Independent Energy Producers Applaud Move to Auction Off PG&E Hydro Assets; Auction Puts State One Step Closer to Competitive Electric Market

Business Wire, Oct 1, 1999

SACRAMENTO, Calif.--(BUSINESS WIRE)--Oct. 1, 1999--

California's Independent Energy Producers (IEP) today announced their support of Pacific Gas & Electric's (PG&E's) decision to auction their hydro assets.

On Thursday PG&E filed an application with the California Public Utilities Commission (CPUC) to hold an open auction of its hydroelectric assets.

"Holding an open auction moves California one step closer to a truly competitive electric market -- which is the surest way to reduce electric rates for all Californians," said Jan Smutny-Jones, Executive Director of IEP. "We encourage the CPUC to move quickly on this application -- so they can address environmental and local government concerns, and let the bidding begin."

PG&E's hydroelectric assets consist of 110 generating units at 68 powerhouses across the state -- with a total generating capacity of 3,896 megawatts. The system includes 174 dams, more than 360 miles of canals, flumes and tunnels, and approximately 95,000 acres of land that will be auctioned with the facilities.

"The fate of PG&E's hydroelectric system affects all of us -- from ratepayers to those who enjoy California's rivers and lakes for their natural beauty or recreation," said Smutny-Jones. "An open, unbiased bid process is the only fair way to proceed."

Electric restructuring legislation passed by the California Legislature in 1996 required PG&E to "market value" its hydroelectric generation assets by Dec. 31, 2001 -- to help determine the total stranded costs it could recover through "competitive transition charges" paid by ratepayers.

"The higher the value of these assets, the sooner stranded cost recovery will be complete -- and the sooner consumers will reap the rewards of a truly competitive electric market," said Smutny-Jones. "An auction will ensure a fair value is set, and we certainly support it."