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<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: NERC Statements on Impact of Security Threats on RTOs Body:: I agree with Joe. The IOUs will point to NERC as an objective third party on these issues. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: NERC Meeting Today Body:: There was an all day meeting of the NERC/reliability legislation group today. I will provide a more detailed report but the group completed the process of reviewing the changes that some had suggested to shorten and streamline the NERC electric reliability organization legislation. Sarah and I asked a series of questions and made comments on our key issues and concerns. I want to give you a more complete report once I have gone back over the now final draft version. The timing being imposed by NERC is that they will circulate a clean version of the proposal tomorrow or Monday. They have asked for comments by next Thursday August 16th with an indication of whether each company/organization does or does not sign on to support it. They will then transmit the proposal and the endorsement letter to Congress and the Administration so they have it as Hill and Energy Dept. staff work on electricity drafting issues this month. I pointed out that EPSA is not due to meet internally with its members to discuss these issues until after the NERC deadline. That is not deterring NERC from moving forward with the above time frame. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: http://www.stanford.edu/~wolak/ Body:: nan What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Govt School Alumni Body:: FYI ----------------- What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Fwd: Portland Consultants Investigation Finds California Has Capacity for Electricity Needs Body:: FYI ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Data responses in SDG&E -- confidential treatment Body:: PRIVILEGED AND CONFIDENTIAL Appropos of Agave's phone message. Steve was in this loop. The discount reports are available to anyone who wants them under the Open Records Act. TK you indicated that Agave thinks the rates were published somewhere by FERC -- I don't know whether that's true but the bottom line is that FERC has the information in its files and could publish it any time at wants we have no control over that. Let me know if you want me to talk with Agave's lawyers. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: CONFIDENTIAL - Residential in CA Body:: In the meeting today no decision was made about what to do with Enron's 16000 residential customers. Each of the contracts gives a basic 30 day out right to Enron. That being said I think that we have a short window to push for DA before any public action impacts us in Sacramento. I realize that the ultimate action (which I think is inevitable) makes it harder for our advocacy on DA but real $ are flowing out of the company. EES will give us notice when a decision is reached. Thanks Jim What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Online Niche Players Capitalize on Natural-Gas Shortage, Bypass Utilities Body:: nan What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: API Question; CONFIDENTIAL AND PRIVILEGED ATTORNEY/CLIENT COMMUNICATION & ATTORNEYS WORK PRODUCT Body:: Stan: V&E wrote/masterminded the partnership agreement for our MLP. It is complicated and has been amended several times. In view of these factors V&E should tell us whether we can use the $2.5 million of cash from the insurance recovery to retroactively reclaim a portion of the 4th quarter API's. In particular Baird should give us this opinion since he has handled the partnership agreement since day one. Baird is gone on vacation for the next week. He is planning to give us an answer within a few days of his return. He will give the matter serious thought but what we are asking is pretty aggressive. His associate Carlos Pena has reviewed the partnership agreement and his first take on the question is that we cannot revise the available cash for the fourth quarter in this way. But the matter requires far more thought than this----and Bob will also need to talk with Lori (also gone on vacation) to come up with a meaningful answer for us. I will stay after this but in light of the above it will probably be early July b/f we get V&E's final position on this. If this won't do please let me know and I'll explore other avenues of getting an answer out of V&E. Thanks. SWD What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Thursday Meeting on Winter Gas Prices Body:: calendar ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Privileged and Confidential communication to my attorneys Body:: Felicia This is a merchant asset which we currently own 100% but plan to sell down in the coming months. It absolutely has separate HR functions from Enron -- they do not participate in Enron benefits and we are working hard to prevent any claims that we could be a joint employer with it. Thoughts? Michelle Enron North America Corp. From: Felecia Acevedo @ ENRON 11/02/2000 08:56 AM To: Michelle Cash/HOU/ECT@ECT cc: Subject: Re: Privileged and Confidential communication to my attorneys Michelle who is GSP? Are they a legal entity? Are they on our payroll? If they are we filed EEO-1's for them. Below is the criteria to file an EEO-1 report: Standard Form 100 must be filed by - A. All private employers who are: (1) subject to Title VII of the Civil Rights Act of 1964 (as amended by the Equal Employment Opportunity Act of 1972) with 100 or more employees EXCLUDING State and local governments primary and secondary school systems institutions of higher education Indian tribes and tax-exempt private membership clubs other than labor organizations OR (2) subject to Title VII who have fewer than 100 employees if the company is owned or affiliated with another company or there is centralized ownership control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise and the entire enterprise employs a total of 100 or more employees. B. All federal contractors (private employers) who: (1) are not exempt as provided for by 41 CFR 60-1.5 (2) have 50 or more employees and (a) are prime contractors or first-tier subcontractors and have a contract subcontract or purchase order amounting to $50000 or more or (b) serve as a depository of Government funds in any amount or (c) is a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Notes. All multi-establishment employers i.e. employers doing business at more than one establishment must file: (1) a report covering the principal or headquarters office (2) a separate report for each establishment employing 50 or more persons (3) a consolidated report that MUST include ALL employees by race sex and job category in establishments with 50 or more employees as well as establishments with fewer than 50 employees and (4) a list showing the name address total employment and major activity for each establishment employ-ing fewer than 50 persons must accompany the consolidated report. All forms for a multi-establishment company must be collected by the headquarters office for its establishments or by the parent corporation for its subsidiary holdings and submitted in one package. For the purposes of this report the term parent corporation refers to any corporation which owns all or the majority stock of another corporation so that the latter stands in the relation to it of a subsidiary. The OFCCP has always held that subsidiary companies that do not have direct govt contracts must comply with AAP regulations if the parent company or other subsidiary companies benefit from government contracts. Their line of thought is that the subsidiary without government contracts benefits indirectly from the contract as well. If GSP is completely free standing and they do not participate in Enron's benefits abide by our policies or procedures participate in our bonus process that may partially or wholly be funded by Enron Corp. etc. they may have some type of argement not to comply but I doubt it. If we own them over 51% I don't see a way they could not file EEO-1's and have an AAP. We do all the AAP's in Corporate so if this is a freestanding Business Unit I need to know. Thanks! Felecia Michelle Cash@ECT 11/01/2000 07:49 PM To: Felecia Acevedo/Corp/Enron@Enron cc: Subject: Privileged and Confidential communication to my attorneys Felicia Does this sound right to you? Just wanted to confirm. Thanks. Michelle ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Rice Letter Body:: Anita Very minor changes. Thanks. Vince What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Enron Wind Policy Meeting Body:: ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Enron Support of a Standards Setting Organization Body:: I have reviewed the SSO principles -- look good to me. Thanks for sending them to look at. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: HOOVER INSTITUTION NEWS ADVISORY: Conference on the California Electricity Problem Body:: H o o v e r I n s t i t u t i o n News Advisory September 27 2001 _____ FOR IMMEDIATE RELEASE Note: The complete text of this News Advisory can also be viewed in the attached file. CONFERENCE ON THE CALIFORNIA ELECTRICITY PROBLEM October 18-19 2001 Sponsored by the Hoover Institution and Stanford Institute for Economic Policy Research (SIEPR) What: A conference on California's electricity problem sponsored by the Hoover Institution and Stanford Institute for Economic Policy Research (SIEPR). When: Thursday and Friday October 18-19 2001 Where: Stauffer Auditorium Hoover Institution Stanford University Why: To address the causes of and solutions to the problem including: its impact on the state economy deregulation issues and politics. Who: ????????The Honorable Spencer Abraham U. S. Secretary of Energy dinner speaker 6:30 p.m. October 18 ????????Discussion: Electricity problem's causes and proposed solution with James Sweeney of SIEPR Hoover and Stanford and Severin Borenstein of UC-Berkeley 1:15 p.m. October 18 ????????Discussion: I. The electricity problem's impact on the state economy with Edward Leamer of UCLA 3 p.m. October 18 ????????Discussion: II. Achieving competition through real time pricing with Frank Wolak of Stanford and SIEPR and Vernon Smith of George Mason University 3 p.m. October 18 ????????Panel: Power production and politics with John Bryson Edison International Peter Cartwright of Calpine Corporation and Hoover fellow and former California Governor Pete Wilson 8:30 a.m. October 19 ????????Panel: Deregulation with Hoover fellows Milton Friedman Nobel laureate former U.S. Secretary of State George P. Shultz and James Sweeney 10:30 a.m. October 19 A mult box will be available for broadcast media. RSVP by October 15: Call Public Affairs at the Hoover Institution at 650-723-0603. Michele M. Horaney APR Michelle Mosman Director of Communications Public Affairs Manager Stanford Institute for Economic Policy Research (SIEPR) Hoover Institution 579 Serra Mall@Galvez St. Stanford University Stanford University Stanford CA 94305-6010 Stanford CA 94305-6015 650-725-7293 F:650-8611 650-725-1872 cell: 650-722-0798 Horaney@Hoover.Stanford.edu mmosman@stanford.edu Hoover.Stanford.edu siepr@Stanford.edu What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Dinner next week with Piotr Body:: Czwartek mi odpowiada. Zadzwonie do Ciebie do pracy we wtorek. Wicek What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Senate passes Alper/Davis Bill 30-0 Body:: ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Mtg w/Bob Gee Body:: I think this is a great initiative but it is critically important that any announcement of the panel makes it crystal clear that the objective of the group is to come up with standards to facilitiate competition. We will do nothing but waste time if it becomes a negotiation over competition. the best and politically easiest time to make that objective clear is in the original announcement not after the group gets underway. Can we get in touch with DOE to make sure they pick this up? Cynthia Sandherr@ENRON 07/18/2000 05:03 PM To: Jeff Brown/HOU/EES@EES cc: Stanley Horton/Corp/Enron@Enron Shelley Corman/ET&S/Enron@ENRON Joe Hartsoe/Corp/Enron@ENRON Steven J Kean/HOU/EES@EES Richard Shapiro/HOU/EES@EES James D Steffes/HOU/EES@EES Janine Migden/DUB/EES@EES Jeff Dasovich/SFO/EES@EES Subject: Re: Mtg w/Bob Gee Jeff: I have followed up with other DOE politicals who advised they will meet this Thursday with Bob Gee to finalize and approve his speech to NARUC on Monday July 24th. It is looking positive that he may be positioned to make the announcement Monday. However DOE will likely need to revisit some folks on the current Blue Ribbon Reliability Panel in order to replace some of the utility transmission-only focused members with others who focus on business practices plus add additional people to represent the internet like APX Altra and HoustonStreet.Com. (these are Steve Kean's suggestions.) Too I have been cautioned about referring to the Blue Ribbon Reliability Panel as a model since their timeline was slow but rather suggest the TVA Blue Ribbon Panel model since they were able to issue a report after only four meetings. I have asked for this issue to be brought to Secretary Richardson's attention and advised this will be done this week. I have also discussed this with John Anderson of ELCON who is supportive. Jeff Brown@EES 07/18/2000 12:45 PM To: Stanley Horton/Corp/Enron@Enron Shelley Corman/ET&S/Enron@ENRON Joe Hartsoe/Corp/Enron@ENRON Steven J Kean/HOU/EES@EES Richard Shapiro/HOU/EES@EES James D Steffes/HOU/EES@EES cc: Cynthia Sandherr/Corp/Enron@ENRON Janine Migden/DUB/EES@EES Jeff Dasovich/SFO/EES@EES Subject: Mtg w/Bob Gee Cynthia and I met with Bob Gee regarding a potential role for DOE in creating a national standards board. Bob appeared comfortable with establishing a Blue Ribbon panel similar to the reliability panel to address this issue. In fact Bob suggested that the reliability panel which includes a balance of key stakeholders could be re-tasked with this issue. We recommended that the focus of any panel should be on the structure (governance segments executive committees) and scope of the organization (retail wholesale gas electric). Bob plans to follow-up with us next week. Jeff What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Shift May Empower California.htm Body:: Thanks for taking time to call yesterday. Good luck with the Lockyer situ= ation. I truly do believe that direct and prompt interaction with Lockyer= will prove more effective for Enron than delayed or intermediated action.= As we discussed if I can be of any help with reconnaissance or as sou= nding board just let me know. =20 I have attached an article from this morning's LA Times. It provides an C= alifornia view on how the shakeup in the Senate might impact the state's e= nergy situation. Certainly by the time that President Bush visits the C= alifornia in a few days the state's two Democratic US Senators will be a = good bit more empowered. =20 Kevin 213-926-2626 =20 [IMAGE] [IMAGE][IMAGE] =09Click here to learn more! [IMAGE]=09 [IMAGE] =09Home | Discussions | Print Edition | Archives | Site Map = | Home Delivery | Advertise | Feedback | Help [IMAGE]=09 =09[IMAGE]=09 [IMAGE] [IMAGE] [IMAGE] [IMAGE] News Politics Entertainment music = movies art TV restaurants [IMAGE] Business Travel Marketplace jo= bs homes cars rentals classifieds [IMAGE] Sports Commentary Shop= ping [IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] A Section= [IMAGE] [IMAGE] TOP STORIES * State's Standardized Test Spurs Scatte= red Backlash * GOP Braces for Jeffords to Bolt Today * Moderates on = Outside of GOP Big Tent MORE [IMAGE] [IMAGE] [IMAGE] STORIES BY DA= TE FOR THIS SECTION 5/24 | 5/23 | 5/22 | 5/21 | 5/20 | 5/19 | 5/18 = [IMAGE] DAILY SECTIONS Front Page A Section California [= IMAGE] Business Sports Calendar [IMAGE] So. Cal. Living EditorialsLett= ers Op/Ed WEEKLY SECTIONS Health Food [IMAGE] Tech Times [IMAG= E] Highway 1 SUNDAY SECTIONS Book Review Opinion Real Estate [IMA= GE] Calendar Magazine Travel [IMAGE] TV Times Work Place [IMAGE] [= IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] Marketplace Find a home car = rental job pet merchandise boat plane or RV classifieds Pl= ace an Ad [IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] L.A. Times = Subscription Services Subscribe Change of Address Vacation Stops = Suspend Delivery College Discount Gift Subscriptions Mail Subscriptio= ns FAQ [IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] Print Ads = from the Newspaper See this week's ads [IMAGE] [IMAGE] [IMAGE] Pri= nt Edition Orange County Valley Ventura County National Communi= ty Papers [IMAGE] [IMAGE] [IMAGE] [IMAGE] Books Columnists Cross= word Education Food Health Highway Horoscope Lottery Magazine = Obituaries Reading by Real Estate Religion Science So.Cal. Living = Special Reports Sunday Opinion Tech Times Times Poll Traffic Weath= er Workplace SITE MAP [IMAGE] [IMAGE] [IMAGE] SHOP 'TIL YOUR = LAPTOP DROPS [IMAGE] [IMAGE] [IMAGE] [IMAGE] [IMAGE] Shopping [IMAGE= ] Search Products Stores [IMAGE] [IMAGE] [IMAGE] [IMAGE] = [IMAGE] [IMAGE] =09[IMAGE]=09[IMAGE] Thursday May 24 2001 | [IMAGE]Print= this story [IMAGE] [IMAGE] Shift May Empower California By RICHARD SI= MON ELIZABETH SHOGREN Times Staff Writers WASHINGTON--James M. J= effords has never mattered much to Californians. Until now. The Verm= ont senator's widely anticipated decision to abandon his fellow Republican= s and put Democrats in control of the Senate could have big implications f= or California particularly on energy and environmental policy lawmakers = and lobbyists said Wednesday. The change which Jeffords is expected= to announce today could increase political pressure on the Bush adminis= tration to respond more aggressively to California's electricity crisis t= hese insiders said. And it might force the White House to compromise= on key elements of the national energy policy it unveiled last week. In f= act the administration's proposed budget cuts for programs to promote ren= ewable energy were said to be a factor in Jeffords' decision. At th= e very least Senate observers said Sen. Dianne Feinstein (D-Calif.) is l= ikely to get the floor vote she has sought on price controls for wholesale= electricity. That doesn't necessarily mean that the administration'= s critics will be able to have everything their way. Even if the Senate ap= proves electricity price caps for example the measure would face stiff o= pposition in the GOP-dominated House--and a likely veto if it made it to t= he president's desk. Still a Democratic majority in the Senate wou= ld give Feinstein and other party members a platform to turn up the politi= cal heat on the administration and congressional Republicans on energy pol= icy. It kicks up the dust groaned one energy industry lobbyist wh= o requested anonymity. Observed Sen. John F. Kerry (D-Mass.): If P= resident Bush's hard-edged conservative approach has in fact caused the ba= lance to shift towards Democrats in the Senate it will have profound impl= ications not just for California but for the environment and our nation's= energy policy. Environmentalists seemed almost giddy as they cont= emplated the possible impact of Jeffords' decision on the policies they ca= re about. All of a sudden they said it seems less likely that oil = exploration will take place in the Arctic National Wildlife Refuge that r= ecreational snowmobiles will have free access to Yellowstone National Park= or that the administration's desire to promote nuclear power will be emb= raced by Congress. On the other hand it seems more probable that C= ongress would approve a new plan for managing a vast swath of the Sierra N= evada to protect the region's oldest trees consider legislation to restri= ct emissions of carbon dioxide from power plants and protect California fr= om a resurgence of offshore oil drilling. It's stunning how broad t= he repercussions are particularly on the environment said Gregory Wetst= one of the Natural Resources Defense Council. We're trying not to count o= ur chickens before they hatch. But it will be easier for us in our battles= at least to keep from moving backwards. For instance Jeffords is= a chief advocate of a bill that would regulate carbon dioxide from power = plants. And if events play out as expected he'll become the new chairman = of the Senate committee with jurisdiction over the issue. Another i= ssue under his purview would be the two-decade dispute over a proposed rep= ository for the nation's spent nuclear fuel at Yucca Mountain in Nevada. = Yucca Mountain is a dead turkey declared Michael Francis of the W= ilderness Society. Environmentalists had been worried that a number= of pro-development provisions would be packed into appropriation bills. B= ut with Democratic senators in charge that would become less of a threat= they said. Every wacko idea Republicans have will get a higher lev= el of scrutiny Francis said. The biggest change would be the power= of Senate Democrats to decide which bills will be considered in committee= s and which ones will make it to the floor of the Senate for votes. = As part of a new Democratic majority Feinstein and fellow California De= mocrat Barbara Boxer are likely to gain leverage with the administration o= n a number of issues considered important to the state. That transl= ates into more federal assistance for California across the board predic= ted Steve Maviglio spokesman for Gov. Gray Davis. I think it mean= s more attention to our state for sure Boxer said. Right now the pres= ident doesn't seem to give a darn. They're all looking at California as a = Democratic state. They're not interested. Feinstein who has been = unable to arrange a meeting with Bush to discuss the energy crisis may ge= t better treatment if winning Democratic support becomes more important to= the administration. She has been regarded as a bridge-builder who worked = effectively with Republicans in the past. This has not been a warm = and friendly administration she complained Wednesday. They've got peopl= e who know all the answers and don't want to listen. The White Hou= se disputed that. In fact Bush agreed Wednesday to meet with Davis during= the president's first visit to California next week. Under a Democ= ratic majority Feinstein would be in line to chair two subcommittees: the= military construction panel of the Senate Appropriations Committee and t= he technology terrorism and government information subcommittee of the Se= nate Judiciary Committee. Boxer would be in line to chair the subco= mmittee on Superfund waste control and risk assessment and the Foreign R= elations subcommittee on international operations and terrorism. Mav= iglio predicted that the effects of Jeffords' expected party defection wou= ld be felt immediately. The chairmanship of the Senate Energy and N= atural Resources Committee would be taken away from Frank H. Murkowski (R-= Alaska) who has been openly hostile to California's plight and handed = to Jeff Bingaman (D-N.M.) who supports Davis' request for electricity pri= ce controls according to Maviglio. Democrats have assailed Bush's e= nergy plan for tilting heavily toward the supply side. With Democrats in c= harge of the Senate the administration would be more likely to compromise= perhaps beefing up funding for Democrat-supported causes such as increas= ed energy assistance to low-income households and more aggressive promotio= n of conservation and renewable energy sources such as wind and solar powe= r. Search the archives of the Los Angeles Times for similar stories ab= out: United States - Politics Republican Party James M Jeffords P= olitical Party Defections California - Politics Senate (U.s.) . You = will not be charged to look for stories only to retrieve one. =09 News Politics Entertainment music movies art TV restaurants = [IMAGE] Business Travel Marketplace jobs homes cars rentals cla= ssifieds [IMAGE] Sports Commentary Shopping [IMAGE] =09[IMAGE]=09 G= et Copyright Clearance Copyright 2001 Los Angeles Times Click for permi= ssion to reprint (PRC# 1.528.2001_000043610) =09 [IMAGE] =09 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Presentation to faculty and students at Berkeley Body:: Maureen -- please send Vince my California testimony and the talking point presentation for Jeff Skilling at the National Press Club. Eliz-- keep Vince on the distribution list for the documents we are generating now to repond to the California situation. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Confidential Contact data and RFI Body:: Any nuclear specific info? Kevin Presto UBS Warburg Energy kevin.presto@ubswenergy.com Phone: 713-853-5035 Fax: 713-646-8272 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Minutes from last Thurs CAISO Board Meeting (Sorry for the delay) Body:: CAISO BOG 10/25/01 Notes taken by G. Alan Comnes Meeting went from about 10:30 to 1 p.m. Written materials discussed at this meeting are available at www.caiso.com/bog. 1. Budget. Board approved budget which contains a significant increase in GMCs and for the first time applies GMC fees on the self provision of A/S. The motion to adopt was modified to say the Board would revisit budget if in response to Gov. Davis requests to par budgets the CAISO budget is cut. 2. Retirement plan Audit 3. Allocation of Above-MCP 487 charges. This mechanism will improve the allocation of OOM costs so that the per-MWh charges match up with actual OOM costs. Stated that penalty revenues used to lower OOM costs could come from imbalance penalties. Action. approved (?) to allow staff to make a tariff amendment on this change. 4. Winter Assessment. Presentation by staff Kahn took issue (i.e. did not even want staff report presented) that CAISO does an assessment without consulting the Power Authority CPUC and the CEC. Worried about conflicting with the other resource assessments out there and giving media ways to take shots at DWR buying practices. In the end the full presentation was not given but questions were asked about whether the assessment spells trouble or provides assurance. The answer: things are tight in some months but are expected to be ok given the level of conservative assumptions used in the analysis. Action: staff was tasked to compare this assessment with CEC's and others and come back in another month. 5. Generator maintenance program. Will use GADS data. This program is mandatory for PGA generator units. CAISO staffer represented that no other ISO has a prescriptive program like the one CAISO is proposing. Current schedule: brief FERC staff next week return to Board in November for approval make FERC filing implement in early '02. Benchmarks are based on each unit's historical performance i.e. dogs will be benchmarked against their past doggy behavior. There is no component to raise the bar on performance but a unit that falls relative to past performance would trigger further review. 6. MSC Selection Committee. MSC provides independent review of the CAISO markets for CAISO the state and FERC. Wolak is the only member left at the moment. Selection committee will be Sheffrin Wolak and Borenstein. Candidates will go to Exec. Director and the final candidates to the Board in February 2002 (!). Kahn questioned how the MSC can survive with only one member and take until February 02 to select a final members. Nonetheless the glacially paced schedule was adopted. 7. FERC RTO Seams Issues. Steve Greenleaf presented. Updated BOG on RTO week and said that the 4 RTO model took a step backward (off the table in the words of Chair Wood) in response to criticism from state PUCs on Thursday. (Is this an accurate recounting of Day 4?). ISO is engaged in interregional coordination. Mentioned CSIC group Mentions SSGWY's (?)sponsorship of a market monitoring workshop on November 16. 8. Update of CERS Settlement BEEP/AS Payment Procedure. Edison and PG&E are making progress but no agreement with CERS have been reached. SDG&E signed and the procedure was implemented at least in part with SDG&E. 9. Monthly reports: financial. 10. Monthly reports: DMA. Sheffrin. Mostly followed the briefing charts. Emphasized the following: CERS OOM purchases are generally down and are reasonably priced once purchases and sales are disaggregated. Said that suppliers are still bidding above costs. DMA files confidential reports that include info on bidding data weekly to FERC. Bids are not coming down. Intrazonal congestion is up due to new generation coming on line. That allows generators to play the dec game. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Bay City News Wed 3/21: Blackouts Not Expected=20 Today Dow Jones Newswire Wed 3/21: Calif State Controller:General Fund Surplus = Dn=20 To $3.2B CBS.MarketWatch.com Wed 3/21: Davis says regulators will act to pay QFs Electricity providers insist they need to be paid Long Beach Press Wed 3/21: Rash power bill may need fix SF Chron Wed 3/21: PUC considers rewarding producers that sign long-term= =20 contracts Sac Bee Thurs 3/22: State claims $5.5 billion overcharge: Refunds by=20 wholesale generators sought Sac Bee Thurs 3/22: Power solution eludes Davis: Lawmakers grow edgy as= =20 crisis drags on Sac Bee Thurs. 3/22: Legislators learn some details of power contracts= San Diego Union Thurs 3/22: Federal judge orders major power wholesaler= =20 to sell to California San Diego Union Thurs. 3/22: Controller: State's power spending imperil= s=20 its financial health San Diego Union Wed 3/21: Governor says utilities must pay in advance f= or=20 some power LA Times Thurs 3/22: Energy Overcharge of $5.5 Billion Is Alleged LA Times Thurs 3/22: Power Strain Eases but Concerns Mount LA Times Thurs 3/22: Graphics: Overcharges Alleged=20 San Fran Chron Thurs 3/22: Net Complex A Dilemma For San Jose=20 SERVER FARM: Plant would tax grid San Fran Chron Thurs 3/22: Contracts Won't Meet Summer Demands=20 DETAILS: 2004 before full impact felt Mercury News Thurs 3/22: California overcharged $5.5 bln for wholesale= =20 power Orange Cty Register Thurs 3/22: Commentary: If the Power Goes Off =20 Orange Cty Register Thurs 3/22: Commentary: Socialized Electricity San Fran Chron Thurs 3/22: Bush's Energy Policy Will Backfire=20 Feinstein Warns / She wants federal price controls now Dow Jones Newswires Thurs 3/22: Reliant Still In Power Pact Talks With= =20 Calif. DWR Dow Jones Newswires Thurs 3/22: CPUC Must Address Rates In QF Repayment= =20 Order - SoCal Ed Dow Jones Newswires Thurs 3/22: Calif Small Pwr Producers To Shut Plant= s=20 If Rates Capped --- --- Blackouts Not Expected=20 Today Bay City News=20 Following two consecutive days of rolling blackouts California's power=20 picture looks much brighter today but conservation is still needed.=20 The California Independent System Operator is urging consumers to continue= =20 conservation measures during today's Stage One Electrical Emergency.=20 The conservation efforts of Californians particularly Tuesday evening we= re=20 significant and helped to reduce the duration and impact of yesterday's=20 blackouts'' according to officials. The California ISO asks customers to= =20 continue their voluntary reductions during this time of tight supply.=20 More than 11500 megawatts of in-state generation remain unavailable with= =20 power plants completing repairs and needed maintenance. However several=20 generating units returned to service today and the level of imported power= =20 has increased boosting the supply.=20 The ISO is cautiously optimistic that customer outages will be avoided=20 today'' according to officials.=20 Today's Stage One alert is in effect through midnight tonight.=20 Stage One Emergencies are declared when power reserves fall below 7 percent= .=20 Stage Two kicks in when reserves fall below 5 percent. Stage Three is=20 initiated when reserves drop to below 1.5 percent. --- Calif State Controller:General Fund Surplus Dn To $3.2B 03/21/2001 Dow Jones Energy Service (Copyright (c) 2001 Dow Jones & Company Inc.) LOS ANGELES -(Dow Jones)- California State Controller Kathleen Connell=20 Wednesday said the state's general fund surplus has dropped to $3.2 billion= =20 from $8.5 billion in January mostly because of electricity purchases made = by=20 the state's Department of Water Resources a press release said.=20 Connell also denied Gov. Gray Davis' request to transfer an additional $5.6= =20 billion from the general fund to the Special Fund for Economic Uncertaintie= s=20 the release said. Connell noted that given the rapid depletion of the general fund on power= =20 purchases the state would need to borrow $2.4 billion in order to tranfer= =20 the $5.6 billion from the general fund to the special fund.=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 fund at risk Connell said.=20 Connell called on Davis to ensure that the CDWR completes by the end of May= =20 2001 the revenue bond sales that will be used to buy power and repay the=20 general fund.=20 She also asked that the CDWR notify her of all power purchases made and=20 contracts negotiated thus far and requested that she be told within 7 days = of=20 any purchases and contracts negotiated in the future.=20 Connell also said she wanted to be told within 24 hours of any power buys= =20 that exceed $55 million and asked that the Department of Finance be directe= d=20 to prepare new general fund cash flow estimates for the next 30 and 60 days= =20 and for the end of the fiscal year.=20 The state's Department of Water Resources has been buying power since Janua= ry=20 in lieu of Edison International (EIX) utility Southern California Edison an= d=20 PG&E Corp (PCG) utility Pacific Gas and Electric Co because suppliers=20 refused to sell to the nearly-bankrupt utilities.=20 -By Jessica Berthold Dow Jones Newswires 323-658-3872=20 Gov. Davis' office said in response to Connell's comments that the state= =20 budget was solid and the economy remained strong.=20 We will be getting the money back we've paid for energy and it should have= =20 no significant effect on the state's finances from the Wall Street=20 perspective said Davis press secretary Steve Maviglio.=20 -By Jessica Berthold Dow Jones Newswires 323-658-3872=20 jessicaberthold@dowjones.com --- -------- Davis says regulators will act to pay QFs Electricity providers insist they need to be paid By Russ Britt CBS.MarketWatch.com=20 Last Update: 9:45 PM ET Mar 20 2001 LOS ANGELES (CBS.MW) - California Gov. Gray Davis said regulators will act= =20 Tuesday on a plan to guarantee that independent power generators are paid. Independent power producers provide about 30 percent of California's=20 electricity from a variety of sources including wind solar and other=20 sources. Because many of the companies known as Qualifying Facilities or= =20 QFs haven't been paid they've begun to withhold power contributing to=20 blackouts in the state Monday and Tuesday.=20 We are anxious to pay the QFs because they're falling like flies Davis= =20 said at a news conference late Tuesday. If they don't get paid the lights= =20 will go out. Davis said the state's PUC order will require the state's nearly bankrupt= =20 utilities to enter five-year contracts with the QFs at rates of 7.9 cents p= er=20 kilowatt hour or 10-year contracts for lower rates. The structure is simil= ar=20 to rates Davis claims he was able to negotiate for long-term power contract= s=20 from out-of-state generators. --- Rash power bill may need fix By Will Shuck From our Sacramento Bureau SACRAMENTO Even as lawmakers lament the slow pace of solving California's= =20 energy crisis the cost of haste has cropped up in their first major act a= =20 multibillion dollar measure that put the state in the power-buying business= .=20 AB1X the highly touted bill that put California in the power-buying=20 business may have been so rashly crafted that it will take another piece o= f=20 legislation to fix it an influential senator said Tuesday.=20 At issue is vague wording that makes it unclear when and to what extent=20 Southern California Edison and other utilities have to repay the state for= =20 buying power.=20 State Sen. Debra Bowen chairwoman of the Senate Energy Utilities and=20 Communications Committee said the bill apparently has left room for utilit= y=20 lawyers to argue that their companies needn't repay the state until they ha= ve=20 covered other costs.=20 But Bowen a Redondo Beach Democrat who represents downtown and western Lon= g=20 Beach said the legislative intent is crystal clear that the state wanted= =20 to be repaid directly for supplying about a third of the power utility=20 companies deliver to their customers.=20 We need a cleanup bill to set the matter straight she said.=20 Although AB1X illustrates the flaws that come with speed Bowen said the= =20 Legislature can't afford to delay.=20 I think we are much too slow in our response she said. But that has to = be=20 balanced against things we've done in a tearing hurry and then have had to= =20 fix later.=20 No matter what the Legislature does in the coming weeks she said Californ= ia=20 is in for a tough summer and only determined conservation efforts will put= =20 much of a dent in a precarious supply-demand equation. --- PUC considers rewarding producers that sign long-term contracts=20 Greg Lucas Lynda Gledhill Chronicle Sacramento Bureau Wednesday March 21 2001=20 2001 San Francisco Chronicle=20 Sacramento -- Some cash-strapped producers of wind solar and other=20 alternative forms of energy will get long-delayed financial relief under a= =20 proposed order by state regulators Gov. Gray Davis said yesterday evening.= =20 A proposed order by the Public Utilities Commission is designed to reward= =20 energy producers who sign long-term contracts with utilities at lower rates= .=20 Alternative energy producers that voluntarily enter such contracts which= =20 would start on April 1 would be paid within 15 days said Davis who=20 requested the order. Those that do not would have to wait until the utiliti= es=20 that buy their power return to solvency.=20 Davis blasted Pacific Gas & Electric Co. and Southern California Edison for= =20 not paying the alternative generators -- know as qualified facilities or= =20 QFs -- even though the companies have been collecting money through rates= .=20 It is wrong and irresponsible of the utilities to pocket and withhold the= =20 money designed to compensate the QFs Davis said. It's immoral and has to= =20 stop.=20 Alternative producers -- ranging from massive co-generation facilities at o= il=20 refineries to tiny biomass plants -- produce about a third of the state's= =20 supply of electricity. But many are shutting down because utilities have no= t=20 paid them since November.=20 The loss of some 3000 megawatts from tapped-out alternative energy produce= rs=20 contributed to the blackouts that snarled California yesterday and Monday= =20 according to the Independent System Operator which manages the state's pow= er=20 grid.=20 The PUC's proposed order -- which will be considered at the board's Tuesday= =20 meeting -- offers the generators a choice of agreeing to a five-year contra= ct=20 at $79 per megawatt or a 10-year deal at $69 per megawatt Davis said.=20 The order does not address the more than $1 billion already owed to the mor= e=20 than 600 alternative energy producers around the state. Davis said to favor= =20 one creditor over another in past debt could bring on bankruptcy proceeding= s=20 from other creditors.=20 The Legislature would also need to act to make the order work.=20 It is critical to keep these facilities up and online said Sen. Debra=20 Bowen D-Marina del Ray who estimates that Edison has $1.5 billion in cash= =20 on hand and PG&E $2.5 billion. The utilities owe it to the people of the= =20 state to pay them.=20 Edison said yesterday that it opposed any attempt to place alternative=20 producers ahead of their other creditors.=20 But Tom Higgins a senior vice president for Edison International which ow= es=20 alternative producers some $835 million said his company was talking to th= e=20 governor's office about possible payment structures.=20 Alternative energy producers particularly those that use high-priced natur= al=20 gas to fire their generators say that without an immediate infusion of cas= h=20 they must close their plants.=20 We've been obsessed with the health of the utilities and (have) forgotten= =20 the health of everyone else said V. John White legislative director of t= he=20 Clean Power Campaign which lobbies for alternative energy producers.=20 CalEnergy Operating Corp. which operates eight geothermal plants in the=20 Imperial Valley producing 268 megawatt hours for Edison has sued the utilit= y=20 asking to be paid and to be temporarily released from their contract with= =20 Edison which has paid them nothing since November.=20 CalEnergy has a court hearing tomorrow on its Edison contract. Edison owes= =20 the company $75 million and the debt increases by $1 million a day.=20 We've lived up to our end of the bargain but Edison hasn't. We're now not = in=20 a position to make a property tax payment on April 10 and we're the largest= =20 employer in the county said Vince Signorotti CalEnergy's property manage= r.=20 Unlike Edison PG&E is paying its creditors 15 cents on the dollar.=20 We have offered over the past five days to prepay for future power not yet= =20 delivered to keep as many of them operating as possible but the state need= s=20 to decide how its going to divvy up the limited money under the frozen=20 rates said John Nelson a PG&E spokesman.=20 The PUC's sudden attempt to recast the rates paid to alternative generators= =20 comes after several months of inaction partly a result of waiting for=20 legislative negotiations on the issue to conclude. Those negotiations=20 eventually failed to move forward.=20 --- State claims $5.5 billion overcharge: Refunds by wholesale generators sough= t By Dale Kasler Bee Staff Writer (Published March 22 2001)=20 In its boldest attempt yet to extract refunds from wholesale power=20 generators the state's grid operator accused the generators Wednesday of= =20 overcharging Californians by $5.5 billion for electricity since last May.= =20 The state's Independent System Operator which manages the state's=20 transmission grid plans to tell a federal regulatory agency today that pow= er=20 generators consistently took advantage of their stranglehold on the=20 California market to ratchet up prices.=20 The federal agency the Federal Energy Regulatory Commission recently=20 threatened to order generators to refund $134.8 million for overcharges=20 mostly covering January and February. But those refunds amounted to just a= =20 fraction of what the grid operator was seeking. The ISO which has been=20 complaining about market abuses for several months says FERC must do more.= =20 We're happy that (FERC) took this first step but we think there's a long= =20 way to go said Anjali Sheffrin the ISO's director of market analysis. A= s=20 far as I'm concerned it's been too little too late. ... The refunds they= =20 have acted on (so far) have been minimal.=20 She said the report covers five major power suppliers and 16 other power=20 importers.=20 FERC Commissioner William L. Massey said it would be improper for him to=20 comment on a report that has not yet been filed. But when told of the $5.5= =20 billion total Massey told the Los Angeles Times: That doesn't shock me in= =20 any way.=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 However most FERC critics are skeptical that the federal agency which is = a=20 strong believer in letting free markets run their course would order a=20 refund anywhere near as large as $5.5 billion -- even though it has found= =20 that California prices at times have been unjust and unreasonable.=20 The big power generators saying their charges were reasonable are disputi= ng=20 the $134.8 million refunds proposed so far and have vowed to fight the ISO'= s=20 latest effort.=20 If the ISO were to prevail the $5.5 billion in refunds could go a long way= =20 toward remedying California's energy mess.=20 They could help restore the financial health of Pacific Gas and Electric Co= .=20 and Southern California Edison which have nearly been bankrupted by the=20 prices charged by the power generators. They also could ease the strain on= =20 the state treasury which is spending billions to purchase electricity for= =20 Californians because PG&E and Edison can't.=20 Sheffrin said her department studied sales made by the power generators to= =20 ISO which makes last-minute power purchases to balance supply with demand= =20 and the California Power Exchange the now-bankrupt entity where most of=20 California's wholesale electricity was bought and sold until December.=20 She said the study made very generous allowances for natural gas expenses= =20 costly air-pollution credits and other factors including the scarcity of= =20 electricity. The result was $5.5 billion worth of charges in excess of=20 competitive costs she said.=20 In many cases the companies used their market clout to submit bids that we= re=20 way beyond their costs she said.=20 It was insufficient competition Sheffrin said. They got away with a lot= .=20 She said the refund request isn't just a shot in the dark. FERC she noted= =20 has already found that prices in the California wholesale energy market ha= ve=20 been unreasonable. We took it upon ourselves ... to show FERC how they got = to=20 be so high.=20 FERC proposed refunds totaling $124 million for January and February sales= =20 declaring that generators' prices were too high.=20 In a separate case the federal agency for the first time accused two=20 generators last week of taking plants offline to force prices up.=20 --- Power solution eludes Davis: Lawmakers grow edgy as crisis drags on=20 By Emily Bazar and Amy Chance Bee Capitol Bureau (Published March 22 2001)=20 Gov. Gray Davis likes to compare the state's energy crisis to a complicated= =20 three-cornered billiard shot.=20 But as California plunged into another round of power blackouts this week= =20 Davis has yet to line up the angle on an ultimate solution.=20 The state's short-term power bill is nearing $4.2 billion and legislators= =20 are balking at the administration's requests for additional money.=20 Getting even the least controversial pieces of the puzzle through the=20 Legislature is taking weeks longer than expected.=20 While the Democratic governor has insisted secrecy about details of his pow= er=20 purchases is necessary to protect the state's bargaining position other=20 state officials are complaining vigorously about the lack of information.= =20 And critical deals the governor hoped to reach with energy suppliers and=20 utility companies are proving difficult to close.=20 I think we all got lulled into a little complacency a few weeks ago. All= =20 these things seemed to be going along and the governor was making all thes= e=20 warm and fuzzy comments said Assemblyman John Campbell R-Irvine.=20 But it only takes one deal to go sideways and we're all blacked out he= =20 added. The governor is running around basically saying 'Trust me.' I'm no= t=20 sure he's deserving of the trust at this point.=20 Davis and his aides insist they are working around the clock on plans to=20 boost power generation encourage conservation and reach an agreement with= =20 utilities that will keep them out of bankruptcy.=20 The utility plan they say is the equivalent of a large corporate merger= =20 that simply can't be accomplished overnight. Davis notes that earlier=20 deregulation efforts might have benefitted from a little more time.=20 Although the state has reached a broad agreement in principle with Southe= rn=20 California Edison to obtain its power transmission lines in exchange for he= lp=20 paying off its debts a final detailed deal has not been reached. The=20 initial agreement with Edison was announced Feb. 23.=20 And the governor has yet to achieve a tentative agreement with Pacific Gas= =20 and Electric Co. which is driving a harder bargain over price and other=20 elements of a potential rescue plan.=20 Joseph Fichera one of several consultants receiving more than $11 million= =20 from the administration for advice on the energy crisis said many people= =20 don't realize the complexity of the deal they're brokering.=20 In their bid to achieve a public takeover of the investor-owned utilities'= =20 transmission lines he said negotiators have to pore over thousands of=20 documents related to the transmission lines alone.=20 We are doing what is normal in a transaction of this magnitude which is= =20 investigate document circulate redocument agree move forward said=20 Fichera an investment banker with Saber Partners in New York City. The=20 governor has put a 'I want this yesterday' fire under his negotiating team= .=20 The negotiator however declined to say when he expects final agreements t= o=20 be reached with the companies.=20 It could be days it could be weeks he said.=20 There were signs meanwhile of trouble brewing on another front: the giant= =20 bond sale the state must make to repay the money it has spent so far on=20 electricity and to finance future long-term contracts for energy.=20 State Treasurer Phil Angelides said Wednesday the utilities are appealing a= =20 ruling by the state Public Utilities Commission that essentially ensures th= e=20 state will be repaid a move that he said threatens to delay the sale=20 indefinitely.=20 If the utilities have decided to adopt a scorched earth policy until they= =20 get what they need and want then it will be a significant problem=20 Angelides said.=20 PG&E spokesman Ron Low said the governor is simply placing too many demands= =20 on a rate structure that doesn't compensate the utilities for their current= =20 costs.=20 Political rhetoric is not going to change the math he said.=20 In the Legislature lawmakers are growing grumpier. Most were taken by=20 surprise Monday when blackouts were ordered across the state weeks before= =20 summer temperatures were expected to set in and strain the power system.=20 I'm more worried than ever said Assemblyman Bill Leonard R-San=20 Bernardino. A lot of the elements we thought we had a handle on in January= =20 are unraveling.=20 A deal the governor said had been worked out weeks ago between the state an= d=20 more than 600 small alternative energy suppliers collapsed last week.=20 The alternative generators have not been paid by the utilities for months= =20 and state leaders attempted to bargain down the price utilities pay those= =20 generators for power.=20 But administration officials complained privately that lawmakers instead=20 sweetened the pot for the suppliers to the point that the measure no longer= =20 helped solve the overall financial situation pushing the utilities toward= =20 bankruptcy. Under a proposal announced Tuesday by Davis the Legislature=20 would authorize the PUC to require the utilities to pay the alternative=20 suppliers at prices more closely resembling the original deal.=20 But the governor ran into immediate opposition as some suppliers said said= =20 he would not pay them enough to cover their fuel costs.=20 We would go from not being paid to losing money said Hal Dittmer of=20 Wellhead Electric a Sacramento-based supplier that has been shut down for= =20 more than a month. Almost everybody who burns natural gas is going to shut= =20 down. (Davis) got it wrong.=20 Democrats outside the Davis administration meanwhile are complaining abou= t=20 the amount of money the state Department of Water Resources is spending on= =20 expensive last-minute power purchases. Within a week $4.2 billion will ha= ve=20 been committed.=20 State Sen. Steve Peace D-El Cajon chairman of the joint Legislative Budge= t=20 Committee is warning the Davis administration that he will block additiona= l=20 funds for last-minute purchases of power until the PUC makes progress=20 recovering money that already has been spent. He intends to hold a hearing = on=20 the issue this morning.=20 On Wednesday state Controller Kathleen Connell told Davis she will refuse = to=20 make a routine budget transfer he had requested saying she is concerned th= at=20 there is no outside check and balance on the money the administration is= =20 spending to buy electricity on the spot market.=20 As the statewide elected official who pays the state's bills Connell said= =20 she has yet to receive information from the Department of Water Resources= =20 about how much it is spending.=20 We really need an accounting as to the total amount of liability they have= =20 accumulated she said. I understand they're in an emergency situation ...= =20 but it begins to imperil the state's ability to manage its cash flow.=20 Meanwhile a bill to provide $1 billion for conservation programs aimed at= =20 reducing power needs this summer also has languished for several weeks in= =20 the state Senate. While Davis has focused his attention elsewhere Republic= an=20 lawmakers have opposed the measure as too expensive. Democrats argue that= =20 each two-week delay prevents the state from saving as much energy as one=20 peaker plant will produce this summer. Peaker plants are designed to help= =20 meet the peaks of electricity demand.