Energy Matters for the Week of: June 11, 2001

California Power

Officials in California have asked the Federal Energy Regulatory Commission (FERC) to force two major electricity suppliers, Williams and AEC, to return to selling power using cost-based pricing rather than market-based pricing. The California Independent System Operator, the state’s grid operator, claims that Williams and AES have used market control to drive electricity prices higher.

Duke Energy Co. has confirmed that it sold electricity to California for up to $3,880 per megawatt hour earlier this year. The company called this price an aberration, stating that its average price was $136 per megawatt hour.

Home Fuel Cells

H Power Corp. (Clifton, NJ) has announced that it plans to sell residential fuel cell systems to the growing California market. The company says that it will start manufacturing and shipping the units on a limited basis within the next several months. H Power will work with Energy Co-Opportunity, Inc. (Herndon, VA), an energy services cooperative, to market the fuel cells to homeowners. Altair Energy LLC (Golden, CO) will sell, install, and service the systems.

Residential fuel cells will be delivered to several Chicago-area families as part of a pilot project to assess the technical, economic, and environmental benefits of using small fuel cell generating systems. The pre-commercial units, designed for single and multi-family households, will be installed by the Community Energy Cooperative and EPRIsolutions, a subsidiary of the Electric Power Research Institute (EPRI). The pilot project will begin in the fourth quarter.

Electricity Supply Outlook

According to the North American Electric Reliability Council (NERC), electricity supplies are expected to be tight not only in California this summer, but also in the Pacific Northwest, New England, and New York City. NERC is a not- for-profit corporation with members from the electric power industry.

NERC anticipates that power shortages in California will be more severe than officials there have anticipated, with about 260 hours of rotating blackouts over the summer. Outages are not expected in the Pacific Northwest this summer, but with a drought continuing and much of its power hydroelectric, power shortages could occur by winter unless there is a significant increase in precipitation. New York City will avoid power shortages depending on timely completion of 11 combustion turbines throughout the city. New England is also expected to avoid any power outages.

DOE Energy Projects

Energy Secretary Spencer Abraham has announced that the Department of Energy (DOE), 48 states, three territories, and the District of Columbia will combine resources to provide $40 million for 164 energy efficiency and renewable energy projects.

DOE is providing $17.5 million through its State Energy Program special projects competitive grants. Though project-by-project details have not yet been determined, the states and their partners will provide approximately $22.5 million in funding through cost-sharing agreements.

The money will be used to improve the energy efficiency of schools, homes, and buildings; promote energy efficient industrial and transportation technologies; and support renewable energy sources such as solar, wind, and geothermal.

Publication date: 06/11/2001

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