The Federal Energy Regulatory Commission Wednesday ordered the California Independent System Operator to enforce its tariffs and start paying for energy it buys from independent generators and dispatches in the real-time market.
But FERC did not set a deadline when the past due bills would have to be paid. Independent generators complained to FERC in September the ISO missed payments for April, May, June, and July even though the settlement process had been completed.
Jan Smutny-Jones, executive director of the trade association Independent Energy Producers in California, called the ISO’s explanation of why no checks were sent to suppliers “troubling” at the least. The ISO said it was discussing the payment of past due bills with the California Department of Water Resources, which has become California’s electricity buyer of last resort.
DWR has been buying power to serve California residents after the utilities ran up huge wholesale electricity bills last year, which they couldn’t pay. Those outstanding bills were the subject of a hearing before FERC along with a claim the generators owe the state $9 billion in refunds for alleged overcharges.
The ISO told Smutny-Jones it had been “frequently meeting” since January with the DWR to decide how the obligations of the ISO would be settled. “The parties involved in this have not as yet come to full agreement as to how such obligations are to be settled,” the ISO said in a letter.
Some generators received letters from the DWR saying the agency would pay suppliers less than 25¢ on the dollar for power purchases after April. The generators complained to federal regulators. FERC said the ISO must enforce its settlement procedures and ensure prompt payment for real-time transactions.
“The ISO must invoice the California Department of Water Resources (DWR) for all ISO transactions it entered into on behalf of Southern California Edison and Pacific Gas & Electric Co. within 15 days of the date of today’s order,” FERC said.
It’s unclear however if the actual payment will occur any time soon. The ISO was given 3 months to submit a schedule for payment. FERC hinted if the ISO doesn’t fulfill its payment obligations payments power supply could become an issue once again in California.
FERC commissioners said they acted to ensure timely payment of the energy suppliers, thus preventing difficulties for the ISO in obtaining its future energy needs.