=20 I'm the eternal optimist but we have to keep working on all fronts said= =20 Sen. Byron Sher D-Palo Alto who hopes to take his energy conservation bil= l=20 up for a vote in the Senate again today. It's a formidable challenge.=20 Bee staff writer Dale Kasler contributed to this report.=20 --- Legislators learn some details of power contracts By John Hill Bee Capitol Bureau (Published March 22 2001)=20 The veil of secrecy surrounding the state's electricity contracts lifted=20 Wednesday -- a little.=20 Gov. Gray Davis gave state legislators a report laying out some of the=20 details of long-term contracts designed to help the state pull out of its= =20 energy crisis. But the report left legislators and others clamoring for mor= e.=20 The information raises more questions said Assemblyman George Runner=20 R-Lancaster. I liken it to watching a parade through a knothole in a fence= .=20 You get to look at one float but you're not sure about what's coming up an= d=20 what you've missed.=20 Davis had previously disclosed that the state had signed or was close to=20 signing 40 long-term contracts at an average price over 10 years of $69 pe= r=20 megawatt-hour.=20 The contracts are part of the state's strategy for trying to avoid a fiscal= =20 shellacking in the energy spot market while making sure there's enough=20 electricity to avoid more blackouts.=20 Davis also previously disclosed that the contracts were for an average of= =20 about 9000 megawatts a year and that the total cost exceeded $40 billion.= =20 But Davis has resisted telling more saying the state would jeopardize its= =20 ability to get the best prices if electricity generators knew what their=20 counterparts were getting.=20 On Wednesday the governor's office released a March 15 report from S. Davi= d=20 Freeman general manager of the Los Angeles Department of Water and Power = to=20 the state Department of Water Resources. The state agency has been given th= e=20 responsibility of making power purchases and Freeman was brought in to lea= d=20 the negotiations.=20 As of March 15 the state had signed 19 contracts with seven suppliers for= =20 periods ranging from 14 months to 20 years with many for three or five=20 years the report says. Some of the contracts are for electricity to meet t= he=20 state's everyday power demand while others are only for times of peak use= =20 such as hot summer days.=20 The state had agreements in principle for an additional 25 contracts.=20 Runner said he has been told that two of these contracts have since been=20 finalized.=20 The amount of power provided reaches a peak in 2004 of more than 10000=20 megawatts. As the long-term contracts start to expire around then the stat= e=20 is hoping that demand can be met with new contracts or spot purchases at=20 prices expected to be much cheaper.=20 The report says nine more long-term contracts were under discussion.=20 Some of the contracts are with power generators while others are with=20 marketers who may get the power from a number of sources.=20 In some cases the state may supply the natural gas used to generate the=20 electricity or power costs may be pegged to the going rate for the fuel.= =20 Some suppliers can cancel if the state fails to sell bonds by a certain dat= e=20 to cover power costs or fails to maintain an investment grade credit rating= .=20 Some depend on the construction of power plants but Freeman said they were= =20 firm commitments.=20 We were pretty careful not to put a hope and a dream in the portfolio he= =20 said.=20 More contracts will have to be signed to meet summer demand and these=20 agreements will probably be more expensive the report says.=20 One item not in Freeman's report was a secret deal to relieve several major= =20 generators from having to pay for polluting the air beyond allowable limits= .=20 The long-term power contracts include language that would have the state pa= y=20 the costs of pollution credits that allow power plants to exceed their=20 permitted levels of smog-forming pollutants the governor's office confirme= d=20 Wednesday. Spokesman Steve Maviglio said that several generators are being= =20 relieved from having to pay those costs.=20 V. John White a Sierra Club lobbyist close to the negotiations said Dyneg= y=20 Inc. which has power plants in El Segundo Encina and Long Beach is one o= f=20 them. Dynegy officials did not return calls to The Bee on Wednesday.=20 Freeman said that generators were demanding hefty premiums for having to de= al=20 with air quality regulators in the summer and he figured it would be cheape= r=20 just to pay for the pollution credits.=20 In other energy-related developments:=20 With more power plants back online grid operators dropped down to a Stage = 1=20 electricity alert. The state Independent System Operator was expecting=20 supplies to gradually increase over the next few days.=20 The state Public Utilities Commission issued a revised draft decision that= =20 would impose the prices outlined Tuesday by Davis for power produced by=20 alternative energy companies -- $79 a megawatt-hour for five-year contracts= =20 or $69 a megawatt-hour for 10 years. The proposal is scheduled for a PUC vo= te=20 March 27.=20 A federal judge ruled that one of the nation's major electricity generators= =20 must continue supplying California with emergency power.=20 In imposing an injunction on Reliant Energy Services Inc. U.S. District=20 Judge Frank C. Damrell Jr. noted the rolling blackouts (that have) darkene= d=20 the California landscape and said the loss of Reliant's production poses = an=20 imminent threat.=20 Bee staff writers Carrie Peyton Chris Bowman and Denny Walsh contributed t= o=20 this report.=20 --- Federal judge orders major power wholesaler to sell to California=20 By Don Thompson ASSOCIATED PRESS=20 March 21 2001=20 SACRAMENTO =01) A federal judge issued a preliminary injunction Wednesday= =20 ordering a major electricity wholesaler to continue selling to California= =20 despite its fear 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.=20 Controller: State's power spending imperils its financial health=20 Governor says utilities must pay in advance for some power=20 ?=20 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 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.=20 State Controller Kathleen Connell said Wednesday that the energy crunch als= o=20 imperils California's financial health.=20 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.= =20 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.=20 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 --- Controller: State's power spending imperils its financial health=20 By Don Thompson ASSOCIATED PRESS=20 March 21 2001=20 SACRAMENTO =01) California's power-buying on behalf of two strapped utiliti= es is=20 gutting its budget surplus and putting the state at financial risk the sta= te=20 controller said Wednesday.=20 The surplus dropped from $8.5 billion in January when the state began buyi= ng=20 electricity for Pacific Gas and Electric Co. and Southern California Edison= =20 to $3.2 billion now Kathleen Connell estimates.=20 Connell ordered an audit of the state's power-buying saying Gov. Gray Davi= s=20 is withholding key financial information from her office and the Legislatur= e.=20 Wednesday marked the first time in three days the state avoided rolling=20 blackouts. Power grid officials credited cooling temperatures and the=20 completion of repairs at several power plants.=20 Connell said the energy crunch now imperils the state's budget as well as i= ts=20 electric grid.=20 California has been spending about $45 million a day =01) $4.2 billion so f= ar =01)=20 to buy power for Edison and PG&E both denied credit by electricity=20 wholesalers.=20 The two utilities California's largest say they are nearly $14 billion in= =20 debt due to soaring wholesale power costs the state's deregulation law bloc= ks=20 them from recovering from customers.=20 Meanwhile the state has faced high natural gas costs and a tight power=20 supply driven in part by power plant repairs in California and scarce=20 hydroelectric power in the Pacific Northwest.=20 Standard & Poor's has put the state on a credit watch due to its power=20 purchases and chastised Davis the Legislature and state regulators for not= =20 taking more aggressive steps to assure the utilities can pay their bills.= =20 On Wednesday Connell said she is refusing a request by Davis and the=20 Legislature to transfer $5.6 billion into a rainy day fund she said was s= et=20 up to impress Wall Street as the state prepares to issue $10 billion in=20 revenue bonds to cover its 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 Connell said the scope of the proposed transfer is unprecedented and amount= s=20 to a shell game that disguises the power purchases' impact on the state= =20 budget.=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.= =20 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. He said his= =20 plan may involve giving the utilities low-interest loans with their=20 transmission lines held as collateral.=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 Maviglio said the administration has released the financial information it= =20 can without jeopardizing negotiations for long-term power contracts with=20 wholesalers.=20 --- Governor says utilities must pay in advance for some power=20 By Jennifer Coleman ASSOCIATED PRESS=20 March 21 2001=20 SACRAMENTO =01) The state's two largest utilities will be ordered to pay=20 environmentally friendly power generators in advance a move Gov. Gray Davi= s=20 hopes will bring a quick end to the power blackouts that darkened Californi= a=20 this week.=20 The statewide blackouts that stretched from San Diego to Oregon on Monday a= nd=20 Tuesday were caused in part by the failure of Southern California Edison an= d=20 Pacific Gas and Electric Co. to pay millions of dollars they owe qualifyin= g=20 facilities or QFs Davis said.=20 Such suppliers use cogeneration =01) steam from manufacturing plus natural = gas =01)=20 or solar wind and other renewable energy to generate electricity. This wee= k=20 California lost about half the power those generators normally provide.=20 Controller: State's power spending imperils its financial health=20 ?=20 Several of them said they hadn't been paid by Edison and PG&E in weeks and= =20 can't afford to keep operating their plants.=20 Davis accused the utilities of taking in money from customers while failing= =20 to pay the QFs. The state has been spending about $45 million a day since= =20 January to buy power for customers of Edison and PG&E which are so=20 credit-poor that suppliers refuse to sell to them.=20 It's wrong and irresponsible of the utilities to pocket this money and not= =20 pay the generators the governor said at a Capitol news conference Tuesday= =20 evening. They've acted irresponsibly and immorally and it has to stop.=20 PG&E called the governor's statements inappropriate and unjustified addi= ng=20 that it was negotiating a payment plan with the QFs. Edison said it is inte= nt=20 on paying creditors and working with the California Public Utilities=20 Commission to pay QFs for future power sales.=20 Controller Kathleen Connell warned Wednesday that the state's $2=20 billion-a-month power purchases are jeopardizing California's budget.=20 The state's budget surplus dropped from $8.5 billion in January when the= =20 power purchases began to $3.2 billion now Connell estimates. She blamed= =20 Davis for withholding key financial information and ordered an audit of th= e=20 state's power spending starting next week.=20 She blocked a request by the Legislature and Davis administration to transf= er=20 $5.6 billion from the state's general fund into a special rainy day fund= =20 saying that would have left the general fund $2.4 billion in debt.=20 The Legislative Analyst's Office said such transfers are routine Connell= =20 agreed but said the size of the transfer is unprecedented.=20 We started this year with a generous budget surplus Connell said. The= =20 energy 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 keepers of the state's power grid were optimistic California wou= ld=20 get through Wednesday without another day of rolling blackouts. Two plants= =20 down for repairs returned to service.=20 Several power plants that were taken down for repairs are also expected com= e=20 online by the end of the week reducing the likelihood of blackouts said J= im=20 Detmers ISO vice president.=20 Power may flow to homes and businesses but it could soon cost consumers=20 more said Assemblyman Fred Keeley one of the Legislature's leaders on=20 energy issues.=20 I think it's intellectually appropriate and honest to tell people as soon = as=20 it's apparent that a rate increase is warranted the Boulder Creek Democra= t=20 said Tuesday indicating that time had come.=20 He estimated that the state Public Utilities Commission may soon have to=20 raise rates by about 15 percent to cover the state's costs and its utilitie= s'=20 bills.=20 My sense is that people will appreciate having some certainty and being ab= le=20 to plan for it he said. They don't have to like it but I think they'll= =20 appreciate it.=20 Davis said he is confident the utilities and the state can pay their bills= =20 without further rate increases for Edison and PG&E customers.=20 In the meantime the Independent System Operator keeper of the grid is=20 counting on continued conservation by residents and businesses to avoid mor= e=20 blackouts. Conservation accounted for about 300 megawatts in savings during= =20 Tuesday's peak usage enough to power 300000 homes.=20 Roughly a half-million homes and businesses were affected by Tuesday's=20 blackouts which snarled traffic and plunged schools and businesses into=20 darkness across the state.=20 The outages began at 9:30 a.m. and continued in 90-minute waves until about= 2=20 p.m. when the ISO lifted its blackout order. They were blamed for at least= =20 one serious traffic accident.=20 Two cars collided at an intersection in the Los Angeles suburb of South El= =20 Monte where the traffic lights were out. Two people were seriously hurt sa= id=20 California Highway Patrol Officer Nick Vite.=20 In San Francisco's Chinatown souvenir shops normally bustling with visitor= s=20 were forced to shut down. Nearby irritated customers waited for a bank to= =20 reopen.=20 The blackouts like Monday's were caused by a combination of problems=20 including unseasonably warm weather reduced electricity imports from the= =20 Pacific Northwest and numerous power plants being shut down for repairs.=20 Adding to those troubles the state lost about 3100 megawatts from the QF= =20 plants.=20 Senate Energy Committee Chairwoman Debra Bowen D-Marina del Rey estimated= =20 Tuesday that Edison has amassed more than $1 billion and PG&E more than $2= =20 billion that they have not paid to generators.=20 Davis said the PUC planned to issue an order next week directing the=20 utilities to pre-pay their future QF bills.=20 PG&E said its prepayments hinge on an upcoming PUC decision on whether the= =20 utility's rates are sufficient to pay its bills and cover the state's power= =20 purchases on its behalf which amount to $4.2 billion since early January.= =20 Edison and PG&E say they have lost more than $13 billion since last June to= =20 climbing wholesale electricity prices which the state's 1996 deregulation= =20 law prevents them from passing on to ratepayers.=20 --- Energy Overcharge of $5.5 Billion Is Alleged=20 Power: Money should be refunded to taxpayers and utilities the state grid= =20 operator says citing evidence of market manipulation. Suppliers deny the= =20 accusation.=20 By TIM REITERMAN and NANCY RIVERA BROOKS Times Staff Writers=20 ?????Wholesale electricity suppliers overcharged California by about $5.5= =20 billion between May and last month and that money should be refunded to th= e=20 state's taxpayers and financially strapped utilities the state power grid= =20 operator said Wednesday. ?????Generators engaged in market manipulation and consistent patterns of= =20 bidding far above costs in the deregulated energy market the California=20 Independent System Operator found in a study of pricing data. The findings= =20 support the widespread belief that these suppliers reaped massive additiona= l=20 revenue by manipulating the market. ?????Spokesmen for the companies denied the accusation. ?????The study prepared for a filing with federal regulators today is=20 central to Cal-ISO's efforts to seek reimbursement for what it considers=20 excessive charges by electricity suppliers during the state's energy crisis= . ?????This might be the first time we told them the total impact and=20 magnitude [of the overcharging] said Anjali Sheffrin Cal-ISO's director = of=20 market analysis. We think the entire amount deserves consideration for=20 refunds. ?????Using confidential bidding data on tens of thousands of electricity=20 sales Cal-ISO found that five companies that together supply about 30% of= =20 the power delivered to customers of the state's investor-owned utilities=20 engaged in two types of behavior that tended to push up prices: ?????* They effectively withheld supplies by bidding at excessive prices= =20 even though they could have made some money selling more electricity. ?????* Less frequently they had power generation available but did not bid= =20 at all. ?????The study concluded that energy suppliers commonly offered their=20 electricity at twice their cost. For example Sheffrin said the average=20 markup in August was 100% during peak hours. ?????A spokeswoman at the Federal Energy Regulatory Commission which=20 oversees wholesale electricity pricing across the country declined to=20 comment Wednesday saying This is part of an ongoing proceeding. ?????FERC member William L. Massey who has considered previous commission= =20 actions on refunds to be inadequate said it would be improper for him to= =20 comment on a report that has not yet been filed. But when told of the=20 $5.5-billion total Massey said: That doesn't shock me in any way. ?????Prices over the past 10 months in California have greatly exceeded th= e=20 federal standards of just and reasonable prices and I think they have=20 exceeded the standards by possibly billions of dollars he said. ?????Cal-ISO which oversees grid operations and an emergency energy market= =20 previously detailed $550 million in alleged overcharges for December and=20 January and asked FERC for refunds. But the commission has proposed refunds= =20 of only a tiny fraction of that amount. ?????The study covered five major in-state power suppliers--Reliant Energy= =20 Dynegy Williams/AES Duke Energy and Mirant formerly Southern Energy--plu= s=20 16 power importers all of which deliver power to customers of Pacific Gas = &=20 Electric Co. Southern California Edison and San Diego Gas & Electric Co. ?????All [21] overcharged but some excessively and some by moderate=20 amounts Sheffrin said. ?????Cal-ISO's public filing will quantify the alleged overcharging by each= =20 company but the companies will be identified only by a number. The code wi= ll=20 be provided to FERC Sheffrin said and Cal-ISO lawyers will determine how= =20 much information about the companies will be made public. ?????State U.S. Investigations ?????California electricity markets and the companies that buy and sell pow= er=20 in the state have been the subject of several investigations by state and= =20 federal authorities since wholesale electricity prices first skyrocketed in= =20 May. ?????Electricity suppliers have repeatedly denied manipulating the Californ= ia=20 market in any way whether through above-cost bidding in spot markets or=20 through physical withholding of electricity to drive up prices. ?????Reliant Energy is cooperating with FERC's requests for more data and i= s=20 confident the commission will conclude that prices charged by Reliant were= =20 justified said Joe Bob Perkins president of the Houston-based company. ?????Perkins also bitterly disputed charges that Reliant has shut down unit= s=20 so that it can earn bigger profits on the power sold by the remaining plant= s.=20 These charges have been leveled against all of the power-plant owners in th= e=20 state. ?????Reliant Vice President John Stout said Cal-ISO's calculations typicall= y=20 don't include such fixed costs as salaries taxes and the interest on bonds= =20 they sold to finance their power plants which they acquired under terms of= =20 the state's landmark 1996 deregulation law. ?????In addition he said many high-priced power days have resulted from= =20 buyers bidding against each other for scarce supplies rather than sellers= =20 charging excessive amounts--like a house price being driven far above the= =20 listing price in a hot real estate market. ?????Williams Energy Services a trading company that markets most of the= =20 power produced by plants owned by AES also says it will be exonerated by= =20 FERC once the commission examines documentation being submitted said Paula= =20 Hill-Collins spokeswoman for the Tulsa Okla. company. ?????FERC has the obligation to investigate when these accusations are=20 made Hill-Collins said. This is just a process of justification not=20 necessarily proof of guilt. ?????Williams/AES was recently ordered by FERC to prove that it did not tak= e=20 generating units out of service last year to drive up electricity prices o= r=20 refund $10.8 million to California utilities. ?????During the period studied suppliers sold electricity in the Californi= a=20 Power Exchange to Southern California Edison PG&E and San Diego Gas &=20 Electric Co. and in a backup market for last-minute electricity operated by= =20 Cal-ISO. But sky-high prices plunged Edison and PG&E deeply into debt and= =20 most suppliers stopped selling to them in January forcing the state=20 Department of Water Resources to step in as the primary electricity buyer f= or=20 the three big utilities' 27 million customers. ?????The Cal-ISO study first summarized at an energy conference last week = at=20 UC Berkeley but not otherwise publicized concluded that the companies=20 exercised so-called market power to pump up electricity prices. ?????Severin Borenstein director of the Energy Institute at Berkeley said= =20 Cal-ISO's study is consistent with his research examining pricing practices= =20 in 2000. ?????We found several billion dollars . . . in departures from competitive= =20 pricing he said. When the market was tight this summer they were able t= o=20 push up prices and they did. ?????The early warning signs of electricity price spikes the study found= =20 appeared in May after two years of relatively stable prices of $30 to $40 p= er=20 megawatt-hour under deregulation. Prices went up during the summer dipped = in=20 September and October with lower demand then took off in November and=20 December as weather turned cold and the price of natural gas which is used= =20 to generate much of the state's electricity reached record levels. ?????There were plant outages and demand and supply became close Sheffr= in=20 said. Whatever price they bid had to be taken and market power asserted= =20 itself. ?????Cal-ISO found that $3 billion of the alleged overcharges occurred=20 between May and November. ?????On Friday federal regulators ordered six wholesale power suppliers to= =20 refund $55 million to California if they cannot justify prices charged in= =20 February. The refund was limited to power sold that month in excess of $430= =20 per megawatt-hour during Stage 3 power alerts when supplies are so tight= =20 that rolling blackouts are threatened. (One megawatt-hour is enough=20 electricity to supply 750 typical homes for an hour.) ?????The previous week FERC ordered 13 suppliers to justify or refund $69= =20 million for power sold in January at prices above $273 per megawatt-hour. ?????Massey opposed the potential refunds as too low because they were=20 limited to hours in which a Stage 3 power emergency was in place and becaus= e=20 the benchmark price set for each month was too high--combining to exempt mo= re=20 than 70000 transactions from scrutiny. ?????We're still looking for our lost wallet under the lamppost which is= =20 Stage 3 alerts said Massey one of three commissioners on the five-member= =20 board (two seats are vacant). ?????Generators have been given the free and clear he said. ?????These tinkling little refunds they have come out with recently are=20 almost a joke said Cal-ISO board member Mike Florio senior attorney at t= he=20 Utility Reform Network. ?????Resisting Price Caps ?????Cal-ISO contends that the last 10 months have proved that generators c= an=20 no longer be allowed to receive electricity prices that are dictated by wha= t=20 the market will bear. ?????FERC granted market-based rate authority on each of these suppliers'= =20 own showing that they could not manipulate prices yet their actions have= =20 shown the contrary Sheffrin said. We feel FERC needs to look at the=20 premise of allowing these generators to continue selling at market-based=20 rates. ?????The commission is responsible for ensuring just and reasonable=20 electricity rates. Although it has called California's power market=20 dysfunctional and vulnerable to manipulation the agency has resisted setti= ng=20 firm price caps sought by California's congressional delegation. ?????Chairman Curt L. Hebert Jr. strongly opposes caps while Massey wants = to=20 use caps across the West as a temporary timeout. ?????Energy Secretary Spencer Abraham in a New York news conference=20 Wednesday reiterated his opposition to electricity price caps as a way to= =20 cope with California's energy crisis. ?????If we put price caps in place there will be more blackouts and=20 they'll be worse Abraham said. ?????Cal-ISO is filing its market study as part of its comments on FERC sta= ff=20 recommendations on ways to thwart market manipulation. FERC's proposal=20 includes strict coordination of power plant outages by Cal-ISO with reporti= ng=20 of suspicious closures to FERC and generator-by-generator bid caps tied to= =20 costs. ---=20 ?????Reiterman reported from San Francisco Rivera Brooks from Los Angeles.= =20 Times staff writer Thomas S. Mulligan in New York contributed to this story= . --- --- Power Strain Eases but Concerns Mount=20 Energy: Officials say summer prices will be high and a state report shows= =20 that contracts with generators are far short of goals.=20 By DAN MORAIN and JENIFER WARREN Times Staff Writers=20 ?????SACRAMENTO--California's fragile electricity system stabilized=20 Wednesday but a Davis administration report suggested troubles ahead becau= se=20 the state could be forced to buy most of its power for the coming summer on= =20 the costly and volatile spot market. ?????After two days of statewide blackouts power plants that had been shut= =20 down were cranked up. Unseasonable heat tapered off. The operators of the= =20 statewide power grid relaxed their state of emergency. ?????But plenty of ominous signs remained. Many small producers remained sh= ut=20 down skeptical about Gov. Gray Davis' plan for utilities to pay them. ?????State Controller Kathleen Connell issued a sharp warning about the hig= h=20 cost of the state's foray into the power business and announced that she wi= ll=20 block an administration request that she transfer $5.6 billion into an=20 account that could be tapped to pay for state purchases of electricity. ?????And a report from the administration summarizing contracts between Dav= is=20 and independent power generators showed that the state has signed contracts= =20 for only 2247 megawatts of electricity significantly less than the 6000 = to=20 7000 megawatts previously claimed. ?????While there are agreements in principle for the full amount the repor= t=20 notes that generators can back out of the contracts for a variety of reason= s=20 including the state's failure to sell bonds to finance power purchased by= =20 July 1. The Legislature has approved plans to sell $10 billion in bonds bu= t=20 none have yet been issued. ?????We are exposed enormously this summer Senate Energy Committee=20 chairwoman Debra Bowen (D-Marina del Rey) said after looking at the report.= =20 We owe the people the truth about how difficult this summer is going to be= .=20 We don't have a power fairy. ?????Perhaps most significant the report suggests that the contracts fall= =20 significantly short of Davis' stated goal of buying no more than 5% of the= =20 state's summer needs on the spot electricity market where prices can be ma= ny=20 times those of long-term contracts. ?????After reading the report Frank Wolak a Stanford University economist= =20 who studies the California electricity market said the numbers suggested= =20 that the state's long-term contracts will cover less than half of what the= =20 state will need this summer. ?????We're definitely short this summer next summer and the summer of=20 2003 he said. ?????California was forced to start buying electricity in December--at a co= st=20 of $50 million a day--because producers refused to sell to Southern=20 California Edison and Pacific Gas & Electric. The two utilities amassed=20 billions of dollars in debt when prices for wholesale power soared on the= =20 spot market. ?????Vikram Budhraja a consultant retained by Davis to negotiate deals wit= h=20 generators said the report represents a work in progress. He said the=20 state may yet sign new contracts. ?????However Wolak said the contract figures confirm what he and others ha= ve=20 been dreading: that summer is going to be rife with rolling blackouts unles= s=20 serious steps to cut demand are taken immediately. ?????Wolak and other experts say large industrial customers must be switche= d=20 to real-time meters and pricing to persuade them to use the bulk of their= =20 energy at times of low demand. ?????The head of the Energy Foundation a San Francisco-based nonprofit tha= t=20 promotes sustainable sources of power made the same proposal to Davis on= =20 Wednesday. ?????The government need not ask customers to swelter in the dark this=20 summer foundation President Hal Harvey argued in a letter. ?????He also proposed a crash campaign to boost sales of efficient applianc= es=20 and lightbulbs. He said the state needs to take over the utilities' contrac= ts=20 with alternative energy providers to ensure they stay in business and sign= =20 new contracts for 1500 megawatts of new wind power--the cheapest fastest= =20 and cleanest source of new supply. ?????Davis had proposed a formula Tuesday to force private utilities to pay= =20 the alternative producers some of which have not been paid since November.= =20 But some of them warned Wednesday that Davis' plan offers them little=20 incentive to turn on their generators. ?????Alternative energy producers supply more than a quarter of the=20 electricity consumed in California. ?????Many producers generate electricity from wind sun and geothermal=20 sources. But most of them generate power using natural gas--and the cost of= =20 natural gas has been soaring. Several natural gas users said Davis' plan= =20 which caps rates won't cover their fuel costs. ?????Davis assumes that the price of natural gas will fall. But small=20 generators say they don't have sufficient purchasing power or sophisticatio= n=20 to gamble on future prices. ?????The Public Utilities Commission is expected to approve Davis' proposal= =20 next week. It offers producers two choices: 7.9 cents a kilowatt-hour if th= ey=20 agree to supply power for five years or 6.9 cents a kilowatt-hour over 10= =20 years. ?????The price of natural gas is higher than that said Marty Quinn=20 executive vice president and chief operating officer of Ridgewood Power LLC= =20 which owns three natural gas-fired co-generation plants. If we operate=20 we'll lose money. ?????Ridgewood is not operating having been cut off by gas suppliers. The= =20 company sued PG&E last month seeking overdue payments and release from its= =20 contracts with the utility. ?????A hearing is scheduled in El Centro today in another lawsuit filed by = a=20 small energy producer an Imperial Valley geothermal producer that sued=20 Edison for refusing to let it break its contract and sell on the open marke= t.=20 CalEnergy says Edison owes it about $140 million for energy sold since=20 November. ?????A company spokesman Jay Lawrence said CalEnergy was going ahead with= =20 its suit despite Davis' proposal. We've had promises before he said. ?????In other developments: ?????* A federal judge in Sacramento on Wednesday ordered Reliant Energy of= =20 Houston a major producer to continue selling power to California during= =20 emergencies despite the company's argument that it may not be fully=20 reimbursed. The order will remain in effect for 60 days or until the U.S.= =20 Federal Energy Regulatory Commission decides a related case. ?????* Connell said the state budget surplus has shrunk to $3.2 billion=20 because the state has spent roughly $2.8 billion on electricity. She=20 criticized the administration for withholding basic information about state= =20 finances and said she will begin an audit on Monday of the Department of= =20 Water Resources which is responsible for purchasing power. ?????Davis' aides said Connell took her action because the Democratic=20 governor endorsed one of Connell's foes this week in the race for Los Angel= es=20 mayor former Assembly Speaker Antonio Villaraigosa. A Connell aide scoffed= =20 at the notion. ?????* Sen. Dianne Feinstein (D-Calif.) said she never has had a response= =20 from President Bush after writing him last month for an appointment to=20 discuss the California energy crisis. ?????In a wide-ranging lunch talk with reporters in Washington she deplore= d=20 the fact that huge huge profits are being made in the California crisis= =20 and said an appropriate federal role would be to guarantee a reliable=20 source of power until the state can get nine new generators online. ---=20 ?????Times staff writers Mitchell Landsberg in Los Angeles and Robert L.=20 Jackson in Washington contributed to this report. --- --- ------------------------ --- --- ------------------------ Net Complex A Dilemma For San Jose=20 SERVER FARM: Plant would tax grid=20 David Lazarus Chronicle Staff Writer Thursday March 22 2001=20 2001 San Francisco Chronicle=20 URL:=20 /22/M N236772.DTL=20 San Jose while trying to block construction of a new power plant is set t= o=20 approve a vast computer complex that could overwhelm California's already= =20 strained power grid.=20 City officials gave preliminary approval last week to what would be the=20 world's largest server farm. The sprawling facility to handle Internet=20 traffic would drain about 150 megawatts of power from the state electricity= =20 grid.=20 If granted final authorization on April 3 the $1.2 billion project would a= dd=20 the equivalent of about 150000 homes to California's power system which w= as=20 hit this week by rolling blackouts as demand for juice outstripped availabl= e=20 supply.=20 The server-farm issue highlights a vexing dilemma for the state.=20 On the one hand Gov. Gray Davis is calling for widespread conservation to= =20 help California overcome its current troubles. On the other no one wants t= o=20 curtail growth of the high-tech industry which is an engine for economic= =20 vitality.=20 San Jose will make a lot of money from this project said Craig Breon=20 executive director of the Santa Clara Valley Audubon Society. But to not= =20 help the state out of its energy situation there's a fair amount of=20 hypocrisy going on.=20 The server farm would be owned by U.S. DataPort a San Jose data-management= =20 firm. As planned it would occupy 10 buildings on more than 170 acres in th= e=20 city's Alviso area.=20 Total projected energy use would be 180 megawatts. About 30 megawatts would= =20 be generated by a small on-site facility and the rest would have to be=20 provided by Pacific Gas and Electric Co.=20 We're confident that the DataPort project will be approved because it's ve= ry=20 important to San Jose and to the local economy said San Jose Mayor Ron=20 Gonzales.=20 But PG&E already is saying that its power cupboard is bare. The utility do= es=20 not have sufficient existing electric infrastructure to meet U.S. DataPort= 's=20 needs it said in a recent letter to San Jose officials.=20 John Mogannam U.S. DataPort's senior vice president of operations counter= ed=20 that it could take as long as five years for the server farm to grow big=20 enough to require the full 150 megawatts from the state grid.=20 Hopefully by then the whole energy crisis will pass by and we won't have= a=20 problem he said.=20 Mogannam stressed the positive aspects of the project such as its ability = to=20 handle about 15 percent of global Internet traffic the 700 jobs it would= =20 create and the $70 million over 10 years it would generate for San Jose in= =20 property and utility taxes.=20 That's why the city likes it he said.=20 Indeed San Jose officials are so enamored with such developments that they= =20 have all but turned a deaf ear to warnings that the server farm will=20 exacerbate California's already dire power shortage.=20 Andrew Crabtree the city's senior planner said the planning commission ha= d=20 barely touched the question of energy supply when it approved the server fa= rm=20 last week.=20 It wasn't incumbent on the commission to solve the state's energy-supply= =20 problems he said.=20 Rather San Jose city planners focused on the environmental ramifications o= f=20 the proposed facility including air pollution from diesel generators and t= he=20 impact on nearby wildlife.=20 How it would affect dozens of burrowing owls in the area was a key topic of= =20 discussion.=20 We all recognized that there's a power shortage Crabtree said. But we= =20 couldn't do anything about that with this project.=20 Except to make things tougher of course.=20 Server farms run 24 hours a day seven days a week. They are an aspect of t= he=20 high-tech boom that was never foreseen by energy experts and which are now= a=20 major contributor to California's surging electricity demand.=20 A server farm essentially is a large building filled with computers. Each= =20 computer handles the Web site or Internet traffic for hundreds of corporate= =20 clients that do not have the technical resources to look after such things= =20 in- house.=20 Most server farms consume between 10 and 60 megawatts of power. At 180=20 megawatts the U.S. DataPort facility is billed as the most extensive data= =20 center on the planet.=20 There won't be another this size anywhere in the world said Mogannam th= e=20 company's senior vice president. This will be the biggest.=20 With such a vast scale however comes additional concerns. For example al= l=20 that hardware will generate huge amounts of heat requiring powerful air=20 conditioners running around the clock to keep things cool.=20 Patrick Dorinson a spokesman for the Independent System Operator which=20 oversees California's electricity network said server farms had a big=20 impact on the state's tight energy supply.=20 We have an economy that's increasingly based on delivery of information = he=20 observed. We certainly need to make sure we're building adequate generatio= n=20 and transmission to get it there.=20 As it stands no major power plants have been built in California for the= =20 past 12 years while dozens of server farms have sprung up throughout the= =20 state.=20 The Yankee Group a Boston consulting firm estimates that the amount of=20 space taken up by server farms nationwide rose to 9 million square feet fro= m=20 1999 to 2000.=20 By 2003 it expects that figure to increase to 25 million square feet or= =20 enough room for more than a hundred 10-story office buildings.=20 San Francisco may be the exception. Supervisor Sophie Maxwell proposed=20 interim zoning controls last week that would require server farms to receiv= e=20 special permission from City Hall to operate.=20 San Jose for its part has no such reservations. It does however draw th= e=20 line at big fat power plants in the backyard of the city's leading corpora= te=20 citizen.=20 Gonzales is spearheading opposition to a proposed 600-megawatt generating= =20 facility in Coyote Valley because of its proximity to a residential area at= =20 the site of a planned Cisco Systems office complex.=20 There's plenty of opportunities to generate power in the city he said.= =20 This project is just in the wrong site.=20 The matter is now in the hands of the California Energy Commission which i= s=20 expected to issue a ruling by May.=20 Cisco critics say twisted the mayor's arm to fight the plant because it d= id=20 not want a generating facility in its neighborhood. The area will be home t= o=20 thousands of well-heeled tech workers.=20 It's politics said Breon at the Audubon Society. City officials are=20 making political decisions rather than good planning decisions.=20 Ted Smith executive director of the Silicon Valley Toxics Coalition a=20 grassroots organization is calling for a moratorium on construction of all= =20 new server farms in the South Bay until sufficient power can be found to ke= ep=20 them running.=20 Until they figure out how to build these things without draining the=20 electricity grid even dryer it is they shouldn't build them he said.=20 The Internet industry is creating unintended consequences that will really= =20 screw up our future Smith added. They are so busy focusing on next=20 quarter's profits that they don't stop and think about the consequences. .= =20 .=20 SOME FAST FACTS ABOUT 'SERVER FARMS' .=20 -- What are they? Server farms are facilities dedicated exclusively to=20 housing powerful computers for Internet use.=20 -- Who uses them? Companies and individuals pay server farms to maintain=20 their Web sites handle Net traffic and store vast amounts of data --=20 functions that otherwise would require extensive hardware and technical=20 support.=20 -- Why do they use them? As Internet use explodes server farms play an=20 increasingly vital role in managing data and keeping information moving.=20 -- What's the problem? Server farms drain considerable amounts of electrici= ty=20 to keep running.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- Contracts Won't Meet Summer Demands=20 DETAILS: 2004 before full impact felt=20 Lynda Gledhill Chronicle Sacramento Bureau Thursday March 22 2001=20 2001 San Francisco Chronicle=20 URL:=20 /22/M N230640.DTL=20 Sacramento -- Long-term power contracts negotiated by the state won't cover= =20 California's entire demand for electricity until 2004 according to newly= =20 released details about the agreements.=20 The information suggests that California might have to scrounge for=20 electricity on the high-priced spot market for a couple more years even as = it=20 continues to push conservation efforts and construction of more generating= =20 plants.=20 Details of the agreements released by Gov. Gray Davis' administration show= =20 that the contracts will provide for just over a third of the state's demand= =20 for power this year. Energy secured by the contracts will grow to meet the= =20 expected demand in three years.=20 Short-term purchases of power have at least temporarily depleted the state'= s=20 budget surplus and have raised the possibility of sharp rate increases=20 sometime in the future for electricity customers.=20 Davis administration officials are banking on the hope that conservation=20 efforts and increased generating capacity will cover the shortfall along wi= th=20 purchases of electricity on the spot market.=20 We're facing an extreme challenge still this summer said Severin=20 Borenstein head of the University of California at Berkeley Energy=20 Institute. Signing contracts doesn't create more electricity.=20 The information released did not include the names of companies that the=20 state has signed contracts with or the purchase prices.=20 The sketchy details did not satisfy frustrated lawmakers who said many=20 questions remain especially how much the state will end up paying under th= e=20 terms of the contracts.=20 The fundamental question is how much is it costing the state of California= =20 to keep the lights on said Assemblyman Tony Strickland R-Thousand Oaks.= =20 What we really need is total disclosure.=20 The state started buying power in January after generators began refusing = to=20 provide electricity to the state's investor-owned utilities. Pacific Gas an= d=20 Electric Co. and Southern California Edison say they have more than $13=20 billion in past debt.=20 The state has been spending $49 million a day on power purchases since Jan.= =20 17 according to documents obtained by The Chronicle last week.=20 Those documents said the average price of the contracts across 10 years is= =20 $69 per megawatt hour including summer peak. The five-year average price i= s=20 $79 per megawatt hour.=20 According to one chart provided by the governor's office yesterday the=20 long-term contracts will fall about 35 million megawatt hours short in 2002= .=20 Based on the average price per megawatt hour the state has been paying sinc= e=20 January that could end up costing between $6.6 billion and $13 billion.=20 The law creating the state purchasing authority allowed purchases up to $10= =20 billion and extends until 2003.=20 The governor's office said 21 contracts have been signed and another 23=20 agreements that have been reached but not yet signed.=20 Several generators have said that they will not sign contracts with the sta= te=20 until the back debt by the utilities has been taken care of.=20 We have some real potential problems said Senate President Pro Tem John= =20 Burton D-San Francisco.=20 Strickland and several media outlets including The Chronicle have filed= =20 public information requests to get more information about the prices of the= =20 contracts from the administration.=20 Releasing the information would jeopardize the negotiations for future=20 contracts said Steve Maviglio Davis' spokesman.=20 Lawmakers also frustrated by the lack of information given out by the Davi= s=20 administration were not given notice that the information was coming and= =20 many said it was lost in their mail pile.=20 The cover letter was on Los Angeles Department of Water and Power letterhea= d=20 not that of the administration. The letter was written by S. David Freeman= =20 head of the Los Angeles system who was on leave for the month of February t= o=20 help the state negotiate the contracts.=20 Assemblyman George Runner R-Lancaster said the ambiguity of the=20 information raises more questions than it answers.=20 It's like watching a parade through a peephole he said. He's showing us= =20 another float but I don't know what the parade looks like.=20 Blaming the state's purchases of electricity Controller Kathleen Connell= =20 said yesterday that the state's cash on hand had fallen from $8.5 billion i= n=20 January to $3.2 billion. Connell ordered an audit of the state's power=20 buying.=20 Connell said she would block a transfer sought by the Davis administration = of=20 $5.6 billion from the general fund to the state's emergency reserve account= =20 claiming it would lead to a ''serious cash flow crisis.=20 The transfer however is not related to the energy crisis. The sum=20 represents a routine rollover of unspent money from the previous fiscal yea= r.=20 State law requires that money to be sent to a special reserve account for= =20 emergencies.=20 Davis officials acknowledged that $3.7 billion in energy purchases have had= =20 an impact on state coffers but they say the state will be repaid once bond= s=20 are issued in the coming weeks. They also said the state typically has its= =20 lowest cash reserves at this time of year. That changes in mid-April when a= =20 flood of income tax revenue pours in.=20 The transfer has nothing to do with energy purchases said Sandy Harrison= =20 a spokesman for the Department of Finance.=20 It's not helpful to ratepayers taxpayers and people who want their lights= =20 to stay on to have the issue muddied with this sort of inaccurate innuendo= =20 Harrison said.=20 In other developments yesterday:=20 -- After two days of statewide rolling blackouts power grid managers avoid= ed=20 outages. Demand was lower because of cooler temperatures around the state a= nd=20 supply increased as several power plants completed repairs.=20 -- A federal judge in Sacramento ordered a major power generator to continu= e=20 supplying power to California. Reliant Energy Services Inc. had insisted th= at=20 it should not be forced to sell to debt-heavy utilities unless the state=20 guaranteed the bills.=20 Chronicle staff writer Greg Lucas contributed to this story. / E-mail Lynda= =20 Gledhill at lgledhill@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- --- ----------------- California overcharged $5.5 bln for wholesale power=20 SACRAMENTO Calif. (AP) -- Electricity wholesalers overcharged California= =20 $5.5 billion over the past 10 months according to a report by managers of= =20 the state's power grid.=20 The five companies among other things frequently offered electricity at= =20 prices double what it cost them to produce concludes the California=20 Independent System Operator study which was published Thursday in the Los= =20 Angeles Times.=20 ``All overcharged but some excessively and some by moderate amounts'' sai= d=20 Anjali Sheffrin the ISO's director of market analysis.=20 The Times said the ISO planned to file the study with federal regulators=20 Thursday and are demanding that the money be paid back.=20 The companies denied the allegations adding they expect the Federal Energy= =20 Regulatory Commission will determine their prices were justified.=20 The commission has recently stepped up its scrutiny of power companies'=20 behavior during California's power crisis asking suppliers to justify $124= =20 million in sales during the first two months of the year or refund the mone= y.=20 Critics claim thousands of additional questionable sales are not being=20 challenged.=20 The ISO study alleges the wholesalers manipulated the market by bidding at= =20 excessive prices effectively withholding supplies or by not bidding at al= l=20 when they had generation capability available.=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 State Controller Kathleen Connell said Wednesday that the state's=20 power-buying is gutting its budget surplus. Since the state started making= =20 emergency power buys the surplus has fallen from $8.5 billion to about $3.= 2=20 billion she said.=20 A federal judge issued a preliminary injunction Wednesday ordering a major= =20 electricity wholesaler Reliant Energy Services to continue selling to=20 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 it= =20 at the last minute on behalf of utilities to bolster supplies and try to fe= nd=20 off rolling blackouts.=20 Such blackouts hit the state twice this week. On Wednesday cooling=20 temperatures and the completion of repairs at several power plants allowed= =20 the state to avoid blackouts.=20 Standard & Poor's has put the state on a credit watch due to its power=20 purchases and chastised Gov. Gray Davis the Legislature and state regulato= rs=20 for not taking more aggressive steps to make sure the utilities can pay the= ir=20 bills.=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 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 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. Transferring the money=20 would leave the state general fund $2.4 billion in debt Connell said.=20 She called the scope of the proposed transfer unprecedented and said it=20 amounted to a ``shell game'' that disguises the power purchases' effect on= =20 the state budget.=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. 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=20 demand that kind of audit information'' Harrison said.=20 Harrison said the state's budget isn't in danger because it will be repaid= =20 with the revenue bonds.=20 Connell's criticism of Davis a fellow Democrat won support from Assembly= =20 Republicans and Secretary of State Bill Jones a Republican who may challen= ge=20 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.=20 ``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. --- --- ---------------------------- If the power goes off=20 Thursday March 22 2001=20 For most of us rolling power blackouts are a nuisance. For some people it= =20 could mean life or death.=20 In Laguna Hills cancer patient Ruben Marquez said the blackout interrupte= d=20 and prolonged his dialysis treatment. He was unharmed the Register report= ed=20 on Monday's blackouts which hit about 1.2 million Californians including= =20 100000 Orange County homes and businesses.=20 What can people do to prevent disaster?