California utilities stiff ISO $1.25 billion for December bills


Ann de Rouffignac
OGJ Online

HOUSTON, Mar. 5, 2001—Only a fraction of December's $1.43 billion in power bills owed by the California utilities to the California Independent System Operator (ISO) was paid Friday.

The California ISO sent out invoices for December's bills but came up mostly empty handed. Market participants—mostly Pacific Gas & Electric Co., a unit of PG&E Corp., and Southern California Edison Co., a unit of Edison International—didn't pay up. California's two biggest utilities are teetering on the edge of bankruptcy and have missed several key payments on debt obligations and purchased power.

Pacific Gas & Electric Co. was billed $1.111 billion and only paid $177 million, said Ron Low, spokesman for the utility.

Southern California Edison Co. was billed $311 million and paid nothing. And $9 million was billed to all others, who are expected to pay, said Patrick Dorinson, spokesman for the ISO.

The new set of debt is piled on top of November's bills for power which are still outstanding. There is a lag of 3 months between the month power is bought and delivered and the billing cycle from the ISO. Bills of $519 million from November are still unpaid, said Dorinson.

That brings the total unpaid power purchases for November and December to $1.76 billion.

Independent power generators have been selling power to the California Power Exchange (PX) and the ISO which buys power on behalf of the utilities. The generators have not been paid for power sold into the market since the utilities failed to pay their November invoice due Feb. 2.

Subsequently, they have been under federal court order to sell power to the ISO with little hope of compensation. Utilities, the ultimate purchaser of the power, are not creditworthy and unlikely to pay. The court order is set to expire next week, but the judge could enter a permanent injunction forcing the generators to continue to provide power.

Generators have reacted to the unpaid bills for spot power by seeking to arrange long-term contracts with the state that will guarantee payment. But the long-term contracts do nothing to cure November, December and upcoming January and February bills, said one source close to a generator.

Many are getting nervous about the possibility those bills will not be paid in full given California Gov. Gray Davis's remarks at a recent analysts' meeting in New York. He suggested that generators would not get paid in full for the money owed them by utilities through the ISO.

Mirant Corp., formerly Southern Energy, did not mince its words in a statement Friday.

"We want quick payment for past due amounts. Any talk of additional delay or of partial payment is counterproductive to finding a solution," said Randy Harrison, chief executive officer of Mirant's western operations. Likewise, Reliant Energy Inc. and Dynegy Inc. have both said they intend to pursue recovery in full of California's unpaid bills.

Sponsored by FLSmidth

Related Articles

Top 10 most read articles from 2014

We take a look back at the stories that you, the reader, read the most this year.

Day & Zimmermann land maintenance contract at Palo Verde Nuclear Generation Station

Day & Zimmermann (D&Z)'s Engineering, Construction & Maintenance group has been awarded a three-year contract by Arizona Public Service Co. (APS) to provide maintenance services at the 3,739-MW Palo Verde Nuclear Generation Station near Phoenix. 

Follow Power Engineering on Twitter

Latest News

GRDA Breaks Ground on Western Hemisphere’s First 501 J Series Gas Turbine

What will likely be the first Mitsubishi Hitachi Power Systems 501 J combined-cycle gas turbi...

Fitch downgrades bonds for Colver waste coal power plant in Pennsylvania

Fitch Ratings said Jan. 23 that, due to concerns about an "aging" power plant that ...

Blizzard warnings drive up Northeast gas, power prices

Spot power and natural gas prices surged for the Northeast as that region prepared for a majo...

OSU regents approve construction of new central plant

The Oklahoma State University Board of Regents has authorized construction of a new central p...
Gas Turbine Air Filtration

Power Engineering Photo of the Day

Duke Energy to build solar power facility at North Carolina military camp

Peabody Energy names new president, CEO

Peabody Energy (NYSE: BTU) announced that Glenn Kellow, current president and chief operating...

Vermont bill would set new standards for renewable energy

Vermont is considering a change to its energy policy that would end a practice that critics s...

Power Engineering Current Issue

01/01/2015
Volume 119, Issue 1
1501pe-cover-lg

Products Showcase

Dynamic Fluoride Ion cleaning DFIC of industrial natural gas turbines Hi-Tech Furnace Systems

Dynamic Fluoride Ion Cleaning of IGT Parts

The Dynamic Fluoride Ion Cleaning (DFIC) Process from Hi-Tech Furnace Systems is able to clean deep, narrow cracks of oxides by cycling between negative, atmospheric, and positive pressure.

Archived Articles

2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015

Buyers Guide Company Listings

Power Industry Wire News

BioSolar Plans to Lower the Cost of Solar Power With Energy Storage Technology

BioSolar Plans to Lower the Cost of Solar Power With Energy Storage Technology

CAPiTA Super Corporation Announces New Factory

CAPiTA Super Corporation Announces New Factory

JC Data Solutions Witnesses an Increase in Transactions for Their Payment Manager Services

JC Data Solutions Witnesses an Increase in Transactions for Their Payment Manager Servi...

Paradigm Oil & Gas: Strong Start to 2015

Paradigm Oil & Gas: Strong Start to 2015

STWA Appoints Energy Industry Executive Thomas A. Bundros to Board of Directors

STWA Appoints Energy Industry Executive Thomas A. Bundros to Board of Directors

Power Engineering

Article Archives for Power Engineering Magazine

Continuing Education

Professional Development Hours

To access a course listing associated to a specific topic listed below, click on the topic of choice from the list below.

Latest Energy Jobs

View more Job Listings >>