While one part of California’s regulatory structure was giving an expedited okay to 95 more megawatts of power to come on line in late summer, California Public Utilities Commission President Loretta Lynch Thursday was taking a slower, more detailed approach to determine how to spread the 3-cent/kW rate increase that was approved last month for the state’s two largest investor-owned utilities. In separate action, Moody’s Investor Service removed Southern California Edison Co. from further possible downgrades because the deal it struck with the governor last Monday.

Also on Thursday, San Diego Gas and Electric Co. clashed with Dynegy Power Corp., refusing Dynegy’s request to shut down 18 small power plants spread around San Diego County that total about 267 MW. SDG&E still operates the plants under a two-year contract that expires May 22, 2001.

“Given the energy crisis currently gripping our state, we are appalled that you would even consider such an action,” wrote SDG&E President Debra Reed to Dynegy’s COO Steven Bergstrom who reportedly requested that the plants be closed and not run when ordered to by the state grid operator during peak-demand times.

And if that wasn’t enough to bring the kettle to a boil, a San Diego-based consumer watchdog group proposed in a report that a “buyers cartel” be established with the states of Washington and Oregon as part of preparation for public takeover of power plants this summer. The proposal is part of a joint report by the Utility Consumer Action Network (UCAN) in San Diego and a University of California, Irvine, economist, Peter Navarro.

It was just another day in what used to be “Paradise,” but now is known more for electricity shortage alerts.

Despite pleas from the utilities to act more quickly, the CPUC’s Lynch set a schedule for formal evidentiary hearings with a target of putting the increased retail electricity rates in effect June 1. The commission president also proposed straw man approaches for tiering rates, a time-of-use pricing schedule and smart meters to allow customer to react to real-time price signals. A workshop was held Thursday for setting the regulatory schedule that calls for a final CPUC decision May 14 to be effective June 1.

Separately at its regular meeting last Wednesday, the California Energy Commission approved a 99-MW gas-fired combined cycle addition to an existing cogeneration facility in the central agricultural valley town of Hanford. The operator, GWF Power Systems, also has submitted a proposal to construct a 95-MW simple-cycle plant at the same 10-acre location that would come on line this summer. The combined-cycle plant is scheduled for 2003. This is the third peaking plant approved under an expedited process for this summer. Those projects collectively represent 276 MW. Three others, totaling 130 MW are due to be acted upon under a special 21-day process; and two others, totaling 152 MW, have been filed under the accelerated process, according to the commission.

With Edison’s signing of a memorandum of agreement with the governor, Moody’s noted on Thursday that the utility’s ratings are removed from review for possible downgrade. However, it said that it remains “concerned about the implementation risk, including obtaining legislative approval to complete the transaction and securing numerous approvals from the CPUC.”

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