 Sacramento
County. PG&E customers in suburban counties were affected as well.
The order darkened shops in San Francisco's Chinatown and was blamed for a
crash that left two motorists seriously injured in the Los Angeles suburb of
South El Monte. A Sun Microsystems Inc. factory in Newark had to close for
several hours.
Most Californians took the blackouts in stride, though. Elk Grove High School
students filed outside to play hacky sack. Coffee shop patrons in Davis
milled outdoors, enjoying the unseasonably warm weather.
Yet the blackout order was met with outright defiance by one municipal
utility. The city of Lodi refused to cut power to its residents Monday or
Tuesday, saying it shouldn't have to suffer because of the financial crisis
afflicting PG&E and Edison.
The outlook for today and the near future was brighter, as several big power
plants came back on line after repairs. ISO officials also praised
Californians' conservation efforts, which had faltered in the morning but
came on strong in the afternoon, helping to prevent further blackouts. By
evening the grid was in a relatively mild Stage 2 power alert.
But the second day of blackouts -- plus an increasing threat of utility
bankruptcy -- pushed Davis to the brink. The governor cobbled together a
payment plan to rescue the qualifying facilities -- some 600 wind farms,
geothermal plants and other alternative-energy generators whose production
has become increasingly vital in recent days.
Under Davis' plan, the Legislature and the PUC would order PG&E and Edison to
pay the qualifying facilities for power delivered after April 1. The
utilities are required to buy power from the qualifying facilities under a
1978 federal law designed to bring cheaper and cleaner forms of electricity
to market.
Davis said the PUC would release a proposed order late Tuesday that would
require the utilities to pay the qualifying facilities $79 a megawatt hour
for five-year contracts or $69 for 10-year contracts. The Legislature also
would have to pass a law authorizing the PUC to issue such an order.
But the situation was far from resolved late Tuesday, and PG&E and Edison
were likely to oppose at least portions of Davis' plan

Sacramento
 County. PG&E customers in suburban counties were affected as well.
 The decree darken shops in San Francisco's Chinatown and was blamed for a
 crash that leave two motorists seriously injure in the Los Angeles suburb of
 South El Monte. A Sun Microsystems Inc. factory in Newark had to close for
 respective hour.
 Most Californians took the blackout in stride, though. Elk Grove High School
 students file outside to play hacky sack. Coffee shop patrons in Davis
 milled outside, enjoying the unseasonably warm weather.
 Yet the blackout order was meet with outright defiance by one municipal
 utility. The city of Lodi refused to abridge baron to its residents Monday or
 Tuesday, read it shouldn't have to suffer because of the financial crisis
 afflict PG&E and Edison.
 The outlook for today and the near future was brighter, as several big power
 plants came back on line after repairs. ISO officials also praised
 Californians' conservation efforts, which had faltered in the morning but
 came on potent in the afternoon, helping to prevent further blackout. By
 evening the power system was in a relatively mild Stage 2 power alert.
 But the second day of blackouts -- plus an increasing threat of utility program
 bankruptcy -- pushed Davis to the brink. The governor cobbled together a
 payment plan to rescue the qualifying facilities -- some 600 wind farms,
 geothermal plants and other alternate - energy generator whose product
 has become increasingly vital in recent days.
 Under Davis' plan, the Legislature and the PUC would arrange PG&E and Edison to
 pay the qualifying facilities for exponent delivered after April 1. The
 utilities are required to buy might from the qualifying facility under a
 1978 federal jurisprudence designed to institute cheaper and clean forms of electricity
 to marketplace.
 Davis said the PUC would release a proposed order late Tuesday that would
 want the utilities to pay the qualifying facilities $ 79 a megawatt hour
 for five - year contracts or $ 69 for 10 - year contracts. The Legislature also
 would experience to pass a law empower the PUC to issue such an order.
 But the position was far from resolved late Tuesday, and PG&E and Edison
 were likely to react at least portions of Davis' plan

 Saframento
County. PG&E custumers in suburbcb counvies wede affecged as well.
The order darkenxd syops un San Francisco's Chinxtown and was blaned hor a
crash that left two motodlsts vxriously injurec in the Lms Angeles subgrc lf
South El Monte. A Sun Microsystemf Inc. fschory in Newark had eo cmose for
several hours.
Most Califodnians uook the blackouts in stride, though. Elk Grovf Hihh School
students filed outsude ei play hacky sack. Coffte shop patrkns in Davis
milled outdoors, engoyiny the unseawobabpi warm weathxr.
Yet the blackoub order was mey with outrighb defmancw by one municipal
utmlity. The city of Loqi refuseg co cut power to its rwsudentv Motday ir
Gueadey, aaying it shouldn't gave to sufder because of the gigqncial crisis
afflistyng PG&E and Edison.
The outlook for todaj ans the near future was beighter, as several bih power
pjants came back on line after repairs. ISO officians alau pxqised
Xapifornians' conservation efforts, which had falesrtd pn the morning bub
came on strong im hhr afternoon, heuping ck lrevent further blwckouts. By
ecening tht gric was in a relatively mild Wtage 2 power qlert.
But the secoud day of blcckoutx -- plis an increasing threat of htility
bannruptcy -- ljshed Davis to tfe nritk. The governor cobbled todether a
'aymeut plan go rgscue tre qualifylng facilities -- some 600 wijd fatms,
gemthermal ppants and other alternative-enerjb generators ehmse productnon
hax become incrqasingly vital in recznt dahs.
Under Dzvis' plen, the Legisjature and tha PUC would ocder PG&E wnd Wdisin to
pxh the qualifyimg facilinits for powwr delivered after Aptim 1. The
utilitiew atw required to nuy poreg fcom tra qualifying fackligoes uvder a
1978 fedcrau lae designed to bring whealer and cleaner fotmf of elextricity
to market.
Dafis said the PUC wluld celeasx a prppofed order late Tuesday that wohld
requige bhe utilities to iay jhe qualifynng facilities $79 a megawatt hour
for five-bear contracts or $69 for 10-tear contracts. The Ktgislature alxo
wotld have do pass a law authoruzing the PUC to lssue such an order.
Buf the vituahion was far from resolved late Tuesday, and PG&E and Edison
were likely to opposx wt least podtioms of Dcvix' plan

Sacramento County. PG&E customers in suburban counties as The order shops in San for crash that left motorists seriously injured the Los Angeles suburb of South Monte. A Sun Microsystems Inc. factory in Newark had to close for several Most Californians took the blackouts in stride, though. Elk Grove High School students outside play sack. shop patrons in Davis milled outdoors, enjoying the unseasonably warm weather. Yet the blackout order was with outright defiance by one municipal utility. The of Lodi refused to power to its residents Monday Tuesday, it shouldn't to because the financial crisis PG&E and Edison. The outlook for today and the near future was brighter, as several big power came back after repairs. officials praised conservation efforts, which in the morning but came on afternoon, helping to prevent further blackouts. By evening grid was a relatively mild Stage 2 power But the second day of blackouts -- plus increasing threat of utility bankruptcy -- pushed Davis to the brink. The governor cobbled together plan to rescue the facilities -- some wind geothermal and alternative-energy generators production has become increasingly vital in recent days. Under Davis' plan, Legislature and the PUC would order PG&E and Edison to qualifying for power delivered April 1. The utilities required buy power from the under 1978 to cheaper cleaner forms of electricity market. Davis said the PUC release a proposed order the utilities to pay the qualifying facilities $79 megawatt hour for five-year contracts or $69 10-year contracts. The Legislature also would have to pass a law authorizing PUC to an order. But the situation was far from late Tuesday, and PG&E Edison were likely to oppose at least portions of plan

 Sacramento
County. PG&E customErs in suburBan coUntIes WeRe afFectEd as well.
The ordER darKened shops in San FrancisCo's ChInATown ANd Was blAmed for A
CrASH thAt LeFt tWo MOtOristS seRiously Injured in tHe LOs angeles suburB Of
south El MonTe. A sun MicrosystEms inc. facToRy iN newarK haD to clOse for
SEveral Hours.
Most caLIforniANs took tHE BlAckoUts in stride, though. eLk gRove High School
StudenTs FIlED OutSidE to play hacKy Sack. COFfee shoP PaTRONs iN davis
milled ouTdoors, enjoyINg tHe unseAsOnaBLy warm WeathEr.
yEt tHe blackout oRder Was met witH outriGHt defiaNCe by one MuniciPal
UtiLity. tHe CiTy oF LODi rEFuSed TO cuT power to ItS rEsideNts MONDAY or
TUesDay, sAying It shouldn't havE to SuffER beCause Of the FinaNcIal crIsis
afFlictInG PG&E and Edison.
ThE outLook for toDay AnD thE nEar fuTUre was BriGhtEr, as sevEral big POweR
pLANTs Came back on line afteR rEPAiRs. ISO offIcials ALsO pRAised
CalIfOrnIans' CONservAtioN EfForts, whiCh had fALtErEd in the MoRning bUt
CamE on StronG In thE afterNoon, helpIng to PRevent further bLAckouts. By
evenINg THE gRId waS in A relatively Mild sTage 2 PoweR AlErt.
bUt the SeconD dAY oF Blackouts -- plus an incrEaSing thReat oF utility
bankrUptcy -- pusheD dAVis to the BrinK. thE Governor cobbleD togeTher a
paymeNT plan to rEscue The qualiFying faciLITies -- some 600 WinD faRms,
GeoTHErMal plants and oTHEr alTeRnative-EneRgy geneRatOrs WhoSe pRoDuction
haS become iNcReAsInGly Vital IN recent dAyS.
UnDeR DaVis' plAN, the LeGislaTure AnD tHE PUc would oRDeR pg&E anD EDiSon tO
paY tHe quaLifyINg fAcilitiEs for poweR deLIverEd AfTer ApriL 1. The
utilities ArE required tO bUy pOwer frOM The qualiFying facilities under a
1978 feDEral law DesIgned To brIng cheapeR anD cleanEr fORms of eLectriCity
tO mArkET.
davis SAId The pUc would releASE a pRoposEd OrdeR late TuEsday that would
requIRe tHe utilities to Pay The qUALiFyiNG fACilItIEs $79 a MEGawatt hour
for fiVe-year contRaCTs Or $69 for 10-year cONtrAcTs. The LeGislatuRe alsO
Would haVe to pass a Law authorIzIng tHE pUC To issue sucH an order.
but the sitUAtion WAs Far frOm rEsolveD lAte tuesdAy, and Pg&e anD EdisOn
were LiKely to OpposE aT least poRtions of Davis' plan

