California is shooting to have all of its qualifying facility (QF) power generation plants back online within the next eight to 10 days, a move that will help ease California’s energy crunch, but won’t solve it completely, state officials told a U.S. House hearing Thursday.

The shutdown of QF plants due to non-payment by utilities was only a “piece of the problem,”and re-starting them will help to “marginally” solve the situation, said Richard Sklar, senior adviser and chairman of Gov. Gray Davis’ generation implementation task force. “We’ve got to get the QFs back on line, and we’ve got to reduce the forced outages to a reasonable number. We’ve got to get the new generation, we’ve got to do the conservation. With all of those, we got a shot at it, but I would not bet on it,” he noted.

“We believe that only 1500 MWs of QFs are off-line” at this point, William Keese, chairman of the California Energy Commission (CEC), told the House Energy and Air Quality Subcommittee during a hearing Thursday on a GOP stopgap emergency bill for the state. Since early April, he said that many QFs have been paid by the state’s investor-owned utilities for at least part of the money owed them, and as a result have returned to service.

Subcommittee Chairman Joe Barton (R-TX), sponsor of The Electricity Emergency Relief Act of 2001, quizzed the California energy officials on the QF issue, noting he thought the provision in his bill that would permit QFs to sell power to third parties was critical to reducing blackouts in California this summer.

Keese further said predictions that the state will have an additional 5,000 MW of baseload generation on line by this summer were optimistic. He estimated that by mid-June about 800-900 MW of new capacity would be in operation, 2,600 by mid-July, and — if all goes well — “probably” 4,500 MW by mid-September.

Keese, Sklar and other state energy officials cited their concerns about the Barton bill, H.R. 1647, pointing to its failure to address high prices in the wholesale power market, its focus on “broad” environmental waivers, apparent conflicts with state efforts to solve its problems, lack of conservation measures, as well as the bill’s overlap with states’ efforts to create a regional transmission organization (RTO).

“What we need from you desperately is to simply tell the Federal Energy Regulatory Commission to do its job,” said one state official. The federal government gave the natural gas industry seven years to transition to a deregulated market, and it bailed out the savings and loan industry, he noted, so why not give the power industry a break.

While the Barton bill is an “ambitious” measure, it doesn’t deal with the “excessively high prices” that have been bedeviling the California electricity market, Keese said. Without effective price mitigation, state power consumers could pay as much as $70 billion for energy this year, he estimated.

As for FERC’s latest attempt at price mitigation, Sklar said the Commission “set out to get a horse to run in Louisville [this weekend] and got a camel” instead. The ruling was “ineffective,” Sklar and others agreed, adding that there were a number of ways it could be gamed. “We just don’t think that the proposal closes all the loopholes that would allow those [high] prices to be charged.”

All agreed that there has to be a better mousetrap to restrain bulk power prices in California, but they weren’t quite sure what it was.

In addition to the absence of price mitigation, Keese said he was concerned that the legislation would allow the Western Area Power Administration (WAPA) to move in and site power lines in California without first consulting with state officials. Keese, as well as WAPA Administrator Michale Hacskayio, agreed that the bill should specify that this should be a cooperative effort. This concern aside, Keese conceded the $220 million that the legislation would appropriate for WAPA to upgrade the constrained Path 15 transmission line in California would “probably [be] welcomed” by California. Further, Keese believes that any effort to form a western-wide RTO should be left to the states, not to Congress.

Jeff Stier, vice president of the Bonneville Power Administration (BPA), agreed on the RTO issue. “We [already] have a very involved effort underway” in the Pacific Northwest to establish an RTO, he said, adding that the Bartons bill’s directive to create an RTO that encompasses much of the West could jeopardize this. “The politics are just very delicate” on this issue, he noted.

Michael Kenny, executive officer of the California Air Resources Board (CARB), told the subcommittee that the air quality provisions and air-emission waivers in the legislation were either “extraordinarily broad” or just weren’t necessary. The state can build more power plants and continue to protect its environment, he said, adding that the two weren’t mutually exclusive. Any legislation that would “alter this well-established policy” by California was unnecessary.

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