Calif. Senate approves Kahn’s renomination to lead Cal-ISO

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Megawatt Daily

The California Senate Monday voted 36-1 to approve Gov. Gray Davis‘ renomination of Independent System Operator Board Chairman Michael Kahn to a three-year term.

Earlier in the day, the Senate Rules Committee approved the renomination of Kahn, who became chairman in January 2001. The committee’s vote came over the objections of Sen. Joseph Dunn, chairman of a select committee investigating potential wholesale power market abuse in California, who has been critical of the ISO’s senior management and has demanded ISO President Terry Winter be fired.

At the hearing, Dunn said he opposed Kahn’s nomination because of the failure to work out a resolution of the Winter issue. Dunn thinks Winter should be dismissed because he encouraged the Federal Energy Regulatory Commission in December 2000 to lift a $250/MWh wholesale power price cap. Dunn charges that the decision was taken without ISO board approval and constituted treason against Californians because the removal caused prices to rise in 2001.

Also yesterday, Gary Cohen, the California Public Utilities Commission‘s general counsel, said he would leave the PUC to become general counsel of the state Dept. of Insurance but will remain at the PUC until he completes work on a number of key matters, including the argument before the state Supreme Court in the case to overturn Southern California Edison‘s $3.5-billion wholesale power debt settlement. The PUC in the meantime has begun a nationwide search for his replacement.

Cohen will also stay on until the conclusion of the proceedings in Pacific Gas and Electric’s case in U.S. Bankruptcy Court. Both of these cases will likely conclude within the next six months.

The PUC did not return calls as to the absolute last day Cohen would be able to stay at the PUC, assuming these cases take longer to finish.

Newly named PUC President Michael Peevey in a statement provided assurances that Cohen’s departure will not change the PUC‘s work in the PG&E bankruptcy case.

Sources said they did not expect Cohen’s departure to affect the ongoing contract and refund proceedings before the Federal Energy Regulatory Commission since much of the cases have concluded or are close to done. Also, the PUC staff working on the cases will remain, they said.

As for state-level issues, consumer groups heralded Cohen’s departure as good news since they contend he has not been knowledgeable about the PUC‘s legal rights. ”They need to find someone who knows the law. He did not produce high quality work,” said Michael Florio, executive director of The Utility Reform Network. ”He presented a muddled case in the PG&E bankruptcy case and caused our group to file litigation on the SoCal Ed settlement.”

Doug Heller, executive director of The Foundation for Taxpayer and Consumer Rights, said that, ”Cohen does not leave a great legacy. …Under his legal advice, the PUC broke state laws to develop the SoCal Ed deal.”



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