California Powers Up at Warp Speed

SACRAMENTO, California, May 31, 2001 (ENS) - California Governor Gray Davis announced the licensing approval Wednesday for a 530-megawatt addition to the existing Contra Costa Power Project by the California Energy Commission.

The announcement marks the 16th major power plant licensed by the Davis administration in response to the energy shortages and soaring prices that hit California hard last year. No major plants were licensed during the 12 years before Governor Davis took office in January 1999.

"California is moving to add new generation to the state's system at warp speed," Governor Davis said.

Davis

California Governor Gray Davis (Photo courtesy Office of the Governor)
"Never before in Californiaís history has so much electricity generation been licensed in such a short time," said Energy Commissioner Robert Laurie, chairman of the Commissionís Siting Committee. The 16 new power plants licensed by the Energy Commission since 1999 will generate a total of 10,403 megawatts, enough to eventually power 10 million typical California homes.

In a meeting with President George W. Bush on Tuesday that Davis described as "cordial, informational, businesslike" the two men found that they have "a fundamental disagreement" over whether or not California is entitled to price relief for the energy it must buy from out of state generators. "I don't think it's a matter of philosophy or ideology. It's a matter of law," the governor said.

Davis gave his view of the 35 minute meeting. "I said we would be out of the woods by the fall of 2003 and I wanted temporary relief. That means that the people who sell us power get all their costs back and a 40 or 50 percent profit, which in this economy is pretty darn good. Just until we get all the new plants on-line. I said, then you could hold us to a rigorous schedule because believe me, we're moving at warp speed getting the plants, California's people and the economy need on-line."

Bush

President George W. Bush speaks to marines at Camp Pendleton, California about energy conservation (Photo by Paul Morse courtesy the White House)
President Bush declined to offer the price cap, a position that Governor Davis said he will counter in the courts. The state will file a lawsuit against the Federal Energy Regulatory Commission for failing to discharge its legal obligations to provide price relief to California, Davis said.

The Federal Energy Regulatory Commission made a determination in November and again on December 15 that the California energy market was dysfunctional, and the prices were "unjust and unreasonable."

Following that determination, Governor Davis said, California is entitled as a matter of law to some form of price relief either in the form of refunds or some tempering of the price in the future.

California paid $7 billion for power in 1999; $27 billion for approximately the same amount of power in 2000, Davis explained. "Even though demand has dropped 8 to 10 percent the first five months of this year, we're looking at spending $50 billion for power in the year 2001."

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Contra Costa County is the site of the newly approved power plant. (Photo courtesy Contra Costa County)
"Now surely, electricity deregulation is not working if Californians have to spend 700 percent more for electricity in 2001 than they did in 1999," he said.

Governor Davis said the President has been helpful in California's efforts to site more power plants. "He has been helpful in seeing that the federal government moves with the same speed the state government is moving in approving permits," Davis said.

Davis signed legislation last week that will speed siting of power plants in California. The bill provides for expedited permitting timelines, air emission offsets, and waivers of standby charges for small distributed generation facilities such as stationary fuel cells to power buildings.

Construction on the $250 to 300 million Contra Costa Power Plant project should begin early this summer, employing about 285 workers. The plant is scheduled to be online in early 2003.

The California Energy Commission Status Report on Permitting of California Power Plants is available online at: http://www.energy.ca.gov/sitingcases/backgrounder.html