San Diego Union-Tribune

August 21, 2001

Question of propriety might end access to control room


WASHINGTON -- Electricity buyers for the state are expected to lose access to a power-grid control room next month, now that a California congressman has raised questions about the propriety of the arrangement.

But a spokesman for the California Department of Water Resources, which began buying electricity for the state during the ongoing power crisis, denied the move was a response to Rep. Doug Ose's objections.

With the crisis no longer so acute, there is less need for water resources personnel to have access to the Independent System Operator's control room in Folsom, said Oscar Hidalgo, a water resources spokesman.

"We're basically trying to cycle out of there," he said.

Ose, R-Sacramento, spotlighted the water resources department's access to the control room during a House subcommittee hearing Aug. 2. In a prepared statement, he charged that the arrangement allowed the water resources
department "to cherry-pick its power purchases."

Ose said the arrangement violated federal regulations and "possibly cost Californians billions of dollars in potential refunds."

The Federal Energy Regulatory Commission has said Department of Water Resources contracts should not be subject to refunds the state is seeking for over-priced power, contending the agency had a competitive advantage. 

Among those who once had access to the room were four energy consultants to the state who were fired for owning stock in a power company from which they were purchasing electricity. 

Appointees of Gov. Gray Davis oversee both the ISO and the water resources department.

Hidalgo said water resources personnel needed access to the control room to coordinate power purchases during a crisis situation.

"In order to keep the lights on in California, this was something that was necessary, we felt," he said. "We did our best to minimize our exposure to any material that was not intended for our usage."

His comments echoed ISO President Terry Winter's defense of the practice before the House subcommittee.

With numerous long-term power contracts in place and the threat of blackouts receding, water resources has set a goal of removing all personnel from the control room by Sept. 1, Hidalgo said.

Six water resources personnel still have access to the room, he said.

Last week, Winter sent a memo to Ose listing nine people who had access to the room and 14 others who no longer had access.