Grid to stop giving key data to power buyers

By Jennifer Coleman, The Associated Press
Wednesday November 21, 2001

SACRAMENTO — California power grid operators must stop giving the state’s energy traders advance notice of its electricity needs, unless it provides that information to all market participants, federal energy regulators ordered Tuesday. 

Two energy producers, Mirant Inc. and Reliant Energy, had complained that grid operators were giving the state’s energy traders preferential treatment by allowing them access to market-sensitive information. 

The Independent System Operator, which manages much of California’s electricity grid, has been giving power traders for the Department of Water Resources information unavailable to other ISO customers. That includes the amount of power the ISO expected to buy in the next hour and hourly bid price and volume information. 

Reliant spokesman Richard Wheatley said the Federal Energy Regulatory Commission upheld the energy companies’ complaints, reinforcing that “preferential treatment of certain market participants are not allowed.” 

FERC denied the energy companies’ request for an investigation of ISO’s relationship with the state energy traders. But the commission ordered the ISO to give the additional information to all market participants or to none, but it cannot release the data to only DWR. 

ISO officials would comply with the order, but hadn’t decided whether to make that information public or to keep it under wraps, said ISO spokeswoman Stephanie McCorkle. 

In January, the DWR stepped in to buy power for customers of three financially strapped utilities. Grid managers are required by federal law to sell to a “creditworthy” buyer and could no longer sell to Southern California Edison, San Diego Gas & Electric Co., and Pacific Gas and Electric Co., which were on the brink of bankruptcy due to months of high wholesale costs. 

Mirant spokesman Patrick Dorinson said the company was “pleased that FERC has clearly stated that DWR is a market participant and must follow the rules as we’re all required to. In order to ensure a properly functioning market, we all have to be treated fairly.” 

DWR spokesman Oscar Hidalgo said the department hadn’t seen the FERC order and couldn’t comment on the details. 

But he cautioned that allowing generators to know the amount of power needed to keep the lights on in the next hour could give them an advantage in the market. 

“The market rules seem to benefit the seller,” Hidalgo said. “I’m sure the rules didn’t anticipate having a public agency as a participant. There was certainly no anticipation for a utility going under.” 

In a related matter, the commissioners ordered that ISO was to bill DWR using the same format as it bills other customers. FERC rules prevent the grid manager from providing detailed bills because they would reveal proprietary pricing information. 

But the state has said it won’t pay the bills unless they specify which energy company provided the power, and at what price. 

Earlier this month, FERC ordered the ISO to bill DWR for $1.2 billion in past due energy costs. The ISO expected that invoice to be sent to DWR Tuesday.