California Tries Again to Curb Power Prices

Los Angeles, CA -- A wave of summer weather sweeping across California Tuesday prompted renewed calls to go easy on the air conditioning while in Washington, western lawmakers were launching another attempt to force reluctant federal regulators to put a lid on the volatile wholesale electricity market. Bipartisan legislation introduced Tuesday by Sen. Diane Feinstein, D-Calif., and Sen. Gordon Smith, R-Ore., would direct the Federal Energy Regulatory Commission to place limits on the price of wholesale power sold in the West for two years. "This legislation is designed to force FERC to do its job so that the financial crisis does not get any worse than it already is," Feinstein said in a release. The bill gives FERC the option of either a firm price cap or requiring power generators to charge so-called cost-based rates that reflect the actual cost of producing the electricity rather than selling the megawatts for whatever the market will bear. The free-wheeling western electricity market has surged to lofty levels in the past year as the growth in demand has outpaced supply and forced utilities in California and the Pacific Northwest to pay a hefty price for electricity. Feinstein said the measure was aimed at providing "reliability and stability in the western energy market," however it promises to meet resistance in Washington where the Bush administration and key Republican members of Congress have consistently opposed price controls. FERC officials and the White House have maintained that limiting wholesale prices would discourage the investment in new power plants and other infrastructure needed to increase the supply of energy in the West. Supporters of the price caps, however, say most new plants won't be online for another year or two and consumers and utilities deserve some degree of federal protection in the interim. Electricity is expected to remain scarce and expensive in California this summer as hot weather increases the demand for air conditioning. After a few weeks of cool spring weather kept demand relatively low, things began to heat up on Tuesday and prompted issuance of a Stage Two power alert by the California Independent System Operator. "The ISO's renewed call for conservation precedes a forecast of 90-degree highs in the inland areas that may tempt many Californians to flip on air conditioners," the ISO said in a statement. "In addition, two generator units in southern California tripped offline this afternoon ... removing from service 1,080 megawatts (MW) of power," the ISO said. "The California ISO is optimistic that customer outages will be avoided today, but is encouraging conservation through tomorrow as the state encounters its first hot spell of the season." Pacific Gas & Electric Announced Tuesday that Unit 2 at the Diablo Canyon nuclear power plant in San Luis Obispo would be shut down on April 29 for refueling, a process expected to last some 35 days. The utility said the refueling of the 1,100 MW unit had been planned since 1999.

Source: UPI