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Granite Update | What are our chances of final approval at FERC at the JUly meeting. Jeff still thinks this is a third quarter close. Do we have any chance of making that happen? ----------------- | project-specific | urgent | 5 |
RE: Neptune -- merchant transmission | Ed I am sure I shall screw up sooner or later (given my aging brain and amount of work). This guy will have to change his name to Ed Krapels to stay employed. Vince | project-specific | casual | 0 |
Re: Daily Update / Legislative Update - 8/23/00 | It's hard to formulate a position without more of the specifics but I think our message should generally be: We support providing immediate rate relief to small residential customers. We believe that relief is best provided by giving San Diego the ability to procure power on a fixed price basis from the market. San Diego has offers in front of it now those should be evaluated and the legislature and the commission should give San Diego the flexibility to accept one or more of them. This is sounder than running huge deferrals (deficits) to be later recovered from consumers. Rate relief should be accompanied by real reform. Rate caps have bad long term consequences: they cause shortages. Combining short-medium term rate relief with expedited siting of new facilities will address the near term problem while laying the proper groundwork for a long term solution. Bruno Gaillard@EES 08/24/2000 11:08 AM To: Edward Hamb/HOU/EES@EES Jennifer Rudolph/HOU/EES@EES Chris Hendrix/HOU/EES@EES Greg Cordell/HOU/EES@EES Harold G Buchanan/HOU/EES@EES Martin Wenzel/SFO/HOU/EES@EES Douglas Condon/SFO/EES@EES James M Wood/HOU/EES@EES Gary Mirich/HOU/EES@EES Dennis Benevides/HOU/EES@EES Roger Yang/SFO/EES@EES David Parquet@ECT mday@gmssr.com SF Directors Paul Kaufman/PDX/ECT@ECT Marcie Milner/Corp/Enron@ENRON Mary Hain@Enron Harry Kingerski/HOU/EES@EES James D Steffes/HOU/EES@EES Richard Shapiro/HOU/EES@EES Peggy Mahoney/HOU/EES@EES Karen Denne@Enron Mark Palmer/Corp/Enron@ENRON Steven J Kean/NA/Enron@Enron Christopher F Calger/PDX/ECT@ECT cc: Subject: Daily Update / Legislative Update - 8/23/00 This email reflects today's events in Sacramento. The information provided is subject to change because of constant flux. However it is important for us to provide this information for feedback and to caution as to new regulations that may affect some deals in the making . Governor Davis Assembly Women Susan Davis and Senator Alpert had a press conference. They will introduce a rate/bill stabilization plan for SDG&E and an expediting siting bill. There is no language as of yet. Although there is no specific language the following elements may be included: The stabilization plan will be applicable to residential and probably commercial customers in SDG&E The bill cap may be set at $68 for residential. The cap will be in place until the end of 2002 There will be language on expediting siting for generation plants Sam Wehn and Sandra McCubbin have been talking with the CEC executive director and several legislators about the siting portion of the bill. Any comments as to the bill cap proposal? | other | formal | 3 |
Revised Enron Comments on NERC Bill | Attached is revised draft of Enron comments on the NERC bill. The helpful editorial revisions came from Charles and Sarah. | energy infrastructure | formal | 3 |
null | calendar ----------------- | calendar & scheduling | casual | 0 |
Re: From Michael L. Kirby, Esq. | Bonnie: Please forward to Michael Kirby. I think the draft looks good. Could you also prepare a draft of the letter we discussed yesterday to convey the proposal to the committee? Bonnie Hugyez <blh@pkns.com> on 07/17/2001 12:34:20 AM To: <mmolland@brobeck.com> <mark.e.haedicke@enron.com> <skean@enron.com> <breasoner@gibbs-bruns.com> <mtuohey@velaw.com> cc: Subject: From Michael L. Kirby Esq. Attached is a draft Nonwaiver Agreement per our telephone conferences of yesterday after the meetings with Senator Dunn. I am available in my office for a conference call to discuss this. The information contained in this e-mail message and any accompanying documents is subject to the attorney-client privilege and/or the attorney work product rule and is confidential business information intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient or representative of the recipient you are hereby notified that any dissemination of this communication is strictly prohibited. If you have received this communication in error please notify Kathryn A. Pugh at kpugh@pkns.com and immediately delete this message from your system. - 289271_1.WPD | legal affairs | formal | 3 |
Re: request to CERA | Your understanding was correct. In light of recent changes in the California regulatory environment (eg the recent rate order) I don't think it makes sense for us to distribute the document at this time so you can ignore the request. Thanks Peter Augustini <paugustini@CERA.com> 03/29/2001 06:18 PM To: 'skean@enron.com' <skean@enron.com> cc: David Gibbons <dgibbons@CERA.com> Subject: request to CERA Steve: Thanks for your note sorry I missed you. From your message I think there may be some miscommunication between your PR guys and us. We understood that your PR people wanted to reprint the Op-ed and redistribute it to as-yet-undetermined people along with various Enron material. They also wanted to post it on Enron's public web site. But your message seemed to indicate you just want to post the op-ed on your intranet - for educational use only for your internal folks. If this is correct we would have no problem with it. In fact we have posted the op-ed on the CERA web page - which is theoretically available to every Enron employee for internal use only. If you want you could just post a link to the CERA web site so your people could get direct access to all our research on the topic. If I misunderstood you and you do want to redistribute the piece to third-parties -- that is a much bigger issue because it involves our intellectual property and branding issues. Obviously we would need to talk some more about this. I hope this helps. On a somewhat-related note we are also getting sucked more and more into the California vortex and being asked to help in areas that are not our traditional business such as expert witness testimony and policy issues. While we are not afraid to take a point of view (as you know!) we must maintain a neutral and independent posture. This is sometimes a difficult path to navigate but we are exploring two areas that may also interest Enron: 1. We have examined Joskow and FERC's analysis on the price gouging issue and we believe there are several major flaws in their methodologies. We are considering how best to broadcast our assessment without impinging on our core business or becoming an expert witness. We think a workshop similar to the Monday event at CERAWeek could work where we would present our findings and issue a report. 2. We are also looking into the economic impact of power outages in the West - especially linked to the overall fragile state of the US economy. This would be a collaborative effort with a major economic forecasting firm or university. Again the reults would go to our clients but could be released to a wider audience and a workshop might help highlight the release. Please let us know if either topic would be of interest to Enron. We would need to raise funding from various clients to help underwrite the effort but the work would be CERA's independent research and we would stand fully behind it. Hope all is well. ...Peter . | other | formal | 3 |
Public Policy Contacts for California | Jeff and Steve ? As you requested I have prepared a list of my preferred public policy contacts?for California.? It is composed of professionals from an array of public private and non-profit backgrounds.? I have worked in some capacity with?each of these people?and most I know quite well.? ? Please call me for further background. ? Kevin 213-926-2626 ? Attachment - Kevin Scott - Preferred Contacts - 6-20-01.doc | other | formal | 3 |
Re: California Power Issues Database | Add Mona Petrochko peggy mahoney and Rob Bradley Gavin Dillingham@ENRON_DEVELOPMENT 08/25/2000 04:55 PM To: joe Hartsoe@ENRON Sandra McCubbin@EES Susan Mara@EES Paul Kaufman@ECT Karen Denne@ENRON Jeff Dasovich@EES Mark Palmer@ENRON James D Steffes@EES Richard Shapiro@EES Elizabeth Linnell@EES Jeannie Mandelker@ECT Steven J Kean/NA/Enron@Enron Mark A Schroeder@ENRON Peter Styles@ECT cc: Subject: California Power Issues Database We have developed an intranet site/database for information tracking purposes for the California Power Issue. The intranet site will be placed on the home.enron.com webpage by Tuesday morning for all Enron employees to access. However today this comprehensive database is available to you for your California Power Issue needs. The database has been populated with the latest information that I have received concerning this topic and has been broken down in three categories: California Power Issues National Power Issues and Secured Documents. It has then been broken down further into subcategories. The secured documents sections will only be accessible to those that are receiving this e-mail. Please let me know if you believe others should have access to this information. The secured document section contains all the information that I have received that Luntz Consulting has helped us develop i.e. principals statements speeches and facts as well as talking points and other statements developed internally. These documents can be easily switched to open access to all Enron employees if you believe that these documents should not be restricted. To access the intranet site you must be logged on to the network and then go to this link: (It is best if you copy this link and paste it in your internet Explorer or Netscape browser.) Once you are at this site you will be able to access all articles and information that I have collected/received concerning the California Power Issue. You can navigate the site by using the links on the left hand side of the screen. While navigating this site keep in mind that the actual interface will be changed before we go live on Tuesday morning. To access the secured documents click on secured documents and type in your user name which is the same as if you are logging onto the network and then type in your password which is the same as if you are logging onto the network. However if you have difficulties entering this site you will need to change your Lotus internet password. Which is very simple to do and which you will need to do regardless if you decide to use this site or not it is all part of the current computer migration. To change your internet password go to this link and then hit the edit person key. Go to the last field that says internet password and type in whatever password you would like preferably your current network login password. (In the internet password section you will see a bunch of numbers and letters delete those and enter your new network password.) There are still some bugs that will be worked out by Tuesday but I thought since this is such a fast moving issue it was best to get this tool out so it could be used when needed. If you have any questions please call me at 713-853-4382. Thanks Gavin | other | formal | 5 |
Meet with Skilling in his office. Project | Balboa and PGE filing - Cancelled for the time being - per Vanessa Bob - They'll call us when he gets back | meetings & events | casual | 0 |
SMethodist Presentation | null | other | neutral | 0 |
Re: So you will know . . . | Thanks I hope we get there soon. Mary Clark 09/26/2000 01:55 PM To: Steven J Kean/NA/Enron@Enron cc: Karen Denne/Corp/Enron@ENRON Mark Palmer/Corp/Enron@ENRON Subject: So you will know . . . Steve I'm leading a team with Beth Tilney that will roll out communications to employees worldwide after our stock price closes at $100. We will keep you posted on our plans as they materialize. Mary | other | excited | 3 |
Re: Information for Jeff Skilling from Kevin Scott | Confirming 1:00 p.m. meeting on June 12 at the Venetian Resort in Las Vegas. Thanks Joannie Williamson 713-345-7774 Kevin Scott on 04/25/2001 04:46:18 PM Please respond to To: Jeff Skilling <jeff.skilling@enron.com> cc: Sherri Sera <sherri.sera@enron.com> Subject: Information for Jeff Skilling from Kevin Scott April 25 2001 Dear Jeff Thank you for setting aside time to meet with me. I have attached my resume to help bring you up to date on my career. As you will see I have been providing advisory services since 1995. During these years I have done some of my best work. I am proud of the service that I have rendered as an independent consultant. Now I feel it is time to move to a new chapter in my career. I look forward to sitting down with you to think through ways to apply my experience intellect and energies to new professional challenges. I respect you tremendously and wherever the next part of my career may lie I know that my search and choice will benefit significantly from your perspective. Finally I am attaching the recommendation to HBS that you wrote in 1981. I found it during a profoundly challenging period in my life. Your historic words of support helped me keep fighting and successfully moving forward. If you would like to reach me before our meeting please call (213) 926-2626 or email kevinscott@onlinemailbox.net . Thank you again. Sincerely [IMAGE] Kevin Attachments (2) - image001.png - image002.gif - Resume of Kevin Scott.doc - Skilling HBS Recommendation.doc | employment | formal | 3 |
Re: FERCs marketing affiliate conference | I heard you were a big hit. Leslie Lawner 03/20/2001 08:45 AM To: James D Steffes/NA/Enron@Enron Shelley Corman/Enron@EnronXGate Rebecca W Cantrell/HOU/ECT@ECT cc: Richard Shapiro/NA/Enron@Enron Harry Kingerski/NA/Enron@Enron Steven J Kean/NA/Enron@Enron Subject: FERC's marketing affiliate conference Becky and I attended FERC's gas marketing affiliate conference last week. Non-affiliated competitors continue to build straw men and describe abuses with no real evidence to back them up (the funny money argument and capacity hoarding are two examples. The funny money argument assumes marketing affiliates will bid above market rates for capacity because they excess payment is going to the corporate bottom line. Hoarding capacity to drive up price may be an issue but it is not a marketing affiliate issue as anyone can do it). FERC staff did not seem terribly sympathetic to the points made but at least one FERC staffer seemed to believe that one solution would be to require the pipelines to offer capacity in smaller blocks to let smaller entities put together bids. FERC also indicated they were in fact auditing compliance but in a non-public way. There were some concerns voiced which I agree with and there is an opportunity to file additional comments on Apr. 30. I would like to put the following in these comments: Evidence of affiliate abuse/preference is just not there. The best folks can do is make up stuff. We welcome FERC monitoring if that is needed to bring confidence to the marketplace that abuse is not occurring. But the issue is really whether we do have a crisis of confidence or merely a bunch of disgruntled competitors who are just seeking to neutralize the affiliated competitors). The FERC rules and the information reported (with a caveat) under those rules are adequate for detection and enforcement and deterrence. That said the definition of marketing affiliate should be expanded to include affiliated electric generators who are siting plants along affiliate pipelines. The pipeline 637 reporting and internet systems should allow users to download and manipulate transportation related data which is not currently the case. We also need to address a deal on Northern where ENA took capacity at a discount albeit after other parties had an opportunity to match our bid. This was a deal brought up in the conference. Let me know how this sounds. Thanks. | energy infrastructure | formal | 3 |
Re: White House Talking Points and Abraham Mtg with EPSA | Linda - as we discussed adding a sentence on open access is key. Also I would delete the sentence about the transmission system not being designed for the way it's being used today. Richard Shapiro 04/02/2001 04:23 AM To: Linda Robertson/NA/Enron cc: Steven J Kean/NA/Enron@Enron Mark Palmer/Corp/Enron@ENRON Joe Hartsoe/Corp/Enron Subject: Re: White House Talking Points and Abraham Mtg with EPSA It would be nice to get a one sentence mention made of open access just to show they care....I say this in part because of Scott Miller's e-mail pleading for more focus on this issue. Thanks. Linda Robertson 03/30/2001 12:31 PM To: Steven J Kean/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron Mark Palmer/Corp/Enron@ENRON cc: Subject: White House Talking Points and Abraham Mtg with EPSA 1. I am faxing to you a bootleg copy of the draft talking points Ed received this morning at the White House energy messaging meeting. These are very close hold. Ed asked that we not circulate these to anyone. Ed asked us to give him feedback of any concerns we have with the talking points (he will be giving them comments). After glancing at the TPs the obvious missing point is open access. However I am not sure we should be alarmed about that. There really isn't any policy in the TPs. This is a typical WH message document. Let me know if you think it is imperative to insert open access. Also Ed would like to position us as the coalition leader of the White House outreach effort. Any thoughts? 2. I am faxing to you EPSA's summary of the generators meeting with Secretary Abraham. I am glad I did not attend this meeting. As you will see from the summary there were three parts to the meeting: a) an exchange of policy views both long and short term b) discussion of how to maximize generator output in Calif and c) a request that industry participate in a DOE reliability group. I don't see any follow up for Enron outside of our normal course of activities and independent interchange with DOE officials. Let me know if you have additional thoughts. | other | formal | 3 |
Re: Translation - Nikkan Kogyo 5/21 (Enron Mentioned) | I think we need to keep the pressure on. I liked the way our basic message= =20 was evolving over the course of last week. As you pointed out the Japanes= e=20 utilities view us as just another annoying US company who is going to come= =20 in bang its head against the wall for a few months and then leave. We nee= d=20 to continue to reinforce the message that not only are we not going away w= e=20 are starting other businesses here to keep us going while we continue to=20 agitate for reform in the electricity sector. Nicholas O'Day 05/21/2001 04:37 AM To: Mark Palmer/Corp/Enron@ENRON Jackie Gentle/LON/ECT@ECT Vance=20 Meyer/NA/Enron@ENRON cc: Steven J Kean/NA/Enron@Enron John Sherriff/LON/ECT@ECT Mika=20 Watanabe/AP/Enron@Enron=20 Subject: Translation - Nikkan Kogyo 5/21 (Enron Mentioned) To date reports on Enron's role in California have been limited to a repri= nt=20 of a Sacramento Bee article appearing in the Denki Shimbun - a limited=20 circulation publication sponsored by the Japanese utilities. Last Friday Mr= =20 Ohta President of Chubu Electric and Chairman of the Federation of Electri= c=20 Power Companies made some uninformed comments at a regular energy press cl= ub=20 briefing about Enron's commitment to its Californian customers . Ohta will = be=20 retiring from both positions in two weeks.=20 In the past both Chubu Electric and the Federation of Electric Power=20 Companies have distanced themselves from Mr Ohta's public comments which ar= e=20 generally considered to be ultra conservative and unsupported by facts. As = a=20 result we have tended to ignore his comments. However on this occasion I= =20 think we need to set the record straight on Enron's role in California. I= =20 would welcome your thoughts on whether we should let the comments pass or= =20 respond. Over the past few months we have received various statements from Houston= =20 (for both internal and external consumption) explaining Enron's role in=20 California. Most recently (May 10) we received from Peggy Mahoney (via Vanc= e)=20 an EES statement dated 1 February entitled Media Statement about EES=20 Resourcing California Customers. It would be helpful if there is a=20 comprehensive statement that has recently been put together that we could= =20 distribute here. If not we can put something together here tomorrow and=20 email it across to you for approval with the aim of getting something out= =20 Wednesday. As an aside we had a record 3766 visitors to the EJ website last Friday= =20 the day the Brattle paper appeared on the website. kind regards =20 ----------------- | other | formal | 3 |
Job well done | null | other | casual | 0 |
null | Congratulations on your appointment by Fox. That's great news. I continue to be impressed by the way Fox is handling things. Let me know what I can do to help. As you know we are looking for a replacement for the unreplaceable Ricardo Charvel. I know you and he have discussed some possibilities. Rick Shapiro has met several candidates and will be bringing two to Houston in the next week or so. Dr. Kean continues to improve her golf game while I slave away at Enron to cover the greens fees. Let me know when you are coming to town next. | other | friendly | 0 |
Re: | Restructuring Today quotes Jeff at length on retail vs wholesale price caps. He does talk about protecting small customers with retail caps and highlights the more destructive nature of wholesale caps. If you need a copy let me know. kmagruder@newpower.com on 09/09/2000 11:39:55 AM To: Steven.J.Kean@enron.com cc: rshapiro@enron.com glockhart@newpower.com mmanly@newpower.com Subject: Re: Thanks Steve. The message we received was that Jeff had said he'd take retail price caps to avoid wholesale price caps. I know the press and listeners will distort things so I take the reports with a grain of salt. We just hope that you and Dasovich will find a way if asked to stress the right way to take care of small customers - enhance competition and create a robust retail market. I know we all want the same result. We just hope that with our roadshow beginning next week Gene doesn't have to explain away any other perceived Enron slams on retail competition. P. S. I can't think of two better spokesmen for the cause of competition than you and Dasovich. Steven J Kean@ENRON 09/08/2000 06:03 PM Sent by: Steven J Kean@ENRON To: kmagrude@enron.com cc: Richard Shapiro/HOU/EES@EES Subject: Got your message. I'm testifying at the Congressional hearing and Dasovich is covering FERC. I think Jeff's comments were taken out of context. He said policymakers do need to take care of small customers whose bills are tripling. Frankly we'd get slaughtered if we said anything else. But he also said there is a right way and a wrong way to do it. Enron and others had provided a market based answer by offering a fixed price deal to SDG&E (which would have enabled them to cap rates to those who had not switched. California elected instead to cap rates and deficit spend (ie create a deferral account). I don't think we can stand for anything that doesn't protect the small customers but we can continue to emphasize the market based solutions. One of the messages in my testimony will be: customers should be encouraged to choose. Those who did are doing fine. | other | formal | 3 |
Andy Zipper | Andy Zipper | other | neutral | 0 |
RE: Meeting with Debra- Rice Professor | Anne I shall brief you on the meeting. Vince | meetings & events | formal | 3 |
Meet with Ralph Reed in EB49c5 | With Rick Mark Lou and possibly Hillings | other | casual | 3 |
RE: Dates for Emerson Meeting | I think I can recommend that the time be set aside but it would be helpful if we pointed out to Emerson that it must be clear that there is a clear opportunity for Enron before we schedule the meeting. Maybe you could use this to get some progress on a bundled outsource deal. Nate Ellis@EES 02/28/2001 03:05 PM To: Marty Sunde/HOU/EES@EES Jeremy Blachman/HOU/EES@EES Michael Mann/HOU/EES@EES Troy Henry/HOU/EES@EES cc: Martin Wenzel/SFO/HOU/EES@EES Micah Hatten/HOU/EES@EES Joannie Williamson/Corp/Enron@ENRON Sherri Sera/Corp/Enron@ENRON Steven J Kean/NA/Enron@Enron Subject: RE: Dates for Emerson Meeting Gentlemen: Situation: Emerson is aggressively seeking at least a three hour time slot for a meeting with Jeff Skilling in April or May 2001. Mr. Skilling's office is hesitant to allocate more than two hours without your recommendation. Emerson is being persistent. The key players from Emerson are David Farr newly appointed CEO and James Berges President and effectively the leader of Emerson's strategic development effort. It is anticipated that both would attend the meeting. Emerson execs want to (i) get to know Mr. Skilling and other senior management (ii) discuss mutual business opportunities and (iii) hold a discussion about the transformation of Enron from a pipeline company to its current form. The last point has to do with Emerson's continuing self-transformation effort and how Enron achieved its transformation. I need your advice and recommendation. Please respond by e-mail or telephone (x5-4040). Background: Emerson initiated this latest round of contact with Enron in November 2000 when Mike Train and Mark Proudfoot both Emerson VPs of Corporate Development visited the Enron building hosted by Steve Kean. I met them at that time. Since that initial meeting Emerson has aggressively pursued a business joint venture as preferred supplier with Martin Wenzel and the distributed power business I believe with promising results. My sense is that Emerson is uniquely positioned as EES' partner in that business. I am waiting to receive an update from Martin. Emerson is also interested in becoming a preferred supplier for EES's DSM business. While we generally support that idea we are pressing Emerson to reciprocate by becoming a customer of our bundled outsource business. Emerson is highly decentralized and our efforts to date have been unsuccessful. I want to use the meeting as an opportunity to press Emerson to consider a proposal from EES's bundled outsource business. Please let me know your recommendation on this matter. Thanks Nate ----------------- | other | formal | 3 |
Re: Meeting w/Sempra | sounds good. I think we should not talk about the conversations with the governor . . . I'd rather not prompt them to go to the gov (presumably to object to the gov talking to us without talking to them at the same time). Jeff Dasovich Sent by: Jeff Dasovich 10/11/2000 02:54 PM To: Richard Shapiro/NA/Enron@Enron skean@enron.com Sandra McCubbin/SFO/EES@EES Paul Kaufman/PDX/ECT@ECT James D Steffes/NA/Enron@Enron Harry Kingerski/NA/Enron@Enron Susan J Mara/SFO/EES@EES Mona L Petrochko/SFO/EES@EES mpalmer@enron.com Karen Denne/Corp/Enron@ENRON cc: Subject: Meeting w/Sempra FYI. Recently Chris Calger has asked me to set up a meeting with Sempra. ENA's seeking deals with the two big CA gas IOUs (PG&E and SoCalGas) that would give ENA access to their assets. In short ENA wants to offer a complete outsource deal for the IOUs' core gas load (i.e. rez and small commercial customers). ENA would take responsibility for providing service for delivery at the city gate and in return would manage all of core's assets (upstream of the city gate). We're meeting with Sempra's Chief Regulatory Office (Bill Reed) and Sempra's CFO next Thursday to discuss. Given the fact that Sempra's primarily focused on electricity the plan is to lead off the meeting with a couple of electricity solutions as a bridge to the gas offer. For electricity the plan has two pieces: 1) a commodity offer that beats the 6.5 cent cap (i.e. nothing fancy) and 2) Deal Bench services with the intent of establishing a procurement mechanism for SDG&E that the California PUC could pre-approve (thereby eliminating some of the immense regulatory risk SDG&E now faces). Wanted to run this by folks to gauge reactions. We'll distribute the slides we're putting together as soon as they're drafted--hopefully by COB Friday. Best Jeff | other | formal | 3 |
Re: Electricity Issues | Thanks. We are preparing a memo (John has seen it) to go out to each of our offices telling them about this incident (and the related ones that occurred the same day) and including some tips on how to handle such confrontations in the future. John_Presley@enron.net on 05/23/2001 02:14:25 PM To: SKean@enron.com Mark.Palmer@enron.com cc: John_Brindle@enron.net David_Cromley@enron.net Subject: Electricity Issues Steve/Mark I have looked into the demonstration by the ACORN group which occurred on 5/21 at our New York Office (780 3rd Ave). I believe you are well aware of the incident as the office there immediately contacted Mark Palmers group. I will respond to the building management to discuss security issues and to gain a better understanding of the security posture of the facility. If you have any questions or require further follow-up please let me know. - John P. John Presley Business Controls Enron Corp (EB4646) Ext. 58208 | utilities | formal | 3 |
EES QBR - in 30c1 | Lunch will be served at 11:30 QBR starts at 12:00. | other | casual | 3 |
Im Leaving Enron | Congratulations on your new position! This all came up rather suddenly at least as far as I can tell. If you have any interest I would like to talk to you sometime. | personal & social | polite | 3 |
Re: followup to telephone conversation of 3-7-01 | Excerpts by email are fine. Also as I mentioned I am very impressed with your background and accomplishments but I would like to have you meet a couple of other people in my group before making a final offer. Thanks and stay warm! Kim Amy <AKim@m-g.com> 03/09/2001 08:44 AM To: 'skean@enron.com' <skean@enron.com> cc: Subject: followup to telephone conversation of 3-7-01 Dear Mr. Kean: Thank you for your call. I am looking forward to working for you. I will be available as of June 1 2001. I will have the writing samples and resume ready for you on Monday March 1 2001. Should I fax it to you? Also my dissertation is quite lengthy. Would you like for me to forward you one chapter or just a couple pages? As discussed I will be available to come down to Houston between March 30 and April 6 2001. More snow (as in 6 inches) is expected today and tomorrow. I'm only 5'6. Pretty soon I will be buried in it since it's snow upon snow. HELP!! I look forward to seeing you again. Regards Amy | other | friendly | 3 |
GREAT NEWS ****FERC Order on Morgan Stanley Complaint Against ISO | See below. This would have presented a bigger problem than price caps. ----------------- | other | excited | 3 |
null | Ken Lay spoke with several California CEOs this morning and urged them to get personally involved in pushing for a comprehensive set of reforms. Three expressed willingness to help. Scott McNealy (Sun): contact person - Piper Cole (piper.cole@sun.com) scott.mcnealy@engeng.sun.com. Mcnealy wants by close of business today a cheat sheet of the talking points to use with politicians (the 8 or 10 elements of the solution) with the expected comeback he may hear from the political leaders and our response to that comeback. He says he hasn't spent time working on issues in Sacremento so we may also want to include a list of suggested contacts. Kevin Sharer (Amgen): contact person - Sarah Jensen VP of Engineering and Operations (805.447.6785) ksharer@amgen.com. Sharer wants the same information as McNealy and he and McNealy both indicated their willingness to call a meeting of other California CEOs. Sharer will also be having breakfast with Hertzberg one week from today. Robert Day (Trust Co of the West): said that he is very close to the mayor of Los Angeles. He urged Ken to call the mayor (mentioning Day). Ken would like some talking points for that call. Jeff - please put these items together. | other | formal | 5 |
DRAFT Comments on Barton RTO Draft | Attached for review and comment is a draft set of talking points on the Barton RTO discussion draft. I went through the testimony at the recent hearing and parsed the legislative language of the discussion draft. You will see that the talking points are designed to respond to two basic points being raised by our opponents: (1) that FERC is rushing and being heavy-handed and (2) that the only interests involved are those of the transmitting utilities (i.e. no mention of discrimination as being what RTOs will remedy). Please let me have your thoughts in the next few days. Once Capitol Hill is up and running again we will distribute the final talking points to our consultants and to members/staff of the Barton Subcommittee as we continue our efforts against the discussion draft's treatment of RTOs. | other | formal | 3 |
Re: | Frank Thanks. I have given your name to the employee Energy and Power Risk Management magazine who organizes Power2001 Conference in Houston (May of 2001). Vince Frank A. Wolak <wolak@zia.stanford.edu> on 11/28/2000 09:04:42 AM To: Vince.J.Kaminski@enron.com cc: Subject: Vince Sorry about the delay in responding. It's the end of the quarter and I'm teaching 3 courses so things are very busy plus I had to work on a response to the FERC Proposed Order for California. Here is my student's CV. Please let me know if you need more information. Frank Wolak - jmyan_cv_new1.pdf | other | polite | 2 |
Re: Telephone Interview with The Enron Corp. Research Group | Marshall: Thanks for responding so quickly. I have scheduled the following intervie= w: Wednesday December 6 - 1:00 PM Houston time. It will last approximately 1 hour. We will call you at (605) 497-4045 unless otherwise instructed. If you have any questions please feel free to contact me at 713/853-5290. Best regards Shirley Crenshaw Jingming 'Marshall' Yan <jmyan@stanford.edu> on 11/28/2000 12:59:55 PM To: Shirley.Crenshaw@enron.com cc: Vince.J.Kaminski@enron.com=20 Subject: Re: Telephone Interview with The Enron Corp. Research Group Ms. Crenshaw Thank you very much for the message. I am very interested in the opportunity to talk to personnel from the Research Group at Enron. Between the two days you suggest I prefer Wednesday 12/6. Considering the two-hour time difference between California and Texas 11:00 am Pacific time (1:00 pm your time) seems to be a good slot. However I am open most of the day on 12/6 so if some other time slot is prefered on your end please let me know. Thanks again. I look forward to talking to you and your colleagues. Jingming On Tue 28 Nov 2000 Shirley.Crenshaw@enron.com wrote: > Good afternoon Jingming: > > Professor Wolak forwarded your resume to the Research Group and > they would like to conduct a telephone interview with you sometime next > week at your convenience. The best days would be Tuesday 12/5 or > Wednesday 12/6. > > Please let me know which day and what time would be best for you and > they will call you. Let me know the telephone number that you wish to be > contacted at. > > The interviewers would be: > > Vince Kaminski Managing Director and Head of Research > Vasant Shanbhogue Vice President Research > Lance Cunningham Manager Research > Alex Huang Manager Research > > Look forward to hearing from you. > > Best regards > > Shirley Crenshaw > Administrative Coordinator > Enron Research Group. > 713-853-5290 > > > Jingming Marshall Yan jmyan@leland.stanford.edu Department of Economics (650)497-4045 (H) Stanford University (650)725-8914 (O) Stanford CA 94305 358C Economics Bldg If one seeks to act virtuously and attain it then what is there to repine about? -- Confucius _?OO??OOo? ?T=15xO-?? -- =14??<o=15 O?> | other | formal | 3 |
RE: Request Submitted: Access Request for maureen.raymond@enron.com | I cannot access the system to approve the request. I get a message that the page is not available on-line. Vince Kaminski | other | urgent | 3 |
CONFIDENTIAL BUSINESS PROPOSAL | And another..... | other | formal | 3 |
RE: | Frank Thanks for your message. What about a meeting on Tuesday September the 4th. We could meet at your office let's say at 4 p.m. We would be delighted if you could join us for dinner later in the evening on the same day. Vince | meetings & events | friendly | 3 |
Test | testing | other | casual | 0 |
Re: eBiz article on Bush energy plan | Looks good to me. I'm glad you had the chance to work with Linda. Jeannie Mandelker@ECT 05/23/2001 03:31 PM To: Karen Denne/Corp/Enron@ENRON Linda Robertson/NA/Enron@ENRON Steven J Kean/NA/Enron@Enron cc: Subject: eBiz article on Bush energy plan Linda thanks for making time for me today. This is the eBiz article we'd like to run Friday. I need your comments by noon tomorrow. You can e-mail them back or reach me at 3-6305. Thanks Jeannie | other | formal | 3 |
Stella Chan /Project Summer transfers | How are we handling these now? Last time I talked to Jeff we weren't going to lift the restrictions until next week (assuming we do lift the restrictions). Any word? ----------------- | project management | casual | 3 |
<<Concur Expense Document>> - Robert L Bradley Jr | ----------------- | finance | formal | 3 |
Energy Issues | Please see the following articles: AP Wires Thurs 3/22: Report: Power wholesalers overcharged California $5.= 5=20 billion Dow Jones Newswires Thurs 3/22: Reliant To Appeal Fed Judge Ruling To Sel= l=20 Pwr To Calif Sac Bee Thurs 3/22: Federal judge orders major power wholesaler to sell t= o=20 California San Jose Mercury News Thurs 3/22: State falling short on pacts that provi= de=20 low-cost energy Contra Costa Times Thurs 3/22: Crisis saps state surplus Sac Bee. Fri 3/23: Bill to pay small energy firms stalls Sac Bee Fri. 3/23: House panel ends energy hearings -- will it step in? Sac Bee Fri 3/23: Dan Walters: Crisis deepens: politicos panic San Diego Union Fri. 3/23: Report says power wholesalers overcharged=20 state $6 billion San Diego Union Fri 3/23: Disappearing state surplus sparks alarm San Diego Union Fri. 3/23: Outages darken economic outlook in state so= me=20 say San Diego Union Fri. 3/23: Out-of-state generators question power=20 regulators' authority San Diego Union Fri. 3/23: Allegheny Energy makes big California=20 connection LA Times Fri 3/23: Judge Frees Small Firm From Edison Contract SF Chron Fri 3/23: Lodi Defies Order for Blackouts=20 Utility tells PG&E to 'pay the bills' SF Chron Fri 3/23: Coming Down to the Wire=20 State legislators battle over alternative energy bills SF Chron Fri 3/23: Grid Operators Push to Prevent Overcharging=20 They say regulators must be aggressive to stop billing abuses=20 Mercury News Fri. 3/23: State's bill for energy could double this year Mercury News Fri. 3/23: Plan for alternate power plants stalls --- --- Report: Power wholesalers overcharged California $5.5 billion=20 DON THOMPSON Associated Press Writer Thursday March 22 2001=20 2001 Associated Press=20 (03-22) 11:41 PST SACRAMENTO Calif. (AP) -- Electricity wholesalers have= =20 overcharged California more than $5 billion since May by manipulating the= =20 energy market according to a report prepared for power grid managers.=20 The Independent System Operator will file the findings with federal=20 regulators and ask for a refund ISO spokesman Patrick Dorinson said.=20 The state auditor also said Thursday that the state's 1996 deregulation law= =20 encouraged both buyers and sellers of electricity to ``manipulate wholesale= =20 prices to their advantage'' by underestimating supply and demand.=20 The auditor's report lays out what it calls ``a complex combination'' of=20 deficiencies and misjudgments it says led to the state's power problems.=20 According to the ISO report five in-state power suppliers and 16 importers= =20 frequently offered electricity at prices higher than it cost them to produc= e=20 -- effectively withholding supplies -- or didn't bid at all when they were= =20 able to generate power.=20 ISO Director of Market Analysis Anjali Sheffrin presented the findings at a= =20 conference in Berkeley last week.=20 The companies have denied overcharging California and have said they expect= =20 the Federal Energy Regulatory Commission will determine their prices were= =20 justified.=20 The commission has recently stepped up scrutiny of power companies' behavio= r=20 during California's power crisis asking suppliers to justify $124 million = in=20 sales during the first two months of the year or refund the money. Critics= =20 claim thousands of additional questionable sales are not being challenged.= =20 California has been spending about $45 million a day -- $4.2 billion since= =20 January -- to purchase power for Pacific Gas and Electric Co. and Southern= =20 California Edison. Both utilities the state's largest have been cut off b= y=20 electricity wholesalers because their credit is almost worthless.=20 Edison and PG&E say they are nearly $14 billion in debt due to soaring=20 wholesale power costs. The state's deregulation law blocks them from=20 recovering the costs from customers.=20 State Controller Kathleen Connell said Wednesday that the state's=20 power-buying is gutting its budget surplus.=20 Since the state started making emergency power buys the surplus has fallen= =20 from $8.5 billion to about $3.2 billion she said.=20 Connell ordered an audit of the power buys saying Gov. Gray Davis is=20 withholding key financial information from her office and the Legislature.= =20 She said she would refuse to transfer $5.6 billion into a ``rainy day fund'= '=20 she said was set up to impress Wall Street as the state prepares to issue $= 10=20 billion in revenue bonds to cover its power buys.=20 Transferring the money would leave the state general fund $2.4 billion in= =20 debt Connell said.=20 Sandy Harrison spokesman for the state Department of Finance and Keely=20 Bosler of the Legislative Analyst's Office said such transfers are routin= e=20 and required by law.=20 ``The law says she has to do it. The law does not give her the power to=20 demand that kind of audit information'' Harrison said.=20 Davis spokesman Steve Maviglio said the administration has released the=20 financial information it can without jeopardizing negotiations for long-ter= m=20 power contracts with wholesalers.=20 Also Wednesday a federal judge ordered a major wholesaler Reliant Energy= =20 Services to continue selling power to California despite its fear that it= =20 will not be paid.=20 The ISO buys power from companies like Reliant on behalf of utilities in=20 attempts to fend off rolling blackouts like those that hit the state this= =20 week and during two days in January.=20 --- Reliant To Appeal Fed Judge Ruling To Sell Pwr To Calif 03/22/2001 Dow Jones Energy Service (Copyright (c) 2001 Dow Jones & Company Inc.) LOS ANGELES -(Dow Jones)- Reliant Energy Inc. (REI) said Thursday it will= =20 immediately file with the 9th Circuit Court of Appeals in San Francisco in= =20 response to a federal judge's ruling late Wednesday that the company contin= ue=20 selling power to California regardless of whether it is paid.=20 U.S. District Court Judge Frank Damrell granted California's Independent=20 System Operator which makes last minute power purchases in the spot market= =20 a preliminary injunction against Reliant saying Californians were at risk = of=20 irreparable harm if Reliant stopped selling power to the state. The ISO manager of the state's electricity grid said the judge's ruling= =20 will allow the agency to keep the lights on in California.=20 Reliant which is owed more than $300 million from the state's cash-strappe= d=20 utilities supplies California with about 3000 megawatts of electricity fr= om=20 power plants it owns in the state.=20 Reliant spokesman Richard Wheatley said the state Department of Water=20 Resources the agency that buys California's bulk power needs on behalf of= =20 PG&E Corp. (PCG) unit Pacific Gas & Electric Edison International (EIX) un= it=20 Southern California Edison and Sempra Energy (SRE) unit San Diego Gas &=20 Electric should back the ISO's last minute power purchases.=20 In a filing with the Securities and Commission Reliant said it is owed $10= 8=20 million by the DWR for last minute power purchases the ISO made during the= =20 six weeks prior to the agreement Reliant made with the DWR.=20 Damrell dismissed Reliant's claim saying he does not have the authority to= =20 force the DWR to pay for that power.=20 We're going to immediately appeal Judge Damrell's order Wheatley said.= =20 Clearly the judge understands the implications of his order. We are requir= ed=20 to do business with creditworthy entities. Unfortuantely the judge did not= =20 force the ISO to post a surety bond which would allowed us to do business= =20 with the ISO.=20 Gov. Gray Davis has said the state is not responsible for the last minute= =20 power purchases the ISO makes despite a law passed authorizing the DWR to= =20 buy power on behalf of the utilities.=20 Wheatley added that the company will also seek relief on the issue at the= =20 Federal Energy Regulatory Commission. Damrell's ruling remains in effect=20 until the Federal Energy Regulatory Commission rules on the matter.=20 Separately Wheatley said a short-term power supply contract that Reliant= =20 signed with the DWR expired Monday and the DWR has not renewed the contract= .=20 A spokesman for the DWR would not comment on the issue.=20 -By Jason Leopold Dow Jones Newswires 323-658-3874=20 jason.leopold@dowjones.com --- --- ----------------------- Federal judge orders major power wholesaler to sell to California Updated: March 21 2001 - 8:23 p.m.=20 A federal judge issued a preliminary injunction Wednesday ordering a major= =20 electricity wholesaler to continue selling to California despite its fear= =20 that it will not get paid.=20 U.S. District Judge Frank C. Damrell Jr. said Californians were at risk of= =20 irreparable harm if Reliant Energy Services stopped selling power to the=20 Independent System Operator which oversees the state's power grid. The ISO= =20 buys last-minute power on behalf of utilities to fill gaps in supply to try= =20 to fend off blackouts.=20 Damrell dismissed Reliant's attempt to force the state Department of Water= =20 Resources to back the ISO's purchases for the state's two biggest utilities= .=20 The state has been spending about $50 million a day on power for Pacific Ga= s=20 and Electric Co. and Southern California Edison both denied credit by=20 suppliers after amassing billions of dollars in debts. The judge said he had no authority to force the DWR to pay for that power.= =20 Gov. Gray Davis has said the state isn't responsible for purchasing the=20 costly last-minute power ISO buys for Edison and PG&E despite a law=20 authorizing state power purchases on the utilities' behalf.=20 ISO attorney Charles Robinson said the ruling gives ISO operators a tool t= o=20 assist them in keeping the lights on in California.=20 Had the decision gone the other way one could expect other generators to= =20 simply ignore emergency orders Robinson said.=20 Damrell's preliminary injunction will remain in effect until the Federal=20 Energy Regulatory Commission rules on the matter.=20 Damrell denied the ISO's request for preliminary injunctions against three= =20 other wholesalers Dynegy AES and Williams who agreed to continue selling= =20 to the ISO pending the FERC ruling.=20 Spokesmen for Reliant Dynegy AES and Williams were out of the office=20 Wednesday night and didn't immediately return calls from The Associated Pre= ss=20 seeking comment on the ruling.=20 The ISO went to court in February after a federal emergency order requiring= =20 the power sales expired. The judge then issued a temporary restraining orde= r=20 requiring the sales but dropped it after the suppliers agreed to continue= =20 sales to California pending his Wednesday ruling.=20 The ISO said it would lose about 3600 megawatts if the suppliers pulled ou= t=20 enough power for about 2.7 million households. One megawatt is enough for= =20 roughly 750 homes.