Calif ISO: Noticeable Rise In Generators' Non-Compliance Updated: Friday, August 10, 2001 06:49 PM ET

By Jessica Berthold

OF DOW JONES NEWSWIRES

LOS ANGELES (Dow Jones)--Generators' failure to respond to orders to provide electricity to California has increased noticeably in the last month, a spokesman for the state Independent System Operator said Friday.

As a result, reliability has been threatened on the 14-state Western power grid, which came very near collapse on Aug. 2 because two companies didn't deliver power when asked, said ISO spokesman Greg Fishman.

"This problem has become more common in the past three to four weeks," said Fishman. "We've seen a number of times when generators are not responding to orders to dispatch electricity. Occasionally, we see instances where generators do not meet their own power delivery schedules in a timely fashion."

Generators say the reason power doesn't always get delivered on time is beause of technical glitches and inefficient communication.

"We've had instances where the electronic system used to dispatch plants gets into a jam at the ISO end, so you can't always get power bid into the market in a timely fashion," said Richard Wheatley, a spokesman for Reliant Energy Inc (REI, news, msgs).

He said he didn't know why the ISO might have noticed an increase in such instances in the past few weeks.

Mirant: Honest Mistake Contributed To Grid Trouble

The ISO's account of what happened Aug. 2 is that one generator who was scheduled to provide power in the morning didn't do so, causing the grid's electrical frequency to dip to 59.93 hertz, below the 60 hertz safety level. The ISO then went to a different generator who was already running a plant and, using an automated system, began running that plant at a higher level.

"Then that plant operator basically brought the plant back down, saying, 'We won't let you run the plant at a higher output than it's scheduled," said Fishman, adding that he couldn't reveal the identity of the generators.

Mirant Corp. confirmed the company had a role in the near-collapse of the grid last week, but declined to provide details. A spokesman said a company employee made an honest mistake.

"It was a combination of human error - a phone call that was not made in a timely manner, and a computer problem. Anyone who suggests other motives is wrong," said spokesman Pat Dorinson.

The Federal Energy Regulatory Commission and the Western States Coordinating Council, a voluntary group of energy suppliers and utilities, are investigating the incident, Fishman said.

Dips in electricity frequency below 60 hertz have occured on other occasions, such as when a plant has tripped off line or a power line goes down, he added. The Aug. 2 incident is troubling because it could have been prevented if only generators had followed the rules, Fishman said.

Generators Wary About New Market Requirements

Days after the Aug. 2 incident, the ISO sent a notice to market participants setting forth new operational guidelines. One of the guidelines is simply unworkable for operators of a certain kind of large power plant, said Reliant's Wheatley.

The requirement is to power, or "ramp up", a plant 10 minutes before it is scheduled to provide electricity, then "ramp down" 10 minutes after it is scheduled to stop. That isn't possible for combined-cycle plants, which use waste heat from natural gas turbines to produce steam for conventional steam turbines, Wheatley said.

"You can't just flip the switch on a combined cycle plant, the way you can with a peaker. It takes a half-hour to bring one of these plants up," said Wheatley.

ISO Cancels Conference Call On Issue, Perplexing Generators

The ISO arranged a conference call for Friday morning with several generators to discuss grid reliability, but cancelled at the last minute. Several generators said privately that they were perplexed by the cancellation, given the urgent tone of the notice about the call.

"The primary purpose (of the call) is to review recent reliability issues and specifically the adverse impact of uninstructed deviations. We hope during this call to make you aware of the urgent nature of this issue," reads the note signed by ISO President and CEO Terry Winter.

The call was restricted to Mirant, Reliant, Dynegy Inc (DYN, news, msgs), Williams Companies Inc (WMB, news, msgs), Duke Energy Inc (DUK, news, msgs) and Calpine (CPN, news, msgs), with "other organizations (to be) included in separate discussions," the notice said.

Fishman said the call was actually intended for discussion of a slightly separate issue from the Aug. 2 incident, but was canceled because of media attention of that incident.

"We decided it would be better to wait until things settled down a bit," said Fishman. The call hasn't been rescheduled yet.

-By Jessica Berthold, Dow Jones Newswires; 323-658-3872; jessica.berthold@dowjones.com

http://quicken.excite.com/investments/news_center/article/printer.dcg?story=/news/stories/dj/20010810/BT20010810005896.htm

-- Martin Thompson (mthom1927@aol.com), August 11, 2001

Answers

This is what will happen every time politicians get up to their ears into the intracacies of private enterprise. They can't compete, either in the brain game or industry expertise departments. As a result their constituents get stomped on.

Does anyone believe that Gray Davis could do a better job of straightening out the California energy mess than PG & E, Con Ed, or San Diego Power and Light - peers dealing with peers.

-- Wellesley (wellesley@freeport.net), August 11, 2001.