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Power bonds may not last until fall

ISO: Supplies short as plants go offline for maintenance

By Jennifer Coleman The Associated Press March 17th, 2001

-------------------------------------------------------------------------------- SACRAMENTO -- Several state lawmakers said Friday they’re concerned the $10 billion in revenue bonds authorized for power purchases might not be enough to pay for power through the summer, when demand and prices increase.

A Department of Water Resources memo circulated to lawmakers this week shows that the state has been paying an average of 30 cents per kilowatt hour -- about 20 percent higher than what State Treasurer Phil Angelides says that price should be for the bonds to last through September.

Jim Detmers, managing director of the Independent System Operator, keeper of the state’s power grid, said it’s going to be “challenging to find power” in the next few weeks as plants are being taken down for maintenance before summer starts.

The DWR memo, given to lawmakers at a budget subcommittee meeting Wednesday, lists the number of megawatt hours purchased through March 11 and the total amount of money the power cost. Daily totals are given for Feb. 15 to March 11.

The state’s highest daily average was on Feb. 16 at 43 cents per kilowatt hour. Since then, the rate has decreased with some fluctuation to about 22 cents per kilowatt hour on March 11.

Moderate weather, longer days and a fairly stable supply of power in recent weeks led to the lower prices, said Assemblyman Fred Keeley, R-Boulder Creek.

Keeley, author of the bill that authorized the long-term contracts and bonds to pay for them, said he had expected long-term contracts to be in place by this point.

“But those that we have now don’t really start putting power into the system until September,” Keeley said.

Davis spokesman Steve Maviglio said contracts covering up to 70 percent of the power needed will begin before summer, and others are being negotiated.

The state has authorized $3.7 billion in power purchases since January.

Another reason prices are expected to rise in the summer is that a large portion of the power available for summer already has been sold, said Sen. Debra Bowen, D-Marina del Rey, chairwoman of the Senate Energy Committee.

-- Martin Thompson (, March 17, 2001

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