=20 Grid officials said Reliant's share alone is about 3000 megawatts. Reliant= =20 said the amount at issue actually is less than a fourth of that because mo= st=20 of the power is committed under long-term contracts.=20 Reliant which provides about 9 percent of the state's power worries it=20 won't get paid due to the financial troubles of PG&E and Edison.=20 PG&E and Edison say that together they have lost about $13 billion since Ju= ne=20 due to soaring wholesale electricity costs that California's 1996=20 deregulation law bars them from passing onto customers.=20 At the same time the state has faced a tight electricity supply due in pa= rt=20 to California power plant shutdowns for maintenance and to a tight=20 hydroelectric supply in the Pacific Northwest.=20 Managers of the state power grid imposed rolling blackouts across the state= =20 Monday and Tuesday as supply fell short of demand. Wednesday cooling=20 temperatures and the completion of repairs at several power plants allowed= =20 the state to avoid blackouts. State Controller Kathleen Connell said Wednesday that the energy crunch als= o=20 imperils California's financial health. Connell said the state's power-buying on behalf of Edison and PG&E is is=20 gutting its budget surplus. Since the state started making emergency power= =20 buys in January the surplus has fallen from $8.5 billion to about $3.2=20 billion she said.=20 Connell ordered an audit of the state's power-buying saying Davis is=20 withholding key financial information from her office and the Legislature.= =20 She is refusing a request by Davis and the Legislature to transfer $5.6=20 billion into a rainy day fund she said was set up to impress Wall Street = as=20 the state prepares to issue $10 billion in revenue bonds to cover its=20 power-buying.=20 Transferring the money would leave the state general fund $2.4 billion in= =20 debt Connell said.=20 Sandy Harrison spokesman for the state Department of Finance and Keely=20 Bosler of the Legislative Analyst's Office said such transfers are routine= =20 and required by law.=20 They put the state's budget surplus at $5.6 billion.=20 The law says she has to do it. The law does not give her the power to dema= nd=20 that kind of audit information Harrison said.=20 He said the state's budget isn't in danger because it will be repaid with t= he=20 $10 billion in long-term debt.=20 Wells Fargo & Co. chief economist Sung Won Sohn said he sees little progres= s=20 in efforts to fix the state's power problems and end state electricity=20 purchases.=20 If we're going to pour money into a bottomless pit I would worry about th= e=20 state's finances he said. At some point we're going to run out of money.= The controller's criticism of fellow Democrat Davis won support from Assemb= ly=20 Republicans and Secretary of State Bill Jones a Republican considering=20 challenging Davis next year.=20 Jones said he wants to announce his own plan to solve the state's energy=20 woes but can't unless Davis releases more financial details.=20 Davis spokesman Steve Maviglio dismissed the criticism. Political grandstanding doesn't generate one more kilowatt of energy for= =20 California in this time of emergency he said.=20 Maviglio said the administration has released the financial information it= =20 can without jeopardizing negotiations for long-term power contracts with=20 wholesalers.=20 Also Wednesday a report by Davis' chief power negotiator appears to show= =20 that as much as 75 percent of the state's power purchases will have to be o= n=20 the expensive short-term market this summer said Sen. Debra Bowen D-Marin= a=20 del Rey chairwoman of the Senate Energy Committee.=20 The prices may be phenomenol she said particularly given predicted=20 hydroelectric shortages due to drought in the Pacific Northwest.=20 The report by David Freeman who is negotiating the state's long-term power= =20 contracts shows California has finalized 19 contracts and has 25 agreement= s=20 in principle. Freeman said DWR is continuing to negotiate other contracts. Bowen said FERC should impose short-term price caps or let generators to=20 charge enough to make a reasonable profit or we could be subject to enormo= us=20 price-gouging this summer.=20 -- Associated Press --- State falling short on pacts that provide low-cost energy=20 Published Thursday March 22 2001 in the San Jose Mercury News=20 BY CHRIS O'BRIEN AND JOHN WOOLFOLK=20 Mercury News=20 The state has signed low-cost contracts for just a third of the energy it= =20 needs this year raising the prospect that California could be forced to bu= y=20 much of its electricity this summer on the expensive spot market.=20 A spokesman for Gov. Gray Davis conceded Wednesday that the state will be i= n=20 trouble without more contracts but insisted California will meet its needs= =20 through conservation and additional long-term deals for cheap electricity.= =20 The state according to a report released Wednesday has fallen far short o= f=20 the governor's goal of filling almost all its electricity needs through suc= h=20 deals. In fact the state has lined up contracts for about half the amount= =20 Davis had projected earlier this month.=20 If the state has to rely heavily on the volatile spot market where the pri= ce=20 of electricity this summer could reach five times the state's contract pric= e=20 pressure could mount to raise the cap on the electricity rates consumers pa= y.=20 But Steven Maviglio the governor's spokesman said ``The governor has sai= d=20 he's committed to work this in the existing rate structure so that's the= =20 plan.''=20 In the report sent to state lawmakers the state Department of Water=20 Resources indicated that it had secured just more than 20 million=20 megawatt-hours for this year leaving it far short of the 60 million=20 megawatt-hours needed.=20 ``This is just a progress report'' Maviglio said. ``They did all this in= =20 three weeks which is pretty amazing when you think about it and we have a= =20 lot more to do.''=20 The state got into the power buying business in January supplying it to th= e=20 state's nearly bankrupt utilities.=20 The state negotiated long-term contracts with generators to supply that pow= er=20 at a reduced rate. Based on the report the state will pay an average of $6= 8=20 per megawatt-hour over the next 10 years -- significantly less than in=20 December when prices spiked higher than $300 per megawatt-hour but not as l= ow=20 as the $55 Davis hoped to reach.=20 Most of this power however won't be delivered until 2004. From 2004 to=20 2006 the Department of Water Resources estimates it has enough power unde= r=20 contract. Until then the amount falls short.=20 In 2001 it appears the state has about one-third of the power it needs. Th= e=20 gap closes to about half in 2002 and two-thirds in 2003.=20 At a news conference in Los Angeles two weeks ago Davis said the state wou= ld=20 have to buy only 30 to 45 percent of the power it needs this summer on the= =20 open market.=20 At the time critics said with only two-thirds of the power under contract= a=20 rate increase was almost inevitable. Even Davis' chief negotiator S. David= =20 Freeman offered a bleak assessment for the summer saying that all availab= le=20 electricity has already been sold.=20 ``We'll be subject to extremely high prices'' said Frank Wolak a Stanford= =20 professor who sits on a market committee for the Independent System Operato= r=20 the agency that runs the state power grid.=20 Wolak said there are two main hopes for avoiding a price increase this=20 summer: Federal officials could cap the wholesale price a step they've=20 resisted or Californians can conserve an unprecedented amount of power. --- --- ----------------------- Crisis saps state surplus POWER CRISIS=20 Controller moves to block a transfer of funds saying the $8.5 billion=20 surplus has been cut more than half since January=20 By Mike Taugher TIMES STAFF WRITER=20 The energy crisis has bled California's once-touted budget surplus by more= =20 than half since taxpayers began buying electricity two months ago leading = a=20 top state finance official Wednesday to order an audit of the power purchas= es=20 and block Gov. Gray Davis' plan to transfer funds into a reserve account.= =20 A booming economy last year produced a budget surplus that totaled $8.5=20 billion in January. But that figure now stands at about $3.2 billion=20 according to Controller Kathleen Connell.=20 We started this year with a generous budget surplus Connell said in a=20 statement announcing her decision to block what Davis administration=20 officials described as a routine transfer of surplus money. The energy=20 crisis has taken much of that away and this transfer on top of the=20 electricity purchases would put the fund at risk.=20 Meanwhile the Davis administration released a report by David Freeman the= =20 governor's chief negotiator on power purchases on the progress of executin= g=20 long-term agreements meant to stabilize the power buys.=20 According to the report only about 40 percent of the electricity needed fr= om=20 the open market this year has been lined up. That means the state could be= =20 forced to continue buying a substantial amount of power on the highly=20 expensive spot market and further drain its coffers.=20 And a key regulatory panel is scheduled next week to issue a ruling that=20 would determine how quickly state funds will be replenished when it decides= =20 what portion of electric bill payments should be allocated to the state=20 treasury a decision that could include a rate increase to fully repay=20 taxpayers without further crippling the state's two largest electric=20 utilities.=20 The Public Utilities Commission also will consider whether it will force th= e=20 utilities to pay alternative energy producers whose shutdowns this week=20 contributed to blackouts.=20 Connell's action underscores a growing nervousness over the sheer volume of= =20 money that is being poured into energy buys despite the fact that state=20 officials plan to replenish the treasury with up to $10 billion in loans th= at=20 will be repaid by electricity consumers.=20 The state has committed to spending $4.2 billion to date to keep lights on= =20 since taxpayers were forced in mid-January to take over electricity buys fr= om=20 the financially crippled utilities Pacific Gas & Electric Co. and Southern= =20 California Edison. Tax money is going out at a clip of about $50 million a= =20 day.=20 High prices already have brought PG&E and Edison to the brink of bankruptcy= =20 and now the state's surplus is at risk according to Connell.=20 In addition to requesting an audit and announcing her intention to delay th= e=20 transfer to the reserve account Connell said she wanted the administration= =20 to send her office more information about the electricity purchases.=20 Davis' representatives questioned Connell's authority in trying to block th= e=20 funds transfer which they called a routine accounting procedure and accus= ed=20 her of making political hay.=20 It is not helpful to the taxpayers or ratepayers or the people who just wa= nt=20 to keep the lights on it isn't helpful to have the situation muddied like= =20 this said Sandy Harrison a Finance Department spokesperson. We're sorry= =20 it came up in this manner.=20 Connell and the administration have butted heads in recent weeks. The=20 controller wants to post details of the state's electricity purchases on he= r=20 Web site a plan that have been delayed under pressure from Davis because o= f=20 the governor's concerns that releasing those details will allow power=20 generators and traders to sell at higher prices.=20 Harrison said administration officials believe Connell lacks the authority= =20 either to block the funds transfer to a reserve account or to audit the sta= te=20 water resources department.=20 Two days of widespread blackouts this week show how vulnerable the power gr= id=20 is to financial glitches. Although several factors combined to produce the= =20 blackouts state power officials say the outages could have been avoided if= =20 the utilities were paying their bills to alternative energy producers.=20 Many of those producers including clean-burning natural gas power plants= =20 wind solar and geothermal energy developers shut down enough production t= o=20 spell the difference between grid reliability and blackouts Monday and=20 Tuesday.=20 Davis called the utilities' failure to pay bills to those producers known = as=20 qualifying facilities immoral. The QFs were either unable to buy gas fro= m=20 their suppliers or were frustrated with the utilities' failure to pay them.= =20 The utilities hoarded billions of dollars since November without paying an= y=20 money out said Davis spokesman Steve Maviglio. They've got the money --= =20 we're pulling the trigger to make them pay it.=20 The utilities however say they are doing all they can to conserve enough= =20 cash to continue operating. Together they owe the QFs about $1.5 billion.= =20 Next week the PUC is scheduled to consider whether to force the utilities = to=20 heed Davis' demand to pay the QFs and it might also decide how much of=20 ratepayers' bill payments will be used to refund taxpayers for power buys.= =20 PG&E says that under a formula proposed by the administration the water=20 resources department would receive about 40 percent of the money collected= =20 from ratepayers for power purchases.=20 The rest of that money about $240 million would have to be divided among= =20 QFs existing power contracts operating PG&E's nuclear and hydroelectric= =20 plants and what hour-by-hour purchases the utility still must make on the= =20 spot market according to PG&E spokesman John Nelson.=20 There isn't enough to do that he said.=20 That is making it increasingly likely that electric bills will be hiked=20 according to a growing chorus of officials and experts.=20 Unless rates are raised Nelson said the only entity that can absorb a lac= k=20 of payment or a partial payment is the state treasury. Cutting off any othe= rs=20 will lead to electricity becoming unavailable and more blackouts he said.= =20 If they do it under existing rates -- given that the existing pool of mone= y=20 is not enough -- who doesn't get paid or who gets a partial payment? Nelso= n=20 said. What's the only entity left with wiggle room? The state.=20 Rate hikes are also a sticking point in negotiations to bail out the=20 utilities through purchase of their transmission lines and other assets=20 Maviglio said.=20 They want rate increases of significant magnitude and we're not going=20 there he said.=20 WE CAN TRIM STORY HERE IF NECESSARY BUT KEEP TAGLINES AT BOTTOM=20 About one-third the electricity needed by the customers of California's thr= ee=20 major utility companies is produced by the companies themselves one-third= =20 comes from alternative producers who use environmentally friendly technique= s=20 and one-third is bought on the open market.=20 The state stepped in to buy the one-third needed from the open market after= =20 the utility companies ran out of cash and credit in January to make the=20 purchases themselves.=20 But that electricity has proven to be enormously expensive and Davis has= =20 planned to lower those prices by committing to long-term purchases.=20 Freeman's report on the progress of those long-term purchases dated March = 15=20 but released this week said the state has finalized 19 contracts with seve= n=20 suppliers and reached 25 additional agreements.=20 Mike Taugher covers the environment and energy. Reach him at 925-943-8324 o= r=20 mtaugher@cctimes.com.=20 Staff writer Andrew LaMar contributed to this story. --- --- ----------------------- Bill to pay small energy firms stalls By Kevin Yamamura Dale Kasler and Jim Sanders Bee Staff Writers (Published March 23 2001)=20 A quickly melded proposal that would assure payments for alternative energy= =20 suppliers whose money woes contributed to power blackouts this week stalled= =20 Thursday in a divided Legislature.=20 The state Senate passed the bill AB 8x but with Republicans balking it w= as=20 rejected in the Assembly along party lines. Assembly leaders said they may= =20 try again today.=20 For most of Thursday lawmakers scrutinized legislation they had overhauled= =20 the night before to include Gov. Gray Davis' plan to force utilities to pay= =20 solar wind and small gas-fired suppliers. Such providers called qualifie= d=20 facilities or QFs provide more than 20 percent of California's=20 electricity and their shutdowns were partly to blame for rolling blackouts= =20 Monday and Tuesday.=20 Under the Democratic governor's plan the state Public Utilities Commission= =20 would determine prices at which alternative generators may sell power but= =20 legislation is needed to authorize the PUC action.=20 Lawmakers faced time pressures Thursday. They wanted to pass the bill quick= ly=20 so the PUC could act next week and legislators could embark Monday on an=20 annual three-day lobbying trip in Washington D.C.=20 Assembly Speaker Robert Hertzberg D-Sherman Oaks said the Republicans'=20 rejection of AB 8x could jeopardize more than $4 billion the state has spen= t=20 or allocated for electricity during the energy crisis.=20 Hertzberg said producers of alternative energy which are owed more than $1= =20 billion have threatened to drag debt-ridden utilities into involuntary=20 bankruptcy if the Legislature failed to pass the measure.=20 They said it and I believe it Hertzberg said. If such bankruptcies occu= r=20 he added the state with its multibillion-dollar debt would become just=20 another creditor in a pile of creditors.=20 But Assembly Republican leader Bill Campbell of Villa Park said the=20 finger-pointing is unfair. Passage of AB 8x would not necessarily prevent= =20 bankruptcies he said.=20 One alternative energy provider won a crucial court ruling Thursday that=20 staved off at least for a while threats by some creditors to haul one or= =20 both big utilities into bankruptcy court for nonpayment of bills.=20 CalEnergy Co. Inc. won the right to sell its geothermal power which was=20 contracted to Southern California Edison on the open market. CalEnergy sai= d=20 it is owed $45 million by Edison.=20 If the Imperial County judge hadn't ruled in CalEnergy's favor the company= =20 and seven other QFs were fully prepared to file an involuntary bankruptcy= =20 petition against Edison this morning said David Sokol chief executive of= =20 CalEnergy's parent MidAmerican Energy Holdings Co. of Des Moines Iowa.=20 That is currently off the table.=20 An involuntary bankruptcy proceeding would take California's energy crisis= =20 into uncharted territory although a bankruptcy judge would have the leeway= =20 to reject the filing.=20 Freed from its contract with Edison CalEnergy will move to sell its=20 electricity to people who will pay for it Sokol said.=20 Besides calming the bankruptcy movement temporarily the ruling also could= =20 prompt other alternative energy providers -- hundreds of which have shut do= wn=20 because of nonpayment by Edison and Pacific Gas and Electric Co. -- to foll= ow=20 CalEnergy's example and find other buyers for their electricity said Gary= =20 Ackerman of the Western Power Trading Forum an association of generators.= =20 Assembly Republicans said they felt the Senate's decision to package three= =20 important energy issues into a single bill was an attempt to ramrod=20 legislation through both houses.=20 We have to stand and say no Campbell said during floor debate.=20 Besides determining alternative generator payments the bill would change a= n=20 earlier law by capping the value of bonds the state may sell for power=20 purchases at $10 billion. It also would extend to large businesses an=20 existing rate cap in the San Diego Gas and Electric Co. service area.=20 And it would earmark a portion of rates paid by utility customers to fund t= he=20 state's ongoing power purchases. Within a week the state will have spent= =20 $4.2 billion on power since January.=20 Without the bill some legislators fear Pacific Gas and Electric and=20 Southern California Edison would be reimbursed before the state.=20 They have got (some) gall to go to the PUC and say they're going to go to= =20 court to keep our money -- to keep our money to pay off their creditors= =20 said Senate President Pro Tem John Burton D-San Francisco.=20 Most of the bill's controversy however centered on how the PUC would trea= t=20 gas-fired alternative generators.=20 The commission issued a revised draft decision Wednesday that would impose= =20 prices for qualifying facilities at $79 a megawatt-hour for five-year=20 contracts or $69 a megawatt-hour for 10 years.=20 But those producers that use natural gas -- representing about two-thirds o= f=20 the alternative energy providers in California -- spent Thursday arguing th= at=20 Davis' plan to rescue them would all but guarantee that they would go out o= f=20 business instead.=20 The plan -- ordering Edison and PG&E to pay them a fixed price for their=20 power -- would set rates well below the cost of natural gas they said.=20 Democratic lawmakers tried to assure such producers that the PUC would set= =20 prices that make business sense even obtaining a letter to that effect fro= m=20 Loretta Lynch who heads the commission.=20 Davis has vowed to fine Edison and PG&E if they don't pay alternative=20 producers for future deliveries. But Sokol said his company isn't convinced= =20 that Edison will pay.=20 Calling Edison a confrontive in-your-face nasty organization Sokol sai= d=20 the utility was sitting on $2 billion and not paying its bills. Edison i= n=20 a Securities and Exchange Commission filing Thursday said its debts outwei= gh=20 its cash reserves by $722 million.=20 The Senate sent the Assembly two other bills that deal specifically with=20 supply and demand. The first SB 5x would spend about $1 billion on energy= =20 conservation and low-income assistance programs. The other SB 28x would= =20 streamline siting procedures for power plant construction.=20 In separate energy-related matters Thursday the Assembly approved:=20 AB 21x which would allow businesses industries or other electrical=20 customers to negotiate private contracts with energy providers.=20 Nine energy bills designed to generate or save 665 megawatts of electricity= =20 -- including 345 megawatts this summer. One megawatt is enough electricity = to=20 light about 1000 homes.=20 The state put power emergencies behind it after dropping out of a Stage 1= =20 alert late Wednesday. The California Independent System Operator which=20 manages the state's power transmission grid was predicting no further aler= ts=20 this week. It expected cooling temperatures and a regular dropoff in=20 electricity use on Fridays to lessen demand at the same time that more pow= er=20 plants were returning to service.=20 Bee staff writer Carrie Peyton contributed to this report.=20 --- House panel ends energy hearings -- will it step in? By David Whitney Bee Washington Bureau (Published March 23 2001)=20 WASHINGTON -- A key House panel wrapped up a series of hearings on the=20 California electricity crisis Thursday and now will decide whether to come = to=20 the state's aid with legislation.=20 But the panel's Texas chairman made clear that West Coast price controls=20 won't be on the table.=20 Caps will not be in anything I am submitting said Rep. Joe Barton=20 chairman of the House Energy and Commerce Committee's energy and air qualit= y=20 subcommittee.=20 Some form of federal controls to hold down escalating wholesale prices this= =20 summer because of power shortages has been the most frequent appeal of=20 witnesses who testified before the panel during roughly 30 hours of hearing= s=20 over five days.=20 Such controls have been sought by the governors of California Oregon and= =20 Washington. As power shortages are forecast for other regions states like= =20 New York also have appealed for temporary price controls to halt gouging.= =20 But the Federal Energy Regulatory Commission which is responsible for=20 enforcing reasonable wholesale rates under the Federal Power Act has refus= ed=20 to impose them and the Bush administration is bolstering that decision by= =20 opposing any legislation that would compel such action.=20 Barton in a brief hallway interview declined to say what other legislativ= e=20 remedies he might propose to address the worsening California situation.=20 He said he expects to submit a list of ideas to the White House today and= =20 after receiving comment on it sit down with other committee Republicans an= d=20 Democrats next week to see if any legislation is in order.=20 If we are going to do anything to help California or the West this summer= =20 we have to make it law within the next month or six weeks Barton said.=20 Even the panel's senior Democrat Virginia Rep. Rick Boucher was urging a= =20 careful and deliberate approach to the California crisis which he said w= as=20 largely of the state's own making.=20 There are steps Congress might take to provide some help to the West such = as=20 more money for conservation and relaxed federal regulation of air quality= =20 standards. That would permit older more polluting generators to operate=20 through a long hot summer when electricity demand could exceed supply by= =20 about 3000 megawatts roughly the amount needed to power 3 million homes.= =20 But Alan Lloyd chairman of the California Air Resources Board said power= =20 production already is being maximized without sacrificing air quality.=20 Simply put no essential electricity generation has been curtailed due to= =20 air emission limitations he said. California's programs to protect publi= c=20 health are not major factors in the electricity shortages experienced to=20 date.=20 The concern is that as shortages turn into more rolling blackouts wholesal= e=20 prices will jump even higher and steadily bleed the economies of California= =20 and the West Coast.=20 William L. Massey the lone member of the energy regulatory commission who= =20 supports price controls said at a Tuesday hearing that without them the We= st=20 Coast faces economic catastrophe this summer.=20 It was evident from the comments of some Republicans that they think their= =20 party could capitalize politically from a difficult summer.=20 If they had a bad summer it could show up in the polls said Rep. Charli= e=20 Norwood R-Ga. And sometimes that's not a bad idea.=20 One of the most dramatic exchanges during the weeklong hearings came Thursd= ay=20 with S. David Freeman the former general manager of the Sacramento Municip= al=20 Utility District who now heads the Los Angeles Department of Water and Powe= r.=20 He recently was named Gov. Gray Davis' chief negotiator with power generato= rs=20 for long-term contracts to stabilize future deliveries.=20 Don't feel sorry for California Freeman said. We're going to come out o= f=20 this stronger than ever.=20 But Freeman said it will be a year or two before all the fixes are in place= =20 and in the meantime the region desperately needs Congress' help to force th= e=20 FERC into controlling wholesale prices which witnesses said are likely to= =20 rise from $7 billion last year to as much as $70 billion or more this year.= =20 We recognize that the current administration and various legislators have= =20 their own opinion as to the California situation Freeman said. But my=20 personal plea is that if the federal government is not going to help us th= e=20 least it should do is refrain from legislation that attempts to tell us wha= t=20 to do.=20 Barton perked up at that idea.=20 Leave California alone huh? Barton said. That might be a good motto.= =20 --- --------------------- Dan Walters: Crisis deepens: politicos panic (Published March 23 2001)=20 That choking sound you hear is California's political class shifting into= =20 near-panic mode as it realizes that the energy crisis is on the verge of=20 becoming a full-scale meltdown with utilities forced into bankruptcy and= =20 consumers hammered by severe and prolonged power blackouts and soaring=20 electricity bills.=20 The Legislature which had been content to allow Gov. Gray Davis to handle= =20 the crisis on his own suddenly came to life Thursday jolted by this week'= s=20 unexpected rolling blackouts and threats by creditors to force the utilitie= s=20 into bankruptcy court. Lawmakers quickly fashioned a basketful of legislati= on=20 aimed -- or so they hope -- at increasing power supplies promoting=20 conservation and relieving the financial pressure on utilities and=20 electricity generators. But it may be too little too late -- and Davis and= =20 other politicians are already pointing fingers of blame aware that a=20 political price will be paid if the apocalypse strikes.=20 While Davis chants his mantra that he inherited a fatally flawed utility=20 deregulation scheme from predecessor Pete Wilson Republicans are blaming= =20 Davis for moving too slowly after the crisis first surfaced last summer an= d=20 even some of Davis' fellow Democrats are distancing themselves from the=20 governor.=20 Deregulation was a product of a Republican governor a Republican author a= nd=20 a Republican PUC (Public Utilities Commission) that was unduly impatient= =20 Davis said at one point this week as the Capitol buzzed with private=20 negotiations and public posturing.=20 A day later however state Controller Kathleen Connell a Democrat issued= a=20 warning that Davis' power purchases running at $50 million a day had=20 already drawn down state budget reserves by nearly two-thirds and she=20 refused to authorize additional transfers. It was a direct shot by Connell = at=20 Davis an old rival and came just a day after the governor had endorsed a= =20 Connell foe Antonio Villaraigosa in the duel for mayor of Los Angeles.=20 Other Democrats didn't join Connell's direct challenge to Davis but there= =20 is nevertheless a growing concern among Democratic legislators that the= =20 power purchases are costing many billions of dollars more than the governor= =20 had projected and could place the state budget in jeopardy. They're nervous= =20 because Davis has refused to reveal even to legislators exactly how much= =20 power the state is buying each day and how much it is paying.=20 From the few details that have been disclosed it's clear that the state is= =20 spending about $1.5 billion a month which would wipe out the state's=20 reserves by midsummer. It's also becoming increasingly clear that Davis=20 probably can't make good on his promise to avoid major consumer rate=20 increases unless the state is willing to plunge deeply and semi-permanentl= y=20 into debt to underwrite wholesale costs or unless federal authorities orde= r=20 huge refunds from power suppliers.=20 Rates in areas served by private utilities have risen only slightly while t= he=20 costs first to utilities and later to the state soared. Data from the=20 administration and utilities when collated indicate that the state is in= =20 line to collect just 20 cents for every dollar it's spending on power=20 purchases and the gap will increase as summer heat drives up demand.=20 Privately some economists say that private utility rates will have to rise= =20 33 percent to 50 percent to cover costs of current power supplies plus=20 utilities' past debts to generators and the state's purchase of the=20 utilities' transmission system if that deal is made final.=20 It's ultimately going to break down and the ratepayer is going to pay for= =20 it one way or the other Republican Sen. Jim Battin said during one of=20 Thursday's many committee hearings on utility legislation. No one disagreed= =20 with him.=20 DAN WALTERS' column appears daily except Saturday. Mail: P.O. Box 15779= =20 Sacramento CA 95852 phone (916) 321-1195 fax: (781) 846-8350 E-mail: dwalters@sacbee.com Recent columns: --- Report says power wholesalers overcharged state $6 billion=20 By Don Thompson ASSOCIATED PRESS=20 March 22 2001=20 SACRAMENTO =01) Electricity wholesalers have overcharged California more th= an=20 $6.2 billion by manipulating the energy market according to a report by an= =20 economist working for power grid managers.=20 The Independent System Operator planned to file the findings with federal= =20 regulators Thursday and ask for a refund said ISO spokesman Patrick=20 Dorinson.=20 In a related development the state auditor said Thursday that the state's= =20 1996 deregulation law encouraged both buyers and sellers of electricity to= =20 manipulate wholesale prices to their advantage by underestimating both=20 supply and demand.=20 Disappearing state surplus sparks alarm=20 Outages darken economic outlook in state some say=20 Out-of-state generators question power regulators' authority=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 The auditor's report lays out what it calls a complex combination of=20 deficiencies and misjudgments it says led to the state's power problems.=20 The ISO's filing came a day after the state controller complained that a=20 relentless energy crisis is jeopardizing California's financial future.=20 Since May the companies manipulated the market by bidding at excessive=20 prices effectively withholding supplies or by not bidding at all when they= =20 had generation capability available according to the ISO study.=20 ISO Director of Market Analysis Anjali Sheffrin presented the findings at a= n=20 energy conference at the University of California Berkeley last week.=20 The companies have denied overcharging California and have said they expect= =20 the Federal Energy Regulatory Commission will determine their prices were= =20 justified.=20 In a burst of activity after weeks of delay both houses of the Legislature= =20 approved bills Thursday designed to ease the energy crisis.=20 The state Senate approved measures to encourage energy conservation and spe= ed=20 up power plant construction.=20 Topping that the Assembly sent the Senate 14 energy-related bills includi= ng=20 $455 million in loans and grants to encourage energy efficiency and=20 conservation and alternative energy projects by this summer.=20 One of the Assembly bills would require new energy plants approved by the= =20 state to sell their power within California before they offer it to other= =20 states.=20 The (California) Energy Commission says for every day we delay this bill= =20 there are 20 megawatts that could be saved that we're not saving said sta= te=20 Sen. Byron Sher D-Stanford as senators voted 28-10 to send his conservati= on=20 measure to the Assembly.=20 Senators also approved another Sher bill speeding up the siting of power=20 plants. It went to the Assembly on a 37-1 vote.=20 Meanwhile a federal judge issued a preliminary injunction Wednesday orderi= ng=20 one of the companies named in the ISO filing Reliant Energy Services to= =20 continue selling to California despite its fear that it will not be paid.= =20 U.S. District Judge Frank C. Damrell Jr. said Californians were at risk of= =20 irreparable harm if Reliant stopped selling power to the ISO which buys at= =20 the last minute on behalf of utilities to bolster supplies and try to fend= =20 off blackouts.=20 Such blackouts struck the state twice this week shutting off power to=20 hundreds of thousands of people from San Diego to Oregon snarling traffic= =20 and shutting down businesses.=20 The state remained free of any power alerts Thursday morning as power=20 reserves stayed above 7 percent.=20 Damrell dismissed Reliant's attempt to force the state Department of Water= =20 Resources to back the ISO's purchases for the state's two biggest utilities= =20 Southern California Edison and Pacific Gas and Electric Co.=20 The judge said he had no authority to force the DWR to pay for that power.= =20 The utilities have been denied credit after amassing billions of dollars in= =20 debt paying high prices for power that the state's energy deregulation law= =20 prevents them from passing on to consumers.=20 Gov. Gray Davis has said the state isn't responsible for purchasing the=20 costly last-minute power the ISO buys for Edison and PG&E despite a law=20 authorizing state power purchases on the utilities' behalf.=20 ISO attorney Charles Robinson said the ruling gives ISO operators a tool t= o=20 assist them in keeping the lights on in California.=20 Had the decision gone the other way one could expect other generators to= =20 simply ignore emergency orders Robinson said.=20 Damrell's preliminary injunction will remain in effect until the Federal=20 Energy Regulatory Commission rules on the matter.=20 In another development Wednesday state Controller Kathleen Connell=20 complained that the energy crunch is imperiling California's financial=20 health.=20 Connell said the state's power buying on behalf of Edison and PG&E is gutti= ng=20 its budget surplus. Since the state started making emergency power buys in= =20 January the surplus has fallen from $8.5 billion to about $3.2 billion sh= e=20 said.=20 Connell ordered an audit of the state's power buying saying Davis is=20 withholding key financial information from her office and the Legislature.= =20 She is also refusing a request by Davis and the Legislature to transfer $5.= 6=20 billion into a rainy day fund she said was set up to impress Wall Street = as=20 the state prepares to issue $10 billion in revenue bonds to cover its power= =20 buying.=20 Transferring the money would leave the state general fund $2.4 billion in= =20 debt Connell said.=20 Sandy Harrison spokesman for the state Department of Finance and Keely=20 Bosler of the Legislative Analyst's Office said such transfers are routine= =20 and required by law.=20 They put the state's budget surplus at $5.6 billion.=20 Davis spokesman Steve Maviglio dismissed the criticism.=20 Political grandstanding doesn't generate one more kilowatt of energy for= =20 California in this time of emergency he said.=20 Connell is a candidate for mayor of Los Angeles in next month's election.= =20 The ISO study meanwhile covered five major in-state power suppliers =01)= =20 Reliant Dynegy Williams/AES Duke Energy and Mirant as well as 16 power= =20 importers. All deliver power to customers of Edison PG&E and San Diego Gas= &=20 Electric Co. the state's three largest investor-owned utilities.=20 All overcharged but some excessively and some by moderate amounts said= =20 ISO's Sheffrin.=20 According to the report the overcharging took place beginning last May wh= en=20 the energy crisis began and continued through last month.=20 During that time according to the report energy suppliers commonly offere= d=20 their electricity at twice the amount it cost them to produce.=20 FERC member William L. Massey said he wasn't shocked to hear the amount=20 overcharged added up to more than $5 billion.=20 Prices over the past 10 months in California have greatly exceeded the=20 federal standards of just and reasonable prices and I think they have=20 exceeded the standards by possibly billions of dollars he said.=20 Chuck Griffin spokesman for Atlanta-based Mirant said the company would=20 justify their charges to FERC officials.=20 I think we're missing sometimes just how basic the problem is in Californi= a.=20 Supply and demand are out of whack and some basic rules of economics kick i= n=20 when that happens he said.=20 --- ------------- Disappearing state surplus sparks alarm=20 Controller puts hold on transfer of $5.6 billion to reserve funds By Karen Kucher and Ed Mendel=20 UNION-TRIBUNE STAFF WRITERS=20 March 22 2001=20 The state's general fund surplus has dropped to $3.2 billion from $8.5=20 billion since January largely because California's power purchases are=20 devouring the money state controller Kathleen Connell said yesterday.=20 Connell said she wants to see more documentation about state power spending= =20 before approving the transfer of $5.6 billion from the general fund to a=20 special reserve fund requested by Gov. Gray Davis.=20 Connell said the state would have to borrow $2.4 billion to cover the=20 transfer.=20 Report says power wholesalers overcharged California $5.5 billion=20 Outages darken economic outlook in state some say=20 Out-of-state generators question power regulators' authority=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 We started this year with a generous budget surplus. The energy crisis has= =20 taken much of that away and this transfer on top of the electricity=20 purchases would put the (general) fund at risk Connell said in a statemen= t.=20 Her action came on a day when state power supplies improved. After two days= =20 of forced outages this week no rolling blackouts were ordered yesterday.= =20 Several power plants came back on line and imports from the Pacific Northwe= st=20 provided enough electricity to meet demand yesterday said Stephanie=20 McCorkle a spokeswoman with the California Independent System Operator=20 which manages most of the state's power grid.=20 Gradually more (electricity) generation comes on every day McCorkle said= .=20 By Monday we should see somewhere around 2200 megawatts back in service= =20 that was not on this Monday. That's if no other generation falls off.=20 Meanwhile Connell's move took some by surprise.=20 A spokesman for the state Department of Finance said Connell is denying a= =20 routine transfer that is required by law. It was just a routine accounting= =20 measure that we didn't anticipate becoming controversial Sandy Harrison= =20 said.=20 Connell announced the denial of the transfer a day after Davis endorsed one= =20 of her opponents former Assembly Speaker Antonio Villaraigosa in the race= =20 for Los Angeles mayor.=20 Connell who monitors California's cash flow said she was deeply concerne= d=20 about putting the state's general fund in a deficit situation in light of t= he=20 energy crisis.=20 About two months ago the state began spending about $50 million a day to b= uy=20 power after Pacific Gas and Electric and Southern California Edison nearly= =20 went bankrupt. It is also purchasing power for customers of San Diego Gas a= nd=20 Electric.=20 The Davis administration said earlier this week it soon will begin spending= =20 an additional $500 million on power purchases bringing the total to $4.2= =20 billion.=20 As that staggering sum continues to grow the state won a court battle with= =20 an electricity supplier yesterday. A federal judge in Sacramento sided with= =20 the state and ordered the wholesaler to continue selling to California=20 despite its fear that it will not get paid.=20 Judge Frank C. Damrell Jr. said Californians were at risk of irreparable ha= rm=20 if Reliant Energy Services stopped selling power to the Independent System= =20 Operator. The ISO acquires last-minute power on behalf of utilities to fill= =20 gaps in supply to try to fend off blackouts.=20 Damrell dismissed Reliant's attempt to force the state Department of Water= =20 Resources to back the ISO's purchases for the state's two biggest utilities= .=20 The judge said he had no authority to force the DWR to pay for the power.= =20 Davis has said the state isn't responsible for purchasing the costly=20 last-minute power the ISO buys for Edison and PG&E despite a law authorizi= ng=20 state power purchases on the utilities' behalf.=20 Meanwhile those who manage the power grid say the forecast for power=20 supplies this week looks good although conditions can change quickly.=20 ISO managers continue to stress the importance of conservation. Utility=20 customers across the state conserved about 900 megawatts of power Tuesday= =20 which kept blackouts from being ordered that night.=20 As the power crisis worsened this week ISO managers wished aloud that they= =20 still could rely on business customers to shut down in exchange for lower= =20 energy rates.=20 Such interruptible customers saved as much as 2100 megawatts last spring= =20 a figure that dropped to about 1700 last summer and 1400 at the end of th= e=20 year. But in January the state Public Utilities Commission told utilities= =20 they could no longer impose fines on business customers who refuse to shut= =20 down when asked.=20 ISO managers realize the program was harming businesses with frequent=20 interruptions of service -- but they still miss having that option McCorkl= e=20 said.=20 It would have made an enormous difference but at the same time we=20 understand the impact it was having on businesses McCorkle said. --- -------------- Outages darken economic outlook in state some say=20 By Dean Calbreath? UNION-TRIBUNE STAFF WRITER=20 March 22 2001=20 Until this week the San Diego Regional Chamber of Commerce was predicting= =20 that the county was well-insulated from the growing threat of economic=20 recession.=20 But that was before the lights went out in the chamber's downtown=20 headquarters Monday.=20 Working by window light in his darkened office chamber economist Kelly=20 Cunningham rapidly erased his previous projections for 3.5 percent growth f= or=20 San Diego County. Cunningham now feels the local economy could fall into a= =20 recession thanks to its shaky supply of energy.=20 Report says power wholesalers overcharged California $5.5 billion=20 Disappearing state surplus sparks alarm=20 Out-of-state generators question power regulators' authority=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 Blackouts are very disruptive to the economy Cunningham said. A busines= s=20 can absorb rising energy prices by cutting costs or raising its own prices.= =20 But an energy shutoff is much less predictable. It cuts into productivity.= =20 Those sentiments are being echoed throughout California as business leader= s=20 and economists worry that rolling blackouts will darken the state's=20 previously glowing economy.=20 At the University of California Los Angeles for instance leading financia= l=20 theorists will meet April 4 to discuss the question Can California grow in= =20 the dark? Although the topic was chosen before the recent string of power= =20 outages the blackouts have given the issue new urgency.=20 These blackouts are not just a single episode said UCLA economist Tom=20 Lieser. They are a bridge to what will happen this summer. If we don't fal= l=20 into a recession in the second half of the year we will fall pretty close.= =20 Tapan Munroe an economist formerly with Pacific Gas and Electric this wee= k=20 crossed out his projection for 2 percent statewide growth. After blackouts= =20 rolled toward his consulting offices in the Bay Area city of Moraga Munroe= =20 decided the state will be lucky if it manages zero growth.=20 I'm a pretty optimistic guy by nature but this has been sobering Munroe= =20 said. On Tuesday one restaurant alone in San Francisco lost $20000.=20 Multiply that by all of the businesses that lost power in the state and=20 you've got a serious problem.=20 Two days of blackouts in San Diego County have hurt businesses large and=20 small. Among the industries under threat is the local biotechnology sector= =20 which requires a steady supply of electricity to power areas of laboratorie= s=20 that must remain temperature-controlled and sterile.=20 Continued blackouts could have a huge impact not only in dollars but=20 multiple millions of dollars said Tom Oster vice president of operations= =20 for BioCom the leading trade organization for the more than 200 biotechs i= n=20 San Diego County.=20 Idun Pharmaceuticals a biotech near La Jolla Village Drive that has 67=20 employees had its power cut for about 40 minutes Tuesday. Though the compa= ny=20 has a back-up generator some segments of its laboratories and lab equipmen= t=20 were not supported by it. Chemists also had to turn off some sensitive lab= =20 equipment to avoid the possibility of a damaging power surge once the=20 blackout was over.=20 We're not in a position as a small company to back up the whole facility= =20 said Steven Mento Idun's chief executive. We haven't done a survey yet to= =20 determine whether we had losses either in experiments or equipment damaged= =20 -- but we're hoping because the blackout was so short that damage will be= =20 minimal.