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GAO-01-865R 1 (2001-06-27)

handle is hein.gao/gaobaalti0001 and id is 1 raw text is: £ Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 June 29, 2001 Congressional Requesters Subject: California Electricity Market Options for 2001: Military Generation and Private Backup Possibilities Since May of 2000, California's restructured electricity market has experienced rapidly rising prices and uncertain reliability. These problems led to widespread disruptions in service (referred to as blackouts) during the winter of 2000 and into spring this year. In response to these problems, the state has taken initial steps to increase electricity supplies-such as by streamlining the process of adding new power plants-and reduce demand through conservation. The California Independent System Operator (the agency in charge of balancing electricity supply with demand) expects high prices and reliability disruptions to continue, and perhaps worsen, in the summer of 2001. In light of these concerns, you asked us to (1) describe the condition of California's electricity market, including changes in demand, supply, and prices; (2) determine the extent to which the Department of Defense (DOD) can help enhance western electricity supplies during the summer of 2001; and (3) discuss available private backup generation resources and any benefits and problems associated with their deployment. We briefed you and your staff on the results of our work on May 15, 2001, using the enclosed briefing slides (see encl. I). A summary of the information follows. A complete list of the requesters appears at the end of this letter. California's Electricity Market Has Changed in Recent Years California's electricity market has exhibited more rapid increases in demand than in supply and recently has witnessed sharply higher prices. In addition, the California Independent System Operator (ISO) expects electricity supply shortages this summer GAO-01-865R California Electricity Options for 2001

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