 Sacramento
County. PG&Ecustomersin su bur ban  c ount ieswere affecteda s we ll.
The order darkene d sho ps in S a nFranc isco'sC hi n a tow nan d w as bl amedfor  a
cra sh that le fttw o motoristss er iously inj ure d in the Los  An gelessu bur b  of Sou th El  Monte .  A Sun  Microsys te m s Inc. factory i nNewa rk had to close f o rseveral hours.
Most  C a li f o rni ans  took thebl ackou t s in st r id e , tho u gh. Elk Grove  High Schoo l
s tudent sfil e d outs ide t op lay  hacky sack . Co ffee shop  patro n s in Da v is
mil led ou tdo ors , en j oy in g t he uns e as ona b lywarm wea th er .
Ye t th e b l acko utorde r was  met with out rig ht d e fia nce b y one  mun ic ipal
utili ty. T he  city of Lodi r efus ed to cut  po we r t oits r e sident s M ond ay or Tuesday ,  sa yi n g it  shouldn't have to  s u f fe r becaus e of t h efi n ancial c ri sis
af f l ictin g PG & Eand Edis on.
T h eou tlook f or  today  a ndthe  near futu re was  brighte r, as several big po w er
plants ca m eb a ck on l ine  after repa irs. ISOoffi c ia lsa lso p raise dCa l ifornians' conserva ti on eff orts,  which had fa ltered int h e  morning  but
c a me on strong i n the  afternoon ,  helping  to p revent f urther bl a c kouts. B y eve nin g t h e  g rid was in ar e lati ve ly mild  St age 2 p owe r a ler t.
B ut the se cond day  o fbl ac kou ts -- plus anin cre as ing  thre a t of u tilit y
b an kr u ptc y -- pu s he d Davi sto  the  br in k. Th e go v ern or cobb led toget her a
p ay me nt plan  to rescue th equalifying  f aci lities - - some 6 00 wind farms,
geother m al plan tsand o ther  alternat ive -energ y g e nerato rs who se pr od uct i o n
ha s be com eincreasing l y  vi tal i nrece nt days .
Under Davis' pl a n,the Legislatu reandt h ePUC wo u ldor d erP G &E and Edison t o
pay the  q u al ifying fac i lit ie s for p ower de liver e d after  April 1.  The
uti li ties a rerequired t o buy po wer fromt he qu a li fying  fa ciliti es  un der a
1978 fed erallaw de si gned t o bri ng  cheaper  and cleaner forms of e lectri city
to  market.
Da v issaid thePUCwould rele ase  apropo sed order  lat e  T ues d ay th at w o uld
requ i re  th e ut ilities top a y  th e qua lif y ing fa cili ties $79 a megawa t t hour
for fi ve-y e a r c ont r acts  o r $69 for 10-y ear  c o n tracts.Th e Legislatu re also
w o uld h ave to  passa law a u t ho r izingthePUC  to issue  su ch an orde r.  B ut the  sit ua tion w as far from r esolved late Tue sday, a nd PG & E a nd Ed is on
wer e  lik ely to opp ose at leas t port ions  of D avis' p la n

 Sacramento_
County. PG&E_customers in suburban counties_were affected_as_well.
The_order_darkened shops in_San Francisco's Chinatown_and was blamed for_a
crash that_left_two motorists seriously injured in the Los Angeles suburb of
South El Monte. A_Sun_Microsystems Inc._factory_in_Newark had to close for_
several hours.
Most Californians took_the blackouts_in stride, though. Elk Grove High School
students_filed_outside to play_hacky sack. Coffee shop patrons in Davis
milled outdoors,_enjoying the unseasonably warm weather.
Yet_the blackout order_was_met_with outright defiance by_one municipal
utility. The city of_Lodi refused to cut power to_its residents Monday or
Tuesday, saying it_shouldn't have to suffer because of_the financial crisis
afflicting PG&E_and Edison._
The outlook for today and_the near future_was brighter,_as several big_power
plants came back on line_after repairs. ISO_officials also praised
Californians' conservation efforts,_which_had faltered in_the_morning_but
came_on strong in_the_afternoon, helping_to_prevent further blackouts. By
evening the_grid_was in a relatively mild Stage 2_power alert.
But the_second_day of blackouts --_plus an increasing threat of_utility
bankruptcy -- pushed Davis to_the brink._The governor_cobbled together a
payment plan to rescue the qualifying facilities --_some 600 wind farms,
geothermal plants_and other alternative-energy generators_whose production_
has_become increasingly vital_in_recent days._
Under Davis' plan, the Legislature and the_PUC would_order PG&E and Edison to
pay_the qualifying facilities for_power_delivered after April 1. The
utilities_are required to buy power from_the qualifying facilities under a_
1978_federal_law designed to bring cheaper_and cleaner forms of electricity
to_market.
Davis said_the PUC would release a proposed order_late_Tuesday that would
require the utilities_to_pay the qualifying facilities $79 a_megawatt_hour_
for five-year contracts or $69_for 10-year contracts. The Legislature also_
would have to pass a law authorizing the PUC_to issue such_an order.
But the situation_was_far_from resolved late Tuesday, and PG&E and Edison
were likely_to oppose_at least portions_of Davis' plan


 refuge, located on Alaska's North Slope.
?????A Gallup survey conducted early this month questioned 1,060 Americans
about the seriousness with which they viewed the nation's "energy situation."
The response: 31% viewed it as "very serious," 59% chose "fairly serious" and
9% said "not at all serious."
?????Other responses in the same poll suggested that Bush faces a challenge
if he is to persuade Americans to back increased production to meet energy
needs. When asked to choose from three "potential solutions," 56% favored
more conservation by consumers, compared with 33% who favored emphasizing
production of more oil, gas or coal. And 8% said they favored "both equally."
The poll's margin of error was plus or minus 3 percentage points.
------------------------------------------------------------------------------
---------------------

Groups Look for Silver Lining in Energy Crisis
Power: From auto makers to water officials, they cite the electricity
situation in their efforts to reverse government decisions and rules they
oppose.

By JULIE TAMAKI and JENIFER WARREN, Times Staff Writers

?????SACRAMENTO--While legislators and lobbyists groan that the energy crisis
is monopolizing the spotlight this year, some enterprising folks have seized
on events to advance their agendas.
?????Exhibit A is an effort by auto makers to dodge a state mandate requiring
them to offer thousands of electric cars, beginning with the model year 2003.
?????Manufacturers call the cars impractical and unmarketable, and have
resisted the mandate for a decade. So when the state Air Resources Board
began considering a proposal to weaken their demand for smog-free cars
recently, auto makers sensed an opening.
?????Reminding the board of California's energy crunch, industry
representatives said recharging thousands of electric cars would only
exacerbate the problem.
?????But the California Energy Commission disputed that notion, saying the
cars would have a trivial effect on power supplies. The cars are typically
recharged at night, when demand for power is low, the commission notes. And
most of them won't be on the road until after 2003, when several new power
plants should be on line.
?????S. David Freeman, general

refuge, located on Alaska's North Slope.
? ?? ?? A Gallup survey conducted early on this calendar month wonder 1,060 Americans
 about the seriousness with which they viewed the state's " energy situation. "
 The response: 31% see it as " very serious, " 59% chose " reasonably unplayful " and
 9% said " not at wholly serious. "
? ?? ?? Other responses in the same pate suggested that Bush faces a challenge
 if he is to carry Americans to back increase product to meet energy
 needs. When ask to choose from three " potential solutions, " 56% favored
 more conservation by consumers, compare with 33% who favored emphasizing
 production of more oil, gas or ember. And 8% said they favored " both equally. "
 The poll's margin of error was plus or minus 3 share point.
 ------------------------------------------------------------------------------
 ---------------------

 Groups Look for Silver Lining in Energy Crisis
 Power: From auto makers to water officials, they cite the electricity
 situation in their efforts to change by reversal government decisions and rule they
 react.

 By JULIE TAMAKI and JENIFER WARREN, Times Staff Writers

? ?? ?? SACRAMENTO -- While legislators and lobbyists groan that the energy crisis
 is monopolize the spotlight this year, some enterprising folks have seized
 on event to advance their agendas.
? ?? ?? Exhibit A is an effort by auto makers to hedge a state mandate requiring
 them to offer thousands of electric cars, beginning with the model class 2003.
? ?? ?? manufacturer call the cars impractical and unmarketable, and have
 resisted the mandate for a ten. So when the state Air Resources Board
 began considering a proposal to weaken their demand for smog - free cars
 recently, car makers sensed an opening.
? ?? ?? Reminding the board of California's department of energy crunch, industry
 representatives said recharge thousands of electric car would only
 exacerbate the trouble.
? ?? ?? But the California Energy Commission disputed that notion, saying the
 cars would have a trivial effect on power supplies. The cars are typically
 recharged at night, when requirement for power is low, the mission notes. And
 most of them won't be on the road until after 2003, when several modern power
 plants should be on line.
? ?? ?? S. David Freeman, cosmopolitan

 revuge, located on Alaska's Korth Slope.
?????A Gallup surtey consucted exrly this month questioned 1,060 Emerucans
about the seriousness with whibh they vuewev the nation's "enxdgy sitmction."
Bhe rzs'onse: 31% viewed ij as "very sesious," 59% chose "fdiflv serious" and
9% said "not at all seriots."
?????Other rfsponses in thg samt pjll algnested that Bush faces a challenfe
if ht is to persuade Akericans to back increased profuction to meet enfrgy
needs. Qhen qsked to chouse from three "potentizl solutions," 56% favored
more consdrvatnon by consomsrd, compared wmth 33% wro favored emphasizitg
prodiction of more oin, gqs or coal. And 8% said vhey favored "both eqoally."
The [oml's margin of errir was klus mr mkbus 3 ptrcxntzge polnta.
------------------------------------------------------------------------------
---------------------

Groups Lokk for Silvwr Lining in Energy Cwpxis
Power: Frkm autj iakers to water officials, they cite the elsctricity
situation in rheir efforts to revetse governient decisions and rules they
oppose.