=20 Mento said rolling blackouts coupled with continuing high energy costs=20 could cripple many small biotechs -- and even take a bite out of bigger mo= re=20 established companies.=20 We generate new compounds in controlled environments on a daily basis and= =20 when power goes off you can lose samples because of contamination and other= =20 issues Mento said. We are fortunate that our losses would be in having t= o=20 repeat an experiment -- but this could be really critical for companies wit= h=20 drug manufacturing and issues of quality control.=20 The wireless firms along Sorrento Valley have not been immune from blackout= s.=20 The lights went out at Qualcomm early this week although executives declin= ed=20 to comment about the impact.=20 No blackouts hit the big shipbuilding operations on the waterfront this wee= k.=20 But the National Steel and Shipbuilding Co. -- one of San Diego's largest= =20 employers -- already experienced a voluntary loss of power this year its= =20 first since World War II. Since the shipyard does not have its own power=20 supply NASSCO executives fear the effect of unplanned outages.=20 Our average payroll totals half a million dollars a day said NASSCO=20 spokesman Jim Scott. When you have a day's work disrupted that can be=20 pretty serious. We're currently in discussions about the possibility of=20 buying from independent power suppliers or setting up a power plant of our= =20 own.=20 Small businesses which constitute the bulk of employment in San Diego=20 County were hurt by disruptions as well -- costing them vital revenue at a= =20 time when their power bills have skyrocketed.=20 At Fantastic Sam's a hair salon in Chula Vista Angelica Alcala estimated= =20 that business dropped 60 percent when the blackouts hit Tuesday. Among othe= r=20 things Alcala had to alter her planned haircuts because she was relying on= =20 scissors instead of electric clippers.=20 At the Family Fun Center in El Cajon the management gave vouchers or refun= ds=20 to the 15 or so video-game players who were in the midst of killing aliens = or=20 fighting ninja warriors as the power went down.=20 Papa John's Pizza estimates that it may have lost several thousand dollars = in=20 business after six stores were blacked out Monday and four others lost powe= r=20 Tuesday. Brian Mills who runs 23 Papa John's stores in the county said hi= s=20 main concern was shutting down the computers so they would not be damaged b= y=20 a power surge when the electricity was restored.=20 Paul Ecke III a member of the West Coast advisory panel for the Federal=20 Reserve said the potential impact of the energy crisis is worse than any= =20 downturn in the stock market.=20 Ecke who runs the Paul Ecke Ranch flower operation in Encinitas said the= =20 crisis could be particularly harmful for the state's agricultural sector= =20 since farmers need electricity to pump water and natural gas to heat=20 greenhouses.=20 What I'm really worried about is the energy thing is going to cast a shado= w=20 on California he said. If you're a business person thinking about moving= =20 to California right now you're probably not going to do it because you're= =20 not sure you're going to have your lights on this summer.=20 Besides the disruption to businesses the energy crisis is also hurting the= =20 pocketbooks of hourly workers who have been sent home during the crisis.=20 Under state law employers are free to send hourly workers home without pay= =20 during such emergencies although salaried workers must still be paid.=20 Susan Kemp an attorney with the California Chamber of Commerce said there= =20 are ways of minimizing the impact on hourly workers.=20 You have to look at what time it is when the blackout occurs and how long= =20 you think it's going to last Kemp said. If it's around a meal time you= =20 might send the workers out for a longer meal period if you think it's going= =20 to be an hour or hour and a half delay.=20 But the potential for losing wages doesn't sit well with the hourly workers= .=20 When you get sent home early and lose your wages you have even less money= =20 to pay your inflated energy bills said an hourly worker who was sent home= =20 during Monday's blackout.=20 --- ---------- Out-of-state generators question power regulators' authority=20 By Karen Gaudette ASSOCIATED PRESS=20 March 22 2001=20 SAN FRANCISCO =01) At least three major out-of-state electricity generators= are=20 challenging the authority of the California Public Utilities Commission to= =20 investigate whether they deliberately reduced power supplies to drive up=20 prices.=20 The PUC has asked for power plant maintenance records as it tries to=20 determine whether Duke Energy Dynegy Inc. Mirant Corp. and other=20 wholesalers have manipulated the energy market at California's expense.=20 At issue is who ultimately controls oversight of in-state plants that provi= de=20 most of California's electricity. The plants once owned by the state's=20 largest utilities were sold off as part of the state's 1996 attempt at=20 deregulation.=20 Report says power wholesalers overcharged California $5.5 billion=20 Disappearing state surplus sparks alarm=20 Outages darken economic outlook in state some say=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 PUC President Loretta Lynch said the public deserves to know whether=20 generators have unnecessarily taken plants off-line to create artificial=20 shortages forcing the utilities and now state bureaucrats to buy much high= er=20 priced power on the spot energy market.=20 What I do know is we have historically high levels of outages across the= =20 board Lynch told The Associated Press. Dynegy and Duke have been fightin= g=20 the PUC in the PUC's quest to obtain documents about these outages.=20 The PUC has the authority to regulate facilities within its borders she=20 added. It doesn't matter where the headquarters of the company is.=20 Duke based in North Carolina says it does matter =01) and that since it a= nd=20 other wholesalers aren't headquartered in California the PUC can't require= =20 it to turn over the maintenance records.=20 We have not given them proprietary information because they do not regulat= e=20 us said Duke's spokesman Tom Williams.=20 Dynegy did not return calls for comment Wednesday.=20 The PUC also faces a new challenge in the legislature. A bill sponsored by= =20 Assemblywoman Carole Migden D-San Francisco which would have granted the= =20 PUC greater inspection authority over out-of-state generators was amended= =20 this month to grant the authority to Independent System Operator instead.= =20 The ISO has managed the delivery of energy through most of the state's powe= r=20 grid but historically has done little regulating and has had no policing=20 authority.=20 This board created during the state's 1996 attempt at deregulation was=20 redesigned in January. Now it has a five-member board appointed by Davis= =20 replacing a 26-member ISO board composed of utility executives marketers= =20 power plant owners and others.=20 The latest version of Migden's bill requires wholesalers to report monthly = to=20 the ISO about any plants that are off-line or working at reduced capacity= =20 and gives the ISO power to audit these reports.=20 But because the ISO board historically has made key decisions behind closed= =20 doors and is exempt from certain open-government regulations government=20 watchdogs are outraged by the switch.=20 The PUC's been no friend of ratepayers but at least under the constitutio= n=20 and state law they're required to conduct their process in the open and the= =20 public can intervene said Harvey Rosenfield of the Foundation for Taxpaye= r=20 and Consumer Rights.=20 Davis ordered last month that the ISO take the lead among state agencies to= =20 ensure adequate energy supplies. Alan LoFaso an aide to Migden said the= =20 amendment follows Davis' lead.=20 Both LoFaso and the governor's spokesman Steve Maviglio downplayed the=20 change. I don't know if we have a preference as to which state agency get= s=20 the authority to continue the probe Maviglio said.=20 The challenge by Duke Energy Houston-based Dynegy Inc. and Mirant Corp. of= =20 Atlanta came in filings March 12 asking for a rehearing of the PUC's Februa= ry=20 resolution reasserting its legal authority to examine the books accounts= =20 memoranda contracts and records of generators selling energy to utilities= =20 already subject to PUC regulation.=20 Those utilities include Pacific Gas and Electric Co. and Southern Californi= a=20 Edison Co. which have been nearly bankrupted buying power from wholesalers= =20 as well as the financially troubled San Diego Gas and Electric -- Allegheny Energy makes big California connection=20 ASSOCIATED PRESS=20 March 22 2001=20 HAGERSTOWN Md. =01) Allegheny Energy Inc. said Thursday it has agreed to s= ell=20 $4.5 billion worth of power to California's electricity-purchasing agency= =20 over the next 10 years.=20 The company said the contract call for Allegheny to provide up to 1000=20 megawatts that the Hagerstown-based company has secured from western=20 generating plants through its new energy trading division Allegheny Energy= =20 Global Markets =01) formerly Merrill Lynch Global Energy Markets.=20 This is a win-win for both the state of California and Allegheny Energy. I= t=20 provides a long-term source of fixed-price energy and should help to=20 stabilize prices in California said Michael P. Morrell president of the= =20 Allegheny Energy Supply division.=20 --- ----------- Judge Frees Small Firm From Edison Contract=20 By KEN ELLINGWOOD and DAN MORAIN Times Staff Writers=20 ?????EL CENTRO--California's balance of electrical power shifted slightly= =20 Thursday when an Imperial County judge temporarily freed a small geothermal= =20 energy producer from its contract with Southern California Edison allowing= =20 it to sell power on the open market. ?????The ruling by Superior Court Judge Donal B. Donnelly could lead to a= =20 mass exodus by hundreds of small energy producers that have been selling=20 power to the state's financially troubled utilities for months without=20 getting paid. ?????At the same time it may have staved off plans by a group of the small= =20 generators to send Edison into involuntary bankruptcy as early as today. ?????In Sacramento energy legislation pushed by Gov. Gray Davis passed in= =20 the state Senate but foundered in the Assembly. The measure was intended to= =20 ensure that the state gets repaid for the electricity that it has been buyi= ng=20 on behalf of Edison and Pacific Gas & Electric which say they lack the cas= h=20 and credit to purchase power. The bill also was supposed to guarantee that= =20 the small alternative energy producers--which together provide nearly a=20 third of the state's power--get paid. But Assembly Republicans opposed it= =20 saying it hadn't been given sufficient scrutiny. ?????The impact of the small producers was made clear in Imperial County= =20 where Edison's failure to pay CalEnergy the county's biggest property=20 taxpayer had outsize implications. CalEnergy had put county officials on= =20 notice that it was about to miss a $3.8-million property tax payment. The= =20 uncertainty had prompted the tiny Calipatria Unified School District to=20 postpone a bond issue for badly needed school repairs. ?????Among CalEnergy Chairman David Sokol's first acts after the judge's=20 ruling Thursday was to promise Imperial County Supervisor Wally J. Leimgrub= er=20 that the company would pay its property taxes on time. ?????That is great news Leimgruber said. ?????Within hours of its court victory CalEnergy had stopped transmitting= =20 geothermal power to Edison and begun selling it to El Paso Energy a=20 marketing company that purchased the energy at prevailing rates and resold = it=20 on the spot market. ?????Some of the more than 700 other small energy producers in the state sa= id=20 they were considering similar action against Edison and Pacific Gas &=20 Electric. ?????We absolutely need the right to sell to third parties said Dean=20 Vanech president of Delta Power a New Jersey company that owns five small= =20 gas-fired plants in California and is owed tens of millions of dollars by= =20 Edison. ?????Sokol praised the Imperial County judge and said his company simply=20 wanted the authority to sell its power to a credit-worthy company that in= =20 fact pays for the power. ?????An Edison spokesman said the company was disappointed with the ruling= =20 but sympathized with CalEnergy and other small producers because=20 California's power crisis has placed [them] in financial distress just as= =20 it has placed utilities in financial distress. ?????Edison expressed concern that the ruling would prompt CalEnergy and=20 other small producers to sell their power out of state. Sokol said CalEnerg= y=20 had specifically told El Paso Energy that it hoped its power would remain i= n=20 California but if someone wants to pay a higher price out of state we=20 can't stop them. ?????Sokol said that Edison still owes CalEnergy $140 million and that the= =20 company--along with seven other small producers--had been prepared to file = a=20 petition in federal bankruptcy court in Los Angeles today forcing the utili= ty=20 into involuntary bankruptcy. He said his company no longer intends to do so= =20 and he believed--but wasn't certain--that the other companies would shelve= =20 their plans. ?????Edison filed papers Thursday with the federal Securities and Exchange= =20 Commission showing that it owed $840 million to various small electricity= =20 producers many of which rely on renewable energy sources such as geotherma= l=20 steam solar energy or wind. ?????The alternative energy producers--and utilities--strenuously objected = to=20 the legislation considered in Sacramento on Thursday. The bill spelling ou= t=20 how the utilities are to pay the state and the small producers passed the= =20 Senate on a 27-9 vote the exact two-thirds margin required. But it stalled= =20 in the Assembly on a 46-23 party-line vote well short of two-thirds. ?????When I was a citizen back in Lancaster I heard these stories about= =20 pieces of legislation that were cooked up late at night that . . . were cu= t=20 and pasted together and were rammed through by the Legislature Assemblyma= n=20 George Runner (R-Lancaster) said. That's exactly what we have before us. ?????The alternative electricity generators including oil companies warne= d=20 that they would lose money under the Davis proposal while representatives = of=20 Edison and PG&E which have amassed billions in debt in the worsening energ= y=20 crisis said the legislation would push them deeper into the hole. ?????There isn't enough money Edison attorney Ann Cohn testified at a=20 Senate hearing on the bill Thursday. It is a very simple question: Dollars= =20 going out cannot be greater than dollars coming in. ?????The bill AB 8X combined several proposals. First it sought to clari= fy=20 earlier legislation by spelling out that Edison and PG&E must pay the state= =20 all money collected from consumers for electricity that the state has been= =20 buying. ?????Additionally the bill would turn over to the California Public=20 Utilities Commission the thorny issue of how much to pay alternative energy= =20 producers for their electricity. ?????Wind solar and geothermal producers might agree to the prices offered= =20 by the administration. But most of the alternative energy producers=20 including Chevron and British Petroleum use natural gas to generate=20 electricity through cogeneration a process of creating steam for both=20 electric generation and heat. With natural gas prices high they contend= =20 they would lose money at the prices Davis is offering. ---=20 ?????Ellingwood reported from El Centro Morain from Sacramento. Times staf= f=20 writers Mitchell Landsberg in Los Angeles and Jenifer Warren Nancy Vogel a= nd=20 Carl Ingram in Sacramento contributed to this story. --- ------------------- Lodi Defies Order for Blackouts=20 Utility tells PG&E to 'pay the bills'=20 Alan Gathright Chronicle Staff Writer Friday March 23 2001=20 2001 San Francisco Chronicle=20 URL:=20 /23/M N171303.DTL=20 Let history show that the rebellion against rolling blackouts started when= =20 the Central Valley town of Lodi defied PG&E and refused to unplug its=20 customers this week.=20 Like several cities that own their own utilities Lodi saw the energy crunc= h=20 looming last fall and spent millions for long-term power contracts in an=20 attempt to avoid blackouts.=20 Now Lodi and a Northern California municipal utility cooperative that=20 includes Palo Alto Santa Clara and Alameda are telling Pacific Gas and=20 Electric Co. that it's unfair to force their customers to endure blackouts= =20 triggered by the near-bankrupt utility's failure to pay its debts.=20 The problem is not paying bills so pay the bills said Alan Vallow=20 director of the utility serving Lodi's 58000 residents. I won't arbitrari= ly=20 screw my customers . . . so 5000 PG&E customers can turn on their lights= =20 somewhere else.=20 When PG&E relayed an order from state power regulators Monday and Tuesday f= or=20 Lodi to black out some of its customers a strategy intended to keep the=20 West's power grid from collapsing Lodi said no.=20 So far other cities in the Northern California Power Agency say they will= =20 continue to participate in rotating outages.=20 But in a letter last Friday to PG&E members of the agency and four other= =20 utility districts including Sacramento's warned they didn't believe long-= =20 standing agreements that allow them to use PG&E transmission lines to conne= ct=20 to the grid obliged them to endure rolling blackouts because of PG&E's=20 failure to pay its power obligations.=20 They say the agreements require them to reduce power demand only in respons= e=20 to natural disasters or malfunctions damaging power lines or plants.=20 The agencies asked for a meeting with PG&E President Gordon Smith before=20 anticipated summer blackouts hit to develop a more rational program for= =20 allocation of risks associated with (power demand) load shedding before you= =20 call on us to participate in load shedding again.=20 REFUSING TO SHARE BURDEN PG&E officials accused Lodi of selfishly refusing to share the burden of th= e=20 statewide energy crisis.=20 It is regrettable that after reaping the benefits of the (power grid)=20 interconnection contract for many years Lodi is suddenly unwilling to bear= =20 their share of the burden of the statewide energy crisis said PG&E=20 spokesman Ron Low. When cities like Lodi do not follow the (state=20 Independent System Operator's) order to curtail power it hurts all of=20 California and jeopardizes the entire power grid.=20 Low also disagreed with accusations that this week's blackouts were trigger= ed=20 by PG&E's failure to pay its bills noting that the ISO stated that 12000= =20 megawatts of power were offline because of plant maintenance.=20 But ISO spokeswoman Lisa Szot confirmed assertions by the municipal utiliti= es=20 that power generators had kept an additional 3000 megawatts offline becaus= e=20 they feared PG&E couldn't pay.=20 Lodi's Vallow said he was legally obliged to serve city customers. Lodi=20 residents are facing rate increases of as much as 15 percent under a power= =20 contract that the city secured in hopes of avoiding blackouts. The contract= =20 required Lodi to pay a $10 million premium above its typical $23 million=20 annual energy bill.=20 'THAT'S NOT FAIR'=20 I've been hearing (PG&E say) 'Gee that's not fair. Where's the equity if= =20 everybody is doing rolling blackouts and you're not?' Vallow said. Well= I=20 put my customers at financial risk to the tune of $10 million. And if they'= re=20 not going to get to use that power they paid for then by God give us that= =20 money back.=20 Vallow said he was willing to sell PG&E some of Lodi's power surplus knowi= ng=20 Lodi might not be paid.=20 But I'm not willing to turn off 5000 customers so 5000 customers=20 somewhere else can turn their lights on Vallow said. The objective here= =20 people is to keep as many lights on as possible.=20 Other city-owned utilities while annoyed with the rolling blackouts aren'= t=20 going as far as Lodi.=20 WEATHERING BLACKOUTS I certainly understand the frustrations of utilities like Lodi and actuall= y=20 share those frustrations in many cases said John Roukema assistant=20 director of Santa Clara's utility.=20 But he stressed that his agency had been able to weather blackouts without= =20 hurting residents or small business because 17 major industrial power user= s=20 had agreed to curtail demand during energy alerts.=20 The prudent thing to do at this time is to continue to do our share and=20 participate in rolling blackouts because a single problem could cause a=20 catastrophic failure in the statewide system Roukema said.=20 In Alameda residents endured blackouts this week despite the fact that cit= y=20 has secured reliable power supplies said Matt McCabe spokesman for Alamed= a=20 Power & Telecom.=20 It was in the best of interests of Alamedans to maintain the stability and= =20 integrity of the grid he said. Now if it becomes evident that the syste= m=20 is being jeopardized for financial reasons then we should not have to=20 subject Alamedans to rolling blackouts.=20 In Palo Alto which also had blackouts this week utility officials told th= e=20 City Council they were expecting a 30 to 40 percent rate hike this spring t= o=20 pay new contracts guaranteeing a stable power supply said Councilman Bern= =20 Beecham. The city hopes to avoid giving customers the double whammy of rate= =20 boosts and more blackouts with a program that gets industrial users to cut= =20 demand voluntarily during alerts.=20 When there's not enough generating capacity in the state to protect the=20 integrity of the grid that is in fact everybody's problem Beecham said= =20 but that doesn't mean Palo Alto is willing to endure blackouts to prop up= =20 PG&E's ailing finances.=20 We need to have some very frank discussions with PG&E about mutual=20 obligations Beecham said.=20 Energy Tips=20 With Californians facing electricity and natural gas shortages PG&E has=20 several tips to help conserve both:=20 -- Set the furnace thermostat at 68 degrees or lower health permitting.=20 -- Wash only full loads in a dishwasher. If operating instructions allow= =20 turn dishwasher off before the drying cycle and let dishes dry naturally.= =20 -- Use low-wattage or fluorescent lights.=20 -- Fix defective plumbing and dripping faucets which waste water and=20 increase the gas or electric bill for heating the water.=20 -- Plug gaps around pipes ducts fans and vents that go through walls=20 ceilings and floors.=20 -- Keep furnaces clean and clean or replace the filter regularly.=20 -- Turn heaters down when using a fireplace and close the damper when not= =20 using the fireplace.=20 -- On sunny days open drapes on windows facing south and let the sun shine= =20 in. At night close the drapes to retain indoor heat.=20 Source: www.pge.com=20 E-mail Alan Gathright at 2001 San Francisco Chronicle ? Page?A - 1=20 --- Coming Down to the Wire=20 State legislators battle over alternative energy bills=20 Greg Lucas Robert Salladay Chronicle Sacramento Bureau Friday March 23 2001=20 2001 San Francisco Chronicle=20 URL:=20 /23/M N113351.DTL=20 Sacramento -- After several weeks of slow to no progress in attacking the= =20 state's energy mess the Legislature erupted yesterday into a frenzy of=20 energy activity.=20 The sudden action on a series of energy bills -- including one to let=20 businesses buy power directly from generators -- stemmed initially from the= =20 fear of bad publicity lawmakers might receive for a planned three-day junke= t=20 next week to Washington D.C.=20 When a key bill bogged down in the Assembly late yesterday Speaker Bob=20 Hertzberg D-Sherman Oaks announced the trip was canceled.=20 Another reason for the flurry of action was recognition that time is runnin= g=20 out.=20 Several alternative energy producers -- like wind farms and biomass plants = -=20 - said they were one day away from forcing the state's two biggest utilitie= s=20 into bankruptcy because they were owed more than $1 billion.=20 The Legislature's action and a court ruling that could free alternative=20 producers from unpaid contracts.=20 This is triage members of the Senate said Sen. Jim Costa D-Fresno. Th= is=20 is crisis activity we're engaged in.=20 The Senate approved a bill aimed at helping state regulators get cash to so= me=20 alternative energy producers. Most of them have been paid little or nothing= =20 since November by the utilities they sell electricity to.=20 Senators passed a bill to help the Public Utilities Commission order=20 utilities to pay solar wind and other alternative energy producers who sig= n=20 lower-priced contracts with the utilities.=20 The bill failed in the Assembly because of GOP opposition fanned in part b= y=20 price concerns by the oil industry a major co-generation producer. The=20 Assembly is set to meet again today to try again pass the bill which the P= UC=20 needs to issue its final order.=20 The PUC's proposed order offers the first hint of financial relief for=20 hundreds of alternative energy producers known as ''qualified facilities = in=20 the energy industry who have been paid just pennies on the dollar by cash-= =20 strapped Pacific Gas & Electric and Southern California Edison.=20 Lack of payments has caused many alternative generators to shutter their=20 operations.=20 The PUC's proposal which will be considered at the commission's meeting=20 Tuesday offers generators a choice of agreeing to a five-year contract at= =20 $79 per megawatt or a 10-year deal at $69 per megawatt Davis said. The goi= ng=20 rate now is about $150 a megawatt hour.=20 The order does not address money already owed to the more than 600=20 alternative energy producers.=20 Under the order utilities would have to pay any generator who signed the n= ew=20 contracts within two weeks.=20 But PG&E said it might not be able to afford do that.=20 Operators of co-generation facilities say the contracts contemplated by the= =20 PUC don't cover their cost of producing energy because the sale price no=20 longer would be pegged to the the price of natural gas.=20 In a significant court decision affecting generators one geothermal energy= =20 supplier in Imperial County won a lawsuit yesterday against Edison allowing= =20 the company to escape a contract requiring it to sell electricity to the=20 utility.=20 A superior court judge said CalEnergy operator of the geothermal plant=20 could suspend deliveries to Edison and sell the 268 megawatt hours it=20 generated on the open market.=20 CalEnergy is owed $75 million by the utility.=20 The court victory may ease mounting pressure from some qualified facilities= =20 including CalEnergy to drive one or both of the utilities into involuntary= =20 bankruptcy.=20 The Assembly and Senate meanwhile rushed through a series of bills aimed = at=20 increasing energy conservation and rushing the building of new power plant= s.=20 Most significant for bigger residential and commercial utility customers is= a=20 measure passed by the Assembly to allow energy customers to buy power=20 directly from generators.=20 That right was eliminated in January when the state began buying power for= =20 the cash-strapped utilities.=20 The bill approved unanimously yesterday would impose a yet to be determined= =20 exit fee on customers who leave the power grid to help cover the state's=20 financial exposure.=20 Tell Us What You Think=20 Can you save 20 percent on your energy use? Gov. Gray Davis' administration= =20 is offering rebates for Californians who save on power starting in June an= d=20 if you've got a strategy for conserving The Chronicle wants to hear it.=20 We'll be writing about the hardest-working energy savers in a future story.= =20 To get involved write to the Energy Desk San Francisco Chronicle 901=20 Mission St. San Francisco CA 94103 or e-mail energysaver@sfchronicle.com= .=20 E-mail the reporters at glucas@sfchronicle.com and bsalladay@sfchronicle.co= m.=20 2001 San Francisco Chronicle ? Page?A - 14=20 --- State's bill for energy could double this year=20 Posted at 9:34 p.m. PST Thursday March 22 2001=20 BY=20 STEVE=20 JOHNSON=20 AND=20 JOHN=20 Warning that California is imperiled by the prices it is paying for=20 electricity a report Thursday said the state's annual power tab could wind= =20 up being 10 times what it was two years ago.=20 At the current rate of spending the report estimated that the total=20 electricity bill in California this year could hit $70 billion which is mo= re=20 than twice what it was last year and about 10 times what was paid in 1999 a= nd=20 1998.=20 ``The California electricity market has gone from being `dysfunctional' to= =20 precipitating a crisis'' according to the report from the Independent Syst= em=20 Operator.=20 It added that the price being charged ``threatens any semblance of just and= =20 reasonable consumer rates the financial viability of California's=20 investor-owned utilities the financial stability of California of its=20 neighboring states and of the nation.''=20 While power suppliers denied any wrongdoing the report said the state=20 appears to have been hit with ``excess'' charges totaling $6.87 billion sin= ce=20 May based on an assessment of the typical operating costs of power plant= =20 owners. Out of that total $6.2 billion appeared to be excessive charges=20 during times when power was not in particularly short supply the agency=20 said.=20 The cost of power has become a growing concern now that the state has stepp= ed=20 in to buy it on behalf of Pacific Gas & Electric Co. and Southern Californi= a=20 Edison which claim to be so strapped for cash that they are on the verge o= f=20 bankruptcy.=20 In making public the report which was sent to the Federal Energy Regulator= y=20 Commission officials at the Independent System Operator were careful not t= o=20 accuse any power companies of price gouging. While the prices appeared to b= e=20 unreasonable they said the state needs to learn more about the specific= =20 operating costs of power plant operators before they could determine whethe= r=20 California was cheated.=20 The officials said they were considering asking the federal agency which= =20 oversees power wholesalers to order the suppliers to make refunds. In the= =20 past two weeks the federal agency has warned a number of suppliers that th= ey=20 may have to refund $135 million in apparent overcharges during January and= =20 February.=20 But many experts question whether the federal agency is serious about=20 demanding such refunds so California officials also are reviewing the=20 possibility of suing the suppliers or seeking criminal charges against some= =20 of them. ``We're working very closely with a number of agencies to review t= he=20 information we currently have to determine what remedies may be available'= '=20 said Charles Robinson the Independent System Operator's general counsel.= =20 The report's suspicions were partly bolstered by another study made public= =20 Thursday by the state auditor. It said California's market structure=20 encouraged bidding gamesmanship by both utilities and power sellers ``in an= =20 effort to manipulate wholesale prices to their advantage.'' But it stopped= =20 short of accusing power generators of profiting illegally.=20 ``There's clearly some evidence of market abuse'' said state Auditor Elain= e=20 Howle. Even so she added ``that's not to say it's anything illegal. We=20 hired consultants they looked at some of the bidding and they weren't=20 comfortable going that far.''=20 Although no power companies were named in either report officials with=20 several suppliers insisted they have done nothing wrong.=20 ``We've conducted our business legally and ethically'' said Richard=20 Wheatley spokesman for Reliant Energy which runs five major California=20 power plants. ``The ISO report appears to be nothing more than just another= =20 attempt to put blame at someone else's doorstep when there's been very=20 little action out of Sacramento to resolve the problems in the California= =20 marketplace.''=20 Duke Energy spokesman Jeremy Dreier said the company which runs plants in= =20 Moss Landing and Morro Bay sold most of its power last year and this year = in=20 relatively low-cost long-term contracts and was among the first to offer= =20 such deals to the state. He added that Duke increased production from its= =20 aging plants to meet surging demand.=20 ``The fact that we were among the first to bring long-term contracts to the= =20 table speaks volumes about how we're trying to serve this market'' Dreier= =20 said.=20 John Sousa of Dynegy Inc. which co-owns three major California plants add= ed=20 that ``given the market conditions the rates we charged were just and=20 reasonable.''=20 --- Plan for alternate power plants stalls=20 Posted at 10:03 p.m. PST Thursday March 22 2001=20 BY DION NISSENBAUM AND JENNIFER BJORHUS=20 Mercury News=20 SACRAMENTO -- The state's prospects for plugging a critical electricity gap= =20 dimmed Thursday when the state Assembly rejected a rescue plan for=20 alternative power companies and a state judge ruled that one such firm coul= d=20 stop selling energy in California.=20 Both actions threaten the plan Gov. Gray Davis announced just Tuesday to ke= ep=20 these companies running and stave off more blackouts. With the state's=20 troubled utilities failing to pay for their electricity many alternative= =20 energy plants have been shutting down.=20 The dual blows came on a day when tempers flared in the Capitol as lawmaker= s=20 jarred by back-to-back blackouts launched bipartisan attacks on Pacific Gas= &=20 Electric Co. and Southern California Edison which aren't paying wind sola= r=20 biomass geothermal and small gas-fired plants for their electricity.=20 After Republicans shot down the measure meant to keep alternative energy=20 companies in business Assembly Speaker Robert Hertzberg D-Van Nuys warne= d=20 that the restless companies might act on their threat to force the utilitie= s=20 into bankruptcy.=20 ``They said it and I understood them to mean it'' he said.=20 The failure overshadowed a burst of action in Sacramento where lawmakers=20 approved a host of other measures. The Senate approved two key bills: one= =20 that would spend more than $1 billion to encourage Californians to conserve= =20 energy and one that would make it easier to build power plants. The Assembl= y=20 approved 14 incremental bills.=20 Six votes short=20 But the Assembly fell six votes short of passing a hastily prepared bill=20 meant to help prop up the nearly 700 alternative energy companies many of= =20 which are now idle.=20 Those closings sapped California of energy this week and helped cause two= =20 days of rolling blackouts -- the first since January.=20 In response Davis and lawmakers cobbled together a plan to set new lower= =20 rates for alternative power and to fine the utilities if they refuse to pay= =20 these companies which supply up to a third of the state's power.=20 But Republicans refused to back the measure and said it contained too many= =20 complex parts that needed more time to analyze.=20 ``Everyone in this room knows that this piece of legislation has not had a= =20 good look'' said Assemblyman George Runner R-Lancaster.=20 Assemblyman Fred Keeley D-Santa Cruz castigated the Republicans and=20 implored them to accept an imperfect solution.=20 ``Ladies and gentlemen: Welcome to the NFL'' he said. ``Welcome to the wor= ld=20 where large complex issues don't have a simple solution.''=20 Approval is needed before state regulators at the Public Utilities Commissi= on=20 can vote on the fine points of the plan. That was supposed to happen Tuesda= y.=20 Much of the criticism focused on concerns raised by power plants that use= =20 natural gas to produce energy. Administrators from those plants said the=20 Davis price caps would make it impossible for them to break even.=20 The derailment came hours after the measure narrowly won approval in the=20 state Senate.=20 Hertzberg plans to search for a compromise today and canceled plans for the= =20 Assembly's annual trip to Washington.=20 Thursday's actions were highlighted by angry attacks on the utilities by=20 frustrated lawmakers.=20 ``I hope they do go bankrupt'' shouted Senate President pro tem John Burto= n=20 D-San Francisco during a debate on the energy crisis. ``Let them go belly= =20 up. I don't care any more.''=20 Legal decision adds twist=20 The legislative failure was compounded by a legal decision in Southern=20 California that further complicated the picture.=20 A Superior Court judge in Imperial County cleared the way for CalEnergy=20 Operating Corp. to break its contract with Edison and sell its 268 megawatt= s=20 of power on the open market. The judge concluded that Edison had breached i= ts=20 contract by failing to pay CalEnergy since November.=20 That ruling could pave the way for hundreds of others to follow suit and=20 drain off power California needs to prevent blackouts.=20 ``It's not good'' said V. John White director of the Center for Energy=20 Efficiency and Renewable Technologies. ``This is potentially going to chang= e=20 the dynamics of the situation and probably not for the better.''=20 Jan Smutny-Jones executive director of the Independent Energy Producers=20 Association said it was unclear whether other companies would sue.=20 ``I think this is a very significant development'' he said. ``We're sort o= f=20 at a period where the industry's reaching the end of the rope.''=20 The ruling did have one silver lining: CalEnergy Chairman David Sokol said= =20 his company and seven others had planned to force Edison into bankruptcy if= =20 they lost in court.=20 But he also warned ``You stick a sharp stick in enough people's eyes and= =20 they get pretty tired of it.''=20 The situation with generators supplying PG&E isn't as dire since the compan= y=20 has been making partial payments.=20 Kent Burton senior vice president for Covanta Energy Corp. in New Jersey= =20 said ``They've tried to be responsive.''=20 Mercury News Staff Writer Mark Gladstone contributed to this report. Contac= t=20 Dion Nissenbaum at dnissenbaum@sjmercury.com or (916) 441-4603 or Jennifer= =20 Bjorhus at jbjorhus@sjmercury.com or (408) 920-5660. | other | urgent | 5 |
Request for Confidential Information by the US GAO | null | other | cautious | 5 |
Enrons natural gas policy positions | coule you get Jeannie copies of the slides or other write ups you have on this. Jeannie -- I don't know how far it is prudent to take a position on this as a co. It has already become a key battleground (garnering some discussion in the Gore-Lieberman debate). I think we stay away from it as a co. but we at least ought to put the information in front of anyone we are asking to do an oped so that they can make a reasoned judgement. | other | formal | 3 |
Re: Questions for Executive Business Review- URGENT | I share your perceptions of Jose though I don't have as much contact as you do. I know also from some recent discussions with Rick (who has also had a fair amount of contact with Jose) that he has very positive views on Jose's work. I think we should make a concerted effort to get the feedback and have a good discussion about Jose at year end to ensure that he is properly ranked. James M Bannantine@ENRON_DEVELOPMENT 10/03/2000 07:13 PM To: Steven J Kean@EES cc: Subject: Re: Questions for Executive Business Review- URGENT ----------------- | other | formal | 5 |
CONFIDENTIAL - ATTORNEY WORK CLIENT PRIVILEGE ASSERTED | Paul -- Can we have a phone call with our Reg team on Friday to make sure that everything is a-ok? I want one final run through. If yes please let me know by phone and I'll ask Linda Noske to set up the call. Also I owe you a call on Sue / Jeff. Are you in Thurs? Jim | legal affairs | casual | 3 |
Report on Senate Energy Hearing Today | Earlier today the Senate Energy Committee held the first of two days of hearings on Chairman Bingaman's white paper on electricity and the electricity provisions of other pending bills. The hearings will continue tomorrow with all of the five FERC commissioners as witnesses plus private sector witnesses. Today's hearing went well from our perpective with support for Super RTOs and general support for expanding the grid both physically and from an access view point voiced by Senators and witnesses. Sen. Craig Thomas even said four RTOs were too many -- there should be one national RTO to run a national grid. Today's witnesses represented the Dept. of Energy EPSA EEI NRECA APPA IBEW union Alliance to Save Energy ELCON NERC NARUC NASUCA and the State of New Mexico. We will provide a more detailed analysis after completing a review of the lengthy written testimony but a summary of the DOE testimony and the first panel of private sector witnesses follows. 1. DOE said they are working on electricity legislative language. Should be done soon. Chairman Bingaman said they needed to get it done in time for the Committee to consider it when the Committee takes up electricity as early as the second week in September. Deputy Sec. Blake implied that their proposal was or would soon be shared with other Administration agencies for review. 2. In response to questions Blake said that legislative action on jurisdiction questions (fed v. state) would be useful but he stressed that they view any new legislation as clarifying that FERC has authority they feel already exists. He said that while states have an important role to play Congress must recongize the interstate character of the market and the need for open access to the interstate grid. (In response to a question Blake later said that FERC had largely addressed the access issue or would do so.) 3. On reliability he was given a chance to say that DOE supports th NERC consensus language but instead repeated that the Administration favors enforceable reliability standards but wants to work with the Committee on the exact language. I took this as confirmation of what we have heard informally from DOE in terms of key players there not being enamored of the NERC consensus approach at least as it exists in its old long form. 4. Sens. Craig and Cantwell pushed Blake on why the Administration has not fully supported BPA's request for a debt limit increase to finance expansion of the BPA grid. Blake said they support the BPA expansion projects but that OMB feels BPA has enough borrowing authority through 2003. This did not sit well with Craig and Cantwell. I spoke with Sen. Craig in the hall following up on a conversation I had with him the other evening about BPA and he stressed that he is committed to getting BPA the debt limit it needs. As you know commercial has asked us to help BPA given matters pending between Enron and BPA. 5. On the first private sector panel even John Rowe the Co-CEO of Exelon and past EEI chairman (testifying for his company and EEI) said several times that there should be strong RTOs that each cover a wide idea. He said his board voted yesterday to sell its transmission assets IF a strong independent operator could be found. Rowe also said that RTOs should be encouraged (implying not mandatory?). The APPA witness was strong on RTOs saying that all entities will be part of RTOs even without legislation. NRECA said that co-ops would oppose federal jurisdiction over them and that they favor voluntary RTOs. EPSA made the usual case for competition open access RTOs etc. | other | informative | 3 |
Draft letter to Paul Joskow for Ken Lay | I think this letter looks fine. For the hororarium I suggest we use whatever we paid Kudlow for his participation (I believe Ken also entered into a consulting contract with Kudlow but I'm referring only to the one-time payment for the advisory council meeting he attended). ----------------- | other | formal | 2 |
Economic Espionage Act Presentation - August 15th | calendar -- FYI ----------------- | calendar & scheduling | casual | 0 |
Re: Price Cap Media--DRAFT | I agree that we need to add our customer contacts to the list. This gives them a great opportunity to look smart -- we went to the market and got price protection. On the messages we need to include Mark's top three: 1) price caps cause shortages (Rob Bradley: let's put some historical examples together) Mona L Petrochko 07/18/2000 01:26 PM To: Jeff Dasovich/SFO/EES@EES cc: James D Steffes/HOU/EES@EES Steven J Kean/HOU/EES@EES Mark Palmer@EES Richard Shapiro/HOU/EES@EES Paul Kaufman@EES Peggy Mahoney/HOU/EES@EES Karen Denne/Corp/Enron@Enron Jeff Brown/HOU/EES@EES Susan J Mara/SFO/EES@EES Sandra McCubbin/SFO/EES@EES Subject: Re: Price Cap Media--DRAFT I have a couple of suggestions on parts of the draft. Media Action: In addition to doing behind the scenes editorial board meetings and the like I would suggest that we get our coalition lined up and ready to release statements for certain key events which are likely to occur over the next several weeks such as: 1. SDG&E's selection of the winning bid to their RFP. Even if Enron isn't selected as the winning bid the coalition should trumpet the market-based solution and the enormous market response to SDG&E's RFP. 2. The Commission vote on UCAN's Emergency Motion. We should be prepared to issue a statement whether the Cmmn votes with us or against us. With us the market can and did provide reasonable expedient solutions to SDG&E's customers and protection from price spikes. Against us despite the overwhelming market response the Cmmn chose to ignore the market solutions and impose more regulation. 3. Potential for ARM members to surface a Provider of Last Resort proposal within the next couple of weeks. 4. ISO Bd. Mtg-keep up pressure against reducing price caps. Coalition Members: Agree that those groups listed should be contacted although the CMA CRA CIU CLECA have been luke-warm in their advocacy. I would add our customers (UC/CSU (especially the San Diego branch) PacTel etc.) NewEnergy has indicated that Kroger/Ralph's grocery stores San Diego-based would give testimonials. I could solicit the members of ARM to identify a key customer contacts for interviews. We could check with our lobbyists and see who they would recommend (wine growers dairy industry etc.) We should also consider the water agencies and the rural counties and the City of Pittsburg. While the immediate message is responding to San Diego's situation this latter group of potential coalition members would go to the larger message (keeping benefits of competitive markets) from a state-wide perspective. What about the City of Pittsburg? Jeff Dasovich on 07/18/2000 10:07:00 AM To: James D Steffes/HOU/EES@EES Steve Kean Mark Palmer Richard Shapiro/HOU/EES@EES Paul Kaufman@EES Peggy Mahoney/HOU/EES@EES Karen Denne/Corp/Enron@Enron Jeff Brown/HOU/EES@EES Mona L Petrochko/SFO/EES@EES Susan J Mara/SFO/EES@EES Sandra McCubbin/SFO/EES@EES cc: Subject: Price Cap Media--DRAFT Here's a draft. Given sense of urgency I tried to develop a target for folks to shoot at rather than The Perfect One-pager. So please fire at will. In particular need PR to fill in Media Approaches and Key Message Points. Best Jeff | other | formal | 3 |
null | http://www.ssrn.com/ | other | neutral | 0 |
May 15 conference | Joe -- could you see if someone at FERC -- Hebert or Madden might be available -- or suggest a suitable alternative? | meetings & events | formal | 3 |
null | You probably saw the announcement that Mike Mcconnell is now CEO of Enron Global Markets. EGM will be focussing on a number of new and existing markets (including coal LNG crude and products interest rates agricultural commodities equities weather etc). One of the markets Mike's group is actively considering is transport capacity. I mentioned your work in the area. He is anxious to see it and meet with you after he has had a chance to review it. | other | excited | 5 |
