Mitigate

Recent steps taken by FERC to mitigate the price of power in California and the West threaten the reliability of the electricity supply in the region and could result in power supply shortages in many areas of the West, a group of Western utilities argued on Tuesday.

California regulators instituted a blackout mitigation program among nonresidential customers in which they can schedule reductions of their power use during peak-demand hours in exchange for a fixed per-kilowatt-hour payment. The action by the California Public Utilities Commission is a smaller version of a proposal made earlier in the month by Houston-based Reliant Energy for a “negawatt” program that would include an auction of voluntarily reduced load, rather than a fixed payment amount.

California regulators Thursday instituted a blackout mitigation program among nonresidential customers in which they can schedule reductions of their power use during peak-demand hours in exchange for a fixed per-kilowatt-hour payment. The action by the California Public Utilities Commission is a smaller version of a proposal made earlier in the month by Houston-based Reliant Energy for a “negawatt” program that would include an auction of voluntarily reduced load, rather than a fixed payment amount.

FERC’s decision to mitigate prices only during Stage I, II and III emergencies will provide effective relief in the months ahead, said Commissioner Linda Breathitt yesterday, given that it’s very likely that California “may be in the stages for a lot of the summer.”

Duke Energy late Wednesday confirmed that it has proposed a “good faith” preliminary global settlement designed to help solve California’s ongoing energy crisis and urged Gov. Gray Davis to take a hard look at the initiatives the company has put forward. Key elements of Duke’s proposed settlement include a willingness by the company to build new supply in the state without taxpayers having to foot the bill and resolution of all pending lawsuits and investigations into Duke’s pricing activities.

In the wake of President Clinton’s release of crude oil from theStrategic Petroleum Reserve (SPR) to mitigate heating oil pricesthis winter, Chairman Frank Murkowski (R-AK) of the Senate Energyand Natural Resources Committee yesterday asked Energy SecretaryBill Richardson whether the administration had anything up itssleeve to reduce natural gas prices as the industry enters thewinter heating season.

After meeting significant conditions to mitigate market power,Enova Corp. and Pacific Enterprises, holding companies of San DiegoGas & Electric and Southern California Gas, respectively,received final FERC approval yesterday of their $6.6 billionmerger. FERC approved the merger application with only minorcode-of-conduct modifications.