SACRAMENTO — Tensions have been rising between the Los Angeles Department of Water and Power and California's main electricity grid operator ever since the state's energy crisis of 2001. But on Thursday afternoon the rancor reached new heights.
A control room engineer at the DWP rudely refused to sell excess power to the grid operator as wildfires endangered a giant transmission line and threatened to black out parts of Southern California.
"You calling me for energy?" asked the DWP engineer, who identified himself as Ken Larson in a routinely taped telephone conversation at 3:29 p.m. The Folsom-based California Independent System Operator was trying to secure enough electricity to meet peak demands on a hotter-than-normal afternoon.
Larson, with apparent sarcasm, told Cal-ISO control room engineer Ricardo Perez that "the first megawatt will cost you $186 million," referring to money that Cal-ISO is charged with helping to refund to the DWP from the 2000-01 energy crisis. He emphasized that point a few seconds later with another outburst.
"I have nothing available for you; we don't do business with you," he said.
"Oh, OK," Perez replied. "Well, sorry, no problem."
Larson's behavior was both "inappropriate" and "irresponsible" and an attempt "to hold the Cal-ISO hostage" for debts incurred during the energy crisis, wrote Yakout Mansour, the Cal-ISO president and chief executive officer, in a letter sent Thursday to DWP General Manager Ronald Deaton.
The DWP, a public utility owned by the city of Los Angeles, operates an independent electrical generation and transmission system and is not part of Cal-ISO, which controls 75% of the state's electrical grid.
The latest incident is "the last straw" in a series of "absent and/or inappropriate communications between two of the largest and most critical control areas in the western United States," Mansour said.
He noted that DWP operators also failed to respond to calls from Cal-ISO on Aug. 25, when the same 3,100-megawatt transmission line, controlled by the DWP, failed, forcing Cal-ISO to order rolling blackouts for customers of Southern California Edison Co. and other utilities.
A similar situation occurred Sept. 12, when DWP technicians cut a line and inadvertently shut down power for half the city of Los Angeles and nearby municipal utilities, Mansour said.
"Ironically, we had learned of the details from TV stations rather than your operators," Mansour wrote.
Mayor Antonio Villaraigosa "was deeply troubled by the unprofessional manner in which the call was handled" and has asked Deaton for an investigation, said Joe Ramallo, the mayor's spokesman.
DWP officials wouldn't condone the making of any "derogatory" comments by its personnel, said Henry Martinez, an assistant general manager for the DWP.
Nevertheless, Martinez emphasized in a prepared statement that the utility notified the Western Energy Coordinating Council of the problems on Aug. 25 and Sept. 12.
The council then passed the word along to other operators, including Cal-ISO.
Martinez said the DWP sells power when available to Edison and San Diego Gas & Electric Co. but has had a policy since 2001 of not doing business with Cal-ISO.
"The policy is not intended to hold Cal-ISO hostage but to ensure the city of Los Angeles maintains its financial integrity on behalf of its ratepayers," he said.
S. David Freeman, who ran the DWP as general manager from 1997 to 2001 before becoming an energy advisor to then-Gov. Gray Davis, denounced DWP operator Larson's comments as "intolerable" and added that "the guy probably thought he was being funny."
Freeman said that during his tenure he pushed to make all needed power available to Cal-ISO and investor-owned utilities such as Edison and Pacific Gas & Electric Co.
"If we have power, we have to sell it," he said. "They will pay us back; the money is there."
He said he expected the state's debt related to the energy crisis to be paid back to the DWP in the near future, as soon as the courts and federal energy regulators resolve a complex legal and financial case.
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An unpleasant conversation
Officials with California's main electricity grid operator complained Thursday after a Los Angeles Department of Water and Power staffer refused to sell excess power to the operator. The head of the California Independent System Operator called the refusal, which was captured on a routinely taped phone conversation, "irresponsible." The conversation was between two control room engineers, Ken Larson of the DWP and Ricardo Perez of Cal-ISO.
DWP: L.A., Ken Larson.
CAL-ISO: Hey, this is Ricardo at the ISO. How ya doing?
DWP: All right.
CAL-ISO: I was looking to see if you would, by any chance, you have any energy available for next hour.
DWP: You calling me for energy?
DWP: First megawatt will cost you $186 million.
CAL-ISO: Oooo -- OK! How about the second one?
DWP: Because that's what you owe us for the last time I sold you power years ago.
CAL-ISO: OK. I don't think it was here. I wasn't the person you sold it to.
DWP: I have nothing available for you. We don't do business with you.
CAL-ISO: Oh, OK. Well, sorry, no problem.
DWP: OK. Bye.
Source: California Independent System Operator