Legislature

“It’s the natural gas, stupid!” That is a refrain–spoken or implied–that ran throughout California’s ongoing electricity debates in both the legislature and among regulators as state officials scrambled Thursday to pave the way for bringing stability back to the state electricity industry.

As a clear signal that the state legislature still wants to weigh in with a broad-based settlement to California’s electricity crisis, state regulators Tuesday canceled a special meeting to vote on suspending direct access retail competition at the urging of state officials, including the Department of Water Resources (DWR), which is buying all of the power for financially crippled private sector utilities. The California Public Utilities Commission will reconsider the issue in mid-August, the drop-dead deadline for a legislative solution that will prevent a second major utility from falling into bankruptcy.

Enron Corp. has decided not to move forward with plans to construct a 500 MW power plant in Pompano Beach, FL, a decision that company spokesperson Eric Thode said is in keeping with Enron’s overall practice of going into a state with plans to build more plants than the company actually intends to construct. Thode emphasized that the move had nothing to do with public opposition to the facility.

The month of May is almost gone and support in the California legislature for the governor’s deal with Southern California Edison was still missing last week, so Republican members crafted an alternative that would not involve sale of the utility’s transmission assets to the state. In the meantime, Democratic state legislative leaders took aim at FERC as did most of the rest of the state government’s elected and appointed officials.

In an attempt to avoid electricity shortages predicted in the state by the end of the decade, Minnesota legislators passed a compromise energy bill late Monday that among other things, improves energy conservation, requires statewide planning for energy needs and clarifies regulations for building power plants and transmission lines. The legislation (SF022) is expected to be signed by Gov. Jesse Ventura and enacted in 2002.

A state legislative proposal (SB 278X) emerged late last Friday to start the political process for implementing the governor’s agreement (MOU) with Southern California Edison Co. to return the utility to credit-worthiness in exchange for selling its transmission system to the state and assuring below-market power supplies from the utility’s existing fleet of hydro, nuclear and coal-fired power plants.

Decisions that could affect the continued supply of power toCalifornia consumers and the price of that power could be renderedthis week in separate cases in federal courts in Los Angeles andSacramento.

Texas Railroad Commissioner Tony Garza warned the statelegislature and the Texas Congressional delegation last week of anexpected 55% increase in natural gas prices this winter for smallcustomers and the expected continuation of high prices for the nextyear to 18 months.

Texas Railroad Commissioner Tony Garza warned the statelegislature and governor yesterday of an expected 55% increase innatural gas prices this winter for small customers and the expectedcontinuation of high prices for the next year to 18 months.