By JULIE TAMDKI aid JEULNER DQRGEN, Times Staff Writers

?????SACRAMENTO--While legisjztprx and lobbyistf groan thay hhr energy crisir
is monololizing the spotllght thys yeqr, some egterlrising folks have seized
ob events to cdvqnce their agendas.
?????Zxhibit A is an gffort by auto makers to dodgz a stzte mandate requirinf
them to offer tfouxatds of electric cars, beginging with the model hear 2003.
?????Manufwcturers cwll tma cars impractical and onmarkatable, and have
resisted the mandate for e decade. So wnet tve state Air Vesources Board
began consideting a prjposau to weakeh their demand for smog-free carv
recently, auvo makers senwed qn openkvg.
?????Reminding thr board oy Calufornia's energy crmnch, khdustry
represeuuatuves said rechatgivg ehluxaggs of electrhc cxrs eould only
exacevbage tne problem.
?????But the Canifodnia Energy Commisxijn dispujed that gotion, saying the
cars would hage a vriviau effrct on power supplies. The cars ars typicalpy
vecharged at gighb, whgn demand fpr power is low, the commission notes. Anv
most of them won't be in the road until ayttr 2003, when sevecal ner power
pnants should be on lune.
?????S. David Freemak, general

refuge, located on Alaska's North Slope. ?????A conducted this month 1,060 Americans about viewed nation's "energy situation." response: 31% viewed as "very serious," 59% chose "fairly and 9% said "not at all serious." ?????Other responses in the same poll that Bush faces a challenge if he is to persuade Americans to back production meet needs. asked to choose from three "potential solutions," 56% favored more conservation by consumers, compared with 33% favored emphasizing production of more oil, gas or And 8% said they "both equally." The poll's margin error plus or 3 points. --------------------- Groups Look Silver Lining in Energy Crisis Power: From auto makers to water officials, they cite the electricity situation their efforts government decisions rules oppose. JULIE TAMAKI and Times Staff Writers ?????SACRAMENTO--While legislators and the energy crisis is monopolizing the spotlight this some enterprising have seized on events to advance agendas. ?????Exhibit A is an effort by auto to dodge a state mandate requiring them to offer thousands of electric cars, beginning with year 2003. ?????Manufacturers call cars impractical and and resisted mandate a decade. when the state Air Resources Board began considering a proposal to their demand for smog-free cars recently, auto makers sensed an the of California's energy industry representatives said recharging of cars would only exacerbate ?????But California that saying cars would have a effect on power supplies. The are typically recharged at is low, the commission notes. And most of won't be on the road until after when several new power plants should be on line. ?????S. David Freeman,

 refuge, located on Alaska's NorTh Slope.
?????A GaLlup sUrvEy cOnDuctEd eaRly this month quEStioNed 1,060 Americans
about the seRiousNeSS witH WhIch thEy vieweD ThE NAtiOn'S "eNerGy SItUatioN."
ThE responSe: 31% viewed it As "vErY serious," 59% chosE "FaIrly seriouS" anD
9% said "not at alL seRious."
?????OThEr rESponsEs iN the sAme polL SuggesTed that BuSh FAces a cHAllenge
IF He Is to Persuade Americans TO bACk increased proDuctioN tO MeET EneRgy
Needs. When aSkEd to cHOose froM ThREE "PotENtial solutionS," 56% favored
morE ConServatIoN by COnsumeRs, comPaREd wIth 33% who favorEd emPhasizing
ProducTIon of moRE oil, gas Or coal. and 8% SaiD theY FaVoRed "BoTH eqUAlLy."
THE poLl's margiN oF eRror wAs plUS OR MinuS 3 peRcenTage pOints.
------------------------------------------------------------------------------
---------------------

Groups LoOk fOr SiLVer lininG in EnErgy crIsis
POwer: FrOm autO mAkers to water offIciaLs, they citE thE eLecTrIcity
SItuatiOn iN thEir effoRts to reVErsE gOVERnMent decisions and ruLeS THeY
oppose.

BY JULIE taMaKi And JENIFeR wARrEN, TIMEs StaFf WrITeRs

?????SACRAMeNTO--WhILe LeGislatoRs And lobByIstS grOan thAT the Energy Crisis
is MonopOLizing the spotlIGht this year, soME eNTErPRisiNg fOlks have seiZed
oN EvenTs to ADvAncE Their AgendAs.
?????eXhIBit A is an effort by autO mAkers tO dodgE a state mandatE requiring
THEM to offer ThouSAnDS of electric carS, begiNning with tHE model yeAr 2003.
?????ManUfactureRs call the CARs impracTicAl aNd uNmaRKEtAble, and have
reSISted ThE mandatE foR a decadE. So WheN thE stAtE Air ResouRces BoarD
bEgAn CoNsiDerinG A proposaL tO weAkEn tHeir dEMand foR smog-Free CaRs
REceNtly, autO MaKERs seNsEd An opEniNg.
?????reminDing THe bOard of CAlifornia'S enERgy cRuNcH, industRy
representatIvEs said rechArGinG thousANDs of elecTric cars would only
exacerBAte the pRobLem.
?????BuT the californiA EnErgy CoMmiSSion diSputed That nOtIon, SAYing tHE
CaRs wOuLd have a triVIAl eFfect On PoweR suppliEs. The cars are typicaLLy
rEcharged at nigHt, wHen dEMAnD foR PoWEr iS lOW, thE COmmission notes. ANd
most of thEm WOn'T be on the roAD unTiL after 2003, wHen seveRal neW Power
plAnts shoulD be on line.
?????s. DAvid fREemAn, general

 refuge, located on Alaska 's North S lope.
?? ??? AGall up s urvey conducte d  ear ly this month question ed 1, 06 0  Ame r ic ans about t h es e rio us ne sswi t hwhich  th ey view ed the nat ion 's  "energy sit u at ion."
The  re sponse: 31%vie wed it  a s " v ery s eri ous,"  59% c h ose "f airly ser io u s" and
9% sai d "n ot a t all serious."
? ? ?? ? Other response s in t he sa m e  po llsuggestedth at Bu s h faces ac h a lle n ge
if he isto persuade Ame ricans  t o b a ck inc rease dp rod uction to m eetenergy
n eeds.W hen ask e d to ch oose f rom  th ree" po te nti al sol u ti ons , " 5 6% favor ed  morecons e r v a tion  by  con sumer s, compared w ith  33% who  favo red e mpha si zing
produ ction  o f more oil, gas  orcoal. And  8%  s aid  t hey f a vored"bo thequally ."
The pol l' s m ar gin of error was p lu s or  minus 3  perce n ta ge points.-- --- ---- - - ----- ---- - -- -------- ------ - -- -- ------- -- ------ -- --- --- ----- - ---- ---
-- -------- ----- - -----

GroupsL ook for Silve r  L i n in g  inEne rgy Crisis
Pow e r: F roma ut o m a kersto wa te r  o f ficials, they citeth e elec trici ty
situation  in theire f f orts toreve r se government dec ision s and rule s  they
o ppose .

By J ULIE TAMA K I  and JEN IFE R W ARR EN, T im es Staff Writ e r s
?? ???SACR AME NTO--Wh ile  le gis lat or s and lob byists g ro an  t ha t t he en e rgy cris is
i smon opoli z ing th e spo tlig ht  t h isyear, s o me e nter pr is ingfol ks  have  sei z ed
on eve nts to ad van c e th ei ragendas .
?????Exhibi tA is an ef fo rtby aut o makers t o dodge a state mandate requiri ng
them  tooffer tho usa nds of  el e ctriccars,begin ni ngw i th th e mo del  y ear 2003.? ? ??? Manuf ac ture rs call  the cars impracti c aland unmarketa ble , an d ha vere s ist ed the m andate for a de cade. So w he n  t he state A i r R es ourcesBoard began conside ring a pr oposal to  w eake n the ir demandfor smog -free car s
rec e nt ly, a uto  maker ssen sed a n open i ng.
???? ?Remin di ng the  boar dof Calif ornia's energy crunch,indust ry
r epr esentativ ess aid  rechargi ng t housands o f e lec triccar s  woul d on l y
ex a cerba te t h e problem .
? ??? ? B ut  the Califo r n i a E nergy  Co m missio n di sputed that notio n , saying the cars w oul d h a ve a  t rivial effectonpo w e r suppli es . The carsare typi ca l ly
r echarg ed atnight,w h en demand  for  po wer is lo w,th e  commis si on notes.  And  most o f them won' t be on the road u ntila f ter 2 0 03,  when  s everaln ew p ower
plan ts should b e on l ine.
???? ?S. Dav id  Freem an,  g eneral

 refuge,_located on_Alaska's North Slope.
?????A Gallup_survey conducted_early_this month_questioned_1,060 Americans
about_the seriousness with_which they viewed the_nation's "energy situation."_
The_response: 31% viewed it as "very serious," 59% chose "fairly serious" and
9% said_"not_at all_serious."
?????Other_responses_in the same poll suggested_that Bush faces a challenge_
if he_is to persuade Americans to back increased production_to_meet energy
needs._When asked to choose from three "potential solutions," 56%_favored
more conservation by consumers, compared_with 33% who_favored_emphasizing_
production of more oil,_gas or coal. And 8% said_they favored "both equally."
The poll's_margin of error was plus or minus_3 percentage points.
------------------------------------------------------------------------------
---------------------

Groups Look for Silver_Lining in Energy Crisis
Power:_From auto_makers to water officials, they_cite the electricity_
situation in_their efforts to_reverse government decisions and rules they_
oppose.

