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The Sept. 17 report, released by California Public Utilities Commission President Loretta Lynch, said the companies failed to produce all available power during electricity interruptions and blackouts. Generators didn't follow the instructions of the state's grid operator and didn't make plants available as soon as possible after outages, the report said.
Lynch's report underplays the role of the ISO in preventing outages, by assuming that power isn't available to the ISO unless it is bid into the ISO market by generators, Dynegy said.
Per its tariff and agreements with Dynegy, the ISO can instruct generating facilities to operate in emergencies, regardless of whether there were bids to sell power from the facilities, the company said.
An ISO spokesman Friday verified that the ISO could instruct plants to operate during emergencies.
"If additional power from any of the generating facilities under Dynegy's control could have been produced and could have prevented any of the emergencies identified in the Report, that power was available to the ISO, both as a practical matter and by operation of law," Dynegy said.
The report is unfair in blaming Dynegy for exacerbating a tight supply situation on Nov. 13, 2000, when a 1,857 MW shortage on the grid caused service interruptions, the company said. The report says that Dynegy had 1,000 MW available and unused that day, enough power "to meet fully one-half the amount of service interruptions that took place on that day."
But Dynegy had to reduce generation capacity on Nov. 13 due to emergency fuel switching operations necessitated by a natural gas curtailment that was out of its control, the company said. The resulting capacity reduction was about 100- 150 MW, said spokesman David Byford.
Dynegy filed an emergency motion four days later at the CPUC to protest the decision that resulted in that natural gas curtailment, the company said.
Dynegy's response didn't specifically address a claim in the Lynch report that during one hour of March 31, 2001, the company had 522 MW of available capacity which it didn't use. There were blackouts or service interruptions of 237 MW in Southern California that day, the Lynch report said.
The generation at issue is controlled by a 50-50 partnership between Dynegy and Xcel Energy (XEL) unit NRG Energy, Inc. Under their West Coast Power LLC partnership, NRG operates the plants and Dynegy markets the power.
Duke Energy, Inc , Williams Companies and Mirant Corp (NYSE:MIR - News) have issued detailed responses to the report, saying it was based on inaccurate outage data, underplayed the role of the state's grid operator in determining which plants are run and when, and overstated plant capacity.
AES Corp (NYSE:AES - News) said in its response that, because it only operates the plants for which it contracts all power to Williams, suggestions of improper bidding or generating behavior are inapplicable.
Reliant Resources, Inc (NYSE:RRI - News) is still working on its response, a spokesman said.
The company responses were sent to state Sen. Joe Dunn, D-Santa Ana, who chairs a committee that is investigating energy market manipulation, with copies sent to the CPUC.
Dunn has said he will hold a committee hearing on the generators' responses, but no date has been set. As reported, he has said his initial impression of the generators' responses is that they are a "smokescreen."
As reported, CPUC Commissioner Michael Peevey Thursday directed the commission's energy division staff to examine the generators' responses and report back to the commission.
Lynch has yet to release a second report on whether reported outages during the state's 2000-2001 crisis were legitimate. Generators have faulted Lynch for implying in the Sept. 16 report that those outages were suspicious without providing evidence.
A CPUC spokeswoman has said there is no time frame for the release of that report.