Report on Calif. Electricity Price Spikes by CPUC and EOB | As we discussed. ----------------- | utilities | formal | 2 |
Re: Privileged and Confidential Communication to my Attorney | Hoyt If GSP LLC would assume the liability at the time of return why would it risk bringing them back for light duty work? Why not wait until they are fully released particularly if one of them is going to sue under workers comp scheme? Also Hoyt you need to be careful about revealing conversations with GSP counsel to MG -- I noticed you had cc'd someone from Media General in the prior email. We don't want to waive any privileges. Michelle HThomas@gspcorp.com on 11/15/2000 06:10:00 PM To: peter.del.vecchio@enron.com david.howe@enron.com cc: michelle.cash@enron.com LFaucheaux@media-general.com MParker@gspcorp.com Subject: Privileged and Confidential Communication to my Attorney Peter we have two long-term worker's comp cases whose accidents happened before Enron bought GSP. We would like to bring them back to do light-duty work to get them in the swing of working again and also to get some adminstrative work done. I am concerned that bringing these employees back to work on light duty will cause these cases to become an Enron liability rather than an MG liability. I discussed this with Pat McCarthy the labor and employment law attorney we are using in NJ and he said that the liability would typically not transfer to GSP just because we brought them back . . . it would still be an MG liability UNLESS THE EMPLOYEE HURT HIMSELF AGAIN. In which case GSP owns it. However Pat said that a lot of what determines the ownership of the worker's comp cases is written into the purchase and sale agreement. He said that there may be language that addresses an employee's return to work from worker's comp. I know that we have an ongoing dispute about worker's comp with MG at this point. What would be your recommendation on bringing these employees back to work? As a bit of additional info one of the two employees seems eager to come back . . . the other one does not. An employee told me that the second employee actually has a lawsuit filed against MG/old GSP about his injury. | other | formal | 5 |
House Energy Committee Passes First Energy Package | Late this morning the House Energy and Commerce Committee adoped the committee print as amended of an energy package that addresses conservation clean coal renewables hydro nuclear and boutique fuels. The vote was 50 to 5 to report the bill. Other committees -- Ways and Means Science and Resources -- also moved their energy bills this week. Thus the House is on track to consider a merged package before the start of the August Recess on August 3rd. As to electricity during the several days of debate this week both Chairmen Tauzin and Barton reaffirmed their intention to next move to electricity issues. Mr. Barton's staff advised me this morning that the subcommittee he chairs will hold a hearing on Friday July 20th on all electricity issues other than transmission. While Mr. Barton has publicly held out hope of marking up an electricity bill this month sources on and off the committee do not see this timetable as realistic. On the Senate side the majority staff is working on an electricity white paper that may be circulated for comment next week. Below is a recap of action on amendments of interest to Enron: 1. Last night on a largely partisan vote (with Democrats Hall Green and John voting with the Republicans) the Committee rejected an amendment by Rep. Jane Harman (D-CA) (that was to have been offered by Rep. Anna Eshoo (D-CA)) that would have retroactively amended the FERC refund date and essentially ordered refunds regardless of amounts owed to power sellers. 2. First thing this morning the Committee again on a largely partisan basis (with Democrats Hall Green John and Towns) rejected a Waxman amendment to impose cost-of-service rates on all power in the West (other than generation added after 1/1/01). (Originally Mr. Waxman was going to offer amendment to impose cost-of-service rates only on those who do not supply all available power during an emergency but he ended up offering basically what he had pursued in subcommittee on the old Californa Only bill.) 3. The Committee adopted an amendment by Rep. Shadegg to amend the Natural Gas Act to make it clear that a natural gas transportation facility shall not be added to the National Register of Historic Places until FERC has abandoned the facility. Apparently there have been some instances of old pipelines being considered as historic places under federal law. The House Resources Committee added a similar amendment to its package yesterday. 4. By voice vote the Committee rejected a Waxman Amendment to require the president to propose and implement a plan to bring U.S. greenhouse gases down to 1990 levels. There was strong opposition voiced by many Republicans and Democrats to this amendment. 5. By mixed vote of 24 to 29 the Committee defeated a Waxman Amendment to set cost and performance goals for renewables including wind power and authorize federal funds to assist with commercial project costs (up to 50 percent). | other | informative | 3 |
Restructuring (Confidential Communications) | At the right time it would be helpful to discuss what we may want to consider as Core Assets (unrelated to trading activities) for purposes of emerging from bankruptcy as a going concern. As you know we are in the process of organizing and formatting in an asset matrix the assets/businesses we currently own (or otherwise have an interest in) that may be potentially for sale separating out potential core assets will be instructive as part of this process. Please let me know your thoughts/suggestions over the next few weeks. Thanks. Jordan | other | formal | 3 |
FERC Presentation on California/West Wholesale Market | Per our discussion | other | casual | 3 |
Wolaks report | Joe Attached find the report you requested. Alan - Governor Davis offered a highly discounted forward contract ($45-50/MWh) at the FERC settlement conference today. As usual California is trying to get its refund with or without FERC requiring it. Alan - Tim and Joe will likely need your assistance with this settlement negotiation. | other | formal | 5 |
Re: Nov. 13 UC summit conference on electricity | I've got a few too many speeches coming up. You are probably in the best position to address this crowd (time for the student to teach the teacher) but I'd understand if you think it would be awkward (the we should just decline). Jeff Dasovich 10/05/2000 01:23 PM To: Tim Belden/HOU/ECT@ECT skean@enron.com cc: Subject: Re: Nov. 13 UC summit conference on electricity Steve: Let me know if you'd like to discuss. I like Tim's idea re: maybe you should take the slot. But in my view definitely not Skilling. I think you saw my thoughts about this conference in a previous email exchange with Schroeder re: Littlechild. Also they're breaking my arms and legs about sponsoring ($3-5K range). I had a thought that maybe EBS could stream the conference as an in-kind contribution---the PR that EBS gets out of streaming might outweigh the cost of providing gratis. I had only raised it as a thought though and am surprised to see it turn up in print. Tim and I had both had Lee as a professor and I've been talking him about this conference alot and have no problem delivering whatever the news is. In fact I had already told them that they shouldn't count on us for this one but that we're always interested in working together. Best Jeff Tim Belden@ECT 10/05/2000 01:00 PM To: Jeff Dasovich/NA/Enron@Enron Steven J Kean/NA/Enron@Enron cc: Subject: Nov. 13 UC summit conference on electricity Jeff I sent this e-mail to Kean last night. I am fine with your recommendation for Skilling to pass on this event. Do you want to deliver the news to Lee. Do we want to offer you Steve Kean or me as an alternative? Personally I would like to attend but don't have much interest in speaking (assuming that they would allow low lifes like you or me to speak). Your call on all of this. Call bob Badeer with questions about the BEEP as I am heading out of town in a couple of hours. Tim: I've worked hard with these guys to try to make this conference the best that it could be but it ain't quite there. So I'd rather keep our powder dry and use Skilling at another time. Not top-shelf enough in my view. If you want to discuss further let me know. Also one question: Is the BEEP stack the constrained supply curve post-adjustment bids? I have that right? ----------------- | meetings & events | formal | 3 |
Re: organizational announcement | I talked with Ken yesterday. He would like to keep David on until May 15 to finish up some things he is working on for Ken. Enron Capital & Trade Resources Corp. From: Sherri Sera 04/09/2001 08:45 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: Re: organizational announcement Just out of curiosity did this ever get resolved? Apologies if I'm being too bold! SRS From: Steven J Kean on 03/14/2001 07:33 AM To: Sherri Sera/Corp/Enron@ENRON cc: Subject: Re: organizational announcement Ken was meeting with him the day before yesterday. I'm just waiting to hear back. Sherri Sera 03/13/2001 10:07 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: organizational announcement Just saw the memo about Sanjay Diomedes and Jim. Guess David Haug is still around? SRS | other | casual | 3 |
Re: Senate passes Alper/Davis Bill 30-0 | what does the siting bill provide for? Mona L Petrochko@EES 08/29/2000 04:38 PM To: Douglas Condon/SFO/EES@EES Martin Wenzel/SFO/HOU/EES@EES James M Wood/HOU/EES@EES Dennis Benevides/HOU/EES@EES Greg Cordell Roger Yang Edward Hamb/HOU/EES@EES Peggy Mahoney/HOU/EES@EES Karen Denne@Enron Mark Palmer/Corp/Enron@ENRON cc: James D Steffes/HOU/EES@EES West GA Richard Shapiro/HOU/EES@EES Steven J Kean/NA/Enron@Enron Mary Hain@Enron Subject: Senate passes Alper/Davis Bill 30-0 AB 265 passed through the Senate a few minutes ago. It now must go to the Assembly where there is still a lot of uncertainty about what changes the Assembly will want to the bill. We still haven't seen the latest republican language. Also AB 265 is double joined to AB 970 controversial siting bill. To the extent one or the other fails they both fail. AB 265 (Davis/Alpert) has: 1. a 6.5 cent/kWh energy rate cap through 2002 with potential extension through 2003. 2. Applicable to residential small commercial (up to 100 kW) 3. Opt-in provision for large industrial/agricultural customers at 6.5 cents with an annual true-up 4. Use of revenues from utility generation assets (including PPA) to offset undercollections. 5. Reasonableness review for San Diego G&E Will update with more information as available. No news about SCE. | legal affairs | informative | 3 |
US Visit for GoodCorporation | null | personal & social | neutral | 0 |
Special Comp Committee Meeting Notice - May 1st | calendar ----------------- | calendar & scheduling | formal | 5 |
Re: Barton Bill | Thanks for the explanation. I agree though I may not have explained the context adequately to Ken. Linda Robertson 05/11/2001 04:32 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: Barton Bill You seemed troubled by the call to Barton. This bill may or may not be subsumed by the comprehensive energy bill that Congress undertakes this summer. Both bills have a very difficult if not nearly impossible path ahead given that the Democrats are in no mood for compromise. The call to Barton was to: a) repair relationships (and with the Wall Street Journal calling Barton about his troubled past with Enron repair is needed) b) proclaim victory even of a limited nature (something I think Enron has not done much of) c) build a further bond with Barton so we would have more input at full Committee (something we will need given the chances that this will go off the track are real) and d) allow Enron to get significant credit for the defeat of price caps. I hear from lots of DC sources that we have not had any success in the House Energy and Commerce Committee. Numerous folks at the markup noted in private conversations that this was Enron's first real role in the Committee. Thus even though this is a very limited bill the call made sense. I do not think that this means we should call the White House to push the bill with them. The bill itself still has lots of obstacles and many potential threats ahead. | government & politics | formal | 3 |
IEP News 5/29 | Today's IEP news ... Los Angeles Times May 27 2001 Sunday Home Edition Page 7 615 words ????The State ?Who Let the Hot Dogs Out? Rhapsodic Lawmakers Legislature: ????Speaking frankly officials have used the wiener as an easily digestible ????metaphor for the state's energy crisis. JULIE TAMAKI MIGUEL BUSTILLO ????TIMES STAFF WRITERS SACRAMENTO (Quotes Smutny on behalf of IEP) The San Francisco Chronicle MAY 26 2001 SATURDAY FINAL EDITION NEWS ????Pg. A1 835 words Davis asks U.S. to limit firms' prices ???RATE SWINGS: ????Governor argues 2 generators manipulated market Lynda Gledhill Sacramento (Quotes ??????? ???Smutny on ?behalf of IEP) The Wall Street Journal Power Drain: The U.S. Energy Crisis California Officials Say State Will ?? ???Enter A Recession Without Energy Price Caps By JOHN R. EMSHWILLER Staff Reporter of THE ?? ???WALL STREET JOURNAL AP Online May 29 2001 Tuesday 9:11 AM Eastern Time Domestic ????non-Washington general news item 770 words AP Top News at 9:10 a.m. EDT ????Tuesday May 29 2001 JEROME MINERVA The Dallas Morning News May 29 2001 Tuesday DOMESTIC NEWS K7523 1046 ????words Bush begins visit in hostile California By G. Robert Hillman Los Angeles Times May 29 2001 Tuesday Home Edition Page 1 1178 words ????Governor to Stress Price Caps to Bush Power: In a meeting today with the ????president Davis will present a letter from economists backing cost controls ????and demand federal assistance. DAN MORAIN JAMES GERSTENZANG TIMES STAFF ????WRITERS Los Angeles Times May 29 2001 Tuesday Home Edition Page 1 1541 words ????THE ENERGY CRISIS Kern County Basks in Role as State's Blackout-Buster ????Electricity: Six new plants will bolster its status as energy center. ????MITCHELL LANDSBERG TIMES STAFF WRITER McKITTRICK Calif. The New York Times May 29 2001 Tuesday Late Edition - Final Section A ????Page 12 Column 1 National Desk 1078 words For Crucial California Trip ????Bush Calibrates How Best to Handle State's Energy Crisis By DAVID E. SANGER ???? LOS ANGELES May 28 The Orange County Register May 29 2001 Tuesday DOMESTIC NEWS K7500 ????825 words California's power crisis generating lots of heat By John Howard The San Francisco Chronicle MAY 29 2001 TUESDAY FINAL EDITION NEWS ????Pg. A1 1291 words Crisis no sweat to some offices ???Many offices keep ????cool in crisis ???Air conditioners blast in state's energy centers Steve ????Rubenstein The San Francisco Chronicle MAY 29 2001 TUESDAY FINAL EDITION NEWS ????Pg. A1 1238 words Bush facing Davis' heat over energy ???In first visit ????to state as president he'll hear governor's plea for help Carla Marinucci ????Lynda Gledhill USA TODAY May 29 2001 Tuesday FIRST EDITION NEWS Pg. 3A 426 words ????Davis to urge Bush to back electricity price cap Laurence McQuillan LOS ????ANGELES The Washington Post May 29 2001 Tuesday Final Edition A SECTION Pg. ????A02 639 words Energy Chief Moves To Aid California Transmission Plan ????Precedes Bush Visit Mike Allen Washington Post Staff Writer LOS ANGELES ????May 28 The Washington Post May 29 2001 Tuesday Final Edition A SECTION Pg. ????A03 1936 words It's Still Dawn for Solar Power in L.A. Despite City ????Subsidies Homeowners Hesitate to Install Expensive Alternative Energy ????Source William Booth Washington Post Staff Writer LOS ANGELES The Washington Times May 29 2001 Tuesday Final Edition PART A NATION ????INSIDE POLITICS Pg. A6 1264 words Greg Pierce THE WASHINGTON TIMES The Washington Times May 29 2001 Tuesday Final Edition PART A NATION ????Pg. A4 809 words Bush faces tough sell on visit to California ?Davis ????likely to be rebuffed on price caps Joseph Curl THE WASHINGTON TIMES LOS ????ANGELES Chicago Tribune May 29 2001 Tuesday NORTH SPORTS FINAL EDITION News ????Pg. 6 ZONE: N 514 words Bush backs WW II project From Tribune news ????services. LOS ANGELES The Associated Press May 29 2001 Tuesday BC cycle 7:55 AM Eastern Time ???? Domestic News 604 words Bush announcing low-income aid but no price ????caps By SCOTT LINDLAW Associated Press Writer LOS ANGELES The Associated Press State & Local Wire May 29 2001 Tuesday BC cycle ????7:31 AM Eastern Time State and Regional 594 words Stakes are high for ????Davis meeting with Bush By GARY GENTILE AP Business Writer LOS ANGELES ABC NEWS WORLD NEWS NOW (2:00 AM ET) May 28 2001 Monday 447 words ????PRESIDENT BUSH VISITS CALIFORNIA WHERE POLITICIANS ARE CRITICAL OF HIS LACK ????OF ACTION FOR THEIR ENERGY CRISIS DEREK McGINTY JOSH GERSTEIN Los Angeles Times May 27 2001 Sunday ?Home Edition SECTION: California Part 2 Page 7 Metro Desk LENGTH: 615 words HEADLINE: The State Who Let the Hot Dogs Out? Rhapsodic Lawmakers Legislature: Speaking frankly officials have used the wiener as an easily digestible metaphor for the state's energy crisis. BYLINE: JULIE TAMAKI MIGUEL BUSTILLO TIMES STAFF WRITERS DATELINE: SACRAMENTO BODY: ??Every crisis has its symbol. ??Watergate had Deep Throat. The S&L scandal had Charles Keating. O.J. did--or didn't--have a bloody glove. ??Here in the Capitol the hot dog has become an unlikely metaphor for the state's energy crisis. ??In packed news conferences and heated Assembly floor debates lawmakers from both parties have evoked images of the ordinary dog to help explain an extraordinary mess. ??The genesis of this statehouse trend is difficult to determine. Assemblyman Fred Keeley appears to be the first to have tossed the hot dog into the political fire. ??During a crucial Assembly discussion in January the Boulder Creek Democrat recited the lyrics to a familiar Oscar Mayer jingle as a way of admitting that a controversial bill to have the state buy electricity to avoid blackouts was unpalatable but necessary. ??It's the dog kids love to bite said Keeley of the jingle. Well this is the bill people love to hate. ??A bizarre partisan hot dog duel ensued. Assemblyman John Campbell (R-Irvine) responded by likening the unpredictable financial consequences of the Keeley legislation to biting recklessly into mystery meat. ??Before I bite into it I see what's on the outside but I can't see the inside Campbell said. If nobody can tell me what's on the inside it may be bitter it may be bad it may make me sick. ??Assemblywoman Carole Migden (D-San Francisco) angrily fired back wanting to know why Campbell a professed hot dog eater was suddenly so critical of its unknown contents. ??It's OK to eat a hot dog that's full of animal bones and hair Migden said. That's a hot dog that's OK with you but this kind of hot dog isn't. ??Yet it was Senate leader John Burton who made it the key ingredient in a Capitol catch phrase. ??Burton described a plan to purchase the electrical power grid from the state's private utilities as a fair swap saying: I give you a dollar you give me a hot dog. ??The sound-bite quickly took on a life of its own. With the cost of the energy crisis growing faster than the price of ballpark franks critics doubted the public's appetite for a multibillion-dollar hot dog. ??Do you really want a hot dog? That is the question said Jan Smutny-Jones executive director of the Independent Energy Producers a trade group for power generators. ??Not content to let a dog lie in its bun lawmakers such as Assemblyman Bill Leonard (R-San Bernardino) kept the hot dog in public discourse. ??When Pacific Gas & Electric Co. filed for bankruptcy protection Leonard was one of a chorus of legislators who questioned the merits of purchasing the remaining portion of the power lines calling it not even half a hot dog. ??Added Assemblyman Bill Campbell (R-Villa Park): It's like paying Mercedes prices for a broken down hot dog cart. ??In recent weeks the hot dog rhetoric appeared to have gone cold. Then Assemblyman Juan Vargas (D-San Diego) revived it. ??After enduring hours of testimony on details of the deal to purchase Edison's power lines Vargas said his opinion of the dollar-equals-hot-dog deal had diminished. ??They're trying to charge us for a hot dog Vargas said of the utility but it looks like we're only going to be getting a wienie. ??Reliant Vice President John Stout also recently weighed in with his own hot dog analogy as he tried to explain why his company's income had jumped so much during the crisis. ??If you have a hot dog stand and you go out and buy five to six more hot dog stands Stout said referring to his company's purchase of power plants then naturally you would expect the operating income to go up. ??Alas the dog days of summer have yet to begin. LOAD-DATE: May 27 2001 of 4 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ????????????????????MAY 26 2001 SATURDAY FINAL EDITION SECTION: NEWS Pg. A1 LENGTH: 835 words HEADLINE: Davis asks U.S. to limit firms' prices RATE SWINGS: Governor argues 2 generators manipulated market SOURCE: Chronicle Sacramento Bureau BYLINE: Lynda Gledhill DATELINE: Sacramento BODY: Gov. Gray Davis pursued a new strategy yesterday to control wholesale electricity costs by demanding that federal regulators ban two generators from selling power in California at market rates arguing that they have manipulated the market to their advantage. ???Meanwhile the Davis administration lambasted a federal plan to implement temporary price controls scheduled to go into effect Tuesday. State officials said the measures would do nothing to tame California's out-of-control costs for electricity. ???Davis whose calls for broader price limits on wholesale electricity have been rejected repeatedly by the Federal Energy Regulatory Commission is scheduled to meet with President Bush next week to ask Washington to do more to help California. ???Federal regulators said that prices were 'unjust and unreasonable' nearly nine months ago but they have been AWOL ever since Davis said in a statement. ???The California Independent System Operator managers of the state's electrical grid asked energy regulators yesterday to revoke the authority they have given Williams Energy and AES Inc. to sell power at market-based rates. Instead the Davis administration wants the companies to be forced to sell at cost-plus rates which would ensure a reasonable but limited profit. ???Market-based rate authority is not an entitlement the ISO said in a filing with federal regulators. ???The ISO asked regulators to act by June 15 saying that any delay places California consumers and the state's economy at extreme peril. ???Similar filings against other companies such as Mirant Duke and Reliant are being considered said Charles Robinson general counsel for the ISO. ???Robinson said the ISO has a well developed record of price manipulation by the two companies. He said information previously given to federal regulators proved the prices charged to California were excessive. ???'GRANDSTANDING' ACCUSATION ???Aaron Thomas a spokesman for Virginia-based AES said the administration is grandstanding. ???This is akin to the rhetoric the governor has used for the past several months he said. We are well below the index FERC uses to establish concerns about market power. ???As to this rhetoric about these companies abusing the marketplace -- check the facts. We lost money last year Thomas said. ???A spokeswoman for Williams said the company would not comment because it had not seen the filing. ???Earlier this month Oklahoma-based Williams agreed to pay $8 million to settle charges with FERC that the company was purposely withholding electricity from California's power market. The company admitted no wrongdoing and officials said a full hearing would have cleared the company. ???If the regulatory commission denies the state's requests or doesn't act in the time frame we believe is necessary to prevent harm the state can appeal to a circuit court Robinson said. ???BUSH VISIT POSTURING CHARGE ???Jan Smutny-Jones head of the Independent Energy Producers Association said the move is posturing by Davis ahead of Bush's visit. ???This is an interesting welcome mat for President Bush he said. Do we want a dialogue or a diatribe? ???In advance of Bush's visit Vice President Dick Cheney said yesterday that nothing more can be done to help solve California's power problems this summer. ???He also rejected price controls saying that previous efforts have contributed to a supply shortage. ???A spokesman for Davis rejected that notion and denied that the timing of yesterday's announcements were connected to the Bush-Davis meeting. ???Davis aides expressed hope that Bush's two new FERC commissioners Pat Wood III a close Bush ally expected to take over the chairmanship of the board and Nora Mead Brownell a state utility regulator in Pennsylvania would hear California's pleas. The two new commissioners were confirmed yesterday by the U.S. Senate. ???Among the things Davis wants changed is the regulatory commission temporary price relief plan scheduled to take effect Tuesday. ???The regulators would limit wholesale prices during power alerts in California when reserves drop below 7 percent of available capacity. ???Many state officials believe that doesn't go far enough. The state Assembly in documents to be filed Tuesday said price controls should cover all hours -- not just power emergencies. ???And there is a chance the controls will be in effect for just a few days. Under the regulatory commission plan the state and the three investor-owned utilities must file a proposal to join a regional transmission organization by June 1. If they do not to do so the price controls disappear. ???Davis administration officials expect to file another response dealing with the regional transmission organization by Friday Robinson said. The Assembly filing rejects joining such an organization which federal officials favor as a means to better manage and improve grid capacity in the West. E-mail Lynda Gledhill at lgledhill@sfchronicle.com. GRAPHIC: PHOTO Vice President Dick Cheney said nothing more can be done to help solve California's power problems. / New York Times LOAD-DATE: May 26 2001 May 29 2001 Power Drain: The U.S. Energy Crisis California Officials Say State Will Enter A Recession Without Energy Price Caps By JOHN R. EMSHWILLER Staff Reporter of THE WALL STREET JOURNAL On the eve of a meeting Tuesday between President George Bush and California Gov. Gray Davis top advisers to the governor said the state could be pushed into recession unless the federal government imposes temporary price caps to contain soaring wholesale electricity costs. President Bush has consistently opposed price caps. The governor's team called a Memorial Day news conference to highlight what they saw as the dangers to the economy of the state and possibly the nation from the tens of billions of dollars being spent this year to purchase electricity. The governor's aides estimated that statewide wholesale electricity purchases this year could hit $50 billion compared with about $7 billion in 1999. Some estimates for this year's power expenditures are even higher. If California were a separate nation an energy shock of that magnitude would be expected to cause a significant recession said Alan Blinder a former vice chairman of the Federal Reserve at the conference. While being part of a broader national economy could somewhat mitigate the impact the higher power costs are a recipe for stagflation in California added Mr. Blinder. Stagflation refers to stagnant economic conditions and inflation -- a condition that struck the nation when energy prices soared in the 1970s. Though the advisers painted perhaps the dreariest outlook yet to come from the governor's office they said that the Davis plan for financing the state's electricity purchases remains intact. As reported the state plans to sell about $12.5 billion in bonds later this year. The state has been purchasing electricity since January when its failed utility-deregulation plan left California's two biggest utilities financially unable to continue buying power. If price caps were instituted the state might have to borrow less money than anticipated or at least face a decreased danger of having to borrow more if the power situation gets worse said Joseph Fichera chief executive of New York-based Saber Partners LLC and an adviser to Mr. Davis. The governor plans to press his case for price caps over the next six to 18 months as supplies are increased with new power plants due to come into operation the advisers said. However Mr. Bush and other federal officials have repeatedly said that they believe price caps would be counterproductive and discourage the building of new power plants. Write to John R. Emshwiller at john.emshwiller@wsj.com1 Copyright 2001 Associated Press AP Online ?????????????????May 29 2001 Tuesday 9:11 AM Eastern Time SECTION: Domestic non-Washington general news item LENGTH: 770 words HEADLINE: ?AP Top News at 9:10 a.m. EDT Tuesday May 29 2001 BYLINE: JEROME MINERVA BODY: ??NATO Won't Back U.S. Missile Plan ??BUDAPEST Hungary (AP) ??NATO's top policy-making body stopped short of endorsing the Bush administration's plan for a national missile defense today preparing to offer only to ''continue substantive consultations'' with Washington. The North Atlantic Council does not portray the possibility of missile attack as a common threat faced by allies as the Bush administration had hoped it said in a statement. Secretary of State Colin Powell had hoped to persuade skeptical NATO allies to be more supportive of U.S. missile defense plans. ??Pakistan Accepts India Offer to Talk ??ISLAMABAD Pakistan (AP) ??Pakistani military ruler Gen. Pervez Musharraf today accepted India's offer to hold peace talks on the disputed Kashmir region and other issues. ''I accept your invitation ... to visit India with great pleasure'' Musharraf said in a letter to Indian Prime Minister Atal Bihari Vajpayee. ''We wish to see a stable prosperous India at peace with its neighbors.'' Musharraf's letter came four days after Vajpayee broke a two-year lull in high-level talks between the two rival nuclear powers by inviting the Pakistani leader to India. ??Consumers' Spending Incomes Rise ??WASHINGTON (AP) ??Consumers spent on services in April but cut back on cars and other big-ticket items. Incomes also rose. The Commerce Department reported today that consumer spending rose by 0.4 percent in April following a 0.2 percent increase the month before. April's rise marked the biggest increase since January. Consumer spending accounts for two-thirds of all economic activity and has been a main pillar propping up the country's fragile economy. Personal incomes rose 0.3 percent. ??Bush Won't Cap Electricity Prices ??LOS ANGELES (AP) ??President Bush says he won't force down soaring electricity prices that have cost California nearly $8 billion since January. The Republican president and embattled Democratic Gov. Gray Davis arranged a meeting today to talk about the state's energy crisis but there was no indication they would break their stalemate. Bush opposes price limits on wholesale electricity that utilities buy arguing they do nothing to address supply-and-demand issues at the heart of the crisis. ??Tornado Injures 18 in Colorado ??ELLICOTT Colo. (AP) ??Dozens of residents of a sparsely populated town in southern Colorado spent the night in a church after a tornado crushed trailer homes sprayed hail and injured 18 people. ''We just hit the floor in the living room and covered the kids and the tornado hit'' said Trish Davidson whose mobile home was lifted into the air and dropped 10 feet from its foundation. Davidson and about 30 other people spent last night in the basement of a church. Power was out to the church and much of the surrounding area. ??Israeli Motorist Killed ??JERUSALEM (AP) ??An Israeli motorist was killed in a West Bank drive-by shooting today as Israeli and Palestinian officials after two rounds of U.S. mediation spoke of resuming security talks aimed at reducing the violence. The motorist died of head wounds shortly after he was shot on by Palestinian gunmen from a passing car near the West Bank city of Nablus the army said. Two Israeli settlers were shot and injured one seriously in another West Bank ambush last night. ??Record-Breaking DJ Still on Air ??JERSEY CITY N.J. (AP) ??Now you can't get disc jockey Glenn Jones off the air. As of 6:30 a.m. EDT today the DJ had been talking for about 93 hours easily shattering the record for the longest continuous radio broadcast. And he was still talking. ''It's been a test of wills a test of determination'' Jones said. ''The first day was the hardest but we're still going strong.'' Jones said he wanted to remain on the air until he hit the 100-hour mark which would be about 1 p.m. EDT and would then decide whether to continue. ??Nikkei Adds 36 Points ??TOKYO (AP) ??Tokyo stocks rose moderately today in light trading following holidays in the United States and Britain. The Nikkei Stock Average gained 36.12 points to close at 13773.89. ??Agassi Capriati Open With Wins ??PARIS (AP) ??Andre Agassi and Jennifer Capriati began their bids for a second consecutive Grand Slam title winning in straight sets today on the second day of the French Open. Agassi who won the French Open in 1999 beat Sweden's Thomas Johansson 6-2 6-3 7-6 (5). Capriati seeded fourth overcame seven double faults in defeating France's Emilie Loit 6-2 7-5. Both Agassi and Capriati won Australian Open titles earlier this year. LOAD-DATE: May 29 2001 of 98 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service Dallas Morning News 29 2001 Tuesday SECTION: DOMESTIC NEWS KR-ACC-NO: ?K7523 LENGTH: 1046 words HEADLINE: Bush begins visit in hostile California BYLINE: By G. Robert Hillman BODY: ??LOS ANGELES _ President Bush landed in hostile territory Monday night beginning his first presidential visit to California amid a pressing energy crisis that he says he cannot ease in the short term. ??We welcome him to California said California Gov. Gray Davis a Democrat who has waged a long-distance war with the Republican president over the high cost and short supply of electricity in the nation's most populous state. ??I hope he has an opportunity to talk firsthand to some of the people who are adversely impacted by the very high rates we're paying for electricity. ??But the president's carefully scrubbed schedule for the next two days provides little time for such an opportunity although he will confer privately with business leaders to discuss high-tech solutions to the state's energy problems. ??Arriving on a cross-country flight that touched down in Arizona for a Memorial Day tribute Bush headed off to prepare for an early-morning stop Tuesday to promote energy conservation at the Marine Corps' Camp Pendleton and a luncheon address to the Los Angeles World Affairs Council. ??On Wednesday he'll visit Sequoia National Park near Fresno Calif. to launch a new drive to clean up and fix up national parks. ??He'll also meet privately Tuesday afternoon with Davis in what the Los Angeles Times characterized as a peace summit. But no major shifts in policy are expected. White House aides suggest that the meeting will be a success if the governor even temporarily tempers his sometimes-harsh words for the administration. ??The president's focus is going to be on solving problems. He's not interested in finger-pointing White House press secretary Ari Fleischer said. ??Whether people agree or disagree with the specifics of his energy plan I think most Americans and most Californians are very pleased to see a president who is leading and taking action in addressing the issue head on. ??However recent public opinion polls show the president and the governor taking hits for the energy crisis in California. ??The Field Poll finished a week ago found that 54 percent of those surveyed believed Bush had handled the energy problems poorly with Davis faring somewhat better at 38 percent. The margin of error for the 1015 California interviews was 3.2 percentage points. ??An earlier survey by the Public Policy Institute of California found Davis' job approval rating plummeting from 63 percent in January to 46 percent in May as the state's energy troubles escalated. Bush's overall approval rating was higher at 57 percent but still just as many of those surveyed gave him low marks for his handling of energy issues. That margin of error for 2001 interviews was 2 percentage points. ??In short political analyst Sherry Bebitch Jeffe said Bush's visit to the state _ in his 19th week as president after already visiting more than half the other states _ is long overdue. ??His not responding or not being perceived to respond to the short-term needs of California has allowed Davis' arguments to resonate _ that the federal government is uncaring is insensitive Jeffe said. ??In his national energy policy unveiled nearly two weeks ago Bush offered a series of mostly long-term recommendations to conserve energy find more of it and substantially upgrade and expand the nation's oil refineries and transmission systems for natural gas and electricity. ??Davis complaining that Texas energy companies in particular are gouging Californians has urged Bush to embrace price controls for wholesale electricity but the president has steadfastly refused. Vice President Dick Cheney who oversaw development of the White House energy policy emphasized as recently as Friday that there's no quick fix on the way for California. ??Long term the answer is to build more power plants and that's exactly what they're doing Cheney told the U.S. Chamber of Commerce. But they're not going to have enough new capacity online this summer to avoid blackouts. ??So the energy woes continue to fester in California. It's not just electricity and rolling blackouts. Gasoline prices of $2-and-more-a-gallon have become commonplace as well. ??The gas bothers me more than the electric said Tait Kmentt who runs a legal process serving business in Irvine Calif. Gas prices are killing me. ??At $2.25-a-gallon for premium gasoline he says it costs him more than $40 to fill up his new Mercedes _ with no relief in sight. ??A newcomer to the state Kmentt voted for Bush last fall and said he's glad the president is finally visiting California. But Kmentt cautioned This will be a big test to see how concerned he is. ??Kmentt said he understands the state's energy troubles are a huge problem that can't be fixed overnight and right now he's blaming the power companies for the high price of electricity. ??I just think the public is being lied to he said. ??Still this is not good news for Bush who has been increasingly portrayed by Democrats as a Texas oilman still beholden to the industry. California which he lost last fall to Al Gore by 12 percentage points has become increasingly a political headache. ??Where his predecessor Bill Clinton seemed politically and personally comfortable Bush is not suggests Jeffe a senior scholar in the School of Policy Planning and Development at the University of Southern California. ??An ego cannot be buoyed by losing the state by 12 points she said. We are the state that was responsible for giving Al Gore his popular vote victory. ??With the Senate now headed for Democratic control Jeffe said Bush's visit to California _ and others that will surely follow _ are essential to help Republicans hold their base in the House. ??If the energy crisis persists in California further punishing its economy the ripple effects will certainly spread she said. ??George Bush remembers the influence of the economy on the career of an incumbent president Jeffe said pointing to Bush's father who was defeated by Clinton during an economic slump in 1992. ??It took a while she said but people are beginning to get angry. ??(c) 2001 The Dallas Morning News. ??Visit The Dallas Morning News on the World Wide Web at http://www.dallasnews.com/ JOURNAL-CODE: DA LOAD-DATE: May 29 2001 of 98 DOCUMENTS 2001 / Los Angeles Times Angeles Times ??????????????????????May 29 2001 Tuesday ?Home Edition SECTION: California Part 2 Page 1 Metro Desk LENGTH: 1178 words HEADLINE: Governor to Stress Price Caps to Bush Power: In a meeting today with the president Davis will present a letter from economists backing cost controls and demand federal assistance. BYLINE: DAN MORAIN JAMES GERSTENZANG TIMES STAFF WRITERS BODY: ??Gov. Gray Davis will present a letter to President Bush today from top economists advocating wholesale electricity price controls warning Monday that a failure by Bush to help California solve its energy crisis could signal to other regions that he may ignore their pleas. ??Bush making his first trip to California has set aside 20 minutes this afternoon to meet with Davis in Century City. In an interview with The Times the Democratic governor vowed to repeat his request that the federal government move to cap wholesale power prices. Failure to act swiftly threatens the state and national economy Davis said. ??I want him to understand Davis said that if California has to pay 700 times more for electricity in 2001 than it did just two years ago it could well drag our economy into a recession and could conceivably trigger a national recession. That is not good for anyone. ??In the letter 10 economists including Cornell professor emeritus Alfred Kahn a major proponent of airline deregulation told of their deep concern about the failure of the Federal Energy Regulatory Commission to stabilize wholesale electricity prices in California. The economists faxed the letter to the White House on Friday afternoon and provided the governor with a copy to present to Bush today. ??FERC's failure to act now will have dire consequences for the state of California and will set back potentially fatally the diffusion of competitive electricity markets across the country the economists led by Frank Wolak of Stanford University wrote. Moreover this negative experience with electricity restructuring could delay or reverse current efforts to introduce competition into other formerly regulated industries. ??Davis called the letter very significant validation of what we've been saying: The marketplace is not working and FERC has an obligation to act. ??We're not pleading for relief we're entitled to it Davis said. ??Bush and Vice President Dick Cheney repeatedly have said such controls never work. In California caps might worsen the situation by limiting supply they have argued resulting in more blackouts this summer when demand for electricity is highest. ??The Bush-Davis meeting has had all the buildup of the political equivalent of a title fight: On one side the Democratic governor of the nation's most populous state which Bush lost by more than 1 million votes in November. On the other the new president coming off a roller coaster week of political defeat (the shift in control of the Senate) and victory (passage of his tax-cut plan) whose work in the Texas oil industry gives him a special history in the topic at hand. ??From afar Davis has battled the Bush administration's energy policy. But said Dan Bartlett one of the president's chief communications advisors The president has some interesting views on this topic as well with some experience himself. ??Bush's Energy secretary Spencer Abraham took steps Monday to increase electricity transmission capacity in California. He ordered the Western Area Power Administration a division of the Energy Department that is responsible for marketing electricity from federal water projects in 15 Western states to finish its planning for extra transmission capacity. ??At issue is so-called Path 15 an 84-mile stretch of power lines with insufficient capacity to carry the necessary load between Southern California and the northern part of the state especially during peak hours. The central question is whether financing is available for a new transmission line. ??Davis lauded the action but said the president needs to do more. ??If I have any advice to him of a political nature it is take a chapter out of President Clinton's book. ?? [Clinton] was very attentive to California and as a result did better in 1996 than he did in '92. People felt he was here for us when we needed help. We need help. ??Davis said that on a recent trip to Chicago officials there worried that if Bush won't offer California some relief he may not offer us relief in a catastrophe. ??Among the facts and figures Davis intends to show the president is a chart showing that California paid $1.2 billion for electricity in the first quarter of 1999 $1.8 billion for the same period last year and as much as $10.3 billion for electricity in the first three months of this year--at a time when conservation efforts had been taking hold and demand was down. ??I hope the president will be as stunned as I am said Davis who is watching as the state spends more than $55 million a day to buy electricity that private utilities can no longer afford. ??Davis said that though he is trying to speed construction of power plants encourage conservation and return the private utilities to financial stability the federal government has control over wholesale power prices. ??Therein lies the final piece of this puzzle Davis said. If it falls into place we're on the way to putting this issue behind us. If it doesn't fall into place it could create real economic havoc here and across the country. ??Davis said that if Bush refuses to impose price controls he should find some way to help us consistent with his own belief. ??Turning a deaf ear not only won't be well received here Davis said. It likely won't be received well elsewhere. ??The state's energy crisis has posed a ticklish dilemma for Bush's busy travel schedulers: Had he visited earlier it would have been awkward not to focus on energy issues. But until 11 days ago when a task force led by Cheney produced energy proposals there would have been little Bush could say. ??Karen Hughes the president's counselor made it clear that regardless of the pressure Bush will not yield on price caps. ??We want to help. The president is very concerned about the energy situation and blackouts she said. But limiting the wholesale price of energy would only discourage its production Hughes said. ??California is the 30th state Bush has visited since taking office Jan. 20. His staff said the delay had to do not with energy issues but with politics and geography. ??With the administration focused in its first months on winning approval of the tax cut the president's travels were largely dictated by that effort his aides said. ??Besides the president confided recently even with Air Force One at the ready it just takes too long to fly from Washington to California. ??Still Hughes said the president is not ignoring California. Condoleezza Rice the president's national security advisor and a former Californian sits next to Hughes every morning at the daily meeting of the White House senior staff she said. ??What's more the president has many friends in California Hughes said adding: Ernie has a home in California these days. Ernie is the Bush family cat that is living with a friend in Brentwood while the First Family lives in the White House. ??