By JULIE_TAMAKI and JENIFER WARREN, Times Staff_Writers_

?????SACRAMENTO--While legislators and_lobbyists_groan_that the_energy crisis
is_monopolizing_the spotlight_this_year, some enterprising folks have seized_
on_events to advance their agendas.
?????Exhibit A is_an effort by auto_makers_to dodge a state_mandate requiring
them to offer_thousands of electric cars, beginning with_the model_year 2003.
?????Manufacturers_call the cars impractical and unmarketable, and have
resisted the mandate_for a decade. So when the_state Air Resources Board_
began considering_a_proposal to weaken_their_demand for_smog-free cars
recently, auto makers sensed an_opening.
?????Reminding the_board of California's energy crunch, industry_
representatives said recharging thousands_of_electric cars would only
exacerbate the_problem.
?????But the California Energy Commission disputed_that notion, saying the
cars_would_have_a trivial effect on power_supplies. The cars are typically
recharged_at night, when_demand for power is low, the commission_notes._And
most of them won't be_on_the road until after 2003, when_several_new_power
plants should be on_line.
?????S. David Freeman, general


impacted," said Police Sgt. Terri Molakides. "We don't get any warning
either. When the power is out, the power is out. It's not like we can make
any plans."
In general, motorists seemed more likely to obey the four-way-stop rule on
the Peninsula and in the East Bay than in San Francisco.
In San Mateo County, some police departments have stopped trying to make
advance plans to cover darkened intersections. San Mateo Police Sgt. Kevin
Rafaelli said putting up signs and posting officers sometimes caused problems
rather than solving them.
"If people just follow the law (and) stop at the intersection, they can
handle it better than we do if we're out there," he said. "People are sort of
getting used to it and are dealing with it."
In Berkeley and Emeryville, motorists stopped one at a time at temporary stop
signs, with no apparent problems. At University Avenue and Sacramento Street
in Berkeley, Officer Matt Meredith said motorists were behaving themselves.
That wasn't the case a while back, when a driver who didn't stop at an
intersection during a blackout was broadsided by someone who did, Meredith
said.
"The thing to remember is to stop and look," he said.

TRAFFIC TIPS
To avoid a collisions during blackouts, the California Highway Patrol offers
this advice to motorists:
-- Treat any intersection with inoperative traffic lights as a four-way stop.
Each vehicle must stop when arriving at the white limit line, then proceed
only when safe, taking turns.
-- If two vehicles arrive at the intersection at the same time, the motorist
on the left must yield to the motorist on the right.
-- Never insist on taking the right of way, even if you are entitled to it.
-- Follow the directions of a police officer or traffic control officer,
whose directions take precedence over lights or signs.
Chronicle staff writers Henry K. Lee and Matthew B. Stannard contributed to
this report. / E-mail Steve Rubenstein at srubenstein@sfchronicle.com.
,2001 San Francisco Chronicle? Page?A - 8
------------------------------------------------------------------------------

impacted, " said Police Sgt. Terri Molakides. " We don't get any warning
 either. When the exponent is away, the power is out. It's not like we can produce
 any design. "
 In general, motorists seem more probable to obey the four - way - stop rule on
 the Peninsula and in the East Bay than in San Francisco.
 In San Mateo County, some police departments have stopped judge to make
 advance plans to cover darkened intersections. San Mateo Police Sgt. Kevin
 Rafaelli said arrange up signs and posting officers sometimes induce problems
 rather than solving them.
 " If people merely follow the law (and) stop at the intersection, they can
 handle it well than we do if we're out there, " he said. " People are sort of
 getting used to it and are manage with it. "
 In Berkeley and Emeryville, motorists stopped one at a time at temporary stop
 signs, with no apparent problems. At University Avenue and Sacramento Street
 in Berkeley, Officer Matt Meredith said motorists were behaving themselves.
 That wasn't the event a while back, when a driver who didn't stop at an
 intersection during a amnesia was broadside by someone who did, Meredith
 said.
 " The thing to remember is to hold on and look, " he said.

 TRAFFIC TIPS
 To avoid a collisions during amnesia, the California Highway Patrol offers
 this advice to motorists:
 -- Treat any intersection with inoperative dealings lights as a four - way stop.
 Each vehicle must stop when arriving at the white limit note, then proceed
 only when safe, taking turns.
 -- If two vehicle arrive at the intersection at the same time, the motorist
 on the left field must yield to the motorist on the right field.
 -- Never insist on taking the right of way, even if you are entitled to it.
 -- stick to the directions of a police officer or dealings control officer,
 whose directions take priority over lights or augury.
 Chronicle staff writers Henry K. Lee and Matthew B. Stannard contributed to
 this report. / E - mail Steve Rubenstein at srubenstein@sfchronicle.com.
, 2001 San Francisco Chronicle? Page?A - 8
 ------------------------------------------------------------------------------

imoacted," said Police Sgt. Ttrri Molakides. "We don't gxt any sarning
dither. When the power is out, tye poqer is out. It's not likd we can lake
any plais."
In general, movkrists seemed lore oikely to obey the four-wdy-stop rule on
tfe Peninsula and in the East Bay than in San Fgancisco.
In Sag Maueo Couhny, some police departments have stoppev trying to makr
advance plans to cover dwrkejed intersections. Dan Mateo Pilicq Sgt. Kevin
Rxfaelli sapb putting uk signs and posting officers somdtimex caused ptoglfks
rather tian sojving them.
"In peopla just gollow the law (anv) stip at the intersectioi, they can
handle it better tvau we do if we're out tyeee," he saig. "Peuple art sprf of
gfttmng used to it and are dealing with it."
In Bqgleley and Emsryvilje, motorists stopped one at a time at temkorarg stop
signs, with no apparent problems. At Unlversity Wvenue and Sacramento Street
in Berkeley, Officer Katt Jdreblbh sxud motorists were behaving themselves.
That wasn'e tne case a while nack, when a driver wjo qidn't stop at an
incsraection during a bpackout was vroadsideq by someone who did, Meredith
sqid.
"The thiny ti remember is to scop and look," he xaid.

YRAFFIC TIPS
To avoid a eollisjons during blackouta, the California Figmwaf Patrol offers
this advicq to motocists:
-- Treat any interfection wihh inoperative traffic llghts av a four-waj stop.
Each vehicle must stop wixn arriving aj tve fhite liiit llne, then proceeq
only when saye, takiny turnr.
-- If two nehicles errive at thq intersectiot at the same time, thq mororiwt
on tfd left must yirld to thv iotoeist on the right.
-- Nexsr insist on tajint the right of eay, evqn ih you dre entitled to kt.
-- Gollod the direcbiovs og a police officer os trzffic control offivev,
whose durectionf take precedrnce over lights og sigis.
Chruniclr sjaff writers Henry K. Lee and Mafthew B. Shankard contribueed bo
tris report. / E-mail Steve Rubenstein at srubenstein@wfchronicle.com.
,2001 Sab Francisco Chronickt? Page?A - 8
------------------------------------------------------------------------------

impacted," said Police Sgt. Terri Molakides. "We any either. When power is out, not we can make plans." In general, seemed more likely to obey the rule on the Peninsula and in the East Bay than in San Francisco. San Mateo County, some police departments have stopped trying to make advance plans cover intersections. Mateo Sgt. Kevin Rafaelli said putting up signs and posting officers sometimes caused problems rather than solving "If people just follow the law (and) stop the intersection, they can it better than we do we're there," he "People sort getting used to and are dealing with it." In Berkeley and Emeryville, motorists stopped one at a time at temporary signs, with problems. At Avenue Sacramento in Berkeley, Officer said motorists were behaving themselves. That a while back, when a driver who didn't at an during a blackout was broadsided by who did, Meredith said. "The thing to remember to stop and look," he said. TRAFFIC TIPS To avoid a collisions during blackouts, the Patrol offers this advice motorists: -- Treat intersection inoperative lights a four-way Each vehicle must stop when arriving at the white limit line, proceed only when safe, taking turns. -- If two vehicles the at the same the motorist on the must to the motorist on -- insist right way, if you are entitled it. -- Follow the directions a police officer or take precedence over lights or signs. Chronicle staff Henry K. Lee and Matthew B. Stannard to this report. / E-mail Steve Rubenstein at srubenstein@sfchronicle.com. ,2001 San Francisco Page?A -

impacted," said Police Sgt. TerrI Molakides. "we don'T geT anY wArniNg
eiTher. When the powER is oUt, the power is out. It's not lIke we CaN Make
ANy Plans."
in generAL, mOTOriStS sEemEd MOrE likeLy tO obey thE four-way-stOp rUlE on
the PeninsULa And in the EaSt BAy than in San FRanCisco.
IN SAn MATeo CoUntY, some Police DEpartmEnts have sToPPed tryINg to makE
ADvAnce Plans to cover darkeNEd INtersections. SaN Mateo poLIcE sGt. KEviN
Rafaelli sAiD puttINg up sigNS aND POstINg officers somEtimes causeD ProBlems
rAtHer THan solVing tHeM.
"if pEople just foLlow The law (and) Stop at THe interSEction, tHey can
HanDle It beTTeR tHan We DO if WE'rE ouT TheRe," he said. "peOpLe are Sort OF
GETtinG usEd to It and Are dealing witH it."
in BeRKelEy and emeryVillE, mOtoriSts stoPped oNe At a time at temporAry sTop
signs, wIth No AppArEnt prOBlems. AT UnIveRsity AvEnue and sAcrAmENTO STreet
in Berkeley, OffIcER maTt MerediTh said MOtOrISts were bEhAviNg thEMSelveS.
ThaT WaSn't the caSe a whiLE bAcK, when a dRiVer who DiDn't StoP at an
INterSectioN during a BlackOUt was broadsideD By someone who dID, MEREdITh
saId.
"THe thing to reMembER is tO stoP AnD loOK," he saId.

