CA Settlement Stalls; Generator Construction on Track 
As work moved forward Tuesday on two new power sources to come on later this summer, the outlook in the immediate two months darkened with no apparent comprehensive solutions emerging from the state legislature. 
"The fact that there are several competing proposals in the legislature kind of indicates [the governor's] Memorandum of Understanding has some trouble," said Jerry Jordan, head of the Sacramento-based California Municipal Utilities Association. "Certainly if there is a [Southern California] Edison settlement we would hope to get paid out of that (as would the merchant generators)." 
AES received all of its final permits last week, and began construction this week on re-powering two generation units totaling 450 MW at its Huntington Beach facility in Orange County about 40 miles south of Los Angeles. Initial power supplies from the re-started and re-built units will begin in August, said Aaron Thomas, AES's San Francisco-based manager for California operations. 
Separately, Calpine Corp. on Tuesday announced that initial construction of 135 MW of peaking generation capacity will begin this week next to the company's existing Gilroy power plant in Gilroy, CA, an agriculture town not far from Calpine's San Jose headquarters. Upon completion of a two-phase build-out, the Gilroy Energy Center will be a 270 MW, natural gas-fired, simple cycle peaking generation facility. Commercial operation of phase one is scheduled for September 2001. An additional three 45 MW gas turbine generators will be installed in phase two, with full build out estimated for May 2002. 
No one thinks current efforts, not matter how accelerated, will avoid rolling blackouts, however. 
"There obviously is concern among some munis that they have adequate supplies, but are still asked to participate in rolling blackouts anyway (the 1 million-customers Sacramento Municipal Utility District is in that category)," said Jordan. "To the extent there is the possibility of bringing on emergency generators, that is being done. Everyone has done pretty much what they can do." 
Jordan noted that the public sector generators, like their private sector counterparts, need air quality restrictions waived temporarily so units that carry restricted hours of operations can be turned loose during summer peak demands to help avoid blackouts.