From: jeff.dasovich@enron.com
To: drothrock@cmta.net
Date: 2001-07-11 12:00:00+00:00
Subject: Re: Sher Shops Alternative Edison Bailout Plan

Thanks.  415.782.7854.  Better or worse than ours?



	Dorothy Rothrock <drothrock@cmta.net>
	07/11/2001 11:54 AM
		 
		 To: Jeff.Dasovich@enron.com
		 cc: Ann.Cohn@sce.com, "'Barbara Barkovich (E-mail)'" 
<brbarkovich@earthlink.net>, "Dominic DiMare (E-mail)" 
<dominic.DiMare@calchamber.com>, "'John Fielder (E-mail)'" 
<fieldejr@sce.com>, "'Phil Isenberg (E-mail)'" <isenberg@hmot.com>, "'Jeff 
Dasovich (E-mail)'" <jdasovic@enron.com>, "'Keith McCrea (E-mail)'" 
<kmccrea@sablaw.com>, "'Linda Sherif (E-mail)'" <lys@a-klaw.com>, "'Linda 
Sherif (E-mail 2)'" <lysherif@yahoo.com>, "'Gary Schoonyan (E-mail)'" 
<schoongl@sce.com>, "'John White (E-mail)'" <vjw@cleanpower.org>, 
dhunter@s-k-w.com, Rick.Simpson@asm.ca.gov
		 Subject: Re: Sher Shops Alternative Edison Bailout Plan


I have the plan.....who wants it? send your fax number (and $10 for shipping
and handling....just kidding)

D

Jeff.Dasovich@enron.com wrote:

> Folks:  Please see highlighted sections.  Anyone seen Byron's plan?  Know
> where it's headed, etc.?
>
> Best,
> Jeff
> *************************************************************************
> Power purchase bills exceed $7.5 billion
>
> Published Tuesday, July 10, 2001, in the San Jose Mercury News
> BY MARK GLADSTONE, NOAM LEVEY AND DION NISSENBAUM
>
> Mercury News Sacramento Bureau
>
> SACRAMENTO -- Six months after jumping into the electricity business, the
> Davis administration on Monday provided the first detailed glimpse of
> California's daily power purchases, showing more than $5 billion in
> payments, much of it to government-owned utilities and private companies
> that state officials have branded as price gougers.
>
> The state spent an additional $2.5 billion on a variety of contracts and
> other electricity services designed to stabilize the volatile energy
> markets, according to documents that the state agreed to release last week
> amid a legal dispute over public access to the data.
>
> In roughly the first five months of the year, the state shelled out $1.2
> billion to Atlanta-based Mirant, the most any company was paid for
> electricity, followed by $1 billion to Powerex, the marketing arm of BC
> Hydro in British Columbia. It also paid $331 million to the Los Angeles
> Department of Water and Power.
>
> The documents raise questions about some of the common assumptions that
> have arisen around the electricity crisis. For instance, almost 40 percent
> of the state's purchases have come from government-run power generators in
> California and elsewhere, but not Texas; some of the biggest suppliers are
> from the Northwest.
>
> Gov. Gray Davis, who has ambitions to run for the White House, has put much
> of the blame for the soaring costs of power on energy companies based in
> President Bush's home state.
>
> The figures are tucked inside 1,770 of pages of invoices that Davis has
> resisted divulging, saying disclosure would encourage suppliers to charge
> more. The state, which last month released information on its long-term
> electricity contracts worth $43 billion, agreed Thursday to release the
> first quarter details.
>
> Short on explanation
>
> The figures were disclosed late Monday by the California Department of
> Water Resources, which buys power for the state's financially strapped
> major utilities, and seem to buttress the administration's contention that
> the price of power is gradually dropping but offer little or no explanation
> for what prompted the decrease.
>
> In January, for instance, the average price for power on the spot market
> was $321 a megawatt hour. It peaked in April at $332 and dropped to $271 in
> May.
>
> One megawatt powers about 750 homes.
>
> Davis spokesman Steve Maviglio said the price data supports the governor's
> assertions that California has been gouged. ``The bad guys are clearly the
> out-of-state generators,'' Maviglio said. ``There has been a significant
> shift of money out of California.''
>
> But the documents fail to shed much light on whether, as the administration
> contends, the price drop was due to long-term power contracts negotiated by
> the state earlier this year. Critics contend that the Davis administration
> panicked and rushed into deals that commit the state to pay high prices for
> many years.
>
> Used for support
>
> Republican officials used the price information to bolster their attacks
> against Davis, a Democrat, for signing long-term contracts with power
> generators even as the price of power on the spot market was coming down,
> partly because of the declining price of natural gas used to fuel many
> plants.
>
> ``It's more clear than ever that the long-term contracts are a bad deal,''
> said Assemblyman Tony Strickland, R-Camarillo. ``The governor's really hurt
> the ratepayers for the next five or 10 years.''
>
> The newly released bills highlight the volatility of California's energy
> market, where the price per megawatt hour ranged from $70 to $1,000. On any
> given day, the records show, the prices from seller to seller varied
> widely, with some of the highest prices being charged by public utilities
> and companies outside Texas.
>
> On one day in February, for example, San Diego-based Sempra Energy was
> charging $165 per megawatt hour, the Eugene Water and Electric Board was
> charging nearly $500 and Duke Energy, a North Carolina company, was
> charging up to $575.
>
> The state's daily spending peaked May 10 at $102.4 million for all power,
> including the spot market and contracted power.
>
> The state began buying power in mid-January on behalf of the state's major
> utilities, which were unable to borrow money to buy power after amassing
> enormous debts for electricity.
>
> San Jose-based Calpine Corp., which is building several new power plants
> around California including one in South San Jose, did only $29 million
> worth of business with the state in the first five months of the year,
> according to the figures.
>
> The state began buying power in mid-January when Pacific Gas & Electric Co.
> and Southern California Edison Co. were on the ropes financially. PG&E
> later went into bankruptcy.
>
> On Monday, state lawmakers took another shot at trying to cobble together a
> plan to rescue financially ailing Edison.
>
> While most concede that a rescue plan Davis worked out with Edison will not
> win the necessary support in the Legislature, lawmakers have created
> several working groups to come up with alternatives.
>
> Compromise plan
>
> On Monday, state Sen. Byron Sher, D-Redwood City, unveiled the latest
> compromise proposal that seeks to protect average ratepayers and small
> businesses from further rate increases and forces everyone else to help
> finance the Edison bailout.
>
> The ``shared pain'' proposal would force power producers, owed about $1
> billion, to take a 30 percent ``haircut'' and agree to forgive about $300
> million in Edison debts. Edison would be asked to swallow $1.2 billion --
> about a third of its debt. And big users would be asked to pay off the
> remaining $2 billion in debts, possibly by paying higher prices for power.
>
> In exchange, large companies would be given the opportunity to buy power on
> the open market, a system that would allow many of them to sign cheap
> energy deals.
>
> Sher presented the proposal to Senate Democrats Monday afternoon, but it
> remains unclear how much support the framework will receive in the
> Legislature.
>
> Contact Mark Gladstone at mgladstone@sjmercury.com or (916) 325-4314.