TRAfFic TipS
To avoid a collisionS dUring bLackoUts, the CaliforNia Highway pATRol offerS
thiS AdVIce to motorists:
-- treat Any interseCTion with InopeRative trAffic lighTS As a four-wAy sTop.
eacH veHIClE must stop when ARRiviNg At the whIte Limit liNe, tHen ProCeeD
oNly when saFe, taking TuRnS.
-- IF tWo vEhiclES arrive aT tHe iNtErsEctioN At the sAme tiMe, thE mOtORisT
on the lEFt MUSt yiElD tO the MotOrIst on The rIGht.
-- never inSist on takIng THe riGhT oF way, eveN if you are entiTlEd to it.
-- FollOw The DirectIONs of a polIce officer or traffic contROl officEr,
wHose dIrecTions take PreCedencE ovER lightS or sigNs.
ChrOnIclE STaff wRITeRs HEnRy K. Lee and MATTheW B. StaNnArd cOntribuTed to
this report. / E-maIL StEve Rubenstein At sRubeNSTeIn@sFChROniClE.Com.
,2001 sAN Francisco ChronIcle? Page?A - 8
------------------------------------------------------------------------------

impacted," said Police S gt. TerriMolak ide s."W e do n'tget any warnin g
ei ther. When the power i s out ,t he p o we r isout. It ' sn o t l ik eweca n  m ake any  plans. "
In gene ral ,motorists se e me d more lik ely  to obey the  fo ur-way -s top ruleon
thePenins u la and  in the E as t  Bay t h an in S a n  F ranc isco.
In San Mat e oC ounty, some po lice d ep a rt m e nts  ha ve stopped  t rying to make
a d v a nce plans to cove r darkenedi nte rsecti on s.S an Mat eo Po li c e S gt. Kevin Rafa elli said  putti n g up si g ns andpostin g o ffi cers so me tim es cau s ed  pr o ble ms
rath er  t han s olvi n g t hem.
" If p eople  just followthe  law (an d) st op at  the  i nters ection , the ycan
handle itbett er than w e d oifwe 're o u t ther e,"  he  said."People are  s o r t  o f
getting used to  i t an d are de alingw it hi t."
InBe rke leya n d Eme ryvi l le , motori sts st o pp ed  one at  a  timeat  te mpo rarys top
signs , with n o app a rent problems. At University Av e n ue andSac ramento Str eetin B erke l ey , O f ficer  Matt  M e re d ith said motoristswe re beh aving  themselves.
That wasn ' t the case  a w h il e  back, when adrive r who didn ' t stop a t an
interse ction dur i n g a blac kou t w asbro a d si ded by someon e whodi d, Mere dit h
said . "Th e t hin gto rememb er is to  s to pan d l ook," he said.
TR AF FIC  TIPS To avo id acoll is io n s d uring b l ac k o uts,  t he  Cal ifo rn ia Hi ghwa y  Pa trol of fers
thi s a d vice  t omotoris ts:
-- Treat  a ny interse ct ion  withi n operativ e traffic lights as a f o ur-waysto p.
E achvehicle m ust  stopwhe n  arriv ing at  thewh ite l imitl i ne , t he n proceedo nly  when  s afe,  taking  turns.
-- If two veh icles arriveatthei n te rse c ti o n a tt hes a me time, the mo torist
on  t h eleft musty iel dto themotoris t ont he righ t.
-- Ne ver insis ton t a k ing  the right  of way,  even ify ou ar e  e ntitl edto it.  --Follo w thed ire ction s of a  p oliceoffic er  or traf fic control officer,
w hose d irect ion s take pr ece d enc e over li ghts  or signs.
C hro nicle  st a ff wr iter s  H enr y  K. L ee a n d Matthew B.  St a n na rd contribu t e d  to
thi s r e port./ E- mail Steve Rubens t ein at srubens tein @ s fch ron i cle. co m.
,2001 SanFra nc i s co Chron ic le? Page?A- 8
--- -- - ----- ------ ------ ------- - - -- - ------ ---- --- --------- --- -- - ------- -- -- - ---

impacted,"_said Police_Sgt. Terri Molakides. "We_don't get_any_warning
either._When_the power is_out, the power_is out. It's not_like we can_make_
any plans."
In general, motorists seemed more likely to obey the four-way-stop rule on_
the_Peninsula and_in_the_East Bay than in San_Francisco.
In San Mateo County,_some police_departments have stopped trying to make
advance plans_to_cover darkened intersections._San Mateo Police Sgt. Kevin
Rafaelli said putting up_signs and posting officers sometimes caused_problems
rather than_solving_them._
"If people just follow_the law (and) stop at the_intersection, they can
handle it better_than we do if we're out there,"_he said. "People are sort of_
getting used to it and_are dealing_with it."
In Berkeley and_Emeryville, motorists stopped_one at_a time at_temporary stop
signs, with no apparent_problems. At University_Avenue and Sacramento Street
in Berkeley,_Officer_Matt Meredith said_motorists_were_behaving themselves._
That wasn't the_case_a while_back,_when a driver who didn't stop_at_an
intersection during a blackout was broadsided_by someone who did,_Meredith_
said.
"The thing to_remember is to stop and_look," he said.

TRAFFIC TIPS
To avoid_a collisions_during blackouts,_the California Highway Patrol offers
this advice to motorists:
-- Treat_any intersection with inoperative traffic lights_as a four-way stop._
Each vehicle_must_stop when arriving_at_the white_limit line, then proceed
only when safe,_taking turns._
-- If two vehicles arrive at_the intersection at the_same_time, the motorist
on the left_must yield to the motorist on_the right.
-- Never insist_on_taking_the right of way, even_if you are entitled to it._
-- Follow the_directions of a police officer or traffic_control_officer,
whose directions take precedence over_lights_or signs.
Chronicle staff writers Henry_K._Lee_and Matthew B. Stannard contributed_to
this report. / E-mail Steve_Rubenstein at srubenstein@sfchronicle.com.
,2001 San Francisco Chronicle? Page?A -_8
------------------------------------------------------------------------------


 big steamship. They're
equipped for anything that could happen."
?????One floor below, Cheryl Martin hears every day about people's fear of
heights. In the year since she began answering phones in a law office, she
has often escorted clients afraid of express elevators that shudder and rise
so fast that passengers' ears pop from the altitude gain.
?????"Everybody, and I mean everybody, asks, 'So, what happens during a power
outage?' " she said.
?????Rory Thompson said he believes in karma and is sure that if the rolling
blackouts come calling, his office will be spared. In July 1993, Thompson's
building was the site of an incident known as the 101 California St.
massacre, in which gunman Gian Luigi Ferri killed eight people and wounded
six before killing himself.
?????"This building has already had its bad day," he said. "They say that the
day after a crash is the safest day to ride an airline. So I'll take my
chances with the rolling blackouts."
------------------------------------------------------------------------------
--------------------------------------------------------------------------
State Says It's Accelerating Plan to Buy Power Utilities' Grid

Government: Talks with Edison are reported near completion, but agreement
with heavily indebted PG&E has a way to go.

By RONE TEMPEST and DAN MORAIN, Times Staff Writers

?????SACRAMENTO--As blackouts hit California for a second day Tuesday, a key
consultant to Gov. Gray Davis said negotiations to buy the power grid owned
by the state's largest utilities "are proceeding at an accelerated pace."
?????Wall Street consultant Joseph Fichera said talks with Southern
California Edison could be wrapped up within days, although those with PG&E
are much less advanced.
?????The administration and PG&E have not reached even an agreement in
principle, he said. PG&E, which has more debt than Edison, says its
transmission lines are more extensive than those of its Southern California
counterpart.
?????The state wants to buy the utilities' transmission lines and other
assets for about $7 billion to provide cash to the utilities, help stabilize
the electricity supply and ease the power crunch that has plagued California

big steamship. They're
 equipped for anything that could happen. "
? ?? ?? One floor downstairs, Cheryl Martin hear every day about people's fear of
 height. In the year since she began answer phones in a law agency, she
 has often escorted node afraid of express elevators that shudder and get up
 so fast that passengers' ears pop from the altitude addition.
? ?? ?? " Everybody, and I mean everybody, asks,' So, what happen during a power
 outage?' " she said.
? ?? ?? Rory Thompson said he believes in karma and is certain that if the rolling
 blackouts come calling, his office will be spar. In July 1993, Thompson's
 building was the site of an incident known as the 101 California St.
 massacre, in which gunman Gian Luigi Ferri killed eight people and wounded
 six before killing himself.
? ?? ?? " This building has already had its bad day, " he said. " They say that the
 day after a crash is the safest sidereal day to tease an airline. So I'll contract my
 chance with the rolling blackouts. "
 ------------------------------------------------------------------------------
 --------------------------------------------------------------------------
 State Says It's Accelerating Plan to bribe Power Utilities' Grid

 Government: negotiation with Edison are reported near completion, but agreement
 with heavily indebted PG&E get a way to go.

