WITH DIRECT ACCESS SCHEDULED TO BEGIN ON Jan. 1, 1998, California regulators are moving quickly to set up their long-considered policies on electric restructuring. The restructuring actions touch nearly every aspect of electric regulation in the state from financing decisions and rate design to the sale of generating assets and monitoring new capital additions.
In addition, restructuring has affected ongoing regulatory activities such as the development of performance-based rate making plans and pricing and rate designs for large incumbent utilities.
Sale of Generation Assets
Southern California Edison wants to divest itself of its 12 gas-fired plants while Pacific Gas & Electric Co. will sell three separate plants representing 45 percent of its fossil fuel generating capacity. Two years ago, the commission had ruled that the utilities should voluntarily divest themselves of at least 50 percent of their fossil fuel generating capacity. See, Re Proposed Policies Governing Restructuring California's Electric Services Industry and Reforming Regulation, 166 PUR4th 1 (Cal.P.U.C.1995).
Now, while authorizing each utility to "commence an auction" of plants, the commission has said it will review the final bids to determine whether the sales will harm either the reliability of the state's electric system or development of competition. Re Pacific Gas & Electric Co., Decision 97-09-046, a. 96-11-020, Sept. 3, 1997 (Cal.P.U.C.); Re Southern California Edison Co., Decision 97-09-049, a. 96-11-046, Sept. 3, 1997 (Cal.P.U.C.).