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To: rolatzi who wrote (58754)	1/17/2001 3:22:54 PM
From: Mark Adams	Respond to of 436258

What percent of the electrical generating costs are due to the price of fuel? I'm not an expert, but I understand NatGas costs are a very high percentage for the types of plants purchased by the IPPs. These plants are older and much less energy efficient than the combined cycle plants currently being built. There was an article in the WSJ last week, that one of the IPP's wanted to revamp and bring back on line one generation unit at a facility, I believe in Huntington Beach. Alas, I can't find it. Edit: AES AES Corp Proposes Restart Of 2 Calif. Gas-Fired Units ARLINGTON, Va. -- AES Corp.'s (AES) Huntington Beach unit submitted a proposal to the California Energy Commission to restart two gas-fired units that were retired in 1995. In a press release Friday, the company said the units would add 450 megawatts of generation in the electricity-strapped state of California as early as June 1, if regulatory approvals can be secured promptly. As reported, PG&E Corp. (PCG) said in an 8-K filed Wednesday with the Securities and Exchange Commission that its utility unit, Pacific Gas & Electric, has a $583-million power bill coming due Feb. 1 and only $500 million in cash on hand. Edison International (EIX) has said its utility unit, Southern California Edison, may run out of cash in just weeks. On Thursday, California Gov. Gray Davis said he won't help the state's two largest utilities make payments on those power bills. AES said the permitting process with the energy commission would have to be completed before March 1 in order to have the units ready by June 1. The company is "prepared to commit significant funds to acquire critical components as well as secure the personnel necessary to meet the aggressive three-month construction schedule." AES cited, however, the need for "tremendous" support from local and state officials. AES said the California Independent System Operator, the manager of the state's electricity grid, predicts a 3,000 megawatt increase in electricity demand for the coming summer. AES Corp.'s proposal to restart two units comes after months of turbulence in California's deregulated wholesale electricity market. Early Thursday, the California Independent System Operator declared a stage three emergency due to the loss of two key generation units in Northern California. A stage three is declared when operating reserves dip below 1.5% and rolling blackouts are likely. As reported, the California Public Utilities Commission approved a temporary rate increase of 7%-15% for the utilities last week, including a 9% raise for retail customers, but the move was widely seen as inadequate. More recently, the Department of Energy issued an order reinstating through Jan. 17 an emergency order requiring power producers to supply California's electricity market. -Pamela Tate; Dow Jones Newswires; 201-938-5400 The Wall Street Journal reported Nov. 9 that AES was seeking fast-track approval for plans to refurbish the Huntington Beach plant, which has two units in operation and two deactivated units. After a $100 million retrofit, the Journal said, the plant would emit 80% less ozone-depleting nitrogen-oxide gas than the current plant, while doubling capacity. At the time, regulators appeared unwilling to speed up their already accelerated review process. The low cost power source in CA today is the nuclear plant I happened to see on a trip to LegoLand, north of San Diego last summer. And the hydro power LAWPD buys from Hoover and some small hydro projects in CA. CA also has some geothermal and wind power investments, that I imagine are very profitable under todays pricing. cbs.marketwatch.com