Davis Signs Bill to Set Maintenance Standards for Private Power Plants

Gov. Gray Davis signed a bill Friday that rolls back one aspect of electricity deregulation by requiring the state to set and enforce maintenance standards for privately owned power plants.

Davis said the new law will allow the California Public Utilities Commission to make sure that when power plants are shut down suddenly it is to correct mechanical problems or ensure safety, and not to create scarcity and drive up prices.

“Statistics show that the average monthly power plant outages in 2001 were double what they were in 2000 and nearly triple that of 1999,” the governor said in a written release.

Utilities panel President Loretta Lynch lobbied for the bill, saying that it would help prevent “gaming” of the power market that California created under a 1996 deregulation plan. As part of that plan, regulated utilities auctioned off many of their gas-fired power plants to private companies over which the state has had, until now, little authority.

Power plant owners opposed the bill, SB 39XX by Senate leader John Burton (D-San Francisco). They argued that their plants suffered a rash of mechanical failures after running unusually hard to supply power in 2000 and 2001.

Utilities panel inspectors have visited private power plants hundreds of times since January 2001. But some energy companies resisted inspection, insisting that their power plants were exempt from state regulation.

The new law requires the utilities panel and the California Independent System Operator, which manages much of the state’s transmission system, to form a committee to write standards for operating and maintaining power plants. It allows the utilities panel to order repairs or improvements. It exempts nuclear power plants and hundreds of small power plants known as “qualifying facilities.”

Reliant Energy of Houston, which owns five Southern California power plants, sued the state earlier this month after the utilities panel repeatedly refused to disclose the records of more than 100 visits by inspectors.

“If state officials want to allege that generators have taken down their power plants deliberately,” said spokesman Richard Wheatley, “then justification for those comments ought to be contained in that data.

“The public has a right to know what those ... inspectors found, not only at our plants but other companies’ plants,” he said.

Utilities panel spokeswoman Terrie Prosper said the commission will make the inspection results public in June. It’s taken more than a year, she said, because the panel had to sue generators twice to get operation and maintenance records.