Inspectors make night visits to California plants

With nearly 11,000 Mw out of service, the California Public Utility Commission and the California Independent System Operator conducted on site plant inspections Wednesday and Tuesday night in an atmosphere one company official likened to a 'drug raid.' Inspectors were checking merchant power electric plants to insure the plants had legitimate reasons to be out of service and were not withholding production to drive up electricity prices.


Ann de Rouffignac
OGJ Online

With nearly 11,000 Mw out of service, the California Public Utility Commission and the California Independent System Operator conducted on site plant inspections Wednesday and Tuesday night in an atmosphere one company official likened to a "drug raid."

Inspectors were checking merchant power electric plants to insure the plants had legitimate reasons to be out of service and were not withholding production to drive up electricity prices. State regulators have publicly claimed there is no supply problem in California, prompting the surprise inspections.

Plant outages and lack of imports from the Pacific Northwest have caused the ISO to call a Stage 2 emergency every day this week. Early Thursday morning the California grid operator ordered interruptible customers to begin turning off electricity and appealed to all customers to conserve power. Officials say similar conditions will prevail every hour of the day for the rest of the month as the state teeters on the edge of rolling blackouts.

Weather forecasters are predicting frigid temperatures for this weekend and early next week in the Northwest, causing the Bonneville Power Administration to warn only firm contracts will be honored.

Many merchant plant operators were caught off guard by the inspections. Houston-based Reliant Energy Inc. has 1,000 Mw out of service for scheduled and approved maintenance, 200 Mw out for environmental reasons, and 400 Mw out of service because of a forced outage.

Surprise inspections
A PUC representative surprised plant personnel at Reliant Energy's merchant plant at Oxnard, Calif., at 9:30 p.m. Tuesday.

�A PUC inspector showed up at the gates unannounced,� says Richard Wheatley, a Reliant spokesman. �The inspector said Gov. Davis had ordered inspections of a list of plants. We were asked to prove that repair work was physically being done.�

Wheatley said the company went the extra mile to keep the plants up and operating during the summer, but "there comes a time when you have to fix them.�

He call the timing of the inspection perplexing.

�We�re mystified why they carried it out in the middle of the night like a drug raid,� he says. �Why would any generator deliberately withhold power in California when the FERC (Federal Energy Regulatory Commission) has the state under a microscope. It would invite all sorts of litigation and onerous reregulation.�

Other merchant plant operators reported similar experiences.

Duke Energy North American, a unit of Duke Energy Corp., received a visit Wednesday morning from a PUC staffer to verify one unit is being retrofitted with emissions control devices and another is down for environmental reasons.

�We welcomed the inspector to look at the plants. But this wasn�t a regular part of our work day,� says Tom Williams, spokesman for Duke Energy in California.

Duke also owns a 222 Mw plant with a 1,200 heat rate that is uneconomical to operate at current gas prices. Gas prices bounced above $40/Mmbtu Wednesday.

�This plant is down because of the market,� says Williams. �It�s not in our business plan to operate at a loss.� Duke's other California merchant plants hedged gas supplies in the forward market and are running, he says.

Ruptured boiler tube
Late on Tuesday night, inspectors appeared at the gates of Southern Energy Inc.�s Pittsburgh plant in San Francisco and spent 4 hours reviewing records and examining a ruptured boiler tube, says Chuck Griffin, spokesman for Southern Energy. The five unit, 1000 Mw plant is completely down for maintenance and repairs. Griffin says some of the boilers are 50 years old.

�Some units are down because of a rupture in the boiler tubes," he says. "It was dangerous to run the units. �We ran that plant flat out during the summer."

Southern had no problem allowing the inspectors to take a look, he says. Southern also offered records to the inspectors.

�We think this is a good thing,� he says. �We have nothing to hide. Maybe they will develop a clearer understanding of what�s going on."

Inspectors also visited AES Corp.�s plants in southern California. The company has 2,000 Mw out of service because of emission compliance issues. But another 2,000 Mw is up and running.

�It�s no secret that we are being investigated by the South Coast Air Quality people for Nox emissions,� says Aaron Thomas, spokesman for AES Pacific, a unit of AES Corp. �The rationale for inspecting us is not clear.�

Dynegy Corp.�s power plant at El Segundo in the Los Angeles Basin was also visited by inspectors on Tuesday night. Two of the four units are down.

�One is down for scheduled maintenance and the other is down for a forced outage,� says Steve Stengle, spokesman for Dynegy.

The 300 Mw unit is down because of problems with the feed water pumps.

�It�s too dangerous to operate it,� says Stengle. �We have paid an expedited fee to our vendors to get this thing running as quick as possible.�

The PUC is still not convinced though.

�We�re not finished with it yet,� says Armando Rendon, spokesman for the PUC. �We are not ready to make a determination.�

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