-Caveat Lector- Utilities fought attempts to boost power supply, monitoring in '90s BY CHRIS O'BRIEN Mercury News The state's three largest utilities blocked attempts to build more power plants six years ago despite a key state commission's prediction that they were needed because California's demand for electricity would begin to soar. At the time, the utilities called those forecasts of increased demand -- since proven frighteningly accurate -- outrageous. They appealed to the federal government, which overruled the state's efforts to increase the supply of electricity. To settle their dispute with the state, the utilities then chose to pay energy companies more than $100 million not to build new plants. That battle was fought primarily by Southern California Edison and San Diego Gas & Electric Co., which insist those plants would make little difference in the present energy crisis. But critics -- and even one PG&E Corp. executive -- say that, if those 1,400 megawatts had come online in 1998 as planned, they would have eased the current energy crunch. But the impact of the utilities' actions also goes well beyond the loss of that electricity. The battle over those plants derailed the state's process for monitoring energy needs and for ensuring that enough power plants are built. When demand did surge, it was no one's job to pay attention. And by the time the state's process for approving new power plants got back on track after deregulation in 1996, the state had already fallen too far behind when shortages began forcing rolling blackouts last month. ``San Diego Gas and Electric and Edison went out of their way to make sure these plants didn't get built,'' said Jan Smutny-Jones, executive director of the Independent Energy Producers. ``If those plants had gotten built, they would be making a significant contribution to keeping the lights on in California.'' President Bush and energy companies are fond of saying that California failed to build any power plants for more than a decade because of red tape and out-of-control environmentalists. Closer to home, the three big utilities try to deflect blame by claiming there was a surge in demand for electricity that nobody could have predicted. Neither claim is true. California stopped approving major power plants projects in 1986 after a flood of them were built in the early 1980s. In addition, during peak demand, the state could buy as much as one-third of the power it needed from its more sparsely populated neighbors such as Arizona. But by 1992, the California Energy Commission, the agency that licenses and approves new power plants, saw those conditions changing. Population in neighboring states was rising fast, leaving less electricity to sell to California. And, with projections that the state's recession would end in the mid-1990s, California's population and economy were expected to boom in the latter half of the decade. Energy forecast The agency's 1992 biennial forecast of the state's energy needs projected that peak demand for electricity would grow from 47,813 megawatts in 1995 to 58,864 megawatts in 2000. Two years later, the commission revised its 2000 forecast downward to 55,819 megawatts. The state's actual peak demand for 2000 turned out to be 54,110 megawatts. ``We felt those were conservative estimates at the time,'' said Claudia Chandler, an assistant executive director at the energy commission. ``In the five-year time period, we expected to see an average growth of 2 percent each year. That was taking into account energy efficiency and population growth.'' The commission passed its forecast to the California Public Utilities Commission, which regulates the state's utilities. The PUC's analysts crunched some numbers and determined that the three utilities would need an additional 1,400 megawatts by 1998. Law aimed for competition Under a 1978 federal law intended to spark competition, the PUC decided to require the utilities to contract with independent companies to generate the power. Those companies then would build enough plants throughout the state to supply the projected shortfall. The utilities vigorously objected. ``Edison does not need any additional power until at least 2005,'' John Bryson, chairman and CEO of Southern California Edison Co., wrote in a 1994 letter. Besides believing extra power wasn't needed, the utilities didn't want to sign long-term contracts because deregulation was around the corner. And they opposed the auctions the PUC set up to award contracts. Under the rules, some of the contracts would be awarded to generators who would sell environmentally friendly power, which would cost the utilities much more. In 1995, San Diego and Edison appealed the PUC's auctions to the Federal Energy Regulatory Commission. Pacific Gas & Electric Co. did not join in because it was in an awkward position. A PG&E joint venture had won several contracts