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By Kent Larsen
California Profits Bypass Power Producer AES
LOS ANGELES, CALIFORNIA -- While many power producers are getting windfall
profits from the current California energy crisis, AES Corp. isn't one of
them. AES, one of the stocks on the Mormon Stock Index because of the Mormon
heritage its chairman, Roger Sant, has three generating plants in Southern
California. But the Arlington, Virginia-based company only gets a flat fee
for turning natural gas into electricity at the plants.
The profits from that electricity go to AES' customer, power distribution
giant, the Williams Cos. The Tulsa, Oklahoma-based firm admitted Monday that
its quarterly profits had jumped 300%, in part because of the crisis. It got
the profits instead of AES because the two firms signed a contract under
which AES converts Williams-supplied natural gas into electricity for a flat
fee. "We're basically paid to do the conversion," said Ed Blackford, manager
of the Huntington Beach AES plant.
But the crisis has caused headaches for AES as local governments and media
have questioned its role in the crisis. In response, AES is struggling to
get approval from California regulators to bring two idled generating plants
on line, making available in California an additional 450 megawatts of
power, going a long way towards solving California's crisis. The plants
would also bring AES some profit from the state.
But getting those plants on line will take some time. "Once we get the
permit from the (California Energy Commission), we would need three months
to bring the units online," Blackford said.
Source:
Energy profits hit and miss
Orange co CA Register 6Feb01 B4
By James B. Kelleher: Orange County Register
EARNINGS: While many electricity sellers are making enormous proceeds, the owner of three area plants is proof that profit is not a sure thing.
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