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Exceptions to the Rule: Bypassing the California Transition Charge

Fortnightly Magazine - November 15 1996

Mw pro rata to districts throughout the state, according to the number of districts in each IOU territory (although most of these districts lie in PG&E territory). Districts can apply for allocations between 8 and 40 Mw, but must provide a "detailed plan" to the CEC. The major limits are that loads served must lie within the district territory, and 50 percent of each year's allocation must be applied to agricultural pumping load.

Still, the remaining 50 percent represents a significant amount of electric power that could be used to directly serve agribusiness customers in those districts. Not only could direct-access or aggregation opportunities reduce the commodity cost of energy for pumping, compared to utility agricultural rates, but exemption from the CTC could provide another $0.02 to $0.03/Kwh margin to irrigation districts.

In a separate provision, water agency members of the Eastside Power Authority and the Southern San Joaquin Valley Power Authority also receive a CTC exemption for pumping loads (em giving a boost to their efforts to bypass SCE.

Who else will take advantage of these exemptions? Certainly the other major irrigation district/ utilities (em Modesto and Turlock (em are already figuring out how to format their competitive plans to meet the requirements of the law and win a major share of the CTC exemption.

The Imperial Irrigation District (IID), however, proves more reticent. According to IID superintendent of generation Jim Mordah, IID "doesn't want to get anybody mad at [them]" by stealing customers from neighboring IOUs (em even though nearby Palm Springs is practically begging for a way to bypass SCE.

Large food-processing plant managers in those districts could also form alliances to turn those exemptions into power-cost savings.

Meanwhile, the state's irrigation districts are contemplating their options. Chris Mayer, assistant general manager for marketing at the Modesto Irrigation District, says that several energy consultants have been spotted driving up and down Highway 99 through the Central Valley, knocking on doors to offer their services to perplexed districts. t

Arthur O'Donnell is editor and associate publisher of California Energy Markets, a newsletter that closely follows the California restructuring effort.

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