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Battin praises IID for power foresight

February 02, 2001|By DARREN SIMON, Staff Writer

The Imperial Valley's state senator, Jim Battin, said Thursday that Imperial Irrigation District power customers should consider themselves blessed in regard to the power crisis affecting much of the state.

Battin's comments came during an interview hours after Gov. Gray Davis signed legislation that places the state in the power-purchasing business.

The legislation allows the state to secure long-term power contracts as a way to avoid the cost of buying power on the open market — a move Battin said could save the state from going bankrupt as the power crunch continues.

Battin, who represents the Imperial and Coachella valleys and a portion of San Diego County, said the power issue does have the potential to bankrupt the state unless the state continues to take steps to control the problem.

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"The energy crisis we have in California is one of the biggest problems we have faced," Battin said from his La Quinta office.

Still, he said in the Imperial Valley and the portion of the Coachella Valley served by IID it is a different story.

IID, as a public utility isolated from the rest of the state, is in control of its own fate.

Battin credited IID for earlier doing what the state is now doing — securing long-term power contracts to avoid purchasing energy on the open market.

"The spot market is incredibly expensive," he said.

Already the state has spent hundreds of millions of dollars to buy energy on the open market to keep the lights on in 80-percent of the state, the portion of the state served by the three investor-owned utilities in California.

Those utilities — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — are for-profit. As such they do not have the authority to purchase long-term power contracts and have been subject to the deregulated power market, which has been called a failure by Davis as the price of energy has risen and power supplies have failed to meet demand.

IID is a non-profit utility. As such it has not been forced into deregulation and it has the authority to enter long-term power contracts.

Battin said because IID has done so it has controlled costs and prevented huge rate hikes for customers.

Battin, who lives in the portion of the Coachella Valley served by IID, said he pays about 40 percent less for power than those in the areas of Coachella Valley served by an investor-owned utility.

Battin did say he realizes IID has raised the energy cost adjustment portion of power bills as a result of the rising cost of producing energy, but he said the bills will still be much lower than most of the state.

The energy cost adjustment is that portion of bills IID has the authority to raise or decrease based on the costs of producing energy.

That cost has risen to three times what it was last year as a result of increases in the cost of natural gas, which fuels IID's power plants. The higher cost means IID customers can expect to pay 8-percent more for power starting this month and continuing through the summer.

Still, Battin said IID was smart in locking in a price for natural gas for the summer. IID recently set the price for natural gas at $7.90 per million BTU. In doing so, district officials hope to avoid much higher market prices, which have risen in recent weeks to as much as $52 per million BTU.

He said while power bills will be higher, they are potentially much lower than they would have been if IID did not set the price it will pay for natural gas.

Regarding the legislation signed by Davis on Thursday to allow the state to seek long-term power contracts, Battin said he voted against that legislation.

He said while he supports the plan, there is language in the legislation that could see people in much of his district — those areas served by the investor-owned utilities — face major rate hikes. Battin said without such language he would have supported the legislation.

Battin added people served by IID will be immune from such large increases.

Staff Writer Darren Simon can be reached at 337-4082.

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