California-Only Sales Rule Fought by Plant

A month after winning final approval to restart two idle generators in Huntington Beach, AES Corp. is fighting a requirement that it sell all the electricity from the units within California, arguing that such a condition violates interstate commerce laws.

AES also asks that the California-only restriction be withdrawn because it obstructs the company’s continuing efforts to forge a contract with the state Department of Water Resources, the agency brokering power deals.

“AES believes that this condition was and is based upon errors of law and fact,” the power giant said in a petition filed Monday with the California Energy Commission.

AES spokesman Aaron Thomas said Tuesday that the two sides are very close to a deal and that the petition is only a precaution should negotiations fail.

“It’s only if we can’t get the agreement over the goal line,” he said without elaborating on the sticking points.

The sales condition, unprecedented in the state, was considered a deal maker as state officials sought a balance between California’s energy needs and concerns of community activists and officials in Huntington Beach.

Local leaders expressed disappointment but not surprise that AES would try to find a way out of selling the power only to the state.

“They want to make as much money as they can,” City Councilwoman Debbie Cook said. “We wish they would become part of our community rather than fighting us.”

Negotiations between AES and the state agency began in March and intensified after the Energy Commission, in granting a fast-track construction permit May 11, limited operation of the two units to 10 years and ruled that their combined 450 megawatts must be sold within California. The 40-year-old units, to reopen in August, will generate 10% of the 5,000 megawatts the state hopes to bring into service this summer to avert an electricity shortage.