Mar 14, 2001 - 06:45 PM

Energy Regulators Loosen Reins on California Electricity Supplies

http://ap.tbo.com/ap/breaking/MGA6F2HPBKC.html

By H. Josef Hebert, Associated Press Writer

WASHINGTON (AP) - Federal energy regulators issued a sweeping directive Wednesday aimed at boosting power and natural gas supplies across the West but said the actions alone will not solve the region's energy crunch.

The Federal Energy Regulatory Commission's move was aimed at streamlining wholesale electric power sales and squeezing as much electricity out of the system as possible as the summer's high-demand period begins.

The agency also directed that federal certification be expedited for natural gas pipeline expansions and licensing of additional hydroelectric power resources to get more power into the region as soon as possible.

Acting unanimously, the three commissioners warned that the regulatory streamlining "will not solve the electricity crisis in California," and power supply shortages probably will continue. The commissioners did not specifically address wholesale prices. California officials and much of the state's congressional delegation have urged the commission to restrict prices of wholesale electricity to prevent price manipulation.

So far the commission has refused. It argues the free market should prevail, and price controls might add to California's power supply problems as well as the region's. Instead, the agency approved a series of lesser actions aimed at removing barriers to wholesale power sales in California and neighboring states.

To try to get more electricity into the market, the agency said it would:

-Make it easier for co-generation facilities at industrial sites to sell wholesale power under bilateral contracts throughout the 11-state area.

-Allow wholesale power purchasers to resell electricity that they do not use because of conservation efforts, thereby making more power available and also promoting energy saving.

-Remove some operating and efficiency constraints on small power producers, generally co-generation facilities, to increase the amount of power available from these sources.

The commission also asked the California power grid manager and transmission owners in other Western states to prepare a list of improvements that could be made in the short term to allow power to flow more freely and ease congestion on transmission lines.

Hoping to deal with the shortage of natural gas in California, the commission said it planned to expedite approval of new pipelines and pipeline capacity expansions. It said it is considering rate incentives and other regulatory streamlining to speed up pipeline construction and increase the capacity of existing pipelines.

The regulatory initiatives were in line with a directive from President Bush last month asking federal agencies to put power and pipeline projects in California on a fast track for consideration.

In addition to California, the states covered by the directives are Arizona, Idaho, Montana, Nevada, Oregon, Utah, Wyoming and parts of Nebraska, New Mexico and South Dakota.

On the Net: Federal Energy Regulatory Commission: http://www.ferc.fed.us/

California Public Utilities Commission electricity page: http://www.cpuc.ca.gov/static/industry/electric/index.htm

AP-ES-03-14-01 1844EST

-- Swissrose (cellier3@mindspring.com), March 14, 2001

Answers

I see absolutely nothing in this to alleviate the coming power crunch for California this summer. Talk, Talk, Talk.

-- Martin Thompson (mthom1927@aol.com), March 14, 2001.

And of course they haven't paid the windmills around Tehachapi Pass for about 3 months while they have been using their power regularly. They talk green, but the state is leaving many of the smaller electrical producers out in the cold. Dummies. Charlie

-- Charlie (cstewart@ime.net), March 15, 2001.