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Enron Mail |
---------------------- Forwarded by Carla Hoffman/PDX/ECT on 10/27/2000 07:08
AM --------------------------- Enron Capital & Trade Resources Corp. From: "Pergher, Gunther" <Gunther.Pergher@dowjones.com< 10/27/2000 06:51 AM To: undisclosed-recipients:; cc: Subject: DJ REPEAT:Cal ISO Board OKs Load Differentiated Price Caps 12:54 GMT 27 October 2000 DJ REPEAT:Cal ISO Board OKs Load Differentiated Price Caps LOS ANGELES (Dow Jones)--The California Independent System Operator passed a motion 13-10 late Thursday to implement load-differentiated wholesale power price caps to be effective Nov. 3, 2000, or as soon after that date as possible. The cap would start at $65 a megawatt-hour for an off-peak load below 25,000 megawatts. The cap would increase to $90/MWh at 25,000-30,000 MW, $105/MWh at 30,000-35,000 MW, $135/MWh at 35,000-40,000 MW, and would remain at the existing $250/MWh price cap for any load above 40,000 MW. The cap is based on actual power prices realized in 1999 at differt load levels, then adjusted upward for current natural gas prices, said board member Mike Florio, who drafted the motion. The cost of natural gas will be figured using the average closing price of New York Mercantile Exchange natural gas futures contracts for Henry Hub during the last three trading days of the Nymex contract. Florio stressed the caps were meant to be temporary, and would be removed as soon as "comprehensive market changes were implemented and the real-time and ancillary servicave demonstvariety of load conditions, that they are workably competitive," according to the motion. The caps would also be void if the ISO Board or Federal Energy Regulatory Commissioed to vote on certain maret redesign proposals Thursday, but elected to wait until more information on those proposals came in. As well, commissioners wanted to wait until the Federal Energy Regulatory Commission issues its report Nov. 1 on California's electricity market. Commissioners who opposed the price cap said the vote should be taken in the context of the completed market redesign proposals, as well as any FERC orders. "I think this may take a while to implement," said ISO President Terry Winter, who voted against the caps. "What do I do if FERC comes out with an order contrary to this on Nov. 1?" -By Jessica Berthold, Dow Jones Newswires; 323-658-3872, jessica.berthold@dowjones.com (END) Dow Jones Newswires 27-10-00 1254GMT Copyright © 1998, Dow Jones & Company Inc DJ Power Sales May Pare Calif Utils' $4.6 Bln Summer Loss By Mark Golden Of DOW JONES NEWSWIRES (This is a revised version of an item published Thursday.) NEW YORK (Dow Jones)--California's two big utilities have said that having to buy power at market prices and deliver it to customers at regulated rates has cost them $4.6 billion since May. But more than 40% of that money has been paid into accounts the utilities own because the utilities are still the biggest generators of electricity in the state. Since California wholesale power prices began to rise in May, Southern California Edison, the regulated utility unit of Edison International (EIX), has paid the California Power Exchange $2.358 billion more on electricity than SCE is allowed to collect from customers. Through September, however, the CalPX has paid the utility about $1.3 billion over its generating costs for electricity sold into the state's wholesale power market, SCE's Chief Financial Officer Jim Scilacci said Thursday in an interview. Likewise in Northern California, PG&E Corp. (PCG) unit Pacific Gas & Electric Co. through August paid the CalPX $2.2 billion more for electricity than it could collect from its customers. During that time, however, the CalPX paid PG&E $700 million over its generating costs for power the utility sold, according to PG&E spokesman Ron Low. Loretta Lynch, chairwoman of the California Public Utilities Commission, and the Utility Reform Network, a consumer group, want the utilities to use those gains to offset some of their electricity purchase losses. The utilities, however, say that the gains from their power plants aren't "profits," as TURN calls them. The money has gone to pay off so-called stranded assets - debts left over from building nuclear power plants before deregulation, and expensive long-term supply contracts the utility was forced to purchase in the 1980's and is still paying for. With income from its generators so high, those debts have been paid off much earlier than expected, and both utilities' stranded-asset accounts are now overcollected by hundreds of millions of dollars. One of the major questions state regulators face is what to do with that money. Utilities Say Power-Sale Revenue Only Partial Solution SCE would support paying off the revenue shortfall with the asset overcollection only as part of an overall revision of deregulation that must include an end to the current rate freeze, Scilacci said. Beyond that, the utility wants the CPUC to "confirm that utilities will be permitted to recover their reasonable procurement costs incurred on behalf of customers," according to a regulatory plea it made late Wednesday. SCE has proposed a rate increase of up to 10% for its customers and is seeking refunds from independent power producers and power trading companies, which it says are charging illegally high prices. Customers who leave the utility and start buying electricity from SCE's competitors in Southern California should also be forced to help pay off the debts incurred this year, SCE's chief executive, Stephen E. Frank, said in a press conference Thursday. PG&E says that using the asset overcollections to pay off the purchased power undercollections won't solve the problem completely. "Assuming that prices during the summer of 2001 are similar to those experience during the summer of 2000, the unrecovered balance in (purchased power costs) will grow to more than double its current level by the end of August 2001," PG&E said in its own filing Wednesday. "Generation revenues from PG&E's hydro and Diablo Canyon plants above costs would offset only about one-quarter of the increase in the undercollection from the same period." Under current regulations, overcollection for stranded assets is to be refunded to customers. Sempra Energy (SRE) unit San Diego Gas & Electric emerged a year ago from its transition to competitive markets and this August sent $390 million in checks to its 1.1 million customers. SCE has assumed for the purposes of its own analysis that its stranded-asset overcollection would go toward reducing rates going forward, rather than to sending checks to customers as SDG&E did. -By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com (END) Dow Jones Newswires 27-10-00 1327GMT Copyright © 1998, Dow Jones & Company Inc G_nther A. Pergher Senior Analyst Dow Jones & Company Inc. Tel. 609.520.7067 Fax. 609.452.3531 The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from any computer. <<Gunther Pergher (E-mail).vcf<< - Gunther Pergher (E-mail).vcf
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