PG&E Aims to Pop $9 Million in Bubble Charges

Pacific Gas & Electric is seeking $9 million?plus $500,000 a month?from the California Independent System Operator for alleged ?improper? charges related to the California-Oregon Transmission Project. PG&E submitted its claim to the American Arbitration Association in June. PG&E ?schedules? power over the transmission line for the Sacramento Municipal Utility District (SMUD) and the Western Area Power Administration. PG&E, however, claims it is not the actual ?scheduling coordinator? because it is a conduit to provide information to the grid operator on behalf of the other owners. Its role in assisting transmission line owners is called a ?bubble? transaction. This is the second time PG&E has sought arbitration over the same type of charges. In a case submitted in 2000, PG&E claimed, and an arbitrator agreed, that related costs, such as CAISO?s ancillary services, cannot be tacked onto the bubble transactions. PG&E claims that the grid operator once again charged it as a formal scheduling coordinator for the transmission line bubble transactions, this time for new charges. CAISO claims that the first arbitration case is different from this one. SMUD split with CAISO in mid-2002, forming its own control area. PG&E, however, still acts as a coordinator for the California-Oregon line and will for several more years. But that is not a clear-cut case, either?even for nonbubble transactions. While the bubble transactions are being fought over between the grid operator and PG&E, SMUD is fighting the price PG&E billed it for regular scheduling coordinator work. PG&E has an outstanding bill to the Sacramento utility for $19 million for scheduling between 1998 and when Sacramento became its own control area two years ago. The muni board voted July 1 to go ahead and pay PG&E despite SMUD?s litigation over the issue at the Federal Energy Regulatory Commission. Unlike SMUD, the Western Area Power Administration opted in March not to split with the grid operator in favor of its own control area. The government agency is still unsure whether it will be subsuming its transmission system under Sacramento or remaining under CAISO, according to WAPA spokesperson Dave Christy. Whichever the agency decides, the contract with PG&E for its transmission expires at the end of the year. Neither PG&E nor CAISO would comment on the arbitration.

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PG&E Aims to Pop $9 Million in Bubble Charges

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