PUC's agenda calls for contract probe between providers, utilities

April 18, 2001|By DARREN SIMON, Staff Writer

The California Public Utilities Commission on Thursday is expected to consider launching an investigation into renewable energy providers as a court battle between CalEnergy and Southern California Edison continues.

On the commission's agenda is an item calling for an order to institute an investigation into the performance of renewable energy providers based on contracts they have with utility companies.

Those utilities include Edison, Pacific Gas and Electric and San Diego Gas and Electric Co.

According to the agenda, the commission recognizes that disputes between renewable energy providers and utilities have arisen regarding non-payment by the utilities.

The agenda also states California's energy crisis "is affected by some QF's (qualifying facilities) refusing to generate and deliver power" to the state's utilities.


The commission, which will meet in San Francisco, states in the agenda it has taken action to try to resolve the payment dispute between renewable energy providers and utilities.

The commission ordered on March 27 that the utility companies pay for power provided by the renewable energy providers "on or after" the effective date of that order. The utilities would be subject to fines if they failed to do so.

According to the agenda, the commission thought that action would resolve the dispute.

The agenda further states since that March 27 decision the commission has received reports that some renewable energy providers are "refusing to perform under their contracts on a going-forward basis."

The agenda names two court cases that have resulted in a renewable energy provider being allowed to suspend its contract with a utility. One case named is the CalEnergy lawsuit against Edison.

CalEnergy sought two actions in Imperial County Superior Court. First, CalEnergy asked the court free it from its contract with Edison; second, CalEnergy asked the court to force Edison to make back payments.

CalEnergy claimed there was a five-month period dating back to November in which Edison did not pay for energy it received. CalEnergy officials have said they are owed more than $120 million.

On March 22, Imperial County Superior Court Judge Donal Donnelly ruled CalEnergy could suspend its contract and sell its power on the open market.

Donnelly has not ruled on the back payment issue. A hearing on that issue has been delayed to June 19.

Since that March 22 ruling, CalEnergy has sold its power to El Paso Merchant Energy Co., which has acted as a broker for the power.

While Edison did offer a $7 million check this week to CalEnergy to start paying for the power on a going forward basis, CalEnergy officials refused to accept that check.

During a court hearing Monday, Donnelly ruled that CalEnergy could continue to sell its power on the open market.

CalEnergy officials have said the company will continue to do so until the back payment issue is resolved.

Should the commission investigate the renewable energy providers, it would entail determining which renewables are "failing" to perform under their contracts.

The agenda states the commission then would take additional steps to ensure the availability of the renewable energy in the state at reasonable prices.

Officials with MidAmerican Energy Holdings Co., the parent company of CalEnergy, voiced anger at the commission's action.

Jonathan Weisgall, vice president of legislative and regulatory affairs for MidAmerican, said the commission should be investigating the utilities not the renewable energy providers.

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

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