The records clearly show that Mirant has gone above and beyond to provide power to California," Harrison stated. "We've done the state a tremendous service in purchasing power on its behalf, and it's wrong for the transactions to be misinterpreted and skewed in a negative light."

At a press conference last week, California's state Controller Kathleen Connell held up an enlargement of a check paid to Mirant for April power. "If the intent was to somehow attack Mirant for its role in the California market in April, then I'd have to say that the state has apparently decided to bite a helping hand," Harrison said, noting that many of the transactions were at the request of the DWR.

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