Peevey Plant Maintenance Plan Extends Olive Branch

By Published On: May 1, 2004

In an apparent effort to appease generators and federal regulators, Michael Peevey, president of the California Public Utilities Commission, has come up with a plan that would refer long-awaited rules on plant operation and maintenance to the Federal Energy Regulatory Commission, via the California Independent System Operator (CAISO). The commission was mandated by SBx2 39 in early 2002 to develop tough standards to guard against merchant generators withholding power. Generators have vociferously maintained that FERC jurisdiction trumps CPUC authority. Earlier this month, Peevey deflected legislative pressure to approve requirements, saying the agency needed to avoid a legal land mine regarding jurisdiction (see <i>Circuit</i>, April 2, 2004). ?We agree that it is in the best interests of all of the affected entities, including [independent generators], for there to be one single set of generator maintenance and operation standards that would serve both FERC?s market-related concerns as well as California?s public health and safety and service adequacy and reliability concerns,? Peevey?s proposed decision states. Toward that aim, and in a ?spirit of comity with our federal counterpart, FERC,? Peevey advocated forwarding adopted requirements to CAISO with a request that the grid operator submit them to FERC in tariff changes. If adopted, Peevey?s plan would, among other things, attempt to eliminate potential conflicts in generator compliance standards to meet different policy concerns of state and federal regulators. Peevey?s proposal and a competing plan that would not submit standards to FERC are up for a CPUC vote on May 6.

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