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
 Palo Verde nuclear power plant is US’ largest producer for 23rd time

Palo Verde nuclear power plant is US’ largest producer for 23rd time

The Palo Verde Nuclear Generating Station in Arizona reached its 23rd consecutive year as the nation’s largest power producer.

Employment in power sector declines, except for renewable generators

According to the latest data available from the Bureau of Labor Statistics (BLS) as published on the website of the U.S. Energy Information Administration (eia), the electric power generation sector lost more than 5,800 jobs from January 2011 to June 2014, despite a gain of nearly 1,800 non-hydro jobs in the renewable energy sector.

Follow Power Engineering on Twitter
Latest News
08/26 Henry Hub Average Natural Gas Spot Prices

08/26 Henry Hub Average Natural Gas Spot Prices

The Henry Hub is the pricing point for natural gas futures contracts traded on the New York M...
Ameren Missouri moving spent nuclear fuel to dry storage casks Callaway Energy Center

Ameren Missouri to begin moving spent nuclear fuel

Ameren Missouri’s Callaway Energy Center will begin this week moving spent nuclear fuel to ne...
Millstone 2 nuclear unit has corrective actions from NRC

NRC issues corrective actions against Millstone 2 nuclear unit

FP&L to buy and sell Cedar Bay coal-fired power plant

FP&L to buy, close coal-fired power plant

Florida Power & Light will buy and shut down a coal-fired power plant under a settlement ...
The Weekly Coal Production Report has been updated for the week ended Aug 22, 2015.

08/22 Weekly Coal Production Report

The Weekly Coal Production Report has been updated for the week ended Aug 22, 2015.

Moody’s affirms Southern ratings, but changes outlook to negative

Deal for AGL comes at time of increasing "risk profile" for Southern, Moody finds

Now that Southern (NYSE:SO) has announced plans to buy AGL Resources (NYSE:GAS), Moody’s Inve...
Federal judge dismisses most coal-fired emissions claims against Luminant

Judge rejects most claims in federal NSR lawsuit against Luminant

A federal judge on Aug. 21 dismissed most of the claims of the U.S. Environmental Protection ...
IAEA, Kazakhstan to establish low-enriched uranium bank

Kazakhstan to host international uranium bank

The International Atomic Energy Agency and Kazakhstan have signed an agreement to establish a...
Power Engineering Current Issue
03/01/2015
Volume 119, Issue 3
1503pe-cover
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

PyroGenesis Canada Inc. to Present at the 4th Annual Liolios Gateway Conference on September 10, 2015

PyroGenesis Canada Inc. to Present at the 4th Annual Liolios Gateway Conference on Sept...

American Power Group Announces Completion of a $3.25 Million Term Loan for the Purchase of Next Generation Natural Gas Flare Capture and Recovery Systems

American Power Group Announces Completion of a $3.25 Million Term Loan for the Purchase...

Anpath Group Signs Merger Agreement With Q2Power

Anpath Group Signs Merger Agreement With Q2Power

Cimation Selected by Shell for Global Cybersecurity Program Roll-Out

Cimation Selected by Shell for Global Cybersecurity Program Roll-Out

Nuclear, LNG Export Projects Dominate Top 10 Capital-Spending Plans in U.S. Southeast Region, an Industrial Info News Alert

Nuclear, LNG Export Projects Dominate Top 10 Capital-Spending Plans in U.S. Southeast R...

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 >>