PSO'S Power Threat On Monday Could Impact Its Stock Price
Wednesday, August 9th 2006, 10:06 am
By: News On 6
Tulsa's biggest provider of electricity struggles to meet peak demand. Public Service Company of Oklahoma earlier this week asked customers to cut back on power usage to avoid rolling blackouts.
They said part of the trouble stemmed from generating units at two power plants. We know one was fixed, but PSO's not talking about the other.
News on 6 anchor Tami Marler says triple-digit heat always stresses Tulsa's power grid. So when those two generating units went down, PSO knew there could be trouble.
The appeal went out at PSO's request, with information from the company about broken generating units and transmission problems. The next day, the company was tight-lipped about the status of the equipment as Tulsa rounds out another triple-digit week.
"On a day-to-day basis, we don't discuss the operating status of any of our units, so that it doesn't compromise our ability to contract with the wholesale market for the lowest cost that we can." Stan Whiteford says Monday was an exception because of the emergency, but he says there's good reason why they don't typically disclose proprietary information. "We work with the wholesale market on a daily basis and if we can purchase the power at a lower price than we can generate it, we're gonna purchase it and deliver that lower cost electricity to our customers."
PSO provides electricity with the help of independent producers that sometimes offer a lower cost. If IPPS know a buyer's weakened position, they could raise prices.
Plants like Calpine in Coweta produce electricity, so why couldn't PSO just tap them more power on Monday? "While there may have been purchase power available to purchase, we couldn't necessarily get it to where we needed to get it delivered to the point because of transmission constraints."
Whiteford said transmission mis-matches would have sent too much power to the Tulsa system and could cause it to crash. "The biggest problem that affects the stock price are unknown announcements."
Financial Analyst Jim Brock says wholesale prices weren't the only problem facing PSO's parent company this week. The New York Stock Exchange showed a sharp drop in AEP's stock price on Monday.
Brock says the news could have had an effect. "Probably more than the financial impact because a large component of the day-to-day pricing in the stock market is an emotional component."