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Chief Executive of Cal-ISO Steps Down

Terry Winter has been a controversial figure in state energy-policy circles. A search for his successor is underway.

June 02, 2004|Marc Lifsher | Times Staff Writer

SACRAMENTO — Terry Winter, the chief executive of the state's electricity grid operator, stepped down Tuesday just as another torrid summer is poised to burden California's overtaxed power-transmission system.

A source close to the Folsom-based California Independent System Operator, known as Cal-ISO, confirmed that Winter was asked to resign by the board of the quasi-governmental, nonprofit corporation.

However, Cal-ISO Chairman Michael Kahn said in a conference call with reporters that Winter, CEO since 1999, and his vice president, Elena Schmid, voluntarily resigned. Winter and Schmid could not be reached for comment.

Cal-ISO was created by the Legislature as part of a sweeping 1996 electricity deregulation law.

Kahn said that a nationwide search for Winter's successor already was underway and that former CEO Jeffrey Tranen would assist the board in running Cal-ISO until a new top executive is hired. In the meantime, Kahn said, "the commitment of the ISO to keeping the lights on is as strong as ever."

Winter, who earned $776,426 in total 2002 compensation, has been a controversial figure in state energy-policy circles since 2000, when he unilaterally asked federal energy regulators in Washington to raise an electricity price cap that the Cal-ISO board had just lowered.

Critics complained that Winter's action set the stage for the state's energy crisis of 2001 by putting investor-owned electric utilities into a financial bind. Pacific Gas & Electric Co. and Southern California Edison Co. suddenly had to pay skyrocketing wholesale prices to generators, but the utilities couldn't recover the higher costs from their customers because of state controls on electric rates for consumers.

Winter at the time contended that he needed to raise the rate caps to ensure that generators would sell power into the grid.

Winter's removal was "long overdue and should have been done years ago," said state Sen. Joe Dunn (D-Santa Ana), who led an investigation into the energy meltdown.

"Terry Winter carried the water" for independent power producers, "instead of looking out for the best interests of the people of California," Dunn said.

Dunn's accusation is outrageous and undocumented, said Jan Smutny-Jones, a former ISO board member and director of the California Independent Energy Producers Assn.

He speculated that the board was reacting in part to Gov. Arnold Schwarzenegger's efforts to craft a new energy policy in time to avoid shortages predicted to hit the state in 2006 or 2007.

"Maybe this is an attempt by the [Cal-ISO] board to try to set a new direction, clean the slate and move on," Smutny-Jones said.

Indeed, the board's move to a new CEO is indicative of its unhappiness with the slow pace and high cost of a plan to revamp the state's electricity market, originally scheduled to be completed in 2002, said V. John White, a former board member and director of the Center for Energy Efficiency and Renewable Technology in Sacramento.

Although Cal-ISO has not released a price tag, sources in the energy policy community said the agency already had spent more than $100 million on the unfinished plan.

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