=20 They and their families should have a backup plan Rebecca Long=20 spokesperson for the Orange County Red Cross told us.=20 The Red Cross recommends in general that you plan for this as you would fo= r=20 any disaster making sure you have battery-operated radios and flashlights.= =20 We do not recommend candles for an emergency because of the fire hazard.= =20 She recommended a Web site: www.prepare.org People with special health needs such as electric-powered respirators and= =20 oxygen machines also should register with the power company. There's a whole classification for such persons with health needs Southe= rn=20 California Edison spokesperson Clara Potes-Fellow told us. The list is for us to alert them that the power could be discontinued. The= y=20 arrange to have power through other means batteries or generators. We=20 recommend that they have a battery backup of eight hours. Therefore if the= =20 rotating outages are one hour they will have plenty. Even though the power company has such people's names she said we don't= =20 inform them in advance because we have just minutes from when the Independe= nt=20 System Operator which directs where the electrons go orders Edison to=20 implement a power outage on the grid Edison owns. By the time it took to= =20 call people the outage would be over. What's the problem at the ISO? We notify as best we can Pat Dorinson IS= O=20 director of communications told us.=20 The object is to keep the lights on. Sometimes it's just a moment's notice= =20 before a blackout. It makes [giving more notice] pretty difficult. We're= =20 looking into ways to make the system better.=20 In the meantime citizens will have to keep taking precautions. We can't help noting that free market pricing instead of politically-drive= n=20 prices would much more likely make electricity available albeit at higher= =20 prices.=20 We would expect too there would be hardship allowances donations and=20 level-pay plans to accommodate various types of needs. --- Socialized electricity=20 Thursday March 22 2001=20 Government control of state power won't add one watt for consumers' use TOM MCCLINTOCK Sen. McClintock R-Thousand Oaks represents the 19th state Senate District= =20 in the state Legislature.=20 In a city where bad ideas never die Sacramento is once again host to a=20 variety of plans for the government takeover of California's power system.= =20 The private sector it is said has done such a terrible job of providing= =20 electricity that government must now step in to save the day. Thus the=20 Legislature is awash in proposals to spend billions of dollars of public=20 money to acquire existing power facilities. Fifteen billion dollars has=20 already been authorized for this purpose and an additional $10 billion is= =20 pending in the Senate.=20 Meanwhile Gov. Davis is losing about a $1.5 billion a month day-trading in= =20 the electricity market. The irony is that after the expenditure of as much = as=20 $25 billion for public power'' not a single inch will have been added to= =20 the transmission lines nor a single watt to the generating capacity of=20 California. The root of California's crisis is a catastrophic shortage of electricity. = In=20 a shortage prices rise or blackouts occur. To reduce prices and avoid=20 blackouts the only permanent solution is to increase the supply. Merely=20 changing the ownership of existing facilities leaves Californians with=20 exactly the same shortage only billions of dollars the poorer for it.=20 Government takeover advocates argue that at least a government power=20 authority will protect consumers against price gouging and poor management.= =20 Unfortunately government power authorities don't insulate against price=20 gouging. The biggest price gouger in this entire crisis has been the Los=20 Angeles Department of Water and Power which was generating electricity for= =20 $51 per megawatt hour and selling it back to California ratepayers for as= =20 much as $1400.=20 Nor does a government takeover assure better management. Just a few years= =20 ago the LADWP was buried in $7 billion in debt. The Sacramento Municipal= =20 Utilities District was a managerial laughing stock having squandered=20 hundreds of millions of dollars for a nuclear plant it barely used. Say what you will'' the government takeover advocates reply when push= =20 came to shove the municipal utility districts of California are in great= =20 shape while the private utilities are a basket case.'' But one needs to lo= ok=20 at the reason. Ever since the state reorganized the electricity market in= =20 1996 the municipal utility districts were allowed to trade in a free marke= t=20 while the private utilities were forced to buy power exclusively in a=20 Soviet-style power exchange where the highest bid during an hour set all=20 prices. The municipal utilities were able to retain their generators. Government=20 forced the private utilities to sell theirs. The municipal utilities were= =20 able to enter into long-term contracts. Government prevented the private=20 utilities from doing the same thing. The municipal utilities were able to= =20 negotiate the lowest prices available for power. Government forced the=20 private utilities to pay the outlandish prices on the government's power=20 exchange. The municipal utilities were allowed to adjust their rates to=20 reflect the actual cost of power to consumers. Government forced the privat= e=20 utilities to sell at astronomical losses. The final argument is simply an ideological one: that power is just too=20 important to be left in private hands. Really? Food is a great deal more=20 important and private hands have kept this nation well fed for centuries.= =20 Picturing the Department of Motor Vehicles running the local supermarket=20 should sober even the most euphoric of the government takeover advocates. California's Independent System Operator is predicting a 6000-megawatt=20 shortfall this summer. When there is no electricity on the transmission=20 lines it really won't matter who owns them. During the hottest hours of th= e=20 hottest days of the year when as many as 6 million homes are without=20 electricity it may begin to dawn on most people that socialism doesn't wor= k=20 any better in California than it did in the Soviet Union. --- --- ------- NEWS=20 Bush's Energy Policy Will Backfire Feinstein Warns / She wants federal pri= ce=20 controls now Carolyn Lochhead 03/22/2001=20 The San Francisco Chronicle=20 FINAL=20 Page A.3=20 (Copyright 2001)=20 Sen. Dianne Feinstein D-Calif. warned yesterday that when blackouts=20 intensify in California this summer the pressure will intensify on the Bus= h=20 administration to explain why it rejected price controls on wholesale=20 electricity.=20 If by this summer California is as anticipated facing these blackouts a= nd=20 the federal government won't help I don't think the American people are=20 going to be very pleased Feinstein told California reporters.=20 Asked if help means the cost-based price controls Feinstein is pushing she= =20 said Right now yes.=20 Feinstein said California Democrats will begin to escalate their criticism = of=20 the administration predicting that support will build among Western senato= rs=20 for her legislation to impose price caps on wholesale electricity in exchan= ge=20 for lifting the rate cap on California consumers.=20 If it passes she said the administration is really going to have to face= =20 whether they're going to help or not help.=20 Feinstein said House Democrats from the West Coast also told her they expec= t=20 that White House inaction on price caps would help them gain seats in 2002.= =20 But she refused to speculate on the political fallout from the energy crisi= s=20 against Democrats in California .=20 Feinstein characterized Energy Secretary Spencer Abraham's adamant argument= s=20 against price controls as recalcitrant saying his statement to a Senate= =20 committee last week essentially said California 's on its own.=20 She speculated that because California is dominantly Democratic even=20 somebody like me that works across party lines is beginning to wonder if th= is=20 isn't an unnecessarily barbed stick at California .=20 White House spokesman Ken Lisaius disputed the charge saying the Bush=20 administration is doing all it can but can't control that demand is=20 outstripping supply.=20 The federal government cannot prevent blackouts but can only help at the= =20 margins in situations like this Lisaius said. The only thing that can=20 prevent blackouts is reduced demand increased supply and good weather.=20 Abraham has twice in the last week argued strongly against price controls= =20 including the cost-based ones Feinstein advocates saying they could increa= se=20 blackouts by discouraging power sales into the Western electricity grid.=20 He also said many power providers including the federal Bonneville Power= =20 Administration in the home district of Sen. Gordon Smith the Oregon=20 Republican co-sponsoring Feinstein's bill would be exempt from federal pri= ce=20 caps. Feinstein disputed that but Smith's office agreed.=20 Abraham argued that price controls would not work in part because roughly= =20 half the Western electricity market would be exempt including federal powe= r=20 marketing authorities such as Bonneville rural electric cooperatives and= =20 municipal utilities such as the Los Angeles Department of Water and Power.= =20 On another front House Republicans omitted from their budget projected=20 revenues from opening part of the Arctic National Wildlife Refuge to oil an= d=20 gas exploration.=20 A Budget Committee spokeswoman said Chairman Jim Nussle R-Iowa determined= =20 that the $1 billion in revenues from the wildlife refuge the Bush=20 administration included in its budget were not needed and that there was n= o=20 reason to put in something that controversial that some of our members don= 't=20 even like when you don't have to.=20 But Rep. Gary Miller R-Diamond Bar (Los Angeles County) said House=20 Republicans are not backing off at all from opening the wildlife refuge t= o=20 drilling. Our goal is to get it passed in the House he said saying the= =20 Budget Committee omitted the revenue projections because the drilling has n= ot=20 yet been approved.=20 PHOTO Caption: Sen. Dianne Feinstein wants to cap wholesale electricity=20 costs and end caps on con- sumer rates.=20 --- ------ Reliant Still In Power Pact Talks With Calif. DWR=20 By Christina Cheddar 03/22/2001=20 Dow Jones News Service=20 (Copyright (c) 2001 Dow Jones & Company Inc.)=20 Of DOW JONES NEWSWIRES=20 =20 (This report was originally published late Wednesday.)=20 =20 NEW YORK -(Dow Jones)- Reliant Energy Inc. (REI) remains in discussions wit= h=20 the California Department of Water Resources to sign long-term power=20 contracts.=20 However issues regarding the creditworthiness of the agency remain said J= oe=20 Bob Perkins president of Reliant's Wholesale Division.=20 We want to be part of the solution Perkins said. At the same time Relia= nt=20 is trying to protect itself from incurring additional unpaid accounts=20 receivable he said.=20 The DWR has been buying power on behalf of California 's financially troubl= ed=20 utilities. However Reliant has yet to sign a formal agreement with the=20 agency because Reliant is concerned it won't be paid.=20 During a conference call Wednesday Perkins said he couldn't comment on a= =20 lawsuit between Reliant and the California Independent System Operator=20 because he didn't know how it was progressing.=20 Further court action on the case is expected Wednesday.=20 The lawsuit stems from Reliant's desire not to be required to sell power to= =20 California if the state won't guarantee payment. The Houston energy company= =20 is concerned that it won't be paid for power being bought by the ISO on=20 behalf of Edison International's (EIX) Southern California Edison unit and= =20 PG&E Corp.'s (PCG) Pacific Gas & Electric Co. unit.=20 To date Reliant is owed some $370 million from unpaid power sales to the= =20 utilities.=20 Much of Perkins' presentation centered on how the power crisis in Californi= a=20 emerged.=20 Using data from research firm Cambridge Energy Research Associates the=20 company discussed the imbalance between California 's power demand and its= =20 power supply.=20 Looking ahead to the summer it isn't a question of whether rolling blackou= ts=20 will occur but how many and how severe Perkins said.=20 Low hydroelectric availability loss of imported power warm weather deman= d=20 growth and plant outages could lead to a worst-case scenario in California = =20 he said adding that some estimates predict California could experience 11= 00=20 hours of power outages this summer.=20 The skyrocketing power prices in the region are a reflection of the power= =20 market's imbalance he said.=20 Reliant submitted only economically sound bids for power Perkins said. H= e=20 expects the company can document why it charged the prices it did as requir= ed=20 by regulators.=20 We have been very rigorous and very disciplined in what we have submitted= =20 Perkins said.=20 He added that retail customer price increases are one way of sending a sign= al=20 to consumers to lower consumption. He cited studies that show a 20% retail= =20 price increase could reduce consumption by 2000 megawatts. A megawatt is= =20 enough power to serve roughly 1000 homes.=20 -By Christina Cheddar Dow Jones Newswires 201-938-5166=20 --- ------ CPUC Must Address Rates In QF Repayment Order - SoCal Ed 03/22/2001=20 Dow Jones Energy Service=20 (Copyright (c) 2001 Dow Jones & Company Inc.)=20 (This article was originally published Wednesday)=20 =20 LOS ANGELES -(Dow Jones)- Any order from the California Public Utilities=20 Commission requiring utilities to pay small independent generators going= =20 forward must determine how that could be done within the existing rate=20 structure a spokesman for Edison International (EIX) utility Southern=20 California Edison said Wednesday.=20 The utility was responding to a PUC proposed decision that would require=20 utilities to pay small generators called qualifying facilities $79 a=20 megawatt hour within 15 days of electricity delivery. The decision will be= =20 voted March 27 by the CPUC.=20 We're still reviewing (the decision) and should have more to say in a day = or=20 two. To the extent that the commission orders us to pay going forward of=20 course we will. But it needs to address how we will pay the QFs a SoCal= =20 Edison spokesman said.=20 SoCal Edison and PG&E Corp. (PCG) unit Pacific Gas & Electric Co. are=20 struggling under nearly $13 billion in uncollected power costs due to an=20 inability to pass high wholesale power costs to customers under a rate=20 freeze.=20 Gov. Gray Davis Tuesday blasted the utilities for not having paid their QF= =20 bills in full since December. Pacific Gas & Electric Co. has made some=20 partial payments to QFs but SoCal Edison has paid nothing. Together they= =20 owe the QFs about $1 billion but the order doesn't address that debt.=20 An Edison executive said in reaction to the governor's sharp comments tha= t=20 the company simply doesn't have the money to pay creditors.=20 The root problem here is there just isn't enough money in the current rate= =20 base to pay our bills said Edison Senior Vice President of Public Affairs= =20 Bob Foster. We understand the financial distress (the QFs) face we are=20 facing financial distress ourselves.=20 The proposed PUC order would also require the state's investor-owned=20 utilities to offer the small generators five- and 10-year contracts for pow= er=20 for $79/MWh and $69/MWh respectively.=20 The QFs may be able to live with the PUC proposal but the five- and=20 10-year contract prices may be inadequate if natural gas prices at one of t= he=20 California borders are high said Jan Smutny-Jones president of the=20 Independent Energy Producers Association. Natural gas prices into Californi= a=20 are currently higher than anywhere in the country.=20 But some say the proposed decision may not be enough to prevent the QFs fro= m=20 filing involuntary bankruptcy proceedings against the utilities for the mon= ey=20 they are still owed.=20 There's still a lot of skepticism. To say our position has changed based o= n=20 the CPUC decision or the governor's announcement is not accurate. A lot sti= ll=20 has to happen said Jay Lawrence a spokesman for a renewable creditors=20 committee.=20 -By Jessica Berthold Dow Jones Newswires 323-658-3872=20 --- ------ Calif Small Pwr Producers To Shut Plants If Rates Capped By Jason Leopold 03/22/2001=20 Dow Jones Energy Service=20 (Copyright (c) 2001 Dow Jones & Company Inc.)=20 Of DOW JONES NEWSWIRES=20 =20 (This article was originally published earlier Thursday.)=20 =20 LOS ANGELES -(Dow Jones)- Many of California 's independent power producers= =20 late Wednesday threatened to take their small power plants offline this wee= k=20 if state lawmakers pass legislation that would cap the rates the generators= =20 charge for electricity they sell directly to the state's three investor-own= ed=20 utilities.=20 At issue is a bill that would repeal a section of the state's Public=20 Utilities Code which links the 688 so-called qualifying facilities'=20 electricity rates to the monthly border price of natural gas.=20 Lawmakers however are poised to pass the legislation.=20 State regulators are then expected to approve a measure that would=20 restructure the fluctuating rates the QFs charge PG&E Corp. (PCG) unit=20 Pacific Gas & Electric Edison International (EIX) unit Southern Californi= a=20 Edison and Sempra Energy (SRE) unit San Diego Gas & Electric from $170 a= =20 megawatt-hour to $69-$79/MWh regardless of the price of natural gas.=20 Whereas each of the 688 QF contracts differed largely because natural gas= =20 prices are higher in Southern California than Northern California the sta= te=20 wants the QFs to sign a general contract with the utilities.=20 The cogeneration facilities which produce about 5400 megawatts of=20 electricity in the state said the rates are too low and they won't sign ne= w=20 supply contracts with the utilities.=20 For $79/MWh natural gas would have to be $6 per million British thermal= =20 unit at the Southern California border said Tom Lu executive director of= =20 Carson-based Watson Cogeneration Company the state's largest QF generatin= g=20 340 MW. Our current gas price at the border is $12.50.=20 Other gas-fired QFs said the state could face another round of rolling=20 blackouts if lawmakers and state regulators pass the legislation which is= =20 expected to be heard on the Senate floor Thursday and allow it to be=20 implemented by Public Utilities Commission next week.=20 Lu whose company is half-owned by BP Amoco PLC (BP) and is owed $100 milli= on=20 by SoCal Ed said the proposals by the PUC and the Legislature will only= =20 make things worse.=20 David Fogarty spokesman for Western States Petroleum Association whose=20 members supply California with more than 2000 MW said the utilities need = to=20 pay the QFs more than $1 billion for electricity that was already produced.= =20 =20 State Loses 3000 MW QF Output Due Of Financial Reasons=20 =20 The QFs represent about one-third or 9700 MW of the state's total power= =20 supply. Roughly 5400 MW are produced by natural gas-fired facilities. The= =20 rest is generated by wind solar power and biomass.=20 About 3000 MW of gas-fired and renewable QF generation is offline in=20 California because the power plant owners haven't been paid hundreds of=20 millions of dollars from cash-strapped utilities SoCal Ed and PG&E for near= ly=20 four months.=20 Several small power plant owners owed money by SoCal Ed have threatened to= =20 drag the utility into involuntary bankruptcy if the utility continues to=20 default on payments and fails to agree to supply contracts at higher rates.= =20 The defaults have left many of the renewable and gas-fired QFs unable to=20 operate their power plants because they can't afford to pay for the natural= =20 gas to run their units. Others continue to produce electricity under their= =20 contracts with the state's utilities but aren't being paid even on a forwar= d=20 basis.=20 The California Independent System Operator keeper of the state's electrici= ty=20 grid said the loss of the QF generation was the primary reason rolling=20 blackouts swept through the state Monday and Tuesday.=20 Gov. Gray Davis recognizing the potential disaster if additional QFs took= =20 their units offline held marathon meetings with key lawmakers Monday and= =20 Tuesday to try and hammer out an agreement that would get the QFs paid on a= =20 forward basis and set rates of $79/MWh and $69/MWh for five and 10 year=20 contracts. He also said he would direct the PUC to order the utilities to p= ay=20 the QFs for power they sell going forward.=20 After next week the QF problem will be behind us Davis said Tuesday. We= =20 want to get the QFs paid...the QFs are dropping like flies...and when that= =20 happens the lights go out.=20 But this just makes the problem worse said Assemblyman Dean Florez=20 D-Shafter a member of the Assembly energy committee.=20 I don't know how we are going to keep the lights on Florez said in an=20 interview. Many of these congenerators are in my district. They said if th= e=20 legislation doesn't change they are going offline. This compounds the issue= =20 of rolling blackouts especially now when we need every megawatt.=20 Davis who didn't meet with people representing the QFs said he was handin= g=20 the QF issue to the PUC because lawmakers failed to pass legislation that= =20 would have set a five-year price for natural gas and allow the QFs to sign= =20 individual contracts with the utilities. In addition SOCal Ed opposed the= =20 legislation saying the rates should be below $50/MWh.=20 Some renewable power producers said they aren't vehemently opposed to the n= ew=20 rate structure because it guarantees them a higher rate than what was=20 originally proposed.=20 =20 QFs Want Third Party Supply Contracts=20 =20 John Wood who represents the SoCal Ed Gas Fired Creditors Committee one o= f=20 a handful of groups that have formed since January to explore options on=20 getting paid by the utilities said his group of gas-fired QF creditors wan= t=20 to be released from their supply contracts and sell to third parties.=20 Under our plan we would be permitted to sell electricity to third parties= =20 (including the state Department of Water Resources) until a resolution to t= he=20 crisis can be accomplished wood said.=20 Hal Dittmer president of Sacramento-based Wellhead Electric in Sacramento= =20 which is owed $8 million by PG&E has 85 MW of gas-fired generation units= =20 offline.=20 Under the state's plan Dittmer said he risks going out of business.=20 I can't buy natural gas for what I would be paid under this decision he= =20 said. The state needs to quit kidding themselves that they don't need to= =20 raise electricity rates. All of this is being driven by an artificial=20 construct that California can avoid raising rates.=20 =20 -By Jason Leopold Dow Jones Newswires 323-658-3874=20 jason.leopold@dowjones.com=20 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: California Update Body:: Please detach the attachment combine it with the articles Gavin Dillingham sent me and attach to an e-mail to Robert Zoellick and Irwin Stelzer with this message from me: Attached is some background information on the reregulation crisis in California. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Joe Hirko farewell reception Body:: ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: California Power Issue Body:: See attached WSJ article particularly the last paragraph. The message is: there has not been enough deregulation the government is still very much in the way. California is a perfect example: the market has responded to demand increases with thousands of megawatts of new generation but state and local officials have not sited them and companies like Enron are offering price protection but utilities are not allowed to take advantage. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Purported Ken Lay Promise to Haley Barbour Body:: Ken hasn't mentioned it. I'll ask next time I talk to him. Linda Robertson 07/03/2001 01:58 PM To: Steven J Kean/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron cc: Pat Shortridge/Corp/Enron@Enron John Shelk/NA/Enron@Enron Subject: Purported Ken Lay Promise to Haley Barbour Pat Shortridge heard from the Executive Director of the Republican Senate Campaign Committee that Haley Barbour the new finance chair for the Committee had called Ken to request that he serve as a Finance Co-Chairman. Pat was told that Ken agreed. Have you heard of this call and did Ken agree?Thanks What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Boston Body:: Bill Thanks. I am forwarding the message to my son. Vince What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Oakland Trib Wed 3/7: Breakthrough made in rescue of PG&E Bakersfield Californian Wed 3/7: El Paso Energy closes six valley power plants Contra Costa Times Wed 3/7: Still undecided: Who'll pay DWR for electricity SF Chron Wed 3/7: State Taxpayers In Dark on Details Of Energy Deal Sac Bee Wed 3/7: Lawmakers pitch fixes for region's energy woes Orange Co. Register Wed 3/7: Power plan called wrong LA Times - Wed 3/7: Bill to Cut Some Power Prices Stalls Sac Bee Wed 3/7: PG&E could face mutiny on outages: SMUD others may balk if utility orders summer blackouts SF Chron Wed 3/7: PUC to Decide Fate Of Utility Workers PG&E Edison want to trim costs by laying off thousands cutting service San Jose Mercury Wed 3/7: Power prices could soar during the summer SF Chron Wed 3/7: Power Plant Plans Cause Conflicts East county residents blast supervisors Contra Costa Times Wed 3/7: Supervisors set search for power plant sites Sac Bee Wed 3/7: Peter Schrag: California's $90 billion infrastructure gap Contra Costa Times Wed 3/7: PG&E power plan debated at hearing SF Chron Thurs. 3/8: State OKs 'Peaker' Power Plant at SFO / Temporary generator could be sending electricity to 50000 homes by August WSJ Thurs. 3/8: Crossed Wires: Major Kinks Emerge In Gov. Davis's Plan To Power California --- State's Outlays for Electricity May Be Hard to Recover Without Rate Increases --- Betting on Long-Term Deals ------------------------ Breakthrough made in rescue of PG&E State ready to pay $7 billion for lines By Steve Geissinger SACRAMENTO BUREAU SACRAMENTO -- Signaling a breakthrough in secret energy crisis talks the Davis administration disclosed Tuesday it may announce the framework of a pact to rescue the teetering Pacific Gas and Electric Co. next week. Things are going very well said Steve Maviglio a spokesman for Gov. Gray Davis. The state appears to be poised to pay at least $7 billion -- and possibly billions more -- for PG&E's high-voltage transmission lines as part of a deal to financially renovate the north-state utility according to sources familiar with the negotiations. But consumer advocates insisted that even the $7 billion price is too much to pay. And experts warned that a deal with PG&E will be more complex than with other utilities. PG&E representatives declined comment in keeping with their policy on the talks even though the Davis administration said an announcement could come as early as next week or the following week. The new timetable for an announcement was substantially sooner than in Davis' original forecast. Until late last week PG&E was still resisting the sale of its power grid despite the fact that Davis had announced the framework of an agreement with Southern California Edison. Davis expects to soon announce a similar deal with the San Diego Gas and Electric Co. However any such deal still would need federal approval. The investor-owned utilities trapped between high wholesale costs and lower regulated retail rates amassed nearly $13 billion in debts and were unable to buy electricity this winter. With the onset of rolling blackouts the state began brokering billions of dollars in emergency short- and long-term power purchases. Davis' strategy to ease the energy price and supply crisis includes bolstering both conservation and generation while fiscally refurbishing the nearly bankrupt utilities. As part of the rescue deal the utilities would have to drop legal actions seeking dramatically higher electricity bills environmentally shield wildlands they own sell power from their generators to Californians for the next decade and secure help with their debts from their parent companies. Together with the cash infusion from the sale of their power 26000-mile power grids the utilities would be allowed to sell bonds to raise funds and use customer money to pay them off. The state would upgrade the high-voltage lines and lease them back to the utilities for operation. In a reflection of the negotiations with the three utilities a Davis administration official said the deal with PG&E is proving to be more complex than with the other firms. Though PG&E finally agreed late last week to sell its transmission grid the utility apparently wants more than the $7 billion that Davis has offered according to sources. The figure is more than twice the book amount or the value placed on the system for purposes of accounting. And that's the markup that lured Edison into an agreement to sell its smaller portion of the transmission grid for $2.8 billion. But PG&E which fears an erosion of its economic base may be asking as much as $10 billion. Due to complexities in the state's 1996 deregulation of the industry PG&E is more likely to lose revenue than Edison as a result of selling its transmission lines according to experts. Big customers might be able to bypass the utility's remaining local distribution lines thereby eroding its customer base. Therefore the utility may view bankruptcy and sale of its transmission lines to the highest bidder as a potentially attractive alternative to selling its share of the grid to the state at too low a price. ---- El Paso Energy closes six valley power plants Filed: 03/07/2001 By CHIP POWER Californian staff writer e-mail: ppower@bakersfield.com El Paso Energy citing non-payment from Pacific Gas & Electric Co. said it has shut down six cogeneration plants this week. The smaller plants produced about 175 megawatts of electricity and are located primarily in the San Joaquin Valley said company spokesman Mel Scott. A megawatt can supply power to 1000 homes. At least 10 plants have closed in the past two weeks as a result of non-payment according to the state Independent System Operator which manages most of the state's electrical distribution. The El Paso Energy plants are operated with various partners and had not been compensated for December January and February deliveries said Scott. He said he did not know the total amount due but said the plants would be closed until PG&E's credit worthiness is improved. A cogeneration plant common in oil fields simultaneously produces heat energy and electrical or mechanical power from the same fuel in the same facility. Typically it produces electricity and steam which can be deployed to enhance oil recovery. Kern County is the state's leading oil-producing county. El Paso owns or has interests in more than 40000 miles of interstate and intrastate pipeline connecting the nation's principal natural gas supply regions to the five largest consuming regions in the United States namely the Gulf Coast California the Northeast the Midwest and the Southeast. El Paso closed up 99 cents on Tuesday or 1.4 percent at $71.49. The Houston-based company's stock price has ranged between $36.31 and $75.30 in the last 52 weeks. ---- Still undecided: Who'll pay DWR for electricity By Karen Gaudette ASSOCIATED PRESS SAN FRANCISCO -- The price tag is $3.2 billion and counting for electricity bought by the state Department of Water Resources for the customers of two nearly bankrupt utilities. Pacific Gas and Electric Co. Southern California Edison and the state disagree over how the DWR eventually will be reimbursed for its purchases on the expensive last-minute power market. So do the state power regulators who have the final call over who gets the money when. Under a recent law the DWR went into the electricity-buying business to help keep the two utilities from sinking further into their $13 billion debt. The state plans to retrieve the money by selling $10 billion in revenue bonds. The utilities continue to collect ratepayer dollars on that electricity which the bill's author Assemblyman Fred Keeley D-Boulder Creek says is meant to help them begin paying down their debt. In a recent letter however DWR officials requested that the state Public Utilities Commission order that a portion of that money be diverted to the state. But after the utilities subtract the costs of generating electricity payments to environmentally friendly power plants and other expenses there is no money left from ratepayer dollars to give to the DWR without sinking further into debt PG&E spokesman Ron Low said Tuesday. If it passed along money to the DWR our undercollection would grow by about $2.4 billion by the end of the year Low said. The commission unable to agree on the best course of action left the issue untouched at its last meeting but expects to revisit the issue when it meets this morning. Commissioner Richard Bilas is proposing an alternate plan that would have the DWR set its own revenue requirements that would be passed on to ratepayers. The PUC also is expected to respond to complaints from laid-off workers and customers that layoffs by utilities to cut costs have been hurting service. Commissioner Carl Wood warned at the last meeting that failure to provide safe and reliable service could mean fines for the utilities. Representatives from electrical workers unions the PUC and the utilities were to discuss the issue Tuesday afternoon. I don't think we believe that utilities can find a way out of their problems by laying off workers said Mindy Spatt a spokeswoman with the Utility Reform Network. We think consumers deserve safe and reliable service and we think they deserve it at a reasonable price. ---- State Taxpayers In Dark on Details Of Energy Deal David Lazarus Chronicle Staff Writer Wednesday March 7 2001 2001 San Francisco Chronicle Few people would purchase a car simply because the dealer said ''Trust me it's a great deal.'' Yet Gov. Gray Davis essentially is telling Californians just that about dozens of long-term power contracts. Because of confidentiality agreements with power companies the governor has revealed only scant details about the state's multibillion-dollar contracts for electricity over the next 10 years. Gov. Davis has our money and we can't see how he's spending it said Doug Heller a spokesman for the Foundation for Taxpayer and Consumer Rights in Santa Monica. We've been locked out of the room. Neither Davis nor power companies would divulge specific details about the price duration or scope of individual contracts. Each cited secrecy clauses that the governor's office said had been desired by both sides. What consumers do know is this: -- California has signed 40 contracts and tentative accords valued at about $40 billion to secure enough power to light 9 million homes over the next decade. -- The average purchase price of each deal is $69 per megawatt hour -- well above the $30 to $40 charged by power generators before California's energy market went haywire last summer. -- If as is widely expected wholesale power prices fall in years ahead the state nevertheless will be locked into paying above-market rates for electricity. But it is not known which generator agreed to part with the most power at the cheapest level or the full range of the prices in concocting the $69 average. Moreover it is unclear how shrewdly the state negotiated with taxpayer money in securing power on behalf of cash-strapped utilities. These agreements are the bedrock of our long-term energy policy Davis said Monday in announcing the deals. The governor's office defended the murky nature of the contracts yesterday. It's a business transaction in which private corporate information is included said Steve Maviglio a spokesman for Davis. That's the kind of information that never gets revealed. While additional elements of the contracts will be publicized in coming months he said the contracts themselves will remain a secret. You'll never see all the details Maviglio said. This did not sit well with many observers. It's a breach of public trust said Daniel Bacon a San Francisco attorney specializing in business law. A public servant spending public money shouldn't be able to keep the spending secret. But Gary Ackerman executive director of the Western Power Trading Forum an energy-industry association in Menlo Park called confidentiality agreements a necessary evil in transactions like this. He explained that no power company would agree to a long-term contract if rival firms could learn the terms of the accord. The company would be losing too much of its competitive edge in the marketplace Ackerman said. At the same time he noted that secrecy allowed the buyer -- in this case California taxpayers -- to secure more favorable terms with individual sellers. A high price with one generator would not necessarily be sought by all power providers. Still the fact that public funds are being used makes confidentiality in this case a different matter than say Cisco Systems' quietly negotiating to take over yet another tech rival. The public is in a very awkward position said Michael Shames executive director of the Utility Consumers' Action Network in San Diego. It has to rely on the good word and expertise of the governor and he has yet to demonstrate that he has expertise or good word in this field. Shames likened consumers to passengers in a plane being flown by a pilot without a license to fly. But what choice do we have? he asked. I don't see many other options available right now. There's the rub. No matter how bad a deal California may have cut to help meet its energy demands the alternative -- blackouts disruptions economic catastrophe -- is far far worse. On the other hand it already appears that the new contracts will not shield Californians from the threat of daily outages this summer when demand surges. Davis said only about 60 percent of the state's summertime electricity needs so far had been met. Part of the reason is that many power companies already have contracted for their output this year. Duke Energy said this was why it would not begin its nine-year contract with California until 2002 while Williams Cos. said it would only gradually increase the amount of available wattage in its 10-year contract. Both companies meanwhile will continue to profit this summer by selling into the volatile spot market where wholesale power went for as much as $1 500 per megawatt hour last year. You can't sell all your power into long-term contracts said Paula Hall- Collins a Williams spokeswoman. You save some for the spot market. Consumer groups worry that consumers will be hammered again this summer with sky-high power prices and then get nailed down the road by contracts for above-market rates. If we could look at the terms of the deals we'd see that California is being gouged for 10 years said Heller of the Foundation for Taxpayer and Consumer Rights. But the governor doesn't want us to see that. Ackerman of the Western Power Trading Forum said the state had gotten the best rates it could under current market conditions. California went for long-term contracts when everyone else moved in as well he said. Californians are paying a price for not acting sooner. ---- Lawmakers pitch fixes for region's energy woes By David Whitney Bee Washington Bureau (Published March 7 2001) WASHINGTON -- California members of Congress pleaded for everything from wholesale price caps to extending daylight-saving time an extra hour to help the region cope this summer with its persistent electricity shortage but none of the ideas seemed to catch fire at a House hearing Tuesday. People will die in California because of this crisis Rep. Brad Sherman a Los Angeles-area Republican warned the House Energy and Commerce Committee. Sherman testified that his idea for saving lives is to extend daylight-saving time by an extra hour so that there would be more daylight at the end of the day when power consumption surges. One of the peak demand periods for electricity occurs between 5 p.m. and 8 p.m. when the sun sets and people come home from work Sherman testified. If people come home and it is light out there is less of an inclination to turn a light on. Sherman said the state Legislature has called for congressional approval for states to be given authority to extend daylight-saving time and he cited analyses by the California Energy Commission and other agencies suggesting that it could cut power consumption by 1 percent to 2 percent. Sherman who was one of about a dozen California lawmakers presenting their views on the energy squeeze drew no questions from committee leaders about what his legislation might do to everything from airline schedules to television programming if West Coast states didn't agree on the same time standard. Most of the committee's questioning was on the more popular idea proposed by several California and Western lawmakers primarily Democrats to require the Federal Energy Regulatory Commission to impose caps on wholesale electricity prices that have gone wild because of a regional power shortage. Rep. Bob Filner D-San Diego charged that the price spiral has little to do with power shortages but a lot to do with a small cartel of generators bilking ratepayers. Rep. Jay Inslee D-Wash. said he brought up the idea of regional price caps with President Bush who was initially skeptical. But Inslee said that Bush warmed to the idea after being told that protections could be built into the caps so as not to discourage construction of new power plants. Upon hearing that Inslee said Bush invited him to meet with the president's Cabinet-level task force led by Vice President Dick Cheney on a national energy strategy. But Inslee said he can't get the group to meet with him. It's very disappointing Inslee said. Tuesday's hearing was part of a series the panel is holding on the California crisis so far without any emerging consensus on what if anything Congress should do. ---- Power plan called wrong Wall Street analysts say the governor's approach to the problem avoids the issue that caused the imbalance. March 7 2001 By DON THOMPSON The Associated Press SACRAMENTO California's scramble to insulate consumers from the soaring price of electricity may add to the state's power problems this summer Wall Street analysts said Tuesday. Gov. Gray Davis' emphasis on buying utilities' transmission lines and negotiating long-term power contracts to help ease their debts skirts the deep imbalance between wholesale and market rates that led to the state's power problems in the first place they said. In the long run it doesn't solve anything said Michael Worms an industry analyst for Gerard Klauer Mattison & Co. In the long run you need to send the right price signals to consumers which will create its own conservation signals. Unfortunately customers were shielded from that in California. Davis said Monday that the state's first contracts to buy electricity for two financially struggling utilities will provide only about two-thirds of the power needed on a typical summer day forcing Californians to cut power use at least 10 percent to avoid blackouts. Since early January the state has been buying one- third of the power Southern California Edison and Pacific Gas and Electric Co. customers need. The two utilities denied credit by suppliers say they have lost nearly $14 billion due to soaring wholesale electricity prices that the state's industry-deregulation law says they cannot pass on to consumers. The keepers of the state power grid had enough electricity Tuesday to avoid declaring an electricity alert but have faced an almost-daily scramble for weeks due to a tight supply and high wholesale prices. Several wholesale and retail rate proposals are circulating. Among them: Free-market advocates such as Worms want an immediate end to the deregulation-imposed retail rate freeze on Edison and PG&E that will expire next year. Davis wants a Western price cap of $100 per megawatt hour on power generators he says have been prof iteering from California's short energy supply. The Bush administration and Federal Energy Regulatory Commission are cool to that idea. In December FERC imposed a soft cap of $150 per megawatt hour on wholesale rates in the state and required suppliers to justify any higher prices they charge. Consumer groups such as The Utility Reform Network or TURN want regulated rates for residential and small-business customers but free-market rates for large industrial customers which sought deregulation in the first place. TURN also advocates a tiered rate structure with higher rates for consumers who use more than a reasonable amount of electricity each month. Assembly Republicans say electricity and natural-gas prices will fall naturally if the state increases supply mainly by making it easier to build plants and pipelines. Right now you're sort of sitting partially with regulation and part with the free market said Paul Fremont an analyst with Jefferies & Co. Both these systems work. It's sort of that in-between system that you have in Califor nia that doesn't appear to be working. The system discourages generators from building new power plants because they aren't guaranteed a profit and it doesn't do enough to discourage power use by consumers because the price they pay doesn't reflect the true cost of power Fremont said. I don't think people here have much faith in the market and why should they? countered TURN's Mindy Spatt. I think there are probably better ways of encouraging consumers to conserve than by gouging them. Davis insists the crisis can be resolved without raising rates for Edison and PG&E customers beyond the existing rate structure. In January state regulators imposed temporary rate hikes of 7 to 15 percent on Edison and PG&E customers. The Legislature and Davis extended the increases for up to a decade to help pay back the estimated $10 billion in power buying the state expects to do for Edison and PG&E over the next several years and finance its purchase of the power lines owned by the two companies and San Diego Gas & Electric. Rates were already scheduled to increase next year for Edison and PG&E customers. Under the 1996 deregulation law the pair's ratepayers saw a 10 percent rate reduction but only until early 2002. That rate cut will likely expire as planned Davis spokesman Steve Maviglio has said. Davis wants those rates to cover not only the traditional cost of generating transporting and distributing power but the added cost of paying off the two utilities' massive debt and buying their transmission lines said Assemblyman Fred Keeley D-Boulder Creek the Assembly's chief power negotiator. Yet Davis has indirectly addressed the rate imbalance by signing legislation that will let regulators raise consumer rates if necessary Keeley said. The governor and lawmakers are in effect spreading out rate increases over a decade by using long-term revenue bonds to buy power for the nearly bankrupt utilities said Severin Borenstein director of the University of California Energy Institute. At some point we have to deal with the reality that all of the power that we buy has to be paid for by somebody - it's either going to come from taxpayers or it's going to come from ratepayers Bor enstein said. Raising rates now would get us a lot of conservation. Davis also wants financial incentives for conservation and power-plant construction in time to make a difference this summer. Our mouths were agape at the rapid timetable Keeley said. Legislators are rushing to pass those incentives by month's end he said allowing three months for consumers and suppliers to act before the heat of summer. Among bills considered Tuesday the Senate Energy Committee approved legislation to accelerate the siting of power plants. It also was considering a proposal to restructure rates for generators that use renewable energy to provide about 30 percent of the state's electricity. ---- Bill to Cut Some Power Prices Stalls Energy: Democrats balk at varying payment levels for alternative generators. By DAN MORAIN JULIE TAMAKI Times Staff Writers SACRAMENTO--Legislation aimed at cutting prices for more than a fourth of the power consumed in California stalled Tuesday as Democrats questioned why a few alternative energy generators--some of them campaign donors--stood to receive higher payments than others. Lawmakers working to unravel California's energy mess have been negotiating for weeks in an effort to cut the price paid to more than 600 generators of alternative power by more than half to below 8 cents a kilowatt-hour. Those alternative generators' contracts with utilities have shot up in recent months because of a rise in the price of natural gas. The cash-strapped corporations have suspended or made partial payments to the generators over the last few months causing many to shut down or reduce their outputs. But even as the lawmakers reached agreement that pushed the average price to near the 8-cent level per kilowatt-hour some generators would have received higher prices under the bill by state Sen. Jim Battin (R-La Quinta). Some of the generators that stood to benefit had donated to Battin's campaigns. One--Windtec Inc.