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Enron Mail |
It looks like Reliant is now using air quality requirements as justification
for their high prices at their plants in CA. We are checking to confirm that their facilities are in fact reaching their emission ceilings. Pressure builds on Davis to relax air standards Updated: May 24, 2001 - 2:22 p.m. A major electricity supplier said Thursday it will sharply cut prices for power from three Southern California plants in anticipation that air quality monitors will let the plants release more pollution this summer. Meanwhile, aides said Gov. Gray Davis will consider paying businesses to run heavily polluting diesel generators to boost the state's power supply and help avert rolling blackouts. Reliant Energy said it could chop its power bids from the high of $1,900 per megawatt hour Davis criticized this month to as little as $150 per megawatt hour -- but only if air regulators quickly allow it to exceed pollution standards at the three plants. The Houston-based generator will cut its prices immediately, but will soon be forced to shut down three of its five Southern California plants for the rest of the year if pollution standards aren't lifted, said Joe Bob Perkins, president and CEO of Reliant Energy Wholesale Group. Davis singled out Reliant's $1,900-per-megawatt-hour charge earlier this month as an example of the egregious prices he said generators should voluntarily cut. Reliant said it deliberately bid the high price to discourage the state's power grid operator from calling its high-polluting plants into use. Using the plants now eats up valuable pollution credits that will likely be needed to keep the plants running during even higher demand periods this summer, the company said. "In essence, we are doing exactly what Gov. Gray Davis has suggested. But if these restrictions are not lowered, we will run out of power from these units very quickly," Perkins said in a statement. Perkins proposed that emissions hours not be counted against Reliant's yearly allotment whenever the plants are called into operation to help prevent blackouts. Reliant's Mandalay, Etiwanda and Ellwood plants each face annual air pollution limits imposed by the South Coast Air Quality Management District and the Santa Barbara County and Ventura County air pollution control districts. Reliant has asked for extensions from each of the districts. "There's no question we are in an emergency situation. We will consider every option available" to avert blackouts, said Davis spokesman Roger Salazar. But he said the administration had not seen Reliant's proposal. Davis also will consider paying businesses to fire up their backup generators when necessary to avoid outages, Salazar said. Running the generators would let the businesses disconnect from the state's power grid, freeing up electricity for other uses. The proposals have consumer and environmental groups outraged. "It's a short-term fix that will have potential long-term health consequences," said Paul Knepprath of the American Lung Association of California. The state should instead cut demand by encouraging more conservation, the lung association and 18 other consumer and environmental groups said in a letter to Davis on Wednesday. Davis already is promoting conservation, but blackouts have health and public safety consequences too, Salazar said. The use of backup generators is being proposed by the administration's top energy advisers, but Davis has not yet seen the proposal, Salazar said. The governor is willing to "explore every conceivable option for generation this summer," Salazar said. The twin developments come the same week the administration cut by 20 percent its estimate of new power generation that will be available this summer. Davis now projects 4,000 additional megawatts, 1,000 megawatts short of his original estimate. A megawatt is enough power for about 750 homes.
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