What
a difference
a recall makes!
Prospects for
competitive markets for power in California and the balance of the West are good
-- far better than in the recent past, stakeholders agreed at the RT conference,
Developing Markets in the West.
The election of Arnold Schwarzenegger as
California governor and his initiatives to recharge the state's power sector
were seen as key drivers.
FERC Commissioner Nora Brownell cited completion
of critical work on California's Path 15 grid bottleneck via public-private
efforts as showing a positive trend. But she is
worried about developing California rules of the road (MD-02) and having enough
power for this summer.
Regional considerations are essential, Gov Arnold
Schwarzenegger's energy adviser, Joe Desmond added.
California needs to weigh energy policy,
generation resources and gas supply in the context of the West as a whole, he
emphasized.
Thus his job is to build relationships with
neighboring states and the federal government.
California's top priority, he specified, is
resource adequacy, followed by wholesale procurement, transmission -- long-term
siting and lowering congestion -- and developing competitive retail
core/non-core competitive model.
Commissioner Mike Gleason of the Arizona
Corporation Commission reported the problem of having half the grid in his state
owned by public power that's not keen on yielding control over wires.
That, he said, makes RTOs impractical but he's
confident of the long-term future of competition in Arizona.
Vicki Sandler, APS Energy Services CEO, discussed
figures that show businesses are paying hundreds of thousands of dollars in
excess bills to keep residential rates at artificially low levels.
To Jackson Mueller, advisor to large energy
buyers, end users' objectives include simplicity, so that they can pay less
attention to the details of procuring their energy needs and focus more on their
own businesses. Regulatory certainty is high on such parties' lists, he
added.
But to get such certainty, Gleason contended,
legislatures will have to stop passing laws and utilities cease asking for rate
cases -- a goal he's not confident of attaining.
Arizona wants no part of membership in a
California-oriented RTO due to the differences in the states' situations, the
commissioner added.
When would the state join a regional entity?
"When the economics are right for an RTO
benefiting customers, that's when we'll get one," Gleason underscored.
(Story originally published in Restructuring Today 7/1/04)
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