Realizing that the California Independent System Operator (CAISO) may renege on its promise to shut down Pacific Gas & Electric?s Hunters Point power plant if electric demand increases, CAISO?s board asked staff September 15 whether they could nail down load growth and conservation parameters with San Francisco. ?If we can set a threshold with the city, we can have conservation plans and demand response? to minimize the risk of blackouts, and the grid operator would be more assured it is meeting its risk criteria, said board member Mike Florio. The criteria are from the Western Electricity Coordinating Council and the National Electric Reliability Council and are legally required, according to CAISO spokesperson Gregg Fishman. The board vows that it indeed wants to make way for the shutdown of the old plant in January 2006. Its pollution is anathema to the neighborhood and a political lightning rod. CAISO will not agree to the closure unless several transmission projects are completed and Mirant?s San Francisco Potrero unit is retrofitted. However, that may not be enough. The board was apprised that even if all those projects happened, Hunters Point might still remain on duty if the region experiences load growth. ?The [city] is entitled to some certainty,? Michael Kahn, board chair, countered. He added that if stakeholders ?do everything we say? and the plant still doesn?t get shutdown approval, ?then we have a bigger problem than I thought.? In other board action, 9,637 MW were designated for reliability-must-run contracts in 2005 from existing deals, and 670 MW of new generation were put into reliability-must-run contracts. CAISO terminated 822 MW of contracts because the capacity is no longer required. The contracts pay a premium to keep units on standby to add power to the grid if needed. The grid operator?s budget for next year is set at $146.5 million, or about 3 percent below this year?s budget. The decrease is attributed to fewer third-party contracts, although there?s an increase in salaries and benefits. CAISO plans to issue $127 million in bonds this year with a five-year term. It expects to be debt-free by 2009.