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Diesel 46.05

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17

Power Supplier Files Lawsuit Against Southern California Edison

A lawsuit was filed today by Watson Cogeneration Company...

LOS ANGELES, California
A lawsuit was filed today by Watson Cogeneration Company asking the court to suspend an electrical supply contract with Southern California Edison in order that power can continue to be provided to the Western U.S. electrical grid.
``Tuesday's action by the California Public Utilities Commission does not provide the assurance to Watson, or other power producers, that is needed to continue providing power to the California grid,'' said Tom Lu, Executive Director, Watson Cogeneration Company. ``It also does nothing to alleviate the $150 million owed to Watson for power already delivered.

``We have no other alternative but to suspend our contract with SCE, so that we can sell our electricity on the open market to credit worthy customers that will pay us,'' Lu added.

The facility not only provides enough electricity to meet the needs of BP's Carson oil refinery, but also produces enough electricity to supply nearly 400,000 homes in Southern California. The facility produces up to 420 megawatts of electricity; although it has reduced generation by 140 megawatts due to SCE's not paying since November 2000.

``Other Qualifying Facilities (QF), many of which are cogeneration facilities, are facing the same issue of not being adequately paid for electricity produced which in turn has forced many of these QFs to curtail much needed supplies of power to the grid,'' Lu said. ``We are committed to be part of the solution to California's energy needs, but we cannot continue to provide power without being paid a fair price.''

``Ironically, the cost of the power that the State is buying to replace generation lost from QFs is twice the cost of power under the QFs' contracts with the utilities,'' added Lu.

The Watson cogeneration plant began full commercial operation in April 1988. The facility is the largest QF cogeneration plant in the Western U.S. - Watson Cogeneration Company

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