ISO, open market cornered by consumers baring teeth

Kathleen Davis, Associate Editor

The championship bout over California power has ended; the price cap was, indeed, lowered to $250. And now California waits-for the heat to dip, for the rates to balance outellipsefor the other shoe to fall.

On July 31st, the California Independent System Operator (ISO) voted 15-6 to again lower the cap. (It had initially lowered the cap from $750 to $500 in late June.) Senator Steve Peace, an outspoken advocate of the $250 cap spent a quarter of an hour lecturing to the ISO board prior to the vote-once again falling back on his “dysfunctional” label.

Peace is just one in an exponentially expanding mass of the unhappy. In late July Michael Shames, the executive director of the Utility Consumers Action Network, went so far as to call on customers to stop paying their energy bills–or to only pay what they did in the summer of 1999.

And the public outcry continues to reverberate up the political chain: from senator to governor to president.

In an August 3rd statement, President Clinton directed “all federal agencies to take steps to reduce consumption of electricity in California to the maximum extent possible.”

“As one of the largest power consumers in California, it is critical that the Federal government take every possible step to reduce non-essential power consumption at federal facilities in the state,” he continued-also ordering federal agencies which generate power to make it available to California.

California’s Governor Gray Davis isn’t far behind. In early August he issued three executive orders to reduce energy consumption and formerly requested that the California Attorney General investigate “possible manipulation in the wholesale marketplace.” Davis applauded President Clinton’s action and his own while calling on the ISO to extend the price caps past the set November deadline.

And we all know where the Public Utilities Commission stands. President Loretta Lynch has been siding with lowering the price cap to $250 since this brouhaha started, and one commissioner was even quoted in the San Jose Mercury News as stating that deregulation was “a mistake”–yet another jab at a wounded opponent.

California’s open market is visibly reeling from the one-two punches it’s been receiving as of late. But if it goes down for the count, customers may not be any happier. The costs to return to regulation (to buy back plants, dismantle commissions, re-hire workers) may keep their bills elevated for years.

San Diego Gas & Electric is attempting to alleviate the burden of high prices with deregulation-related checks totaling $390 million. The typical residential customer will get $260 and the typical small-business customer, $870. But it may not be enough.

California’s great experiment in the deregulated market teeters on the brink of re-regulation and Gov. Davis has been toeing the line marking the edge of that issue for weeks. He’s not quite sure he wants to leap in, but he’s not sure it’s much safer out here in the open either. It’s a quandary–for both Californians and California politics.

Previous articlePOWERGRID_INTERNATIONAL Volume 5 Issue 7
Next articleTVA mulls fuel cell plant that will store electricity

No posts to display