Posted on 11/20/2001 2:11:53 AM PST by snopercod
LOS ANGELES -(Dow Jones)- At least one executive at California's grid operator was told last April that state power-buying practices now under investigation could be a problem, but chose not to look into the matter, documents and interviews with the parties show.
As well, those sources indicate the California Independent System Operator ordered a low-cost power plant to reduce its output as early as last April, when the state was still experiencing staged power alerts.
The revelations highlight concerns about the relationship between the ISO, which is run by a board appointed by Gov. Gray Davis, and the California Department of Water Resources, which is buying power on behalf of customers of the state's ailing utilities.
"Current DWR practices cause very large additional costs for purchases and compromise reliability," ISO adviser and former board member Eric Woychik wrote in an April 13 e-mail to Randall Abernathy, the ISO's vice president of market services. "This situation is worse than alarming, it's a potential bombshell of negative publicity waiting to go off."
That bombshell eventually did go off, when the press began reporting that the state had been selling surplus power at a loss and that the ISO appeared to be giving preference to state-bought power, even when it was more expensive.
The DWR was telling the ISO to schedule power from short-term bilateral contracts rather than accept cheaper available power from Edison International utility Southern California Edison's baseload Mohave plant, Woychik wrote. It was also overscheduling cheap power from the south and underscheduling power in the north, which strained transmission lines between the two in an attempt to redistribute the power where it was needed, Woychik said.
The state Senate Committee To Investigate Market Manipulation is studying Woychik's allegations as part of a larger investigation into the causes of electricity market dysfunction, said an aide to committee chair Joe Dunn, D- Santa Ana. Parts of the memo were read last Tuesday in a hearing before the committee. Generators have complained about the practices in filings with federal regulators.
The ISO and DWR have denied any wrongdoing.
Woychik's e-mail asked Abernathy for an analysis of how state power-purchasing practices may threaten the reliability of the high-voltage transmission system and incur extra costs.
In an interview, Abernathy conceded the ISO ordered less-expensive generating units to reduce output periodically last April, because there were times when the state bought more power than it needed using short-term bilateral contracts, Abernathy said.
"That bilateral power was already purchased and paid for in a block, so during that time did we (reduce the output of) a less expensive resource? Yes. I mean, the state had already paid for the power; it was money already spent," he said.
The California Department of Water Resources began purchasing power in January on behalf of cash-strapped utilities.
Abernathy said he met with Woychik and ISO board member Mike Florio on a regular basis between April and July to talk about market design issues, but decided it wasn't feasible to analyze the costs of the DWR's purchasing practices.
"We could have done an analysis, but it wouldn't have been meaningful, because it's difficult to determine cause and effect," Abernathy said. "We didn't feel it would be productive."
The DWR's practices in April probably had more to do with inexperience than design, Florio said. Still, he was disappointed that there was no analysis and no explanation as to why.
"It certainly is enough to discourage an 'independent' board member from trying to do anything other than look good as a potted plant," Florio said.
-By Jessica Berthold, Dow Jones Newswires; 323-658-3872; jessica.berthold@ dowjones.com
(This story was originally published by Dow Jones Newswires)
Copyright (c) 2001 Dow Jones & Company, Inc.
All Rights Reserved
As well, those sources indicate the California Independent System Operator ordered a low-cost power plant to reduce its output as early as last April, when the state was still experiencing staged power alerts.
So those union lackeys who testified that they observed private plant operators shutting down production in order to increase profits weren't telling the truth, after all. What a surprise! The private plants claimed they were instructed by the CAISO to curtail production--they were right--where's LewisLynn?
Is this part of the FERC investigation into CAISO practices that may result in CA paying millions in fines?
Now if it will have an effect on Lowbeam Davis , that is the question!!!
This statement says a lot:
"It certainly is enough to discourage an 'independent' board member from trying to do anything other than look good as a potted plant," Florio said.
They knew they served at the pleasure of the Governor!
Another footnote for the biography of the most historically incompetent governor in U.S. history...
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