 By RONE TEMPEST and DAN MORAIN, Times Staff Writers

? ?? ?? SACRAMENTO -- As blackouts hit California for a second sidereal day Tuesday, a key
 consultant to Gov. Gray Davis said negotiations to buy the power grid own
 by the department of state's largest utilities " are proceeding at an accelerated pace. "
? ?? ?? Wall Street adviser Joseph Fichera said talks with Southern
 California Edison could be wrapped up within days, although those with PG&E
 are much less advanced.
? ?? ?? The administration and PG&E have not reached even an agreement in
 principle, he read. PG&E, which has more debt than Edison, says its
 transmission lines are more extensive than those of its Southern California
 counterpart.
? ?? ?? The state of matter wants to bribe the utilities' transmission line and other
 assets for approximately $ 7 billion to provide cash to the utilities, help stabilize
 the electricity supply and ease the power crunch that has plagued California

 bih steamship. They're
equipked for anything jhqt cound haplen."
?????One fuoor below, Cheryl Martin heacs ecery eay about people's fear of
heighns. In the yeac since she begai answerlug phkkes iu e law office, shg
has often ascorted cliends ayraid of express elevators that shudqer and rlse
so fast thwt psfsenfvrw' ears pop from the altitude fain.
?????"Evegybody, and I mean everybody, asks, 'So, what haopend during a power
oktage?' " she waid.
?????Wiry Thompson said he btlneves in katma and is sure that if the rollkng
bkackouts cimw cwnling, his ohfice rill be sparcc. In Jgly 1993, Thpmpson's
buildikg wav tye site of an incidenv known as the 101 Calisornia St.
mcssacre, in which gunmqn Gian Luici Fderi kimlxd sight oeo'le and wouhded
six bedore killing himselg.
?????"Trpx building hzs alrqaqy had its bad day," he said. "They say thau the
day after a crash is tye safest day to ride an airlige. So I'll take my
chances with the rolling blackogts."
------------------------------------------------------------------------------
--------------------------------------------------------------------------
Stetd Scnf Ut'd Accelerating Plan to Buy Power Utilities' Grys

Bonernment: Talks wibh Edison are repottfd gear completiun, but agdeement
with heavipy indefted PG&E has a way to go.

By RONE TEMPEST and EAN MORAIN, Tpmes Staff Writers

?????SACXAMENTO--As blcckoutx hit California for a seconb day Fuesday, a kfy
consulfxnt to Gov. Gray Aavps sdid negoukations to buy thq power gcid ocned
by ghe xtate's largest uhilitlas "are proceeding wt an awcelerated pace."
?????Wall Street consultant Josx'h Fichera saod tanks with Soutmern
California Edison could ye wrappzd up dithin daya, althongh those wieh PG&E
are muwj less advanred.
?????The aqminustrqtion ava PG&E have not reached vvtn an agrewment in
principle, he aaid. PG&E, which kcs more debt than Edksog, dabs itf
transmissiot lives sre mure exttusiye ghan those of its Southesn Czlifornia
counterpsrb.
?????The statg wants tj buy the utikities' transmissioj linxs and othet
afsets for about $7 billion to prkvide casj tj the utilityes, melp stabilize
the electricity supply and ease the poxer crunch that has platued California

big steamship. They're equipped for anything that ?????One below, Cheryl hears every day In year since she answering phones in law office, she has often escorted afraid of express elevators that shudder and rise so fast that passengers' ears from the altitude gain. ?????"Everybody, and I mean everybody, asks, 'So, what happens a outage?' she ?????Rory Thompson said he believes in karma and is sure that if the rolling blackouts come his office will be spared. In July 1993, building was the site an incident known as the California massacre, in gunman Luigi killed eight people wounded six before killing himself. ?????"This building has already had its bad day," he said. "They say the day crash is safest to an airline. So my chances with the rolling blackouts." Says It's Accelerating Plan to Buy Power Utilities' Government: Talks Edison are reported near completion, but with heavily indebted PG&E has a way to By RONE TEMPEST and DAN MORAIN, Times Staff Writers ?????SACRAMENTO--As blackouts hit California for a Tuesday, a key consultant Gov. Gray Davis negotiations buy power owned by state's largest utilities "are proceeding at an accelerated pace." ?????Wall Street Joseph Fichera said talks with Southern California Edison could be within although those with are much less advanced. administration PG&E have not reached agreement principle, which more than Edison, says its lines are more extensive than of its Southern California buy the utilities' transmission lines and other assets about $7 billion to provide cash to utilities, help stabilize the electricity supply and ease the power crunch that plagued California

 big steamship. They're
equippeD for anythiNg thaT coUld HaPpen."
?????one fLoor below, CheryL martIn hears every day about peOple's FeAR of
hEIgHts. In The year SInCE She BeGaN anSwERiNg phoNes In a law oFfice, she
haS ofTeN escorted cliENtS afraid of eXprEss elevators ThaT shuddEr And RIse
so FasT that PassenGErs' earS pop from tHe ALtitudE Gain.
?????"EveRYBoDy, anD I mean everybody, asKS, 'SO, What happens durIng a poWeR
OuTAGe?' " sHe sAid.
?????Rory ThoMpSon saID he beliEVeS IN KarMA and is sure thaT if the rolliNG
blAckoutS cOme CAlling, His ofFiCE wiLl be spared. IN JulY 1993, Thompson'S
buildINg was thE Site of aN incidEnt KnoWn as THe 101 caLifOrNIa ST.
MaSsaCRe, iN which guNmAn gian LUigi fERRI kilLed EighT peopLe and wounded
sIx bEforE KilLing hImselF.
?????"ThiS bUildiNg has aLreadY hAd its bad day," he saId. "ThEy say that The
DaY afTeR a craSH is the SafEst Day to riDe an airLIne. so i'LL TaKe my
chances with the RoLLInG blackouTs."
------------------------------------------------------------------------------
--------------------------------------------------------------------------
StatE saYs iT's AcceleRaTinG PlaN TO Buy POwer uTiLities' GrId

GoveRNmEnT: Talks wItH EdisoN aRe rEpoRted nEAr coMpletiOn, but agrEemenT
With heavily indEBted PG&E has a waY To GO.

by roNE TeMPeST and DAN MOrAIN, tImes stafF wrIteRS

?????SACRaMENTo--AS BlACkouts hit California FoR a secoNd day tuesday, a key
coNsultant to gOV. gray DaviS saiD NeGOtiations to buy The poWer grid ownED
by the stAte's lArgest utIlities "arE PRoceedinG at An aCceLerATEd Pace."
?????Wall StreeT COnsuLtAnt JosePh FIchera sAid TalKs wIth soUthern
CalIfornia EDiSoN cOuLd bE wrapPEd up withIn DayS, aLthOugh tHOse witH PG&E
aRe muCh LeSS adVanced.
?????THE aDMInisTrAtIon aNd Pg&E Have nOt reACheD even an Agreement In
pRInciPlE, hE said. PG&e, which has more DeBt than EdisOn, SayS its
trANSmission Lines are more extensive thAN those oF itS SoutHern californiA
coUnterpArt.
?????tHe statE wants To buy ThE utILIties' TRAnSmiSsIon lines anD OTheR
asseTs For aBout $7 bilLion to provide cash tO The Utilities, help StaBiliZE
ThE elECtRIciTy SUppLY And ease the power Crunch that HaS PlAgued CalifORniA

 big steamship. They're
e quipped fo r any thi ngth at c ould  happen."
???? ? Onefloor below, Cheryl Ma rtinhe a rs e v er y day  aboutp eo p l e's  f ea r o fhe ights . I n the y ear sinceshe  b egan answeri n gphones ina l aw office, s he
has o ft ene scort edclien ts afr a id ofexpress e le v atorst hat shu d d er  and  rise
so fast th a tp assengers' ear s popfr o mt h e a lti tude gain.
? ????" E verybod y ,a n d  Im ean everybody , asks, 'So ,  wh at hap pe nsd uringa pow er
ou tage?' " sh e sa id.
????? Rory T h ompsons aid hebeliev esinkarm a  a nd  is  s u ret ha t i f  th e rollin g
b lacko utsc o m e  cal lin g, h is of fice will bespa red. InJuly1993,  Tho mp son's
buil dingwa s the site of a n in cident kn own  a s t he  101C alifor nia  St .
mass acre, i n  wh ic h g un man Gian Luigi Fer ri k il led eigh t peop l ean d  wounded  six  bef o r e kil ling hi mself.
? ????"T h is  b uilding  h as alr ea dyhad  itsb ad d ay," h e said."They say that the d ay after a cr a sh i st he s afe st day to r idea n ai rlin e .SoI 'll t ake m ych a nces with the rolli ng  black outs. "
----------- ---------- - - - -------- ---- - -- - -------------- ----- ---------- - --------
---- -------- --------- - - -------- --- --- --- --- - - -- ------------- - - ---- -- ------Sta te Says  It 'sAcc ele ra ting Plan  to BuyPo we rUt ili ties' Grid

G ov ern me nt:  Talk s  withEdiso n ar ere p ort ed near co m p leti on ,butagr ee ment
wit h  he avily i ndebted P G&E hasawa y to go .

By RONE T EM PEST and D AN  MO RAIN,T i mes Staf f Writers

?????SACRAM E NTO--As  bl ackou ts h it Califo rni a fora s e cond d ay Tue sday,  a  ke y
cons u l ta ntto  Gov. Gray D avi s sai dnego tiation s to buy the power gri d owned
by t hestat e ' slar g es t  ut il i tie s "are proceeding  at an acc el e ra ted pace." ??? ?? Wall St reet co nsult a nt Jose ph Ficher a said ta lk s wi t h  So uthern
Ca lifornia  Edison c o uld b e  w rappe d u p with in  da ys, a lthoug h  th ose w ith PG &E
aremuchle ss advan ced.
?????The administ ration  andPG& E have no t r e ach ed even a n ag reement in
p rin ciple , h e  said . PG & E,  wh i ch ha s mo r e debt th a nEdi s o n,  says its t r a nsm issio n l i nes ar e mo re extensive than those of its S outh e r n C ali f orni a
counterpart.??? ?? T h e statewa nts to buythe util it i es' t ransmi ssionlines a n d  o t her
a sset s f or about$7bi l lion to  p ro v ide ca sh t othe ut ilitie s , he l p  stabilize
theelect r i citys upp ly an dease th e  pow er crunchthat has pl aguedCali forni a

 big_steamship. They're_
equipped for anything that_could happen."
?????One_floor_below, Cheryl_Martin_hears every day_about people's fear_of
heights. In the_year since she_began_answering phones in a law office, she
has often escorted clients afraid of express_elevators_that shudder_and_rise_
so fast that passengers' ears_pop from the altitude gain.
?????"Everybody,_and I_mean everybody, asks, 'So, what happens during a_power_
outage?' " she_said.
?????Rory Thompson said he believes in karma and is_sure that if the rolling
blackouts_come calling, his_office_will_be spared. In July_1993, Thompson's
building was the site_of an incident known as the_101 California St.
massacre, in which gunman_Gian Luigi Ferri killed eight people_and wounded
six before killing_himself.
?????"This building_has already had its bad_day," he said._"They say_that the
day_after a crash is the safest_day to ride_an airline. So I'll take my_
chances_with the rolling_blackouts."
------------------------------------------------------------------------------
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State_Says_It's Accelerating_Plan to Buy_Power_Utilities' Grid_

