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Calif. seen facing next power crunch in May 2002
Dow Jones Interactive October 16, 2001 Texas Ready For Jan 1 Start For Deregulation -Official Dow Jones Interactive October 16, 2001 Calif Will Have Enough Power On Hand This Winter -Report Dow Jones Interactive October 16, 2001 CPUC Approves Transmission Project. Dow Jones Interactive October 15, 2001 WestConnect Established as Framework for Regional Transmission Organization Dow Jones Interactive October 15, 2001 Calif. seen facing next power crunch in May 2002 LOS ANGELES, Oct 15 (Reuters) - California looks to have sufficient power supplies to get through the winter without blackouts, with its next supply challenge likely to occur next May, according to a report issued by the California Independent System Operator (CAISO) on Monday. "Based on currently available data with the possible exception of May 2002, the CAISO anticipates sufficient capacity margins throughout the winter season..," the agency, which controls most of the state's power grid, said in its winter assessment report. The report, which covered October 2001 through May 2002, projected that resources would cover expected load each month with the exception of May, when demand rises significantly as the region starts to heat up. "Operating margins for May 2002 are slim with the current level of planned outages. However, the May peak generally occurs late in the month and planned outage levels usually decline significantly throughout the month," the report noted. The report also said that new generation should play a key role in helping to avert blackouts in May. "It is expected that sufficient new generation will become available such that the projected deficiency for May 2002 can be avoided," the report said. An additional 1,612 megawatts is expected to be operational by the end of 2001. During 2002, an additional 6,490 MW of new generation capacity is expected to be added based on currently announced plans. "This additional generation is in varying phases of development and it is uncertain how much of this new capacity will become available during the January through May 2002 period," the report said. Forecast peak load was seen mostly running slightly below an average covering 1998-2001. In December, for example, a peak load of 33,586 MW was projected versus an average of 33,937 MW, ISO figures show. Demand has been running below year earlier levels each month this year. "The CAISO foresees that there will be some lasting effects due to conservation efforts, but anticipates that the magnitude of conservation may decrease over time," the report said. California, hit with a severe power shortage linked partly to a flawed law deregulating its electricity market, endured the year's sixth and so far last rolling blackout on May 8. The lights stayed on throughout the summer, when the threat of blackouts was seen to be greatest due to heavy use of power hungry air conditioning systems. Conservation and new power plants are believed to have played important roles in preventing blackouts. Texas Ready For Jan 1 Start For Deregulation -Official CHICAGO -(Dow Jones)- Texas will be ready to implement full-scale deregulation of the retail electricity business at the beginning of next year, despite challenges from critics, the top official at the state's power-grid operator said Monday . "We believe that we've come a long way," said Tom Noel, chief executive officer of the Electric Reliability Council of Texas. "My confidence is very high that the Ercot system will be ready to go Jan. 1, 2002." A coalition of Texas consumer groups filed with the state's Public Utility Commission last week to urge a delay. A pilot program for 5% of Texas' investor-owned utility customers has been in effect since late July, and it started after a nearly two-month delay linked to system glitches. The consumer groups, including AARP and Consumers Union, the nonprofit publisher of Consumer Reports, want to delay the start of full competition until Ercot proves its systems are up to the task. The groups cited problems with switching customers from their utility to alternate suppliers, among other issues. "It is in the best interests of consumers and the industry to be sure that when the market is open it is also functional," the groups said in comments filed with the PSC. But Noel said most glitches have been fixed or will be fixed in time to meet the Jan. 1 deadline. So far 11,952 of 78,825 customers that requested a switch to a new provider have been switched, and the others are moving through the planned 45-day switching process, he said. There was a backlog of customers waiting to switch in August, caused by system malfunctions, but those have mostly been resolved, he said. Ercot has had other trouble making sure its system gets customer information to the new power supplier, but it believes those systems will be fixed by mid November, Noel said. Noel also said Ercot's settlement system will become more accurate over time as more data is collected to provide better cost estimates. The settlement system calculates costs for large and small wholesale power customers and has been a source of dispute in the state. "The market's working very well," Noel said. "What we have is a data problem." Ercot's systems are designed to handle about 20,000 customer switches a day. So far, the system has received and processed a peak volume of between 10,000 and 15,000 switches, Noel said. -By Jon Kamp, Dow Jones Newswires; 312-750-4129; jon.kamp@dowjones.com Calif Will Have Enough Power On Hand This Winter -Report LOS ANGELES -(Dow Jones)- California may be able to chill out a bit this winter. New power plants and continued conservation should give the state enough of a margin to head off the soaring prices and rolling blackouts that plagued it a year ago, according to a forecast released last week by the state's power grid operator "In general, it looks like a pretty good forecast through the winter months into 2002," said Gregg Fishman, spokesman for the California Independent System Operator. Last winter, California experienced an unprecedented electricity shortage that resulted in more than 30 days of power emergencies and scattered rolling blackouts. The situation was partly due to the deteriorating financial condition of the state's two largest utilities, high prices of natural gas and maintenance outages. This winter, however, the state should have an adequate supply of electricity , due in part to new generation coming online and a statewide conservation effort. Power-plant maintenance will be minimal during the 2001-2002 winter season compared with last year, and new power plants operating since Sept. 30 will produce 2,231 megawatts in new supply, according to the ISO report. The ISO, charged with keeping power supply and demand in balance on the grid and operating the state's spot electricity market, expects demand for power to peak at 34,359 megawatts in October and about 32,000 megawatts from November through May. That would leave operating reserves of between 2,000 and 2,200 megawatts - roughly a 7% reserve margin - the minimum amount required by the Western Systems Coordinating Council, which maintains grid reliability throughout the West. The ISO said the reserve margin is enough to avert the disaster the state experienced last winter, according to the report. In addition, the ISO expects there will be enough natural gas in storage to meet demand. Last winter, the price of natural gas skyrocketed to $60 a million British thermal unit. Currently, the average price of natural gas is about $2/MMBtu. "Natural-gas storage is looking very, very strong," Fishman said. "There's far more in storage and available in general than we saw last year at this same time." The ISO doesn't know whether generators have firm fuel contracts in place to cover demand. But the grid operator doesn't expect limits on gas supplies to hurt its ability to keep the lights on, according to the report. The ISO forecast assumes Californians will continue to conserve about 12% of their electrical consumption, Fishman said. The state also relies heavily on imports from the Pacific Northwest in order to get through without any power emergencies or rolling blackouts. The state expects to import about 3,000 MW this winter. As a result, the ISO forecast could change in the coming months, if the state is unable to import power. Currently, the forecast for the Pacific Northwest calls for a wet winter in the Northwest, according to the National Weather Service. Jerry Rust, president of the Northwest Power Pool, told Dow Jones Newswires the region expects to cover peak demand this winter. The agency is currently preparing its own report, he added. New generation upgrades in northern California will help minimize congestion on the transmission link known as Path 15, the key north-south interconnection, although bottlenecks could still occur, according to the report. "Depending on actual Pacific Northwest import levels and Northern California hydro levels, potential overloads on Path 15 could occur again this winter as a result of south-to-north power transfers," according to the report. Some areas of northern California , particularly Humboldt County and the Bay Area, could encounter some difficulties if local generation isn't available due to power plant maintenance or breakdowns. For 2002, the ISO said there are 40 new power plant projects totaling 6,490 megawatts that are in different phases of hooking up to the grid, but it's unclear how much of that capacity will be added before May 2002, according to the report. CPUC Approves Transmission Project SAN FRANCISCO, California - The California Public Utilities Commission (CPUC) last week approved a transmission project to increase capacity to several cities in the San Francisco metropolitan area, that will be built by Pacific Gas & Electric (PG&E). The 230-kilovolt transmission line would serve the cities of Dublin, Pleasanton, Livermore, San Ramon, and unincorporated areas of Alameda and Contra Costa counties. The CPUC placed a cap of $118 million on the project costs for the 8.8-mile line. As a condition for approval, the CPUC also required PG&E to remove an existing 60-kilovolt line. WestConnect Established as Framework for Regional Transmission Organization TUCSON, Ariz.--(BUSINESS WIRE)--Oct. 15, 2001--A broad group of electric transmission line owners in the Southwest has taken initial steps to form WestConnect, a for-profit regional transmission organization (RTO). Founding members believe WestConnect will form the framework for an RTO for the entire Western United States. Agreements and operating protocols for the RTO were filed today with the Federal Energy Regulatory Commission (FERC) by Arizona Public Service Co., El Paso Electric Co., Public Service Co. of New Mexico, and Tucson Electric Power Co., each of which is subject to FERC oversight. These utilities, along with Salt River Project in Arizona, have agreed to fund start-up of WestConnect operations, which are projected to begin in 2004. Other utilities in the Desert Southwest and adjoining areas have been actively involved in the process and are expected to continue to be involved as WestConnect gets underway. FERC has proposed RTOs to facilitate development and operation of transmission on a regional basis. WestConnect will strengthen reliability for customers and ease the transfer of electricity between regions. It will do so by focusing on transmission line reliability, non-discriminatory open access to use of the lines, support for a robust wholesale market, and governance that is independent of market participants. WestConnect evolved from an earlier Southwestern RTO development project named DesertSTAR, and it has used the operating protocols developed by DesertSTAR stakeholders through extensive negotiations during the last four years. DesertSTAR Chairman of the Board Jack King said, "WestConnect is a logical step. I am encouraged by the actions of the WestConnect members in building upon the work of DesertSTAR to move toward an RTO for the West." The group turned to the for-profit governance structure, in lieu of the not-for-profit DesertSTAR model, in response to recent FERC rulings and a desire to create a governance structure that will encourage innovation and creativity in the operation and further development of the Western transmission grid. WestConnect has been structured to permit involvement by investor-owned utilities, cooperatives, public-power entities and federal power marketing agencies, so it can transition into the RTO for the West. WestConnect is working closely with other utility companies and provisional RTO projects to explore expanding WestConnect's service area. WestConnect utilities say they are confident their filing with FERC conforms to the regulatory agency's established organizational and operating guidelines.
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