United States

United States

FOCUS OF RESTRUCTURING MOVES TO SACREMENTO

The California Public Utilities Commission (CPUC) failed to live up to its promise of delivering a revised de-regulation proposal on March 22, a move that has both good and bad connotations for wind power developers.

The delay "shows the CPUC is feeling the pressure," comments Jan Hamrin of San Francisco based Hansen, McOuat, Hamrin & Rhode. "They were going to go with a mandatory power pool, which would have been the worst of all possible worlds," she says. Nonetheless, the lack of a decision creates more uncertainty in the market. "There are developers out there who would rather know what the final plan was, just so there is some certainty," adds Hamrin.

The three CPUC commissioners could not agree on whether the agency should endorse the direct access/retail wheeling proposal it had originally proposed, or go forward with proposals put forth by Southern California Edison and San Diego Gas & Electric for a power pool arrangement similar to that in the United Kingdom. The CPUC was scheduled to release its revised deregulation proposal on April 26.

The log jam could be broken with the appointment of Henry Duque, a banker from the San Francisco Bay Area, to the CPUC. But while he believes in deregulation, his position in the "pool versus direct access" debate is not known. He is, however, a buddy of President Dan Fessler, who favours pools.

The Duque appointment, however, may be too little, too late for the CPUC. The focus of the restructuring debate already seems to be shifting to California's State Capitol in Sacramento, where a flurry of bills has been introduced to reform the state's electric utility industry. Karen Edson, a principal in energy consulting firm Edson-Modisette, says, "Independent power producers are directly affected by more bills this year than in any year since the oil embargoes of the 1970s." Of the over 3200 bills introduced so far this year, the Independent Energy Producers has tentatively identified 33 for high priority treatment, she pointed out.

The key to the restructuring debate at California's Capitol is Senator Steve Peace of San Diego, who now chairs the Senate Energy and Public Utilities Committee. (His previous claim to fame was as director of a late 1970s underground cult movie entitled "Attack of the Killer Tomatoes." ) In the past, Peace has sided with southern California utilities on electricity policy issues, including issues surrounding the Biennial Resource Plan Update. However, during a series of legislative hearings conducted earlier this year, Peace grilled everybody and anybody that spoke while voicing support for recognising the benefits of renewables in a future electricity market. Peace has already introduced legislation which would impose a surcharge on electricity and gas to fund social programmes, such as renewables development.

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