to build power plants in San Diego and Edison territory. A month later, the regulatory commission overruled the PUC auctions on a technicality, saying it was illegal to set aside part of the auction for environmentally friendly power. But federal energy officials also expressed skepticism about the demand forecasts. ``While we have grave concerns about the need for this capacity and the staleness of the data relied upon by the California Commission, we do not reach a definitive conclusion on these issues,'' the federal officials wrote in their decision. The regulatory commission didn't order the plants not to be built. Instead, it told the PUC to fix the process so it didn't violate federal law. This put the PUC in a bind. The PUC had one state agency telling it there was a need for more power. It had utilities saying this wasn't true. And it had energy companies that had spent millions of dollars preparing bids and that might decide to sue the state to recoup those costs. So the PUC tried for compromise. Rather than hold new auctions, the commission gave the utilities three options: Negotiate new cheaper contracts with the auction winners, which would have led to plants being built; sign options with the winners in case the utilities wanted plants built later; or pay a settlement to bidders in exchange for withdrawing their bids. Edison signed options with two bidders, but the three utilities chose to settle with all of the other bidders. The San Diego utility agreed to pay $5.1 million to three bidders and is still negotiating with two others. Edison will pay $92.1 million to 10 bidders. And, in a little noticed decision issued in December even as the current energy crisis was in full swing, the PUC approved PG&E's proposal to pay $9.5 million to three bidders. Art Larson, a spokesman for Sempra Energy which owns San Diego Gas & Electric, points out the utility proposed in 1993 to expand its plant in Chula Vista. But the project was delayed by community opposition and was later dropped when deregulation was passed and the utilities were encouraged to get out of the generation business. Shortage in dispute Edison officials deny there is really an electricity shortage today. They believe the root cause is unscrupulous energy traders who are shutting down some plants to create a shortage and drive up prices. ``There's no correlation in the market between the price being charged and the supply,'' said Bob Foster, an Edison executive. ``Withholding is going on in this market.'' How much difference would 1,400 megawatts make today? It's hard to know for sure. But when Northern California experienced rolling blackouts last month, the Independent System Operator -- the agency that runs the state's electricity grid -- had to curtail power use by 500 megawatts on Jan. 17 and 1,000 megawatts on Jan. 18. Earlier, on Dec. 7, to avoid rolling blackouts, the ISO asked customers to curtail their use by 1,593 megawatts. ``I would say that given today's situation, any additional megawatts would have helped ease the shortage of supply we're facing today,'' said Tom Bottorff, system operator a PG&E vice president, who sat through a number of hearings on deregulation in the mid-1990s. But critics of the utilities say that almost as disastrous as the failure to add 1,400 megawatts to the state's electricity grid was the dispute's undercutting of the process for determining power needs and meeting those needs. With utilities and federal officials deriding the energy commission's projections, its influence dimmed. And after state lawmakers drew up the deregulation law in 1996, the agency was told that its biennial demand forecasts were no longer needed. ``It triggered criticism that we don't need to forecast demand,'' the energy commission's Chandler said. ``Everyone said the market would determine what the need was and what would come online. But the fallacy is: Who is looking at the whole system?'' By 1997, the battle had lasted five years and resulted in no major power plants being built. Since then, nine power plants that will generate 6,278 megawatts have been approved, but the first won't be running until summer. Mercury News Staff Writer Brandon Bailey contributed to this report. Contact Chris O'Brien at [EMAIL PROTECTED] or (415) 477-2504. ANOMALOUS IMAGES AND UFO FILES http://www.anomalous-images.com <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! These are sordid matters and 'conspiracy theory'�with its many half-truths, mis- directions and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRLgives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== Archives Available at: http://peach.ease.lsoft.com/archives/ctrl.html <A HREF="http://peach.ease.lsoft.com/archives/ctrl.html">Archives of [EMAIL PROTECTED]</A> http:[EMAIL PROTECTED]/ <A HREF="http:[EMAIL PROTECTED]/">ctrl</A> ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
