Julie, could you post on the outage tracking Web page?

GAC
POWER POINTS Special: Calif ISO Inflates Outage Figures
By Mark Golden
  
04/04/2001 
Dow Jones Energy Service 
(Copyright (c) 2001, Dow Jones & Company, Inc.) 


A Dow Jones Newswires Column 

   
NEW YORK -(Dow Jones)- The California Independent System Operator on Monday 
published on its Web site its list of off-line generators, as it has done 
every day since Jan. 25, as a way of showing why it is having such a hard 
time keeping the lights on.

Monday's bottom line - 15,501 megawatts of generating capacity out of service 
- was stunning since electricity usage within the ISO's area peaked that day 
at 28,632 MW. 


But on Monday, as it has every day since Jan. 25, the ISO padded the list. It 
included power that isn't in any way considered resources of the ISO; 
qualifying facilities that the ISO counts twice; and generators that returned 
to service hours before the list was published. 


When those are eliminated, Monday's listed outage total falls to 8,905 MW 
from 15,501. 


The ISO list, for example, added 1,221 MW to the total of its "California 
Generation Curtailments" because the 1,221-MW Palo Verde nuclear unit 1 was 
taken off line over the weekend for scheduled refueling. But only one of the 
three investor-owned utilities that the ISO represents, Edison 
International's (EIX) Southern California Edison, owns any of the electricity 
from the Palo Verde plant, which is in Arizona. Edison's take from the 
generator is just 201 MW. 


The same could be said for Four Corners unit 4, which contributes 355 MW to 
the ISO when its running, but 740 MW to Monday's ISO outage list. 


The ISO list also includes dozens of generators owned by California municipal 
utilities that aren't part of the ISO's system. The ISO is responsible for 
managing the combined electricity load of Southern California Edison and 
California's other two investor-owned utilities: PG&E Corp.'s (PCG) Pacific 
Gas & Electric Co. and Sempra Energy's (SRE) San Diego Gas & Electric Co. 
Power plants owned by the three utilities are considered to be ISO resources, 
as are the big power plants that the utilities sold to merchant power 
companies like Dynegy (DYN) and Reliant (REI), and smaller, alternative power 
plants - or "qualifying facilities" - that provide juice to utilities under 
long-term contracts. 


On Monday, the ISO included 2,726 MW of off-line generation that isn't 
considered by anybody to be ISO resources in the first place. 


The ISO agrees it shouldn't be counting the entire output from generators 
that the utilities only partially own. 


"It's a flaw in the calculation by the software. We're trying to get that 
fixed, and it should be within a week or two," said Tracy Bibb, the ISO's 
managing director of engineering and maintenance. 


As for counting generators owned by municipal utilities in Pasadena and 
Sacramento that the ISO doesn't serve, Bibb said the ISO has no choice but to 
include them. 


"The governor issued an emergency order that the ISO shall publish a list of 
all unit outages in California. We contacted all the utilities and said that, 
even though you're not part of the ISO, you are required to report outages to 
us, and we're required to post them," Bibb said. 


The inflated daily outage list hurts the reputation of the state's merchant 
power companies. One of the primary uses of the list is to imply that 
"out-of-state generators," as they are often called, are keeping massive 
amounts of power off line to maintain false scarcity and pump up the 
wholesale power market. 


"California once again was threatened with blackouts Friday, which put 
Reliant Energy on the spot when it announced it had taken one of its units 
out of service at its second-largest power plant in the state," the Houston 
Chronicle reported last week. "California critics have called power producers 
pirates, saying practices like taking plants out of service at key times push 
up prices." 


The ISO includes every little difference between maximum output and actual 
output, however small or temporary. Of the 73 large in-state generating units 
owned by merchant power companies Reliant, Dynegy, AES Corp. (AES), Duke 
Energy (DUK) and Mirant (MIR), 51 units were on the ISO's list. Many are off 
line for scheduled spring maintenance, but most are on the list because at 
some point in the day they weren't generating at full capacity. Duke's 171-MW 
Morro bay unit 1, for example, appeared on Monday's list because at some 
point in the day it was generating just 155 MW. 


"We hardly ever bring that 44-year-old unit to full load. It will stay on 
longer that way. The 171-MW maximum is running it flat out under perfect 
weather conditions," said Duke spokesman Tom Williams. 


And many units are run at partial capacity due to annual limits on emissions 
of nitrogen oxide, which became far more strict this year, Williams and 
others said. 


The ISO doesn't want to hear the excuses. 


"A lot of them have been certified to a certain maximum capacity. Any derate 
at all off of that does get picked up. The unit is supposed to be good for 
that maximum," Bibb said. 


As for NOx limits, Bibb agreed the limits are being reached because the units 
are running more than ever before. But he said there are ways around the 
limits, such as obtaining variances. 


AES had to shut down several plants when it exhausted its emissions last 
year, and this spring and fall AES is installing NOx reduction equipment at 
eight of its big generators. But that raises another problem the merchant 
power companies have with the way the ISO breaks down its outages. Of the 
15,501 MW shortfall listed Monday, 8,035 is listed as "unplanned." The 
merchant companies said most of these "unplanned" outages were coordinated 
with, and approved by, the ISO months ago. 


"The ISO has coordinated the schedule for all 17 units in the L.A. basin that 
are going to be off line for SCR (selective catalytic reduction) 
installations this year. The schedule was finalized in early March," said AES 
spokesman Aaron Thomas. 


Nevertheless, three AES units out for SCR installation contributed 672 MW to 
Monday's unplanned outage total. 


It's the unplanned total that is often used to imply that merchant power 
companies are creating a false scarcity in order to drive up prices. 


Weirdly, if a unit is generating less than its maximum by different amounts 
at different times of the day, the two curtailments are added together for 
the ISO list, though Bibb says this will also be fixed in the new software 
program. 


Also on Monday, the ISO listed 1,580 MW off line at Southern California 
Edison's Mohave plant, even though the generators involved had returned to 
full operation hours before the ISO put its list out at 11:45 a.m. PDT. The 
return of any capacity before the list is published is ignored, but if a unit 
trips off line just before the list is published, that gets included, the 
ISO's Bibb said. 


The grid operator double-dips when it cites the state's smaller qualifying 
facilities. The ISO's chief operator and spokesman have said repeatedly in 
press conferences, interviews and press releases that the qualifying 
facilities that have been turned off due to lack of payment from utilities 
are separate from the ISO outage list. And daily newspaper reports give both 
the outage total and the qualifying facility total separately. 


But the outage list includes QFs every day. On Monday, for example, 1,726 MW 
of QF generation contributed to the outage total. 


In the meantime, it's the list's inflated total that grabs attention. 


"We don't get that many questions on it from the media. People pretty much 
take what they need from it - the bottom line," said ISO spokeswoman 
Stephanie McCorkle. 


-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com



 

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