Customers of Cheyenne Light, Fuel and Power could be bringing inthe New Year in the dark if FERC doesn’t step in and order and theutility’s power supplier to keep the lights on past the bewitchinghour of midnight.

In a Sections 206 and 306 complaint filed last Wednesday, theCheyenne, WY-based utility asked the Commission to order PacifiCorpto keep the power flowing to its customers under the “rates, termsand conditions” of its current power sales agreement (PSA) for atleast 60 days after the proposed Dec. 31 cut-off date.

Commission regulations require the Portland, OR-based PacifiCorpto notify FERC at least 60 days in advance of its plans toterminate service so FERC can review whether the cancellation isjust and reasonable. But Cheyenne Light contends the power supplierhas failed to submit a notice of termination in its case. Nor, itsaid, has PacifiCorp provided Cheyenne Light with a written noticeof cancellation of service.

FERC’s decision on whether “termination of the PSA is just andreasonable will be a particularly important safeguard to Cheyenneand its customers during this time of turmoil in the westernelectricity markets,” Cheyenne Light told the Commission [El01-21]

Cheyenne Light, a wholly-owned subsidiary of Xcel Energy Inc.,owns transmission and distribution facilities, but depends onPacifiCorp to supply its power requirements. It has been afull-requirements customer of PacfiCorp since 1963. Its currentcontract expires on Dec. 31.

The utility said it has been trying to negotiate a replacementcontract with PacifiCorp since late May or early June.”PacifiCorp’s last offer to Cheyenne of a one-year contract pricedat an hourly market index potentially would raise rates by over650% compared with the [existing] PSA’s rates.” This deal wouldexpose Cheyenne Light to the kind of “risk of price volatility that[it] seeks to avoid by entering into a long-term bilateral fullrequirements arrangement.”

The rates demanded by PacifiCorp are “substantially higher thanthe $74 per MWh benchmark price the Commission recently establishedas a presumptively prudent long-term price for sales in theCalifornia markets,” Cheyenne Light noted. Granted, “Wyoming is notCalifornia, but the disruptions in the California market haverippled across all the markets in the Western Systems CoordinatingCouncil, including Wyoming.”

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