Showing some tiredness with the continuing round of “emergency”declarations swirling throughout California’s energy markets, stateregulators Thursday refused to consider an eleventh-hour request bySouthern California Edison Co. to modify a legislatively-setpricing formula for renewable energy and qualifying facilities (QF)from which it buys power in lieu of the current unprecedentednatural gas prices. The payment formula is based on price indicesfor gas at the California-Arizona border, which saw spot prices atthe $36 to $41/Mcf level earlier this week.

The California Public Utilities Commission agreed the gasprices’ impact on the QF power costs needed to be dealt with”expeditiously,” but the five members weren’t swayed by Edison’scontention they should deal with the issue now to avoid what Edisonestimates will be $115 million in added power costs for December.

The CPUC has covered the issue earlier in the year and there isan ongoing state proceeding examining it.

Specifically saying she did not want to “add an emergency to ouragenda,” CPUC President Loretta Lynch said her opposition toconsidering the issue on an emergency basis does not mean shethinks the current formula for QF payments is “correct,” becauseshe thinks it is “flawed because it does not represent theutility’s avoided costs and is subject to market manipulation,” butshe is not convinced it can’t be resolved on an expedited basislater in the month.

She said an “adequate record” should be developed on anexpedited basis to allow the formula to be changed for prices inJanuary 2001.

Former CPUC President Richard Bilas said he agreed, noting thattwo years ago while heading the commission he testified to FERC onthe issue of gas prices at the California border, “and so far, theyhave done nothing.”

Richard Nemec, Los Angeles

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.