* ??Times Staff Writer Massie Ritsch contributed to this story. LOAD-DATE: May 29 2001 of 98 DOCUMENTS 2001 / Los Angeles Times Angeles Times ??????????????????????May 29 2001 Tuesday ?Home Edition SECTION: Part A Part 1 Page 1 Metro Desk LENGTH: 1541 words HEADLINE: THE ENERGY CRISIS Kern County Basks in Role as State's Blackout-Buster Electricity: Six new plants will bolster its status as energy center. BYLINE: MITCHELL LANDSBERG TIMES STAFF WRITER DATELINE: McKITTRICK Calif. BODY: ??You could think of this as California's own little slice of west Texas. ??Here in the scruffy brown hills of western Kern County oil rigs grow more easily than trees pickups are more common than cars and chicken fried steak is the most popular dish at Mike and Annie's McKittrick Hotel. ??The hotel--which no longer offers lodging just food and drink and plenty of it--is bustling these days with the roustabout energy of a Lone Star construction camp. Just down the road a mammoth electrical power plant is rising out of the sagebrush its generators housed in four boxy buildings the size of airplane hangars. ??It is one of six new major gas-fired power plants expected to be built in Kern County over the next several years an electrical construction boom unmatched anywhere in California. Kern which already has a large surplus of electricity is cementing its place as California's energy capital assuming far more than its share of the burden in recharging the state's drained power supplies. ??Over the next several years the county will add nearly 5000 megawatts of power to the statewide grid. That is more than California now imports on average from out-of-state suppliers. It's enough to supply about five counties the size of Kern which fills the dusty southern rim of the San Joaquin Valley and has a population of 662000. ??In some parts of the state a proposal to build a new power plant is a call to throw up the barricades. In recent months intense community opposition has forced developers to pull back proposals to build major plants in South Gate and San Jose although Gov. Gray Davis has tried to revive plans for the San Jose plant. ??You don't hear a lot of not-in-my-backyard talk in Kern County. ??There should be power plants in everybody's backyard said Paul Gipe chairman of the Kern chapter of the Sierra Club which did not oppose any of the new plants. If people are concerned about having too many power plants they should think twice when they flip on the light switch. ??New natural gas-fired power plants Gipe reasoned are relatively clean and will not add significantly to the county's serious air pollution problems. Ideally he said they will allow the state to close some older dirtier plants that cause considerably more environmental damage. ??If environmentalists don't oppose the plants it's not too much of a leap to guess that some people might be positively thrilled about them. ??Just try for instance asking somebody in Taft an oil center south of McKittrick. It's more money coming into Kern County--that's the way I look at it said Pamela Dunlap who runs a downtown thrift shop. ??An Economy Rooted in the Oil Industry ??She stood in the twilight outside her shop on a street that embodies many of the most attractive attributes of small town Americana--with one small difference. Where some towns might have statues of their founders or war heroes in prominent public places Taft has erected small oil rigs and other pieces of drilling machinery a reminder of its economic roots. ??That Kern County has stepped up as California's blackout-buster is perhaps not surprising. ??To begin with there's geography. Kern stands astride California's major north-south electrical transmission lines at precisely the spot at which they divide between the service areas of Pacific Gas & Electric which serves Northern California and Southern California Edison. That spot can be pinpointed as the Midway substation a vast jungle of humming wires transformers and circuit breakers that lies a short distance west of Interstate 5 in the town of Buttonwillow. ??Already massive new circuit-breakers--they look like Frankenstein helmets sprouting 5-foot-long sparkplugs--are being erected at Midway to handle the power from two major plants that will be revving up in the coming months: PG&E National Energy's La Paloma plant the one near McKittrick and Edison Mission Energy's Sunrise plant just south of Taft. ??The county is served by two major natural gas pipelines which will be tapped to run the plants. In fact Kern contains the state's largest known reservoirs of natural gas. ??Another of Kern's geographic advantages? ??You look around and you'll see there aren't a lot of people living around here observed Stephen Whaley who is overseeing construction of the Sunrise plant. In the surrounding hills an orchard of oil rigs bobbed in the morning haze. Dirt roads cut crudely across the landscape bisecting a crisscross of steam pipes fuel lines and electrical wires. ??This area is all about oil Whaley said. Casting a glance at the modular 560-megawatt plant rising behind him he added with a wry smile You know I guess you could look at this from the road and you could make the argument that it improves the looks. ??The Sunrise plant a relatively simple single-cycle plant is expected to fire up 320 megawatts of its total output by Aug. 1 a scant nine months after construction began. The other plants--more complex and efficient dual-cycle operations--will be opening over the next several years assuming all receive final approval. ??The lack of major opposition to the plants is of course another reason developers see Kern County as a good place to build. The county has long had a more intimate relationship with energy--oil gas electricity--than most places. To people here the link between a natural gas well and a lightbulb or an oil derrick and a gas pedal is neither theoretical nor especially threatening. They're comfortable with energy. ??Kern produces more crude oil than any other county in the United States outside Alaska. Property taxes from oil companies have helped build handsome new schools in Bakersfield the county seat and largest city. The companies' big payrolls have helped populate elegant subdivisions with names that sound vaguely Houstonian: Seven Oaks River Oaks Landmark Estates. ??Which brings us to the Texas connection. ??It's hard to overlook it in a county that runs on oil and cotton and boasts a country music scene to rival Austin's. Conversations in the finer Bakersfield restaurants are filled with references to trips to Texas of colleagues in Midland and Odessa. A Bakersfield radio station was running a contest recently: The winners would be flown to a bull riding championship in Houston. ??Until December 1999 American Airlines offered direct jet service between Bakersfield and Dallas. It stopped after Occidental Petroleum moved its headquarters from Bakersfield to Houston. ??This is a county where President Bush received more support in the November election than he did in Texas his home state. But then Bush already had a Bakersfield connection: He lived there briefly as a child when his father former President George Bush worked in the Kern oil fields. ??You look at the topography around Bakersfield and the county's morals and ethics--that predominantly conservative attitude that we have around here--and you look at the oil and you could be in Midland said John Allen the general manager of Occidental of Elk Hills which is developing a power plant in tandem with Sempra Energy of San Diego. ??A lot of people in Kern County will tell you they don't mind being an energy farm for the state. It's a living after all. ??It's good to be working at home said Joe Ryan a Bakersfield pipe welder who has spent years on the road seeking the heavy construction work that seemed to have vanished in his hometown. Now he's working at the La Paloma plant a 1048-megawatt behemoth that will come online in phases beginning in December. ??About 800 people are at work on the plant and several hundred more will be employed in the coming months. And after that plant is done there will be others to build. ??This is a good job here I tell you what said Ryan 47 who has been banking his overtime on six 10-hour days a week--sometimes more. ??County Sees Itself as 'Part of the Solution' ??But there are some signs of simmering resentment especially among county leadership. After all if every other county produced just half the electricity that Kern generates California wouldn't have an energy crisis. And people in Kern County are getting hit with the same spring-loaded electricity bills the same rolling blackouts as everybody else. ??I think the people of California are either going to be part of the solution or part of the problem said Assemblyman Roy Ashburn (R-Bakersfield). And in Kern County we have a long history of being part of the solution especially when it comes to energy issues. ??Elsewhere in the state Ashburn sees a lot of arrogance--people who enjoy the benefits of a very high quality of life enjoy the benefits of electric power for jobs and for their personal life but with an exclusivity that it's someone else's problem to create that for them. We don't have that attitude in Kern County. ??Power Buildup in Kern County ??Six new major gas-fired power plants are expected to be built in Kern County over the next several years making the county the power capital of the state. ??* ??RELATED STORY ??Letter to Bush: Gov. Davis will ask for wholesale energy price caps. B1 GRAPHIC: PHOTO: Tom Romesberg general manager of La Paloma plant being built in Kern County stands next to the unit's cooling tower. PHOTOGRAPHER: AL SEIB / Los Angeles Times PHOTO: From rigs and pipelines like these near Taft Kern pumps more crude oil than any other county in the U.S. outside Alaska. With several gas-fired power plants coming online in the next several years the county will solidify its place as California's energy capital. PHOTOGRAPHER: AL SEIB / Los Angeles Times GRAPHIC: Power Buildup in Kern County Los Angeles Times LOAD-DATE: May 29 2001 of 98 DOCUMENTS ??????????????????Copyright 2001 The New York Times Company New York Times ?????????????????May 29 2001 Tuesday Late Edition - Final SECTION: Section A Page 12 Column 1 National Desk LENGTH: 1078 words HEADLINE: For Crucial California Trip Bush Calibrates How Best to Handle State's Energy Crisis BYLINE: ?By DAVID E. SANGER DATELINE: LOS ANGELES May 28 BODY: ??Days after he suffered the biggest political setback of his four-month-old presidency and then won the tax cut that he staked his campaign upon President Bush traveled tonight to California carefully calibrating how to deal with the state's energy crisis. ??After Memorial Day celebrations in Washington and Mesa Ariz. Mr. Bush began his first visit as president to the most populous state which he lost by roughly 12 percentage points in November's election. The visit seems likely to showcase the clash between two very different energy strategies and political strategies. ???Mr. Bush will meet briefly on Tuesday with Gov. Gray Davis who will insist as he did again today that the federal government impose price caps on wholesale electric power. ??The White House says Mr. Bush will refuse again. He will argue that such caps would only discourage increased production of electric power. We think that's a mistake Vice President Dick Cheney said on Friday talking about why he rejected those options when he prepared the energy policy the administration made public 10 days ago. ??But Mr. Bush knows that how he handles the California energy crisis could prove critical to his political fortunes especially now that his party's loss of control in the Senate seems bound to slow or derail passage of major elements of his energy plan. ??Moreover the president can no longer argue that the best cure for high energy prices is a tax cut because that is now legislative history. As one of his aides said this weekend after Congress approved the $1.35 trillion tax cut that will be phased in over the next 10 years we will have to turn now to the other arguments. ??Most of those arguments involve urging the rest of the country not to follow California in a partial deregulation of the market with disastrous results. ??Repeatedly Mr. Bush has chastised California's politicians and by implication Mr. Davis himself for ignoring politically unpalatable choices to avert the state's power-generating crisis. Ten days ago standing in front of a hydroelectric plant in Pennsylvania Mr. Bush used the state as Exhibit A for his argument about what happens when population rises when over-regulation freezes the construction of new power plants and the stringing of new transmission lines and when politicians fail to plan for the long term. ??The problems in California shows that you cannot conserve your way to energy independence Mr. Bush said then. ??At the same time his aides were pointing to polls showing Mr. Davis's approval ratings plunging. They did not mention that Mr. Bush's ratings in the state were hardly any better. A series of recent polls show that roughly two-thirds of Californians believe Mr. Bush should be doing far more to help the state though it is unclear exactly what kind of help they have in mind. ??So Mr. Bush's aides have been struggling for days to choreograph the two-day visit here trying to find ways to differ with Mr. Davis without seeming callous about the problem or in conflict with the state. ??The betting is that Mr. Bush will focus on long-term solutions in contrast to Mr. Davis's call for the quicker fix of price caps. ??The effort started today. Energy Secretary Spencer Abraham issued an order of chiefly symbolic importance saying his department would move quickly to determine whether investors were interested in financing and co-owning a new transmission line that could bring more power to the state. ??The level of interest will be a factor in the decision to build the line later this year the Energy Department said. It said that it would proceed with studies of how the land could be acquired by eminent domain if necessary and that it would speed ahead with environmental reviews. ??But Mr. Abraham left wide open the question of whether Washington would go ahead with the project even if no private financing was available. ??The Bush administration is taking a leadership role in addressing a long-neglected problem in California's electricity transmission system Mr. Abraham said. California's electricity problems developed over a period of years and cannot be solved overnight. However we can move now on actions that will help avert the same types of problems from recurring year after year. ??The statement was clearly intended as a prelude to the meeting with Mr. Davis which will be closed to the press. So will a meeting with energy entrepreneurs. (Mr. Bush passed on Mr. Davis's suggestion of a forum with small-business owners and residents who have seen the lights go out.) ??Few expect Mr. Bush or Mr. Davis to change his mind about energy caps after their meeting. ??But for Mr. Bush it will not all be tough love. On Tuesday morning Mr. Bush is scheduled to travel to Camp Pendleton to repeat his call for the military and other federal users of power in California to flip off their switches whenever possible. But given his own comments and Mr. Cheney's about the limited utility of conservation that order could strike some Californians as a little hollow. ??Later he will give a trade speech in Los Angeles underscoring the message that if California hopes to remain the world's greatest exporter of high technology -- if it were a nation California would be the world's sixth-largest economy -- it must find new ways to produce and deliver electricity. ??Already leading Silicon Valley companies are threatening to build their next-generation chip fabrication plants elsewhere probably in Texas which has a surplus of generating capacity a move that would further undermine Mr. Davis's stewardship. ??In fact Mr. Bush's Texas roots will never be far from the political battlefield here. Mr. Davis has accused Texas energy companies of profiteering at California's expense. To press the case he has hired two political operatives from the Clinton White House Marc D. Fabiani and Chris Lehane who are being paid tens of thousands of dollars a month to make the case for price caps. ??California's attorney general Bill Lockyer also a Democrat suggested to The Wall Street Journal last week that some time in jail would be the best way to deal with one of Mr. Bush's biggest supporters -- Kenneth Lay who heads the Enron Corporation and has sought to influence the selection of members of the Federal Energy Regulatory Commission. ??The comments may have been partly facetious but they were not interpreted that way here. ??http://www.nytimes.com LOAD-DATE: May 29 2001 of 98 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ??????????????????????????The Orange County Register 29 2001 Tuesday SECTION: DOMESTIC NEWS KR-ACC-NO: ?K7500 LENGTH: 825 words HEADLINE: California's power crisis generating lots of heat BYLINE: By John Howard BODY: ??SACRAMENTO Calif. _ Detectives would seem to be tripping over each other to discover who did what to whom and why in California's energy crisis. ??While electricity may be scarce investigations are plentiful. A dozen major probes are afoot many overlap and more loom. The atmosphere is heated the rhetoric strong. State federal and local investigators along with court officers financial experts and special investigators are poring over thousands of pages of documents from government agencies and private companies. ??At the top of the swarming heap is the $10 million investigation mounted by the state Attorney General's Office to answer the core question: Did a handful of power sellers fix prices to bilk Californians of billions of dollars? ??But it's not just the government that is busy. The companies themselves _ which have categorically denied any wrongdoing _ are overwhelmed by the scrutiny. ??We are supplying reams and reams of documents. ... It is a distraction from our day-to-day work there's no question said Tom Williams of North Carolina-based Duke Energy which operates several power plants in California. It affects our employees and their families this barrage of innuendo. I don't know what more we can do. ??Accompanying the investigations are at least a half-dozen lawsuits against the companies by individuals. Like the probes the suits contend the companies improperly manipulated the market. Legislative leaders meanwhile have sued the federal government contending it has failed to protect consumers from price-gouging. ??This all permeates our business in so many ways said Gary Ackerman of the Western States Power Forum a group that represents power sellers and buyers in the West. It even affects my ability to talk to the newspapers because we're afraid statements may turn up later and be used as evidence. We're not sure what we're dealing with whether a suit or even a grand jury if the (attorney general) decides to take criminal action as he said he might. ??The state's top prosecutor said that indeed criminal charges are a possibility. ??There is an investigation under way that involves potential criminal conduct said Sandra Michioku a spokeswoman for Attorney General Bill Lockyer. It could be at least eight weeks before that probe is completed she said. ??Other investigating agencies include the Federal Energy Regulatory Commission the California Public Utilities Commission the city attorneys' offices in Long Beach Los Angeles and San Francisco California's grid manager the Independent System Operator the obscure Electricity Oversight Board which oversees the ISO and the state Senate and Assembly. ??The state has even considered asking two more federal agencies the Department of Energy and the Federal Trade Commission to get into the act. Some offices are conducting multiple investigations. In the case of at least two agencies the PUC and the Attorney General's Office the investigations are being at least partly coordinated. Some agencies are examining the same issues. The PUC the attorney general and ISO for example all are looking at whether power plants were shut down to drive up demand and prices. ??There is a lot of overlap and there probably are problems of coordination said Nettie Hoge of The Utility Reform Network of San Francisco a grass-roots watchdog group. ??With so many agencies trying to extract information Hoge said even those who have done no wrong are concerned about talking freely because of the greater likelihood that proprietary information will leak to competitors. ??Others feel the overlap is beneficial. ??When you're up against an industry as wealthy and powerful as the energy industry it's probably better to double-team them said Doug Heller of the Foundation for Taxpayer and Consumer Rights. ??Hoge believes that if any investigation is going to produce results it will be Lockyer's because the governor has thrown all the resources that way. ??Investigators have requested mountains of paperwork. Transaction and maintenance documents market reports financial records even e-mails _ all have been sought. ??Martin Wilson a spokesman for Texas-based Reliant contends the intensity of the probes could have negative long-term effect on California's business climate. ??There is a climate of instability and uncertainty that makes companies rethink their decisions about investments (in California) he said. ??But for consumer groups the goal of all these investigations is straightforward. ??Certainly we're really hopeful that these investigations will lead to refunds for customers said TURN's Mindy Spatz. There is a widespread belief among people who follow these issues that widespread gaming and manipulation has occurred in the market. ??(c) 2001 The Orange County Register (Santa Ana Calif.). ??Visit the Register on the World Wide Web at http://www.ocregister.com/ JOURNAL-CODE: OC LOAD-DATE: May 29 2001 of 98 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ?????????????????????MAY 29 2001 TUESDAY FINAL EDITION SECTION: NEWS Pg. A1 LENGTH: 1291 words HEADLINE: Crisis no sweat to some offices Many offices keep cool in crisis Air conditioners blast in state's energy centers SOURCE: Chronicle Staff Writer BYLINE: Steve Rubenstein BODY: Some very cool places to be during the dog days of spring and summer turn out to be the places with their fingers on California's air conditioning switch. ???If only the entire state could cram itself into the cavernous control room in Folsom of the Independent Systems Operator where the air is a comfortable 69 degrees and receptionists wear sweaters at high noon -- when it's upwards of 90 degrees outside. ???Or the Pacific Gas and Electric Co. lobby in downtown San Francisco where the air is an even chillier 65 degrees which admittedly isn't much of a bounty considering it's usually that cool outside anyway. ???Other cool places to be are the state Capitol where legislators who promulgate energy edicts hang out and the headquarters of the state Public Utilities Commission where bureaucrats who promulgate energy edicts hang out. ???Armed with a high-tech digital thermometer The Chronicle made the rounds of the energy crisis poohbahs to make sure they are practicing what they are preaching. ???Some were some weren't. Those that weren't blamed it all on that most familiar of modern scapegoats the computer. ???Computers must be kept cool -- in the 60s for big mainframes and a bit more for the smaller units most folks use though some can go into the 80s without hiccuping. So generally people who work alongside the computers get to keep cool by association although it's the computer that counts. ???The ISO headquarters located in an industrial park 20 miles east of Sacramento is a delightfully cool and comfortable place when the outside temperature soars into the 90s and 100s. ???The reception area the only room accessible to the outraged public is a fairly stiff 76 degrees -- only two degrees cooler than the 78 degrees recommended by President Bush and the federal energy crisis czars and czarinas. ???But take a step past the lobby security doors and the temperature plummets. In the main hallway the temperature is 73 degrees. And in the control room where two dozen engineers and technicians sit at consoles and monitor the flow of California electricity on a giant diagram of state power lines so they can order blackouts for everyone else -- the temperature is 69 degrees. ???NO SWEATING AT ISO ???Some managers do not take off their sports coats and jackets. ???We want these people to be comfortable explained Tony Capasso facilities manager for the ISO complex. We don't want these people sweating bullets in the middle of a crisis. ???Inside the state Capitol where legislators and the governor preach compliance with federal guidelines calling for 78-degree thermostats the temperature dips into the high 60s. The coolest spots are the press briefing room and the treasurer's old office. ???GOVERNOR'S OFFICE ???The governor's suite is in the mid-70s apparently because folks are often coming by with thermometers and it wouldn't do not to set an example. Press secretary Steve Maviglio said Governor Gray Davis is a practice-what-he-preaches kind of guy who keeps corridors dark shades drawn air conditioners idle. His personal secretary works in short sleeves with a cheap plastic fan humming nearby. ???It's so dark in the hall that we're always bumping into things said one aide. ???Even so the temperature in the governor's suite of offices is three degrees cooler than the 78 degrees recommended by President Bush -- not the first time the two men have failed to agree. ???THE LEGISLATURE ???The Assembly chamber is 71 degrees while the Senate chamber -- with 40 fewer legislators spewing forth -- is 73 degrees. But the Senate chamber has a southern exposure one Capitol guide explained. ???Hot air from the people sitting inside has nothing to do with it he said. ???In San Francisco the temperature inside cavernous City Hall dips in spots to the mid-60s. College student Jasmine Westbrook who dropped by with her art class on a project to sketch the interior of the building was doing her sketching while wearing a windbreaker to keep warm. ???I want to stay comfortable she said. It think it's supposed to be hotter in here isn't it? ???The mayor's office at 73 degrees was eight degrees warmer than another office down the hall even without the mayor sitting in it. ???63 AT THE PUC ???At the headquarters of the state Public Utilities Commission which is supposed to be keeping an eye on the self-declared bankruptcy of the utility that mails out the bills the lobby temperature is 63 degrees. ???Chief engineer David Omosheyin eyeing The Chronicle's thermometer nervously insisted the 63-degree reading was caused by the lobby's proximity to the front door where the outside temperature at the moment was in the low 60s. He invited the thermometer to visit the upper floors where the temperature was 70. ???As for San Francisco's federal buildings: Bush would probably not frown. ???His orders appeared to be followed during The Chronicle's visits so much so that it was actually hotter inside than out. Though that wouldn't be hard considering it was in the low 60s outside. And the places measured happened to be courtrooms and tax offices where the body heat from anxiety alone could probably melt the paint some days. ???San Franciscans Omosheyin said are losing their perspective when it comes to things like electricity energy alerts and rolling blackouts. In his native country of Nigeria he said the electricity runs sporadically if at all. ???There the power can go off for a week he said. The world goes on. Here people take a lot of things for granted and electricity is one of them. ???As for the offices of the places that report on such matters they fared about the same. ???The Walnut Creek bureau of The Chronicle where the sun sizzles into the 90s with regularity in the summer is kept at 67 degrees because of all the computers. The main newsroom of The Chronicle is kept at 71 degrees because of all the computers. But the reception room was 71 degrees too and there aren't any computers there not a one. ???Some offices keeping their cool Place ????Outside ?temperature Control Room California Independent Systems Operator (Folsom) ?????????????????69 ??????90 Governor's office Capitol (Sacramento) ???75 ??????94 Press briefing room Capitol (Sacramento) ?68 ??????94 Caltrans headquarters (Sacramento) ????????70 ??????94 Chronicle bureau newsroom (Walnut Creek) ??67 ??????90 Mayor's Office San Francisco City Hall ???73 ??????63 Calif. Public Utilities Commission lobby (San Francisco) ???????????????????????????63 ??????63 State Building (San Francisco) ????????????69 ??????63 Courtroom 19th floor Federal Building (San Francisco) ???????????????????????????70 ??????63 Lobby Pacific Gas and Electric headquarters (San Francisco) ??????????????65 ??????65 IRS office Federal Building (San Francisco) ???????????????????????????69 ??????63 Main newsroom San Francisco Chronicle (San Francisco) ???71 ??????64 ???E-mail Steve Rubenstein at srubenstein@sfchronicle.com. GRAPHIC: PHOTO (2):CHART: SEE END OF TEXT (1) It's too warm for jackets in the chief clerk's office in the state Capitol building in Sacramento. (2) Jane Malison of Millbrae needed a fan while touring a warm section of the state Capitol but other parts of the building are kept below 70 degrees. / Photos by Kat Wade/The Chronicle LOAD-DATE: May 29 2001 of 98 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ?????????????????????MAY 29 2001 TUESDAY FINAL EDITION SECTION: NEWS Pg. A1 LENGTH: 1238 words HEADLINE: Bush facing Davis' heat over energy In first visit to state as president he'll hear governor's plea for help SOURCE: Chronicle Political Writers BYLINE: Carla Marinucci Lynda Gledhill BODY: President Bush wasn't on California soil for more than five minutes yesterday when he was drawn into his first debate on the state's power crunch. ???Rep. Brad Sherman a Democrat from Thousand Oaks who met Air Force One on the tarmac at Los Angeles International Airport along with a group of high school students wasted no time button-holing the president for what appeared to be an animated conversation. ???I brought up . . . the idea that after his meeting with our governor I hoped he would be in favor of wholesale regulation (of energy prices) Sherman said later. He disagreed with me. ???Sherman -- who two weeks ago suggested that the headline to the president's national energy policy should be Bush to California: Drop Dead -- didn't seem optimistic yesterday about Bush's 48-hour visit to the state. I think that the president's policies show either a lack of understanding of what's really going on in California or a lack of concern he said. ???That vignette underscored some of the challenges facing Bush who arrived in California as protesters geared up and Democratic Gov. Gray Davis prepared to press him for federal action on the state's power troubles. ???Besides Sherman Bush was greeted by a crowd of cheering Republicans including Secretary of State Bill Jones and Los Angeles Mayor Richard Riordan the former a declared GOP candidate for governor in 2002 the latter a rumored one. ???But today Bush will sit down with the present governor who lately has been blistering in his criticism of the president. ???The last time I looked California was still part of the United States of America Davis told reporters this weekend. We have contributed disproportionately to the economic growth of this country. There's no reason why a president should not respond to a legitimate request from the chief executive of the largest state in the union. ???In his first visit to California since just before the election Bush plans to emphasize the energy crisis -- but will focus on it through the lens of his own energy plan. ???ENERGY SECRETARY ACTS ???Just hours before the president landed Energy Secretary Spencer Abraham ordered a speedup in planning to relieve a notoriously overloaded electricity transmission line in California. ???Abraham's holiday action was timed to provide a bit of positive news for Bush to announce in California. He ordered the Western Area Power Administration a 15-state marketing arm of the Energy Department to complete planning and seek outside financing to reduce the transmission bottleneck on California's Path 15 which connects the northern and southern parts of the state. ???This morning Bush will visit the Marine Corps base at Camp Pendleton near San Diego to underscore his conservation order for a 10 percent cut in energy usage in federal buildings and military facilities. ???In Los Angeles he will deliver a wide-ranging talk before the World Affairs Council and lead a discussion among business leaders about technological advances in energy conservation. ???Then he will head to Fresno and Sequoia National Park to press his initiative to improve national parks. Along the way protesters have vowed to provide a vocal commentary on Bush's energy and environmental policies. ???But the real drama of the trip will no doubt be the sit-down between Bush and Davis today. The governor pushed for a lengthy open meeting with Bush that would include testimony from officials and consumers affected by the energy crisis. Bush's camp announced Friday the meeting would be 20 to 30 minutes -- in private. ???Davis plans to outline steps the state has taken to alleviate the energy crisis and what it wants the federal government to do -- including implementing price caps on the wholesale cost of energy cost-based pricing and the possibility of ordering refunds. ???DAVIS THREATENING SUIT ???The governor has said he will consider suing the Federal Energy Regulatory Commission -- the agency charged with overseeing energy prices -- if it does not impose temporary price caps. ???And the state Legislature has already filed a suit saying the commission has failed to stop what it has determined are unjust and unreasonable prices. ???With California's energy woes worsening and a summer of rolling blackouts predicted the Bush-Davis session holds potentially deep political pitfalls for both leaders both of whom are suffering in state polls as a result of their handling of the energy crisis. ???Bush needs to demonstrate his concern for California a state that gave a 12-point margin of victory to Al Gore in the presidential election. ???But even as Bush adviser Karen Hughes told state reporters this week that the president had arrived to show he cares Vice President Dick Cheney again chastised state officials for delaying their response to the energy crisis because all of the action was potentially unpleasant. ???And Cheney signaled that the administration would resist long-term price caps saying We think that's a mistake. ???Such talk drew fire from Davis' senior political adviser Garry South who charged that Cheney's words demonstrated insensitivity to California's troubles and only underscored the perception of an all-oil all-the-time ticket. ???Davis whose campaign for re-election next year will depend on his handling of the crisis has stepped up his criticism of Bush and profit-hungry energy firms particularly those from Texas in recent weeks. ???And yesterday signaling no letup Davis' supporters made an unusual holiday conference call to again press his case for federal action. They argued that without immediate intervention from the Bush administration the economy of California -- and potentially the entire nation -- was at risk. ???'THIS ENORMOUS SHOCK' ???We have this enormous shock in prices that needs to be addressed and not ignored said Joseph Fichero head of Sabre Partners and a consultant to Davis. ???Alan Blinder a Princeton economist and former vice chairman of the Federal Reserve warned that energy woes in California alone would take almost a half a percent of the gross domestic product off of the national economy. ???Blinder and others argue that short-term relief -- for about 6 to 12 months -- is necessary while new power plants are being built. ???Most times and most places I agree price caps are not the long-run solution but they can be part of a short-term solution Blinder said. There really is a case for temporary price caps to shield consumers and the California and national economy from the full force of the energy shock. ???Limited new price caps approved by the Federal Energy Regulatory Commission on the sale of wholesale electricity begin today in California. But the temporary caps which go into effect when the electricity reserves dip below 7.5 percent have been lambasted by Davis as ineffective and inadequate. ???Political analysts say Bush's resistence on the issue could cost him in California -- and elsewhere. ???(California) is probably an area where he is criticized more than any other region in the country said Mark DiCamillo director of the statewide Field Poll. Californians are looking to Bush for some relief -- and to the extent they don't get it Bush may be in some jeopardy here.Chronicle news services contributed to this report. / E-mail the writers at cmarinucci@sfchronicle.com and lgledhill@sfchronicle.com. GRAPHIC: PHOTO (2) (1) Rep. Brad Sherman (left) D-Thousand Oaks buttonholed President Bush as he arrived at Los Angeles International Airport to discuss the state's energy crisis. (2) President Bush signed autographs for students from El Camino High School at Los Angeles airport. Bush is to meet with Gov. Davis today. / Photos by Carlos Avila Gonzalez/The Chronicle LOAD-DATE: May 29 2001 of 98 DOCUMENTS 2001 Gannett Company Inc. TODAY ?????????????????????May 29 2001 Tuesday FIRST EDITION SECTION: NEWS Pg. 3A LENGTH: 426 words HEADLINE: Davis to urge Bush to back electricity price cap BYLINE: Laurence McQuillan DATELINE: LOS ANGELES BODY: LOS ANGELES -- California Gov. Gray Davis will urge President Bush today to back a 2-year cap on electricity costs as the best way to keep his power-starved state -- and possibly the U.S. economy -- from sinking into recession. ???The Democratic governor and Republican president who have been sparring from afar over energy policy will meet here to discuss their differences. The White House has said repeatedly that it opposes price caps as a way to deal with energy shortages in California. ??In an interview with USA TODAY Davis said a limit on wholesale electricity costs is needed while the state attempts to build 15 new power plants. He said that would still allow a 30% profit margin. ??While the president didn't create this problem he is uniquely situated to solve it Davis said. I'll make clear that he has an opportunity to relieve the pain and give California the breathing space to put more plants online. ???Bush making his first visit to California as president unveiled a long-term energy policy this month that calls for increased production and to a lesser extent conservation. The president will promote conservation steps being taken by the federal government during a visit today to the Marine Corps base at Camp Pendleton. ??The president believes that imposing price caps will only make the problem worse White House spokesman Dan Bartlett said. ??Davis whose popularity has plummeted as Californians cope with blackouts to offset electricity shortages said his state's problems could hurt all Americans if they are not dealt with quickly. I'm asking for some form of relief that reduces the outrageous prices we're currently bearing he said. Without that relief lots of people will lose their businesses and California could well be dragged into a recession. Since we're about one-eighth of the national economy that doesn't bode well for America. ???The California Public Utilities Commission has announced rate increases of up to 50% for businesses and 37% for homes. ??Bush has sidestepped California after losing the state by 12 percentage points to Democrat Al Gore last year in the presidential election. But with Democrats targeting several GOP House members in next year's elections Republicans must go on the offensive or risk losing control of the closely divided House of Representatives. ??Davis a possible presidential candidate in 2004 said he wants to avoid rancor with Bush: I'm saying 'Look we got into this in a bipartisan way. We should get out of it in a bipartisan way.' LOAD-DATE: May 29 2001 of 98 DOCUMENTS 2001 The Washington Post Washington Post ?????????????????????May 29 2001 Tuesday Final Edition SECTION: A SECTION Pg. A02 LENGTH: 639 words HEADLINE: Energy Chief Moves To Aid California Transmission Plan Precedes Bush Visit BYLINE: Mike Allen Washington Post Staff Writer DATELINE: LOS ANGELES May 28 BODY: ???President Bush landed at ground zero of the nation's energy worries tonight hours after Energy Secretary Spencer Abraham speeded up planning to relieve a notoriously overloaded electricity transmission line through California. ???Abraham's holiday action was timed to provide a bit of news for Bush to announce during his first presidential trip to California where he is to hold a politically charged private meeting with Gov. Gray Davis (D) on Tuesday. Bush's aides said he will pledge to cooperate with California but will stick to his position that no action by the federal government can prevent the rolling blackouts expected this summer. ???Abraham ordered the Western Area Power Administration a 15-state marketing arm of his department to complete planning and seek outside financing for an increase in transmission capacity that he said would be a big step in the right direction and a big step forward for Californians. ???California's electricity problems developed over a period of years and cannot be solved overnight Abraham said in a news release. However we can move now on actions that will help avert the same types of problems from recurring year after year. Today's action is designed to reduce the bottleneck on California's Path 15 which connects the northern and southern parts of the state. ???Davis who is seeking reelection next year has seen his poll ratings plummet as electricity prices soared utilities hit dire financial straits and homes and businesses were surprised with blackouts. ???Bush has taken several steps to try to encourage additional power generation in the state but has maintained since before he took office that California's problems were created here -- through a troubled effort at electricity deregulation and public opposition to construction of additional power plants -- and would have to be solved here. ???Davis plans to use the meeting to lobby Bush once again to endorse a cap by the Federal Energy Regulatory Commission on the wholesale price of electricity. Again and again the administration has said it will not take that step. ???This administration does not and will not support energy price controls Bush told a business audience in March. Price controls do not increase supply and they do not encourage conservation. Price controls contributed to the gas lines of the 1970s. And the United States will not repeat the mistake again. ???Davis energy advisers told reporters on a conference call today that without the cap California energy costs could be $ 50 billion higher this year than two years ago. Alan S. Blinder the Princeton University economist and former Federal Reserve Bank vice chairman said on the call that California's energy crisis should be enough to get the attention of policymakers in Washington. ???The visit by Bush who flew here after making a Memorial Day speech at a fighter aircraft museum in Mesa Ariz. is being carefully managed to avoid contact with the general public. After speaking to military families at Camp Pendleton on Tuesday morning he plans to address a luncheon meeting of the Los Angeles World Affairs Council which has sold out of tickets at $ 75 for members or $ 85 for guests. ???Afterward Bush will hold a closed-door session with business people and then meet with Davis for 20 minutes. As Bush departs Davis plans to make an immediate statement for cameras. ???Although Bush says he has taken more than a dozen steps to help California Davis says price caps are essential and has said he may sue the federal government in an effort to get them if Bush does not go along. ???He has been helpful on a number of small matters and I appreciate his assistance Davis said during a telephone interview on Friday. But the big enchilada is the price of electricity. LOAD-DATE: May 29 2001 of 98 DOCUMENTS 2001 The Washington Post Washington Post ?????????????????????May 29 2001 Tuesday Final Edition SECTION: A SECTION Pg. A03 LENGTH: 1936 words HEADLINE: It's Still Dawn for Solar Power in L.A. Despite City Subsidies Homeowners Hesitate to Install Expensive Alternative Energy Source BYLINE: William Booth Washington Post Staff Writer DATELINE: LOS ANGELES BODY: ???One year ago this city announced its intent to become the Solar Capital of the World with 100000 roofs covered with solar electric panels by the end of the decade an audacious goal to transform the homes of this smoggy but sunny metropolis into miniature power plants. ???To fulfill what is perhaps the nation's most ambitious solar campaign the Los Angeles Department of Water and Power began offering substantial buy down subsidies that would reimburse rate payers for half the price of each new solar energy system. For the average home a photovoltaic package costs between $ 10000 and $ 20000 parts and labor included before the rebate. ???How many have been installed? ???At last count about 40. ???That leaves only 99960 rooftops to go. ???The Bush administration and especially Vice President Cheney architect of its energy plan have been criticized for skepticism regarding alternative energy sources. But a close examination of the Los Angeles solar experiment and a review of similar programs suggest the former oilmen in the White House have a point: Solar at least has not proven ready for prime time. ???For all of Los Angeles's good intentions and for all of solar's many positive attributes the problems of harnessing its power remain. Some of those challenges are economic and some technological others are more mundane but often ignored such as finding a qualified contractor a homeowner can trust to drill dozens of holes in the roofs to mount the things. ???In a reprise of the 1980s solar again is hot. The price of photovoltaics is dropping and interest is growing. Other states such as New York Arizona Florida and Washington are moving to join California in major efforts to wire homes to draw power from the sun. ???But as many Americans are beginning to understand the delivery of energy is like a complex interconnected assembly line and the devil lurks in the details. ???The Los Angeles experiment tells the story shared by other locales. In L.A. for example the city's lone solar panel manufacturer has not been able to supply enough systems to meet demand. ???The systems too are often oversold by solar proponents. In the real world most do not pay for themselves in a few years as some advocates claim but take 20 years or more to return their initial cost in the form of reduced utility bills. ???Nor are the systems maintenance-free: At a minimum the rooftop panels must be routinely cleaned of pollution dust and leaves. ???They cannot be installed efficiently on homes without shade-free south-facing roofs the shadow from a neighbor's palm tree can frustrate the system's photovoltaic cells. ???Nor will the most common systems allow buyers to live off the grid unless they want to purchase a large bank of batteries. Even with the batteries homeowners probably would not be able to run their washing machines and air conditioners at the same time. ???It is not an economic proposition at this point conceded Terry Peterson a solar expert at Electric Power Research Institute in Palo Alto Calif. But one day Peterson predicts 100 years from now solar energy will provide a substantial percentage of the world's energy needs. In a decade or two the cost of solar will likely be competitive with other energy sources such as natural gas nuclear or coal. ???But now? It is still a luxury item. Like buying a swimming pool Peterson said. ???I really like the idea of running my house with solar power said Andrew Chin a potential customer in Los Angeles who has been researching a purchase. But they're still pretty expensive even with the rebates and so I gotta ask myself what am I doing this for his conscience or his wallet. I'm thinking I might wait until they work the kinks out. ???The most knowledgeable and experienced solar contractor in Los Angeles is probably Graham Owen the founder owner and single full-time employee of Go Solar Co. ???His installation of a one-kilowatt solar electric system on a home in the San Fernando Valley was the first to be awarded a rebate by the Los Angeles power department in March. ???How many systems has he installed as part of the rebate program? Three. ???But Owen is a true believer and over the next year he plans to cover hundreds of roofs with solar panels. On his shelf Owen still has an unreturned library book The Coming Age of Solar Energy published in 1963 and checked out from his high school in Lennox Hills Ill. in 1979. I guess we're still stuck in the coming age of solar energy he said smiling. He recalled that the buzz about solar water heaters in the 1980s led to disappointment with shoddy workmanship and less than spectacular energy savings. ???Until recently there has been little widespread interest in solar electric power. Since 1998 the California Energy Commission has been pushing its own program to encourage homeowners to erect photovoltaic panels on their roofs offering to subsidize about one-third of the cost. ???Across a state with a population of about 35 million only 450 solar energy systems have been installed on homes. ???Then the California energy crisis struck with its power interruptions and steep rate increases and the phone calls began to overwhelm Owen's voice mail. ???On days with rolling blackouts? I get a hundred calls maybe more Owen says. His Web site www.solarexpert.com is now receiving 3000 hits a day. Customers are begging him to do jobs. ???The Los Angeles power department reports a similar surge in interest since the energy crisis began six months ago. Customer demand has shot through the roof says Angelina Galiteva executive director for strategic planning at the Department of Water and Power. She estimates that her department receives 1000 calls on some days about its solar subsidy program. ???Yet while the reliability and cost of solar electric technologies continue to improve solar power today accounts for only a sliver of the national pie chart of energy production -- less than 1 percent. The country produces about 300 megawatts of electricity with solar -- about the same amount produced by a single mid-sized traditional power plant. ???The current trend for photovoltaics is not to erect large centralized solar farms in the desert an experiment that withered in the 1980s but to pursue distributed generation or individual units on scattered rooftops. ???The problem has consistently been the cost of the solar panels which has been too steep to justify them except for customers who are committed environmentalists or techies who like the elegance of the systems. ???Los Angeles began its solar experiment after Sacramento legislators mandated that utilities spend about 3 percent of their revenue on efficiency conservation and renewable energy. For solar the power department committed $ 75 million over the next five years -- enough to subsidize panels on 7500 homes. ???The power department will pay $ 5 for each watt of solar installed on a residence or business. Homeowners typically purchase a one-kilowatt or two- kilowatt (1000 or 2000 watts respectively) solar electric system meaning that the municipal utility would pay between $ 5000 and $ 10000 of the cost up front -- an enticing tax-free offer. ???For many years I wanted to do solar but it was so expensive said LaWanda Geary in the San Fernando Valley who in April had Owen install 32 panels for a two-kilowatt system on her sunny roof. The rebate really got me going. I don't know many times when the government offers to pay half of anything. ???The systems that are eligible for rebates must be tied into a utility's electric power grid meaning that during the day when the sun is shining the panels are adding a stream of electrons used by the home to run its lights and appliances. ???If there is a surplus of solar power that electricity goes back into the power lines and is passed along to a neighbor and the electric meter at the house actually runs backward. Homeowners however are not selling their excess electricity -- they're giving it away to the utility company. ???On cloudy days and at night the home is not being powered by solar energy but getting its electricity the traditional way from the power lines. ???Calculations on savings vary. A two-kilowatt solar system can supply an average-sized home with 20 to 80 percent of its electrical needs depending on how many lights appliances and air conditioners are running and how efficient they are. ???After the subsidy and depending on how the system is paid for (in cash or with borrowed funds) a solar system can pay for itself in as little as six years and as much as 36 years. Owen assumes about 20 years. ???Potential solar clients moreover often mistakenly assume that going with the sun will take them off the grid which is not possible without a large bank of batteries that costs several thousand dollars more. Because the solar panels are still wired to the power grid if there is a blackout the power in a solar house goes off just like everyone else's. If uninterrupted power is needed Owen suggests a diesel generator. ???Galiteva does cite one real advantage of solar: It reduces the electricity that must be purchased from power companies and protects to some degree a solar home from the full brunt of upwardly spiraling rate increases. Unfortunately for solar enthusiasts the L.A. Department of Water and Power which was not deregulated along with the three other major utilities in California has perhaps the cheapest and most stable supply of electricity in the state making the economic argument harder to make. ???To receive the full $ 5 per watt subsidy the L.A. Department of Water and Power requires a homeowner to purchase solar panels from a manufacturer based in the city. The idea is not only to become the solar capital of the world but also to encourage local growth of an emerging industry and create jobs. ???One hitch is that no solar panel makers were located in Los Angeles. ???After lengthy negotiations Siemens Solar Industries based in Camarillo Calif. an hour's drive to the north announced in February that it would open a solar panel manufacturing plant in Los Angeles. But it is not a complete facility: The L.A. plant does only some final assembly and then the units must be returned to Camarillo for final testing and shipping. ???Tina Nickerson a spokeswoman for Siemens Solar estimates her company has sold a couple dozen to L.A. homeowners for the rebate program. But she too reports that the interest from consumers is sometimes overwhelming and that supply has been a problem. Most U.S.