--gave Battin a $20000 campaign donation in 1999. Others contributed from $3000 and $5000 last year. Battin acknowledged that he has received campaign contributions from some wind power generators but said there is no connection between the donations and the bill's provisions. It is illegal it is unethical and it's not how I do business he said. Battin noted that 25% of the state's alternative energy producers are in his district. As Democrats on the Senate Energy Committee blocked the bill Battin warned that some alternative energy producers might react to the delay by trying to force Southern California Edison and Pacific Gas & Electric into bankruptcy. We will be the cause of bankruptcy Battin said. That prompted Energy Committee Chairwoman Debra Bowen (D-Marina del Rey) to retort: I'm really tired of being threatened with bankruptcy. Alternative energy producers including those that use wind solar power biomass and other means produce 27% of the energy used in California. They sell the electricity to the utilities which in turn transmit it to retail consumers. But with the utilities facing multibillion-dollar debts the alternative energy producers under contract with Edison have not been paid since November. Scores of alternative energy producers supported the measure. Edison International and the San Francisco-based consumer group the Utility Reform Network opposed it. Michael Florio of the Utility Reform group said the deal could result in higher consumer prices an Edison representative said the same thing. Battin and Assemblyman Fred Keeley (D-Boulder Creek) worked out an arrangement with many of the generators. Keeley took the lead in the early negotiations and then turned to Battin to introduce the legislation SB 47X. Rather convoluted language would have allowed higher payments to a select few generators that produce electricity from wind and biomass. Most of California's wind suppliers for instance would have received about 6 cents per kilowatt-hour. But a handful of them about half a dozen wind farms--mostly in the Palm Springs area represented by Battin--would have received 7.8 cents. Battin contends that other wind producers receive additional payments that boost them to the same level as Windtec and others that would get the higher payments. They get the same deal Battin said of the handful of generators that would benefit from the provisions he added to the bill. In California's overall energy market the amount of money that would have flowed to the favored generators is minor. But the added prices that would have been paid to the generators would have translated to at least $19 million in the next five years to be absorbed by Southern California Edison customers according to one analysis. Also Tuesday more details were disclosed about another leg of the state's effort to escape from the energy crunch--the deals with large power generators to supply electricity to California for as long as 10 years. Those arrangements were announced by Gov. Gray Davis Monday as the bedrock of California's energy policy. But some consumer advocates warned that the deals could lock the state into excessively high-priced contracts. S. David Freeman the general manager of the Los Angeles Department of Water and Power and Davis' negotiator said that the state guarded against that by varying the time spans of its deals. About 6000 megawatts are expected to be available this summer about one-third of the energy needed by the state Freeman said. The amount of power under contract swells until more than 9000 megawatts are contracted in 2004 half of the needed amount before dipping to 8000 megawatts in 2010. What we're doing here is what everybody said had to be done Freeman said. We deliberately bought 50% so we'd have a good mix between long-term contracts which may turn out to be somewhat higher or somewhat lower than the spot market and purchases on the spot market. ---- PG&E could face mutiny on outages: SMUD others may balk if utility orders summer blackouts By Carrie Peyton Bee Staff Writer (Published March 7 2001) Sacramento's electric utility wants out of a deal that imposes rolling blackouts locally on PG&E's command. So do a lot of other utilities. They've been writing letters lobbying lawmakers and launching informal talks with Pacific Gas and Electric Co. to get off the hook before summer. Who dodges the blackout bullet is going to play out as a political hot button around the state said George Fraser head of the Northern California Power Agency a coalition of municipal utilities. In Sacramento the next volley is expected soon with the Sacramento Municipal Utility District reportedly poised to notify PG&E that it will no longer black out homes and businesses on the larger utility's command. We are absolutely trying to fight off the requirement for rolling blackouts for the Sacramento area said Linda Davis one of seven elected members of the SMUD board of directors. Saying they don't want to be dragged down by somebody else's problems two Southern California utilities have written grid operators asking to be exempted from any blackouts caused by PG&E's or Southern California Edison's financial woes. But in PG&E's view California is in an energy crisis (and) ... we're all in this together said spokesman John Nelson. The maneuvering comes amid bleak forecasts for power supplies this summer. Although Gov. Gray Davis has said conservation new power plants and moderate weather could avert blackouts officials at the Independent System Operator which runs much of California's grid expect frequent rotating outages. One consulting firm Cambridge Energy Research Associates predicts 20 hours of rolling blackouts during July and August and about 200 hours of especially intense calls for voluntary cutbacks. Before blackouts hit the jockeying over just whose lights air conditioners and assembly lines will be shut down is growing. The outcome could affect millions of people statewide. The state Public Utilities Commission is probing rolling blackout programs run by the for-profit utilities it regulates including PG&E and Edison. A PUC analysis has suggested that PG&E's program which currently exempts about 40 percent of its customers should spread the burden more broadly. For example it said 1.9 million homes and businesses are spared just because they share a circuit with a customer deemed essential. But not-for-profit utilities such as SMUD which answer to their own elected boards or city councils have other worries. Many have already lined up their power supplies for summer. Some have raised rates or are considering raising rates. Some have taken extra conservation steps. They think those preparations ought to give them leverage to ease blackout clauses in their contracts with PG&E. SMUD general manager Jan Schori is going to use every avenue ... any avenue to put pressure on including lobbying the ISO the governor and others said utility director Davis. The Northern California Power Agency a joint-powers authority that owns and operates power plants for municipal utilities has begun informal negotiations with PG&E to change blackout rules according to Fraser its top executive. It is preparing to write PG&E asking that its members be exempted from outages altogether. Failing that it wants them to face fewer outages or to be compensated for cutting off power he said. At SMUD the utility board has met in closed session to discuss exactly what it is required to do during electric emergencies under terms of the interconnection contract that links SMUD's lines to PG&E's. The contracts are being inspected with a fine-tooth comb said SMUD director Howard Posner. Schori declined to comment on any specifics. Sources indicated that the main option being considered is notifying PG&E that because of changed circumstances SMUD believes it no longer is required to routinely comply with outage requests. Other options being explored include re-negotiating existing agreements with PG&E. Posner said that ever since two days of rolling blackouts in January constituents have been asking him 'Why are we participating when we're not the problem?' And I don't have a good answer to that. Several directors said SMUD has already spent a lot of money -- and is considering 16 percent rate increases -- to ensure that it has enough electricity under contract to meet its customers' summer demands. They believe PG&E should do the same. We're almost like a David against Goliath here said board vice president Genevieve Shiroma. The huge investor-owned utilities next door have severe problems that they need to get under control. In addition SMUD plans to argue that because it can cut usage through its Peak Corps program which remotely turns off air conditioners at volunteer households it has already done its part without rotating outages director Davis said. PG&E believes the interconnection agreements that govern smaller utilities' ties to its transmission lines have benefits and burdens to both sides said Nelson. It wouldn't be fair or good policy for just one provision to be altered without taking a look at how that affects the entire contract he said. Interconnection contracts generally have clauses that require utilities to help each other out to avert greater emergencies. Sometimes reducing demand -- called load shedding -- can be the only way to stabilize the electric grid in the seconds after a major power plant or transmission line fails. It's been around in the electrical fabric forever said Jim Pope head of Silicon Valley Power Santa Clara's city-run utility. In addition to legal requirements you have a moral obligation so you don't bring the system to collapse. Like other city-run utilities Silicon Valley Power has a contract with PG&E that requires it to shed load during an electric emergency. But its contract allows it to work with big users to reduce their demand so no one has to be completely shut off. Such agreements formed long before deregulation when PG&E ran the north state's grid now are complicated by the 1997 creation of the state Independent System Operator. The ISO today runs pieces of the grid owned by PG&E Edison and San Diego Gas & Electric Co. If it believes power use is about to surge past supply potentially triggering a grid collapse across the western United States the ISO notifies the three utilities that they have to shed a certain number of megawatts. The big utilities meet that requirement two ways. They cut circuits to some of their own customers and they tell smaller connected utilities to cut a proportionate share. In Northern California about 80 percent of the outages are borne by PG&E customers and the rest by customers of SMUD and other municipal utilities and irrigation districts. In one sense we are all in this together. If SMUD were in danger of going down we would hope others would help us out said SMUD's Posner. But that's if we're in danger from circumstances beyond our control not from mismanagement or lack of financial wherewithal. It is unclear what penalties if any a utility would face for violating an interconnection agreement. In the long run the issue would be fought either in the courts or before the Federal Energy Regulatory Commission grid officials said. As a practical matter in the seconds when the risk to the grid is greatest if one utility refused to shed load the ISO would probably solve to problem by calling on PG&E Edison or others who are willing to make deeper cutbacks they said. ---- PUC to Decide Fate Of Utility Workers PG&E Edison want to trim costs by laying off thousands cutting service Bernadette Tansey Chronicle Staff Writer Wednesday March 7 2001 2001 San Francisco Chronicle State regulators are set to decide today whether debt-ridden Pacific Gas and Electric Co. and Southern California Edison can conserve cash by laying off thousands of workers and letting service standards slip. Union officials who protested the layoffs before the California Public Utilities Commission warn that if the cuts go through neighborhoods hit by power outages could stay dark for hours and more customers could face busy signals when they call about their bills. An administrative law judge agreed advising the commission in February to order the utilities to restore 725 positions already cut and block the elimination of an additional 2125 jobs. Judge John Wong said PG&E and Edison have acknowledged the layoffs will not substantially improve their shaky financial condition which arose from skyrocketing wholesale electricity costs the utilities could not pass on to consumers under a rate cap. The savings would barely make a dent Wong said in his draft decision. The two companies together claim that their debt from power purchases amounts to more than $13 billion. PG&E says it has saved $18 million from the first wave of 325 layoffs. Wong's recommendation is already running into resistance on the PUC. Commissioner Richard Bilas said the five-member panel should not be micromanaging the utilities in a time of crisis. Bilas has proposed an alternate ruling that would allow the utilities to make the cuts but provide for PUC monitoring of service in case the commission wants to step in later. We're in a situation where the utilities are not collecting the revenues they need to operate and yet we may be guilty of not letting them cut expenses where they can cut expenses Bilas said. PG&E spokesman Jon Tremayne said savings from the layoffs are helping to keep electricity running and gas flowing. It keeps cash in our accounts so we can keep doing day-to-day business Tremayne said. In addition to the 325 positions dropped so far PG&E is proposing to cut an additional 675 during the next three to six months. The cuts affect temporary and contract workers who read meters handle new service hookups and replace equipment. PG&E has no plans to eliminate permanent positions. The company is struggling to keep up with a higher workload at its call center as customers deluge the lines with inquiries about their rising bills and the effects of deregulation. Calls to PG&E ballooned from 1.3 million in January 2000 to 2.3 million in January 2001. Bilas advocates granting PG&E's request to temporarily relax standards requiring the utility to respond swiftly to customer calls and to read customers' meters once a month. PG&E wants to read meters bimonthly and send bills based on the estimated use between readings. Discrepancies could be corrected later. Wong called those measures unacceptable. He said customers need to know immediately if their efforts to conserve power are working. Wong also said the utilities' own experts have said the workforce reductions will lengthen the time required to restore power after nonemergency equipment failure. Eric Wolfe communications director for the International Brotherhood of Electrical Workers Local 1245 said some customers have already been left without power overnight because PG&E is trying to avoid the use of overtime on nonemergency power outages. It hurts a lineman to walk away from the job leaving a customer without power Wolfe said. Tremayne said PG&E is trying to minimize overtime costs but denied the company has allowed customers to go without power out of financial concerns. He said crews were pulled out when darkness and falling trees made the work too dangerous. ---- Power prices could soar during the summer Posted at 10:35 p.m. PST Tuesday March 6 2001 BY STEVE JOHNSON Mercury News Unless Gov. Gray Davis arranges significantly more long-term electricity contracts or persuades people to turn off a lot more lights California's unpredictable spot market for power could wreak havoc this summer. Even with the 40 long-term deals announced by Davis on Monday experts interviewed Tuesday said up to 43 percent of the state's daily needs may have to come from this highly volatile market in which power is bought within a day of need. That could could prove hugely expensive because some spot market energy has cost five to six times what it would under the long-term contracts. It's widely expected that consumers ultimately would have to pay that tab which could amount to billions of dollars. And because that power won't be locked up in contracts there is no guarantee it will be available when it's needed which could lead to blackouts according to a recent report to the California Independent System Operator which oversees three-fourths of the state's power grid. ``The situation in California could reach catastrophic proportions'' the report concluded adding that unless things change dramatically ``it is a virtual certainty that peak demand will go unmet during many hot summer days.'' Steven Maviglio Davis' press secretary conceded Tuesday that the spot market could be troublesome. ``It's a major concern'' he said which is why the state is trying to line up more power contracts speed up power plant construction and promote conservation. During the normally hot month of August peak daily demand for power in the Independent System Operator's territory is expected to hit about 47700 megawatts -- enough for nearly 48 million homes. The state's three main utility firms generate about 8200 megawatts and have long-term contracts from wind solar and other energy sources for about 11700 megawatts more. That totals about 20000 megawatts. Add in the 7000 megawatts of long-term power that Davis has announced for this summer and the state is still nearly 21000 megawatts short. Costly proposition If all that power has to be obtained on the spot market the price could be high. On Friday last-minute purchases on the market averaged $411 per megawatt-hour compared to about $150 per megawatt-hour for all power obtained by the Independent System Operator and $69 per megawatt-hour on average under Davis' long-term contracts. It's possible that not all 21000 megawatts would have to be purchased on the market. Assuming Davis is successful in getting people to save 10 percent -- which could prove difficult -- conservation could reduce peak demand by nearly 5000 megawatts. California also might be able to trade for another 5000 megawatts with the federal government's Bonneville Power Administration and a hydroelectric operator in British Columbia said Arthur O'Donnell editor of California Energy Markets a trade publication. Under such deals those two outfits often send that much power to California when they don't need it and California returns the same amount or more when its demand is low. But O'Donnell said it wasn't clear whether 5000 megawatts would be available this summer because ``they still haven't gotten the snowpack they need in the Pacific Northwest'' which could limit that region's generating capacity. Still falling short Even if those hydropower imports are available and conservation works as Davis hopes it's likely California would still require the spot market for 11000 megawatts to meet the August demand. That's more than 20 percent of the state's overall power needs. ``All of the surrounding states are buying probably less than 5 percent at most of their energy on the spot market'' said Frank Wolak a Stanford economist who monitors electricity prices for the Independent System Operator. He worries about how much that power could cost and is disturbed that state officials haven't adequately addressed the issue. ``No one has any idea what they are going to do and that is part of the problem'' he said. Officials at Pacific Gas & Electric Co. are particularly concerned. They fear that their company -- which is nearing bankruptcy -- could get stuck for much of the spot market purchases by the Independent System Operator which has threatened to bill the utilities for the cost. Fearing the annual bill for that power could hit $2.4 billion this year PG&E wants the tab sent to the Department of Water Resources which also is buying power on the spot market for the state. But the Department of Water Resources has objected to that idea and the matter is expected to be heard today by the California Public Utilities Commission. ``We're looking for clarity on a number of issues'' regarding how the spot market will work ``and certainly that's one of them'' said Thomas Hannigan the water agency's director. ``I don't think anybody knows the answer of who's going to pay for it'' added PG&E spokesman John Nelson. But Nettie Hoge executive director of the Utility Reform Network in San Francisco said she suspects consumers ultimately will foot the bill. The unfortunate likelihood about spot market purchases is that ``ratepayers are responsible for all of it eventually'' Hoge said. ``It's a very big problem.'' ---- Power Plant Plans Cause Conflicts East county residents blast supervisors Jason B. Johnson Chronicle Staff Writer Wednesday March 7 2001 Industry dreams of building new power plants in east Contra Costa's hills are prompting an angry reaction among residents and elected officials who say they don't want more plants. The conflict was sparked by a vote by county supervisors yesterday to aggressively explore possible sites for new power plants throughout the county. The measure by Supervisors Mark DeSaulnier and Federal Glover which passed on a 4-to-0 vote directs the county administrator and Department of Community Development to compile a report on possible sites within 45 days. Supervisor Donna Gerber abstained after criticizing the plan for potentially repeating the same mistakes that plagued the state's energy deregulation effort by not considering how much energy the state region and county will need in future years and how much power is slated to come online. Gerber said alternative power sources such as solar should also be examined. A site drawing much attention is on top of a deposit of natural gas near the Concord Naval Weapons Station off Highway 4. The owners of 70 acres of land near the station recently formed a company Golden State Power Co. to pursue construction of at least one small peaker plant and a much larger facility capable of producing 600 megawatts. The site could hold up to three small 50-megawatt peaker plants and a larger 15-acre natural gas plant said Steve Thomas managing partner with Golden State. No land use applications have been filed. Thomas said 30 acres could be kept as open space to form a buffer around the project. Both (facilities) are state of the art said Thomas. We believe that the site is ideal. But east county residents at yesterday's meeting blasted the supervisorial measure and the power plant proposal complaining that more plants could put people's health at risk. The region already is home to six power plants. We're going to get a good dose of poor air quality and (negative) health conditions from this said Concord resident Evelyn Frietas. I think we need to stop and think about what we're doing to our quality of life. Dan Torres said the home he bought in 1995 at a new Bay Point development would be alarmingly close to the proposed Golden State site. It will be dragging emissions over our home said Torres. I didn't buy a home on that hill to be surrounded by power plants. There are six power plants in operation in east Contra Costa. Pittsburg already has two power plants and two more under construction. City Council members Frank Aiello and Yvonne Beals said the Antioch-Pittsburg area has done more than its share of energy production. Aiello said Pittsburg will soon produce enough energy to power three million homes in California. When is enough enough? asked Aiello. Pittsburg has shouldered responsibility for a land-fill and two more power plants. At some point you have to say enough. Beals said that while power plants have added millions to the city's general fund the negatives of additional plants could outweigh the benefits. I don't think that Pittsburg or east county should be the dumping ground for energy for California said Beals. ---- Supervisors set search for power plant sites The board also heard from the potential developers of a 650-megawatt plant between Bay Point and Concord By Thomas Peele TIMES STAFF WRITER MARTINEZ -- Contra Costa County supervisors took tentative steps Tuesday toward allowing the construction of at least one small power plant before summer ordering that its staff identify potential sites in unincorporated areas within seven weeks. The board voted 4-0 to search for locations. Third District Supervisor Donna Gerber abstained saying her colleagues lacked a comprehensive context'' to identify sites. I think the board knows just enough to be dangerous'' she said. Gerber said the county should examine the potential for additional power plants within its borders but not investigate individual sites yet. But Fourth District Supervisor Mark DeSaulnier said the action was necessary because of the energy crisis and because of Gov. Gray Davis' call for local governments to help speed the construction of so-called peaker plants before July and August. I wouldn't do this except under an emergency DeSaulnier said after the vote. There are unusual circumstances. We're not talking about putting this in a residential area. Fifth District Supervisor Federal Glover backed DeSaulnier but said he hoped for a location outside his heavily industrialized East County district. There's a lot of concern in East County as to the number of plants he said. DeSaulnier said though that the only logical place for a small plant remains the industrial belt'' stretching along the waterfront from West County to Antioch. He declined to provide specifics but said the only other potential site outside the industrial areas was the Concord Naval Weapons Station property. But he quickly added that he believes the U.S. Department of Defense would never go for it. Also DeSaulnier said he could not rule out the county building the plant itself and entering the electricity-selling market during peak demand times. Board Chairwoman Gayle Uilkema called that idea extremely premature and unlikely. That's a very powerful decision. I do not think we are ready'' she said. The California Energy Commission listed the Equilon refinery in Martinez as one of 32 potential peaker plant sites in the state last week. Peaker plants kick in during peak usage times. Davis called for their quick construction before the height of summer and its energy demand for air conditioning. Plants that generate as much as 50000 megawatts don't need Energy Commission approval. DeSaulnier said he believed a peaker plant could be built about a month after final approval. Supervisors also heard from the potential developers of a 650-megawatt plant between Bay Point and Concord. Walnut Creek commercial real estate developer Steve Thomas announced his intentions for the site north of Highway 4 last week. Construction could take two years. Eric Hasseltine a consultant representing Thomas and what he described as a brand new company for the site the Golden State Power Co. told supervisors that if they intended to speed peaker plant construction they should do what they can to expedite the larger plant. The Thomas site could house a peaker plant until the proposed larger one goes online. A large natural gas line passes under the site. DeSaulnier seemed cautious about the larger proposal which he had described last week as a good site. Uilkema too said she knew too little about it to comment. A resident who lives near the Thomas property asked the board to build it (the larger plant) closer to where you have industrial areas. You have to carefully consider the people who live nearby said Dan Torres 39. Evelyn Freitas of Concord said she lives downwind of the proposed site. Our air quality is going to be worse then it is now she said. Gerber played on the environmental issues saying the county already ranks second statewide to Los Angeles in volume of hazardous materials and amount of electrical generation. ---- Peter Schrag: California's $90 billion infrastructure gap (Published March 7 2001) By now California's surreal energy mess has grown from a crisis to a condition. It may not be quite as permanent as say death and taxes but it's still something that could get a whole lot worse before it gets better. Until there's more realistic pricing no gubernatorial pea-under-the-shell buyout scheme will solve it. Beyond the energy crisis however and in many ways similar to it California faces a whole range of other infrastructure problems -- in transportation in water resources and sewer systems in school and university buildings -- that seem once again to be all but forgotten. The Business Roundtable has estimated the need at roughly $90 billion though no number can possibly be exact. What's certain is that after a burst of high-level investment in public facilities during the 1950s and 1960s California's annual capital investment has sunk precipitously -- from an annual $150 per capita in the 1960s according to a set of recent studies for PPIC the Public Policy Institute of California to about $30 in the 1990s. But you probably don't need to tell anyone driving Bay Area or Los Angeles freeways or looking at the ubiquitous portable classrooms those dreary brown boxes that house a fourth of our public school students. Ever since passage of Proposition 13 in 1978 we have been flying the flag of deferred maintenance. As in the state's electricity crisis however there's no way California can effectively address those problems merely by building or bonding itself out of them. In highway construction in developing water resources in finding enough university space to accommodate the Tidal Wave II of students managing demand is likely to be as crucial to any solution as new construction. In the energy market -- and in electricity particularly -- it's been a familiar principle ever since David Roe of the Environmental Defense Fund first persuaded Pacific Gas and Electric that a dollar invested in conservation may be worth as much as the same investment in new generation. But in most other sectors of California's infrastructure state and local it's a lesson still to be learned. There have been scattered attempts to encourage conservation and reduce demand -- significant reduction in water use for example through the installation of low-flow faucets and low-flush toilets some reduction in traffic by using rush-hour diamond lanes or by adjusting highway or (as in New York) bridge tolls to levels of congestion. But as pointed out by David Dowall an urban economist at Berkeley state policy-makers have not really begun to consider how demand management strategies can be applied to infrastructure service areas or how the more efficient use of facilities and more realistic pricing -- highway tolls say or parking fees -- can reduce demand for scarce infrastructure resources. In any case says Dowall in one of the PPIC reports we should pick which major projects we will build not just according to per capita estimates of how much we need but according to how much consumers are willing to pay for them. To avoid hurting the poor congestion-related highway tolls and other tariffs can be rebated on the basis of income. University fees can be means-tested. In California they also could be adjusted to encourage summer school classes and other off-peak uses rather than (as in the past) making UC summer courses more expensive. Given the political and economic uncertainties there's no way to know how far such demand management can be taken. But there's not much doubt that as Dowall and others point out the state's infrastructure planning is a jumble of uncoordinated agency agendas and wish lists. The Legislature last year passed a bill AB 1473 by Assembly Speaker Robert Hertzberg that requires the governor beginning next year to submit an annual five-year infrastructure plan for state agencies and public schools along with recommendations on how to fund it. In addition Gov. Gray Davis' infrastructure commission is expected to recommend better coordination of infrastructure and land-use planning when it issues its report this spring. That would be a start. As California State Treasurer Phil Angelides has pointed out the state desperately needs to start joint planning -- regional planning -- for housing roads and other resources to reduce the need for long commutes to preserve open space and to bring jobs to where people live and housing to where the jobs are. That would itself reduce demand for more freeway lanes and equally important improve the quality of life. At present most planning for housing roads water systems and other facilities rarely recognizes the regional impact of local decisions. In the East Bay slow-growth forces push well-intended initiatives that would force more development into Tracy or Modesto and further tax the transportation systems to Silicon Valley. In city after city there are beggar-thy-neighbor efforts to grab yet another shopping mall that produces a little extra sales tax revenue for the city that gets it and that often compounds traffic and revenue problems in adjacent communities. In higher education we divide bond proceeds evenly among UC the California State University and the community colleges even though the community colleges serve eight times as many students as UC. We plan road projects according to county not regional priorities. It is all done according to antiquated political and fiscal formulas that often no longer make sense. We don't just need better capital planning we need a whole new planning system. ---- PG&E power plan debated at hearing A PUC meeting on the utility's capacity expansion project for the Tri-Valley follows weeks of protest from officials residents Power upgrade in valley debated By Megan Long TIMES STAFF WRITER SAN FRANCISCO -- Dublin officials and the developer of a Livermore subdivision faced questions Tuesday about their opposition to alternative routes of PG&E's controversial Tri-Valley power upgrade plan -- and answered by restating their long-standing objections. Tuesday's cross-examination came during the third and likely final week of the California Public Utility Commission's evidentiary hearings on the utility's $91 million Tri-Valley 2002 Capacity Increase Project. It has followed weeks of protests of PG&E's upgrade plans by officials and residents of Livermore Pleasanton Dublin and San Ramon. And before the questioning started Dublin Vice Mayor Janet Lockhart reiterated concerns about an alternative route deemed environmentally superior that would place a substation just 1000 feet north of Interstate 580 between Tassajara and Fallon roads. She said that would undermine the results of a 15-year process to plan the eastern development of the city. It's extremely important to the residents of our community to follow a plan we worked hard to produce she said. Dublin officials favor PG&E's proposed placement of the station three miles north of the freeway away from new high-tech company offices and housing developments. Besides the Dublin substation the project calls for construction of a substation in North Livermore expansion of the Pleasanton substation and installation of 23.5 miles of new lines. In response to questions from PUC Administrative Law Judge Michelle Cooke Dublin's public works director Lee Thompson confirmed that the Lin family the owner of the property where the alternative substation would go wasn't interested in selling the land to PG&E. Cooke also asked Thompson to define a discretionary permit which is how city officials said they might treat a permit for a substation. Lee said that type of permit is one the city has the right to approve or not depending on the project's impact. Eddie Peabody Dublin's community development director testified that the zoning for the Lin property accommodates uses such as commercial business research and development and light manufacturing. It would not he said be appropriate for a power substation. He said parcels within the East Dublin area that could host a station would include those zoned for public and semi-public uses including land recently bought by Oracle and Sun Microsystems for new campuses. While Dublin officials testified that one buyer of land in that area paid $86 per square foot others suggested land prices would be inflated to help make a PG&E land buy look prohibitively expensive. An executive of Centex Homes the developer of new houses near Isabel Avenue and Concannon Boulevard objected to an alternative route that would place high-voltage transmission lines overhead along Isabel and Stanley Boulevard. David Barclay president of Centex's Northern California division said that the 80-foot to 150-foot towers would have a severe visual impact on residents of the Prima tract. Ed O'Neill a lawyer for the Kottinger Ranch Homeowners Association pointed out that existing distribution lines on 50-foot poles on Isabel already mar the view for residents. The Foley family has been ranching on land south of Pleasanton city limits for years said their attorney Kennedy Richardson. The utility's project would place overhead lines and a transmission station on rolling hills that the family envisions as one day being public open space with limited development Richardson said. Lawyers for Pleasanton Livermore Kottinger Ranch and Centex are scheduled to cross-examine a PG&E engineer today about the project's routing. That testimony should be the most controversial of the hearings. Judge Cooke is expected to recommend an alignment by July to the PUC which will make the final decision. ---- NEWS State OKs 'Peaker' Power Plant at SFO / Temporary generator could be sending electricity to 50000 homes by August Marshall Wilson 03/08/2001 The San Francisco Chronicle FINAL Page A.20 (Copyright 2001) State energy officials yesterday approved plans to build a temporary electrical plant at San Francisco International Airport that should generate enough juice to power 50000 homes by August. Meeting in Sacramento the Energy Commission voted 4-0 to give the green light to the gas-fired plant. It will operate during peak summer and winter demand to help the state avoid Stage 3 power alerts and rolling blackouts. Texas-based El Paso Merchant Energy Co. won approval under a new state law mandating speedy four-month reviews of so-called peaker plants. It was the only one of seven applications statewide to win approval. The other proposals were withdrawn for various reasons. The 51-megawatt plant formally called the United Golden Gate Power Project is scheduled to be built at the northwest corner of the airport near the United Airlines maintenance center. Within the next few weeks El Paso plans to apply to build a 571- megawatt $400 million plant in the same area company spokesman Jesse Frederick said. It would undergo a separate review by state energy officials. The small peaker plant approved yesterday is to generate electricity beginning around Aug. 1 for up to three years. After the end of three years the plant would be closed or converted to a cleaner-burning system. Under state law a temporary peaker plant is permitted to spew more air pollution than a permanent plant. El Paso's temporary plant is to be built next to a co-generation plant operated by United Airlines. It would use existing connections for natural gas and water supplies and tap into existing power transmission lines. Electricity generated by the plant would be pumped into the state's electrical grid Energy Commission spokesman Gary Fay said. It would also serve as a backup for San Francisco Airport in case of a blackout. No one spoke against the proposed plant at yesterday's commission meeting. The proposal however has been criticized by area residents and environmentalists worried about air pollution. Scott Buschman a professional photographer and San Bruno resident said yesterday it was unjust that state officials 100 miles away in Sacramento approved a Texas company's proposal to put a power plant on land owned by San Francisco. The fact that they approved it without considering the public's concerns foremost air quality is very disturbing he said. Fay said the plant complies with clean-air standards. Answering the criticism about the location of yesterday's deliberation he said three hearings and several workshops were held in communities near the airport. Copyright 2000 Dow Jones & Company Inc. All Rights Reserved. ---- Crossed Wires: Major Kinks Emerge In Gov. Davis's Plan To Power California --- State's Outlays for Electricity May Be Hard to Recover Without Rate Increases --- Betting on Long-Term Deals By Wall Street Journal staff reporters Rebecca Smith Mitchel Benson and John R. Emshwiller 03/08/2001 The Wall Street Journal A1 (Copyright (c) 2001 Dow Jones & Company Inc.) SACRAMENTO Calif. -- Earlier this year Gov. Gray Davis made what may be the biggest bet in the history of the nation's biggest state: that he could tame an out-of-control electricity market and avoid devastating blackouts without busting the state's budget antagonizing its consumers or derailing his own political career. His wager is still on the table but the assumptions that underlie it are looking increasingly shaky these days. The governor has already spent around $2 billion of public money buying hugely expensive wholesale power taking over the role formerly played by the state's near-bankrupt electric utilities. And California will probably be obliged to spend billions more before its electricity market stabilizes and those utilities are restored to some semblance of financial health. Under the governor's plan California aims to recoup the money it is using to buy electricity by issuing $10 billion in bonds. That way it would still have a healthy budget surplus to finance new spending on roads schools and other public services. But there's a potentially big obstacle to this plan. The state Legislature worried about racking up billions in new debt has put limits on the size of any bond offering. In broad terms the Legislature's action would allow the state to borrow only four times as much as it can recover annually from utility customers. Right now that doesn't appear to be much. Under the current rate structure essentially set in place by California's flawed 1996 electricity-deregulation plan consumers pay far less for power than the cost of acquiring it on the wholesale market. Preliminary estimates submitted by utilities last month to the California Public Utilities Commission show the state's share of the proceeds from electricity sales this year could be as little as $241 million -- not enough to support even $1 billion in bond sales under the Legislature's formula. That would leave the state on the hook for much of the money it has already paid for power -- not to mention the billions more Gov. Davis will need to spend. That in turn raises the prospect that California's economy and its credit rating both could deteriorate significantly. But state finance officials say that based on their own projections they will be able to extract enough money to support a $10 billion bond issue. Walking a careful line between fiscal prudence and political survival Mr. Davis and others in his administration are scrambling to come up with ways to get around the legislative restrictions without raising rates for consumers. If I wanted to raise rates I could solve this problem in 20 minutes Mr. Davis says. The governor says he believes that the state can obtain enough affordable power through long-term power-supply contracts to avoid the need for a big rate increase. The billions of dollars the state hopes to borrow would be used to help pay for power until electricity prices drop as they are expected to do when new power plants come online over the next few years. The Davis administration fears that what may be its only other option -- a big increase in retail electric rates -- could prompt angry consumer groups to seek new electricity laws through a statewide ballot initiative during next year's election. That's when Mr. Davis is expected to run for a second term as governor. But trying to save California without rate increases is forcing Mr. Davis to make some colossal gambles with the state's money. State officials estimate that in the next several months California will need to spend as much as $6 billion on power purchases -- equivalent to the state's entire fiscal surplus. Mr. Davis is also looking to spend several billion more to buy the transmission assets of three investor-owned utilities in order to restore two of them to credit-worthiness. He also has announced plans to spend several hundred million dollars more on conservation programs designed to reduce demand while new power plants are being built in the state. In order to limit the state's financial exposure in the meantime the governor and his aides have in some cases ignored state law. They have threatened appointed officials who have stood in the way. And they have sharply restricted the flow of information to the public. None of those steps is expected to do much to reduce state spending on power in the coming months. In a few weeks power usage is expected to begin a sharp seasonal rise as Californians switch on their air conditioners with the coming of warmer weather. By various estimates demand during peak periods this summer could outstrip supply by 10% or several thousand megawatts. That could produce more rolling blackouts like the ones that hit Northern California earlier this year. It is also likely to put strong upward pressure on wholesale electricity prices. Steven Zimmerman managing director of Standard & Poor's Corp. says Mr. Davis and his aides don't have a lot of time to put a cap on the state's financial exposure to the crisis. The credit-rating agency has put the state on credit watch for a possible downgrade which would affect the value of all of California's outstanding public debt. Moody's Investor Service Inc. is also concerned. It said in a recent report that the power crisis could soon seriously threaten the health of the state's economy. Mr. Davis a Democrat and career politician was dealt a bad hand when he took office in 1999. The deregulation plan that sparked the state's electricity crisis was enacted under his predecessor Republican Pete Wilson. But Mr. Davis was slow to react to early signs of trouble this past summer and alarms sounded by members of the state Legislature. By the time Mr. Davis finally sprang into action earlier this year a troublesome power-supply squeeze had escalated into a crisis. In a Jan. 17 declaration of emergency the governor designated the state Department of Water Resources to take the utilities' place as the daily buyer of huge quantities of electricity. His hope: that by making the state the dominant player in California's power sector he would ease electricity producers' concerns about getting paid and give the state enough clout to negotiate lower long-term power prices. Earlier this week Mr. Davis announced final or tentative agreements with 20 power suppliers to furnish the state with a total of 8900 megawatts for periods of as long as 20 years. But the supply situation remains extremely uncertain for this summer when demand probably will top 45000 megawatts. If the state can secure enough power under contract and push down demand through aggressive conservation it might be able to squeak through the summer season. If not it will be forced to keep buying huge amounts of costly power in the cash market. Under deregulation retail electric rates were frozen for several years while wholesale-power costs were free to fluctuate. When the plan was conceived wholesale prices were low and expected to go lower. However a combination of unexpected growth in power demand and a lack of new generating capacity helped produce a supply squeeze. Average wholesale prices more than tripled last year from 1999. And in January those prices were up 10-fold from a year earlier. By then California's two biggest investor-owned utilities -- the Pacific Gas & Electric unit of PG&E Corp. and the Southern California Edison subsidiary of Edison International -- faced imminent financial collapse. They had racked up billions of dollars in wholesale power bills they couldn't afford to pay. As generators began shying away from selling to the two utilities the Clinton administration forced them to sell power into the California market an order left in place during the first weeks of the Bush administration. Still northern California was hit by rolling blackouts on several days in early January. Since then the DWR which does some electricity trading as an adjunct to its main mission of managing the state's giant system of aqueducts and reservoirs has had to learn the ins and outs of power markets on the run. It hasn't been easy. David Mills trading-floor manager for the federal Bonneville Power Administration says the water agency has at times offered to pay $50 to $100 per megawatt hour more than the available market price. They agree to prices that make you wonder says Mr. Mills whose organization markets electricity from federal dams in the Pacific Northwest. You'd at least think they'd check to see what the prevailing price is before throwing out their offer. Mr. Mills says that to cut California some slack he occasionally has instructed his traders to sell at prices lower than the DWR had offered to pay. Ray Hart the water agency deputy director responsible for the power purchasing says he isn't aware of any cases in which the DWR has overpaid. He says his team has been extremely successful by all measures. Ultimately the DWR's trading acumen is far less important than the overall arithmetic of power supply and demand in California. With the price of natural gas that feeds many of the region's generating plants at near record levels and some suppliers reluctant to sell into the troubled California market wholesale electric prices remain stubbornly high and in recent days have again been rising. The Legislature has advanced the DWR about $3 billion from the state's general fund for power purchases. Under emergency legislation passed by the Legislature and signed by Mr. Davis on Feb. 1 the general fund is to be reimbursed from a planned bond sale later this year. But under terms of the emergency law the water agency would have to wrest $2.5 billion a year in revenue from retail electricity rates in order to sell the $10 billion worth of bonds sought by Mr. Davis. Assembly Speaker Robert Hertzberg a Southern California Democrat says the formula was created to ensure that there would be a way to repay the bonds without draining the state's coffers. We didn't want to just open our wallets he says. According to the language of the Feb. 1 law the water agency gets what's left of revenue collected from ratepayers after the utilities pay certain of their own power-supply bills and other expenses. And in their filings with the PUC last month the utilities reckoned under their worst-case scenarios that there would be only $241 million available to the DWR this year. State officials are quietly pushing the PUC to rejigger the formula so that the water department gets more money -- even though that would clash with terms of the Feb. 1 law. Robert Miyashiro deputy director of the Department of Finance says the emergency law was drafted poorly and has led people to believe the DWR only gets the leftover money. He predicts there will be cleanup legislation. At the request of the Davis administration the PUC is considering a plan to use a different revenue-sharing formula than the one in the state law. The proposed new formula was written in close consultation with Mr. Davis's Finance Department says PUC President Loretta Lynch who supports the initiative and is hoping to rush it through. The effort has drawn some opposition. Commissioner Richard Bilas at a recent PUC meeting questioned the legality of the commission attempting to change a formula set by the Legislature. PG&E is even more emphatic since the DWR's extra money could come at the utility's expense. The formula threatens to undo the very financial protections for the utilities that [the new law] attempted to provide the utility said in a recent filing with the PUC. As politicians and regulators wrestle with that issue the Davis administration has taken a step to reduce the outflow of state cash that also seems to conflict with the Feb. 1 law. It was widely assumed that the law required the DWR to buy any electricity the state needed to keep its lights on. However on many occasions the DWR has refused to buy power on the grounds that it was too expensive citing a portion of the new law that urges the agency to hold down costs. The task of covering any remaining shortfall has passed to the California Independent System Operator which manages the state's energy grid and is charged with buying power when necessary to avert shortages. However the ISO doesn't have any power-purchasing money of its own and the major parties it would normally bill are PG&E and Edison whose inability to pay their power bills was the reason the state started buying electricity in the first place. Amid criticism of its stance from generators utilities and Wall Street the DWR says it has started covering more of the utilities' electricity costs. The water agency is now buying 95% to 99% of what California needs in a given day says the agency's Mr. Hart. But increased buying only adds to the uncertainty about the eventual tab. The state's legislative analyst Elizabeth Hill recently recommended that lawmakers hold off considering more than $2 billion in state spending on items ranging from college construction to beach cleanups because of continuing questions about the financial impact of the electricity crisis. Like others Ms. Hill complains that the governor's office and state agencies haven't been forthcoming with information. Indeed the DWR refuses to say precisely how much power it is purchasing and at what prices though it has on several occasions gone back to the Legislature for more money. State officials say that data on its purchasing activities would give suppliers an advantage in continuing electricity-supply contract talks. State Controller Kathleen Connell who is running for mayor of Los Angeles in an April election recently announced plans to post state power-spending information on her department's Web site. But within 24 hours Ms. Connell suspended that plan after discussions with senior Davis administration officials. I feel very strongly that this information should be publicly released says Ms. Connell. I just don't want to do anything that would weaken the state's effectiveness in negotiating. In an effort to more tightly control events the governor obtained legislative approval to abolish the 26-member ISO board which was made up of everyone from utility executives to representatives of consumer groups. He then appointed a new five-member board. To ensure a quick transition the California attorney general threatened the old board members with fines of as much as $5000 each if they didn't immediately relinquish their positions. All did. I was offended at the heavy-handed treatment says Karen Johanson a former ISO board member. One of the first acts of the ISO's new board was to close a meeting about the electricity crisis. The former ISO board routinely held such meetings in public. ISO attorneys say the meeting was largely designed as a private briefing for new board members and that the organization is committed to keeping its deliberations as open as possible. The Wall Street Journal and other news organizations have unsuccessfully challenged the closure in Sacramento state court. Copyright 2000 Dow Jones & Company Inc. All Rights Reserved. