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Enron Mail |
---------------------- Forwarded by Kay Mann/Corp/Enron on 11/01/2000 05:56
PM --------------------------- Kay Mann 11/01/2000 04:16 PM To: Sheila Tweed/HOU/ECT@ECT cc: Subject: Cal ISO Enron: Withdrawing 300 MW From Summer Peaking Program Wednesday, November 1, 2000 02:18 PM ?Mail this article to a friend (Corrected 1:59 pm) NEW YORK (Dow Jones)--In response to new California power market rules proposed Wednesday by the U.S. Federal Energy Regulatory Commission, Enron Corp (ENE, news, msgs) has canceled some new generator projects it was discussing with the state's electric grid operator, Enron said. The generators that are no longer financially feasible would have amounted to 300 megawatts of new generation installed in California next spring, Enron said. The company, however, continues to negotiate other new generator projects with the California Independent System Operator. The FERC Wednesday proposed limiting the California Power Exchange's price setting mechanism to $150 a megawatt-hour. The preliminary order could become a federal mandate by the end of the year, after the FERC takes comments from the public, or it could be modified. Enron and 13 other companies, meanwhile, are in final negotiations with the ISO for the new peaking capacity for next summer. The ISO plans to pay a total of $255 million a year for three years to the power companies for installing the new generators, which the power companies will own. In addition, California's three investor-owned utilities would pay the generators for any electricity the new generators produce. Pricing for the power would likely be based on the daily price set by the state-chartered CalPX. "There's too much uncertainty that we would be able to recover the cost associated with those specific projects. For the purposes of making capital commitments, we view this as a $150 price cap," Enron's Mark Palmer said. Earlier Wednesday, the ISO's chief operating officer, Terry Winter, expressed concern that FERC's proposed new rules could jeopardize some of the projects. FERC's proposals Wednesday are the result of a two-month investigation of California's wholesale electricity market, where prices this summer were three times what they were a year earlier. To meet the state's rising demand for power, California's three utilities have paid billions of dollars more than anticipated to independent power producers in order to keep the lights on. By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com Quote for referenced ticker symbols: EIX, ENE, PCG, SRE , 2000 Dow Jones & Company, Inc. All Rights Reserved.
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