Power supply jeopardized as anger at utilities grows

Palm Springs wind farms among firms demanding payment now

Wire, staff reports

February 16th, 2001

-------------------------------------------------------------------------------- A third of the state’s electricity supply could be in jeopardy because cash-strapped utilities cannot afford to repay millions in debt to plants that generate power from the sun, wind, and natural gas.

Three environmentally friendly plants are already offline in Northern California. On Thursday, a group of renewable energy producers -- including two companies with wind turbines in Palm Springs -- banded together to urge that debt owed them by Southern California Edison be paid either by the utility or the state.

Among the companies joining the effort are enXco Inc. and Wintec, both of which produce wind energy in the Palm Springs area.

Kelly Lloyd, chief financial officer of enXco, told The Desert Sun recently that the company couldn’t go on indefinitely without getting paid for its power.

“We can make it another couple of months, but most of us will have to draw upon credit lines,” Lloyd said.

If there isn’t a solution soon, however, companies such as enXco will have to find other customers for their power, or shut down.

“We don’t want to lay off workers,” Lloyd said, indicating his company has 140 employees, 60 of whom live in the Coachella Valley.

California has 600 so-called “qualifying facilities” that are fueled by solar, wind, steam power or natural gas. They are crucial players in the daily search for megawatts to keep the state humming.

The more power plants offline, the more power California’s Independent System Operator must buy on the expensive spot market at a time when finding a few spare megawatts can prevent rolling blackouts.

“If the QFs fold, that makes another one-third of the so-called net short that we have to cover,” state Sen. Bill Morrow, R-Oceanside, said Thursday as lawmakers crafted possible solutions to the problem. “We don’t want that to happen.”

It’s a possibility because Pacific Gas and Electric Co. and Southern California Edison say they have a $13 billion debt between them and have not paid millions owed to the plants.

That means renewable plants are sinking into debt, too.

In response, eight renewable energy companies said Thursday they were banding together to ask the state to help recoup $210 million owed to them by Edison.

“It’s obviously a severe situation when you’re delivering a product but not being able to pay your own bills,” said Chris Thompson, the group’s spokesman.

Edison did not comment on the announcement.

The companies own plants that generate 2,400 megawatts of electricity, enough to power about 2.4 million homes.

Assemblyman Fred Keeley, D-Boulder Creek, and Sen. Jim Battin, R-La Quinta, have proposed reducing the cost of power from renewable plants to help the utilities climb out of debt.

Keeley says the proposal would tie the rates for renewable energy to a five-year average cost of natural gas rather than the monthly average, which has jumped in recent months.

Renewable energy companies say they want a guarantee that they will be paid for past production.

http://www.thedesertsun.com/news/stories/local/982303525.shtml

-- Martin Thompson (mthom1927@aol.com), February 16, 2001