Calif Resells Surplus Power At A Loss In Second Quarter
 
LOS ANGELES -(Dow Jones)- The California agency buying power in lieu of the state's ailing utilities resold electricity in the spot market during the second quarter at an average price of $45 a megawatt-hour, the agency said Wednesday. 

The announcement by the California Department of Water Resources was an answer to critics who blasted the department this summer for having to resell surplus power for as little as $1 a megawatt-hour because it secured too much electricity under long-term contracts negotiated by the administration of Gov. Gray Davis, the department said. 

In a press release, the department's California Energy Resources Scheduling division, its power-marketing arm, said it resold 224,871 megawatt-hours, or 1.1% of its total purchases. That power generally was first bought on the spot market or through monthly or quarterly contracts, not the long-term contracts, the department said. 

Such sales are typical of any power-buying operation, as demand for electricity can vary in unpredictable ways, the department said. 

The DWR is responsible for buying all the power needed by the customers of the state's three main utilities beyond what the utilities generate themselves or have secured under their own long-term contracts - or about one-third of the total. 

According to the DWR, power secured under Davis' long-term contracts covers one-third to one-half of the electricity it must supply. Short-term deals, such as monthly or quarterly contracts, represent one-third of the portfolio. The rest is bought in the spot market. 

The state has put its average cost of power under the long-term contracts at 7.9 cents per kilowatt-hour for the first five years and 6.9 cents per kilowatt-hour for the next five years. 

Davis has taken heat for locking up too much electricity at high prices. Similarly, the Department of Water Resources has been criticized for amateurish purchasing practices. 

The DWR releases information on its power transactions quarterly to protect its negotiating position, the department said. 

The DWR buys power for customers of PG&E Corp. (PCG) unit Pacific Gas & Electric, Edison International (EIX) unit Southern California Edison and Sempra Energy (SRE) unit San Diego Gas & Electric.