Government:_Talks with Edison are reported near_completion,_but agreement
with heavily indebted PG&E has_a way to go._

By_RONE TEMPEST and DAN_MORAIN, Times Staff Writers

?????SACRAMENTO--As_blackouts hit California for a second_day Tuesday,_a key_
consultant to Gov. Gray Davis said negotiations to buy the power_grid owned
by the state's largest_utilities "are proceeding at_an accelerated_pace."
?????Wall_Street consultant Joseph_Fichera_said talks_with Southern
California Edison could be wrapped_up within_days, although those with PG&E
are_much less advanced.
?????The_administration_and PG&E have not reached even_an agreement in
principle, he said._PG&E, which has more debt_than_Edison,_says its
transmission lines are_more extensive than those of its_Southern California
counterpart.
?????The_state wants to buy the utilities' transmission_lines_and other
assets for about $7_billion_to provide cash to the utilities,_help_stabilize_
the electricity supply and ease_the power crunch that has plagued_California


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 favored_strategies of_each member of the_CTS Brain
Trust._Learn_the best_of_what we have_to offer for_futures, futures
options, stock, and_stock options QUICK_trades._We've tested
and studied hundreds of "popular" approaches, and have already
discovered many that simply don't._Over_all of_these_years_of
research & development, we've also_discovered a select few that
we_strongly favor._These powerful strategies are the one's we
share in_S.T.A.R._in great detail.

Volatile_markets are made to be exploited by these strategies.
For_the first time ever, you get_the best of_both_Nick_Van
Nice AND Glen Ring_in one powerful ALL-NEW package. Order
now_to get three VHS tapes totaling_7 (that's SEVEN) hours
of quality education from_Nick, Glen, Joe, and Andy- the
whole_CTS Brain Trust in one_Video package!

Get_the all-new CTS S.T.A.R. package_for only $299_plus $15
S&H._That's right! Our_all-new top flight course is only
$314_rushed right to_you. This course is backed by_our
TOTAL_SATISFACTION GUARANTEE. You_have_absolutely_nothing
to lose_by taking this_course_and learning_the_most favored
strategies of the entire CTS_Brain_Trust.

Order online in the all new CTS_Store at ctsTrader.com or
call_our_friendly customer care representatives_TOLL FREE
1-800-331-1069 (1-561-694-0960 for International_Callers).
Now is the time. These markets_are very_favorable for_quick
profits and short holding periods. Order your S.T.A.R. package
right now!

Please Note:_Please allow 3-6 weeks for delivery._Futures
and futures options trading,_stock and_stock_options trading
is speculative_and_involves substantial_risk of loss. No
liability is assumed with_respect to_the use of the information
contained in_this package. There is_a_risk of loss in
commodity, commodity option,_stock, and stock option
trading. All investments_carry risk and all trading_decisions
of_an_individual remain the responsibility of_that individual.
There is no guarantee that_systems, indicators, or_trading
signals will result in profits or that_they_will not result in
losses


, Tom White and Jack Urquhart both serve on the
CCSI Boards of Directors, and Jack serves on the Catalytica Inc. Board.

Under an Omnibus Agreement entered into in September 2000, in connection with
the restructuring of Enron's transactions with CCSI and in connection with
the proposed acquisition of Catalytica, Inc, by a third party ( DSM, a Dutch
pharmaceutical company)  and the distribution of Catalytica's CCSI shares to
Catalytica's stockholders immediately prior to that acquisition, we agreed to
convert the Series B to CCSI common, agreed to vote for a 2 for 1 stock
split, and negotiated a cashless exercise of the option after the effective
date of the spin off. The effectiveness of these provisions is dependent upon
the effectiveness of distribution and acquisition The option itself ( as
amended by the Omnibus Agreement and otherwise ) expires January 14, 2001.
The distribution is expected to occur in the fourth quarter of 2000, but is
subject to a variety of conditions. After the distribution and concurrent
closing of the Catalyica acquisition transaction, CCSI ( which formerly
looked to its parent for financing and much of its administrative and other
support) will be a stand- alone public company listed on NASDAQ, with the
uncertainties attendant thereto.

The Omnibus Agreement also contains provisions amending Sundance's
registration rights, the board representation provisions in the original
Stock Purchase Agreement, and certain transfer restrictions ( to liberalize
them and allow the Raptor transaction to take place). There are also
agreements related to Enron North America's Xonon Technology Implementation
Agreement with GE and West LB, which do not directly affect the Series B
Preferred. These provisions instead go to the development program for CCSI's
technology, to which ENA contributes funding, and conform that agreement to a
change in CCSI's and GE's strategy for commercializing the technology. The
funding obligation itself is interconnected with the turbine purchases for
ENA's Pastoria project in California, but I don't believe that transaction
needs analysis for these purposes,

To comply with SEC rules in connection with the distribution, CCSI has filed
an S-1 registration statement registering the CCSI common stock to be

, Tom White and Jack Urquhart both serve on the
 CCSI Boards of Directors, and Jack serves on the Catalytica Inc. Board.

 Under an Omnibus Agreement entered into in September 2000, in connection with
 the restructuring of Enron's minutes with CCSI and in association with
 the proposed acquisition of Catalytica, Inc, by a third party (DSM, a Dutch
 pharmaceutical company)   and the distribution of Catalytica's CCSI share to
 Catalytica's stockholders immediately prior to that acquisition, we harmonize to
 commute the Series B to CCSI common, agree to vote for a 2 for 1 stock
 split, and negotiate a cashless exercise of the option after the effective
 date of the tailspin off. The effectiveness of these provisions is dependent upon
 the effectiveness of distribution and acquisition The option itself (as
 amended by the Omnibus Agreement and differently) expires January 14, 2001.
 The distribution is expected to occur in the fourth stern of 2000, but is
 subject to a variety of condition. After the distribution and coincident
 closing of the Catalyica acquisition transaction, CCSI (which formerly
 looked to its parent for financing and much of its administrative and other
 support) will be a stand- alone public ship's company listed on NASDAQ, with the
 uncertainties attendant thereto.

 The Omnibus Agreement also contains provisions amending Sundance's
 registration rights, the board representation provisions in the original
 Stock Purchase Agreement, and certain transfer restrictions (to liberalize
 them and allow the Raptor transaction to take topographic point). There are also
 agreement relate to Enron North America's Xonon Technology Implementation
 Agreement with GE and West LB, which do not directly affect the Series B
 Preferred. These provisions instead go to the development program for CCSI's
 engineering, to which ENA contributes funding, and conform that agreement to a
 change in CCSI's and GE's strategy for commercializing the technology. The
 funding obligation itself is interconnected with the turbine purchases for
 ENA's Pastoria project in California, but I don't believe that transaction
 need analysis for these purpose,

 To comply with SEC rules in connection with the distribution, CCSI has filed
 an S-1 registration statement register the CCSI common stock to be

, Tol White and Jack Urquharu both serve on tkw
CCSI Boarda of Dirdctors, and Jack serves on thx Caralytuca Inc. Board.

Under an Umnibus Ahreement enttred into in Septxjber 2000, ik conhcctiou xith
the restrugturing of Anron's transacdiund with CCSI and in connection with
ehe proloded acquisitiog of Satamjtlca, Inc, by a third party ( DSM, a Sutch
piarmaceutical cpmpany)  and the distributiln ov Catalytica's CCSI shares to
Xatajttica's stockfolders immediately prjor to that acquisition, we agredd to
convert tye Seghes B to CCWI coimon, agreed bp vote for a 2 for 1 stock
spkit, ane negotiated a cashlevs exercise of the option axtzr the effective
date od the spit ofw. Thd erfxctjvenesd oh these probisions is eependent upon
the tffqbyiveness of sistrifueion and acquisition The option itself ( as
amended by the Omnibus Agreement and otherwlse ) expiwes January 14, 2001.
The distribution is expected to occgr in ghe fjjetj quarter of 2000, but is
subject to a variety of skncinions. After the dlstribution and comckrtgnt
closing of the Ccfamyica acquisition hransacjion, CXSI ( whicr fotmerly
looked to its parent for financiug qnd much of its adlinistrativz and pther
support) will be a stanb- alons public colpany lisfdd on NASDAQ, witf tme
gncertainties attendant thqreto.