-manufactured units are shipped overseas to places such as Germany Japan and Scandinavia which have had generous subsidies in place for years. ???LaWanda Geary had to call Siemens herself to push them to deliver panels for her house -- and she was eligible for the rebate because of a stopgap compromise that allows to Siemens to ship solar panels from Camarillo until its L.A. plant is fully operational. ???Everyone involved concedes there have been bottlenecks. Siemens now says it has enough panels to begin to meet demand and Owen and the city are hoping things will sort themselves out especially if more solar manufacturers are drawn to Los Angeles. But proponents worry about what will happen when the subsidies run out. ???Selling solar is now the easy part Owen says. I could sell a hundred a week. It's getting them up on the roof that's the hard part. LOAD-DATE: May 29 2001 of 98 DOCUMENTS ????????????????Copyright 2001 News World Communications Inc. Washington Times ?????????????????????May 29 2001 Tuesday Final Edition SECTION: PART A NATION INSIDE POLITICS Pg. A6 LENGTH: 1264 words BYLINE: Greg Pierce THE WASHINGTON TIMES BODY: ??TAKING YOUR MEDICINE ??Oakland Mayor Jerry Brown who was once governor of California likens current Gov. ?Gray Davis' handling of the electricity crisis to his own bungling of the medfly crisis. ??Here's an analogy to the medfly crisis Mr. ?Brown said in an interview with the Los Angeles Times' Douglas Foster. ?When I first heard about the medfly I said 'Well it's just a few flies maybe they'll go away. ?Maybe they won't keep reproducing.' And the winter came and they stopped reproducing. ?And then somewhere around February or March I learned about something called 'spring emergence.' As the ground got warmer the larvae turned into flies and more medflies started appearing. It got out of hand and ultimately I had to order malathion spraying. ?It would have been better had I taken forceful action at the first notice of the medfly. ??Mr. ?Foster asked: Are you saying that the governor missed opportunities to act early in the same way? ??Mr. ?Brown replied: There's an analogy there. ?I didn't want to spray because I knew the people in Santa Clara County didn't want to have helicopters spraying malathion over their homes. ?It didn't sound good. ?As governor I wouldn't have wanted to see rate increases either. ?But sometimes you have to take your medicine early. ?It's less bitter than if you postpone it. ??Mr. ?Davis served as Mr. ?Brown's chief of staff when the latter Democrat was governor. ??ENERGETIC CRITICISM ??President Bush's energy plan already under fire from Democrats and environmentalists is dismissed by National Review the conservative magazine as so much political posturing. ??The hyperbolic attacks on the Bush plan by environmentalists (as an attempt to poison the air and kill the caribou) shouldn't trick conservatives into an exaggerated sense of its merit the magazine says in an editorial in its current issue dated June 11. ??The basic thrust of the administration's thinking on energy is sound: a growing economy requires more energy which in turn entails more production. But the Bush plan itself is a political document meant to placate corporate interests environmentalists and everyone in between and so is festooned with an embarrassment of subsidies and incentives that will at best prove an irrelevance. ??As Jerry Taylor of the Cato Institute writes in this issue the phantom energy crisis is already healing itself. ?Power plants are being built at a rate that outpaces Dick Cheney's benchmark of one plant a week. Altogether almost 100000 new daily megawatts of electrcity capacity are scheduled to be available nationwide by next year. ?This is twice the amount of electricity that California now uses on an average day. ?While Cheney has been sitting with his advisers around a White House conference table investors and entrepreneurs have been digging building and refining his energy problem into oblivion. ?By the time all the Bush plan's tax credits have kicked in there may well be an energy glut. ?All of this is thanks to the most efficient energy plan known to man: market pricing. ??WRONG ON BOTH COUNTS ??The buzz in the media after Sen. ?James Jeffords' switch put Democrats in control of the Senate was that President Bush must change his ways. ?He has to become more moderate. ?Why? ?Because only that will prevent more Republican defections and it's the president's one hope for getting his agenda through Congress. ?This is wrong on both counts Fred Barnes writes in the Weekly Standard. ??Bush and GOP congressional leaders bent over backwards to accommodate Jeffords and liberal Democrats on education the senator's top priority. Jeffords bolted anyway. ?On taxes Bush stuck with his conservative tax cut until nearly the end when he compromised just enough to assure passage. Jeffords voted with him Mr. ?Barnes said. ??The truth about the impact of Jeffords' move is that no political earthquake has occurred. ?The Senate is ideologically unchanged. ?The swing votes in the Senate including John McCain are important but they already were. ?There's no clear path to victory for the Bush agenda after taxes and education but that was always true. ?To pass a patients' bill of rights a prescription-drug benefit or missile defense a bipartisan coalition of some sort will be essential. ??Yes there's one big change with Democrats taking over: judges. ?Bush will have a harder time getting conservative nominees through a Senate Judiciary Committee run by Patrick Leahy perhaps the most partisan Democrat on Capitol Hill. ?One more downbeat side effect: Jeffords' announcement overshadowed Bush's tax-cut victory denying him any political momentum he might have gotten from it. ??INCOHERENT REBEL ??Before liberals put James Jeffords on Mount Rushmore can we please stop and note how he's already betrayed Democrats and his own avowed principles by deciding that his defection won't take effect until after President Bush's wrongheaded tax cut has been signed into law? syndicated columnist Matthew Miller writes. ??Any traitor (I mean 'man of conscience') worth his salt shoves the knife in to the hilt - otherwise what's the point? ?Machiavellis throughout history have wisely advised that when you move against the king you'd better finish him off Mr. ?Miller said. ??Yet Jeffords took pains to make sure his switch wouldn't derail the centerpiece of Bush's agenda the very agenda that inspired Jeffords' move and which Jeffords had the power to stop via his action. ??We are dealing in other words with a deeply incoherent rebel. ?This would be a private matter for Jeffords to sort out with his therapist were not his cowardice in this moment of 'courage' so consequential for the country. ??THE LONELY VERMONTER ??In the final analysis Vermont Sen. ?James M. ?Jeffords was out of step with his party making his departure appropriate if politically inconvenient. ?Those who argue that it was the party out of step with Jeffords some political analysts are saying are those who wish the Republicans no good. UPI political analyst Peter Roff writes. ??The conservative low-tax minimal-government Republican Party enjoys national parity with the Democrats something the Northeastern liberal GOP could not achieve. ?Jeffords is in that regard these observers say out of step with victory. ?One GOP consultant went so far as to say 'If the Republicans were doing better in New England Jeffords would not have been so lonely. ?Why is it that the people from states where the GOP usually doesn't win think they can tell the rest of us how to run the party and what we all should believe? ?It doesn't make sense.' (spade) ??There are those in the GOP who regret the loss of the majority that Jeffords' defection brings but very few if any are mourning the loss of the lonely Vermonter Mr. ?Roff said. ??LAST WORDS ??Brill's Content asked PR pros how they would handle Vice President Richard B. Cheney's heart problems. ??It's inconceivable that Mr. ?Cheney can put in the kind of time we're led to believe he is without putting himself at risk one public relations man John Scanlon told the magazine. ?My recipe for controlling the situation would be photo-ops access to his schedule and a couple of exclusive articles. ?He's got to convince people he's fit for the job. ??Unfortunately Mr. ?Scanlon did not live to see his quote in the magazine's June issue the New York Post reports. ?He died of a heart attack. ??* Greg Pierce can be reached at 202/636-3285 or by e-mail at gpierce@washingtontimes.com. LOAD-DATE: May 29 2001 of 98 DOCUMENTS ????????????????Copyright 2001 News World Communications Inc. Washington Times ?????????????????????May 29 2001 Tuesday Final Edition SECTION: PART A NATION Pg. A4 LENGTH: 809 words HEADLINE: Bush faces tough sell on visit to California Davis likely to be rebuffed on price caps BYLINE: Joseph Curl THE WASHINGTON TIMES DATELINE: LOS ANGELES BODY: ??LOS ANGELES - Twenty minutes - that's how long Gov. ?Gray Davis who has accused the Bush administration of ignoring California's energy crisis will have to sway President Bush in a meeting today to consider imposing federal price caps on wholesale power prices. ??His plea likely will fall on deaf ears. ??That's simply not going to happen said one senior Bush official. Both Mr. Bush and Vice President Richard B. ?Cheney who on Friday again blamed the state government of California for the energy crunch oppose cap measures. ??In his first visit to California since the presidential election where he lost the state to former Vice President Al Gore by 54 percent to 41 percent Mr. Bush hopes to sell his national energy policy to a vocal group of opponents. But the hue and cry has been muted of late since residents have battled rolling blackouts and sky-high gasoline prices. ??A new poll released Friday shows 59 percent of Californians many of whom have been longtime foes of nuclear energy now believe the non-polluting energy source may be the way to solve the state's problems. ??Mr. ?Davis' popularity has plummeted. ?The Democrat facing re-election next year and often mentioned as a presidential candidate is viewed as having poor job performance by 60 percent of Californians according to a survey by the Public Policy Institute of California. ??In a small gesture to California Energy Secretary Spencer Abraham yesterday announced plans to increase transmission capacity in California which he said would be a big step in easing rolling power blackouts. ??Abraham ordered the Western Area Power Administration - an Energy Department arm responsible for marketing electricity from federal water projects in 15 Western states - to wrap up planning for building extra transmission capacity. ??The governor has repeatedly blamed Mr. ?Bush who took office four months ago for the energy crunch in California. ?He points the finger of blame far outside the state's boundaries primarily at Washington and Mr. Bush's home state. ??The people that have dropped the ball are the federal government Mr. Davis said last week. ?They need to reimpose a price cap because we're being obscenely gouged by price gougers out of Texas and the Southwest. ?. . . There's a massive transfer of wealth going on from ordinary citizens in California to Texas. ??Mr. ?Davis has also charged that utility companies are withholding power in order to drive up prices a claim the Federal Energy Regulatory Commission has investigated and dismissed. ??Mr. ?Bush and Mr. ?Cheney have often pointed out that California is second only to Rhode Island in conservation efforts but the state is on the brink of an energy supply collapse. ??Still despite the state's failure to build new power plants Mr. Davis says California is entitled to a federal bailout approved by Mr. Bush. ??I'm going to keep asking him to do it because we're part of America. The state the last three years has led American economic growth. ?. . . We're doing everything we can out here he said. ??In the Democratic response to the president's weekly radio address Mr. Davis accused the president a former oil man of being concerned only with the petroleum magnates. ??With all due respect I urge you to stand up to your friends in the energy business and exercise the federal government's exclusive responsibility to ensure that energy prices are reasonable he said. ??Many analysts however blame the state's deregulation scheme and failure to construct adequate electrical generating capacity. ?The price wholesale power providers can charge utilities is not capped but the fee those companies can charge users is capped - resulting in massive debt for providers. ??The state was slow to respond to increased demand the analysts say even though the state is building 10 new power plants four of which will come on line this summer. ??In his national energy policy Mr. ?Bush lays out 105 proposals that focus on increasing domestic supply improving the nation's ability to move energy between regions and increased conservation. ?But the policy is geared more toward long-term solutions - such as decreasing America's reliance on foreign oil - than short-term relief for Californians and motorists nationwide. ??Mr. ?Cheney who heads the president's energy task force and said Friday that California knew for more than a year about the impending energy shortage has promoted nuclear power as essential to America's energy needs. ?He said that at least some of the 65 power plants that need to be built annually to meet future electricity demand ought to be nuclear. ??A poll by the Field Institute last week found many Californians now agree. Although nuclear energy produces 20 percent of the nation's energy California has just two nuclear plants. GRAPHIC: Photo Gov. ?Gray Davis LOAD-DATE: May 29 2001 of 98 DOCUMENTS ????????????????????Copyright 2001 Chicago Tribune Company Tribune ???????????????May 29 2001 Tuesday NORTH SPORTS FINAL EDITION SECTION: News Pg. 6 ZONE: N LENGTH: 514 words HEADLINE: Bush backs WW II project BYLINE: From Tribune news services. DATELINE: LOS ANGELES BODY: ??President Bush promised World War II veterans a Washington memorial that will stand for the ages and paid Memorial Day tribute to America's fallen soldiers before embarking on a three-day West Coast swing to try to ease his political problems in California. ??Bush landed at ground zero of the nation's energy worries Monday night hours after Energy Secretary Spencer Abraham speeded up planning to relieve a notoriously overloaded electricity transmission line through California. ? ??Abraham's action was timed to provide a bit of news for Bush to announce during his first presidential trip to California where he is to hold a politically charged private meeting with Democratic Gov. Gray Davis on Tuesday. Bush's aides said he will pledge to cooperate with California but will stick to his position that no action by the federal government can prevent the rolling blackouts that are expected this summer. ??Abraham ordered the Western Area Power Administration a 15-state marketing arm of his department to complete planning and seek outside financing for an increase in transmission capacity that he said would be a big step in the right direction and a big step forward for Californians. ??California's electricity problems developed over a period of years and cannot be solved overnight Abraham said in a news release. However we can move now on actions that will help avert the same types of problems from recurring year after year. Monday's action is designed to reduce the bottleneck on California's Path 15 which connects the northern and southern parts of the state. ??Davis who is seeking re-election next year has seen his poll ratings plummet as electricity prices soared utilities hit dire financial straits and homes and businesses were surprised with blackouts. ??For most of Monday however Bush focused on U.S. veterans and the solemn ceremonies in two states honoring those who never returned from America's wars. ??Their losses can be marked but not measured Bush said at the traditional Memorial Day ceremonies at Arlington National Cemetery in Virginia. We can never measure the full value of what was gained in their sacrifice. We live it every day in the comforts of peace and the gifts of freedom. ??Bush also laid a wreath at the Tomb of the Unknowns. ??Later he traveled to Mesa Ariz. to pay tribute to veterans at the Champlin Fighter Aircraft Museum. He asked the crowd to observe a nationwide moment of silence at 3 p.m. Arizona time. ??Any foe who might challenge our national resolve will be repeating the grave error of defeated adversaries the president said. ??Bush opened the day at the White House where he signed legislation to construct a World War II monument on the National Mall a setting criticized by some. Bush said the monument between the Washington Monument and Lincoln Memorial will stand for the ages. ??I will make sure the monument gets built the president told an audience of veterans in the yellow-curtained East Room among them former Sen. Bob Dole (R-Kan.) who has supported the memorial. ??. GRAPHIC: PHOTOPHOTO (color): President Bush and Maj. Gen. James T. Jackson attend Monday's wreath-laying at Arlington National Cemetery's Tomb of the Unknowns. AP photo by Ron Edmonds. LOAD-DATE: May 29 2001 of 98 DOCUMENTS Associated Press The materials in the AP file were compiled by The Associated Press. ?These materials may not be republished without the express written consent of The Associated Press. ???????????????????????May 29 2001 Tuesday BC cycle AM Eastern Time SECTION: Domestic News LENGTH: 604 words HEADLINE: Bush announcing low-income aid but no price caps BYLINE: By SCOTT LINDLAW Associated Press Writer DATELINE: LOS ANGELES BODY: ??President Bush traveled across the country to deliver news Gov. Gray Davis doesn't want to hear: He won't force down soaring electricity prices that have cost California nearly $8 billion since January. ??The Republican president and the embattled Democratic governor arranged a 20-meeting Tuesday to talk about California's energy crisis but there was no indication they would break their stalemate. ??Bush opposes price limits on wholesale electricity that utilities buy arguing they do nothing to address supply-and-demand issues at the heart of the crisis. ??Davis contends federal energy regulators are ignoring their mandate to ensure just and fair electricity prices. ??With no sign of a break in the deadlock each side maneuvered for maximum advantage from Bush's first full day in California as president. ??Davis in an interview Tuesday on ABC's Good Morning America defended his record on licensing more power plants. ??We've licensed 15 plants. Ten are under construction four will be online this summer four next summer and by the end of 2003 we will have built our way out of this problem. But between now and then we are getting gouged unbelievably Davis said. ??The Bush administration timed positive energy announcements to coincide with the president's visit. ??At the Marine Corps base at Camp Pendleton Bush was announcing the expansion of a program that provides federal money to help low-income residents pay for power. ??Bush was proposing $150 million in addition to $300 million already budgeted for a component of the Low Income Home Energy Assistance Program to provide special help to cash-strapped residents of California and certain Midwest areas such as Chicago a senior administration aide said. ??Bush was also reminding state residents of his order that military facilities in the state cut peak-hour usage by 10 percent. ??To alleviate an electricity bottleneck on a crucial south-north transmission path the Department of Energy announced that the Western Area Power Authority will try to raise money from a variety of private and public entities to finance a crucial additional lines. ??The Bush administration is taking a leadership role in addressing a long-neglected problem in California's electricity transmission system said Energy Secretary Spencer Abraham. California's electricity problems developed over a period of years and cannot be solved overnight. However we can move now on actions that will help avert the same types of problems from recurring year after year. ??Davis had a letter for Bush from top economists who maintain price caps are justified and necessary. ??Aides to the governor expressed amazement that Bush would travel all the way to California with no major announcement in hand and predicted Davis would respond with polite rage. ??Mindful of the national stage he commanded Davis planned a news conference to air his grievances. And he convened a panel of families he said have been victimized by the energy crisis in the same hotel where Bush was staying. ??Davis wants Bush to pressure the Federal Energy Regulatory Commission to impose stiff price caps. ??Tuesday limited caps ordered last month by FERC go into effect in California but only when electricity reserves fall below 7.5 percent in the state - a step Davis called inadequate. ??Protesters planned demonstrations in Los Angeles and at Camp Pendleton in San Diego County. ??Bush also arranged a speech on energy and trade to the Los Angeles World Affairs Council and planned to president over a closed-door energy round-table discussion. GRAPHIC: AP Photos DSM106 KDJ102 LOAD-DATE: May 29 2001 of 98 DOCUMENTS ???????????????????The Associated Press State & Local Wire The materials in the AP file were compiled by The Associated Press. ?These materials may not be republished without the express written consent of The Associated Press. ???????????????????????May 29 2001 Tuesday BC cycle AM Eastern Time SECTION: State and Regional LENGTH: 594 words HEADLINE: Stakes are high for Davis meeting with Bush BYLINE: By GARY GENTILE AP Business Writer DATELINE: LOS ANGELES BODY: ??With California facing a summer of outages Gov. Gray Davis was to meet President Bush to press for a federal cap on energy prices. ??But Davis wasn't expected to win any concessions during the 20-minute Tuesday meeting where he's expected to point to Texas energy makers. ??Davis has appeared on national news programs attacking Bush for opposing price controls on wholesale electricity and suggesting the president has ignored price-gouging by Texas-based electricity generators. ??The president did not create this problem but he is uniquely situated to solve it Davis said Monday. What I'm going to ask him to do with all respect is to enforce federal law. The money that leaves this state goes directly to energy companies in Texas and the Southwest. ??If Bush refuses to administer price controls as expected Davis can use that as ammunition in his sparring with the administration. ??Bush has blamed California officials for the state's power woes and said price controls won't solve shortages. Instead they said Bush plans to stress his efforts to conserve energy in federal buildings and will bring one or two new initiatives to the table. ??One of them commits the federal government to helping organize a consortium to build more power lines for the state. ??Energy Secretary Spencer Abraham directed the Western Area Power Administration a federal agency to take the first steps to clear the way for building more transmission capacity between southern and northern California. That would help relieve a transmission bottleneck in the central part of the state. ??While this will not help this summer Abraham said in a statement the line improvements when completed will help avert the same types of problems from recurring year after year. ??The stakes of the meeting are high for both politicians. ??Davis who has been mentioned as a Democratic challenger to Bush in 2004 wants federal help to solve an energy crunch that threatens rolling outages this summer and has cost state taxpayers nearly $8 million since January - the price of buying power for two cash-starved private utilities. And his plan to rescue one of those companies reportedly is faltering. ??Leaders of both the state Senate and Assembly oppose a $3 billion-plus plan to bail out Southern California Edison by buying its power lines the Los Angeles Times reported Monday. ??Bush meanwhile needs to mend fences in vote-heavy California. The Republican president lost badly here in November and polls show most Californians dislike his handling of their energy crisis. ??Bush's Tuesday agenda was heavy on energy issues. At the Marine Corps base at Camp Pendleton near San Diego Bush was to highlight his order that federal agencies and installations cut back energy use. Then it was on to Los Angeles to discuss his energy plan in a speech to the Los Angeles World Affairs Council. ??Bush was confronted by the issue virtually as he stepped off the plane Monday in Los Angeles. Rep. Brad Sherman D-Los Angeles escorted the Academic Decathlon national championship team from El Camino Real High School in Woodland Hills to meet Bush. He told the president California needs regulation of electric generators. ??The president seems to believe just by instinct that rate regulation reduces supply and also by instinct that all those in the energy industry are fair people who are not trying to game the system Sherman said. Anyone who studies the facts in California knows that power is being withheld in order to drive up the price. LOAD-DATE: May 29 2001 of 98 DOCUMENTS ????????????????Copyright 2001 Burrelle's Information Services NEWS ??????????????????????SHOW: WORLD NEWS NOW (2:00 AM ET) 28 2001 Monday TYPE: Newscast LENGTH: 447 words HEADLINE: PRESIDENT BUSH VISITS CALIFORNIA WHERE POLITICIANS ARE CRITICAL OF HIS LACK OF ACTION FOR THEIR ENERGY CRISIS ANCHORS: DEREK McGINTY REPORTERS: JOSH GERSTEIN BODY: ??DEREK McGINTY co-anchor: ??When Air Force One touches down in California today it will mark President Bush's first visit to the Golden State since taking office. Now that fact has not been lost on Governor Gray Davis who has accused the president of ignoring his state's power crisis. ?As ABC's Josh Gerstein tells us Mr. Bush's visit could have major ramifications for his presidency and his party. ??JOSH GERSTEIN reporting: ??(VO) Since taking office President Bush has visited 28 states but until this week he had not found time on his schedule to visit the nation's most populous state California. ??Mr. DAN SCHNUR (GOP Political Consultant): Because the state is going through such extraordinary times right now because of the energy crisis his absence has been much more noticeable and the discussion about it's been much more heightened. ??GERSTEIN: (VO) Democrats have begun an aggressive effort to paint the president and other Republicans as obstacles to resolving the energy crisis. ??Offscreen Voice: (From TV Commercial) President Bush has offered no relief to hard-pressed rate payers. ??Text: ??The President...believe(s) that the issue is mostly a California matter... ??GERSTEIN: (VO) On Tuesday Mr. Bush meets with California Governor Gray Davis. ?He and other Democrats want the federal government to impose caps on wholesale prices for electricity. ??Representative ANNA ESHOO (Democrat California): Our people are hurting. We're bleeding in the sand. ?We need a tourniquet and the president is the one that can do this. ??GERSTEIN: (VO) During his trip President Bush plans to highlight the federal government's conservation efforts but aides say he will not endorse price caps. ??Mr. TUCKER ESKEW (Director White House Media Affairs): The president believes that capping wholesale prices would do nothing to lower demand or increase supply the two fundamental solutions to any energy problem such as this. ??GERSTEIN: Holding the line against price caps may have political costs. Most analysts give Mr. Bush little chance of winning California in 2004 but Republican congressmen there face re-election next year. ?So far five of them have endorsed some kind of limit on electricity pricing. ??Representative RANDY CUNNINGHAM (Republican California): We're in an extreme emergency right now. ?It takes extreme measures. ??Unidentified Woman: We are in rolling blackouts. ??GERSTEIN: (VO) While electricity may be in very short supply in California this summer the president and politicians of all stripes are likely to find there's more than enough voter anger to go around. ?Josh Gerstein ABC News the White House. LOAD-DATE: May 29 2001 | other | formal | 1 |
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Protecting Confidential Information | The exciting cocktail of credit derivatives and Enron Online raises significant novel legal risks for Enron. As most of you will by now know probably the most significant risk would arise in a situation where Enron has confidential information about a reference entity and wrongfully uses that information in pricing the credit derivative on that entity. This could well result in legal proceeding against Enron. In practice an allegation of misuse of confidential information can be very difficult indeed to defend without adequate procedures in place to safeguard that information. In fact Enron's credit trading will as you know rely strictly on publicly available financial information and will not involve the use of confidential information unless the reference entity has specifically consented. Nevertheless to avoid the appearance of impropriety we are taking additional steps to consider confidentiality agreements we have in place with potential reference entities before deciding whether or not we will quote prices on such entities. Against this background is the ever-present risk of insider dealing. This crime - which in the UK carries a maximum prison sentence of 7 years and an unlimited fine - is committed where a person (or member of their family etc) deals in the securities (shares bonds or derivatives on them) of a listed company on the basis of unpublished (confidential) price-sensitive information. We do not expect at this time to deal in publicly traded bonds as part of EnronCredit.com but insider dealing is relevant to the conduct of Enron staff and could affect other parts of our business. In addition SFA rules in the UK require the safeguarding of confidential information the misuse of which is a serious disciplinary matter. In order to ensure the success of this new business and that confidential information is not misused either by Enron or its staff we are now introducing important new policies and procedures in Europe and in the US. These procedures have been drawn up specifically for your credit trading group by lawyers in London Houston and New York and are attached. Please familiarise yourself and any future member of the group with these procedures. Once you have read and understood the attached procedures each one of you is required to confirm this to me in writing (or by note mail). Please note that similar procedures have been distributed to the key business heads in Europe who may have confidential information about reference entities (similar procedures are being disrtibuted to US business heads). This requires them to safeguard confidential information and to abide by the Restriced List procedure described below. Nevertheless you should treat your group as being within a Chinese Wall and see it as your personal responsibility not to solicit or accept from anyone in Enron information about reference entities which may be confidential. Thank you for your co-operation in implementing these important new procedures. I look forward to receiving your confirmation mentioned above (which is also described in the procedures). Best regards Paul | other | formal | 5 |
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WPTF Friday Deliver Unto Us A Burrito | THE FRIDAY BURRITO ...more fun than a fortune cookie and at least as accurate. =01&Are those folks smoking crack?=018 he asked in an outrage. My friend = Ol=01 Dave in Houston has trouble understanding the workings of our power business here in California. In fact so do I. Yesterday=01s Joint Senate/Assembly Committee on Energy and Natural Resources did nothing to improve either Dave=01s or my understanding of the national embarrassment California is perpetrating with electricity deregulation. =01&The next thing you know they will be taking property and forcing utilities to build power plants and transmission=018 he mused between sips of Dixie longneck beer and chomps of jalapeno peppers. =01&Come to think of it Dave they did say something about that. Yeah=018 I recalled =01&Senator Peace was expounding on his favorite idea which is forcing the ISO or the utilities to build peakers and not let the market build them. I can=01t remember if that was before or after he suggested to EOB Chairman Kahn that the ISO and the PX should be folded into State agencies under the direction of the Electric Oversight Board.=018 I know what you are thinking right now. The next thing you know California will have regulated retail rates. That recipe should be out of the PUC=01s oven sometime next week. =01&Well the power marketers are jigging the system bidding up to the ISO=01s bid cap. There is no way you can tell me that a generator planned to make $750/MWH in its pro forma=018 Dave added. =01&So you agree with Herr (Hair) Peace! You don=01t believe in markets=018 I retorted. = =01&Oh I believe in them but I remember when I was short on a 300 MW trade and without any notice or advanced warning the price in the Midwest market went against me=018 Dave recalled. =01&I called everyone who I tra= ded with and they had nothing. I finally called XXXXX and I asked what will it cost for 50 MW?=018 =01&Why didn=01t you ask for 300?=018 I wondered. =01&I didn=01t want to= show him my position. You get hosed when you show the buyer your position. Ask for 50 first=018 Dave chided. =01&What happened?=018 =01&Oh they offered to sell for $150/MWH. I said I= =01d take it and then said I needed another fifty. He asked $300. I took that and he priced the next 50 MW at $600=018 lamented Dave. =01&He just wanted to see how far he could push me. That=01s what I mean when I say the traders are jigging it.=018 =01&But Dave you old communist your forgetting the trading function is what mitigates the risk. The traders are the in between people who guess at the price. Sometimes they guess right and sometimes they guess wrong. But the damage or the reward is on their book not passed on to the ultimate consumer. It has nothing to do with the marginal cost of a generating plant.=018 And there you have it. Put in a price cap and the traders have a target for which to shoot. I can=01t prove the following yet but I=01l= l wager with any of you that as the price cap level dips down the average trading price climbs even as the so-called =01&dysfunctional=018 price spik= es are eliminated. Consumers get hosed and the fundamental economic principle is upheld which is one can never be made better off with the imposition of an additional constraint. I feel better already. Here is what is on our short agenda this week. >>> Things in the Mailbag >>> Things in the People=01s Republic of California @@@ The ISO Replies to the EOB Report @@@ Reflections on a Day of Senate Hearings @@@ PUC Issues OII on Functioning of Wholesale Market >>> Odds & Ends (_!_) >>> Things in the Mailbag It has been awhile since we put the mail feedbag on and had a munch. Here is what my friends have been writing me. FPL Energy=01s Steve Ponder was only too quick to tell me =01&Please Gary= no more whining about your computer. How old are you?? Is this the year you get the AARP letter??? A very depressing moment. Do you really not know how to spell Morro Bay??? Please let us know what is going on with your son's hockey team?? Don't forget the cigars for Moron??? Bay!!!!=018 It is good to have friends like Steve. They make the pain of separation so much easier. And Steve when you FPL guys get that Entergy merger sorted out in a dozen years or so you let us know. I want to participate in the name selection for the new entity. How about Fentergy PLus? Next from the PX=01s Mark Hoppe who writes =01&As you've heard from others I don't know quite how you manage to knock out all this material each week. The burrito is informative humorous and usually contains a sprinkle of irony tragedy (ISO Drama). Though you are usually neutral regarding the PX you are not unduly negative which I appreciate. I think we do a pretty good job over here and so often people in the industry forget the amount effort and challenge it took the PX to successfully open this market.=018 Thanks Mark. I just want you to know that my ability to write this stuff every week is not constrained by the facts or evidence. I have learned from watching Herr (Hair?) Peace that as long as you can talk (write too) fast and have conviction in your statements regardless of how groundless they may be you will have a willing and eager audience. A few weeks ago I received from the PX=01s Jennifer Sherwood a note which she wants you to know are her opinions not necessarily the PX=01s. It=01s okay Jennifer. I paid Georgeyesterday the $20 I owed him for that sham Rose Bowl bet (remember? Stanford lost) and your opinions are cool with us. =01&Just curious - has anyone been comparing high unleaded prices to high CA electricity prices? What I mean is we are up in arms about how we should protect the unfortunate San Diego consumer who can't afford to keep the AC on. But what about the inflated unleaded gas prices the whole country has seen over the last few months? No effort is made by the government to shield the consumer from how much it costs to fill their gas tank. No mention is made of those who can't afford to drive to the grocery store because they can't afford the extra 15 or 20 cents a gallon. The costs are passed along to the consumer without pause. Granted there are differences between the unleaded market and the electricity market in terms of demand-side responsiveness but then again is it that much different to say =01+I can't drive today because gas is too expensive=01 vs. =01+I can't turn up the AC today because it's too expensive.=01=018 Finally from one of our [secret] Washington readers and I am not telling who I received the following: =01&I ... broke down and listened to the [ISO Governing Board] discussion and vote. Ugh! I too noted that the speak fast was applied to everyone but Herr Peace. My goodness what a mess we have. I loved Jerry's picture in USA Today -- it spoke volumes. My sources at FERC tell me though that we should keep an eye out for {FERC Chairman] Hoecker to do something really ... [Censored] ... for political reasons. Given no Commission meetings til September the only way to act is by unanimous consent so I would hope he can't do all that much.=018 >>> Things in the People=01s Republic of California @@@ The ISO Replies to the EOB Report Several of you people commented to me that the ISO=01s reply to the PUC/EOB report was very good. I decided to excerpt the best sections of it for the Burrito. The full document can be found on the ISO=01s website. =01&... the [PUC/EOB] Report asserts that the suspected activities of certain generators on June 13 created frequency instability leading to the Bay Area blackouts the following day. In fact the events of June 13 and June 14 were completely independent of one another. The voltage instability on June 14 was caused by system conditions on that day alone -- exceptionally high loads insufficient generation in the specific local area and transmission constraints that prevented the import of generation from outside the area. =01&The Report states that the ISO =01&never tried=018 to call upon consume= rs to reduce demand in order to avoid the Bay Area blackouts. In fact the ISO had in place on June 14 a number of demand response programs designed to reduce load including the Summer 2000 Demand Response Program under which customers have agreed through a prior solicitation to curtail energy use in exchange for a fee =01&The Report makes a number of assertions concerning the prices paid by =01+purchasers=01 of energy as a result of the recent price spikes (e.g. $= 1.2 billion in the month of June alone). These assertions leave one with the mistaken impression that these prices reflect amounts actually paid by the UDCs and/or passed through to customers. However in determining the total cost of energy one must determine the impact of any forward contracts entered into by the UDCs in advance of the wholesale energy markets. These contracts which are designed to =01&lock-in=018 a specific price in advance of real-time or near real-time market activities are specifically designed to mitigate the impact of price volatility and are standard in all commodities markets. We have reason to believe that some of the UDCs were substantially hedged during the period of the recent price spikes. =01&In a similar vein the reports asserts that California =01&might well= =018 have saved $110 million dollars had a $250 price cap been in place in May and June. This assertion assumes that all energy purchases would have been made at or below the $250 bid cap. In fact during times of peak demand when all of the state=01s generation has been exhausted the ISO competes with neighboring regions for available generation. In order to secure the necessary power the ISO must purchase on a bilateral basis this energy from resources located outside of the ISO=01s control area. =01&The Report asserts that California power markets =01&are not now competitive=018 and implies erroneously in our view that this is the normal state of affairs. It is not. The Market Surveillance Committee has noted that =01&market power in the California energy market appears to arise primarily during periods of peak demand=018 and warned that demand growth would increase the incidence of market power during the summer of 2000. =01&The Report asserts that the ISO is answerable only to a self-interested board and not to the citizens of California. This simply is not the case. The ISO is subject to the provisions of the Federal Power Act and to the rules and regulations of FERC which dictate in part that wholesale energy rates must be just and reasonable and in the public interest. The ISO further operates under a detailed tariff reviewed and approved by FERC. Every change to our market design and virtually every aspect of the ISO=01s business is subject to review and scrutiny by FERC. The FERC process provides substantial opportunities for input by the state agencies and such agencies have in fact been active participants in the FERC proceedings. =01&The Report asserts that California supply conditions have been affected by restructuring and that somehow the restructuring choices have made California more vulnerable to supply shortages. This assertion is unfounded. Significant load growth in California and neighboring states coupled with a lack of significant infrastructure investment in both generation and transmission have caused this vulnerability. Restructuring has increased proposed power plant applications many fold. Only by immediate and sustained attention to streamlining approval and siting processes for both of these critical infrastructure elements will this significant shortage be addressed.