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POWER BIDS DRAW FIRE FIRMS LEFT IN DARK WITH STAGE 3 ALERT.

Byline: From staff and wire reports

As Sacramento lawmakers Friday blasted secret power bids for putting billions of dollars at risk, California faced its 11th straight blackout alert and 1,200 Southern California businesses were asked to cut their power.

Factories, businesses and schools that had agreed to emergency outages in order to cut rates were left in the dark for the third consecutive week to prevent rolling blackouts in Northern California.

The alert, prompted in part by the sudden loss of electricity from the Southwest, cost thousands in lost production, laid-off workers, or fines for failing to flip the switch.

California Lutheran University, an interruptible customer of Southern California Edison, was ordered to cut power - and heat - for 1,600 students and faculty again Friday.

The Thousand Oaks liberal arts school faces more than $100,000 in penalties for keeping the power on for the past two weeks. Like many businesses and government institutions, the college operates under contracts that give it lower energy rates under normal conditions but imposes huge penalties when shortages force interruptions.

``I think it's unconscionable that the financial trouble of the utilities are being used to shut us off,'' said Ryan Van Ommeren, the university's facilities manager. ``We are actively engaged in trying to get our own generator in order to sustain these types of outages.''

The state, its strapped grid stressed by high demand, uncertain imports, transmission problems and power plants idled for maintenance, has been under a near-continuous Stage 3 alert for the past two weeks.

The cost to the California economy has hit $2.32 billion, according to Jack Kyser of the Los Angeles County Economic Development Corp.

``I had an energy experience today at noon,'' Kyser said. ``I was in the Long Beach Westin Hotel and the escalator was turned off for energy conservation. The meeting room had its lights off.

``It was so Third World.''

With each passing day, Kyser added, ``this is getting to be an expensive little exercise.''

The crisis has prompted several lawmakers Friday to demand a probe into secret bidding procedures to learn how much taxpayer money - if any - would be at risk in a multibillion-dollar state-backed attempt to resolve California's electricity crisis.

Several Republicans said Democratic Gov. Gray Davis has released too little information about the bids the state is using to negotiate long-term contracts to buy power for the customers of cash-strapped Pacific Gas & Electric Co. and Southern California Edison.

SoCal Edison and PG&E, the state's two biggest utilities, say spiraling wholesale power costs in California's deregulated electricity have pushed them close to bankruptcy.

The investor-owned utilities, prevented by a rate freeze from passing the rising wholesale costs onto their customers, say they've lost $12 billion since June.

On Friday, the state continued negotiating long-term contracts to provide power to Edison and PG&E customers. The state received bids from 39 electricity suppliers during an auction this week.

The governor said he was pleased at the offers for long-term power - averaging about 6.9 cents per kilowatt hour during typical night and day use.

But offers for the highest periods of power use - during hot daytime hours in summer and early evenings in winter - were not averaged into the price or disclosed to the public. The governor's office also declined to release details on the bidding, including the bids' range and origin.

``If we give you the range, it alerts the low bidders. Bidders could easily withdraw their bids. If we reveal the lowest bids, it is no longer secure and that results in higher prices,'' said Davis spokesman Steve Maviglio.

Assembly Minority Whip Tony Strickland, R-Camarillo, and several other GOP lawmakers, however, asked for an investigation and public disclosure of the bidding.

He said withholding bidding information from the public could cloak the amount of money the state pays to secure electricity. The contracts could put the state into the power-buying business for as long as 10 years.

``I'm absolutely astounded by the way the governor is misleading the state of California,'' added Assemblyman Minority Whip Keith Richman, R-Granada Hills, a staunch critic of the way Davis has managed the energy crisis.

With average bids ``maybe as much as nine or 10 cents (per kilowatt- hour),'' how many billions will energy end up costing - and who will pay for it?

In other developments Friday:

--The state Public Utilities Commission voted to let utilities continue asking businesses and others in the interruptible rate program to shut down during times of high demand even if the utilities - as in PG&E's case - have already reached their annual limit of such shutdowns.

However, the PUC also temporarily suspended fines for customers who refuse to turn off electricity despite their agreements with the utilities to do so.

PUC Chairwoman Loretta Lynch said such businesses - who get discounted rates in return for agreeing to the shutdowns - have borne a disproportionate burden during the state's power crisis.

Commissioner Carl Wood voted for the suspension, in effect until further notice, but said it made rolling blackouts more likely until the state resolves its power crunch.

--Lawmakers continued talks on a plan to issue state revenue bonds and extend consumer rate increases to help pay off the utilities' debt.

A recently imposed rate increase of 7 percent to 15 percent would stay in effect for Edison and PG&E customers for up to a decade, and the state would have options to buy some of the utilities' stock at favorable prices as the companies' credit improved.

Davis told CNN the plan ``lets ratepayers know they will gain as the utilities gain.''
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Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Jan 27, 2001
Words:932
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