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Eurelectric conference Body:: Houston has experienced catastrophic flooding. My flight has been cancelled. It is conceivable that I could get out tomorrow but I am wondering if I should try. I could still make the speech if we don't get more rain but given the lack of other reasons for me to go I am considering cancelling. I don't think it makes much sense for me to go for a 15 minute speech. what do you think? phone 713.621.6550 What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: A Supportive Note Body:: Dear Mr. Lay: I'm writing this note to you as a show of support to you during your dire times. The reason that I share this with you is my respect for you as a CEO a business leader and a person. My wife is one of your employees who routinely shares stories about you that are nothing less than inspiring. I know that during difficult times sometimes words emerge that can help people through difficult times. I believe that you are sincere man and know that you must be broken hearted but I hope that this article can help you lead a dispirted workforce to see things more clearly. My wife Shelly Pierce has worked for Enron for the past two years and like many of your employees has lost a great deal of her life savings. Of course I accept most of the blame for this for reasons related to this article. I lost my investment discipline and held out the false hope that Enron could not falter. After reading the article to her while I was out of town I believe that her spirit was a bit rejuvenated and she was ready to face the challenges that lay before you. Mr. Lay I appreciate the opportunity that you have given my wife and our family and hope that this story inspires you to regain your successes. From the USA Today Tuesday November 27 2001 page 15A. In recession face brutal facts thrive By Jim Collins A man in his early 20s recently asked me So what's a recession like? Its an entirely alien concept to him he'd grown up during the greatest economic boom in modern memory. His question drove home the fact that we haven't faced a severe protracted economic setback for nearly 2 decades leaving us terribly unpracticed at dealing with tough times. With this recession - long in coming perhaps long to stay - now officially upon us it is imperative that corporate leaders relearn a key lesson about how great companies (and great people) deal with difficult times differently from how they deal with merely good ones. That lesson is the Stockdale Paradox a peculiar psychology shown by those who emerge from tough times not just intact but stronger. Adm. Jim Stockdale was the highest-ranking U.S. military officer in the Hanoi prison camp during the Vietnam War. Tortured many times during his 8-year imprisonment Stockdale lived without any prisoner's rights no set release date and no certainty as to whether he would ever again see his family. He shouldered the burden of command while fighting an internal war against his captors and their attempts to use the prisoners for propaganda. At one point he beat himself with a stool and cut himself with a razor deliberately disfiguring himself so that he could not be put on video as an example of a well-treated prisoner. He exchanged secret intelligence information with his wife through their letters knowing that discovery would mean more torture and perhaps death. After his release Stockdale became the first three-star officer in the history of the Navy to wear both aviator wings and the Congressional Medal of Honor. You can understand then my anticipation at the prospect of spending part of an afternoon with Stockdale who happened to be at the Hoover Institute across the street from my office when I taught at Stanford. In preparation I read In Love and War the book he and his wife wrote to chronicle their experiences those 8 years. As I read the book I found myself getting depressed. It just seemed so bleak - the uncertainty of his fate the brutality of his captors. And then it dawned on me: Here I am sitting in my warm comfortable office looking out over the Stanford campus on a beautiful Saturday afternoon. I'm getting depressed reading this and I know that he gets out reunites with his family and becomes a national hero. If it feels depressing for me how on earth did he deal with it when he was actually there and did not know the end of the story? I never lost faith in the end of the story Stockdale said when I asked him. I never doubted not only that I would get out but also that I would prevail in the end and turn the experience into the defining event of my life that in retrospect I would not trade. I didn't say anything for many minutes and we continued the slow walk toward the faculty club Stockdale limping and arc-swinging his leg still stiff from repeated torture. Finally I asked Who didn't make it out? Oh that's easy he said. The optimists. The optimists? I don't understand I said completely confused. The optimists. Oh they were the ones who said 'We're going to be out by Christmas.' And Christmas would come and Christmas would go. Then they'd say 'We're going to be out by Easter.' And Easter would come and Easter would go. And then Thanksgiving and then it would be Christmas again. And they died of a broken heart. After another long pause he turned to me and said This is a very important lesson. You must never confuse faith that you will prevail in the end - which you can never afford to lose - with the need for discipline to confront the most brutal facts of your current reality whatever they might be. My conversation with Stockdale had a profound influence on me but I never really considered it a business lesson until my research team began to wrestle with the question of why some companies rise from difficulty to become great while others emerge from those exact same difficulties weakened and dispirited. We found that companies that became great embraced a corporate version of the Stockdale Paradox. Fannie Mae for example found itself in the 1982 recession losing $1M every business day with $56B in loans under water. Many analysts thought Fannie Mae which was getting 9% on its mortgage portfolio but paying 15% on the debt it issued was doomed. But CEO David Maxwell and his team never wavered in their aim to not merely survive but also to prevail as a great company. Yes they confronted the brutal fact that the interest-rate problem was not going to magically disappear (certainly not by Christmas). But they used this grim fact as a catalyst for creating an entirely new business model based on asking three central questions of greatness: What can we potentially do better than any other company in the world? What can best drive our economic engine? What best ignites the passions of our people? Instead of reacting to the recession with mindless restructuring Fannie Mae rebuilt itself based on its answers to these questions. Eventually it generated investor returns nearly eight times those of the general stock market. When asked how he dealt with the nay Sayers and the analysts who wrote Fannie Mae off Maxwell said that it was never an issue inside the company. Of course we had to stop doing a lot of stupid things but we never entertained the possibility that we would fail. We were going to use the calamity as an opportunity to remake Fannie Maw into a great company. The sad truth is that most executive teams won't respond that way to these dark days of uncertainty. Instead of using this recession as an opportunity to fundamentally rethink their business and rebuild a culture of discipline the will simply restructure lay off a bunch of people and liquidate their cultural equity. Mediocre leaders will hold out false hopes for a quick fix only to watch those hopes be swept away by events. Their companies will begin to die of a broken heart. It need not be this way. Those who lead with the Stockdale Paradox - those who retain the unwavering faith that they will find a way to prevail in the end but who also retain the discipline to confront the most brutal facts of reality - will find this an ideal time to rebuild and reinforce greatness. Used correctly this recession can be a defining time in your firm's history that in retrospect you would not trade. Used wrongly this recession will weaken your foundations and make it that much harder to become great. The choice is yours. Jim Collins the author of Good to Great operates a management-research laboratory in Boulder Colo. Regards Steve Steve Alexander Vice President North American Artemis Consulting Artemis International Solutions Corporation Office: +1 281.338.9616 Mobile: +1 281.830.7430 www.artemisintl.com What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Sac Bee Wed 6/20: Weather an early test for fee caps:=20 Any severe jump in prices will likely be curbed experts say Sac Bee Wed 6/20: State to borrow up to $5 billion to buy energy Sac Bee Wed 6/20: Dan Walters: Once burned lawmakers are very wary of Davis-Edison agreement SD Union Wed 6/20: Senate Democrats lay back to see if FERC action=20 provides rate relief=20 SD Union Wed 6/20: House panel erases Bush energy cuts LA Times Wed 6/20: Davis Regulators Face Off at Hearing LA Times Wed 6/20: Energy on Agenda but Issue Is Blame LA Times Wed 6/20: Blackout Forecasts' Dark Side LA Times Wed 6/20: FERC Move Short-Circuits for Hard Price Caps LA Times Wed 6/20: Plan Won't Raise Rates Davis Says LA Times Wed 6/20: State to Pay Electric Bill With Loan Not Taxes LA Times Wed 6/20: Edison Unveils Blackout Warning Plan LA Times Wed 6/20: State Joins Challenge to Bush on Air-Conditioner=20 Standards LA Times Wed 6/20: New Price Caps Not a Deterrent Power Firms Say LA Times Wed 6/20: The FERC's Action Is Good Bad Ugly (Commentary) SF Chron Wed 6/20: Davis OKs stopgap loan=20 CRISIS POWERS: Action sidesteps Legislature SF Chron Wed 6/20: Experts say state must seize the day=20 ANALYSIS: Price caps set stage for future SF Chron Wed 6/20: California's energy crisis hits Northwest like a tidal= =20 wave SF Chron Wed 6/20: Davis demands nearly $9 billion for electricity=20 overcharges SF Chron Wed 6/20: Fed price caps placate Demos=20 But Feinstein's bill to regulate energy producers was more strict SF Chron Wed 6/20: Potrero Hill power plant hit by 2 lawsuits=20 Neighbors city ask court to cut back hours of operation SF Chron Wed 6/20: Washington wakes up Mercury News Wed 6/20: Feinstein halts electricity price caps bill=20 Mercury News 6/20: FERC's fixes have fallen short (Commentary) OC Register Wed 6/20: Easing the crunch on costs of power (Commentary) Individual.com (Bridgenews) Wed 6/20: [B] POWER UPDATE/ US Senate panel to hold off vote on Calif. cap bill=20 Individual.com (Bridgenews) Wed 6/20: [B] FERC order seen having little= =20 effect on US generator profits Individual.com (PRnewswire) Wed 6/20: SCE Unveils Rotating Blackout Web S= ite and Public Notification Plan=20 Individual.com (AP) Wed 6/20: Edison CEO/ Ruling Hasn't Helped NY Times Wed 6/20: At Last Action on California (Editorial) NY Times Wed 6/20: Regulators' Order Could Bring Broad California Power= =20 Accord Wash. Post Wed 6/20: Davis Finds Hope in Calif. Power Crunch NY Times Wed 6/20: The Lesson of When to Give Aid to Free Markets --- Weather an early test for fee caps: Any severe jump in prices will likely b= e=20 curbed experts say. By Dale Kasler Bee Staff Writer (Published June 20 2001)=20 California electricity prices have shot back up recently potentially posin= g=20 an early test of a new federal price-control plan that takes effect today.= =20 Warm weather has sent wholesale prices doubling this week partially=20 reversing a dramatic slide that had some state officials believing they'd= =20 tamed the wildly unpredictable California electricity market.=20 The rebound in prices would be expected said Arthur O'Donnell editor of= =20 the California Energy Markets newsletter. It's 110 degrees in Phoenix and= =20 it's 100 degrees (in Sacramento) and points in between.=20 Prices this week moved back above $100 a megawatt hour about double what= =20 they were last week -- although well below the roughly $300 suppliers were= =20 charging California in mid-May. Prices showed signs of stabilizing Tuesday= =20 analysts said.=20 Experts said the Federal Energy Regulatory Commission's new price-mitigatio= n=20 plan is likely to curb the most severe price spikes. This will eliminate t= he=20 astronomical prices said Severin Borenstein director of the University o= f=20 California Energy Institute.=20 But the plan probably won't bring California a cascade of cheap power=20 either.=20 Prices likely will bump up constantly against FERC's new price caps which= =20 will fluctuate from time to time and they're not likely to go much below t= he=20 caps unless there's a significant glut of energy said Peter Stiffler of th= e=20 energy consulting firm Economic Insight Inc.=20 Traders will always trade in at the price ceiling Stiffler said. They'r= e=20 going to offer power at the highest price they can.=20 The fluctuating FERC caps are tied to the production costs of the=20 least-efficient most-expensive generating plant operating in California wh= en=20 supplies are tight and an official power alert is declared by the state's= =20 Independent System Operator which runs most of the power grid. When there= =20 isn't a power alert prices can't exceed 85 percent of the price establishe= d=20 during the most recent alert.=20 FERC said the system would begin today with a cap of $108.49 a megawatt hou= r=20 but would rise to $127.64 if a power alert is declared.=20 But the cap can fluctuate significantly. Under the old FERC plan the price= =20 cap in May was set at $267 a megawatt hour. The old plan was similar to the= =20 new system but applied only to California and only kicked in during power= =20 alerts.=20 With the caps flexible generators could have incentives to withhold power = at=20 some plants in order to raise the caps said Stanford University economist= =20 Frank Wolak.=20 The FERC plan still doesn't solve the problem of withholding said Wolak= =20 chairman of the ISO's market surveillance committee.=20 Wolak also said he's afraid FERC will let power generators exaggerate their= =20 costs in order to bump up the caps.=20 The good news is they seem to be more serious Wolak said of the=20 oft-criticized commissioners. But given how many times we've been taken in= =20 I'm wary.=20 In addition generators will be allowed to exceed the price caps if they ca= n=20 justify it to FERC officials. Borenstein said FERC in the past has allowed= =20 generators to justify just about every price level imaginable and he's=20 suspicious that the commission will let generators do the same in order to= =20 evade the new price controls.=20 State officials while cautiously optimistic about the plan were upset tha= t=20 FERC will allow a 10 percent price premium on electricity because of the ri= sk=20 of selling to the California market.=20 We recognize that the risk of nonpayment in California continues to be=20 greater than in other states the commission said in its written opinion= =20 released late Tuesday.=20 Gov. Gray Davis' spokesman Steve Maviglio called the premium ludicrous=20 because the state Department of Water Resources has been buying electricity= =20 ever since the state's troubled utilities exhausted their credit in=20 mid-January.=20 The state is as creditworthy a buyer as you can get Maviglio said.=20 Experts said the plan also won't correct the state's energy imbalance.=20 None of this is going to have much effect on blackouts Borenstein said.= =20 This is solving part of the problem I'm worried people will think=20 everything has been solved.=20 The emphasis now has to be on getting California to conserve he added.= =20 A spokesman for power generators Gary Ackerman said the price controls=20 could worsen shortages this summer and will discourage generating firms fro= m=20 investing in the new power plants the West desperately needs.=20 Builders are going to sit on the fence and think about this said Ackerma= n=20 head of the Western Power Trading Forum.=20 Acting in the face of mounting political pressure and unrelenting criticism= =20 from California FERC voted Monday to impose round-the-clock price controls= =20 throughout the 11-state Western region.=20 The FERC plan replaces a three-week-old plan that applied only to Californi= a=20 and took effect only when power reserves fell to below 7 percent of demand= =20 and an official power alert was declared.=20 By extending the plan to the entire West experts said the commission=20 probably put an end to the phenomenon known as megawatt laundering in=20 which power was shipped out of California and then re-imported. Imported=20 power wasn't subject to the old price controls.=20 The new controls said consultant Stiffler significantly narrow the abili= ty=20 of a trader to move power around and play the market.=20 The Bee's Dale Kasler can be reached at (916) 321-1066 or dkasler@sacbee.co= m. State to borrow up to $5 billion to buy energy=20 By Emily Bazar Bee Capitol Bureau (Published June 20 2001)=20 State Treasurer Phil Angelides announced Tuesday that he will borrow up to = $5=20 billion to pay for future power purchases a move he said was necessary to= =20 avoid a continued drain on California's budget and cuts in other state=20 programs.=20 Since mid-January energy purchased by the state Department of Water=20 Resources on the spot market and under long-term contracts has come out of= =20 the state's general fund the source of most state spending.=20 Once the loan becomes final by the end of next week however energy will b= e=20 purchased with the proceeds.=20 Made possible by an emergency order from the governor the loan ultimately= =20 will be paid off by customers of the state's investor-owned utilities throu= gh=20 their electricity rates.=20 In essence it stops the general fund bleeding Angelides said.=20 The state has so far committed $8.2 billion from the general fund to=20 electricity purchases. Of that amount Angelides said the Department of Wat= er=20 Resources has actually spent about $6.1 billion through June 12 on power=20 purchases and has received about $900 million back from customers'=20 electricity rates.=20 Officials expect the loan to finance power purchases through September whe= n=20 they plan to issue up to $13.4 billion in revenue bonds.=20 The bonds will reimburse the general fund and and pay off the loan.=20 This gives the state some more running room some more cushion in case=20 anything goes awry with the bond sale to make sure ... the state does not r= un=20 out of general fund money jeopardizing education programs law enforcement= =20 programs children's and health services the Democratic treasurer said.= =20 Angelides said he has obtained firm commitments for $3.5 billion from JP=20 Morgan and Lehman Brothers at a blended interest rate of about 4.5 percent.= =20 If the long-term bonds are not issued by Oct. 31 the interest rate would= =20 climb to about 7 percent.=20 Lawmakers initially had hoped to close the short-term loan in May and float= =20 the long-term bonds shortly thereafter. However Republicans in the state= =20 Legislature balked at the plan forcing the delay of the bond sale until=20 mid-August.=20 Rather than wait Gov. Gray Davis invoked his emergency powers to allow for= =20 the loan and circumvent the delay.=20 Assembly Republicans don't mind that the governor used his emergency powers= =20 to expedite the loan said James Fisfis a spokesman for the caucus. Instea= d=20 he said they're concerned the loan could backfire and hurt Californians.= =20 If the larger bond offering falls through the penalties and added interes= t=20 could add up on ratepayers' bills he said.=20 But Angelides argued that the loan would benefit ratepayers on several=20 fronts: Power generators can no longer argue the state should pay a credit= =20 premium on electricity he said and for the most part will not be able to= =20 walk away from long-term energy contracts that have provisions requiring th= e=20 Department of Water Resources to obtain external financing by July 1.=20 Outside the Legislature the announcement drew praise from financial analys= ts=20 who had criticized the state for buying power with taxpayer money.=20 In late April for instance Standard & Poor cited fears over the state's= =20 mounting power costs when it downgraded California's credit rating on state= =20 bonds.=20 But S&P managing director Steven Zimmermann called the governor's executive= =20 order a step in the right direction.=20 We're very happy Zimmermann said. We were very anxious for the state to= =20 take the general fund out of the energy purchasing position it's been in.= =20 The Bee's Emily Bazar can be reached at (916) 326-5540 or ebazar@sacbee.com= . Dan Walters: Once burned lawmakers are very wary of Davis-Edison agreement (Published June 20 2001)=20 The Capitol's politicians rarely attempt to resolve big complicated policy= =20 issues preferring to occupy their time with relatively trivial matters --= =20 which also tend to be the priorities of well-heeled and generous interest= =20 groups.=20 And when they even acknowledge a need to address something big they'll oft= en=20 just nibble at the edges rather than confront the underlying conflicts=20 squarely. That's been the pattern on water transportation population grow= th=20 and public education to name but a few of many examples.=20 The Capitol completed just one comprehensive or seemingly comprehensive b= it=20 of policymaking during the last quarter-century. But the issue on that=20 occasion was electric utility deregulation which has exploded into an ener= gy=20 crisis of monumental proportions. And that experience is having a paralyzin= g=20 effect on the Capitol's denizens.=20 Some Capitol old-timers call it 1890 disease named after the number of t= he=20 1996 bill that created California's fatally flawed system of pricing electr= ic=20 power. The legislation was written largely by lobbyists for affected intere= st=20 groups and then presented to the full Legislature for take-it-or-leave-it= =20 approval. The measure was passed without a single dissenting vote even=20 though only a few lawmakers even began to understand its ramifications.=20 It was a huge failure of the legislative process virtually a dereliction o= f=20 duty and those who participated have been doing some fancy explaining. But= =20 given the history both veteran legislators and those who came to the Capit= ol=20 after 1996 are very leery about putting their names on additional pieces of= =20 energy policy that could backfire if the real-world outcome is markedly=20 different from the purported effects.=20 One example is the $43 billion in long-term energy supply contracts=20 negotiated by Gov. Gray Davis' administration to end the state's dependence= =20 on volatile spot market prices. When the long-term contracting program was= =20 authorized by the Legislature early this year it was on the assurances of= =20 the administration that it could obtain large quantities of power at cheap= =20 prices. But by the time that the contracts were made final months later t= he=20 average price was 25 percent higher than what was stated earlier while the= =20 spot market had fallen dramatically. Now the long-term contracts that seeme= d=20 like such a good idea in January and February could become financial=20 albatrosses.=20 An even more telling example is the deal Davis made with Southern Californi= a=20 Edison to keep the utility from joining Pacific Gas and Electric in=20 bankruptcy. The utilities accumulated at least $13 billion in debts in six= =20 months buying power at prices much higher than they were allowed to=20 recapture from their customers. Consumer groups are denouncing the Edison= =20 deal as a corporate bailout that would impose multibillion-dollar burdens o= n=20 customers while imposing virtually no financial onus on Edison or its=20 creditors. And the deal's critics are pouncing on legislators' reluctance t= o=20 do something that might haunt them later -- especially in 2002 a critical= =20 election year.=20 Five years ago lawmakers and the utilities foolishly foisted this=20 deregulation scheme onto California consumers and now the governor and=20 Edison expect the ratepayers to pay billions more to save the utilities fro= m=20 their own mismanagement and bad policy decisions consumer gadfly Harvey= =20 Rosenfield said Tuesday as legislative hearings opened on the Edison deal.= =20 This time the whole world is watching the Legislature.=20 Harry Snyder of Consumers Union echoed Rosenfield's pledge to hold=20 legislators accountable. It looks a lot like 1890 Snyder said. It's too= =20 big (and) this is the same process all over again.=20 The sheer complexity and potential ramifications of the deal are weighing= =20 heavily on lawmakers. This is not a Mother's Day resolution Senate Energ= y=20 Committee Chairwoman Debra Bowen said wryly as the hearings began. Davis an= d=20 Edison lobbyists are pulling out all the stops but legislators are very= =20 very nervous about taking another big step that could generate public=20 backlash.=20 The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.c= om . Senate Democrats lay back to see if FERC action provides rate relief=20 By Finlay Lewis COPLEY NEWS SERVICE=20 June 19 2001=20 WASHINGTON =01) Key Senate Democrats called a truce Tuesday in the politica= l=20 wars raging over California's energy crisis as they adopted a wait-and-see= =20 posture over the Federal Energy Regulatory Commission's latest order=20 restricting electricity prices across much of the West.=20 Senators of both parties expressed relief over FERC's action on Monday. But= =20 Sen. Dianne Feinstein D-Calif. said she was skeptical that the order woul= d=20 end wholesale price manipulation by power providers or result in refunds to= =20 overcharged ratepayers.=20 Feinstein and Sen. Gordon Smith R-Ore. have prepared legislation seeking = a=20 much tighter pricing formula than the one FERC used. But she asked that the= ir=20 bill be set aside temporarily in deference to the agency's action.=20 I think we should wait and see what happens Feinstein said during a Sena= te=20 Energy and Natural Resources Committee hearing on the FERC order.=20 Democrats on the committee pressed FERC Chairman Curtis L. Hebert and the= =20 four other commissioners on why they had not acted sooner to control the=20 daily price turbulence in the California energy market. A market-interventi= on=20 order issued by FERC in April was designed to cope only with energy-supply= =20 emergencies despite pleas by California Gov. Gray Davis and other Californ= ia=20 Democrats for more drastic measures.=20 It's time to stop blaming and start problem-solving said Hebert a=20 Republican appointed chairman by President Bush.=20 Hebert noted that electricity prices on the volatile spot market have dropp= ed=20 considerably since the April order. Prices on the energy futures market hav= e=20 also tumbled as have natural gas prices =01) a key component in the cost o= f=20 electricity.=20 On Monday FERC unanimously ordered around-the-clock restraints on wholesal= e=20 electricity prices in California and 10 neighboring states over the next 15= =20 months.=20 As was the case with the April measure prices will be pegged to the costs = of=20 the least efficient power provider when reserves in California fall below 7= =20 percent. But when reserves are more plentiful the prices will drop to 85= =20 percent of the level established during supply shortages.=20 The order also provides for a 22-day period involving arbitration and revi= ew=20 by an administrative law judge for resolving price-gouging allegations and= =20 providing refunds in cases of improper pricing.=20 Adamantly opposing price controls earlier FERC acted after coming under=20 intense pressure from lawmakers of both parties. Republicans said they were= =20 worried that their GOP colleagues in California would have been blamed and= =20 possibly imperiled at the polls if FERC had failed to act.=20 Bush who also took a hard line against price caps blessed FERC's action= =20 after it was taken.=20 Hebert criticized the bill advanced by Feinstein and Smith as an attempt to= =20 solve California's problem by bureaucratic fiat.=20 Their measure would calculate wholesale electricity prices based on the=20 reported production costs of the individual generators with an added=20 allowance for a profit margin.=20 Hebert argued that the mitigation price that FERC will establish is not = a=20 blunt arbitrary figure that bears no resemblance to market conditions and = is=20 subject to political pressures and whims.=20 Meanwhile Commissioner William Massey made it clear that he harbors=20 misgivings about the FERC measure although he supported it.=20 He said the agency should have acted earlier to avoid the subsequent=20 carnage in California has failed to provide guidelines that would assure= =20 refunds to overcharged consumers and has acted questionably in allowing pow= er=20 providers to impose a 10-percent surcharge to cover credit-worthiness risks= .=20 Massey a Democrat who has consistently criticized his colleagues for movin= g=20 too slowing in the California crisis also said he wondered whether the ord= er=20 would provide an unintended incentive for generators to continue using=20 inefficient units in order to assure higher profit margins for their more= =20 modern facilities.=20 Sen. Barbara Boxer D-Calif. said she would propose legislation later this= =20 week designed to assure refunds to customers who have had to pay unfair=20 prices for their electricity.=20 If FERC won't do it ... Congress should Boxer said.=20 A spokesman for Sen. Jeff Bingaman D-N.M. chairman of the committee said= =20 Bingaman agreed with Feinstein on the need for a time-out while the FERC=20 order is being implemented.=20 Gov. Davis will testify today (6/20) before the Senate Government Affairs= =20 Committee which is investigating FERC's role in the crisis. Hebert and the= =20 other commissioners will also appear.=20 House panel erases Bush energy cuts=20 By Alan Fram ASSOCIATED PRESS=20 June 19 2001=20 WASHINGTON =01) A House subcommittee voted Tuesday to spend $1.2 billion mo= re=20 next year than President Bush proposed for energy and water programs=20 underlining lawmakers' sensitivity to the West's power problems and their= =20 desire for home-district projects.=20 The $23.7 billion measure approved by voice vote by a panel of the House= =20 Appropriations Committee is normally one of the more routine of the 13=20 annual spending measures Congress must approve. But with this year's=20 escalating battle between Bush and Democrats over energy policy the=20 measure's profile has been raised.=20 The bill would provide $18.7 billion for the Energy Department $641 millio= n=20 more than Bush requested and $444 million more than this year. Fiscal 2002= =20 which the bill covers begins Oct. 1.=20 It also includes nearly $4.5 billion for the Army Corps of Engineers and th= e=20 hundreds of water projects it has under way across the country $568 millio= n=20 more than Bush proposed but $73 million less than this year.=20 The measure was approved shortly after top members of the committee met wit= h=20 Bush at the White House.=20 Participants said Bush and the lawmakers reaffirmed their goal of keeping t= he=20 price tag of the 13 bills to $661 billion which is one-third of the overal= l=20 federal budget. That would be a 4 percent boost over 2001 which many=20 Democrats =01) and some Republicans in private =01) say is too low.=20 He said there would be attempts to raise this as we go through the process= =20 and let's stick with him said Rep. Sonny Callahan R-Ala. chairman of th= e=20 energy and water subcommittee.=20 Illustrating the pressures Republicans face David Sirota spokesman for th= e=20 Democrats on the committee said the bill lacked the new spending needed fo= r=20 renewable energy and other programs that could help alleviate power=20 shortages.=20 Under the bill approved Tuesday renewable energy programs would get $377= =20 million $100 million more than Bush wanted and $1 million more than this= =20 year. Nuclear energy basic energy sciences biological and environmental= =20 research and a study of whether spent nuclear fuel should be stored at a=20 Nevada site would all get about what Bush proposed.=20 The bill's $7.03 billion for environmental cleanups is $699 million more th= an=20 Bush proposed. Programs aimed at containing the nuclear arsenals of former= =20 Soviet states would get $845 million $71 million more than Bush's plan.=20 Members voted to hold the brief meeting behind closed doors after citing th= e=20 national security sensitivity of publicly discussing some of the nuclear=20 weapons programs covered by the bill.=20 Davis Regulators Face Off at Hearing From Reuters=20 ?????WASHINGTON -- California Governor Gray Davis a Democrat today blamed= a=20 Republican-led energy regulatory agency for not doing enough to help his=20 energy-starved state and demanded refunds of $6.7 billion for alleged=20 price-gouging by power generators. ?????Davis whose political future has been linked to his state's electrici= ty=20 woes was testifying at a Senate hearing with members of the Federal Energy= =20 Regulatory Commission. ?????The hearing marked the first time that Davis met face to face with all= =20 five FERC commissioners. ?????FERC regulates interstate electricity markets and has jurisdiction to= =20 order refunds by power generators found to have overcharged utilities. ?????Earlier this week the agency led by a Republican majority rejected= =20 Davis' pleas for strict caps on prices that soared above $400 per megawatt= =20 hour last month. ?????Sen. Joseph Lieberman the former Democratic vice presidential nominee= =20 heads the Senate Governmental Affairs Committee that quizzed the FERC=20 commissioners and Davis on efforts to stabilize the chaotic Western=20 electricity market. ?????Davis accused FERC of failing to act aggressively against alleged=20 price-gouging by out-of-state generators. ?????To date not a single penny in refunds has been returned to=20 Californians Davis said. It is unconscionable for the generators to prof= it=20 from their egregious overcharges. FERC must move quickly to enforce the law= =20 and order the energy companies to give back the money. ?????Davis said the state is owed refunds of at least $6.7 billion.=20 California's grid operator has estimated that from May 2000 to May 2001=20 power generators charged the state nearly $9 billion more than a competitiv= e=20 market would warrant he said. ?????California the nation's most populous state has been hit with a seri= es=20 of rolling blackouts the bankruptcy of its largest utility and an economi= c=20 slowdown since the power crisis began last year. ?????The state is expected to convene a criminal grand jury to investigate= =20 whether some power generators withheld supplies shut down plants or=20 exploited the bidding process to drive up prices. Out-of-state generators= =20 deny any illegal activity saying the high prices simply reflect supply=20 shortages. ?????Today also marks the day that FERC's newly expanded price mitigation= =20 program goes into effect in all 11 Western states with a wholesale price=20 limit of $107.9 per megawatt hour linked to a market formula. The plan had= =20 previously applied only to California during emergency power outages. ?????Since FERC's action earlier this week Senate Democrats dropped a=20 legislative effort to strictly cap electricity prices in the West. However= =20 California Democrats in the House were still trying to force a full vote on= a=20 package of energy amendments including a price cap. ?????The Bush administration and many Republicans oppose price caps=20 contending they would discourage more power production. ?????Separately today the U.S. Energy Department issued a study that=20 supported the White House's view that strict price caps would hurt not hel= p=20 California. ?????The study found California faces about 113 hours of rolling blackouts= =20 this summer a level that would double if wholesale prices were capped at= =20 $150 per megawatt because some 3600 megawatts of generating capacity would= =20 shut down. An alternative approach of setting a price cap based on producti= on=20 costs plus $25 per megawatt would delay or close about 1300 megawatts of= =20 capacity scheduled to be built in the state according to the study. ?????However lawmakers from both political parties have scrambled for some= =20 kind of solution to address the shortages in California well before the=20 congressional elections next year. ?????The FERC plan expands an existing price mitigation program in=20 California to 10 other Western states. The plan which runs through Septemb= er=20 2002 means that during nonemergency periods the price for wholesale power= =20 cannot exceed 85 percent of the cost of electricity sold during a Stage 1= =20 power shortage emergency in California. ?????A Stage 1 emergency is declared when electricity supplies fall below 7= =20 percent of demand on the Western power grid. ?????The plan also imposes a 10 percent surcharge on all power sales into= =20 California as financial protection for generators reluctant to sell to the= =20 state's financially weak utilities. ?????Davis was due to meet the two newest FERC commissioners Patrick Wood = of=20 Texas and Nora Brownell of Pennsylvania today. Both are former utilities= =20 regulators in states that successfully deregulated their power industry and= =20 nominated to the agency by President Bush. Copyright 2001 Los Angeles Times=20 NEWS ANALYSIS Energy on Agenda but Issue Is Blame=20 Politics: Gov. Davis will try to sway voter anger toward the GOP as he face= s=20 a Senate panel.=20 By RONALD BROWNSTEIN Times Political Writer=20 ?????WASHINGTON--When California Gov. Gray Davis testifies at a high-profil= e=20 Senate hearing today the issue formally on the table will be the expanded= =20 electricity price controls that federal regulators approved this week. But= =20 the session's political subtext will be the escalating struggle between Dav= is=20 and national Republicans to determine where California voters look for=20 solutions--and blame--for the state's power woes. ?????In both California and Washington Republican strategists believe Davi= s=20 is trying to manufacture a succession of conflicts with the White House tha= t=20 will allow him to run in 2002 as much against President Bush as against=20 whomever the state GOP nominates in the gubernatorial race. In return=20 Republicans are trying to shift the focus back toward Davis--most=20 aggressively through a California-wide television advertising campaign=20 organized by Scott Reed a former executive director of the Republican=20 National Committee. ?????Our goal is to get the focus back to Sacramento where it belongs= =20 Reed said. ?????Both sides see the same prize in this tug of war: the opportunity to= =20 determine where most Californians direct their anger during what could be a= =20 long hot summer of power shortages. ?????The situation is that the public's minds are not made up on this=20 issue--whether it is Sacramento or Washington who has acted too little too= =20 late said Mark Baldassare a pollster at the independent Public Policy=20 Institute of California. That gives both sides an opportunity to get their= =20 messages out. The stakes are fairly high in terms of how the public in=20 California ends up assessing blame over the next few months. ?????A Slight Uptick in Davis' Popularity ?????Overall Davis' political situation appears to be stabilizing. After= =20 months of runaway power costs the prices the state pays for wholesale=20 electricity are falling and new plants will come online next month. And=20 following a free fall in private polls Davis has seen his numbers tick bac= k=20 up slightly. Similarly a poll financed by independent power generators=20 showed that in mid-June for the first time in months Californians were=20 becoming slightly more confident that the crisis is easing. ?????Within the state Capitol Davis is asserting himself demanding that= =20 lawmakers hold hearings on his rescue plan for Southern California Edison. = On=20 Monday he released details of a similar plan for San Diego Gas & Electric.= =20 Last week he announced an agreement that is likely to increase generation = by=20 alternative energy producers who account for about a fourth of the state's= =20 supply. ?????This guy is changing said state Sen. Steve Peace (D-El Cajon) who = a=20 few months back had been urging that Davis take a more aggressive stance on= =20 the crisis. There is a difference in his demeanor and focus. ?????Yet the energy crisis still looms as a vast cloud over a reelection=20 campaign that once looked like a stroll on the beach. ?????The paradox for Davis is that the substantive victory for pricecontrol= =20 advocates at the Federal Energy Regulatory Commission meeting this week may= =20 complicate his political goal of maintaining a heavy focus on Washington.= =20 Though Davis and some congressional Democrats portrayed FERC's decision as= =20 insufficient it appears to have lanced the pressure for federal legislatio= n=20 to impose the tighter price controls that Davis supports.=20 ?????Sen. Dianne Feinstein (D-Calif.) a principal sponsor of that bill on= =20 Tuesday announced she would shelve the measure for six months to give the n= ew=20 FERC plan time to work. ?????As a result the political effect of the FERC ruling could be to shift= =20 the focus away from Washington back toward decisions in Sacramento which i= s=20 exactly what Republicans prefer. Gray Davis is the dog that finally caught= =20 the car said Dan Schnur a San Francisco-based GOP consultant. Davis is= =20 going to keep screaming about price caps and refunds but now Republicans c= an=20 point to substantive action. ?????Davis: 'Much More They Should Do' ?????For months Davis has criticized Bush for refusing to support=20 electricity price controls and other measures that the governor says could= =20 ease California's energy crunch. At almost every opportunity Davis offers= =20 the same message: California is taking the steps it needs to but Washingto= n=20 has failed to help enough. That was precisely Davis' message Monday when FE= RC=20 significantly expanded the limited price caps it had imposed previously. ?????While saying that FERC had finally taken a step in the right=20 direction Davis added: There is much more they should do--including=20 providing refunds to California for alleged overcharges. The overall tone o= f=20 Davis' statement was much more skeptical about FERC's action than the remar= ks=20 from Feinstein who described the decision as a giant step forward. ?????Aides say Davis plans to repeat that two-part message in his appearanc= e=20 today before the Senate Governmental Affairs Committee chaired by Sen.=20 Joseph I. Lieberman (D-Conn.). In his testimony and in a round of schedule= d=20 television appearances Davis will demand that FERC order refunds in the=20 range of $5 billion to $6 billion to the state aides said. Davis also will= =20 distribute to every member of Congress a 177-page book chronicling the=20 state's response to the crisis. ?????Inside the Bush White House some officials see in Davis' cool respons= e=20 to FERC's decision more evidence that the governor is determined to use the= =20 White House as a foil in his reelection campaign. The prevailing view one= =20 official said is that no matter what concessions the administration offer= s=20 Davis will immediately raise the bar and demand something else--the way he= =20 did by talking about rebates as soon as FERC offered tougher price controls= . ?????That is Davis' M.O. said one official involved in the White House's= =20 energy strategy. He asks the administration to do something the=20 administration does it and then he attacks the administration for not doin= g=20 enough. . . . He needs someone to blame. ?????Davis aides reject that characterization arguing that the governor is= =20 merely representing the state's interests against an administration that th= ey=20 maintain is favoring energy producers over consumers. But Davis advisors=20 acknowledge that they have used focus groups to test campaign messages that= =20 pin the blame for the energy crunch primarily on Davis' Republican=20 predecessor Pete Wilson and a Republican president who has failed to sto= p=20 his rich friends in the energy industry from gouging consumers one aide= =20 said. ?????You don't have to tell people in focus groups more than once how this= =20 is connected the Davis aide said. ?????Gubernatorial Rivals Are Free of Blame ?????Baldassare the independent pollster notes it may be especially=20 imperative for Davis to keep Bush's energy decisions in the spotlight becau= se=20 none of his potential Republican opponents in 2002--California Secretary of= =20 State Bill Jones former Los Angeles Mayor Richard Riordan or businessman= =20 William E. Simon Jr.--is easily tagged with complicity in the problem. Non= e=20 of them were really involved in the decision-making over deregulation=20 Baldassare said. The only one else to blame in a political sense is=20 Washington and the Bush administration. ?????The new independent advertising campaign against Davis was inspired=20 largely by the fear of that strategy succeeding--damaging the standing in= =20 California not only of Bush but also of other Republicans particularly tho= se=20 in Congress. Reed whose American Taxpayers Alliance is funding the ads sa= id=20 he decided to launch the campaign after Davis appeared to gain the upper ha= nd=20 in the media debate following Bush's visit to California late last month. ?????The Bush trip really changed the terms of debate about Davis' problem= =20 and made it more of a possible national Republican problem Reed said. Th= e=20 entire terms of debate turned around and was focused on the issue of price= =20 caps as opposed to negligence on Davis' behalf. Our group is attempting to = go=20 out and engage Davis. ?????To engage Davis Reed's group which has not revealed its donors is= =20 spending what he said would be $1.5 million on an initial ad criticizing=20 Davis this week though a spot check of TV stations around the state=20 indicated a far more modest buy. Reed said the group is planning to air a n= ew=20 ad as soon as this week. ?????Democrats plan to answer the ads with attacks of their own and will be= =20 filing complaints with the IRS and other federal agencies about the anonymo= us=20 funding of the Reed ad. ?????Today's Senate hearing will give Davis another chance to respond to th= e=20 GOP and make his case for greater help from Washington. But Lieberman aides= =20 acknowledge the hearing is likely to be much less confrontational than it= =20 would have been if FERC had not acted Monday. The agency's decision change= d=20 the dynamic the aide said. ?????That assessment may apply not only to the conflict between FERC and it= s=20 critics but also equally to the hostilities between Davis and the White Hou= se. ---=20 ?????Times staff writers Dan Morain in Sacramento and Mark Z. Barabak in Lo= s=20 Angeles contributed to this story. Copyright 2001 Los Angeles Times=20 Blackout Forecasts' Dark Side=20 If optimists are wrong and the power runs out California's energy crisis= =20 could quickly cost lives and cripple the economy.=20 By JENIFER WARREN Times Staff Writer=20 ?????It's here. Summer 2001 the blackout season is only a day away. ?????Already Californians anticipate power outages when temperatures rise. = By=20 August the occasional annoyances endured so far--stoplights gone dark=20 computers air conditioners and elevators idled--could seem almost quaint. ?????Gov. Gray Davis insists we needn't worry. Four large new power plants= =20 are firing up soon he said and government's best and brightest are lockin= g=20 up still more megawatts to help meet our peak summer need. Californians=20 Davis predicts will valiantly heed his call to conserve helping the state= =20 survive the hot months no sweat. ?????With luck he'll be right. Power prices have stabilized and some ener= gy=20 analysts are wondering whether California may have tamed the blackout beast= . ?????But what if those plants don't get built in time people don't trim=20 their electricity use 7% and energy imports are more meager than expected? ?????And what if the state gets hit by a summer that is not moderately hot= =20 as Davis bets but blistering record-setting hot? ?????Government experts who ponder such questions don't expect disaster in= =20 the coming months. But they are planning for it nonetheless. ?????At best they say Californians can expect some gridlocked=20 intersections an occasionally overloaded 911 system perhaps some business= =20 bankruptcies certainly inconvenience. At worst the Western power grid cou= ld=20 crash causing uncontrolled blackouts that might lead to looting=20 contaminated water supplies even civil unrest. ?????How bad could this summer get? said state Sen. Joe Dunn (D-Santa Ana= ).=20 This summer could be the worst disaster to ever hit the state of Californi= a. ?????Imagine it's a Thursday morning in the third week of July. Relentless= =20 heat grips California the curse of a stubborn high-pressure ridge that jus= t=20 won't budge. ?????As air conditioners from Redding to Chula Vista lumber to life manage= rs=20 of the state's power grid in Folsom gulp their third and fourth cups of=20 coffee stare at a bank of computers and begin to fret. ?????Demand is jumping. Supply is static Canada and Arizona have nothing t= o=20 sell. It's looking tight. ?????Thirty minutes later the picture is gloomier. A brush fire shuts down= =20 transmission lines near Fresno squeezing supply in the Central Valley. In= =20 the Bay Area the unusual heat drives demand well past projections. ?????By noon things look bleak. Operators of the Diablo Canyon nuclear powe= r=20 plant near San Luis Obispo have cut output by 80%. The trouble? Chunks of= =20 kelp have lodged in one of the plant's seawater intake valves creating a= =20 clog like one that plagued the facility in January. ?????With a chorus of groans the grid's keepers scour the market for power= =20 to offset the Diablo loss. No luck. As the mercury climbs and the Golden=20 State economy roars into full swing electricity consumption ticks upward= =20 minute by minute. And when managers of a power plant near Long Beach cut=20 output because of a cracked turbine everyone knows what it means. ?????Alert the utilities. It's lights out California for the fourth day i= n=20 a row. ?????Dr. J. Michael Leary dreads blackouts--not personally but=20 professionally. Leary is an emergency room physician in the desert city of= =20 Rancho Mirage. When air conditioners go on the blink there the=20 victims--scores of them mostly old folks--wind up in his ER. ?????In a normal year 75% of his emergency patients are geriatrics. Like= =20 infants the elderly are unusually vulnerable to the heat. When blackouts= =20 hit they are most at risk. ?????It's as if you lived in Maine and they turned the heat off in January= =20 Leary said. This is an extreme environment we live in. The effects can be= =20 devastating. ?????Many desert seniors are on fixed incomes and live in mobile homes som= e=20 of them poorly insulated boxes that turn into ovens under the brutal summer= =20 sun. Take away the air conditioning and the humans inside start baking qui= ck. ?????For Leary the specter of continual back-to-back blackouts in=20 July--and some predict in June and August too--conjures images of an=20 82-year-old man living alone in one of those mobile homes taking medicati= on=20 for heart disease. The cardiovascular drugs plague the man with numerous si= de=20 effects one inhibits his body's ability to cool itself. ?????When a person gets overheated body temperature eventually rises=20 uncontrollably. Then comes a nasty spiral of effects and pretty soon you = go=20 into shock Leary said. Everything just shuts down. ?????On average each year 371 Americans die from heat-related causes more= =20 than the number killed by earthquakes tornadoes hurricanes lightning and= =20 floods combined. In 1995 a record hot spell in Chicago killed 465 people.= =20 Eleven Californians died from the heat in 1998. ?????A new report by the United Seniors Assn. predicts that more than half = a=20 million elderly Californians could need hospitalization for heat-related=20 ailments this summer.