DOE order sends more electricity to California

For the first time in almost 2 weeks, the California Independent System Operator didn�t call a Stage 1 emergency Friday and the likelihood of a Stage 2 or 3 has diminished substantially. The ISO attributes improving conditions to increased availability of electricity imports thanks to direct intervention by US Energy Sec. Bill Richardson. Imports all but dried up in California causing threats of rolling blackouts and a daily crisis atmosphere earlier this week.


For the first time in almost 2 weeks, the California Independent System Operator didn�t call a Stage 1 emergency Friday and the likelihood of a Stage 2 or 3 has diminished substantially.

The ISO attributes improving conditions to increased availability of electricity imports thanks to direct intervention by US Energy Sec. Bill Richardson. Imports all but dried up in California causing threats of rolling blackouts and a daily crisis atmosphere earlier this week.

�It is clearly the DOE order and conservation by Californians that are behind the improved conditions,� says Stephanie McCorkle, an ISO spokesperson.

Acting under the Federal Power Act, Richardson ordered all electricity producers in the western US with spare power to sell it to the ISO. The order became official Thursday evening.

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. California investor-owned utilities are operating under a rate cap that prevents them from recovering the full cost of their wholesale purchased power from retail customers.

Some marketers say they are hearing directly from the Energy Department (DOE). With 1,150 Mw of capacity, PPL Montana, a unit of PPL Corp., has sold surplus power to the ISO, extending credit to that agency. The ISO buys power on the spot market and passes the costs along to the utilities.

�Unfortunately, the California ISO is now over the credit limit that we established,� said Larry De Simone, president of PPL EnergyPlus, the marketing arm of PPL Montana. �We need to clear up the credit risk issues.�

On Thursday, PPL received an order from the Department of Energy regarding emergency requirements to sell electricity into California.

"While we still have significant concerns about the creditworthiness of the California ISO, we will comply with the DOE order to supply that market directly, after we have met our firm contractual obligations to Montana Power and to other parties in the Western Systems Coordinating Council,'' said De Simone.

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