the film
Commentaries and editorials

Calpine Chief Sees
Power Troubles for California

by Reuters
Forbes, May 26, 2004

SAN FRANCISCO -- California faces tight electricity supplies if it does not add more power plants as the state's economy improves, Calpine Corp. Chief Executive Officer Peter Cartwright said on Wednesday.

Cartwright told shareholders at the independent power company's annual meeting in Aptos, California, that "we have not built the plants that we should have" in the wake of the state's energy crisis in 2000-01.

"If plants are not built as the state economy recovers, and if we have hot summers and low hydroelectricity years, we will be in trouble," Cartwright said.

Cartwright said, however, that he was "optimistic that Gov. (Arnold) Schwarzenegger will get this program back on track and build more plants."

Schwarzenegger unveiled a plan in April to push California regulators into speedier approval of rules to encourage utilities to sign long-term power purchase contracts to avoid another energy emergency.

California deregulated its power market in 1996 under a flawed law which ultimately contributed to blackouts in parts of the state and the bankruptcy of its largest utility, San Francisco-based Pacific Gas & Electric Co., a unit of PG&E Corp.

The utility filed for bankruptcy protection in 2001 after running up billions of dollars in costs buying power at sky-high prices for its customers which it was not initially allowed to recover. The utility finally emerged from bankruptcy earlier this year.

Power Sales Deals

San Jose, California-based Calpine is building three new natural gas-fired power projects in the state and has permits for four more.

"We're working toward getting power sales agreements for those projects and then we could go forward and build them," Cartwright told shareholders.

California's power grid has already had several close calls this year when spring heat waves triggered heavy demand for power to run air conditioners.

Summer imports of hydropower from the Pacific Northwest could be crimped by a record drought that has slashed hydro supplies at Northwest utilities.

Cartwright also noted that California and other regions need more gas supplies for power stations, and that one or two liquefied natural gas terminals proposed along the West Coast from British Columbia to Baja California could be developed.

At the meeting Wednesday, Calpine shareholders overwhelmingly rejected a proposal by the Calvert Asset Management Co. investment advisory firm that Calpine not develop a proposed geothermal power project on Indian land in a remote area in northern California.

Cartwright said Calpine will meet with the Pit River Tribe "to see what we can work out to accommodate their needs."

"We will continue to monitor and advocate that the company take into consideration the Pit River Tribe's concerns," said Lily Donge, an analyst for Calvert.

Calpine Chief Sees Power Troubles for California
Forbes, May 26, 2004

See what you can learn

learn more on topics covered in the film
see the video
read the script
learn the songs
discussion forum
salmon animation