=20 ?????Some communities have laid plans for cooling shelters wading pools an= d=20 other measures to provide relief. But will all who need help get it? Or get= =20 it in time? ?????Out in the desert paramedics expect a crush of 911 calls when the pow= er=20 goes out and the ill frail and frightened seek help. Leary and others at= =20 Eisenhower Medical Center will be waiting armed with ice packs cooled IVs= =20 and ventilators. ?????I am very very worried the doctor said. I think we'll see a great= =20 toll in human suffering even mortality. ?????California's tomato processors are no less anxious. They wash cook= =20 peel chop mash and can about 1 million tons of tomatoes a week from July = to=20 October--enough to account for half the world's supply. For them a string = of=20 unexpected power losses could mean economic ruin in a matter of days. ?????The reason lies in the peculiar nature of food processing--a sterile= =20 system instantly contaminated if the power fails and the plant's precise=20 temperature is disturbed. ?????Once a batch of tomatoes is tainted it must be thrown out--all 50000= =20 pounds. The plant must then be sanitized a painstaking process that takes= =20 about 36 hours. ?????If you get hit by blackouts every third day for say two weeks you'= re=20 starting stopping cleaning restarting--it's a nightmare said Jeff Boes= e=20 president of the California League of Food Processors. You could lose thre= e=20 batches and be out $40 million before you knew what hit you. ?????Meanwhile farmers with still more truckloads of tomatoes line up=20 outside the plant waiting to be paid for their crop: If we can't process= =20 them the farmers have spent an entire season growing them for nothing=20 Boese said. ?????In Sonoma County the object in peril is the chicken. Egg producers=20 equip their laying houses with fans and swamp coolers to keep the hens=20 comfortable. Power is also needed to run giant refrigerators filled with eg= gs. ?????In a blackout those hens can overheat in no time said Rich Matteis= =20 of the Pacific Egg and Poultry Assn. In 20 or 30 minutes you could have= =20 100000 birds die. ?????Many large producers have backup generators but they are not designed= =20 for ongoing intensive use. Will they hold up? Small-scale egg producers=20 often have no backup power at all. ?????Hundreds of other California businesses could suffer if summer shapes = up=20 as bad as some predict. ?????The Valero Refining Co. of California northeast of San Francisco=20 produces 115000 barrels of gasoline a day. Because restarting a refinery i= s=20 a complicated task two or three blackouts close together could prompt=20 officials to shutter it until electricity supplies stabilize--costing=20 California about 10% of its gasoline supply. ?????At a Berkeley medical laboratory doctors say power losses to their=20 freezers could destroy bone marrow needed to give young leukemia patients= =20 lifesaving transplants. The state's 400 dialysis centers where patients=20 without kidney function go to have their blood cleansed every other day ar= e=20 in the same fix. Few have backup generators so when an outage hits=20 technicians must crank the machines by hand. ?????Most Californians of course face far more ordinary consequences. The= =20 scoreboards will fizzle at summer softball games joggers on treadmills wil= l=20 be stopped in their tracks electric organs will go silent leaving choirs = to=20 sing without accompaniment. ?????Parents will be asked to retrieve children from day-care centers when= =20 the lights and cooling systems conk out. Anniversary lunches may be ruined= =20 when restaurants cannot grill salmon or blend margaritas. ?????Most people will tolerate occasional disturbances psychologists say= =20 doing their part in a time of crisis. But what if such irritations become a= n=20 everyday fact of life? ?????Hundreds of essential energy users--including prisons fire=20 departments and airports--are protected from blackouts and hundreds more= =20 have applied for exemptions. That means the pool of people bearing the=20 blackout burden is shrinking so more frequent outages are likely. ?????Blackout predictions vary widely but at least one forecaster a=20 consultant for California water districts anticipates an outage almost eve= ry=20 afternoon of every workday this summer if temperatures are unusually warm. ?????Californians are accustomed to trash compactors giant-screen TVs and= =20 having the Internet at their fingertips. How much deprivation will they=20 tolerate? ?????So far the version of blackouts we've experienced hasn't looked too= =20 scary to people--it happens on a workday in the afternoon and you basical= ly=20 have to come home and reset your VCR said Dan Kammen a professor of ener= gy=20 and society at UC Berkeley. ?????But if outages become daily events and start to invade the evening=20 hours the public mood could change abruptly. ?????When there's a disaster or crisis or trauma people tend to act=20 heroically and work together said Robert Butterworth a Los Angeles=20 psychologist and trauma specialist. But the civilized behavior only lasts = a=20 short period. Then people start acting in unpredictable ways. ?????That tendency may be exacerbated Butterworth said by the nature of t= he=20 energy crisis--not a natural disaster but a man-made one. ?????People start to look for a scapegoat he said. People will look for= a=20 target and there's a tendency to strike out at whoever is closest to you. ?????One place that tendency may surface Butterworth said is on=20 traffic-clogged roads. Blackouts already have led to scores of accidents. A= dd=20 summer heat to the mix and repeat the pattern day after day at rush hour= =20 and motorists' patience could wear thin law enforcement officials say. ?????We're bracing for . . . possible acts of violence and road rage sai= d=20 Sacramento County Sheriff's Lt. Larry Saunders. ?????Lon House is the water consultant who predicts California could see=20 blackouts almost every summer weekday. Among the worries for the 440 water= =20 agencies he represents: losing the ability to pump water during wildfire=20 season. ?????I'm telling them to be ready for a major earthquake every day this=20 summer--meaning all your power is out throughout your district for multiple= =20 hours House said. ?????House insists he isn't an alarmist. But on top of the fire fears he= =20 warns that blackouts of more than a few hours would allow air into water=20 pipes contaminating supplies. If that happens Californians would be urged= =20 to boil their water until the system can be disinfected from one end of the= =20 pipe to the other. ?????Though rolling blackouts are risky they remain essentially a controll= ed=20 phenomenon occurring when and where the grid managers and utilities decide= .=20 Far more frightening--and devastating--are unexpected cascading outages th= at=20 could shut down the entire Western power grid. It happened in August 1996= =20 leaving 4 million people without power during a triple-digit heat wave. ?????The problem began when power lines in Oregon sagged into trees and shu= t=20 themselves off. That triggered a chain reaction of automatic switch-offs an= d=20 oscillating surges of energy that ultimately shut down all four of the main= =20 power arteries between California and the Pacific Northwest. ?????That robbed the system of thousands of megawatts--enough to power the= =20 city of Seattle four times over--and scattered outages across California an= d=20 six other Western states. Thousands of customers were without power for mor= e=20 than a day. ?????Though such an episode is rare California grid managers say it is mor= e=20 likely today because the system is taxed by the ever-increasing load of=20 electricity it bears. ?????The system is very dynamic and when it's heavily loaded and highly= =20 stressed like it is now the smallest little thing could cause big trouble= =20 said Kevin Bakker who oversees California's connection to the greater=20 Western power grid.=20 ?????If a massive uncontrolled outage should hit the ramifications could = be=20 dizzying said Mike Guerin chief of law enforcement for the state Office o= f=20 Emergency Services. Police departments would probably go to tactical alert= =20 guarding against looting by criminals who might take advantage of disabled= =20 alarm systems and darkened street lights. ?????In hot areas cities might convert municipal buses--parked with air=20 conditioners running--into cooling shelters Guerin said. The state would= =20 provide emergency generators to nursing homes and others in need while the= =20 California National Guard might be called into action. ?????With this kind of blackout scenario you're not worried about the=20 bologna going bad in the refrigerator Guerin said. We're talking about= =20 doctors doing surgeries on backup generators for three days. We're talking= =20 about a lot of things we don't like to think about. ---=20 ?????Times staff writers Nancy Vogel and Alexander Gronke and researcher=20 Patti Williams contributed to this story. Copyright 2001 Los Angeles Times=20 FERC Move Short-Circuits Push for Hard Price Caps=20 By RICHARD T. COOPER and JANET HOOK Times Staff Writers=20 ?????WASHINGTON--The Federal Energy Regulatory Commission's decision to=20 impose full-time price ceilings on wholesale electricity in California and= =20 the West appears to have deflated the congressional drive for a return to= =20 traditional utility regulation. ?????Sen. Dianne Feinstein (D-Calif.) calling the price mitigation syste= m=20 FERC unveiled Monday a giant step forward announced Tuesday that she is= =20 pulling back her bill to force a return to the cost of service pricing=20 system that prevailed before deregulation. Republican Sen. Gordon Smith of= =20 Oregon a co-sponsor agreed as did Sen. Jeff Bingaman (D-N.M.) chairman = of=20 the Senate Energy Committee. ?????House Democrats vowed to fight on for tougher controls but they were= =20 given little chance to succeed. ?????As a result although the political blame game will rage on the reali= ty=20 of a long ugly summer for California appears to have arrived: at least=20 several months of tears toil sweat--and fast-rising electric bills. ?????California consumers are likely to face an unpleasant paradox energy= =20 analysts said: Given present power shortages blackouts are virtually=20 inevitable this summer. And since state authorities are beginning to let= =20 high wholesale prices flow through into retail bills after months of=20 subsidies many consumers could face higher charges at the same time their= =20 lights begin to flicker. ?????Even if FERC's order succeeds and wholesale prices fall as they have= =20 begun to do in recent weeks consumers' bills are likely to rise. Since=20 retail charges lag well behind wholesale prices closing the gap will=20 probably mean a period of higher costs for consumers regardless of what=20 happens in wholesale markets. ?????There is light at the end of the tunnel energy analysts said but it = is=20 probably a year away. And reaching it they said depends in part on=20 government officials taking no action that might spook investors and disrup= t=20 present plans for expanding the region's capacity to generate and deliver= =20 more power. ?????The new FERC system which its designers said would provide temporary= =20 price relief while preserving incentives for energy investment imposes=20 cost-based curbs on wholesale prices throughout the West and covers all suc= h=20 sales not just those during periods of extreme shortages as did the order= =20 issued in April. ?????FERC Chairman Curtis L. Hebert Jr. told the committee the new system= =20 will prevent megawatt laundering and other potential abuses. He said his= =20 agency is committed to ferreting out any forms of market misbehavior 24=20 hours a day seven days a week. ?????With the apparent collapse of demands for more intervention Congress= =20 now seems ready to give FERC a year or more of leeway to see whether its pl= an=20 will curb wholesale prices and create what FERC member Linda Breathitt a= =20 Democrat called a breathing spell in which California and the West can= =20 repair their dysfunctional markets. ?????It still remains to be seen whether there can be manipulation but I= =20 think we should wait and see Feinstein said Tuesday at a Senate Energy=20 Committee meeting attended by all five FERC members. The commissioners call= =20 their new system price mitigation not price caps but Feinstein said it= =20 amounts to the same thing. ?????Whether you call it price mitigation or something else a rose is a= =20 rose is a rose said Feinstein a member of the energy committee. ?????And Sen. Barbara Boxer (D-Calif.) appearing before the committee as a= =20 witness said: I was very pleased with [Monday's] about-face by FERC. I=20 believe they have a new tone. ?????Democrats on the other side of the Capitol pledged to keep fighting fo= r=20 traditional regulation but with Republicans in control of the House the= =20 struggle appears to be largely symbolic. ?????House Democrats wanted to introduce amendments on price controls and= =20 other energy policy to a mid-year supplemental appropriation bill due to co= me=20 before the House today. However GOP leaders expected to block Democrats fr= om=20 even offering the amendments on procedural grounds. ?????The most sweeping of the amendments would set cost-based limits on=20 wholesale energy prices in the West. Rep. Henry A. Waxman (D-Los Angeles) a= nd=20 other sponsors insisted that the measure is still needed in spite of the FE= RC=20 action which he said would continue to provide windfall profits to=20 generators encourage suppliers to withhold power and do too little to=20 restrain the price of natural gas. ?????He called the FERC policy an experiment that is using California and= =20 other Western states as subjects. ?????Similarly Rep. Nancy Pelosi (D-San Francisco) said: Although the FER= C=20 decision [Monday] is a step in the right direction I am concerned it does= =20 not remove incentives for energy suppliers to withhold power drive up pric= es=20 and gouge consumers. ?????The commission went as far as it did in part because of the specter of= =20 broader price control legislation Pelosi said. They felt the heat they s= aw=20 the amendments coming and decided to act. ?????And Rep. Bob Filner (D-San Diego) in an interview Tuesday said he wi= ll=20 press ahead with legislation to impose hard price caps. I would advise the= =20 senators that after a year of dealing with these price gougers that they wi= ll=20 easily manipulate this latest order he said calling it a Swiss cheese= =20 order--full of holes.=20 ?????Feinstein's shift put House Democrats in an awkward political position= =20 because it came just as they prepared to make their big push for tougher=20 controls. But the Democrats tried to minimize the differences in legislativ= e=20 strategy. ?????She too is waiting to see if the FERC experiment works Waxman said.= =20 I'm a little more skeptical but we're both watching carefully. ?????As a political matter a Democratic leadership aide acknowledged the= =20 FERC order muddies the debate at a time when Democrats have been working ha= rd=20 to make it a defining issue--and one they had hoped would help them win=20 control of the House in the 2002 elections. ?????It's hard to describe to people what the difference is between what w= e=20 want and what FERC has done said the aide. ?????And Republicans said FERC's action had clearly taken the wind out of t= he=20 sails of price control efforts that some GOP strategists feared might have= =20 passed the House. ?????I would have thought [it would pass] last week said John Feehery= =20 spokesman for House Speaker J. Dennis Hastert (R-Ill.). But now with what= =20 FERC did it takes a lot of air out of the balloon. ?????I think the FERC action will dissipate that strong push agreed Emil= y=20 Miller a spokeswoman for House Majority Whip Tom DeLay (R-Texas). It will= =20 take the heat off. ?????House Majority Leader Dick Armey (R-Texas) said the message to Democra= ts=20 was It's time to come off your political high horse. ?????He said he wanted to keep Democrats from offering their price control= =20 amendment to Wednesday's supplemental appropriation bill because the propos= al=20 is a political statement not a policy statement. ---=20 ?????Times staff writers Megan Garvey and Richard Simon contributed to this= =20 story. Copyright 2001 Los Angeles Times=20 Plan Won't Raise Rates Davis Says=20 Edison: Governor seeks to assure Senate where Democrats say action is a=20 bailout of nearly bankrupt utility.=20 By CARL INGRAM Times Staff Writer=20 ?????SACRAMENTO--Gov. Gray Davis sought to assure the state Senate on Tuesd= ay=20 that his plan to save Southern California Edison from threatened financial= =20 collapse would work without increasing customer rates. ?????Davis sent assurances to the Senate Energy Committee through his top= =20 attorney Barry Goode who helped negotiate the controversial proposal with= =20 the utility. ?????Senate Republicans have taken a wait-and-see attitude on the plan. But= =20 they generally contend that the business of utilities belongs in the hands = of=20 private enterprise. ?????But Democrats in both houses have charged that the deal between Democr= at=20 Davis and Edison represents a state bailout of the nearly bankrupt=20 Rosemead-based utility. The analysis is shared by leading consumer activist= s. ?????At the first in a series of Senate hearings on the package which is= =20 considered all but dead in its current form Sen. Byron Sher (D-Palo Alto)= =20 voiced concerns about political problems with the plan. ?????He asked Goode who was flanked at a witness table by Edison executive= s=20 whether monthly bills of the utility's customers would increase as a=20 consequence of approval of the governor's package. ?????Our models say there will be no additional impact on the ratepayers= =20 Goode replied. ?????Other members appeared ready to pursue rate increase questions but=20 Chairwoman Debra Bowen (D-Marina del Rey) cut them short. She said the issu= e=20 would be fully examined at a later hearing. ?????To spare Edison from going into bankruptcy and to restore its=20 credit-worthiness Davis and executives of the utility reached a complex=20 compromise in April the centerpiece of which was a state purchase of=20 Edison's transmission grid for about $2.8 billion more than twice its book= =20 value. ?????Edison has estimated that it owes $3.5 billion to creditors including= =20 wholesale power generators as a result of deregulation of retail electrici= ty=20 prices in 1996. ?????Because of a freeze in retail rates Edison was prohibited from passin= g=20 its energy costs to customers. ?????Other features of the deal include dedicating a portion of consumer=20 rates to help pay off the debt a guaranteed 11.6% rate of return to Edison= =20 on its sales and investments and termination of an ongoing Public Utilitie= s=20 Commission investigation into financial dealings of Edison's parent company= =20 Edison International. ?????The energy committee held the hearing for fact-finding purposes and di= d=20 not consider the Edison bill SB 78x by Sen. Richard Polanco (D-Los Angeles= ). ?????But the Davis-Edison deal has angered consumer activists who contende= d=20 that bankruptcy for Edison would be preferable. ?????They deplored it as a bailout that would cost Edison customers $5=20 billion to $7 billion. ?????If the Legislature makes the mistake of forcing the ratepayers of=20 California to pay one more penny to bail out these companies we will put [= an=20 initiative] right on the ballot said Harvey Rosenfield of the Foundation= =20 for Taxpayer and Consumer Rights. ?????Consumer organizations in 1998 put to the voters an initiative to junk= =20 the 1996 deregulation law. The measure failed. ?????Rosenfield Harry Snyder of Consumers Union and Matt Freedman of the= =20 Utility Reform Network all asserted at a news conference that the Davis=20 rescue program should be killed. ?????Snyder who opposed deregulation said the governor's bill is shaping = up=20 as a replay of 1996. ?????It's too big too complicated. . . . This is the same process that=20 brought about this [deregulation] disaster Snyder said. ?????Separately San Diego Gas & Electric agreed Monday to sell its=20 transmission grid to the state for about $1 billion on the same terms as=20 Edison. ?????With all the controversy surrounding the Edison deal the chance of=20 SDG&E winning legislative approval of its sale is slightly better than 50%= =20 said Stephen L. Baum chief executive of Sempra Energy parent of SDG&E. ?????I think there's a widely shared view in the Legislature that they don= 't=20 want the state in the long-term business of power procurement. . . . In ord= er=20 to get Edison back into that business there has to be this infusion of=20 capital to pay off past electricity debts and make the utility=20 credit-worthy Baum said. ---=20 ?????Times staff writer Nancy Rivera Brooks contributed to this story. Copyright 2001 Los Angeles Times=20 State to Pay Electric Bill With Loan Not Taxes=20 By MIGUEL BUSTILLO Times Staff Writer=20 ?????SACRAMENTO--California taxpayers who have had to bankroll billions of= =20 dollars in electricity purchases for the teetering power utilities will so= on=20 no longer see their money evaporate at record rates under an executive ord= er=20 by Gov. Gray Davis. ?????As early as next week the order will stop the hemorrhaging of the sta= te=20 budget by allowing Treasurer Phil Angelides to borrow $5 billion to buy=20 electricity. That money is expected to cover power purchases until this fal= l=20 when the state plans to sell an unprecedented $12.5 billion in bonds to rep= ay=20 the general tax fund and buy future electricity. ?????Angelides said Tuesday that he has already lined up $3.5 billion in=20 loans from two Wall Street firms and expects to secure at least another=20 billion by next week when he plans to close the deal and obtain the money. ?????The loan is critical he said because without it electricity purchas= es=20 would completely deplete state coffers as early as October. ?????In essence it stops the general-fund bleeding Angelides said. Wha= t=20 this interim financing does is take the pressure off the general fund and= =20 hopefully avert a cash crisis. ?????The loan could also ease concerns on Wall Street that California's ris= ky=20 entry into the power business has placed the state budget in a precarious= =20 position. Those concerns were one of the main reasons two major credit rati= ng=20 agencies downgraded the state earlier this year. ?????We have been looking forward to this day said Ray Murphy a vice=20 president at Moody's Investors Service one of the two firms that downgrade= d=20 California's credit rating. We view this as a positive first step toward= =20 getting the state out of the power business. We wanted the state to get the= =20 general fund out of the business as quickly as possible. ?????California has allocated $8.2 billion in taxpayer money for electricit= y=20 since January because the state's private utilities became too saddled with= =20 debt to continue purchasing power on the open market. and massive blackouts= =20 loomed. ?????Under a plan devised by Davis and approved by the Legislature the sta= te=20 budget is supposed to be reimbursed for the power purchases with the bond= =20 issue the largest in American history. The bonds in turn are to be paid= =20 off by utility ratepayers through their monthly bills. ?????The bond issue however has been delayed by partisan politics and=20 complex legal issues raised by the bankruptcy of Pacific Gas & Electric Co.= =20 the state's largest private utility. ?????A bond sale initially planned for May is now scheduled for late=20 September according to Angelides' latest estimate. The state's Public=20 Utilities Commission still needs to take a number of technical actions befo= re=20 the sale can take place. ?????As a result the state budget has been drained for power purchases far= =20 longer than initially anticipated--a situation that has imperiled spending = on=20 education transportation and other critical needs at least temporarily. ?????Angelides had earlier sought to secure a $4-billion bridge loan to rep= ay=20 the state budget for power purchases until the bonds were sold but was=20 rebuffed by Republicans in the Legislature who argued that the loan was no= t=20 necessary. ?????Davis' executive order issued late Monday as part of the Democratic= =20 governor's emergency powers during the energy crisis gives Angelides the= =20 authority to press ahead. ?????But it does not allow the treasurer to use the loan to repay the budge= t=20 for the billions spent so far this year on electricity as he had originall= y=20 intended. Rather it permits Angelides to use the loan proceeds to assist t= he=20 Department of Water Resources the state agency buying power with its futu= re=20 electricity expenses. ?????If the bond issue is further delayed Angelides estimated the loan=20 would gives California another four to six months before it would begin to= =20 run out of money. Furthermore the loan closes a potential loophole that=20 existed in the long-term contracts Davis had signed to stabilize the cost o= f=20 electricity which would have let power suppliers walk away from the deals = if=20 the state had not secured a source of financing by next month. ?????But Republicans warned that by entering into a bridge loan deal withou= t=20 knowing when the bonds would be sold Davis and the Democrats were incurrin= g=20 major risks that could further drive up the price tag of the crisis. ?????The loan carries a blended interest rate of about 4.5% but if it is n= ot=20 repaid by Oct. 31 the rate jumps to 7%. Because the loan is to be repaid b= y=20 the bonds which have been marred by a history of delay GOP officials=20 Tuesday were already calling the bridge loan a bridge to nowhere. ?????The thing that is most troubling is that the governor did not bother = to=20 consult with anyone said Assembly Republican leader Dave Cox (R-Fair Oaks= )=20 who learned of Davis' order from reporters. It's disappointing but the=20 governor does not seem to recognize there is a legislative branch. Copyright 2001 Los Angeles Times=20 Edison Unveils Blackout Warning Plan=20 Technology: The utility will notify customers by Internet and telephone whe= n=20 power might go out.=20 By DANIEL HERNANDEZ Times Staff Writer ?????Southern California Edison on Tuesday unveiled a system that will=20 forecast coming blackouts over the Internet and by telephone.=20 ?????Ordered by the state to create a warning system for customers as=20 California enters a summer that will almost certainly include rotating=20 blackouts Edison is also preparing to use automatic phone calls faxes and= =20 wireless communications to alert subscribers to outages.=20 ?????With these steps Edison is complying with an order by the state Publi= c=20 Utilities Commission which in April told the company to notify customers o= f=20 coming outages. Privately held Pacific Gas and Electric Co. established a= =20 similar program months ago.=20 ?????Edison previously opposed a notification system arguing that such a= =20 system could incite looters and burglars. But police agencies including th= e=20 Los Angeles County Sheriff's Department saw more danger in not warning=20 customers said Richard Rosenblum an Edison senior vice president. ?????On balance [we concluded] it was preferable for public safety to mak= e=20 that information available Rosenblum said. ?????Consumer advocates said Edison's notification system is welcome if=20 tardy. ?????It's fair to say that Edison has been a little behind where PG&E has= =20 been in trying to implement this said Mike Florio an attorney with the= =20 Utility Reform Network and a member of the California Independent System=20 Operator board which runs the state power grid. ?????Edison's Web site www.sce.com now features a pop-up screen that warn= s=20 of any blackouts coming in the next hour. It also links to a page which ca= n=20 be reached at www.outagewatch.com that forecasts which outage groups wil= l=20 be cut off next in the event of rotating blackouts. Detailed maps outline= =20 which areas are included in each group.=20 ?????The new Web features are expected to handle about 4 million simultaneo= us=20 users. Beginning this month Edison customers also can learn their block=20 number by looking at their bills said Edison spokesman Gil Alexander. ?????Outage information also will be made available on an automated phone= =20 line (800) 611-1911. ?????Edison officials are negotiating with another company to provide=20 additional warnings by e-mail fax phone and wireless communications. SDG&= E=20 which like Edison was required to inform customers of outage forecasts has= =20 moved more quickly providing large industrial customers with blackout=20 notification via pager since June 4. ?????Up-to-the-minute outage reports also will be provided in several=20 languages to radio and TV stations Edison officials said. ?????Edison officials emphasized that the new alert system can never be 100= %=20 accurate and that sudden blackouts although rare are always a possibilit= y.=20 ?????We have planned as aggressively as we think is warranted understandi= ng=20 that you can't predict how your customers will respond Alexander said. Copyright 2001 Los Angeles Times=20 State Joins Challenge to Bush on Air-Conditioner Standards=20 Regulations: U.S. rolled back Clinton rule from 30% increase in efficiency = to=20 20% on manufacturers' urging.=20 By JENIFER WARREN Times Staff Writer=20 ?????California and two other states joined environmentalists Tuesday in=20 suing the Bush administration over its decision to weaken efficiency=20 standards for home air conditioners. ?????The lawsuit caps weeks of criticism heaped on the administration after= =20 it rolled back a rule requiring manufacturers to increase the efficiency of= =20 air conditioners 30% by 2006. ?????That rule was adopted by President Clinton during his final days in=20 office and after years of research and debate. California and other=20 states--including Texas--endorsed it as a way to substantially cut energy u= se=20 and improve air quality. ?????But after reviewing the rule at the industry's behest Bush=20 administration officials in April sliced the mandated increase to 20%. The= =20 higher standard they said would have made home coolers too expensive=20 especially for the poor. ?????Conservationists and consumer groups blasted the policy change callin= g=20 it shortsighted at a time when California and other states are enduring an= =20 energy crunch. ?????In California residential air-conditioning accounts for about 15% of= =20 the peak energy demand. Weakening efficiency standards critics say will= =20 require as many as 60 new power plants nationwide four in California. ?????This is a time when we need to conserve electricity and reduce our=20 dependence on the large energy generators and importers state Atty. Gen.= =20 Bill Lockyer said in an interview. Weakening this standard is precisely th= e=20 wrong message at precisely the wrong time. ?????In their lawsuit Lockyer and the attorneys general of New York and=20 Connecticut allege that federal law bars the U.S. Department of Energy from= =20 softening an appliance efficiency standard. A separate but similar suit was= =20 filed by the Natural Resources Defense Council the Consumer Federation of= =20 America and another nonprofit group. ?????Joe Davis the Energy Department's deputy spokesman said there would = be=20 no immediate comment on the suit filed in federal court in Manhattan. He= =20 added however that we believe all of the actions of our decision-making = in=20 the air conditioner standards are well within the law. ?????When Clinton's rule was issued in January his outgoing energy=20 secretary Bill Richardson said the payoff in power savings and cleaner ai= r=20 would be one of the administration's greatest environmental achievements. ?????But a trade association representing air conditioner manufacturers=20 challenged the new rule arguing that it would dramatically increase costs = of=20 the units--priced between $2000 and $4000--and thus discourage people fro= m=20 replacing old ones. ?????The Department of Energy sided with the industry group in April.=20 Officials said Clinton's proposal would have added $335 to the price of a n= ew=20 air conditioner while the lower 20% standard would boost prices only abou= t=20 $213. ?????Others however say those figures do not take into account the=20 economies of scale gained when manufacturers increase production of the mor= e=20 efficient units. When Congress passed the first efficiency standard for air= =20 conditioners in the late 1980s industry said the sky was falling and tha= t=20 it would increase the cost of air conditioners by $700 said Andrew Delask= i=20 executive director of the nonprofit Appliance Standards Awareness Project. = In=20 fact he said U.S. Department of Commerce data showed no price jump. ?????Dan Reicher the assistant secretary of Energy under Clinton who overs= aw=20 development of the stricter standards added that high-efficiency air=20 conditioners are not some exotic untested technology. ?????There are lots and lots of air conditioners already meeting the=20 standards--between 5% and 10% of the units sold today he said. ?????Although most manufacturers support the Bush rollback the second=20 largest maker of air conditioners--Houston-based Goodman Global Holding=20 which produces the Amana brand--opposes it saying any higher upfront costs= =20 would be recovered by consumers in lower utility bills. ?????On Tuesday the company's president John Goodman issued a statement= =20 supporting the lawsuit saying the tougher standard would give consumers a= n=20 enormous cost saving U.S. energy consumption will drop and our environment= =20 will benefit from reduced air pollutant emissions and greenhouse gases. ---=20 ?????Times staff writer James Gerstenzang in Washington contributed to this= =20 story. Copyright 2001 Los Angeles Times=20 New Price Caps Not a Deterrent Power Firms Say=20 Regulation: Producers are unhappy with the federal action but say it is=20 unlikely to discourage them from constructing new plants.=20 By NANCY VOGEL and THOMAS S. MULLIGAN Times Staff Writers=20 ?????The expanded electricity price limits approved by federal regulators= =20 could squeeze big energy traders but will probably not discourage power pla= nt=20 construction in California electricity producers said Tuesday. ?????Power plant owners and marketers said they had not had time to digest= =20 the 53-page order and thus could not say exactly how it would affect=20 California and the 10 other Western states it covers. ?????But the companies generally asserted Tuesday that the order would not= =20 deter them from investing in the vast power-starved Western region--though= =20 they have often raised such a prospect in arguing against price controls. ?????Whatever its long-term effects Monday's order by the Federal Energy= =20 Regulatory Commission appeared to have an immediate effect in dampening=20 prices in California's volatile daily or spot market. ?????The order does not take effect until today but the prospect of new=20 measures aimed at limiting prices appeared to tame markets Tuesday.=20 Californians used more electricity at the late-afternoon peak than on any d= ay=20 this year yet market prices hovered around $100 a megawatt-hour. ?????That is well below the average of $284 a megawatt-hour that the state= =20 paid for electricity from January through April with prices soaring as hig= h=20 as $1900 at times of tight supply. ?????All the markets in the West have come down said Mike Wilczek senio= r=20 power markets reporter for Platts the energy market information division o= f=20 the McGraw-Hill Cos. It's bearish news. ?????Nevertheless several generators minimized the effects of the FERC=20 order contradicting earlier warnings from some industry sources and=20 officials of the Bush administration who consider price limits to be=20 impediments to future investment in power plants. ?????Calpine will have no problem operating under this order said Joe=20 Ronan vice president of regulatory affairs for San Jose-based Calpine Corp= .=20 which has three power plants under construction in California and plans to= =20 build at least three others. ?????The federal order lasts only until September 2002 he said and becaus= e=20 it sets prices based on the cost of running the most expensive inefficient= =20 power plant in the market it should guarantee the owners of modern plants = a=20 profit. ?????Another company planning major investments in California Duke Energy= =20 Corp. of North Carolina said it will not be seriously affected by the=20 federal order because it has sold the output of its four California plants= =20 well into the future. ?????We've already forward-sold 90% of our generation for 2001 and 70% for= =20 2002 company spokesman Pat Mullen said. ?????Reliant Energy Inc. of Houston which owns five power plants in=20 California was not so sanguine about the federal order but it has not=20 backed away from plans to install more generators. ?????We remain committed to California as hard as it is to do business he= re=20 today spokesman Richard Wheatley said. We have plans that are on the=20 drawing boards for at least one possibly two projects. ?????On Monday Reliant Chief Executive Joe Bob Perkins called the FERC=20 action more of a political response than an acknowledgment of the gap=20 between electricity supply and demand in California. ?????Price caps don't work Perkins said and he warned California=20 consumers against assuming that the energy crisis is over simply because=20 wholesale electricity prices have recently dropped to their lowest levels i= n=20 a year. ?????Prices are falling because of mild weather not price controls he sai= d. ?????Without sound economics that increase available supply and reduce pea= k=20 demand . . . consumers can only hope for favorable weather and look forward= =20 to [rolling blackouts] Perkins said. ?????Energy analyst Frederick Schultz of Raymond James & Associates in=20 Houston called the FERC order a nonevent to the California generators=20 because so much of their power is now being sold through long-term contract= s. ?????However every long-term deal reduces the size of the electricity=20 market which supplies about 20% of California's needs. And that in turn= =20 limits trading opportunities for such firms as Enron Corp. which profit on= =20 the daily market's ups and downs Schultz said. ?????Enron representatives did not respond to calls for comment. ?????The federal order imposes round-the-clock price curbs on wholesale=20 electricity sold in 11 Western states that are connected by transmission=20 grids. ?????Under the order traders say market prices will probably hover around= =20 $100 a megawatt-hour depending upon the price of the natural gas that fuel= s=20 most of the state's electric generating plants. Though that is well below= =20 recent market prices it is higher than the average of about $32 a=20 megawatt-hour that California utilities paid in 1999 before the state's=20 deregulated market spiraled out of control. ?????The FERC order dictates that the price for spot market electricity=20 across the West will be based on the cost of producing one megawatt-hour of= =20 power at the least-efficient plant selling to California grid operators. Ma= y=20 31 when a previous FERC order based on a similar formula took effect the= =20 price set was $127 a megawatt-hour. ---=20 ?????Vogel reported from Sacramento Mulligan from New York. Copyright 2001 Los Angeles Times=20 Wednesday June 20 2001=20 The FERC's Action Is Good BadUgly=20 By PETER NAVARRO ?????The Federal Energy Regulatory Commission's new wholesale price caps wi= ll=20 save the Western states literally tens of billions of dollars in electricit= y=20 bills. As wonderful as that sounds the FERC order still allows wholesale= =20 generators to extract enough windfall profits to drive the region into=20 recession.=20 ?????The FERC's approach may also perversely lead to more air pollution and= =20 natural gas shortages.=20 ?????Let's look at what the FERC did right. First the order approved Monda= y=20 establishes price caps on a 24/7 basis rather than simply during power=20 emergencies--a long overdue reform.=20 ?????Second the order protects the entire West not just California. This= =20 regional cap will end megawatt laundering whereby in-state generators so= ld=20 power across California lines and then resold it back into the state to eva= de=20 caps.=20 ?????Third the order closes the ridiculous broker loophole that made the= =20 FERC's previous price caps Swiss cheese. Before generators could redirect= =20 their sales from the market to energy brokers who were exempt from the pric= e=20 caps.=20 ?????So where did the FERC go wrong? The problem may be traced to the two= =20 competing methods of imposing price caps and the all-important concept of= =20 economic rent.=20 ?????Economic rent in the wholesale electricity market is the market pric= e=20 of electricity minus the producer's cost where cost includes not just labo= r=20 and fuel but a fair profit on the invested capital as well. In traditiona= l=20 regulation this fair profit is calculated very simply as the market cost o= f=20 the money borrowed to build the power plant.=20 ?????Under this definition if the producer's cost is a nickel a kilowatt= =20 hour and he can sell it for 35 cents--as producers in the West have been=20 doing--the producer can extract 30 cents of economic rent from consumers.= =20 ?????In California the extraction of such economic rent through market=20 manipulation has taken place on a grand-theft scale. In 1999 California's= =20 electricity bill was about $7 billion. Last year it was almost $30 billion= =20 for roughly the same amount of electricity. This year California's bill is= =20 well on its way to $50 billion annually.=20 ?????To stop this rip-off Gov. Gray Davis proposed cost-based price caps= .=20 Such caps are calculated on a plant-specific basis. Each generator is allow= ed=20 to recover its cost of production including the fair profit but not a pen= ny=20 more.=20 ?????Thus for example a newer highly efficient plant generating power at= a=20 nickel per kilowatt hour would collect a nickel. The oldest least efficien= t=20 plant that generated power for 20 cents would be allowed to collect 20 cent= s.=20 ?????By setting different prices for different plants the economic rents a= re=20 driven to zero. Yet each generator still has a fair profit incentive to=20 produce. From a public policy perspective it's the best of all possible=20 worlds. And it was categorically rejected by the FERC. Instead the FERC se= ts=20 a single price for all generators based on the cost of the least efficient= =20 plant.=20 ?????The obvious problem with this umbrella pricing rule is that it still= =20 allows generators to extract billions in economic rent from consumers.=20 ?????In our previous example and under the FERC's rule the least efficien= t=20 plant still collects 20 cents a unit to recover costs. However the most=20 efficient plant producing power at a nickel-per-kilowatt also collects 20= =20 cents rather than a nickel and thus extracts a full 15 cents of economic=20 rent.=20 ?????Thus under the FERC's rule wholesale generators still will be able t= o=20 capture tens of billions of dollars more from consumers and businesses than= =20 under Davis' cost-based rule.=20 ?????The FERC's approach is still subject to the same kind of strategic=20 gaming that has been the hallmark of this crisis. Generators will ensure th= at=20 during peak times when the price cap is being established the most=20 expensive possible plant is in operation--whether it needs to be or not. Th= is=20 will peg the price at the highest level.=20 ?????In addition the FERC provides generators with a perverse incentive to= =20 run their least efficient units more often. Since these least efficient=20 plants are also the highest polluting the result will be dirtier air.=20 Moreover the excessive running of these plants may also put a strain on=20 already stretched natural gas supplies. These least efficient plants use up= =20 to 40% more natural gas to produce a unit of electricity.=20 ?????The bottom line: The FERC done good. But it could have done a lot=20 better. And the way things stand now there still is a danger that higher= =20 electricity costs could push California and the rest of the West--and=20 eventually the nation--into a nasty recession.=20 - - - Peter Navarro Is an Associate Professor of Economics and Public Policy at U= c=20 Irvine. E-mail: Pnavarro@uci.edu Copyright 2001 Los Angeles Times=20 Davis OKs stopgap loan=20 CRISIS POWERS: Action sidesteps Legislature=20 Greg Lucas Sacramento Bureau Chief Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL: .DTL=20 Circumventing the Legislature Gov. Gray Davis used his emergency powers=20 yesterday to authorize borrowing up to $5 billion for energy purchases in= =20 advance of a record bond issue.=20 Sidestepping the Legislature with a stroke of the pen Davis' action=20 indicates that the state may need more time to prepare a $12.5 billion bond= =20 issue this fall the largest sale of its kind in history.=20 The Democratic governor's action was swiftly assailed by the Republican=20 leadership.=20 This is not a dictatorship. It's a democracy said Assembly GOP leader Da= ve=20 Cox of Carmichael. There is a judiciary a legislative side and an executi= ve=20 side and everyone has roles and responsibilities. Yet we continue to have= =20 the governor say 'I'm the only one around here that makes any difference.= =20 The rest of you shall do my bidding.' =20 Normally it is the Legislature that has the power to raise and spend money= =20 and a governor may not spend a cent unless lawmakers allow him to.=20 But Davis has broad powers under the state of emergency which he declared = in=20 January to combat California's energy crisis.=20 NO ADVANCE NOTICE The governor's aides declined to comment on yesterday's executive order and= =20 gave no advance notice of it.=20 This executive order authorizing a bridge loan will allow us to get=20 California's General Fund out of the power-buying business was the=20 governor's only comment in a written statement issued last night.=20 State Treasurer Phil Angelides said lawyers had advised him and the governo= r=20 that such borrowing could be authorized by an executive order.=20 The loan from Wall Street will temporarily fill the $5.2 billion -- and=20 growing -- hole in the state budget created when the state began buying=20 electricity on behalf of the state's cash-starved utilities in January.=20 The idea is to tide the state over until a larger bond sale of $12.5 billio= n=20 can be arranged later this year. A portion of that sale will pay back the= =20 $5.2 billion borrowed from Wall Street.=20 'STOPS THE BLEEDING'=20 It stops the general fund bleeding said Angelides. It takes the pressur= e=20 off and hopefully we'll avert a cash crisis.=20 The state runs out of internal borrowing power sometime in October. Angelid= es=20 said the loan would buy the state another four to six months.=20 The idea of a loan was floated earlier this year.=20 Cox and other GOP lawmakers objected wondering why the state should pay=20 interest on borrowed money when it could still borrow from various accounts= =20 within the state budget.=20 They refused to vote for a bill authorizing the larger bond sale of $12.5= =20 billion forcing a delay in issuing it until at least Aug. 14.=20 The idea of borrowing from Wall Street appears to have been abandoned sinc= e=20 both Davis administration and legislative budget-writers said the state cou= ld=20 keep borrowing internally into October well after the bond sale.=20 Yesterday's executive order authorizing the borrowing suggests that neither= =20 Angelides nor Davis are confident that the steps needed to prepare the $12.= 5=20 billion bond issue for market can be completed before then.=20 Angelides had previously said he hoped to sell the bonds in early September= .=20 Yesterday he said the governor's hope is to still sell long-term bonds by= =20 Sept. 30.=20 ACT OF DESPERATION? Sen. Tom McClintock R-Northridge described the executive order as an act = of=20 desperation that would suggest they are expecting the large bond sale to= =20 occur later rather than sooner.'=20 Numerous actions must be completed before the bond sale.=20 Among them are the approval by the Public Utilities Commission of several= =20 deals with the state and utilities to ensure that enough money from=20 consumers flows back to bond buyers to pay off interest and principal.=20 Although Davis' executive order authorizes $5 billion in loans Angelides h= as=20 only lined up $3.5 billion.=20 So far only two lenders have come forward to offer the state a loan J.P= =20 Morgan with $2.5 billion and Lehman Brothers with $1 billion at an interes= t=20 rate of 4.5 percent. If the long-term bonds are not sold by Oct. 31 that= =20 will increase to 7 percent.=20 Angelides said he hoped to line up another $1 billion by next week when th= e=20 loan deal occurs.=20 Assuming a loan of $4.5 billion Angelides said the state would pay out $8= =20 million in fees.=20 E-mail Greg Lucas at glucas@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 Experts say state must seize the day=20 ANALYSIS: Price caps set stage for future=20 David Lazarus Chronicle Staff Writer Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL: DTL=20 One day after federal authorities ordered long-sought electricity price cap= s=20 throughout the West analysts said yesterday it is up to California to=20 respond with measures to bring an end to the state's long frustrating=20 experiment with deregulation.=20 Possible steps the experts point to include raising power bills easing=20 pollution controls and spending billions of dollars in taxpayers' money on= =20 new plants.=20 Gov. (Gray) Davis and his team have been making this up week by week sai= d=20 Paul Joskow director of the Center for Energy and Environmental Policy=20 Research at the Massachusetts Institute of Technology.=20 It's time for them to get together with the Federal Energy Regulatory=20 Commission (FERC) to come up with some solutions he said. The state need= s=20 to get down to business and decide how the power market is going to look 18= =20 months from now.=20 Easier said than done. To date California's strategy for tackling its ener= gy=20 woes largely has consisted of wheedling cajoling and all but begging feder= al=20 officials to come to the rescue.=20 Now that the federal regulators have gone much of the way toward granting t= he=20 state's wishes analysts said Davis and other officials must act swiftly an= d=20 decisively to further remedy California's prolonged power troubles.=20 For his part however the governor feels that federal regulators have not= =20 done enough. He will push today during congressional hearings in Washington= =20 for billions of dollars in refunds for California ratepayers.=20 FERC has taken some first steps but the proverbial fat lady hasn't sung= =20 said Steve Maviglio a spokesman for Davis.=20 This persistent focus on federal assistance could slow progress toward a=20 lasting solution to California's problems some analysts believe.=20 We are still likely to experience blackouts this summer said Michael=20 Zenker director of Cambridge Energy Research Associates in Oakland. It's= =20 not yet clear that the state will do what it can to address other aspects o= f=20 the problem.=20 Put simply such steps would require enormous political courage -- and woul= d=20 be very expensive. In the end taxpayers and ratepayers will bear the burde= n=20 for this prolonged fiasco.=20 Among measures under consideration:=20 -- Raising electricity rates even higher. Although Californians got the=20 largest rate increase in state history last month even higher charges woul= d=20 promote conservation and lessen the need for California to borrow billions = of=20 dollars in the bond market.=20 -- Loosening emissions restrictions for power plants statewide. This would= =20 provide more electricity during shortages but turn back the clock on=20 California's strict environmental standards.=20 -- Building new plants at taxpayers' expense. This would guarantee a steady= =20 supply of juice but would leave the state struggling for years to recoup th= e=20 huge investment costs.=20 Of the three easing pollution controls is the easiest first step and the= =20 most likely analysts said. Such environmental protections have been roundl= y=20 criticized by power industry officials who claim the restrictions have=20 hampered the construction of new generating plants.=20 Taxpayer-financed power plants are possible under a new state power authori= ty=20 backed by the governor but the timing and financing remain undecided.=20 Higher electricity rates could be the toughest move to make analysts agree= .=20 They note that Davis will seek re-election next year and doesn't want to be= =20 seen as the governor who sent voters' power bills into the stratosphere.=20 Already critics are trying to paint him as the governor who was asleep at= =20 the power switch.=20 As federal regulators were moving at last on the price-cap front this week= =20 another big development took place closer to home Monday when Davis disclos= ed=20 a tentative deal with Sempra Energy's San Diego Gas & Electric Co. The plan= =20 calls for the state to purchase the utility's 1800 miles of power lines fo= r=20 nearly $1 billion.=20 As with a similar accord reached with Southern California Edison the Sempr= a=20 deal is intended to counter the catastrophic effects of California having= =20 deregulated wholesale power prices but not allowing the state's utilities t= o=20 pass on costs to customers.=20 Between them California's three major utilities have rung up more than $15= =20 billion in debt.=20 Here too the state appears unsure how to proceed. Both the Sempra and=20 Edison agreements require approval from the Legislature. It's anyone's gues= s=20 whether such approval is forthcoming.=20 It's going to be a really really tough sell said Nettie Hoge executive= =20 director of The Utility Reform Network in San Francisco. These aren't=20 fabulous deals.