California Senate Committee Deposes CEO Of State's Power Grid

SACRAMENTO, Calif. (AP) 11.07.01, 8:50a --

The state Senate committee investigating possible price manipulation of California's energy market questioned the CEO of the state's power grid Tuesday about his call to end price caps last winter as the state neared possible rolling blackouts for the first time.

Terry Winter, CEO of the Independent System Operator, said his goal last Dec. 8 was to keep the lights on in California, despite dwindling power supplies.

The ISO entered its first Stage Three that night, when electricity reserves dropped to just more than 1 percent. Grid managers try to keep at least 7 percent in reserve.

Sen. Joe Dunn, D-Santa Ana, the chairman of the Senate Select Committee to Investigate Price Manipulation in the Wholesale Energy Market, questioned why Winter filed a request with federal regulators to end a $250-per-megawatt price cap.

The Federal Energy Regulatory Commission approved the request, which "ultimately led to the total disaster we saw in California in January, February and March," Dunn said. California had two days of rolling blackouts in January, then two more in March, and wholesale prices hit record highs during those months.

Once the price cap was lifted, ISO grid operators say more energy became available, alleviating the threat of blackouts.

The FERC filing was made without the knowledge of the ISO board, and Dunn said Winter "was clearly acting on his own and to us, at least as outsiders looking in, that seemed to be beyond the authority that he had."

During a break in the deposition at the state Capitol, Winter said as CEO of the grid he has "very broad authority to do what I think is necessary to keep the lights on, and that's what I did."

He said he didn't discuss the filing with Gov. Gray Davis' office because "I thought I would get a big resounding, 'No, let's discuss it for the next three weeks and decide what we're going to do."'

The crisis unfolded in about 36 hours, he said, and grid managers didn't have time to enter long-term discussions about lifting the price caps, he said.

Winter said there was no question that he was going to ask FERC to lift the caps "because I couldn't keep the system working if we didn't get relief."

FERC already had proposed lifting the price caps, and the ISO was asking them to impose that order immediately, said ISO spokeswoman Stephanie McCorkle.

ISO management had made FERC filings previously without approval or knowledge of the board, which at that time consisted of more than two dozen members, including utility executives, marketers and power plant operators.

The Senate committee has deposed about a dozen witnesses in the probe. Several, including Winter, have opted to open their deposition to the public. Others have been conducted in private.

PERSONAL NOTE: Fall guy No. 1 ????

-- PHO (owennos@bigfoot.com), November 07, 2001