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United States

California delays decision on retail wheeling

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Regulators expect to have a revised assessment of the re-structuring of California's $18 billion electric supply market this October. California Public Utilities Commission (CPUC) officials told legislators in late May that they will delay the assessment until October, rather than issue it in August as scheduled when the re-structuring was initially proposed ten weeks ago.

The CPUC, on April 20, proposed a radical, two-pronged restructuring of the state's power market that would include full-blown retail wheeling for the first time in the United States (Windpower Monthly, May 1994). Hearings were held on June 14 in Los Angeles, and are also being held on July 1 and July 29. Retail wheeling is significant for independent producers as it would change the entire multi-billion dollar market into a system whereby a consumer chooses from whom it buys power -- a broker or a power producer. Environmentalists and consumer groups fear the environment will lose out in the ensuing fierce competition among suppliers for customers.

The date for the main plan for restructuring is also vital for wind as the Biennial Resource Plan Update (BRPU) remains deferred until afterwards. That means that little news on the BRPU is likely until after at least October. Several hundred megawatts of wind had been initially chosen under the results of the BRPU released late last year (Windpower Monthly, January 1994).

The deferral of the BRPU process, in which $1.5 billion of new investment is at stake, has been met with dismay by independent power producers and renewables advocates. The BRPU process attracted a considerable amount of resource offers at a far lower price than regulators or utilities anticipated. But utilities have argued that the purchase of alternative energy is a costly obligation for their ratepayers in an environment that is increasingly competitive and in which they say additional capacity is not needed. A 500 MW compromise agreement between Kenetech Windpower and Southern California Edison has yet to get CPUC approval. The deal was a preliminary agreement for a power purchase contract for 500 MW of wind in southern California.

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