US Energy Sec. Richardson issues California order

With California on the brink of blackouts Thursday for the second time this week, US Energy Sec. Bill Richardson formally issued an emergency order requiring generators and marketers to make power available to the California grid operator. The Federal Energy Regulatory Commission, which governs interstate transportation of natural gas and electricity, is scheduled to issue its formal rule changes for the California market Friday afternoon


Kate Thomas
OGJ Online

With California on the brink of blackouts Thursday for the second time this week, US Energy Sec. Bill Richardson formally issued an emergency order requiring generators and marketers to make power available to the California grid operator.

The Federal Energy Regulatory Commission (FERC), which governs interstate transportation of natural gas and electricity, delayed issuing its formal rule changes for the California market until Friday afternoon. It had planned on issuing them in the morning.

Under Richardson's order, electricity suppliers will be required to make power available to the California Independent System Operator during emergencies, if the suppliers have power in excess of the amount needed to satisfy service to firm customers. Suppliers that have provided power to the California Power Exchange and the ISO in the last 30 days that have firm capacity available would also be subject to the order.

Under the order, the ISO must notify suppliers how much is needed by 9 a.m. on the day before the requested service. The ISO must allocate the requests in proportion to the amount of each supplier's available power.

The order is effective until Dec. 21, unless modified. If the ISO and the supplier cannot agree on a price, the Federal Energy Regulatory Commission will determine the "just and reasonable rate" at a later date, under Richardson's order.

"Emergency orders should be issued sparingly," Richardson said. "However, I am deeply concerned about the reliability of California's grid. I urge suppliers to act in a responsible manner that will help keep the lights on."

Richardson initially acted Wednesday after power suppliers threatened to halt sales to California for fear they might not be paid by the state's biggest utilities, now strapped by more than $8 billion in power costs. To keep the lights on in the state, Richardson said the federal government would require all generators and marketers to sell power to California at set prices.

TransAlta Corp. offered to sell power to the ISO Thursday, said Dan Pigeon, director of wholesale marketing, "but they have not accepted our offer." Pigeon acknowledged the Canadian company, which owns the 1,340 Mw coal-fired Centralia power plant in Washington state, previously had discussions with the ISO about "credit support. We are an investor-owned business and we have to be conscious of that."

Based on those discussions, TransAlta "helped them out in preventing a Stage 3 emergency," Wednesday, Pigeon said.

Responding to Richardson's order, the Bonneville Power Administration (BPA) said it sent hydroelectric power from dams in Oregon and Washington California Thursday to help meet peak evening loads. Earlier in the day, ISO officials warned of rolling blackouts if it could not import additional power into the state.

However, California must return power to BPA on a two-for-one exchange basis. At least half of the return must occur within 24 hours of BPA deliveries. BPA said the remainder of the exchange can occur during nighttime hours and weekends when loads are relatively low.

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