=20 ONE SCENARIO FOR UTILITIES Rather she believes the agreements will be reworked so that less taxpayer= =20 money changes hands while allowing the utilities to retain possession of=20 their power systems.=20 Hoge said this could subsequently influence a speedy resolution of Pacific= =20 Gas and Electric Co.'s bankruptcy proceedings. If it can avoid selling off= =20 key assets like power lines PG&E may be more open to any settlement plans= =20 put forward by the state.=20 The utilities are all going to end up with similar deals Hoge forecast.= =20 State Senate President Pro Tem John Burton D-San Francisco isn't so sure.= =20 He observed that the Edison deal hinges on a sale of the utility's power=20 lines to the state while the Sempra accord could stand even without such a= =20 transaction.=20 The two deals are totally unrelated Burton said adding that approval of= =20 the Edison accord is very much in flux. A bankruptcy filing by the state'= s=20 second-largest utility remains a distinct possibility he said.=20 This would only increase the importance of price caps in bringing some=20 stability back to California's power market.=20 While the state's current rate freeze will continue cushioning consumers fr= om=20 the volatility of wholesale electricity prices the caps -- or price=20 mitigation as federal regulators are calling it -- will limit the amount= =20 that power generators can charge on the open market.=20 SYSTEM HAS FLAWS It is not a perfect system: Power companies can base prices on the cost of= =20 running the least-efficient -- and thus costliest -- generating facility. B= ut=20 this amount almost certainly will be below some of the more outrageous pric= es=20 seen when the sky was the limit.=20 On at least one occasion this year California's wholesale power price topp= ed=20 $3000 per megawatt hour compared with just $30 about a year ago.=20 This is a plan that is good for California good for the Pacific Northwest= =20 and good for the entire West said FERC Chairman Curt Hebert.=20 That remains to be seen. As it stands the price caps will remain in effect= =20 through next summer.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 California's energy crisis hits Northwest like a tidal wave=20 Jeff Hammarlund Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/E D165509.DTL=20 THERE WAS a time when many Northwesterners thought we could watch=20 California's energy crisis from a safe distance.=20 We have since learned that a major energy crisis does not stop at the Golde= n=20 State's borders but instead rolls over the Northwest like a tidal wave= =20 wreaking havoc with our economy and overwhelming our carefully crafted ener= gy=20 policies.=20 As one Northwest utility official put it We learned that everyone else is= =20 the tail. California is the dog.=20 To understand why the Northwest is now facing its own energy crisis and how= =20 the energy problems in the Northwest and California each affect each other= =20 one must understand how the Northwest gets its power.=20 In the Northwest falling water is our primary fuel. Depending on the=20 available snowpack hydroelectricity produced at more than 200 dams in the= =20 Columbia River basin generates between 60 and 75 percent of the region's=20 electricity. About two-thirds of this hydropower comes from 29 dams owned a= nd=20 operated by the two federal agencies the U.S. Army Corps of Engineers and= =20 the Bureau of Reclamation.=20 By taking advantage of the region's geography and climate the Columbia's= =20 hydroelectric dams have produced some of the least expensive electricity in= =20 the nation power that has been the economic backbone of the region.=20 However the Columbia's hydrosystem also has two curses.=20 One is that water conditions can vary greatly and right now the Northwest= =20 and California are in the middle of an extreme drought. The second is the= =20 dams' negative impact on salmon. These dams operate under a federal salmon= =20 recovery plan established under the Endangered Species Act that calls for= =20 more water to be sent over spillways to help push the salmon downstream=20 instead of through the dams' power-generating turbines.=20 That power is sold at cost and transmitted to Northwest consumer-owned=20 utilities by yet another federal agency called the Bonneville Power=20 Administration. These cost-based rates cover the expense of repaying the= =20 U.S.=20 Treasury for the cost of developing these hydropower projects moving the= =20 power over massive transmission lines and supporting efforts to restore th= e=20 dwindling salmon runs.=20 Under federal law Northwest consumers get preferred access to the relative= ly=20 low-cost power. Any surplus power can be sold most often to California's= =20 municipal and investor-owned utilities.=20 This Northwest regional preference to federal power was part of the deal= =20 that led to the construction of the massive transmission lines called the= =20 intertie which first connected the Northwest with California and the=20 Southwest in the late 1960s.=20 For decades the intertie worked almost flawlessly and to everyone's benefi= t.=20 During the summer when air conditioners caused California's power use to= =20 peak many California utilities would supplement their needs by turning to= =20 the Northwest. In the winter when Northwest electric furnaces are turned o= n=20 for space heating California utilities would return the favor and ship the= ir=20 surplus power north.=20 Recently the BPA has had to purchase large blocs of power on the wholesale= =20 market to meet its contractual obligations to its Northwest customers.=20 The same exorbitant wholesale prices that began to plague California last= =20 year have also affected the Northwest meaning that the BPA has been runnin= g=20 out of money and is now in danger of defaulting on its debt obligations to= =20 the Treasury.=20 California's deregulation plan has affected energy relations between the tw= o=20 regions in other ways. For example the BPA has historically sold surplus= =20 power to California for relatively low prices. However the state's=20 deregulation law made it almost impossible for California utilities to ente= r=20 into favorable long-term contracts.=20 Instead power had to be purchased at the much higher market clearing pric= e=20 on the short-term spot market.=20 The BPA has taken extraordinary steps to help California keep the lights on= .=20 At times the agency even declared energy emergencies which allowed it to= =20 temporarily override salmon protections and use the water to generate power= =20 for California rather than sweep salmon over the dams. California officials= =20 have praised the BPA for its cooperation but Northwest environmentalists a= nd=20 tribal leaders complain that the BPA has been helping California address it= s=20 energy crisis by selling salmon down the river.=20 The Northwest will be helped by FERC's decision yesterday to extend limited= =20 temporary price restrictions it had imposed in California in the spring to= =20 other Western states during severe shortages. The order should also be good= =20 for California. Without consistent price restrictions throughout the West= =20 power marketers would simply skip California during an emergency and sell a= t=20 higher prices elsewhere.=20 But not everyone is happy with the decision. Many critics say the rates are= =20 still too high and some critics said in s published report that the order= =20 rewards inefficiency by pegging price ceilings to the costliest California= =20 gas plants.=20 The half-hearted response from FERC along with continuing supply shortages= =20 and other problems make it likely that California will continue to face=20 rolling blackouts and high utility bills -- even though they may not be as= =20 high as we once feared.=20 The Northwest may follow suit next winter.=20 Some in our region fear that some desperate California political leaders=20 might try to wrest control of the BPA and a large portion of the Columbia= =20 Basin's hydropower. The 6600 megawatts of hydropower from the Columbia's= =20 federal dams would only offer a few drops in the bucket for California's=20 massive 50000-megawatt system but its loss would devastate the Northwest= =20 economy.=20 The four Northwest governors (of Washington Oregon Idaho and Montana) and= =20 more than 40 state legislators met in February and agreed to explore ways t= o=20 ensure that the Northwest does not lose its regional preference to the=20 Columbia's hydropower.=20 Northwest governors have had some productive meetings with Gov. Gray Davis= =20 and his staff this year regarding power sharing and there are encouraging= =20 signs that trust is growing at this and other levels.=20 Just last week officials from the BPA California's Department of Water=20 Resources and the California ISO agreed on a plan that outlines when and h= ow=20 the BPA may be able to help California during the expected summer shortages= .=20 We will soon find out whether our two regions will succeed in collaborating= =20 with or cannibalizing each other as we enter the next phase of the West Coa= st=20 energy crisis.=20 Ultimately California's experience with energy deregulation makes the case= =20 for a strong and supportive federal role in the energy markets. It also=20 reinforces the view that electricity should be treated as an essential=20 service and be sold at cost by utilities that are owned and controlled by t= he=20 public rather than as a commodity and sold at the highest price.=20 In fact something like a California power authority that places California= =20 in charge of its own destiny makes more sense to me all the time.=20 Jeff Hammarlund is an adjunct associate professor and research fellow at th= e=20 Mark Hatfield School of Government at Portland State University where he=20 teaches graduate courses on energy policy. He is also president of Northwes= t=20 Energy and Environmental Str=20 2001 San Francisco Chronicle ? Page?A - 19=20 Davis demands nearly $9 billion for electricity overcharges=20 H. JOSEF HEBERT Associated Press Writer Wednesday June 20 2001=20 2001 Associated Press=20 URL:=20 ation al1103EDT0569.DTL=20 (06-20) 08:03 PDT WASHINGTON (AP) --=20 California Gov. Gray Davis demanded that power generators refund nearly $9= =20 billion in electricity overcharges and complained that federal regulators= =20 have looked the other way while energy companies bilked our state.=20 Davis told a Senate hearing Wednesday that the decision by the Federal Ener= gy=20 Regulatory Commission to curtail price spikes in California and 10 other=20 Western states was a step forward. But its actions do nothing about the=20 overcharges over the past year he said.=20 The governor a Democrat has been criticized by Republicans who charge he= =20 has allowed the California power crisis to get out of hand.=20 Davis defended his actions saying the state has stepped up approval for ne= w=20 power plants and strengthened conservation programs. He also said the state= =20 has little control over price gouging by out-of-state power generators.=20 The governor once said he could solve California's problems in 15 minutes.= =20 ... But it appears that California has continued to try and hide the true= =20 cost of power by having the state pay for it instead of the utilities=20 putting California taxpayers in jeopardy said Sen. Frank Murkowski=20 R-Alaska.=20 Murkowski said many of the alleged overcharges are by public power entities= =20 not under FERC jurisdiction=20 Sen. Joe Lieberman D-Conn. chairman of the Governmental Affairs Committee= =20 said the FERC which regulates wholesale electricity sales has been slow t= o=20 respond and surprisingly reluctant to assure that electricity prices are= =20 just and reasonable as required by the 1934 Federal Power Act.=20 The agency's response to the Western power problem raises serious question= s=20 about whether (FERC) has or will oversee the newly deregulated energy=20 markets not only in the West but across the rest of the country.=20 The federal agency whose commissioners were to testify later in the day= =20 imposed limited market-based price caps on Monday in California and 10 oth= er=20 Western states from Washington to Arizona. The agency also ordered the=20 parties to attend a conference next week to try to work out agreements on= =20 overcharges and other issues.=20 Months ago the FERC singled out $124 million in alleged overcharges by pow= er=20 generators. The power companies have since challenged the agency's findings= =20 and the matter remains in dispute.=20 To date not a single penny in refunds has been returned to California=20 complained Davis. He said that between May 2000 and the beginning of this= =20 month power generators are believed to have overcharged California $8.9=20 billion.=20 They must be required to give us back our money said Davis. It is=20 unconscionable that FERC looked the other way while energy companies bilked= =20 our state for up to $9 billion.=20 The state spent $7 billion for electricity in 1999 and $27 billion in 2000= =20 and is projected to pay nearly $50 billion this year said Davis. Power=20 generators have been able to exert extreme power over our energy market h= e=20 said.=20 Davis rejected Republican criticism that the state is not addressing the=20 problem. He said newly approved power plants will provide 20000 additional= =20 megawatts of electricity by 2003 including 4000 megawatts by the end of= =20 this summer. Everything that can be done to bring reliable affordable=20 energy to California is being done ... except wholesale price relief he= =20 said.=20 This administration has minimized this crisis (for) more months said Sen= .=20 Patty Murray D-Wash. alluding to President Bush's repeated refusal to urg= e=20 the FERC to mitigate electricity prices. Bush has strongly opposed price=20 controls although he indicated support for FERC's limited price mitigation= =20 effort this week.=20 Murray said the government should issue a disaster declaration so that=20 businesses can get low-income loans and require that FERC press its=20 investigation into price gouging and demand refunds not only in California= =20 but in the Pacific Northwest where electricity prices have also skyrockete= d.=20 Republicans continued their opposition to more stringent price caps based o= n=20 the cost of generation at individual power plants.=20 Having a federal agency try to determine what is a just and reasonable pri= ce=20 is laughable said Sen. Fred Thompson of Tennessee the committee's rankin= g=20 Republican. Hard price caps don't work when supply is the problem. ... The= y=20 make a bad situation worse he said.=20 After FERC issued its limited price control order this week Senate Democra= ts=20 on Tuesday said they would drop legislation to require more stringent=20 cost-based price caps on Western electricity sales.=20 Democrats in the House however said they would continue to pursue a bill= =20 requiring the FERC to take more aggressive action.=20 2001 Associated Press ?=20 Fed price caps placate Demos=20 But Feinstein's bill to regulate energy producers was more strict=20 Carolyn Lochhead Chronicle Washington Bureau Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/M N145950.DTL=20 Washington -- With federal regulators moving to cap prices on wholesale=20 electricity California's Dianne Feinstein and other Senate Democrats=20 yesterday withdrew their threat to do it for them.=20 A rose is a rose by any other name Feinstein declared to the five member= s=20 of the Federal Energy Regulatory Commission the day after they unanimously= =20 imposed a sweeping price ceiling on electricity throughout eleven western= =20 states.=20 I'm very grateful Feinstein told the commissioners who were called to= =20 testify to the Senate Energy and Natural Resources Committee. Let's watch= =20 and wait and see how this order works.=20 Feinstein had been leading the Democratic charge in Washington to force FER= C=20 to impose price controls indeed yesterday's hearing had been intended to= =20 highlight the agency's inaction. Gov. Gray Davis is still billed to appear= =20 today at another Senate panel headed by Sen. Joe Lieberman D-Conn. to=20 investigate price gouging.=20 The 60-page FERC order which takes effect at midnight tonight and remains= =20 until September 2002 limits prices based on the cost of the least-efficien= t=20 and therefore highest-cost generating plant. It is intended to mimic the w= ay=20 a competitive market functions.=20 While Democrats hailed FERC's move power generators and marketers warned= =20 that it would backfire leading to more blackouts and stifling investment i= n=20 new power plants.=20 It doesn't create or conserve a single megawatt in California or the West= =20 said Enron spokesman Mark Palmer. Government price controls always have=20 unintended consequences and history has proven that those have never been= =20 good for consumers.=20 Joe Bob Perkins president and chief operating officer of Reliant Energy= =20 bluntly called the price caps a political response to California's crisis= =20 that ignores the basics of supply and demand.=20 Price caps don't work Perkins said in a statement. This fact has been= =20 proven over and over in the context of virtually every business sector in= =20 which government regulators have experimented with such measures.=20 The Bush administration which has fought electricity price caps since taki= ng=20 office in January yesterday insisted that FERC had actually spurned them.= =20 It's important to note that FERC rejected price controls said White Hous= e=20 spokesman Ari Fleischer who instead called it a market-based mitigation= =20 plan.=20 He added the order is in keeping with the president's desire to help the= =20 state of California and to make certain that there is no illegal price=20 gouging carried on by any companies.=20 FERC's action coincided with the arrival of two new Bush appointees to the= =20 agency Patrick Henry Wood III a former Texas utility regulator and Nora= =20 Mead Brownell a former Pennsylvania regulator.=20 The soft-spoken boyish-looking Wood yesterday sought to allay Feinstein's= =20 lingering concerns that the new price control scheme would still permit=20 generators to manipulate the market.=20 Feinstein's bill would have gone further than the new FERC plan imposing a= =20 cost-of-service based price cap that would return California to the=20 regulatory regime it had before its 1996 electricity restructuring.=20 I am personally not allergic to that sort of remedy Wood told the panel = -=20 - a position that is toxic to the Bush administration's former opposition t= o=20 price caps. The cost-of-service regime was good enough for 80 years Wood= =20 said. We're trying to move away from it but we can still do it.=20 FERC's action followed by Feinstein's bill withdrawal quickly defused a= =20 mounting political confrontation between the Bush White House and Democrats= =20 over price caps -- one that saw Capitol Hill Republicans beating a retreat.= =20 Democrats argued that Bush by refusing to impose price controls was=20 allowing out-of-state generators based mostly in Texas to gouge California= =20 consumers.=20 The administration especially Vice President Dick Cheney and Energy=20 Secretary Spencer Abraham had insisted that price controls would backfire = by=20 reducing electricity sales and power plant investment making the state's= =20 blackouts worse.=20 Yesterday Sen. Gordon Smith an Oregon Republican who co-sponsored=20 Feinstein's bill as much as said the White House would have lost the fight= .=20 Smith said their measure would have won large majorities in both the Senat= e=20 and House had it gone to a vote.=20 E-mail Carolyn Lochhead at clochhead@sfchronicle.com=20 2001 San Francisco Chronicle ? Page?A - 11=20 Potrero Hill power plant hit by 2 lawsuits=20 Neighbors city ask court to cut back hours of operation=20 Rachel Gordon Chronicle Staff Writer Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/M N238116.DTL=20 The San Francisco city attorney joined forces with environmental and=20 community groups and sued in federal court yesterday to force the operator = of=20 the Potrero Hill power plant to cut its ramped-up electricity output until= =20 more rigorous pollution controls are installed.=20 The plant run by Mirant Corp. increased its output in response to Gov. Gr= ay=20 Davis' move to relax environmental laws on power producers and generate mor= e=20 electricity for Californians.=20 The lawsuits filed against Mirant in U.S. District Court allege the compa= ny=20 is illegally operating its so-called peaker plants. The suits appear to be= =20 the first challenge in California to Davis' efforts to produce more power.= =20 The Potrero Hill plant which runs during times of peak demand has a total= =20 of six turbines that generate 156 megawatts of electricity enough to power= =20 156000 homes. Each turbine is permitted to operate 877 hours a year -- a= =20 threshold that already has been exceeded.=20 Mirant struck a deal March 30 with administrators of the Bay Area Air Quali= ty=20 Management District -- the regional agency that regulates air pollution -- = to=20 run the plants as much as needed to keep up with the energy demand. In=20 return Mirant will pay $20000 per ton of excess emissions of nitrogen=20 oxides a pollutant that causes smog. The company placed $400000 on deposi= t.=20 The Mirant Corporation is behaving like an outlaw and the air district is= =20 their willing accomplice in violating clean air laws said Mike Thomas an= =20 organizer with Communities for a Better Environment one of the plaintiffs.= =20 The other groups that sued are Bayview-Hunters Point Community Advocates an= d=20 Our Children's Earth.=20 The city filed a separate suit over the same issue.=20 The lawsuits ask the court to order Mirant to stop operating beyond the 877= -=20 hour cap until it obtains new permits. The city and environmental groups=20 argue the permits for expanded operation are required by the federal Clean= =20 Air Act.=20 The lawsuits also demand that more stringent pollution controls be installe= d=20 on the peakers. The increased power production poses a potentially serious= =20 health risk to the people who live and work in the surrounding neighborhood= =20 the plaintiffs charge.=20 Because the peaker plants weren't originally intended to run full time the= y=20 aren't equipped with the most up-to-date pollution controls.=20 The plaintiffs also allege the air district regulators violated the=20 California Environmental Quality Act by failing to conduct thorough reviews= =20 of the expanded operation and not allowing for public comment.=20 We as a city are not saying no to power. We're saying there's a process an= d=20 they need to follow it said San Francisco Supervisor Sophie Maxwell who= =20 represents District 10 where the power plant is located.=20 Terry Lee a spokesman for the air district said her agency and Mirant did= =20 nothing illegal. Mirant spokesman Patrick Dorinson concurred.=20 They pointed to Davis' executive orders earlier this year that gave power= =20 companies the right to step up production without going through the normal= =20 permit process and adhering to the stricter pollution controls.=20 William Rostov an attorney for Communities for a Better Environment=20 contends Davis does not have authority to override federal air quality laws= .=20 Lee said the U.S. Environmental Protection Agency signed off on the=20 governor's plan.=20 The plant near 23rd and Illinois streets long has been a target of=20 neighbors trying to close it. Mirant is hoping to build a new 540-megawatt= =20 plant on the site that uses cleaner-burning natural gas. The existing plant= =20 burns highly polluting distillate oil.=20 Lee said the money Mirant is paying for the extra emissions will help reduc= e=20 air pollution in Potrero Hill. The efforts include placing filters on Muni= =20 diesel fuel buses that operate in the neighborhood and installing a lower-= =20 polluting engine on a tug boat that runs off the nearby shores.=20 Is this a perfect situation? No Lee said. But under the governor's=20 executive orders this is the way we're proceeding.=20 E-mail Rachel Gordon at rgordon@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 13=20 Washington wakes up=20 Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/E D40132.DTL=20 WASHINGTON after all does feel our pain. Partial but reasonable price=20 controls will contain wholesale electricity prices beginning today under a= =20 long-sought ruling by the Federal Energy Regulatory Commission. It's about= =20 time.=20 Where was this agency until now and why the sudden willingness to help?=20 Politics.=20 At first the Bush administration denounced controls as market interference= =20 that would chase off investment in power generation.=20 But the peril has spread beyond California to other Western states whose= =20 governors are Republicans. Mid-term elections for Congress are coming up ne= xt=20 year. Also the White House was besieged by California Republicans and=20 business groups worried about blackouts and price gouging.=20 President Bush finally sounded the retreat the day before the commission=20 vote. He could accept a mechanism that would mitigate any severe price= =20 spike. He insisted that the final results were not firm price controls=20 which arguably they are not.=20 Gov. Gray Davis who begged for help for months said the final package=20 didn't go far enough. What he wanted were tougher limits pegged to generati= on=20 costs plus a profit figure of 30 to 50 percent.=20 The final formula approved by the commission amounts to a loose-fit limit= =20 that should dampen the absurd price surges that have endangered the state.= =20 The 24/7 plan rewards modern plants by setting prices based on the=20 least-efficient power producers. It covers 11 states not just sickly=20 California.=20 There is room for doubt. Canny operators may find ways to exploit the prici= ng=20 mechanism. Also California will be whacked with a one-state-only surcharge= =20 of 10 percent. The commission took no action on another Davis complaint tha= t=20 power generators may have overcharged the state by $6.2 billion.=20 Still the new limits may be the most anyone could expect. Consider how far= =20 Washington has come: A hidebound ideology has given way to real-world=20 recognition of a huge problem. U.S. Sen. Dianne Feinstein acknowledged as= =20 much yesterday when she dropped a measure to impose stricter price limits.= =20 California's troubles aren't over. Conservation remains supremely important= .=20 New power plants need approval and speedy construction. The financial damag= e=20 to state utilities and the state's coffers needs attention. The severity of= =20 summer blackouts is a wild card.=20 The federal controls add a measure of protection from this volatile mix. It= 's=20 a shame that help didn't come sooner.=20 2001 San Francisco Chronicle ? Page?A - 18=20 Feinstein halts electricity price caps bill=20 Posted at 12:15 a.m. PDT Wednesday June 20 2001=20 BY JIM PUZZANGHERA=20 Mercury News=20 WASHINGTON -- Like a steam valve on an overheating boiler the move by=20 federal regulators to enact broad new electricity price controls in the Wes= t=20 has relieved much of the growing political pressure for stronger action --= =20 for now.=20 Sen. Dianne Feinstein removed one major source of that pressure Tuesday.=20 Satisfied that the Federal Energy Regulatory Commission has taken ``a giant= =20 step forward'' in curbing California energy prices Feinstein withdrew her= =20 legislation to enact price caps on wholesale electricity prices throughout= =20 the West.=20 ``Let's watch and wait and see how this order works'' the California=20 Democrat told members of the commission during a Senate hearing.=20 But while the battle over the actions of federal regulators may have=20 subsided the larger political war over energy prices continues.=20 California Gov. Gray Davis who has been pounding away for weeks at the Bus= h=20 administration for not providing enough help to the state will step into t= he=20 fray here today. The governor will appear at a Senate hearing where he will= =20 praise federal regulators for moving in the right direction with the new=20 plan. But he's also expected to continue to press for harder price caps and= =20 criticize federal regulators for taking months to act while the state drain= ed=20 billions from its budget to pay for electricity.=20 In addition Davis will question some aspects of the plan such as the lack= =20 of strong action on forcing refunds from suppliers. ``He wants to make sure= =20 that Congress gets the message loud and clear that we want our money back= =20 from the overcharges by generators'' said Davis media representative Steve= =20 Maviglio.=20 But the Republicans are just as eager to lay responsibility for the=20 electricity crisis on Davis who is up for re-election next year. A=20 hard-hitting Republican-backed TV ad campaign in California organized by=20 Scott Reed a former executive director of the Republican National Committe= e=20 blames the governor for failing to act quickly when the crisis first emerge= d.=20 The politics of shifting blame are likely to set the tone for the hearings= =20 organized by the new Democratic chair of the Senate Governmental Affairs=20 Committee Sen. Joe Lieberman D-Conn. Davis and all five FERC commissioner= s=20 have been invited to the hearing to determine if the commission has lived u= p=20 to its legal obligation to ensure ``just and reasonable'' electricity price= s=20 in California.=20 Price controls=20 With that oversight hearing pending this week the commission called a=20 special meeting Monday and took stronger action. It expanded existing=20 electricity price controls around the clock and to 11 Western states. Under= =20 the commission's plan ceiling prices will be set that suppliers can exceed= =20 as long as they provide justification for the higher price. A hard price ca= p=20 would set a price that could not be exceeded.=20 Commission Chairman Curt Hbert a Republican said politics played no role= =20 in enacting the new plan. But Commissioner William Massey one of two=20 Democrats on the five-member commission acknowledged that political pressu= re=20 in recent weeks from Republicans and newly empowered Democrats in the Senat= e=20 had an impact.=20 ``We are an independent agency but we operate in a highly charged political= =20 environment. I would not imply that we did not rule on an independent basis= =20 here but you know this is Washington D.C. for God's sake'' Massey told= =20 the Mercury News on Tuesday. ``I think that it was enlightening to the agen= cy=20 that this wasn't just a Democratic question this was Democrats and=20 Republicans throughout the West saying `My God solve this problem.' And s= o=20 we hope we have.''=20 The White House which had opposed any form of price controls also moved t= o=20 adjust to this political reality.=20 ``To the degree that it is a market-based program this is in keeping with= =20 what the president said and the president is pleased to be able to help=20 California in that manner'' White House press secretary Ari Fleischer said= .=20 ``It does not change the president's fundamental view that a separate=20 economic matter which would be price controls would not be productive.''= =20 But Democrats are eager to point to the shift as evidence that the White=20 House realized it was paying too high a political price for its earlier=20 position insisting that the electricity crisis was largely California's=20 problem to solve.=20 ``The Bush administration is realizing the jig is up. The game is over''= =20 said Sen. Barbara Boxer D-Calif. ``Their attitude of hands-off has hurt th= em=20 deeply.''=20 Democrats in the House have vowed to continue pushing for a vote on their o= wn=20 price-caps bill. The legislation is adamantly opposed by Republican leaders= =20 in Congress who believe FERC's actions Monday are enough government=20 intervention.=20 ``I hope that its actions are based on market principles not political=20 half-measures'' said House Majority Whip Tom DeLay R-Texas. ``It's now ti= me=20 for Governor Davis to stop pointing fingers and shifting blame.''=20 Feinstein has vowed to quickly resurrect her bill if electricity prices sho= ot=20 up dramatically. Boxer said she will introduce legislation to force FERC to= =20 order power suppliers to refund what the state says are billions of dollars= =20 in overcharges for electricity purchases.=20 Meeting on refunds=20 The commission has set up a conference for the state suppliers and utiliti= es=20 to settle the contentious refund issue by July 10. If no settlement can be= =20 reached under the auspices of an administrative law judge the judge will= =20 make a recommendation to the commission and it will resolve the dispute=20 Hbert said.=20 Massey had supported Feinstein's legislation to force him and his fellow=20 commissioners to enact price caps. But after the commission unanimously=20 approved its expanded price-control plan he joined the four other=20 commissioners Tuesday in urging the Senate Energy and Natural Resources=20 Committee not to pass such a law.=20 The commission's chair Hbert strongly warned against legislative action= =20 saying ``I believe in my heart and I know in my educated mind that we ar= e=20 on the right track.''=20 But the issue disappeared Tuesday as Feinstein and the Republican co-sponso= r=20 of the price-cap legislation tabled their plan.=20 ``I think it renders substantially moot the legislative efforts that she an= d=20 I were pursuing'' Sen. Gordon Smith R-Ore. said of the commission's new= =20 price-control plan. ``And I do believe that effort would have won large=20 majorities in the Senate and the House and so I think what you are doing i= s=20 reflecting the will of the elected representatives of the American people.'= '=20 Feinstein said that whatever the commission calls the plan it is close=20 enough to hard caps to merit a chance to work.=20 ``I view this action by FERC as a giant step forward and I'm very grateful = to=20 you'' she told the commissioners. ``I also view the fact that Senator Smit= h=20 and I have worked hard on this bill perhaps has been helpful in urging you= =20 along.''=20 FERC's fixes have fallen short=20 Published Wednesday June 20 2001 in the San Jose Mercury News=20 BY FRANK WOLAK=20 ON Monday for the third time in the past eight months the Federal Energy= =20 Regulatory Commission the agency charged with regulating wholesale=20 electricity prices in California implemented remedies that it claims will= =20 set just and reasonable wholesale electricity prices. This is a case where= =20 the third time is unlikely to be a charm.=20 As chairman of the Market Surveillance Committee of the California=20 Independent System Operator the independent committee formed by FERC to=20 monitor the California market I have analyzed the results of FERC's previo= us=20 attempts. They reveal a misunderstanding of important details of the=20 California electricity market. It is therefore not surprising that they hav= e=20 been ineffective.=20 Starting in November of 2000 FERC acknowledged that wholesale prices in=20 California during the summer of 2000 were unjust and unreasonable. Its=20 December 2000 order implemented the first set of remedies. Both the=20 California Power Exchange Market Monitoring Committee and the committee I= =20 chair pointed out important shortcomings in FERC's analysis of the Californ= ia=20 market and argued that its remedies would most likely harm rather than=20 enhance market performance.=20 At this time FERC also did not order refunds for the unjust and unreasonab= le=20 prices even though it acknowledged the prices reflected the exercise of=20 market power which is the ability of a producer to force prices higher. Th= e=20 Federal Power Act requires refunds under these circumstances. But FERC said= =20 it was unable to find specific instances of firms exercising market power.= =20 This makes no sense. If FERC finds that prices indicate market power then= =20 the generators who bid those prices are exercising market power.=20 Following the implementation of these remedies conditions in the Californi= a=20 market deteriorated far beyond what had been predicted by the two market=20 monitoring committees. Even though January and February are the lowest dema= nd=20 months of the year average wholesale electricity prices were almost 10 tim= es=20 higher in 2001 than they were during the same two months of 2000 and almost= =20 double the average price during the summer of 2000. In January March and= =20 May California experienced several days of rolling blackouts and had syste= m=20 emergencies almost every day during January and February of 2001.=20 IN April FERC made another round of market rule changes designed to lead t= o=20 just and reasonable prices. However in response to growing pressure from= =20 Congress less than 10 days after these remedies were implemented FERC=20 enacted its most recent order.=20 Before Congress declares victory it should verify that FERC's most recent= =20 plan achieves the following two goals.=20 First the plan should guarantee that the average price of wholesale=20 electricity paid by California over the next two years is equal to the=20 average price that would occur in a competitive electricity market with=20 California's current supply and demand conditions and fuel costs. The Feder= al=20 Power Act requires not just a high probability of just and reasonable rates= =20 it requires that they occur with certainty.=20 The second goal is to alter the incentives faced by all market participants= =20 so that it will no longer be profit-maximizing for a firm to withhold=20 electricity from the market in order to drive up prices.=20 FERC's most recently implemented plan does not achieve either of these goal= s=20 although it does come closer than any previous attempts.=20 One solution satisfying both of these goals has been proposed to FERC. In a= =20 December report to FERC the Market Surveillance Committee of the Californi= a=20 ISO proposed a one-time regulatory intervention. This intervention would=20 require that each generator serving California sign a forward contract=20 guaranteeing that California consumers can purchase 75 percent of the=20 generator's expected output over the next two years at a specified=20 competitive benchmark price. Once a firm has signed these forward contracts= =20 it is free to sell all remaining energy in the western U.S. wholesale marke= t=20 at whatever price it can obtain.=20 The obligation to provide power under the contracts and the incentive to= =20 sell 25 percent of power at unrestricted prices would prevent generators= =20 from withholding power.=20 Unless FERC implements a solution satisfying these two goals Congress shou= ld=20 require FERC to suspend the market-based pricing authority for all supplier= s=20 in the Western U.S. for the next two years and order all sales during this= =20 period at cost-of-service prices. This will guarantee that FERC meets the= =20 statutory mandate of the Federal Power Act in California. Frank Wolak is a professor of economics at Stanford University.=20 Wednesday June 20 2001=20 Easing the crunch on costs of power=20 It could have been worse. Yesterday the Federal Energy Regulatory Commissio= n=20 expanded limited price caps on electricity to cover 11 Western states and t= o=20 last 24 hours a day during an emergency.=20 This follows an action in April that imposed caps only in California during= =20 the hours the state declared a power emergency.=20 Under the new rules when reserves are below 7 percent in the California= =20 Independent System Operator spot markets ... the maximum price that can be= =20 charged for spot market sales ... will be 85 percent of the highest hourly= =20 price that was in effect during the most recent Stage 1 [emergency] called = by=20 the ISO the FERC explained yesterday. The order will last until Sept. 30 2001.=20 The action came after intense pressure by Democrats and the Bush=20 administration on the FERC whose three Republican and two Democrat members= =20 all voted for the new controls. It also comes after continuing stories about gouging by suppliers. On=20 Sunday the Register reported how Tulsa-based Williams an energy supplier= =20 manipulated the market to keep prices high.=20 And after Gov. Gray Davis last week attacked Los Angeles' government-run=20 Department of Water and Power for gouging the state on electricity purchase= s=20 reported the Los Angeles Daily News the DWP caved in and agreed to start= =20 selling the state power at 'cost'. The new FERC ruling certainly is better than the demand for across-the-boar= d=20 continuous price controls demanded by Gov. Davis and other Democrats. They're trying to let the market do the best it can under tremendous=20 pressure Robert Michaels a professor of economics at Cal State Fullerton= =20 told us of the FERC members. It's explicitly only for one kind of power= =20 that on short-term so-called spot market kinds of exchanges. Most power is= =20 under other kinds of contracts not touched. The main effect of the new order is that unlike full-blown price controls= =20 it should not discourage the construction of new power generators.=20 [B] POWER UPDATE/ US Senate panel to hold off vote on Calif. cap bill=20 June 20 2001=20 (BridgeNews) June 19 2124 GMT/1724 ET=20 TOP=20 STORIES:=20 US Senate panel to hold off vote on Calif. power cap bill=20 San Francisco June 19 (BridgeNews) - U.S. Senate Energy and Natural=20 Resources Committee Chairman Jeff Bingaman D-N.M. plans to hold off on=20 voting on a bill for U.S. West power price caps following a request by fell= ow=20 senators Dianne Feinstein D-Calif. and Barbara Boxer D-Calif. according= =20 to an aide in Bingaman's office Tuesday. ( Story .20121 )=20 IPE says merger with ICE complete will keep IPE name=20 New York June 19 (BridgeNews) - London's International Petroleum Exchange= =20 has completed its merger with the Intercontinental Exchange an electronic= =20 market for the trading of energy and metals products IPE Chief Executive= =20 Richard Ward said Tuesday. He said the company will still be called the IPE= .=20 His statement follows ICE's announcement Monday that all of conditions of i= ts=20 recommended offer to acquire the issued share capital of IPE Holdings had= =20 been satisfied or waived and that the offer was unconditional. ( Story=20 .17970 .19353 )=20 OF=20 INTEREST:=20 --AMERICAS--=20 FERC order seen having little effect on US generator profits=20 San Francisco June 19 (BridgeNews) - A U.S. Federal Energy Regulatory=20 Commission order to impose a soft price cap on U.S. West wholesale power= =20 prices will likely have little significant effect on producer profits from= =20 electricity sales while the order is in effect over the next year industry= =20 analysts said Tuesday. Some analysts cautioned that some producers without= =20 long-term contracts could be negatively affected by the order. ( Story .203= 40=20 )=20 White House says FERC power plan helpful step for California=20 Washington June 19 (BridgeNews) - The White House Tuesday said action take= n=20 Monday by the federal energy regulators to extend limits on electricity=20 prices in California is and can be a helpful step for the beleaguered=20 state. ( Story .18824 )=20 Calif. ISO rescinds Tues blackout forecast supplies still tight=20 New York June 19 (BridgeNews) - While the California Independent System=20 Operator has rescinded its forecast of possible blackouts for Tuesday the= =20 agency running the Golden State's electricity grid is currently projecting= =20 very little surplus power generated in the state for the day. ( Story .1491= 3=20 )=20 Three states sue DOE over air conditioning standards ruling=20 New York June 19 (BridgeNews) - Attorney generals of California Connectic= ut=20 and New York along with several consumer groups sued the Department of Ener= gy=20 to block a Bush Administration plan allegedly designed to weaken efficiency= =20 standards for residential appliances including air conditioners and heat= =20 pumps. The complaint filed Tuesday in Manhattan federal court calls the=20 administration short sighted and seeks to invalidate its rule changes. (= =20 Story .18548 )=20 NY New England ISOs expand power reserve sharing agreement=20 New York June 19 (BridgeNews) - The Independent System Operators (ISO) for= =20 New York (NYIOS) and New England (ISO-NE) have agreed to expand their=20 reserve-sharing agreement to allow for each ISO to draw on available reserv= es=20 in the other region in the event of a system interruption according to a= =20 statement issued Tuesday by ISO-NE. ( Story .19283 )=20 AGA Preview: US natural gas inventories seen up 85 to 95 bcf=20 New York June 19 (BridgeNews) - The American Gas Association (AGA) is=20 expected to report Wednesday that U.S. natural gas stocks have risen by 85= =20 billion to 95 billion cubic feet (bcf) for the week ended Friday according= =20 to a BridgeNews survey of brokers analysts and traders. The AGA will relea= se=20 the storage report at 1400 ET Wednesday. ( Story .1856 )=20 --ASIA/PACIFIC--=20 GAIL planning 20-bln-rupee gas pipeline in southern India=20 New Delhi June 19 (BridgeNews) - India's state-owned Gas Authority of Indi= a=20 Ltd. plans to lay a new 500-kilometer-long natural gas pipeline connecting= =20 the two southern states of Kerala and Karnataka at a cost of 20 billion=20 rupees the Press Trust of India said Tuesday. The pipeline will carry 6=20 million cubic meters of gas. ( Story .12193 )=20 Indonesia official sees power cuts by 2004 unless new units built=20 Jakarta June 19 (BridgeNews) - Indonesia will face power cuts by 2004 unle= ss=20 additional generating capacity is built Eddie Widiono president director = of=20 state power group PLN said at an industry seminar here on Tuesday. But=20 experts warned that the capital markets were unwilling to finance the=20 billion-dollar investments needed and the public sector could not afford it= .=20 ( Story .12536 )=20 Indonesia to restructure PLN raise power tariff says minister=20 Jakarta June 19 (BridgeNews) - The government aims to revive investment in= =20 Indonesia's power sector with a scheduled 17.5% rise in electricity prices= =20 this year and a later $3 billion debt equity swap to restructure state powe= r=20 company PLN minister of energy and mines Purnomo Yusgiantoro said Tuesday.= =20 PLN will negotiate directly with independent power producers (IPPs) to=20 install additional capacity he added. ( Story .10568 )=20 Indonesian minister claims ExxonMobil to resume Aceh operations soon=20 Jakarta June 19 (AFP) - PT Exxon Mobil Indonesia will resume oil and gas= =20 production in separatist-plagued Aceh province in early July ending a free= ze=20 of more than three months for security reasons a minister said Tuesday. (= =20 Story .10751 )=20 --EUROPE/MIDDLE EAST--=20 Czech's Temelin nuclear plant reactor to be restarted in July=20 Prague June 19 (AFP) - Reactor number one at the controversial Temelin=20 nuclear plant in the Czech Republic will be restarted on July 21 after bein= g=20 shut down for two months for repairs the plant's spokesman announced=20 Tuesday. The reactor was shut down in early May when faults were detected i= n=20 its non-nuclear secondary circuit the latest in a series of technical=20 glitches discovered since it was first put into service in October last yea= r.=20 ( Story .16716 )=20 British Energy: Sizewell B power plant back onstream=20 London June 19 (BridgeNews) - The 1188-megawatt Sizewell B nuclear power= =20 plant has been back onstream for a few days a spokeswoman for operator= =20 British Energy told BridgeNews Tuesday refusing to detail when exactly the= =20 plant was recommissioned and whether its available capacity had since been= =20 utilized by the market. ( Story .12928 )=20 Germany's Mueller says nuclear phase-down formula won't disrupt=20 Berlin June 19 (BridgeNews) - The formula for shutting down German nuclear= =20 power plants should cut atomic generating capacity only one-sixth by 2010= =20 insufficient to raise fears of shortages said Economics Minister Werner=20 Mueller. ( Story .12337 )=20 TURKEY CRISIS: Press: Govt late on IMF pledged power sell-offs=20 Ankara June 19 (BridgeNews) - The Turkish Cabinet has decided to propose t= o=20 the parliament to extend the transfer of operational rights of power plants= =20 to the private sector by another four months once again violating pledges= =20 made to the IMF when securing a U.S. $10 billion bailout package after the= =20 February crisis Sabah newspaper reported Tuesday. The government in its n= ew=20 IMF-supported program pledged to complete transfer of the rights by=20 end-June. ( Story .11978 )=20 se SPOT= =20 NEWS LINKS:=20 THE=20 MARKETS:=20 US FUTURES: UK FUTURES .1908 NY Natural Gas Pre-Opg .1795 IPE Nat Gas Review=20 .1906 NY Natural Gas Review .1794 IPE Nat Gas Midday=20 .1747 NY Natural Gas=20 US/CANADA CASH NATURAL GAS UK/EUROPE CASH NATURAL GAS .1894 Henry Hub natural gas .1807 UK Spot Gas=20 .1884 US/Canada Spot Natural Gas=20 US CASH ELECTRICITY UK/EUROPE CASH ELECTRICITY .8575 California PX: Next day .1892 UK Power Index=20 .8576 .8577 WSCC Forwards (AM/PM) .1889 Nordic Power Market=20 .8585 .8586 PJM Forwards (AM/PM) .1890 Spanish Power Market=20 .8593 .8594 Cinergy Forwards (AM/PM) .1844 UK EFA Power Market=20 .8597 .8598 Entergy Forwards (AM/PM) CANADA CASH ELECTRICITY=20 .8601 .8602 ERCOT Forwards (AM/PM) .5637 Canadian Power Market=20 .8603 New England Forwards=20 .8587 .8600 TVA Forwards (AM/PM)=20 OTHER=20 .1873 US Nuclear Plants Operating Status=20 .2029 BRIDGE CALENDAR: US POWER: Key events to watch=20 .2030 US Utility Deregulation Digest=20 .1704 US Utility M&A Digest=20 SYMBOL=20 LINKS:=20 Click below for adamb chart in Athena NATURAL GAS=20 NYMEX - IPE - NYMEX ELECTRICITY=20 Palo Verde electricity - COB electricity- Cinergy electricity - Entergy electricity - PJM electricity - BridgeNews=20 Send comments to gennews@bridge.com=20 [B] FERC order seen having little effect on US generator profits=20 June 20 2001=20 By Christine Cordner San Francisco June 19 (BridgeNews) - A U.S. Federal Energy Regulatory=20 Commission order to impose a soft price cap on U.S. West wholesale power= =20 prices will likely have little significant effect on producer profits from= =20 electricity sales while the order is in effect over the next year industry= =20 analysts said Tuesday. Some analysts cautioned that some producers without= =20 long-term contracts could be negatively affected by the order.=20 * * * FERC's decision to expand the soft price cap throughout the western grid i= s=20 not very painful for generators Barry Abramson UBS Warburg analyst said= =20 in a research note. The expanded soft price cap will have little impact on= =20 the earnings of the wholesale generating companies. By definition every=20 other power plant is more efficient than the least efficient power plant a= nd=20 thus every other power plant should be able to make a good profit selling a= t=20 the soft price cap.=20 Furthermore on most days most of the power that is produced is sold at= =20 prices below the soft price cap so the soft-price cap has little impact on= =20 the overall earnings of the wholesale generators in the region Abramson= =20 said.=20 FERC on Monday unanimously voted 5-to-0 to expand wholesale price caps to t= he=20 10 western states comprising the Western Systems Coordinating Council. FERC= =20 also expanded the price caps on wholesale power to 24 hours per day seven= =20 days per week from limits only during supply emergencies when reserve=20 margins in California fall below 7%.=20 Under the order wholesale power prices will be limited to 85% of the price= =20 in effect during the final hour of the most recent emergency when Californ= ia=20 is not in a supply emergency. The proxy price will be based on the costs fo= r=20 the least efficient power plant used to generate electricity on that day as= =20 well as the price for natural gas.=20 Generators investor-owned utilities and independent power producers=20 however can receive more than the proxy price if they can justify the high= er=20 generation costs. The plan also allows a 10% surcharge on all wholesale pow= er=20 sales in California in order to account for credit risk.=20 In a research note JP Morgan analysts Jim Von Riesemann and Anatol Feygin= =20 said that earnings for generating companies should remain relatively intac= t=20 and valuations look attractive especially for AES Mirant and NRG.=20 Robert Winters a Bear Stearns analyst said The near-term actions by the= =20 FERC (and the focus on Monday's meeting) the heightened political rhetoric= =20 and the weakening in gas and power prices across much of the U.S. over the= =20 past month has led to the weakness in the shares of the wholesale energy=20 companies...We believe very attractive buying opportunities are being creat= ed=20 within certain areas of the wholesale energy sectors where companies are no= w=20 trading at discounts to their projected earnings growth range.