PUC Promises to Keep Power Plants in Check

Armed with new rules, California regulators pledged Thursday to prevent power generators from creating electricity shortages and boosting prices this summer through bogus plant shutdowns, a tactic used by several companies during the energy crisis.

Under requirements approved Thursday by the state Public Utilities Commission, power plant operators must abide by state standards for maintenance, operations and record-keeping.

State officials can conduct audits, investigations and surprise inspections to enforce the new rules, and the PUC can impose penalties for violations, according to the commission.

Commissioner Carl Wood, who helped formulate the new standards along with outside experts, said the new rules would help the state survive a potentially difficult summer for electricity.

“On paper we have plenty of power [for the summer], but if some of that generation isn’t available when we need it, then we’re going to get in trouble again,” Wood said. “I didn’t want to go into the summer without having anything with which to hold the generators accountable.”

During the state’s 2000-2001 energy crisis, an unusually high number of plant outages contributed to higher electricity prices and shortages that sometimes triggered blackouts.

In the years since the crisis, investigators have uncovered evidence that some companies faked maintenance and mechanical troubles in order to hold back badly needed power so that prices -- and profits -- would soar.

Last month, the Justice Department charged Reliant Energy Services Inc. and four current or former employees with misconduct that included shutting down four of the firm’s five California power plants in June 2000 to tighten supplies and boost prices.

The company has said that the actions were legal at the time and that they did not contribute to the energy shortage that hit California later that year.

Phil Pettingill, manager of policy development at the California Independent System Operator, which runs much of the state’s electricity grid, said the new rules provided some assurance to consumers that the owners of the state’s power plants would maintain them properly.

Jan Smutny-Jones, who as executive director of the Independent Energy Producers represents private generators, said his members believed the PUC lacked the authority to enact and enforce the new standards. “We’re going to see how it goes,” he said. “If it becomes overly intrusive, then there will be probably be a challenge to the rules.”