CA Power Contracts Multiply, Controversy Continues

California inked three new power contracts last week at the same time a San Diego state Superior Court was ordering the state to make the full contents of the contracts public. In another arena, the state discontinued talks with AES over 450 MWs of supply it will bring on line in August with the re-powering of two units at its Huntington Beach generating plant.

Announced through Gov. Gray Davis' office, the three new deals will provide 325 MW this summer, ratcheting upward with 530 MW next summer and 800 MW in the summer of 2003. The bulk of the supplies will come from the Edison Mission Energy-Texaco cogeneration plant, Sunrise, southwest of Bakersfield. The governor flipped the switch on that plant, the first new power plant in the state in more than 10 years, in ceremonies last Wednesday.

Longer term, the two other contracts are with Calpine Corp. for 180-225 MW from its North San Jose peaking project, which is scheduled to come on line next spring; and Clearwood Electric Co.'s geothermal plant, which will provide 25 MW beginning next May.

California officials said the new contracts continue the state's efforts to get "affordable energy," support renewable sources and minimize exposure to the spot market.

Regardless of the court decision, State Controller Kathleen Connell, a constant critic of the governor's handling of the electricity situation, said her office would post the full contents of the contracts on the Controller's web site beginning this Thursday (July 5).

Elsewhere last Thursday, the state senate's committee investigating wholesale price spikes from earlier in the year ordered a number of generators to turn over by July 10 detailed operating information under confidentiality agreements still to be worked out. Two suppliers, Enron and Mirant, were found in "contempt of the legislature" for balking at data requests from the lawmakers. The majority of the out-of-state suppliers have agreed to work something out, including AES, Duke, Dynegy, NRG, Reliant and Williams.

Along with a UCLA business school economic forecast and related study with Cambridge Energy Research Associates (see related story) that predicts a recession later this year and next, principally sparked by the state's electricity crisis, a Los Angeles Times Poll released last week showed that a majority of the state's residents don't believe there is a real "crisis," and that prices have been manipulated upward by the merchant generators.

While almost half the 1,541 adults polled thought the governor was doing a poor job of handling the situation, they gave President Bush even lower marks, according to the LA Times poll, but it was clearly the generators on which they placed the most blame.

"A whopping three-quarters of the state (including three-quarters of registered voters) agreed strongly that `independent power companies have manipulated the electricity market...to make higher profit'," the poll summary stated.

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