Hull breaks with other governors over power crisis

Max Jarman The Arizona Republic Feb. 02, 2001

PORTLAND, Ore. - At an energy policy summit to address the mounting California crisis that's causing blackouts and forced conservation, Gov. Jane Hull broke with other Western governors who wanted the federal government to put price caps on wholesale power producers.

Instead, Hull expressed concern that caps would compromise Arizona's deregulation plan and interfere with the rollout of new power plants.

"This would undermine our deregulation efforts and discourage investment in power plants," she said.

Governors from Washington, Oregon, California and Wyoming, however, argued for the caps as necessary to protect consumers and local power distributors who have been forced to absorb exorbitant prices for wholesale power.

Hull and Idaho Gov. Dirk Kempthorne opposed the plan, and Secretary of Energy Spencer Abraham resisted pressure from other governors to move it forward.

The specter of a hot, dark summer loomed large for the governors, tribal leaders, power producers and energy policymakers in attendance. They explored both short- and long-term solutions at the one-day summit.

Shortages in California are expected to persist and wholesale rates continue to soar. Washington and Oregon also will be in trouble because they've sent hydroelectric power to California this winter, and depleted reservoirs in the Northwest.

In Arizona, utility companies Salt River Project, Arizona Public Service Co. and Tucson Electric Power have taken steps to acquire additional supply and are confident there will be no service interruptions this summer. But the companies acknowledge a string of unusually hot days and the unexpected loss of a major generator or transmission line could bring the system to the brink.

Given Arizona's own thin margins, Hull is concerned that persistent problems in California could spill over into Arizona during the summer, undermining Arizona's supply.

"California has a supply problem and we don't want to spread all over the West," she said. "We want to make sure our power supplies are protected."

Hull has been an outspoken opponent of any California bailout that would adversely affect Arizona consumers. Under a Department of Energy order issued last month, power producers have been ordered to sell electricity to California. So far sales by APS and SRP have involved non-critical surplus power. But there is concern the federal government could ask the states to cut back on their own consumption so that more power would be available for California.

The governors recognized a trade-off between energy production and environmental regulations, and vowed to streamline approvals for new power plants and transmission lines.

"We need to keep a balance between environmental concerns and reliable power," Hull said.

Reach the reporter at max.jarman@arizonarepublic.com or (602) 444-7351.

http://www.arizonarepublic.com/arizona/articles/0202azenergy-ON.html

-- Martin Thompson (mthom1927@aol.com), February 03, 2001