What a difference
a recall makes!

Prospects for competitive markets for power in California and the balance of the West are good -- far better than in the recent past, stakeholders agreed at the RT conference, Developing Markets in the West.
     The election of Arnold Schwarzenegger as California governor and his initiatives to recharge the state's power sector were seen as key drivers.
     FERC Commissioner Nora Brownell cited completion of critical work on California's Path 15 grid bottleneck via public-private efforts as showing a positive trend.      But she is worried about developing California rules of the road (MD-02) and having enough power for this summer.
     Regional considerations are essential, Gov Arnold Schwarzenegger's energy adviser, Joe Desmond added.
     California needs to weigh energy policy, generation resources and gas supply in the context of the West as a whole, he emphasized.
     Thus his job is to build relationships with neighboring states and the federal government.
     California's top priority, he specified, is resource adequacy, followed by wholesale procurement, transmission -- long-term siting and lowering congestion -- and developing competitive retail core/non-core competitive model.
     Commissioner Mike Gleason of the Arizona Corporation Commission reported the problem of having half the grid in his state owned by public power that's not keen on yielding control over wires.
     That, he said, makes RTOs impractical but he's confident of the long-term future of competition in Arizona.
     Vicki Sandler, APS Energy Services CEO, discussed figures that show businesses are paying hundreds of thousands of dollars in excess bills to keep residential rates at artificially low levels.
     To Jackson Mueller, advisor to large energy buyers, end users' objectives include simplicity, so that they can pay less attention to the details of procuring their energy needs and focus more on their own businesses.  Regulatory certainty is high on such parties' lists, he added.
     But to get such certainty, Gleason contended, legislatures will have to stop passing laws and utilities cease asking for rate cases -- a goal he's not confident of attaining.
     Arizona wants no part of membership in a California-oriented RTO due to the differences in the states' situations, the commissioner added.
     When would the state join a regional entity?
     "When the economics are right for an RTO benefiting customers, that's when we'll get one," Gleason underscored.

(Story originally published in Restructuring Today 7/1/04)

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