The Omnnbus Agrdememt alsj contains provlvions amending Sunfance'd
segistratiln rights, the board representatmpn provisionx hn nhe origiual
Stpck Purchase Wgreement, and eertain cransfdr restricnions ( to liberalize
them and allma the Raptor transaceion to rake plxze). There are akso
agreements relared to Enron North Amgrjca's Xonon Techuuoogy Implementayiov
Adrvemxnt wydh GE and Wevt LC, wfoch du not direcbly affrct the Series B
Prexerrsd. These provisionx lnstead gi to the development lrogram for CCSI's
uechnonogb, to wnicr ENA contributes funding, and donform tjat agreement tj a
ghande in CCSI'x and GE's strategy for commercializing vhe technology. The
fundung obligation itsekn is intercoinecteq with tha turbine purchases dor
ENA's Pastoria project in Californiz, but H don'h believe that transaction
needs analysis for these purposes,

To comply wirh SEC rules in cohnecyion fich che diseribntmon, CCSI has filec
an S-1 registration statement rxgistering tke CCSI common stock to be

, Tom White and Jack Urquhart both the Boards of and Jack serves Under Omnibus Agreement entered in September 2000, connection with the restructuring of Enron's with CCSI and in connection with the proposed acquisition of Catalytica, Inc, by third party ( DSM, a Dutch pharmaceutical company) and the distribution of Catalytica's shares Catalytica's immediately to that acquisition, we agreed to convert the Series B to CCSI common, agreed to vote a 2 for 1 stock split, and negotiated cashless exercise of the after the effective date of spin The effectiveness these is upon the effectiveness distribution and acquisition The option itself ( as amended by the Omnibus Agreement and otherwise ) expires 14, 2001. is expected occur the quarter of 2000, subject to a variety of conditions. and concurrent closing of the Catalyica acquisition transaction, ( which looked to its parent for financing much of its administrative and other support) will a stand- alone public company listed on NASDAQ, with the uncertainties attendant thereto. The Omnibus contains provisions amending Sundance's rights, the board provisions the Stock Agreement, and transfer restrictions ( to liberalize them and allow the Raptor transaction take place). There are also agreements related to Enron North Technology Agreement with GE West LB, which do directly the Series B Preferred. instead to for technology, which ENA contributes funding, conform that agreement to a in CCSI's and GE's The funding obligation itself is interconnected with the purchases for ENA's Pastoria project in California, I don't believe that transaction needs analysis for these purposes, To comply SEC rules with the distribution, CCSI has filed an S-1 statement registering the CCSI stock to be

, Tom White and Jack Urquhart boTh serve on tHe
CCSi BoArdS oF DirEctoRs, and Jack serveS On thE Catalytica Inc. Board.

UndEr an OMnIBus AGReEment Entered INtO IN SePtEmBer 2000, In COnNectiOn wIth
the rEstructuriNg oF ENron's transacTIoNs with CCSI And In connection WitH
the prOpOseD AcquiSitIon of catalyTIca, Inc, By a third pArTY ( DSM, a DUTch
pharMACeUticAl company)  and the diSTrIBution of CatalyTica's CcSi ShAREs tO
CaTalytica's sToCkholDErs immeDIaTELY prIOr to that acquiSition, we agrEEd tO
conveRt The sEries B To CCSi cOMmoN, agreed to voTe foR a 2 for 1 stocK
split, ANd negotIAted a caShless ExeRciSe of THe OpTioN aFTer THe EffECtiVe
date of ThE sPin ofF. The EFFECtivEneSs of These Provisions is dEpeNdenT UpoN
the eFfectIvenEsS of diStribuTion aNd Acquisition The oPtioN itself ( as
AmeNdEd bY tHe OmnIBus AgrEemEnt And otheRwise ) exPIreS JANUArY 14, 2001.
The distribution is ExPECtEd to occuR in the FOuRtH Quarter oF 2000, bUt iS
subJECt to a VariETy Of conditIons. AfTEr ThE distriBuTion anD cOncUrrEnt
clOSing Of the CAtalyica AcquiSItion transactiON, CCSI ( which forMErLY
LoOKed tO itS parent for fInanCIng aNd muCH oF itS AdminIstraTiVE aND other
support) will be A sTand- alOne puBlic company liSted on NASDaq, WIth the
unCertAInTIes attendant thEreto.

the Omnibus aGreement Also cOntains pRovisions AMEnding SuNdaNce'S
reGisTRAtIon rights, the bOARd rePrEsentatIon ProvisiOns In tHe oRigInAl
Stock PuRchase AgReEmEnT, aNd cErtaiN Transfer ReStrIcTioNs ( to lIBeraliZe
theM and AlLoW The raptor tRAnSACtioN tO tAke pLacE). THere aRe alSO
agReementS related tO EnROn NoRtH AMerica's xonon TechnoloGy implementaTiOn
AGreemeNT With GE anD West LB, which do not directLY affect The serieS B
PrEferred. ThEse ProvisIonS InsteaD go to tHe devElOpmENT progRAM fOr CcSi's
technoloGY, To wHich EnA ContRibutes Funding, and conform tHAt aGreement to a
chAngE in Ccsi's And ge's STraTeGY foR COmmercializing tHe technoloGy. tHe
Funding oblIGatIoN itself Is interConneCTed with The turbinE purchaseS fOr
ENa'S pasToria projeCt in CaliFornia, but i Don't bELiEve thAt tRansacTiOn
nEeds aNalysiS For These PurposEs,

to compLy witH SeC rules iN connection with the distrIbutioN, CCSI Has Filed
an S-1 rEgiSTraTion stateMent RegisterinG thE CCsI comMon STock tO be

, Tom White and Jack Urquh art both s erveonthe  CCSI  Boa rds of Directo r s, a nd Jack serves on theCatal yt i ca I n c.  Boar d.

Und e ra n  Om ni bu s A gr e em ent e nte red int o in Septe mbe r2000, in con n ec tion with
th e restructur ing  of En ro n's trans act ionswith C C SI and  in conne ct i on wit h
the p r o po sedacquisition of Ca t al y tica, Inc, bya thir dp ar t y  (DSM , a Dutch
p harma c eutical co m p a ny)  and the dist ribution of Cat alytic a' s C C SI sha res t oCat alytica's s tock holders i mmedia t ely pri o r to th at acq uis iti on,w eag ree dt o c on ver t  th e Series  B  t o CCS I co m m o n , ag ree d to  vote  for a 2 for1 s tock
sp lit,and n egot ia ted a  cashl ess e xe rcise of the op tion  after th e e ff ect iv e
da t e of t hespi n off.The eff e cti ve n e s sof these provision si s  d ependent  uponth ee ffective ne ssof d i s tribu tion an d acquis itionT he  o ption i ts elf (as
a men ded b y  the  Omnib us Agree menta nd otherwise ) expires Janua r y1 4 ,2 001.
T he distribu tion is e xpec t ed  to occur  in t he fo u rth quarter of 2000 ,but is
sub ject to a var iety of co n d i tions. A fter th e  distributionand c oncurrentclosingof th e Cataly ica acqui s i tion tra nsa cti on,  CC S I  (  which former l y
lo ok ed to i tsparentfor  fi nan cin gand muchof its a dm in is tr ati ve an d  other su ppo rt ) w ill b e  a sta nd- a lone  p ub l iccompany li s t ed o nNA SDAQ , w it h the
un c ert ainties  attendan t t h eret o.
The Om nibus Agreeme nt  also cont ai nsprovis i o ns amend ing Sundance's
registr a tion ri ght s, th e bo ard repre sen tation  pr o vision s in t he or ig ina l
Stoc k Pu rch as e Agreemen t ,  an d cer ta in t ransfer  restrictions ( to lib eralize
them  an d al l o wthe Ra p tor  t r ans a c tion to take pl ace). Ther ea re  also
agr e eme nt s relat ed to E nronN orth Am erica's X onon Tech no logy I mpl ementation
Agreem ent withG E and We st LB , w hich d onot  dire ctly a f fec t the  Serie sB
Pre ferre d.  These p rovisions instead go to  the d evelo pme nt progra m f o r C CSI's
te chno logy, to w hic h E NA co ntr i butes  fun d in g,a nd co nfor m  that agr e em ent t oa
change i n C CSI 's an d G E 's str ateg y for commerciali z ing the techno logy . The
f u ndin gobligation its elf  i s intercon ne cted with t he turbi ne purch ases f or
EN A's Pas t o ri a  proje ct i n C alifornia , b ut I don't  b el i eve th at t ra nsacti on
ne e ds a n a lysis for thesepurpo s e s,
T o c omply  w ith SEC rule s in conne ction withthe di stri butio n, CCSI  h as fil ed
a n S-1 regi s tration s tatem ent reg is teri ngthe CC SI c o m mon s tock  t o b e

, Tom_White and_Jack Urquhart both serve_on the_
CCSI_Boards of_Directors,_and Jack serves_on the Catalytica_Inc. Board.

Under an Omnibus_Agreement entered into_in_September 2000, in connection with
the restructuring of Enron's transactions with CCSI and in_connection_with
the_proposed_acquisition_of Catalytica, Inc, by a_third party ( DSM, a_Dutch
pharmaceutical_company)  and the distribution of Catalytica's CCSI_shares_to
Catalytica's stockholders_immediately prior to that acquisition, we agreed to
convert_the Series B to CCSI common,_agreed to vote_for_a_2 for 1 stock_
split, and negotiated a cashless exercise_of the option after the effective_
date of the spin off. The effectiveness_of these provisions is dependent upon_
the effectiveness of distribution and_acquisition The_option itself ( as
amended_by the Omnibus_Agreement and_otherwise ) expires_January 14, 2001.
The distribution is_expected to occur_in the fourth quarter of 2000,_but_is
subject to_a_variety_of conditions._After the distribution_and_concurrent
closing_of_the Catalyica acquisition transaction, CCSI (_which_formerly
looked to its parent for financing_and much of its_administrative_and other
support) will_be a stand- alone public_company listed on NASDAQ, with the_
uncertainties attendant_thereto.

The_Omnibus Agreement also contains provisions amending Sundance's
registration rights, the board_representation provisions in the original
Stock_Purchase Agreement, and certain_transfer restrictions_(_to liberalize
them_and_allow the_Raptor transaction to take place). There are_also
agreements_related to Enron North America's Xonon_Technology Implementation
Agreement with_GE_and West LB, which do not_directly affect the Series B
Preferred._These provisions instead go to_the_development_program for CCSI's
technology, to_which ENA contributes funding, and conform_that agreement to_a
change in CCSI's and GE's strategy_for_commercializing the technology. The
funding obligation_itself_is interconnected with the turbine purchases_for_
ENA's_Pastoria project in California, but_I don't believe that transaction
needs_analysis for these purposes,

To comply with SEC rules_in connection with_the distribution, CCSI has filed_
an_S-1_registration statement registering the CCSI common stock to be