Judge orders power wholesaler to sell to California

Posted at 6:48 p.m. PST Wednesday, March 21, 2001

BY DON THOMPSON

http://www0.mercurycenter.com/cgi-bin/edtools/printpage/printpage_ba.cgi

Associated Press

SACRAMENTO -- A federal judge issued a preliminary injunction Wednesday ordering a major electricity wholesaler to continue selling to California despite its fear that it will not get paid.

U.S. District Judge Frank C. Damrell Jr. said Californians were at risk of irreparable harm if Reliant Energy Services stopped selling power to the Independent System Operator, which oversees the state's power grid.

Damrell denied the ISO's request for preliminary injunctions against three other wholesalers, Dynegy, AES and Williams.

The judge dismissed Reliant's attempt to force the state Department of Water Resources to back the ISO's purchases for the state's two largest utilities. The state has been spending about $50 million a day on power for customers of Pacific Gas and Electric Co. and Southern California Edison, both denied credit by electricity suppliers.

Damrell said he had no authority to force the DWR to pay for that power. The judge denied the ISO's request for preliminary injunctions against three other major suppliers, Dynegy, Williams and AES. They agreed to continue selling to the ISO pending a Federal Energy Regulatory Commission ruling on the same matter.

The ISO went to court in February after a federal emergency order requiring the power sales expired. The judge then issued a temporary restraining order, requiring the sales, but dropped it after the wholesalers agreed to continue sales to California, pending his Wednesday ruling.

The ISO said it would lose about 3,600 megawatts -- enough power for roughly 3.6 million homes -- if the three suppliers pulled out.

It said Reliant's share alone is about 3,000 megawatts. Reliant said the amount at issue actually is less than a fourth of that, because most of the power is committed under long-term contracts. One megawatt is enough for roughly 750 homes.

Reliant, which provides about 9 percent of the state's power, worried it might not get paid due to the financial troubles of PG&E and Edison.

PG&E and Edison say that together they have lost about $13 billion since June due to soaring wholesale electricity costs that California's 1996 deregulation law bars them from passing onto customers.

-- Swissrose (cellier3@mindspring.com), March 22, 2001