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Off Peak

The city utility in Vernon, California thought it had bought plenty of power, but then got blacked out anyway.
Fortnightly Magazine - June 1 2001

Off Peak

June 1, 2001

Dear ISO: Why Me?


The city utility in Vernon, California thought it had bought plenty of power, but then got blacked out anyway.

March 19, 2001
Dear Mr. Winter:

Recently, we have noticed articles in the newspaper describing attempts being made by many agencies to obtain exemption from such rotating blackouts [called by the California ISO] ...

It seems apparent that the rotating blackouts that are occurring today were instigated primarily by the fact that the two investor-owned utilities ... have allowed their credit to lapse ...

I do not believe that the WSCC [the regional reliability council], the FERC or the Secretary of Energy has ever determined that this unwillingness of a utility ... to make the necessary payments ... constitutes an event that, under FERC precedent or other good utility practice, would permit the ISO to call, assert or to demand rotating blackouts from other utility distribution companies who have made adequate financial arrangements ... for their customers.

Kenneth J. DeDario

March 20, 2001
Dear Mr. DeDario:

The ISO, like Vernon, is very concerned with these blackouts. ...

However, the ISO would like to correct the information Vernon is relying on from "articles in the newspaper," with the actual facts that have resulted in the blackouts yesterday. Currently, approximately 12,000 megawatts of in-state generation is out for maintenance; additionally yesterday morning the following outages occurred. ...

The state of California is currently buying all capacity that is available, regardless of price. [T]he outages yesterday were due to a lack of capacity and energy in real time ... not due to real-time financial constraints of the investor-owned utilities. This type of System Emergency is what the ISO Tariff and the Utility Distribution Company Operating Agreement executed by Vernon contemplated.

Kindest regards,
Terry M. Winter

March 28, 2001
Dear Mr. Winter:

Thank you for your prompt response to my March 19 letter. However, your letter did not respond to the question posed. That question was: If [Southern California] Edison, PG&E or San Diego Gas & Electric or any other utility does not meet the creditworthiness standards and does not schedule sufficient resources to meet its load, will the ISO insist that other [utilities] absorb rolling blackouts or manual load shedding?

Your letter instead provides a characterization of what may have occurred on [the day in question] and describes those occurrences as "a real-time emergency that is not due to real-time financial constraints of the investor-owned utilities." ...

Therefore, please respond to the above question.

Kenneth J. DeDario

See FERC Docket No. EL01-75-000


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