=018 >>> Things in the People=01s Republic of California @@@ Reflections on a Day of Senate Hearings If you want to imagine a scary sight imagine then twelve California legislators gathering together in one hearing room to rectify the wrongs of electric restructuring. Also imagine as if you are in the Twilight Zone witnesses that are slow on their feet and reckless in their facts. Then you get a glimpse of what yesterday=01s Joint Senate/Assembly hearing was like. It started over two hours late. The Senate was busy congratulating one of their own who is term-limited out next session and they wanted to heap on the glory. That said the show began with CEC Commissioner Bill Keese. Mr. Keese has one story and regardless how well he tells it and he does it is always the same story. It is the heat storm story. One can imagine in the heat storm story a lead character who is a single-mom call her Lady-Bird Bowen who travels across an angry land with her precocious pre-teen child Stevie Wonderboy. They are searching for electric power plants in the dessert which by the grace of God have been shipped to other countries which have more liberal returns on investment. Being the first speaker Mr. Keese took at least half the heat (storm) of the day. The rage of the Energy Fuhrer was palpable. Last week San Diegans shed 350 MW of load last week to save the entire system and did not receive one penny of compensation (I=01m not making that up ... He said it). He is sick of hearing about demand management as being a solution for the problem over the last five years and he is about done listening. People in San Diego are depressed by the sudden price hikes. Yikes! Keese did mention that the California reserve margin has sunk to 7% but in neighboring Arizona the reserve margin is -1% or -2%!! Mr. Keese correctly pointed out that electric power is not solely a California problem it is a regional problem. One member of the Committee asked what the legislature could do to speed up the power plant siting and construction process? Keese referred to Governor Gray Davis=01 Executive Order issued last week to which the CEC plans to respond soon date uncertain that lays out a 6 month permitting time line. The six months are enough if the applicant has the land secured zoning okayed transmission access and air offsets. Hmmmmmm. That alone might take six months before you get to the CEC. The next panel included Mr. Kahn of the EOB and Ms. Lynch. I went too hard on her last week calling her Let=01s Do Lynch. That was a 0.8 TPC. Sorry. I promise to be nicer starting now. The Energy Fuhrer instructed Ms. Lynch to use her authority to order SDG&E to divert the pass through of funds from the customers to the PX until the dysfunction of the market is cured. Put it in an escrow account. Ms Lynch promised to review this option at her August 21 PUC Meeting where she will enact SDG&E rate caps (told you). The star of the day I thought was FERC General Counsel Doug Smith. Mr. Smith comes to Sacramento. Isn=01t that a switch? Mr. Smith came in place of Mr. Hoecker thank the Lord. Mr. Smith put into FERC-eese what these 12 legislators could not get through their heads any other way. The 12 angry legislators were looking for a way for FERC to declare the wholesale market as non-competitive and then ask the generators to give back the money they over collected. When can we do that? Mr. Smith answered as only a FERC attorney can answer. There is a process. It takes time. You must have evidence. FERC uses a three-part criteria for assessing whether or not market based rates are allowable. It=01s based on market concentration and dominance not the existence of high prices. You would have to sue FERC in federal court and the best you could hope for is for FERC to reconsider its decision upon remand from the US Court of Appeals. Slowly the wind came out of the sails of the gang of 12. They were stumped. Herr (Hair?) Peace screamed couldn=01t you Mr. Smith of FERC today use your authority to declare the markets non-competitive that generators who had market based rates have exercised market power and retro-actively implement a $250 rate cap across the Western region? Like a wheezing accordion Mr. Smith played back and forth the familiar strains of music like a solo street musician on the corner. Back and forth: the process the process the process. There have been times in the past I hated the process at FERC. Today I have a renewed respect for what process affords me and you ... Freedom from the tyranny of a mob. For the remainder of the hearing they focused on remedies that could be undertaken by the PUC. >>> Things in the People=01s Republic of California @@@ PUC Issues OII on Functioning of Wholesale Market Well the official title is =01&Order Instituting Investigation into the Functioning of the Wholesale Electric Market and Associated Impact on Retail Electric Rates in the Services Territory of San Diego Gas & Electric Company=018. I like my title better. This Order or OII was issued at the last business meeting of the Commission on August 3. It calls for an investigation of the wholesale markets responses from the three UDCs and a pre-hearing conference in San Diego on August 29 at the San Diego Convention Center. Here are the questions the PUC wishes us to address: =01=07 What bill payment options should be provided to assist residential a= nd small commercial customers? (What does this have to do with the functioning of the wholesale market?) =01=07 Should SDG&E be authorized to participate in bilateral contracts or other supply procurement activities? How should the Commission assess reasonableness? Are SDG&E=01s purchasing activities serving its customers on just and reasonable terms? =01=07 What is SDG&E=01s obligation to minimize energy costs for its curre= nt customers? =01=07 How should the Commission Attorney General EOB ISO and PX coordinate to investigate wholesale market events behaviors and irregularities? How should state/federal concerns be addressed? =01=07 What are the causes of the price increases? Are anticompeititve practices causing some of the price increases? Are there mechanisms the Commission can employ to make ratepayers whole? >>> Odds & Ends (_!_) As promised last week I have a message from our event coordinator Barb Ennis regarding the upcoming WPTF General Meeting on October 5 and 6. Listen up! She writes: Hi Folks...... Well it is almost that time again....WPTF's October General Meeting will be held at the Inn at Morro Bay Sixty State Park Road Morro Bay California 93442. Their phone numbers are: 800-321-9566 or 805 772-5651. The dates are October 5th and 6th Thursday and Friday. The Inn at Morro Bay will also honor the same room prices if you choose to also stay WednesdayFriday or Saturday. We have blocked 24 rooms for October 5th. Which range in prices: Petite Room with Queen Bed $89. (16 rooms) Pool and Garden View with King Bed and Private Hot Tub $152. (4 rooms) View of Bay rooms with two (2) Double Beds $152. (4 rooms) All these rooms are on a First come basis. SHUTTLE Information: The San Luis Obispo Airport is about 25 to 30 minutes by shuttle NOTE: FOG CAN BE THICK AT THIS AIRPORT..FLY IN THE AFTERNOON ....... Ride-On Shuttle (805) 541-8747 Rates Door to Door are $22.00 per person for the 1st person and ONLY $2.00 per person afterwards....SO if some planning can be done on the Airline Arrival times through Barb and one person books the Shuttle for a Group....the cost is substantially lower. Now for(e) our Golfers....Tee times have been booked for Thursday October 5th starting at 8.07am 8.15am and 8.22am (space for 12 Golfers)..Sorry for the early morning start. The Golf Course has a Group going out from 8.30 am until 11.30am. The Golf Course is across the Inn at Morro Bay and your contact at the Course is Pat (805) 471-4360. For folks that may want to tour Hearst Castle is located only 30 minutes from the Inn at Morro Bay. Within walking distance of the Inn is a Natural History Museum a marina with kayak and canoe rentals. Shopping and dining along the Embarcadero and some great hiking. World class wineries and tasting rooms numbering over 40 are located within a short drive from the Inn. If you choose to drive it is 3-hours from San Jose American Eagle Skywest and United Express all serve the local Airport in San Luis Obispo. Duke Energy is willing to conduct a Plant Tour (A woman=01s only plant tour will be led by Duke=01s Carolyn Baker) if some may wish to do so. The sooner we can do the booking the better. So bring the Family and we are looking forward to seeing you at WPTF's General Meeting. Agenda for October General Meeting Thursday October 5 3:30 pm - 5:30 pm All Member=01s Meeting 7:00 pm - Dinner Reception (We are still working on the details) Friday October 6 9:00 am Opening Remarks and Program Irene Moosen - Distributed Generation Case at the PUC Bill Freddo - Confessions of a Merchant Plant Operator in New England ISO Dr.Frank Wolak - Topic of his choice Open Session - Everyone Gets a Chance to Speak Lunch provided at Noon. The object of humor notwithstanding and seeing how the flow of new material has slowed a bit my wife provided this week=01s laughter. She didn=01t have to attend the Senate hearing. Subject: The Brilliance of Women There were 11 people hanging onto a rope that came down from a helicopter. Ten were men and one was a woman. They all decided that one person should get off because if they didn't the rope would break and everyone would die. No one could decide who should go so finally the Woman gave a really touching speech saying how she would give up her life to save the others because women were used to giving up things for their husbands and children and giving in to men. All of the men started clapping. Have a great weekend y=01all [applause] gba | other | casual | 3 |
RE: Dates for Emerson Meeting | I'm suggesting that we make progress on it before we agree to a CEO summit Nate Ellis@EES 03/02/2001 02:01 PM To: Steven J Kean/NA/Enron@ENRON cc: Subject: RE: Dates for Emerson Meeting Agreed. It's great that these guys want to sell us product but what's in it for Enron? I'm already pushing that point with Emerson and will continue to do so. I definitely want to bring it up at the CEO summit. Thanks for your input Steve. Nate From: Steven J Kean@ENRON on 03/02/2001 01:16 PM To: Nate Ellis/HOU/EES@EES cc: Subject: RE: Dates for Emerson Meeting I think I can recommend that the time be set aside but it would be helpful if we pointed out to Emerson that it must be clear that there is a clear opportunity for Enron before we schedule the meeting. Maybe you could use this to get some progress on a bundled outsource deal. Nate Ellis@EES 02/28/2001 03:05 PM To: Marty Sunde/HOU/EES@EES Jeremy Blachman/HOU/EES@EES Michael Mann/HOU/EES@EES Troy Henry/HOU/EES@EES cc: Martin Wenzel/SFO/HOU/EES@EES Micah Hatten/HOU/EES@EES Joannie Williamson/Corp/Enron@ENRON Sherri Sera/Corp/Enron@ENRON Steven J Kean/NA/Enron@Enron Subject: RE: Dates for Emerson Meeting Gentlemen: Situation: Emerson is aggressively seeking at least a three hour time slot for a meeting with Jeff Skilling in April or May 2001. Mr. Skilling's office is hesitant to allocate more than two hours without your recommendation. Emerson is being persistent. The key players from Emerson are David Farr newly appointed CEO and James Berges President and effectively the leader of Emerson's strategic development effort. It is anticipated that both would attend the meeting. Emerson execs want to (i) get to know Mr. Skilling and other senior management (ii) discuss mutual business opportunities and (iii) hold a discussion about the transformation of Enron from a pipeline company to its current form. The last point has to do with Emerson's continuing self-transformation effort and how Enron achieved its transformation. I need your advice and recommendation. Please respond by e-mail or telephone (x5-4040). Background: Emerson initiated this latest round of contact with Enron in November 2000 when Mike Train and Mark Proudfoot both Emerson VPs of Corporate Development visited the Enron building hosted by Steve Kean. I met them at that time. Since that initial meeting Emerson has aggressively pursued a business joint venture as preferred supplier with Martin Wenzel and the distributed power business I believe with promising results. My sense is that Emerson is uniquely positioned as EES' partner in that business. I am waiting to receive an update from Martin. Emerson is also interested in becoming a preferred supplier for EES's DSM business. While we generally support that idea we are pressing Emerson to reciprocate by becoming a customer of our bundled outsource business. Emerson is highly decentralized and our efforts to date have been unsuccessful. I want to use the meeting as an opportunity to press Emerson to consider a proposal from EES's bundled outsource business. Please let me know your recommendation on this matter. Thanks Nate ----------------- | other | formal | 3 |
RE: Eeegads... | I'll be there as will Sandi McCubbin. Are you interested in going? I thought not. | meetings & events | casual | 0 |
Re: NARUC Summer Committee Meeting | Is Jeff available? ----------------- | other | formal | 3 |
RE: CONFIDENTIAL Information Request for Henry Bath US | I do not have any of this information -- Cathy is the Metals plan the same as Enron domestic? If so then I would suggest that Chris Rahaim participate in this process. Feel free to work with me on it but I just don't have any data. Thanks. Michelle | other | formal | 3 |
California Power Crisis Update (No. 10) | We have been pulling together these weekly(sometimes more often) summaries for internal purposes. Would you find it helpful to be on the distribution list? Hope you are doing well. Look forward to touching base soon. | other | friendly | 0 |
RE: reply | Michael It looks like we have sponsorship. Jeff Dasovich at Enron (GSPP ~'90) thinks he can get commitments from his company and others. He's excited about the idea. Severin Borenstein of Haas and UCEI and Frank Wolak at Stanford are very interested. When you return from vacation could we have a conference call with you me Jeff and whoever at the school might be involved to proceed with the plan? We were thinking perhaps a one day session in October with dinner the evening prior with a few panels featuring widely varying points of view. We'll need to figure out how to get press attention among other things if/when we talk. Enjoy your vacation. Thanks. Rob > | other | formal | 5 |
Re: Advisory board meeting | While the more-open gas market may have more tools available than in electric markets market solutions have been proposed as an alternative to legislated rate caps in the hard hit San Diego market. Gavin -- please send Irwin copies of the articles on the offers made in San Diego. Stelzer@aol.com on 08/25/2000 03:14:04 PM To: skean@enron.com cc: Subject: Advisory board meeting The WSJ report of 8-23 on the power/price situation in Con Ed's territory contains the following: And the tools to hedge prices such as those that exist in other commodities markets aren't fully developed yet for th fledgling deregulated electricity industry. That might be worthy of comment in my talk. Anything I should see on the subject? | other | formal | 3 |
Follow up for Ken | Rep Scott McGinnis (colo) told Ken that he would like to be briefed on the California and broader energy situation so that he can speak out on the issue. Also don't forget that we need to go see your buddy Newt! | other | casual | 3 |
California Power Markets | null | energy trading | neutral | 0 |
CONFIDENTIAL - Disclosure Schedules | > Attached please find copies of the following schedules and annexes to the > Purchase and Sale Agreement: > > 1) the Master Parent Disclosure Letter > > 2) the schedules for India > > 3) the schedules for EGEP > > 4) the schedules for APACHI and > > 5) Annex G listing the contracts that have been excluded for > confidentiality reasons. > > Please note that the schedules for the SoCal assets will follow shortly > under a separate cover. In addition we plan to circulate copies of the > CALME and Wind schedules tomorrow. > > If you have any questions or any problems opening any of the attachments > please do not hesitate to contact either Gray Sasser at (713)758-3425 or > Donnie Roark at (713)758-3374. > > > > > > <<Master-Disclosure-Ltr.DOC>> <<India-Schedules.DOC>> > <<EGEP-Schedules.DOC>> <<APACHI-Schedules.wpd>> <<Annex G -- > > > > +++++++++++++++++++++++ > CONFIDENTIALITY NOTICE > +++++++++++++++++++++++ > The information in this email may be confidential and/or privileged. This > email is intended to be reviewed by only the individual or organization > named above. If you are not the intended recipient or an authorized > representative of the intended recipient you are hereby notified that any > review dissemination or copying of this email and its attachments if > any or the information contained herein is prohibited. If you have > received this email in error please immediately notify the sender by > return email and delete this email from your system. Thank You > > - WORD v1 Summer Disclosure Letter.DOC - 00 India Schedules.DOC - 285641_1.DOC - Lightning-Schedules3.wpd - Annex G -- Excluded Information Based on Confidentiality Requirements.DOC | other | formal | 3 |
House Energy Committee Passes First Energy Package | Late this morning the House Energy and Commerce Committee adoped the committee print as amended of an energy package that addresses conservation clean coal renewables hydro nuclear and boutique fuels. The vote was 50 to 5 to report the bill. Other committees -- Ways and Means Science and Resources -- also moved their energy bills this week. Thus the House is on track to consider a merged package before the start of the August Recess on August 3rd. As to electricity during the several days of debate this week both Chairmen Tauzin and Barton reaffirmed their intention to next move to electricity issues. Mr. Barton's staff advised me this morning that the subcommittee he chairs will hold a hearing on Friday July 20th on all electricity issues other than transmission. While Mr. Barton has publicly held out hope of marking up an electricity bill this month sources on and off the committee do not see this timetable as realistic. On the Senate side the majority staff is working on an electricity white paper that may be circulated for comment next week. Below is a recap of action on amendments of interest to Enron: 1. Last night on a largely partisan vote (with Democrats Hall Green and John voting with the Republicans) the Committee rejected an amendment by Rep. Jane Harman (D-CA) (that was to have been offered by Rep. Anna Eshoo (D-CA)) that would have retroactively amended the FERC refund date and essentially ordered refunds regardless of amounts owed to power sellers. 2. First thing this morning the Committee again on a largely partisan basis (with Democrats Hall Green John and Towns) rejected a Waxman amendment to impose cost-of-service rates on all power in the West (other than generation added after 1/1/01). (Originally Mr. Waxman was going to offer amendment to impose cost-of-service rates only on those who do not supply all available power during an emergency but he ended up offering basically what he had pursued in subcommittee on the old Californa Only bill.) 3. The Committee adopted an amendment by Rep. Shadegg to amend the Natural Gas Act to make it clear that a natural gas transportation facility shall not be added to the National Register of Historic Places until FERC has abandoned the facility. Apparently there have been some instances of old pipelines being considered as historic places under federal law. The House Resources Committee added a similar amendment to its package yesterday. 4. By voice vote the Committee rejected a Waxman Amendment to require the president to propose and implement a plan to bring U.S. greenhouse gases down to 1990 levels. There was strong opposition voiced by many Republicans and Democrats to this amendment. 5. By mixed vote of 24 to 29 the Committee defeated a Waxman Amendment to set cost and performance goals for renewables including wind power and authorize federal funds to assist with commercial project costs (up to 50 percent). | other | informative | 3 |
PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT COMMUNICATION | Jeff & Sue -- We need to discuss at 9am your time (as well as other things). Jim | legal affairs | formal | 5 |
Re: EES Video | I am interested but it's probably more important that Jeff Dasovich and Sandi Mccubbin (in our SF office) know so that they can keep the politicos informed (and keep them from doing something stupid). Thanks Enron Energy Services From: Harold G Buchanan 08/03/2000 07:53 PM To: Steven J Kean/HOU/EES@EES cc: Kim Frumkin/HOU/EES@EES James M Wood/HOU/EES@EES Martin Wenzel/SFO/HOU/EES@EES Subject: EES Video Steve - I just saw your video and it is great - I think it will be released Wednesday on our web site and will be available to a very large group - Your comments will put the issues in SD in perspective. We have a team of six now calling the market in SD. If you'd like us to review our market plan in SD with you let me know. Thanks again for your time. | other | excited | 3 |
Enron Mentions - 09/17/01 | What Now? --- Solutions Solutions: How California might get out of the mess it's in The Wall Street Journal 09/17/01 What Now? --- Looking to Washington: What can the feds do to make deregulation a less bumpy process? The Wall Street Journal 09/17/01 What Happened? --- Lessons From Across the Seas: Deregulation is working pretty well in Britain But it has taken a long time The Wall Street Journal 09/17/01 What Now? --- On Second Thought: In the wake of California's power problems many states are taking a wait-and-see approach to deregulation The Wall Street Journal 09/17/01 German Deal for U.S. Water Utility The New York Times 09/17/01 Germany's RWE Agrees to Buy American Water Works for $4.6 Billion Plus Debt Dow Jones Business News 09/17/01 INDIA: UPDATE 1-Enron's Dabhol says needs cash to pay lenders. Reuters English News Service 09/17/01 UK: INTERVIEW-Screen trading enhances metals market. Reuters English News Service 09/17/01 French Electricity Bourse To Run Tests Before Launch Dow Jones Energy Service 09/17/01 RWE to Buy American Water Works for $7.6 Billion (Update6) Bloomberg 09/17/01 Enron India Unit Serves Second Notice to Cancel Power Contract Blomberg 09/17/01 Energy (A Special Report) What Now? --- Solutions Solutions: How California might get out of the mess it's in By Jason Leopold 09/17/2001 The Wall Street Journal R14 (Copyright (c) 2001 Dow Jones & Company Inc.) Just about everyone has an opinion about how to solve California's energy problems. From building more power plants to capping prices to doing away with deregulation federal regulators consumer advocates economists and energy companies all have weighed in with plans for ending the electricity shortages and financial distress that have troubled the state over the past year. Here is a look at what some say California should do now: LEVEL THE PLAYING FIELD For many the solution to California's energy woes is to increase the supply of power in the state by building more power plants. A greater supply from more sources would bring wholesale prices down. And two California economists Severin Borenstein at the University of California's Energy Institute in Berkeley and Peter Navarro at the University of California at Irvine argue that the impact would be particularly pronounced in areas where electricity generators now have monopoly or near-monopoly power. We need to build more power plants in close proximity to the ones where companies have market power says Mr. Borenstein. The problem the economists say is that some areas of the state have only one power plant so the energy suppliers can manipulate the price by reducing output at a certain plant when demand is high in order to boost prices. California does get some power from generators in the Northwest and Canada. But because demand is so great in the state and throughout the entire region and supply is limited what is brought in doesn't make much of a dent. The economists add that because suppliers including Williams Co. Duke Energy Mirant Corp. and Enron Corp. have this freedom to charge whatever the market will bear they can take unfair advantage of consumers. For instance in Carlsbad a community in San Diego only one power plant owned by Duke Energy provides electricity to utilities in that area. The company has no competition so it has the ability to set the price for its power according to state Sen. Joseph Dunn a Democrat from Santa Ana who has set up a Senate committee to investigate manipulation in the wholesale power market. If you need electricity and there's only one place to buy it and everyone wants it you're going to pay through the nose says Frank Wolak an economics professor at Stanford University and the director of a power-market monitoring committee which monitors the wholesale electricity market to identify anticompetitive behavior. Is this fair? No. Something must be done about it. Duke Energy spokesman Tom Williams says the company denies that it has ever done this and rejects allegations that it has manipulated the price of electricity. Spokespeople for the other companies also deny such allegations saying prices have surged because demand has outstripped supply. Partly to prevent possible abuse of market power by suppliers the Independent System Operator which runs California's grid contracted with energy companies to have them operate some power plants as reliability must-run units. In return for a fixed annual payment from the state the companies agreed to make these plants available at a moment's notice to balance supply and demand. Electricity from the plants was priced based on the price of natural gas and other variable operating costs. In 1999 the ISO canceled two-thirds of the RMR contracts because the units were rarely called upon due to a steady supply of power in the state and the expense of the contracts to the state. When power prices surged in 2000 however the ISO didn't use the remaining contracts to help keep supply in balance and power costs down. An ISO spokesman says the agency doesn't have a reason to explain why the RMR contracts weren't utilized. He declined to comment further. CAP PRICES While many including Gov. Davis see more power plants as a long-term solution to the state's energy woes they advocate capping the prices of energy sold on the spot market as an interim solution to keep the market stable while the plants are being constructed. In the short term we need price caps Gov. Davis has said to state legislators. That means that [power generators] get all their costs back and a 40% or 50% profit which in this economy is pretty darn good. Robert Glynn chief executive officer of PG&E Corp. unit Pacific Gas & Electric which sold some of its generating plants during deregulation adds that price caps will keep wholesale prices low while new power plants are built. For more than a year the governor had urged the Federal Energy Regulatory Commission to place a temporary cap on electricity sold in the spot market saying the move would save the state's consumers billions of dollars on their energy bills while new power plants are being built. In May after many months of rejecting the idea the agency imposed an initial cap on prices in California during emergencies. In June it extended the cap to other Western states and established that it would remain in effect at all times. Wholesale electricity prices at first fell in response to the caps but surged again during a spate of hot weather in early July. FERC has been forced to make a number of adjustments to the cap as a result. These price caps however will expire in September 2002. Gov. Davis believes the caps need to stay in effect longer -- for three years -- to allow for the construction of new plants. RESTORE CREDIT-WORTHINESS Rebuilding a financial base for utilities is key to putting California's power market back on track. One way to do this some experts say is to let the utilities sell bonds to help them pay off debts and recoup the billions of dollars they've lost buying power at prices they couldn't afford. This would then allow the utilities to get investment-grade ratings. All California has to do is to ensure the utilities are credit-worthy again via the bond sale says John Bryson president and chief executive officer of Edison International the Rosemead Calif. parent of Southern California Edison Co. So far the California Assembly and Senate have proposed that Southern California Edison sell $2.9 billion in revenue bonds backed by a surcharge tacked onto the bills of the state's largest businesses to pay off its commercial paper holders and alternative-power producers such as wind and solar generators. The utility has a contract with the alternative-power producers and the price it pays for power is fixed. But the utility has defaulted on those payments. The state believes that Edison International needs to help rescue its struggling utility. A $400 million tax rebate that Edison International is expected to receive from the federal government also could be applied to help the utility out of its financial crisis. The state needs to provide some stability to Edison so we can get back in the power business again says Mr. Bryson. It's a pretty straightforward solution. While utilities still continue to deliver electricity to consumers the state has had to step in to buy the power on their behalf. Energy companies are currently refusing to sell power to the utilities fearing they won't get paid because the utilities have defaulted on prior payments and have no credit. California's 1996 deregulation law uncapped wholesale power prices but froze the rate the utilities could charge consumers. When wholesale prices surged in both the spot and day-ahead markets running well above what the utilities could charge customers the utilities couldn't do anything about it because the state deregulation law didn't allow them to sign long-term supply contracts. Restoring the utilities' credit-worthiness however may not be as quick as Mr. Bryson makes it sound given the huge sums that Southern California Edison and Pacific Gas & Electric owe the energy companies that sold them electricity. Pacific Gas & Electric filed for bankruptcy-court protection in April and is trying to write a reorganization plan in just six months pay off all of its creditors in full and return to the power business says the company's Mr. Glynn. CONSERVE ENERGY A massive conservation effort that busts the energy cartel by reducing demand and thus lowering the price of wholesale power is the only way to save the state in the short term says Harvey Rosenfield who heads the Foundation for Taxpayer and Consumer Rights a consumer-advocacy group in Santa Monica Calif. Only if demand falls so greatly that members of the energy cartel are forced to break ranks and lower prices will conservation solve the short-term problem. Gov. Davis says Californians already are conserving at a record rate. For example in July Californians boosted conservation efforts during the day by 11% compared with the same time last year. Conservation efforts have been suggested from the use of halogen light bulbs to running washing machines in the evening to setting the thermostat at 78 degrees. REREGULATE Nettie Hoge executive director of the Utility Reform Network a consumer-advocacy group based in San Francisco believes the state should return to the days when utilities monopolized the power market. Back then she says power supplies were abundant and prices preset. It was working just fine back then Ms. Hoge says. It's not until we opened this state up to so-called competition that everything started to go in the toilet. Look at us now: We're like a Third World country. We can barely keep the lights on. She says regulation would let consumers know what the price of electricity is and that price would stay the same regardless of fluctuations in supply and demand. California wouldn't be held hostage by out-of-state energy companies that not only control the price of electricity but also control the supply Ms. Hoge says. But some experts say that under federal law it might be impossible for states to reclaim authority over power plants that fall under the jurisdiction of the federal government. And it would cost billions of dollars to construct new government-owned generators or buy back with public funds old utility plants. LEAVE MARKETS ALONE Others believe that California's electricity markets should be left alone to evolve and become more competitive. The state should resist putting in constraints like price caps a number of Wall Street firms have advised the state. Merrill Lynch & Co. Credit Suisse First Boston and Goldman Sachs & Co. are among companies that helped the state and its utilities try to come up with financial solutions earlier this year to help ease the energy problem. None of the plans were implemented however. The state needs to get out of power business says Richard Cortwright an energy analyst at Standard & Poor's Corp. The goal of any new plan should be to eliminate what's left of regulation says Susan Abbott an executive director at Moody's Investor Service Inc. State regulators restricted the utilities from signing forward contracts [locking in power supply at a fixed price] they capped retail rates and never encouraged retail choice says Ms. Abbott. That's the antithesis of a competitive market. Until the state understands competition this energy crisis will just continue to fester for years to come. --- Mr. Leopold is chief of the Los Angeles bureau for Dow Jones Newswires. Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. Energy (A Special Report) What Now? --- Looking to Washington: What can the feds do to make deregulation a less bumpy process? By Vasugi V. Ganeshananthan 09/17/2001 The Wall Street Journal R13 (Copyright (c) 2001 Dow Jones & Company Inc.) WASHINGTON -- Before California's energy problems began support was building for congressional action on national electricity deregulation. But this year says Sen. Frank H. Murkowski a longtime proponent support for deregulation is not there in my opinion. Still even without a comprehensive package the federal government could take some crucial partial steps toward more-open power markets. Some in Congress have backed measures that would lead to restructuring as opposed to deregulation. That could involve such steps as settling more authority on the Federal Energy Regulatory Commission to ensure reliability and access to the transmission grid. Another target for Congress will be the remaining antiquated laws and regulations designed for the days of monopolies when each utility had its own borders. The aim is to fix troubled wholesale markets to set the stage for states to elect to deregulate at the retail level. I think it would be in the industry's best interest for this Congress to deal with some of the issues that have been hanging out there for some time says Rick Shapiro managing director of local and governmental affairs at Enron Corp. the Houston-based energy giant. In Congress so far this year several bills have been introduced. The energy bill the House passed in early August offered some modest measures to foster competition such as tax breaks to utilities joining regional transmission organizations or RTOs which FERC has asked energy companies to create to operate the power grid. Rep. Joe Barton a Texas Republican and chairman of the House Energy and Air Quality Subcommittee plans to introduce even more restructuring legislation this fall. His bill may address reliability transmission and incentives for building power plants among other issues. And Sen. Jeff Bingaman of New Mexico chairman of the Senate Energy and Natural Resources Committee has plans for a bill of his own: His main point is to enhance FERC's authority to address power-market problems like reliability and fair access to the grid. But among other issues he is making the latest of several pushes over the past few years to repeal the Public Utility Holding Company Act of 1935 which was designed to prevent large national companies from dominating the industry. Though Congress in 1992 passed the Energy Policy Act permitting competition among wholesale electricity suppliers the 1935 law still limits certain investments by utility holding companies. And many say it impedes competition. Sen. Bingaman also wants to repeal the parts of 1978's Public Utility Regulatory Policies Act that mandate the use of renewable energy though he has said he still supports promoting renewable energy. Of course there are longstanding thorny issues that make federal action on energy markets a tough sell. While some Democrats like Mr. Bingaman are interested in the topic the party in general is less in favor of deregulation than are Republican lawmakers. Thus the recent Democratic takeover of the Senate is widely considered a setback. And while some regions strongly favor change others don't. For instance many Western states -- including Washington whose Democratic Sen. Maria Cantwell is a member of the Senate Energy and Natural Resources Committee -- are feeling the ill effects of deregulation in California and are thus leery. Naysayers point to what they say was FERC inaction regarding inadequate power supplies and controversial pricing auctions. From California's perspective FERC failed miserably by doing nothing for month after month after month says Rep. Henry Waxman a Democrat from California. I fear we might make the same mistake at the national level that California made at the state level. But deregulation advocates think nationwide deregulation is inevitable. Would you like to be in an airport where there is one airline from here to Atlanta? Or an airport where there are three airlines including a low-cost option? says Marc Yacker director of government and public affairs for the Electricity Consumers Resource Council a Washington D.C. group of large industrial electricity users. If regulated states see that residents in Pennsylvania and Texas have a well-functioning electricity system . . . they will change. Here are some of the main issues currently being hashed out in Washington: -- WHOLESALE MARKETS: Before any serious discussion of consumer deregulation can take place Mr. Bingaman thinks wholesale markets need to be fixed. Among his main points: clarification of FERC and state jurisdiction. A recent white paper from him outlining his planned legislation calls for Congress to clarify that FERC is the ultimate authority over all transmission issues with the power to overrule states. The paper adds Legislation should affirm FERC's authority to order utilities to join regional transmission organizations. Such powers the thinking goes would allow FERC to ensure that power transmission is fair and that access is free of any favoritism among affiliated utilities. And that would go a long way toward fixing wholesale markets and paving the way for retail deregulation should individual states choose to participate. To leave electricity legislation for another day would be to ensure that the problems faced now in the West will be replicated across the country he wrote in the paper. -- FEDERAL AUTHORITY: The extent to which a federal entity should have authority over power markets is a contentious issue. Mr. Bingaman desires far-reaching powers for FERC. And power suppliers favor having federal regulators hold sway over transmission issues. Eugene Peters of the Electric Power Supply Association a Washington D.C. trade group for competitive power producers says FERC has a role here in that they can essentially create a national template. Democratic Sen. Dianne Feinstein of California has also said she will push to get more authority for FERC in order to ensure that all power prices are reasonable -- for instance by assessing civil penalties to power suppliers who engage in unfair pricing. But some in the energy industry say FERC already has plenty of authority -- it's just that the commissioners haven't exercised it properly. Opponents of extending FERC's role fear a tangle of federal bureaucracy reaching a local level. I think that if FERC exercises the authority that I believe that they have in many of these areas legislation is not necessary says Dave Penn executive vice president of American Public Power Association a trade group of public utilities based in Washington D.C. FERC itself isn't arguing strenuously for more authority. Chairman Pat Wood says additional affirmations of authority would probably save the agency time in court later. And he says he wouldn't mind having the ability to assess penalties on utilities that fail to provide reliable service. But he adds While I welcome any authority they want to give us what we've got in the statute now is plenty good enough. -- TRANSMISSION: Transmission is an industrywide beef it's widely acknowledged that with electricity now being sold over greater distances the current system is overtaxed risking bottlenecks and reliability problems. So the nation needs more lines. But who decides where to put them? Plus with the same people selling power and running transmission lines there's a natural inclination for those controlling the transmission lines to want to sell their own electricity first. FERC has ordered the industry to institute RTOs to run the transmission system to ensure fair access to transmission lines no matter who owns them. Sen. Bingaman's proposals would affirm that power for FERC. And Mr. Wood says the RTOs can also handle siting of new transmission lines. But many states are unhappy with FERC's strategies. Some fearing federal interference with the states' authority over siting are taking steps to form their own multistate councils that would ensure regional cooperation while leaving control in state hands. And Maryland the District of Columbia and Virginia are requesting a rehearing of a FERC order that they join RTOs saying that federal regulators are moving with undue haste even in areas where transmission isn't a problem. -- INTERCONNECTION: In a competitive system the growing number of new electricity generators must be able to connect to the power grid. But the interconnection of new generators with the old utilities that own the grid's transmission lines can raise two kinds of problems. On the technical side newer generators can have different types of systems with different generating capacities raising concerns of overloads and other problems. On the competitive side utilities can make it difficult for new generators to connect to the grid. So many in the industry are calling for uniform technical standards to allow equal access to the grid -- once a generator meets the standards a utility would have no basis to deny a hookup -- and to ensure that interconnection doesn't risk the safety and reliability of the system. As we've moved into deregulation there are more entities that want to connect to the system says Ken Rose a senior economist at the National Regulatory Research Institute at Ohio State University. There must be some means he says to ensure that access for all these new players remains fair. FERC's Mr. Wood says interconnection is a top priority for the agency. He has officially asked utilities to file their interconnection rules and FERC will issue a policy on interconnection this fall. Chris Mele legislative director of the National Association of Regulatory Utility Commissioners in Washington D.C. says that interconnection rules need to be flexible. NARUC supports Congress requiring the establishment of national interconnection and power-quality standards that would be developed and adapted by an appropriate technical-standards organization says Mr. Mele. However the states need to have the flexibility to adapt these rules or to adapt their own rules. --- Ms. Ganeshananthan is a staff reporter in The Wall Street Journal's Washington bureau. Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. Energy (A Special Report) What Happened? --- Lessons From Across the Seas: Deregulation is working pretty well in Britain But it has taken a long time By Geoffrey T. Smith 09/17/2001 The Wall Street Journal R9 (Copyright (c) 2001 Dow Jones & Company Inc.) LONDON -- For all those who just can't understand why electricity deregulation is worth bothering with: Look abroad. It has to be admitted that Europe's deregulation experience looks better than the U.S.'s largely because of the relative starting positions. Europe is the 300-pound couch potato who feels more of a difference after a month in the gym than the guy who is already quite fit. For decades the European electricity industry was run by engineers patronized by politicians. The result: a hugely overbuilt system with rows of underused power plants and legions of unnecessary staff paid for by sky-high regulated rates. Deregulation is starting to put an end to all that. Electricity prices have fallen in most European markets especially in Germany since a European Union deregulation directive took effect in 1999. And in the United Kingdom deregulation has gone further than in most of Europe. Electricity prices are down by around a third for families and businesses and there are few problems with supply. But there is a catch -- an important one for an American public already weary of the pain of deregulation: In Britain it has taken more than a decade to make deregulation start to work. Britain started out with a few advantages that places such as California don't have. Its policy is in the hands of a single central government committed to deregulation while U.S. state and federal regulators often disagree on what needs to be done. It started out owning the whole energy business and could carve it up as it pleased. As it deregulated it didn't have to face the problem of exploding demand due to Silicon Valley and rapid population growth. And Britain unlike California started from a position of significant oversupply and for years was liberal in allowing still more plants to be built because they would be fueled by cheaper and cleaner North Sea natural gas instead of coal. Despite all this British electricity deregulation has had its share of false starts. For 10 years up until 1998 the whole process seemed to be bringing little in the way of concrete gains. For much of the decade the government was a timid pioneer relying on the blunt policy instrument of price controls to bring prices down when its fancy new market models didn't work. But Britain was also willing to try different approaches if its first choice failed -- perhaps a lesson for the U.S. Like California Britain set up a wholesale pool for day-to-day power purchases Britain scrapped the pool when it failed to bring prices down. Britain also allowed power buyers and sellers the crucial freedom to lock in their prices for months ahead insulating them from the price zigzags that have crippled California's two largest investor-owned utilities and sent the biggest PG&E Corp.'s Pacific Gas & Electric Co. unit into Chapter 11 bankruptcy proceedings. The U.K. has got the balance about right but competition has been a long time in coming says Richard Lewis U.K. managing director of Enron Corp. Houston. The seeds were sown in 1988 when then-Prime Minister Margaret Thatcher decided to extend her free-market ideology to the electricity sector. The British government had a clear idea what it wanted to do. New laws were passed. Deregulation began. By contrast Germany's federal government which started the process at the end of 1998 has had to negotiate electricity deregulation with two other tiers of government and more than 800 electricity companies. Britain split the electricity sector into three parts: power generators completely separate regional suppliers and National Grid PLC to which it gave ownership and control of the country's high-voltage power lines. By separating the grid from the companies that actually sell and produce electricity this structure ensured that no seller could keep others out of the market. The government sold majority stakes in all 12 English and Welsh regional electricity suppliers to the public in December 1990. Six months later it had sold 60% each of National Power PLC and Powergen PLC giving to those two companies almost all the coal-fired power plants in England and Wales. The sale of nuclear generator British Energy PLC followed in 1996. Managers across the sector started cutting cut costs agressively especially for labor. With privatization the design of new plants was increasingly influenced by economic factors such as natural gas's cost advantage over coal rather than political ones. Back in 1988 Britain's old Central Electricity Generating Board had wanted to build expensive new coal plants and nuclear reactors despite the presence of vast untapped natural-gas reserves right on the U.K.'s doorstep in the North Sea. But thanks to privatization almost all the new power plants built in the next 10 years were gas-fired. In fact so many were built that the government slapped a moratorium on new plants in order to cushion if not stop the decline of the domestic coal industry. The moratorium was lifted last November. In the early 1990s a model evolved in which the companies that distributed power to homes and businesses -- known as regional suppliers -- were allowed to charge a specified amount for getting the power to the customer if a company could find a way to do it for less it got to pocket most of the difference. Customers got lower bills and the companies' shareholders were happy -- a little too happy in fact as the public started to resent the fat cat bosses who were seen as skimming off fat profits for little improvement in service. Deregulation really got going in 1994 when the government allowed industry to shop around for its power. A year later it gave up its rights to veto foreign takeovers of suppliers starting a wave of U.S.-led takeovers. But within a few years most of the U.S. firms had either sold or said they intended to although Dallas's TXU Corp. stayed and thrived. For much of the 1990s it wasn't market forces that brought British electricity prices down. Almost all of the cuts in prices to consumers came from [our] price controls on monopolies says Steve Smith head of trading arrangements at the Office of Gas and Electricity Markets the regulator that has implemented government policy under one name or another since 1990. Most of a household's bill comes from the cost of running the distribution network not from producing the power. It was this distribution part of the business that bore the brunt of the price controls. The failure to bring down the price of power itself threatened to provoke a crisis in 1998 when the government finally extended competition to the household and small-business sectors. Nine years after the Electricity Act got the ball rolling the market for customers was 100% open. But something still had to be done about the power generators' prices which weren't falling as expected. In theory British power generators had had to bid into a wholesale pool each day since 1990 telling the National Grid at what price each plant could supply power. The Grid would then buy as much power as needed from each plant starting with the cheapest. But the pool didn't work. There were too few players in it. The generators' prices to resellers -- the regional suppliers -- stayed stubbornly flat. Accusations of market manipulation abounded but could rarely be made to stick. The answer was NETA -- the New Electricity Trading Arrangements which were the centerpiece of last year's Utilities Act. Under the new rules which took effect March 27 electricity has become as close as it is ever likely to be to being a market like any other. Producers consumers and intermediaries now all trade electricity directly with each other up to 3 1/2 hours before they have to deliver or use it -- rather than buying power through an intermediary pool that buys from the generators. The grid operator still manages the physical flow of electricity but intrudes only inasmuch as buyers and sellers have to notify it how much they intend to put into or take out of the grid at each half-hour of the day. NETA has galvanized competition. Prices for electricity have fallen 15% since March according to British regulator Ofgem and they continue to fall. But it's not a question of forcing prices down -- more of allowing the market to set the price of power. More than 7.8 million customers have switched suppliers since 1998. And the Electricity Association a trade group for companies in the electricity business reckons that households can cut almost GBP 30 ($43) or about 12% off their annual bills by switching. At last deregulation is working. NETA has definitely been the right framework to foster competition says Brian Count the new chief executive of Innogy PLC a power generator and supplier that is one of two companies created last year by the breakup of the generation company National Power. But even as the free-marketers lean back and congratulate themselves on a job well done storm clouds gather on the horizon. The Labour government re-elected in June has ordered the U.K.'s first national energy policy review in 20 years. The government is signaling that it wants more control over future investment decisions. The nuclear industry and renewable sources such as wind power look likely to benefit as the British government tries to reduce greenhouse-gas emissions. As Britain's own natural-gas reserves run out in the middle of this decade it will become like the rest of Europe -- uneasily dependent on countries such as Algeria and Russia for supplies. Hence the support for nuclear power. The industry accepts all this but Innogy's Mr. Count speaks for many when he says: For goodness' sake don't let us now get dragged back to central planning and regulation. --- Mr. Smith is an assistant news editor for Dow Jones Newswires in London. Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. Energy (A Special Report) What Now? --- On Second Thought: In the wake of California's power problems many states are taking a wait-and-see approach to deregulation By Eileen O'Grady 09/17/2001 The Wall Street Journal R13 (Copyright (c) 2001 Dow Jones & Company Inc.) California's energy crisis has a lot of people wondering whether it's really such a good idea to let consumers shop for electricity. No one wants to repeat California's mistakes. So while 12 states and the District of Columbia already offer residential and commercial energy consumers a choice of providers and a handful are pressing ahead with plans to fully deregulate next year some 20 others are either delaying deregulation plans or taking a hard look at whether they ought to move toward competition. And no state has started a new deregulation effort since California's blackouts and price spikes were first reported. But while the fervor for deregulation definitely has cooled not all of the blame can be laid at California's doorstep. Indeed in virtually all of the states that deregulated before California's troubles began -- particularly in Pennsylvania Massachusetts and New Jersey -- consumers have seen for themselves that many of the new entries in the power market haven't delivered on one of the new system's key promises: lower prices. Texas Michigan and Virginia are expected to stick to their plans to open their electricity markets fully next year. But industry sources agree that a lot more states would be about to do the same if California's electricity troubles hadn't given them second thoughts. The advance of retail competition has definitely stalled says Ken Rose a senior economist at the National Regulatory Research Institute at Ohio State University in Columbus a research arm of a national trade group for state utility regulators. The question is whether it reverses Mr. Rose adds. You would expect bumps in the road maybe a slow start but for the past year and a half it's not been going in the right direction. While no state has repealed an electricity-deregulation law in the wake of California's troubles seven states have altered their deregulation laws mostly to delay the start of consumer choice by a few months or a few years -- until state regulators and legislators can see how deregulation plays out elsewhere. Oklahoma one of those states pushed its shopping start date back to 2004 or later from July 1 2002 worried that deregulation might jeopardize its below-average electric rates. California has slowed down the restructuring effort but hasn't stopped it says Oklahoma state Sen. Kevin Easley a Democrat and an early supporter of deregulation. Long term we think it's still a positive thing for Oklahoma. As a major producer of natural gas Oklahoma has attracted a large number of new power plants that run on natural gas. Deregulation its local supporters say thus could help the state create new jobs by encouraging more local power plants that export electricity adding value to the state's natural resources. Nevada where electricity demand is growing dramatically used an emergency measure in April to delay the start of consumer choice for a third time. The measure also froze electricity rates until early next year and placed a moratorium on utility sales of power-generating plants. That effectively undid a customer-choice law passed in 1997 although the state will allow some large customers to shop for power next year. Wisconsin has no deregulation law but its utilities were beginning to propose ways to divide their power-generation assets in order to create a competitive market. When California's problems emerged however Wisconsin Public Service Corp. a unit of WPS Resources Corp. Green Bay withdrew a proposal that would have urged state regulators to allow the company to transfer some of its power plants to a separate company -- a first step toward deregulation. Wisconsin has been set back by California says Larry Weyers chairman of Wisconsin Public Service. Any talk of deregulation is met with a lot of opposition and anything seen as changing the system is dead on arrival. Our plan could have been successful but attitudes became cautious. So much for the states that got cold feet. How are the pioneers faring? Not very well. Most electricity customers in fully deregulated states have seen few competitive options. Figures from regulators indicate that after an initial burst of consumer interest new energy providers in New Jersey New York Massachusetts and Pennsylvania have seen significant reductions in numbers of customers. When New Jersey started letting consumers shop in 1999 about 2.2% of residential consumers switched to a new provider. Now only 1.1% are still buying electricity from a company other than their incumbent utility. Even Pennsylvania which was seen as the biggest deregulation success is beginning to look more ordinary says Mr. Rose the regulatory economist. Some electricity retailers that pulled out of the state blamed a climate of fear arising from California's troubles. But rising wholesale power prices have taken their toll as well says state consumer advocate Irwin Popowsky. In 1998 Pennsylvania residential customers had a choice of at least 30 alternative power providers. Today there are fewer than 10. The reason: The new entries proved unable to compete with the lower capped rates offered by the incumbent utilities industry sources say. Initially Pennsylvania's biggest utility Peco Energy Co. a unit of Chicago-based Exelon Corp. lost 44% of its industrial customers and 30% of its commercial clients to new suppliers according to data published by the state consumer advocate's office in July 2000. One year later however many of those customers had returned to Peco leaving the utility with a loss of only 4.7% of its industrial customers and 5% of its commercial clients. For residential power customers the story's the same: Around the state initially about 10% selected a new supplier before California's problems erupted. Today six of the state's seven original power companies have regained residential customers as competing suppliers leave the market and savings offered by those remaining shrink Mr. Popowsky says. The number of residential customers being served by new suppliers dropped to 574661 as of late June 2001 down 18% from March. It's a price issue says Sharon Reishus associate director at Cambridge Energy Research Associates Cambridge Mass. Though wholesale power prices have fallen since the first part of the year they remain unpredictable she says. A competing provider might be able to make profits say 10 months of the year but could still get killed in the spot market if prices spike Ms. Reishus says. One of the biggest new competitors in Pennsylvania is New Power Co. a subsidiary of NewPower Holdings Inc. Purchase N.Y. New Power bid for and won 250000 Peco Energy customers around the time of Peco's 1999 merger with Unicom Corp. to become Exelon. But New Power's plans extend well beyond the borders of Pennsylvania. It has plans to sell natural gas and electricity to residential consumers and businesses around the U.S. We have seen some volatility in the Pennsylvania market due to the rise in wholesale prices says H. Eugene Lockhart president and chief executive officer of New Power. But he adds we remain committed to serving our customers there and hope to step up our marketing efforts in the near future. But Houston-based Shell Energy Services a unit of Royal Dutch/Shell Group's Shell Oil Co. cited the slowing pace of retail access around the country for its recent decision to drop out of the hunt for new electric customers in Texas and Ohio -- even before markets in those states are fully open. Shell Energy Services had already signed up 40000 residential customers in Texas and 30000 in Ohio but officials said that given the slow progress of deregulation it was unlikely the company would reach the size needed to be profitable in a reasonable length of time. The prospects for selling power to residential customers remain difficult but the opportunity for marketing to business is brighter. Small businesses are seen as key for electricity suppliers seeking new customers says Scott Gahn managing director of commodity management at Enron Corp.'s Enron Energy Services unit which markets power to business. Each month that goes by we're adding gas and power customers in Maine Massachusetts New York New Jersey Illinois Ohio and Texas Mr. Gahn says. He even goes so far as to say that California's impact on deregulation hasn't been all bad. For energy markets in many states he says the California crisis has gotten the issue [of being able to choose your own provider] onto their radar screen in a way that you'd have to pay an advertising agency to do. State officials in Texas Michigan and Virginia where consumers will start shopping next year vow not to repeat California's mistakes. Everyone asks me will we have California's problems? says Tom Noel chief executive of the Electric Reliability Council of Texas which runs the state's power grid. No we won't have their problems but we will have some of our own. The Texas electricity market is very different from that of California. Texas has a copious supply of electricity thanks to extensive construction of power plants powered by natural gas which also is in plentiful supply locally. One reason California got into trouble: Its utilities had to import a lot of electricity and high-priced natural gas to meet the state's growing demand for power. Texas has attracted about two dozen companies to compete for consumers' business through a 1999 deregulation law that carved existing utilities into separate generating transmission and retail units. It has been running a customer-choice pilot program ahead of its Jan. 1 2002 debut of full deregulation. We're in this for the long haul says New Power's Mr. Lockhart. With the opening of the market in Texas there will be a national example of getting it right -- saving consumers money and giving them choices to help manage their energy use. --- Ms. O'Grady is a reporter for Dow Jones Newswires in Houston. Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. Business/Financial Desk Section C German Deal for U.S. Water Utility By ANDREW ROSS SORKIN 09/17/2001 The New York Times Page 6 Column 3 c. 2001 New York Times Company In the first deal in the United States since the terrorist attacks of last week American Water Works of Voorhees N.J. has agreed to be sold to RWE a German utility for more than $5 billion executives close to the transaction said yesterday. The deal which is expected to be announced today before the markets open will be a crucial test of investor confidence in mergers and acquisitions in the wake of the calamity. One executive said the transaction was being announced now partly as an effort to demonstrate the resolve of businesses worldwide. ''We discussed holding off for obvious reasons'' the executive said. ''But we decided that we should press ahead. The markets need to know that business will continue as usual. And by that I mean business -- the commerce of life -- will not stop in the face of terrorism.'' For RWE the deal represents its latest effort to expand through acquisitions. Last year RWE acquired Thames Water of Britain and the E'town Corporation of New Jersey. American Water Works the largest publicly traded water utility in the nation with annual revenue of $1.4 billion has been acquisitive itself. It recently announced an agreement to buy the Azurix North America Corporation the water utility of the Enron Corporation and is about to complete a deal to buy the water assets of the Citizens Communications Company of Stamford Conn. Spokesmen for American Water Works and RWE could not be reached for comment last night. Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. Germany's RWE Agrees to Buy American Water Works for $4.6 Billion Plus Debt 09/17/2001 Dow Jones Business News (Copyright (c) 2001 Dow Jones & Company Inc.) ESSEN Germany -- German utility RWE AG said it has agreed to buy American Water Works Co. the largest publicly traded water utility in the U.S. for $4.6 billion plus $3 billion in debt in attempt to expand internationally. RWE said it would offer $46 per outstanding share of American Water Works a 37% premium to American Water Works' share price in the past 30 days. The offer values American Water Works (AWK) at a total $7.6 billion as RWE will offer $4.6 billion for the shares and assume $3 billion in debt it said. Discussions between RWE and American Water had broken down late last month. When the transaction is complete RWE plans to bundle American Water Works which has a market capitalization of $3.3 billion with its Thames Water operations in the U.K. RWE said. RWE is looking to expand internationally to close the gap with competing global utility firms Vivendi SA and Suez SA both larger in size by market capitalization. Last year RWE bought Thames Water PLC of Britain and also acquired E'town Corp. of New Jersey. American Water Works Voorhees N.J. is an aggressive buyer in its own right. It recently announced the purchase of Azurix North America Corp. the North American water-services division of Houston's Enron Corp. for $141.5 million including $8.3 million of debt and tax savings of $13 million for an enterprise value of $136.8 million. It scrapped a planned acquisition of water utility SJW Corp. San Jose California earlier this year after repeated regulatory delays. And it is expected to complete soon a nearly two-year-old deal to buy the water and waste-water assets of Citizens Communications Co. Stamford Connecticut. RWE said shareholders representing 24% of American Water shares have already entered binding agreements to support the transaction. In addition to providing us with a top position in the U.S. the acquisition of American Water will further establish RWE as a global leader in the position of water services RWE Chief Executive Dietmar Kuhnt said in a statement. The development of RWE's world-class water business in turn will provide greater balance to our core utility portfolio and allow us to deliver enhanced growth and shareholder value he added. The deal is expected to be completed within 18 months to two years. The transaction will require shareholder and cartel authority approval. RWE's supervisory board and the board of American Water Works have approved the offer. Copyright (c) 2001 Dow Jones & Company Inc. All Rights Reserved Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. INDIA: UPDATE 1-Enron's Dabhol says needs cash to pay lenders. By Sriram Ramakrishnan 09/17/2001 Reuters English News Service (C) Reuters Limited 2001. BOMBAY Sept 17 (Reuters) - U.S. energy firm Enron Corp's Dabhol Power Co said on Monday it has sought urgent funding from its foreign lenders to repay interest on past loans and preserve a $2.9 billion power plant that is lying idle. Dabhol which is 65 percent owned by Houston-based Enron said monthly interest payments to its lenders have to be made in September but it does not have enough cash. It has about 25 foreign lenders which include ABN AMRO Citibank US Exim and Bank of America. The company has funds in its account to make certain payments and anticipates that some of those will be made. It has requested disbursement from banks towards the rest the spokesman told Reuters. He did not disclose details of the interest payments nor the cash it wants. The project has been funded 70 percent by debt. Dabhol has not been earning any income after its sole customer the Maharashtra State Electricity Board (MSEB) in May stopped buying any more power from its plant citing high tariffs. MSEB was buying the entire output from the plant's first phase of 740 MW and had committed to buy the second phase output of 1444 MW when it was ready. Following the cancellation foreign and local lenders stopped disbursals of around $400 million forcing complete stoppage of work on the second phase. They have also declined to provide funds to preserve expensive equipment from being damaged by natural elements. Without funds for preserving the facility the physical assets will begin to deteriorate almost immediately which in turn will further add to the overall cost of completion the spokesman added. Dabhol now wants at least a portion of this $400 million amount disbursed to help it meet its interest payments and take care of the plant. The development is likely to put further pressure on India's federal government to solve the contentious dispute which has affected the country's efforts to attract foreign investment in the power sector. Three foreign power companies have already pulled out including French giant Electricite de France . Analysts believe that a quick solution to the problem is key to restoring investor confidence. UGLY SPAT Once considered the showpiece of India's liberalisation programme the Dabhol project is now being dubbed an example of political and bureaucratic bungling. Enron has announced its decision to sell its equity in the project to the federal government or any other company. It says MSEB is yet to pay bills worth $185 million. On Monday Dabhol further upped the ante by slapping MSEB with two preliminary notices of termination. One is for not paying bills for the months of June and July and the other for MSEB's decision in May to cancel the power purchase agreement the contract that governs the state board's purchase of power from Dabhol. This is the third such notice from Dabhol. In May it served the first notice for non-payment of bills for December and January. The two fresh notices are a body blow for MSEB analysts said as it means the state utility could end up fighting three separate arbitration battles. According to the power purchase agreement all disputes will have to be settled by the International Court of Arbitration in London. As per this agreement serving preliminary notice is followed by a six-month cooling off period. If the dispute is not settled by then Dabhol can issue a final notice and the dispute automatically goes for arbitration. The six-month period for the first notice which was issued in May ends in November. If there is no settlement by then MSEB will have to answer Dabhol's charges of non-payment of bills for December and January. The same procedure will be followed in the case of the other two notices. But efforts to solve the issue so far through arbitration have been delayed by domestic litigation. MSEB wants the dispute to be heard by local courts while Dabhol is pressing for arbitration in London. The Bombay high court which began hearing this dispute on Monday is expected to give a final verdict soon. ($1=48.83 Indian rupees). Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. UK: INTERVIEW-Screen trading enhances metals market. By Martin Hayes 09/17/2001 Reuters English News Service (C) Reuters Limited 2001. LONDON Sept 17 (Reuters) - The emergence of electronic screen systems alongside existing open-outcry and telephone markets has enhanced trading in base metals Paul Shuman LME desk manager at Cargill Investor Services (CIS) said. From our perspective because we are brokers and do not run a proprietary position we are bound and always will be to try and get the best price for our customers. The more platforms there are for us to trade on the better for our customers Shuman told Reuters. The London Metal Exchange (LME) the world's leading non-ferrous metals market introduced an automated trading system (ATS) known as Select in February and unveiled a more sophisticated phase last week. The LME's system joined rival platforms managed by Spectron Metals and Enron Online part of Enron Corp. These systems have improved market liquidity and increased price transparency throughout the day Shuman said. Instead of being restricted to the ring and the telephone market where you have to ring around you have instant access to bids and offers all through the day. Now when we give our customers a market we can do that on the basis of the best bid and offer on the screen. From our company's perspective it has been very helpful he said. Spreads between bids and offers have narrowed and access to the market has become faster. It is certainly a tighter market a quicker market and probably a more liquid market he said. SCREENS NOT PARAMOUNT However the LME's ATS is not designed to replace open-outcry on the 124-year-old exchange. Rather it will complement the current mix of inter-office phone trading and open-outcry. Screens do not replace the ability to talk to one another he said. There are instances when customers needs to transact a highly complex multi-legged carry or spread trade and it is unlikely that any system will be able to replicate that. You phone up another broker and say what you want to do. You either have to do it face-to-face or on the phone - you cannot do it on the screen - speed is important. He said there may well be a fall-off in volume at one or other of the current platforms but the screens and the telephone market are likely to run in tandem while the LME plans to continue open-outcry ring trading as well. For the customers they are going to get the best of all worlds he added. LME SCREENS GAINING ACCEPTANCE On the screens the dust has still to settle between the rivals but there are signs that LME Select is being used more by the market. In the last few weeks Select has done better as more people have become used to it and it (Select) is free whereas some others are not Shuman said. And now the Select system is much more capable after the release of the second more sophisticated phase. It is very ambitious and it will be interesting to see how it works he said. The second release incorporates a unique request-for-quote function. This allows traders to direct enquiries such as market size and depth to as many or as few respondents as required and whether or not to be anonymous. It also covers all the LME's contracts - the initial release was confined to the basic cash three months and cash-to-threes spread contracts. It is going to take a while for Select Two to become the tool for the industry. But Cargill is in favour of anything that allows us to give a better service to our customers Shuman said. Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. French Electricity Bourse To Run Tests Before Launch 09/17/2001 Dow Jones Energy Service (Copyright (c) 2001 Dow Jones & Company Inc.) PARIS -(Dow Jones)- French electricity bourse Powernext SA took one step closer to its imminent launch with the announcement Monday that it will host a series of simulations from Sept. 25. Powernext will stage three sets of simulations the first from Sept. 25 to Sept. 27 the second on Oct. 2-4 and the third on Oct. 9-11 Powernext said in a press statement. Close to 20 companies will participate in the tests including electricity suppliers traders the exchange's investors industrial consumers and traders. TXU Europe Energy Trading and Enron will be among the participants. The exchange is also holding seminars this week for participants to get acquainted with the ElWeb electronic trading system also currently used by Nord Pool in the Nordic region the market model and Clearnet the exchange's financial guarantor. Jean-Francois Conil-Lacoste Powernext's director-general said the exchange is still on track for its official launch later this autumn although a date hasn't been set yet. Euronext Paris SA and HGRT a financial holding for European electricity grid operators hold 34% and 17% of Powernext respectively. Currently Electricite de France (F.EDF) is the sole shareholder in HGRT although the long-range plan envisions Dutch grid operator TenneT and Belgian counterpart Elia as potential investors. Powernext aims to expand its activities in the Benelux region dovetailing newly created Euronext formed through a merger of the Paris Brussels and Amsterdam stock exchanges. Powernext will also announce later this autumn the addition of new investors. Currently the remaining 49% is divvied up among French banks BNP Paribas (F.BNP) and Societe Generale (F.SGF) plus state-owned EDF oil giant TotalFinaElf (TOT) and Belgian utility Electrabel (B.ELE) which each hold 9.8%. These stakes will fall to 5.0% with the entry of the new investors the threshold necessary to hold one seat on the board of directors. The exchange plans to initially offer physical electricity in hourly blocks for delivery the next day. Separately EDF Trading the London-based trading joint venture of EDF with commodities trader Louis Dreyfus will start trading in the French wholesale market Oct. 1. EDF's Director of Client Services Loic Caperan said last week. EDF Trading is barred by the European Union Competition Authority from trading in the French retail market. The trading arm isn't allowed to assist EDF to structure contracts for France's energy-intensive industrial consumers the group eligible to choose suppliers representing about one-third of domestic power consumption. But the entry of EDF Trading into the wholesale market is viewed by some traders as crucial to injecting necessary liquidity for electricity trading to flourish in France. The pace of power market deregulation is slowly starting to pick up in France. Powernext is the second project to launch this autumn aimed at kick-starting trading. Last week EDF auctioned options on close to 1200 megawatts of local power production. As the E.U.'s second-largest power market which shares its borders with five countries and is connected to the U.K. via an under-water electricity interconnector France is key to the eventual formation of a pan-European traded market. -By Sarah Wachter Dow Jones Newswires 331-4017-1740 sarah.wachter@dowjones.com -0- 17/09/01 09-56G Copyright ? 2000 Dow Jones & Company Inc. All Rights Reserved. RWE to Buy American Water Works for $7.6 Billion (Update6) 2001-09-17 07:02 (New York) RWE to Buy American Water Works for $7.6 Billion (Update6) (Adds where American Water is based in second paragraph moves stock drop to seventh adds context in third paragraph.) Essen Germany Sept. 17 (Bloomberg) -- RWE AG Europe's No. 4 power company agreed to buy American Water Works Inc. the biggest publicly traded U.S. water utility for $7.6 billion in cash and assumed debt in a bid to catch up with larger rivals. RWE is offering $46 in cash per share 35 percent more than last Monday's close for the Vorhees New Jersey-based company. Germany's RWE will assume $3 billion of American Water's debt said Chief Financial Officer Klaus Sturany on a conference call. The purchase will add more than 10 million U.S. customers to RWE's water unit and further reduce its reliance on the German electricity market. It will also help RWE narrow the gap to Suez SA and Vivendi Environnement SA a year after Chief Executive Dietmar Kuhnt spent $9.8 billion on Thames Water Plc of the U.K. ``RWE has said it wants to expand in water and this is another step in that direction'' said Ulf Moritzen who helps manage 100 million euros ($93 million) at Nordinvest. ``In the current situation it makes sense to buy a defensive business.'' The planned purchase isn't cheap. Including debt RWE will pay about 5.4 times sales for the U.S. company compared with 4.9 times sales for Thames Water. In the U.S. buyers paid about 4 times sales for the 15-plus takeovers in the country's water industry over the past two years according to Bloomberg data. Stock Drops Including pending acquisitions by the U.S. company the price will rise to about $8.4 billion by closing said Sturany. RWE will sell an unspecified amount of new bonds to finance the purchase he said without giving a time frame. RWE shares fell as much as 2.27 euros or 5.5 percent to 38.90 euros in Frankfurt. They've declined 17 percent this year. American Water shares closed at $34.12 last Monday the last day U.S. markets were open before the terrorist attacks. The acquisition is the biggest announced since terrorists attacked the World Trade Center and the Pentagon last Tuesday. Sturany said the companies reached an agreement last week though they decided to delay the announcement because of the disaster. ``We have enormous confidence in the U.S. economy'' Sturany said. ``Despite the enormity of the events we expect the U.S. market to prevail.'' He said the contract with American Water doesn't include any special clauses related to the attack. After the purchase which may take as long as two years to complete the Essen Germany-based company will have 56 million water customers worldwide according to spokesman Bill McAndrews. Suez and Vivendi each serve more than 100 million people. More Purchases Sturany said American Water which will become a unit of Thames Water will expand further in the U.S. by using the German company's ``strong balance sheet.'' The Thames Water purchase last year gave RWE New Jersey-based utility E'town Corp. RWE said the new acquisition will make it the largest water company in the U.S. the world's biggest single market. American Water has customers in 23 U.S. states the German company said. The U.S. market with more than 54000 local utilities is ``ripe'' for consolidation he said. RWE today said the latest purchase will help boost earnings before goodwill in the first year after completion. The company had sales of $1.35 billion last year and employs 5000 people throughout the U.S. RWE's total debt will rise to about 8 billion euros ($7.4 billion) after the purchase Sturany said. RWE's debt-to- equity ratio was about 2.8 before the purchase compared with 41 times for Vivendi Environnement according to Bloomberg data. The yield on RWE's outstanding 6.5 percent 20-year bond rose 0.1659 or 0.2 percent to 100.0455 after the announcement. RWE in April sold 3.46 billion euros worth of bonds to help pay for Thames Water including 350 million pounds in 20-year bonds. RWE has an ``Aa3'' rating from Moodys' Investors Service and a ``AA-'' rating from rival agency Standard & Poor's. Merrill Lynch & Co. and Morgan Stanley Dean Witter advised RWE on the U.S. purchase. Goldman Sachs advised American Water. RWE said 24 percent of American Water's shareholders are already backing its takeover offer which has also been approved by the German and the U.S. companies boards of directors. Enron India Unit Serves Second Notice to Cancel Power Contract 2001-09-17 08:50 (New York) Mumbai Sept. 17 (Bloomberg) -- Dabhol Power Co. Enron Corp.'s Indian unit said it has served a second notice on the state-owned Maharashtra State Electricity Board stating that it will start proceedings to cancel its power supply contract because its waiting to be paid past dues. Enron owns 65 percent of Dabhol Power Co. which runs the $3 billion power plant India's biggest foreign investment. It is owed $64 million by the Maharashtra State Electricity Board its sole customer in unpaid bills for 9 months. The board in May stopped buying power saying it's too expensive. ``Little progress has so far been made on reaching a fair and reasonable solution'' to the payments dispute the company said in a statement. Enron on May 19 issued the first notice to cancel the power supply contract with the board. It began looking to sell its stake in the project after the negotiation panel failed to get other buyers for its power. Eight Indian states said they would buy electricity but at less than half the price charged by Dabhol. Enron said it has invested $875 million in the project and is ready to sell to the government its stake at cost. | other | neutral | 2 |
null | I am having lunch on Monday with Michael Isikoff a newsweek investigative reporter. He is doing yet another Ken Lay/Enron political influence story. One of the things he wants to talk about though -- and I think this is a good sign -- is Enron's climate change policy and how it compares to the administration's. What I need from you as soon as possible is a timeline (what the Administration said when -- doesn't have to be down to the day) the Administrations position and our position (and how they differ). Borrow heavily from existing materials. | government & politics | formal | 5 |
Re: FERC course on for Thurs, July 26, 1-4 p.m. | Great news. With respect to the Commissoners I think it makes sense to go back through Ellen and ask if she could set up meetings with a few commissioners ater the staff briefing. wgramm <wgramm@osf1.gmu.edu> on 07/17/2001 03:23:19 PM Please respond to <wgramm@osf1.gmu.edu> To: Jerry Ellig <jellig@gmu.edu> Steve Kean <skean@enron.com> cc: Susan Dudley <SDudley@gmu.edu> Subject: FERC course on for Thurs July 26 1-4 p.m. Susan got it done -- it'll be Thursday July 26 1-4 p.m. at FERC (a room on the 3rd floor?). Susan has talked with Bill Albrecht. He'll probably be coming in on Wed. p.m. Steve any ideas about a Commissioner strategy? (invite them to attend if the FERC folks agree ask the FERC folks to do the inviting ask the FERC folks to help set up meetings afterwards or a follow on if they like what we do and think it useful for Commissioners try to do a walkaround -- that is offer to have Jerry Bill Susan visit commissioners individually Friday a.m. after the course or Thursday a.m. before the course?) Wendy Wendy Gramm Regulatory Studies Program Mercatus Center George Mason University 703-993-4884 | energy infrastructure | formal | 3 |
Moving foward at a good clip | Steve Good news. As you indicated would happen Kalen Pieper called me mid-week. We had a very good conversation about EES and Dave Delainey's leadership. She explored my views about doing business with government. Shortly thereafter Dave's office called to invite me to Houston on Thursday July 26. Kay Chapman explained that Dave's schedule would keep him out of pocket until August 16. In order to move forward Janet Dietrich will be meeting with me when I go to Houston next Thursday. (I must confess that after all the great things I have heard about the man I do look forward to meeting Dave himself.) Is there a time next week that I can speak with you by phone to fine-tune my thinking / preparation for Thursday's meeting with Janet? Thank you for your all of your help. I am pleased and appreciative that things are moving forward at a good clip. Kevin Contact Information E-mail kevinscott@onlinemailbox.net Phone (213) 926-2626 Fax (707) 516-0019 Traditional Mail PO Box 21074 ?Los Angeles CA 90021 | other | confident | 3 |
Re: Enron Mentions | Thanks for the note. Jim Hughes asked the same question you did. Here is my (and John's) response. | other | formal | 1 |
Enron Comments on NERC Legislation | Attached below are the Enron comments submitted to NERC and the other parties involved in the NERC-led discussions on reliability legislation. The comments indicate that Enron does not support the final version on which comments were requested by today. The comments as submitted were reviewed by Jim Sarah and Charles and reflect their suggested changes. Thanks to them for their assistance. | energy infrastructure | formal | 3 |
RE: Risk 2001 Australia | Philip Please try Frank Wolak from Stanford University. He is the best expert on California right now. Vince | other | formal | 3 |
Re: MEC | Start with Joe hillings in DC To: Steven J Kean/HOU/EES@EES cc: Subject: MEC Steve What are your thoughts on public subsidies/tax breaks for MEC? Who should I contact to discuss the possibilites for some tax advantages on new facilities? Thanks Mark | other | formal | 3 |
EES Staff Meeting, in 746 | Ralph Reed--get back to him (second week of Oct) Paul Carrier 202-586-5659 Phil Sharp 617-495-1363 496-6335 617- 495 1364 Slides for QBR re project Balboa | other | formal | 3 |
RE: Thanks for your time this morning. | Aruna No address was attached. Vince | employment | polite | 0 |
Re: Alhamds Presentations | Offer him the job. Rob Bradley@ENRON 07/25/2000 12:40 PM To: Steven J Kean/HOU/EES@EES cc: Andrew Miles/HOU/EES@EES Subject: Alhamd's Presentations FYI--go to the Internet Strategy one for what you need. I am pretty sure he will work out with me and Jeff--you can pull the trigger and hire him with my concurrence if you feel comfortable enough. - Rob ----------------- | other | formal | 3 |
Re: ENE Officer Elections | We should include David Oxley -- VP of human resources. From: Kelly Johnson/ENRON@enronXgate on 07/18/2001 11:13 AM To: Steven J Kean/NA/Enron@Enron cc: Maureen McVicker/NA/Enron@Enron Subject: ENE Officer Elections Steve: Please review the attached ENE Officer list for your direct reports and approve. Thank you. Kelly M. Johnson Enron Corp. Executive Assistant Tel: (713) 853-6485 Fax: (713) 853-2534 E-Mail: kelly.johnson@enron.com | human resources | formal | 3 |
RE: DPC - strictly confidential and privileged | In the three years I have been here I am unaware of an ENA/ECT bad faith claim against any insurance company. Anyone else? If so please contact Michelle. | other | formal | 3 |
Re: DRAFT EDITORIAL: Enron is Committed to Floridas Energy Future | I think it starts off a bit too hot. I would pull up some of the arguments you make about the need for additional supply and the importance of electricity to our way of life. I'd then go into a discussion of the debacle in the West (and how they are now playing catchup - with loud polluting diesel generators ... as was reported today). Then I'd go into how our plants in Florida represent a very reasonable inobtrusive solution for Florida. From: Eric Thode/ENRON@enronXgate on 05/24/2001 09:07 AM To: Steven J Kean/NA/Enron@Enron Mark Palmer/Corp/Enron@ENRON Karen Denne/Corp/Enron@ENRON cc: Subject: DRAFT EDITORIAL: Enron is Committed to Florida's Energy Future In support of of our three power plant proposals in South Florida I have written an editorial for distribution to South Florida newspapers including the Sun Sentinel and Miami Herald. Additionally we would distribute it to a number of small city papers including the Pompano Pelican Deerfield Times Pompano Times Deerfield Observer etc. Needless to say no decision has been made regarding releasing it. I would like your input on the subject. If we decide to proceed our goal would be placement during the first week in June leading up to the next round of Commission hearings which are scheduled for June 6 8 and 12. Please provide comments to me at your earliest convenience. If you have any questions please call me at ext. 3-9053. Thanks. Eric | other | formal | 3 |
Energy Issues | Firsst article attached refers to the 1946 Nebraska case I mentioned to you= =20 in DC | other | casual | 2 |
EGEP Sale Announcement | print | other | casual | 3 |
Speaking Engagement | MARC Conference per Iowa Commissioner Emmett George 8:30 Sue Landwehr will meet you at the hotel for breakfast 10:30 - 12:00 Power Supply and Transmission Lunch at 12:00 at conference Irene Baeg 515-281-8644 Afternoon fly to DC | other | casual | 5 |
Confidential - Calif Peaking Plant | Phil-- Enron is currently evaluating the possibility of installing an NGL peaking facility with appurtenant storage and rail facilities near Needles California. Ideally the plant would inject / vaporize normal butane at the rate of 18750 gallons per hour into a high pressure natural gas transmission system. Current gas pipeline specs are as follows: Operating pressure - 850 - 1000 psig worst case 750 normal range 800-900 Gas Volume - 650000 - 750000 MMBtu/day Expected normal butane (GPA spec) requirement - 450000 gallons/day (18750 gal/ per hour) My questions are: 1) Is anyone currently using butanes for peaking service and if so where? 2) Do we need to blend with air (how much) or can we inject straight normal butane? 3) At what line pressure point do the butanes re-liquefy further downstream of the injection point as the pipeline pressure falls? 4) Is this peaking plant configuration feasible and if so at what price (ball park here don't go way out of your way)? (If it's not what would your suggestion be for a design). I will fax you the normal butane specs as soon as I get them (please email back your fax number). As always we're on a pretty tight time frame. After you've had a chance to review the above I'd like to get together and discuss this with you. I can meet you in Ohio if it fits your schedule better just let me know. Thanks for the help and I look forward to talking with you soon. Kevin Hyatt 713-853-5559 kevin.hyatt@enron.com | other | formal | 5 |