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From:  <tbradley@bracepatt.com>
To: Aryeh Fishman <afishman@bracepatt.com>, Andrea Settanni <asettanni@bracepatt.com>, Charles Ingebretson <cingebretson@bracepatt.com>, Charles Shoneman <cshoneman@bracepatt.com>, Deanna King <dking@bracepatt.com>, Dan Watkiss <dwatkiss@bracepatt.com>, Gene Godley <ggodley@bracepatt.com>, Kimberly Curry <kcurry@bracepatt.com>, Michael Pate <mpate@bracepatt.com>, Marc F. Racicot <mracicot@bracepatt.com>, Paul Fox <pfox@bracepatt.com>, Ronald Carroll <rcarroll@bracepatt.com>, Shelby Kelley <skelley@bracepatt.com>, Scott Segal <ssegal@bracepatt.com>
Date: Thursday, October 18, 2001 1:48:25 GMT
Subject: 

FYI

FERC To Discuss Possible Changes To West Pwr Price Caps
    
Updated: Thursday, October 18, 2001 08:16 AM ET 

(This article was originally published Wednesday) 

By Jason Leopold and Andrew Dowell 

OF DOW JONES NEWSWIRES 


LOS ANGELES (Dow Jones)--Federal energy regulators said this week they will discuss possible changes to price controls the agency imposed on western wholesale power markets in June. 

Western utilities complained that the price controls, based on the price of generating power in California, aren't appropriate for the entire region. In particular, demand in the Northwest rises sharply in the winter, while California's power demand and cost are typically highest in the summer. 

The Federal Energy Regulatory Commission said in a notice its Oct. 29 meeting discussions could include an elimination of the 10% premium allowed for sales into California and changes to the way the price caps are adjusted.
T
 he price cap is set at about $92 a megawatt-hour and is calculated by taking the 85% of the most expensive hourly price during the most-recent Stage 1 power emergency in California, when operating reserves fall below 7%. 

Gov. Gray Davis lobbied hard for FERC to impose price caps throughout the entire western U.S., saying generators would sell their power to other western states if California were the only state with price controls. 

"The governor would be very disappointed if FERC contributed to additional economic uncertainty, particularly in these troubling times" if the agency were to lift the price restrictions, said Steve Maviglio, a spokesman for Davis. 

Last summer, Sierra Pacific Resources (SRP, news, msgs) unit Nevada Power was forced to initiate rolling blackouts to a small number of customers for about 45 minutes because of the new price caps imposed on the market by FERC and blistering heat, said Paul Heagen, Sierra Pacific's chief spokesman.
I
 n addition, some generators, including a unit of Enron Corp. (ENE, news, msgs), scrapped plans to build small power plants, the so-called peaking units used when demand for electricity is at its highest, in the western U.S. because of the price controls. 


-By Jason Leopold and Andrew Dowell, Dow Jones Newswires; 323-658-3874; jason.leopold@dowjones.com