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Power woes hit home for CalEnergy

February 09, 2001|By DARREN SIMON, Staff Writer

The state's power crisis is hurting the Imperial Valley's geothermal industry as Southern California Edison has failed to pay for power it has received from CalEnergy since November.

CalEnergy has 10 geothermal plants in the Valley, eight of which supply power to Edison at a price CalEnergy officials declined to disclose Thursday.

Edison is one of two investor-owned utilities in the state facing bankruptcy.

Mark Reinders, a spokesman for Mid-American Energy Holdings Co. of Des Moines, Iowa, the parent company of CalEnergy, said only that Edison has failed to pay a significant amount.

Reinders did say the CalEnergy plants produce more than 300 megawatts of power. While he could not say specifically how much of that goes to Edison, he did say the majority is contracted to Edison. One megawatt is enough to meet the needs of 1,000 homes.

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Reinders added Edison has given no indication when it might start making payments again.

He declined to comment on how much money CalEnergy has lost but he said it is hurting the company.

He said CalEnergy has been unable to pay royalties for the selling of power to the landowners upon which the geothermal plants operate.

Reinders said landowners are concerned about that but have not pushed for payment. Still, he said the situation must be resolved in the near future.

"We are looking for ways to resolve the situation favorably," he said.

Reinders added talks are taking place between Edison, Mid-American Energy and the California Public Utilities Commission to try to resolve the issue.

When asked if the lack of payment could force the CalEnergy plants to close, Reinders said that is not going to happen.

"We are continuing to operate," he said, adding a contingency fund is allowing the company to pay employees and maintain operations.

He added Mid-American Energy is "financially strong" and that will allow CalEnergy to survive the power crisis.

Still, he said, "We can't let it go forever."

Reinders said if the situation does not change, CalEnergy will have to look elsewhere to sell its power.

Imperial Irrigation District officials said the CalEnergy issue is a concern they are monitoring.

IID supplies energy to CalEnergy in what is known as a "parasitic load." CalEnergy uses the district's power to help run its geothermal operations.

Jane Alsip, IID's finance and treasury manager, said CalEnergy has maintained its monthly power payment, which totals about $120,000.

However, she said IID is one of the landowners upon which the CalEnergy geothermals sit. As such, the district has not received royalty payments totaling $60,500 per month.

IID Executive Officer Brad Luckey said IID has a stake in the future of CalEnergy.

He said the district is going to be looking for new power sources in coming years and preliminary talks have started with CalEnergy.

CalEnergy is not the only geothermal company in the Imperial Valley. There are geothermals operating in Heber and in the East Mesa operated by separate companies.

Information on whether those companies supply power to Edison was unavailable this morning.

CalEnergy also pays millions of dollars in property taxes to the county each year. Reinders said the company is up to date on tax payments. The previous property tax payment was in March and another payment is due in April.

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

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