| By JOSEPH KAHN
In Depth: Blackout Additional information about the
energy crisis in California and its effects on the nation from The New
York Times and the PBS series "Frontline" is available at www.pbs.org
"Blackout," a documentary co-produced by Frontline and The New York Times,
aired on June 5.
WASHINGTON, June 29 - An investigative arm of Congress
faulted federal regulators today for claiming that there was no evidence
to support accusations that power companies manipulated California's electricity
market.
The General Accounting Office reviewed a study by the
Federal Energy Regulatory Commission issued in February. The energy agency
found no evidence that companies withheld power to drive up prices.
Politicians in California and some economists have been
asserting for months that power companies withheld available electrical
generating capacity to create or worsen shortages. Generating companies
had cited the energy agency's report to rebut those accusations.
The accounting office said the agency's work looked only
at physical reasons for outages and did not explore the possibility that
generating companies used bidding strategies to withhold supplies. Moreover,
the office found that the study did not prove that cutoffs had occurred
for unavoidable physical reasons.
"FERC's study was not thorough enough to support its overall
conclusion that audited companies were not physically withholding electricity
supply to influence prices," the accounting office said.
The office said that industry experts it consulted agreed
it was "practically impossible" to determine whether cutoffs were justified
merely by examining physical evidence because plants frequently ran with
some physical problems.
The accounting office's study comes a week after three
former employees of Duke Energy, a leading generator in California, told
the State Legislature that the company shut production units to drive up
prices.
The energy agency has an obligation under federal law
to ensure "just and reasonable" electricity prices. It has found that electricity
prices in California have not met that standard, but recently it began
imposing price controls.
Some analysts have said they suspected generating companies
kept generating units off-line, limiting competition and forcing California's
grid operator to pay stratospheric prices to avoid blackouts. The accusations
were supported by circumstantial evidence that showed supplies of electricity
declining this year when compared with the year before.
Generating companies have said they are doing all they
can to run aging power plants at full capacity to meet demand. They say
they shut units only for routine maintenance.
The energy agency conducted inspections and telephone
inquiries at several California generating plants. It found the cutoffs
were justified.
Curt Hébert Jr., the energy agency's chairman,
wrote a letter to the accounting office, saying he agreed with its "basic
findings." But he said his agency's study was never intended to examine
all accusations of withholding but only to explore whether price manipulation
had occurred in the few cases that were examined.
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