SACRAMENTO – California added 16 new power plants that can produce enough energy to operate about 3 million homes, but a financial slump has state officials concerned about future energy supplies.
The 4,100 megawatts represent power plants built since May 2001, said Steve Larson, executive director of the California Energy Commission, the state agency that licenses and approves new power plants.
The commission expects to gain 3,600 megawatts from plants that are scheduled to be running by next summer, Larson said, and 2,400 megawatts are expected the following year.
However, Larson said Monday, state officials "are concerned about after 2005."
Energy companies' stocks have plummeted following the high-profile bankruptcy of Enron Corp. and the ongoing investigations into the price spikes in California in 2000 and 2001. That caused several companies to delay building new power plants, Larson said.
"We're very concerned about the financial conditions of these different corporations. We think that most of them will weather it, will get through the storm, and will supply energy to California," he said.
Companies that are having problems finding financing to complete construction of a power plant can apply to the state's new Power Authority, he said.
S. David Freeman, chairman of the Power Authority, said his agency can raise the funds through lower-cost bonds, with the caveat that the plant sell power to the state at "just and reasonable rates."
The Power Authority can sell up to $4 billion in revenue bonds to build, buy or lease power plants, or help private companies finance the construction of a plant deemed necessary for California's energy supply.
Patrick Dorinson, a spokesman for Atlanta-based Mirant Corp., said companies aren't rushing to the Power Authority for financing because of the restriction on future pricing.
"I don't know of any generators that are talking to them," he said. "I think that right now, the companies are looking at how they are going to get through this difficult period."
Mirant has postponed a 550-megawatt plant in Contra Costa County, citing financing difficulties.
"Everybody's stocks are trading low and the industry is taking multiple punches," Dorinson said. "We'll just have to see how things shake out."
