California’s weather turned milder Monday, but that didn’t coolthe political and regulatory heat centered on its electricityrestructuring and supply/price woes this summer. The latest turnwas San Francisco-based PG&E Corp. throwing in the towel lastFriday in its plans to bring a 95-MW peak-shaving generating plantinto the San Francisco Bay on a barge.

The preponderance of state permitting requirements overwhelmedthe utility holding company, leaving them with a timeline thatwould have prevented start-up of the temporary generation thissummer when it is most sorely needed, according to Brian Herzog, aPG&E spokesperson.

“After being in discussion with state regulatory authorities andlooking at the timing for the necessary permits and approvals, itwould put us out past the summer time,” Herzog said.

In the meantime, the state legislature reconvened Monday andpromptly scheduled a joint hearing on Thursday among the members ofthe Senate and Assembly energy committees to ferret out theelectricity crisis that has drawn the attention of everyone,including President Clinton, FERC and Gov. Gray Davis.

The agenda will be set later in the week, but observers expectan outpouring of representatives from all sectors of the energyindustry. PG&E’s utility will testify at the hearing, accordingto a utility spokesperson in San Francisco.

A Sacramento-based representative for the California PublicUtilities Commission (CPUC) said the joint hearing will begin witha focus on the emergency electricity report submitted to thegovernor last week by CPUC President Loretta Lynch and ElectricityOversight Board Chairman Michael Kahn. That report is extremelycritical of California’s ongoing electric industry restructuring.The industry will then be given a chance to provide its input, theCPUC’s Sacramento representative said.

Some relief in the political pressure is expected as milderweather and the start of refund checks arriving this week for SanDiego electricity consumers averaging $260 for residential and $870for businesses. In total, San Diego Gas and Electric Co. is sendingback $390 million to its residential and small business customers,and another $100 million later to all of its 1.3 million customers.

For the immediate problem of generating shortfalls in the midstof peak-demand periods, PG&E and its utility have no otherplans to try to add generating capacity on a quick-turnaroundbasis. The utility will concentrate on expanding its demand-sidemanagement programs, Herzog said.

As part of a package of relief measures last week, the CPUCauthorized Southern California Edison Co. to re-assume operationsof its former 150-MW Highgrove power station in Grand Terrace, CA,and it hopes to be able to get 120-MW out of the plant, starting bythe end of this month, according to a SoCal Edison spokesperson.This plant was sold along with all of Edison’s fossil fuelgeneration three years ago, and it had been operated sporadicallyby its new owner, Massachusetts-based Thermotek, but more recentlythat firm decided it could not operate the facility economically.

PG&E’s power plant-building subsidiary, PG&E Generating,has one large new merchant plant under construction in California,but it won’t come online until 2002, and its proposed Otay Mesaplant south of San Diego continues to struggle through California’spermitting process, which the governor has asked to be streamlined.

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