=20 Winters said there were buying opportunities with Williams which continue= s=20 to be our top pick in the wholesale energy space and with Enron Corp.=20 But Abramson noted that the order does not allow producers to mark up the = r=20 price of spot power for resale above the soft price cap which could affec= t=20 some profit margins.=20 The FERC plan should make it challenging for some to repeat the growth of= =20 the last couple of quarters in the West particularly those that without=20 long-term contracts. It appears that the plan would likely dampen volatilit= y=20 although price caps can have unexpected consequences said Merrill Lynch= =20 analyst Steven Fleishman.=20 On a relative basis we believe companies that have locked up much of thei= r=20 capacity under long-term contracts and have efficient baseload power are be= st=20 positioned under the new FERC plan Fleishman said in a note. He said=20 Calpine Dynegy NRG Energy and Williams stand to benefit the most from thi= s=20 scenario.=20 Companies that could be challenged are those with less long-term contracts= =20 that are more dependent on inefficient peaking plants and that could be=20 affected by less volatility in the West Fleishman said. The big question= =20 is how well the marketers positioned their books ahead of this changed=20 environment. He said Reliant Resources since it appears to have the least= =20 contracted in the West for 2002.=20 The plan which will be in effect from Wednesday to Sept. 30 2002 follows= =20 pleas from California Gov. Gray Davis to control wholesale prices which he= =20 said cost the state roughly $50 billion this year.=20 The state's largest utility Pacific Gas & Electric declared bankruptcy=20 earlier this year citing losses from high wholesale prices. End=20 SCE Unveils Rotating Blackout Web Site and Public Notification Plan=20 June 20 2001=20 ROSEMEAD Calif. June 19 /PRNewswire/ via NewsEdge Corporation -=20 Southern California Edison (SCE) today unveiled its enhanced Web site and= =20 public notification process to help guide the public through possible=20 rotating power blackouts when ordered by the California Independent System= =20 Operator (Cal-ISO).=20 We have been able to increase significantly the amount of outage informati= on=20 available to our customers because we want to empower them with critical= =20 information to prepare for and safely cope through power blackouts said P= am=20 Bass SCE's senior vice president of customer service. We recognize that t= he=20 more information customers have before and during rotating outages the=20 better equipped they will be to address the concerns and safety of their=20 families and employees.=20 Bass said customers have indicated they want to know four basic things when= =20 rotating blackouts occur: the location the duration whether it affects=20 them and what they should and should not do to safely get through the=20 outages. SCE offers several information resources that address these concer= ns=20 -- through toll-free phone lines through news media updates and now throu= gh=20 an expanded user-friendly rotating outage Web site.=20 All of these sources will tell customers that the outages rotate among=20 electrical circuits across SCE's vast service area for about one hour as= =20 directed by Cal-ISO. They will also list the likely affected customer group= s=20 and communities and even provide geographic maps outlining the specific=20 neighborhoods. Customers will also be able to access practical tips on how = to=20 prepare and function safely through outages.=20 Customers can find out the group their home or business is assigned to by= =20 identifying their alphanumeric Rotating Outage Group Number which now=20 appears directly under the customer's name and address in the top left corn= er=20 of the bill's front page. When Cal-ISO predicts possible rotating outages= =20 SCE will immediately announce which groups may be affected through its outa= ge=20 hotline -- (800) 611-1911 -- its Web site -- www.sce.com -- and through the= =20 news media.=20 When outages are forecasted or actually begin customers can determine if= =20 their group is part of the current outage or likely to be included in the= =20 next round since SCE generally interrupts groups in numerical order with= =20 some exceptions. For example customers can now hear on the morning news=20 whether Cal-ISO is predicting outages for the day. By calling the hotline o= r=20 checking www.sce.com they can learn which groups would likely be interrupt= ed=20 if circumstances turn out as predicted. If their group number is on the lis= t=20 of groups likely to be interrupted the customer could take steps to prepar= e=20 for the likelihood of rotating blackouts affecting their home or business= =20 that particular day.=20 It should be noted that group numbers may change without advance notice for= =20 operational reasons or when state regulators revise their policy regarding= =20 customers exempted from blackouts. SCE will notify customers of such change= s=20 as quickly as practical.=20 Visitors to SCE's customer Web site www.sce.com will find the following= =20 helpful enhancements:=20 -- The site displays outage group numbers and corresponding communities=20 affected during recent current and predicted rotating outage=20 incidents.=20 -- When customers click on the name of a community affected by an outage= =20 they are taken to a detailed street map of the affected circuit.=20 -- The Web site offers general outage information and links including=20 outage preparation and safety tips grid status information from Cal-=20 ISO frequently asked questions about rotating outages and=20 conservation tips.=20 -- A dynamic home-page pop-up window will change messages depending on=20 state power conditions. For example during a Stage 2 Emergency=20 customers will be directed to information about potential outages.=20 During a Stage 3 Emergency in which rotating outages are underway the=20 box will provide a hotlink to group numbers and communities currently=20 affected and likely to be affected should outages likely continue.=20 For customers who don't have Internet access SCE provides essentially the= =20 same Web site information through an automated outage phone line (800)=20 611-1911. This service makes it possible to obtain outage information=20 immediately without waiting. Among major features:=20 -- Customers can call at any time to learn the Rotating Outage Group=20 Number assigned to their home or business.=20 -- When customers experience a power blackout they can call to determine= =20 whether they are part of a rotating outage incident or if their=20 circuit has been affected by a routine interruption such as a car or=20 construction accident.=20 -- During rotating blackouts customers can learn if their circuit is=20 currently affected or may be affected in the coming hours and which=20 portions of specific communities may be affected.=20 -- When customers call they should have their account number and group=20 number handy. However if customers call during a rotating outage=20 incident and do not know their group number they will be able to=20 obtain information by entering their zip code.=20 SCE's media relations office has developed strategic communications=20 partnerships with radio and television stations that provide frequent live= =20 updates to the public including information about circuit groups affected = or=20 likely to be affected by outages.=20 It should be further noted that while SCE is committed to providing as much= =20 advance public notification about pending rotating blackouts it can only d= o=20 so as it receives timely notification from Cal-ISO.=20 SOURCE Southern California Edison=20 CONTACT: Corporate Communications of Southern California Edison=20 626-302-2255 www.edisonnews.com=20 Web site: http://www.sce.com (EIX)=20 Edison CEO/ Ruling Hasn't Helped=20 June 20 2001=20 By LESLIE GORNSTEIN AP Business Writer LOS ANGELES (AP) via NewsEdge Corporation -=20 A federal ruling this week limiting wholesale energy prices in 10 Western= =20 states hasn't been enough to pull Southern California Edison any further fr= om=20 the brink of bankruptcy Edison International chief John E. Bryson said=20 Tuesday.=20 The state's second-largest utility is no further from or closer to bankrupt= cy=20 now than it was ``two weeks four weeks six weeks ago'' Bryson told a pre= ss=20 conference before a speech to Town Hall Los Angeles a public policy forum.= =20 Bryson is chairman president and chief executive officer of Edison=20 International parent of subsidiary Southern California Edison which serve= s=20 4.2 million customers.=20 Bryson said however that he senses a warming among state legislators to a= =20 proposed bailout deal between his company and the state.=20 That deal would supply billions of dollars to Edison in exchange for years = of=20 cheap power and possibly the utility's power lines.=20 ``Interest has at least intensified in Sacramento on the part of legislator= s=20 to take steps _ debate continues exactly what steps _ to have Edison health= y=20 and to take the state out of the power business and so on'' Bryson said.= =20 Such lawmaker approval is required for the deal to survive. Key lawmakers= =20 surrounding the deal were not immediately available for comment.=20 In his Town Hall address Bryson used the forum as a kind of open plea to= =20 state legislators listing what he called a series of widespread myths that= =20 might be keeping leaders from acting.=20 ``The first myth is that somehow Southern California Edison is seeking a=20 bailout from taxpayers'' Bryson said. ``Only the reverse is true.''=20 Instead Bryson said it was Edison who bailed out California by keeping th= e=20 lights on even when the utility's power costs far exceeded its revenues.=20 Secondly Bryson said Edison and its investors are not profiting from the= =20 power crisis and SoCal Edison's parent did not act improperly by collectin= g=20 money from the utility earlier this year.=20 That money was later given to shareholders a move that outraged consumer= =20 groups.=20 Bryson also warned that a SoCal Edison bankruptcy would severely hurt=20 California's economy by scaring away new businesses and investment capital.= =20 ``Inaction would deeply hurt the state of California and all of us'' he=20 said.=20 Editorial Desk Section A=20 At Last Action on California=20 ?=20 06/20/2001=20 The New York Times=20 Page 22 Column 1=20 c. 2001 New York Times Company=20 After months of dithering the Federal Energy Regulatory Commission took so= me=20 potentially meaningful steps on Monday to contain the wholesale price of=20 electricity in California and elsewhere in the Western United States. Anxio= us=20 not to be seen as caving in to public pressure or abandoning its fidelity t= o=20 the free market the White House described the new policy as ''consistent= =20 with where the president has been all along.'' Gov. Gray Davis of Californi= a=20 for his part said the policy did not go far enough and of course only= =20 time will tell whether it does. But to many others including Senator Diann= e=20 Feinstein of California the move amounted to the first significant federa= l=20 intervention in the California wholesale market since the crisis began last= =20 year. Ms. Feinstein withdrew her own price-cap bill pending the outcome of= =20 the new plan.=20 Under the new arrangement approved unanimously by a reshuffled five-member= =20 Regulatory Commission price limits will be based on the cost of producing= =20 electricity at the least efficient generator. The formula covers the sale o= f=20 electricity for immediate delivery -- the so-called ''spot market'' that=20 supplies about 20 percent of California 's needs and that California turns = to=20 when it is desperately trying to keep the lights on. The companies will be= =20 allowed to charge higher prices during peak periods but not the huge sums= =20 they command today.=20 In addition the constraints will apply throughout 10 other Western states= =20 presumably eliminating any incentive for generators to withhold power from= =20 the California market in order to obtain a higher price elsewhere. The=20 controls are to expire in September of next year which should relieve some= =20 of the administration's earlier fears that constraints of any kind would=20 discourage investment in new and badly needed sources of supply.=20 The benefits will not immediately be felt by California consumers. Both=20 individuals and businesses have recently been hit by rate increases belated= ly=20 imposed by the state's Public Utilities Commission at Mr. Davis's request.= =20 But the new plan should ultimately benefit taxpayers by lessening the impac= t=20 of higher energy costs on the state government which has been buying power= =20 on behalf of the state's two largest utilities both essentially insolvent.= =20 Recent estimates have suggested that California which paid $7 billion for= =20 electricity two years ago could pay as much as $50 billion this year.=20 Until quite recently the president and his energy czar Dick Cheney had=20 seemed almost indifferent to California 's needs. But Republican members of= =20 Congress from California and other Western states have been growing=20 increasingly restive as they contemplate the potential political fallout in= =20 the midterm elections of 2002. In addition the two newest members of the= =20 regulatory commission both Bush appointees have expressed sympathy for=20 California 's plight. Whatever the reason the administration appears to ha= ve=20 seen the light even though it is reluctant to admit it. National Desk Section A=20 Regulators' Order Could Bring Broad California Power Accord By LAURA M. HOLSON with JEFF GERTH ?=20 06/20/2001=20 The New York Times=20 Page 14 Column 3=20 c. 2001 New York Times Company=20 LOS ANGELES June 19 -- An order by federal regulators that power generator= s=20 enter settlement talks with the State of California could open the door to = a=20 sweeping compromise of the financial issues in the state's power crisis=20 energy industry analysts and executives said today.=20 But the question that remains -- and it is a vital one they said -- is=20 whether the Federal Energy Regulatory Commission has the wherewithal to for= ce=20 the warring parties to hammer out an understanding that at its heart is a= s=20 much about politics as about money.=20 The commission on Monday gave California regulators and power generators=20 until July 9 to come up with a plan for settling accounts between the=20 generators and California 's struggling utilities. The power companies are= =20 owed billions but the state has accused them of price-gouging. If the=20 parties cannot reach some agreement an administrative judge will step in a= nd=20 recommend a settlement to the commission instead.=20 Asked at a Senate hearing in Washington today to clarify what he hoped to= =20 accomplish as a result of the two weeks of settlement talks the commission= 's=20 chairman Curtis L. Hebert Jr. was noncommittal. The parties he explained= =20 need two things for the talks to succeed: a deadline and uncertainty.=20 Senator Dianne Feinstein Democrat of California expressed skepticism abo= ut=20 the undertaking. Ms. Feinstein said at the hearing held by the Senate Ener= gy=20 and Natural Resources Committee that she was concerned that the commission= =20 had laid out ''no rules'' for the talks.=20 ''Very little if any money has changed hands as a result of prior=20 settlement conferences'' she said.=20 Many industry executives and state officials have not yet seen the=20 commission's order and they were scrambling today to figure out exactly wh= at=20 they were being asked to do.=20 ''Without seeing what exactly is in the order who knows?'' said Sean=20 Gallagher a staff lawyer for California 's Public Utilities Commission.=20 ''But we wouldn't turn our noses up at participating in negotiations.''=20 Gary Ackerman executive director of the Western Power Trading Forum a=20 coalition of energy traders and electricity generators noted that the=20 federal regulators' timetable ''has a very short fuse.'' And the fact that= =20 the state's biggest utility the Pacific Gas and Electric Company has file= d=20 for bankruptcy will complicate efforts to reach a comprehensive agreement = he=20 added.=20 ''I don't hold high hopes that a settlement would work out'' Mr. Ackerman= =20 said ''but I commend the FERC for taking a stab.''=20 Moreover the parties to the settlement talks may lack an element vital to= =20 successful negotiations: trust.=20 Several California entities including the Public Utilities Commission are= =20 investigating whether generators took advantage of consumers by charging=20 excessive prices for power. The Independent System Operator which runs the= =20 state's power grid released a study in March concluding that Californians= =20 might have been overcharged for electricity by more than $6 billion. One=20 state government negotiator said the California attorney general's office= =20 could file a suit against the power generators in the next few weeks.=20 And as state officials including Gov. Gray Davis continue to hurl attacks= =20 at the generators calling them pirates and profiteers the companies and= =20 California utilities are blaming legislators saying they failed to address= =20 the power crisis quickly enough.=20 In March Duke Energy one of the companies the state has accused of=20 profiteering offered to negotiate a broad settlement but Governor Davis= =20 ruled out calling off the state's inquiries as part of any agreement.=20 The outlines of Duke's proposal included a compromise on the money owed by= =20 California utilities in exchange for the dropping of private lawsuits=20 California 's complaints to federal regulators and the state investigations= .=20 Duke would have admitted no wrongdoing.=20 In formal proceedings the power generators to date have vigorously fought= =20 discounting the debts they are owed by California .=20 The Federal Energy Regulatory Commission has ordered generators to refund= =20 nearly $130 million in what it judged to be overcharges. Today one of the= =20 commissioners William L. Massey said 80 percent of that money had not bee= n=20 collected. A Section=20 Davis Finds Hope in Calif. Power Crunch Rene Sanchez and Peter Behr ?=20 06/20/2001=20 The Washington Post=20 FINAL=20 Page A06=20 Copyright 2001 The Washington Post Co. All Rights Reserved=20 LOS ANGELES June 19 -- Sinking in the polls under attack by a new=20 Republican advertising campaign and still struggling to avert a summer of= =20 blackouts California Gov. Gray Davis (D) nevertheless seems heartened abou= t=20 the latest developments in the power crisis that has engulfed his state and= =20 threatened his political career.=20 On his first trip to Washington in months Davis will detail California 's= =20 plight Wednesday in testimony to a Senate committee newly led by sympatheti= c=20 Democrats -- one important reason for his optimism.=20 But he has others: Conservation is taking hold in the state and prices for= =20 power on the daily spot market are dropping. California has managed to avoi= d=20 rolling blackouts so far this month in part because it has been spared a= =20 heat wave.=20 Federal regulators under pressure even from Republican lawmakers decided= =20 Monday to impose more controls on prices that energy suppliers can charge= =20 California . Two new power plants are scheduled to begin producing=20 electricity in weeks. California also has recently secured more than a doze= n=20 deals for power over the next decade a move Davis contends will stabilize= =20 the volatile wholesale market for energy.=20 In short Davis and his aides say their concerted political strategy and=20 efforts to ease the crisis are beginning to pay off.=20 The bottom line is that we're stabilizing prices and assuring the power wi= ll=20 be there without additional rate increases said Steve Maviglio a spokesm= an=20 for the governor. But he added: We're not ready to say the war is over. It= 's=20 still going to be a tight summer.=20 Whether any or all of those steps will keep the lights on in California thi= s=20 summer or help solve an array of other financial problems the crisis has= =20 caused is hardly clear.=20 In fact California 's power shortfall could produce 113 hours of rotating= =20 outages this summer according to a U.S. Department of Energy study schedul= ed=20 to be released Wednesday.=20 Since California 's two largest utilities fell into financial ruin this yea= r=20 forcing the state to spend nearly $5 billion to buy power directly and=20 saddling residents with huge new rate increases the support that Davis onc= e=20 had from a majority of voters has vanished. Recent polls suggest that he=20 could have trouble winning a second term.=20 Consumer advocates here are besieging him saying that the $43 billion in= =20 long-term power deals that Davis has signed could lock residents into payin= g=20 artificially high utility rates for years. Some contend that all he has=20 gained from Washington is political cover.=20 The Bush administration has created this toothless price cap mechanism tha= t=20 will be used as political protection but certainly not consumer protection= =20 said Doug Heller a director of the Foundation for Taxpayer and Consumer=20 Rights.=20 Davis has stuck mostly to the same political script. He is demanding more= =20 federal help for California -- on Monday he called the Federal Energy=20 Regulatory Commission's decision merely a step in the right direction --= =20 and he is denouncing out-of-state energy suppliers and their Republican=20 allies.=20 Today Republicans launched a $1.5 million advertising offensive that blame= s=20 Davis for the state's energy crunch. The spots running on English and=20 Spanish-language media describe the crisis as Grayouts from Gray Davis.= =20 Scott Reed the GOP strategist who runs the American Taxpayers Alliance=20 which funded the ad campaign said his group wants to counter the governor'= s=20 spin. The blame game has to end said Reed.=20 But Davis's aides say the ads are a sign that Republicans sense California = 's=20 energy predicament could deepen GOP political troubles in the state.=20 Privately some Republican lawmakers pushing for more federal assistance sa= y=20 they are worried that in midterm congressional elections next fall the GOP= =20 could lose House seats in California that it needs to hold a majority.=20 Today's hearing will bring both Davis and his adversaries on the Federal=20 Energy Regulatory Commission before the Senate's Governmental Affairs=20 Committee chaired by Sen. Joseph I. Lieberman (D-Conn.).=20 Instead of a committee debate on California 's electricity prices the focu= s=20 of the session may be shifting toward the billions of dollars of alleged=20 overcharges by energy suppliers.=20 Under growing pressure from both parties in Congress FERC's commissioners= =20 responded Monday with far more extensive price controls than they had been= =20 willing to consider previously. They extended April price controls that had= =20 applied only to times of power emergencies to all hours of the day through= =20 September 2002. And they expanded the controls to cover 10 other western=20 states.=20 California Sens. Dianne Feinstein and Barbara Boxer both Democrats said= =20 FERC's action was a positive step and agreed to delay efforts to direct the= =20 commission to clamp down on California 's energy prices. We're willing to= =20 give them a chance to see if it works Boxer told reporters.=20 Now Davis will press his demands that FERC recover some $8 billion in=20 alleged overcharges by wholesale power suppliers since the crisis began -- = a=20 far larger amount than the $124.5 million in refunds that FERC has so far= =20 assessed.=20 Whether there is even a chance of a peace process is unclear. Just last wee= k=20 California Attorney General Bill Lockyer announced plans to convene a=20 criminal grand jury to investigate whether power generators illegally=20 conspired to drive up electricity and natural gas prices.=20 The governor could face other new problems. Several of California 's major= =20 independent power generators said the price controls and state lawsuits=20 against the generators made it more difficult to justify expanding operatio= ns=20 in California a warning echoed today by Energy Secretary Spencer Abraham.= =20 But heading into the summer California 's power prices are much lower than= =20 they were a month or two ago with daily or spot power prices averaging $= 78=20 per megawatt hour in June compared to $372 in April.=20 Both Davis and the FERC commissioners are taking credit. S. David Freeman= =20 Davis's energy adviser said that the long-term power contracts the state h= as=20 signed the new power plants and favorable weather have tamed prices.=20 FERC Chairman Curt Hebert Jr. said Monday that the limited price restraints= =20 that the commission imposed on wholesale electricity sales in April have be= en=20 a key reason for the price decline.=20 Sanchez reported from Los Angeles and Behr from Washington. Staff writers= =20 Mike Allen and Juliet Eilperin contributed to this report from Washington.= =20 Contact: National Desk Section A=20 The Lesson of When to Give Aid to Free Markets By DAVID E. SANGER ?=20 06/20/2001=20 The New York Times=20 Page 14 Column 3=20 c. 2001 New York Times Company=20 WASHINGTON June 19 -- Three weeks ago George W. Bush addressed a sympathet= ic=20 audience of business executives at the Century Plaza Hotel in Los Angeles a= nd=20 declared that his administration ''will not take any action that makes=20 California 's problems worse and that's why I oppose price caps'' on=20 electricity .=20 As he spoke the Democratic governor of California Gray Davis sat=20 impassively on the dais preparing to meet Mr. Bush and then denounce him f= or=20 failing to protect California consumers from an electricity market gone wil= d.=20 Today the White House halfheartedly welcomed action by federal regulators = to=20 impose throughout the West a system that looks and smells a lot like price= =20 caps -- though the White House said it was something different.=20 ''This is not a price control'' Ari Fleischer the White House spokesman= =20 said. ''This is a market-based mitigation plan that now will extend to 11= =20 Western states.''=20 In fact it bore some resemblance to a proposal made by 10 leading economis= ts=20 who urged a middle ground between fixed prices and a deregulated electricit= y=20 market. Mr. Davis used their proposal to support his position in favor of= =20 limited price restraints when Mr. Bush visited California .=20 The White House shift from outright opposition to price controls to its mor= e=20 nuanced position today exemplifies how Mr. Bush has tempered his embrace of= =20 completely unfettered markets in recent weeks. He didn't have much choice.= =20 As the threat of blackouts loomed demands for action rose from officials o= f=20 both parties and from consumers in the West. It was almost possible to hear= =20 sighs of relief at the White House today that the Federal Energy Regulatory= =20 Commission -- an independent body in the Energy Department -- had moved to= =20 turn down the political heat.=20 In fact while some House Democrats are still pressing for firmer caps on= =20 prices Senators Dianne Feinstein Democrat of California and Gordon H.= =20 Smith Republican of Oregon withdrew a bill that would have placed strict= =20 price controls on electricity sold in Western markets.=20 Senator Feinstein said the White House could call yesterday's regulatory=20 action ''mitigation'' or anything else it pleased.=20 ''A rose is a rose by any other name'' she said today.=20 And a free market is not always free. Two weeks ago the administration said= =20 it would rescue steel companies and steelworkers who have long complained= =20 about unfair competition from South Korea Taiwan China Brazil Germany= =20 Russia and Ukraine. The White House defended the action by saying it was th= e=20 only way for the industry to adjust to a new competitive environment.=20 Last month with no major announcements at the White House the Bush=20 administration voted for International Monetary Fund aid to two countries= =20 Turkey and Argentina that (like California ) had made some economically=20 disastrous political decisions.=20 In each case Mr. Bush's economic orthodoxies were tempered by political=20 realities.=20 The California crisis was one thing when it involved a Democratic governor = in=20 a state Mr. Bush lost by a million votes it was another one of his aides= =20 conceded today when congressional Republicans from around the West were=20 warning Mr. Bush that blackouts and sky-high prices could blow up in his=20 first year in office.=20 ''We heard from a lot of members of Congress who feared that Republicans=20 would be tarred with worsening the problem even though it happened on Gray= =20 Davis's watch'' the political aide said. ''The president took that on=20 board.''=20 Similarly the steel decision was partly about enforcing laws against=20 ''dumping'' foreign products in the market -- and partly about Mr. Bush's= =20 desire to convince labor unions not to block his trade agenda. Like=20 Californians coping with higher energy prices the steelworkers need time t= o=20 adjust to a new world the administration said.=20 ''Open markets improve the lives of people by increasing opportunity choic= e=20 and economic freedom'' Robert B. Zoellick Mr. Bush's trade representative= =20 said in an interview today. ''But compassionate conservatism also recognize= s=20 the reality that the effects of rapid change fall harder on some communitie= s=20 and industries'' which he said need ''vital breathing space to adapt to= =20 change.''=20 While Mr. Bush expressed deep reservations about I.M.F. bailouts during the= =20 presidential campaign the situation seemed a bit more complicated once he= =20 got to Washington. The State and Defense Departments feared that if Turkey= =20 were engulfed in economic chaos and blamed the United States for failing t= o=20 come to its aid its leaders might be less inclined to let American fighter= =20 jets use its territory to mount missions over Iraq.=20 So given the choice between letting the Turkish people pay a high price for= =20 political mistakes -- Californians take note -- and weakening American=20 pressure on Saddam Hussein Mr. Bush decided that economic niceties were le= ss=20 important than political consistency. Mr. Bush chose the Pentagon over the= =20 Treasury.=20 Administration officials said these actions did not represent a retreat fro= m=20 let-the-markets-prevail orthodoxy.=20 Lawrence B. Lindsey Mr. Bush's chief economic adviser said in an intervie= w=20 today that he opposed price caps at the beginning of the California crisis= =20 and that he opposed them now. But he would not criticize the federal=20 commission for ''mitigating'' price spikes in the market.=20 ''What they are trying to do is achieve two incompatible missions --=20 preserving what is called 'just and reasonable pricing' and assuring an=20 adaquate supply of electricity '' Mr. Lindsey said. Yet the reality he=20 added is that new supplies of electricity will not become available for a= =20 year or more. ''FERC is doing its best to square that circle in the face of= =20 the fundamental problem which is inadequate supply'' he said.=20 That is the kind of argument that keeps economists happily arguing for hour= s.=20 It is not likely to be the kind of argument Mr. Bush himself is likely to= =20 engage in for long. As one of his political advisers said the other day=20 ''Don't think about this purely in terms of megawatts. We need to produce= =20 more electricity but we also need to produce some more seats in the=20 House.''=20 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: ticket Body:: vkaminski@aol.com What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: nan Body:: Do you still expect Guinn to call Ken? If so do we have updated talking points (and background) for Ken? What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: JDF Gala Body:: Thanks for the invite (and the follow up voicemail). I'd love to see the General (and you of course) but I'm going to have to pass. Thanks anyway. Sent by: Cathy Phillips@ECT To: Steven J Kean/NA/Enron@Enron cc: Subject: JDF Gala I would like to invite you and a guest to join me for the annual Juvenile Diabetes Foundation Gala to be held on May 12 2001 at the Westin Galleria. The guest speaker this year will be General Norman Schwarzkof. Please contact Cathy Phillips (X-36898) and let her know if you are interested in attending. Thank you. Mike What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: IHI Arbitration: PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT COMMUNICATION Body:: That all depends on your definition of the wordjob. It was actually anticlimactic---Mark told Bob he needed to stick around on some of the old EI litigation a fact we already knew. Are you at the Sempra deposition. how is it going? Gail Brownfeld/ENRON@enronXgate 03/07/2001 03:06 PM To: Richard B Sanders/HOU/ECT@ECT cc: Subject: RE: IHI Arbitration: PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT COMMUNICATION He keeps saying that he needs the $15 million. Maybe it's a budget thing. I think he really just wants to renegotiate the deal. I don't think he thinks that IHI has the money to pay us back. What happened at the meeting on Monday with Mark? Do I still have a job? What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Enron Opportunity Body:: any interest? What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: nan Body:: I just spoke with Clark Smith head of Elpaso's merchant arm. I told him that we had been hearing that El Paso was blaming Enrononline for problems in Western gas markets. He asked for some more specifics about who exactly was spreading the rumor (I told him we had heard it from 3-4 sources). He acknowledged that EOL was not the problem said he couldn't believe that it had been identified as such and said he would bring it up on his call with his Washington team this afternoon. I think he will put it to rest (except for whatever damage has already been done). I did promise to get some more specifics on who has told us that El Paso pointed to us. Can anybody give some info on that? What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Entry tax to dergulating markets Body:: ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Dow Jones: Enron, Bushs Biggest Contributor Body:: nan What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: CONFIDENTIAL - Residential in CA Body:: Were you on the call yesterday---I went ballistic. And where are you now!?! The calls underway. Karen Denne 04/13/2001 12:45 PM To: Jeff Dasovich/NA/Enron@Enron cc: Subject: Re: CONFIDENTIAL - Residential in CA I get so worked up over this issue... I really think now is the time to speak up and dissent. Skilling told us at a floor meeting that as an organization we've made poor decisions in the past and he believes it's because the people who disagreed with those decisions never spoke up. So help me out! From: Jeff Dasovich on 04/13/2001 12:34 PM Sent by: Jeff Dasovich To: Karen Denne/Corp/Enron@ENRON cc: Subject: Re: CONFIDENTIAL - Residential in CA Amen. What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: From Michael L. Kirby, Esq. Body:: 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 What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: HIGH PRIORITY - PRs PRC Meeting Body:: Please get available dates. I need to be there for this. ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Meeting with RW Beck, per Everett Chartier, 508/935-1675. Theyll be in a conference room to be determined. Body:: Dan Leff also setting up other meeting with wholesale retail and gov't affairs people with RW Beck.Rates discussion - Rebecca knows you won't be there. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Birhtday Body:: Kevin Thanks. I am becoming an old man. Vince What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Enrons Matching Gift Program Body:: Tim -- Cindy manages this program. Mary -- please give some thought to how we might solicit employee views on this. Cindy -- I believe we already allow matching of donations to quasi-religious organizations: religious schools for example and perhaps relief organizations like Catholic Relief Services? I think that if we want to consider extending it we should probably discuss it in a smaller group than the e-speak forum -- the Enron Foundation Board perhaps? This could become controversial though (recall the Planned Parenthood debate and the periodic attempts of shareholders to add restrictions through the proxy mechanism). ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Nepal Body:: There may be some press today about Enron's involvement in the Nepal hydro project. The government of Nepal is hopeful that we will pursue it but we are not going to. Kelly's response on press inquiries will be that we are not pursuing the project. Kelly will also be getting in touch with David Howe. I just wanted to keep you guys posted in case you are getting questions. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Humberto (Beto) Kuhn, resume Body:: Humberto - I forwarded your resume to Barry Hunsaker who is general counsel at EOG Resources. As you may know EOG used to be Enron Oil and Gas a majority-owned Enron subsidiary. A couple of years ago Enron sold its interest in EOG and it became a stand alone company. EOG Resources has been doing very well. I don't know if they are looking for lawyers now but I think I sent your resume to the right place. Humberto Kuhn <BetoKuhn@msn.com> on 05/21/2001 11:17:21 AM To: <skean@enron.com> cc: Subject: Humberto (Beto) Kuhn resume Dear Steve:? With sincere and advance thanks and pursuant to your recent conversation with my brother George I attach a copy of?the short version?of my resume.? I have a longer detailed version as well as numerous references that I will be pleased to furnish you.? In addition I am at your disposal at any time that?you or any others at ENRON should wish to meet with me.? Again?my thanks for your assistance and guidance. ? Kind regards ? ? Beto Kuhn Cell:? 713/ 906-8463 Res:? 713/ 467-3974 - RESUME HGKShort Form 05-01.doc What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: address Body:: JOSEPH KOOTHRAPPALLY (713) 853-6819 jkoothr@enron.com What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: California Power Markets Body:: nan What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Portal Body:: Attached are some late night thoughts on the portal. Most of this is focussed on the portal for opinion leaders but some of it could be applicable to the comemrcial portal as well. Could you forward this to Palmer ... for some reason my address book doesn't pull him up when I'm off the system. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: PG&E PX Credit Calculation -- CONFIDENTIAL ATTY CLIENT WORK PRODUCT Body:: Except that my understanding of the SCE model is that the CTC structure will continue beyond 3/31/02 (and may then apply for PG&E). I agree that if you were to go to a bottom's up it would require the CPUC to put in place a surcharge for remaining stranded costs (non-generation for example QFs) and a second surcharge for Negative CTC overpayment. Key question is who will pay the Negative CTC overpayment? On trying to understand the PX Credit algorithim my concern is that to understand how much the overpayment was during Oct - Feb we need to understand how costs hit the structure during that time period. Otherwise we don't know what form or amount of discount is required in the Settlement talks. Jim What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Mondays follow-up meeting on cost control Body:: I am calling Rob Walls to see if he can attend. Carol Ann Brown@ENRON COMMUNICATIONS 03/30/2001 02:49 PM To: Steven J Kean/NA/Enron@ENRON cc: Subject: Monday's follow-up meeting on cost control Steve Should Jim Derrick be invited to Monday's cost control meeting? I asked Kevin and he told me to ask you. Suzanne Brown came by today and said that his name was brought up at last week's meeting. Sincerely Carol Brown Office of the Chairman Enron Broadband Services Inc. 713.853.7974 713.853.9469 - fax carol_brown@enron.net What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Draft - Confidential - New Procedures to be introduced by ENA OTC for Exec Employment Agreements and Hiring of Commercial Staff below VP into ENA Body:: So I guess Dave doesn't want to send this out. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: TW Gas Sales: PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT PRIVILEGE Body:: In anticipation of potential litigation involving TW's operational activities please prepare an analysis for me of the reasons for TW's sale of excess natural gas at the California border. I am aware of several of these sales and have been informed that excess pressure at the border is the basic reason for them. I'd like a more specific explanation that includes the following information: 1. What are the specific pressures and volume considerations that could make it operationally necessary to sell gas at the California border? 2. What is the process that is followed to make such a determination? 3. Which individuals or groups are involved in determining whether an operational sale is necessary? 4. In what way have system operations changed since last year and how do those changes contribute to the increased frequency of such sales compared to previous years? 5. What alternatives to operational sales are considered before the decision to make a sale is reached? Thanks for your attention to this request. Please give me a call to discuss and please designate your response as Privileged and Confidential Attorney Client Privileged. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: BIPAC Board meeting Body:: I wuold like to attend if my calendar is open ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Beta Gamma Sigma Body:: Thanks for the invite. I would suggest Jean Ryall - who heads our Texas government/regulatory affairs team. She is certainly more familiar with the details (of which there will be many more after this legislative session and the conclusion of the pilot program). She is also a very good speaker (and can probably relate a few war stories to spice things up). From: Susan Skarness/ENRON@enronXgate on 05/04/2001 11:20 AM To: Steven J Kean/NA/Enron@Enron cc: Maureen McVicker/NA/Enron@Enron Subject: Beta Gamma Sigma Steve I am a member of Beta Gamma Sigma (BGS) the honor society for business programs accredited by AASCB - The International Association for Management Education. If you are not familiar with BGS a member must be in the upper 5% of their class as a junior and the upper 10% as a senior and in graduate school to be nominated for induction into the society. In an effort to provide additional programs and benefits to alumni members alumni chapters are being developed around the country. There are currently nine alumni chapters around the U.S. with a new one being formed in the Houston area. I am serving on a steering committee for the development of this Houston Area Alumni Chapter. Our primary reasons for starting a Houston Area Chapter include networking professional affiliations outreach to students resources learning opportunities and providing scholarships. Our initial outreach to Beta Gamma Sigma members will be through a reception/dinner to be held in October 2001. We are currently looking at either October 16 or 18. All 6200 Houston area members will be invited to participate however we expect attendance to be closer to 75-100 people. The ages experiences and business affiliation of the members will be very diverse but all will have the common thread of business excellence. The details of this event are still being finalized however at our last meeting the discussion encompassed possible speakers and topics. Overwhelmingly the team decided on Electricity Deregulation in Texas and since I work at Enron I was asked to assist in locating a dynamic speaker. Cliff Baxter suggested that you would be an ideal speaker on this topic. Are you available and willing to address this group in October? If I can provide any additional information please let me know. Thank you for your consideration Steve. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Pipeline safety legislation - update Body:: print What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: California Power Crisis Update (No. 10) Body:: 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. What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: nan Body:: I set up a meeting for next Friday in Washington with Ed G. and Ralph Reed starting at 7:30 am. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Congratulations Body:: Thanks. Vince J Kaminski@ECT 01/11/2000 08:01 AM To: Richard Shapiro/HOU/EES@EES cc: Subject: Congratulations Rick I have just looked at the memo regarding promotions. Congratulations - well deserved. Vince What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Sen. Hagels ESI speech Body:: The senator's speech is focused on the oil sector almost exclusively but it does an exceptional job of framing the importance of the issue. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Privileged and Confidential Attorney Client Work Product Body:: Rick Committee staff attendees included David L. Cavicke (Committee Majority Counsel) Brian McCullough (Committee Majority Professional Staff Member) Christopher Knauer (Committee Minority Investigator) and Michael Geffroy (Committee Minority Counsel). Jim What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential Information and Securities Trading Body:: To:NEMEC GERALD Email:gerald.nemec@enron.com - 7138533512 ? Enron Wholesale Services - Office of the Chairman ? From:??Mark Frevert Chairman & CEO ??????Greg Whalley President & COO ??????Mark Haedicke Managing Director & General Counsel ? Subject:??Confidential Information and Securities Trading ? Enron Wholesale Services ('EWS') maintains official Policies and Procedures Regarding Confidential Information and Securities Trading ('Policies and Procedures') which have been revised as of November 15 2000 to reflect the new EWS structure. These policies and procedures are intended to allow us simultaneously to pursue our diverse businesses and to protect confidential information our reputation for integrity and EWS and its employees from legal liability. ? You are required to become familiar with and to comply with the Policies and Procedures. The newly revised Policies and Procedures are available for your review on LegalOnline the new intranet website maintained by the Enron Wholesale Services Legal Department. Please click on the attached link to access LegalOnline: ? ? You must certify your compliance with the Policies and Procedures within two weeks of your receipt of this message. The LegalOnline site will allow you to quickly and conveniently certify your compliance on-line with your SAP Personal ID number. If you have any questions concerning the Policies or Procedures please call Lance Schuler at extension 3-5419 Mark Haedicke at extension 3-6544 Alan Aronowitz at extension 3-3214 Bob Bruce at extension 5-7780 or Donna Lowry at extension 3-1939. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: SBX 6 / SBX 33 Body:: nan What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: CONFIDENTIAL Information Request for Henry Bath US Body:: I am not aware of any. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Body:: Aruna I shall be in London this week. Please call me on Monday next week. Best time is between 7:30 and 8:30 my time. Vince What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: ISOs Response to BPA Rebuttal of Sheffrin Study--Confidential Atty Client work product Body:: I recommend reading CAISO's response. This letter was reported in last week's trade press. I am told that BPA does not consider this letter confidential even though it is labeled as such by CAISO. Many of the CAISO backpedal statements made re: claims of strategic bidding would apply equally to other importers. Alan Comnes What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Department meeting conference call. 800-283-1805, in Ricks name. Body:: Page Montovano Diane -- pay for part of an admin Ken Rice Steve Shackman -- MayaMora Weber 609 279 4094 Cal trip Leave meessage for Eliz and Karen 39504 Sheila Galloway Ralph Cavanagh (415) 777 -0220 Mike Day 415 781 0701 Meg Nollen What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Errata to SRP Settlement Proposal - Privileged and Confidential F or Settlement Purposes Only Body:: In our July 30 2001 document entitled Receipt Capacity Allocation Proposal Prepared By Salt River Project there is an inadvertent error. Section I.F. properly states that the numbers used in this proposal would be updated with peak figures through the last season prior to additional capacity being placed into service by El Paso. Consistent with that Section II.A. in describing the CD and FR Entitlement Methodology should read as follows: II.A. A total peak day entitlement is established for each FR customer by summing its highest (peak) single day takes during the period January 1 1997 through the end of the last season prior to additional capacity being placed into service by El Paso at each of its D-Code points (eg. DAPSPHX DSWGPHX etc.). (footnotes 1 and 2 unchanged) Please make this change to your document. We apologize for the error. Joel Greene Energy Advocates LLP 202-371-9889 202-371-9025 (fax) jlgreene@energyadvocates.com What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Southern Co.s Testimony Body:: I think a rebuttal would be in order if others agree. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Project Stanley Q&As Body:: I think the Qs and As look good. I wouldn't bring up the California situation (eliminate the second half of A25). Eric Thode 08/22/2000 04:53 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: Project Stanley Q&As Comments? ----------------- What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: The Energy Daily, EEI, and EPRI Present "Surviving The Summer of 2000: A Summit On Reliability" Body:: I'm normally not a big fan of conferences but this one may be of interest. I think it may be of even more interest if we don't speak: it's possible some utilities may say some of the same things we would say but they may be less likely to do so if we speak and they feel they have to respond. Let me know what you think. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Western Wholesale Activities - Gas & Power Conf. Call Privileged & Confidential Communication Attorney-Client Communication and Attorney Work Product Privileges Asserted Body:: Can you guys coordinate to make sure someone listens to this conference call each week. Tara from the fundamental group was recording these calls when they happened every day. Phillip ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Fletcher School/Enron Body:: Thaniks for the note. Christie is now organizing our university relationships so direct the communication to her. Thanks again David Merrill@ENRON_DEVELOPMENT 09/09/2000 05:59 AM To: Steven J Kean/NA/Enron@Enron cc: Subject: Fletcher School/Enron Dear Steve: Last month while at my reunion at the Fletcher School of Law and Diplomacy at Tufts University some of the school officials told me that Enron has hired about eight Fletcher graduates recently and is happy with them. The school is also happy and wants to strengthen its relationship with Enron. They had earlier this year contacted a Laura Kalmans Director of Community Development at Enron to discuss various ideas for cooperation with Enron that would strengthen our capacity in environmental matters and give the students exposure to real world issues but nothing happened and they lost contact. They asked me who they should contact to find out how to pursue this and I said I thought it might be you or someone under you. They now want to send a letter to someone at Enron on this proposal. It is OK if it is addressed to you or should I tell them another name? Please advise me how to steer them in the right direction. Many thanks. David Merrill ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Hap Boyd Promotion Body:: I don't really have a problem with this but I thought that all VP promotions were supposed to go through our year end process. That's what I have been saying in response to the inquiries I am getting. Ken being newly back in the fold likely didn't know about the process. Kurt S Huneke@ENRON_DEVELOPMENT 12/12/99 08:31 PM To: Steven J Kean@EES cc: Subject: Hap Boyd Promotion First I heard about this. I assume it is a reward for the PTC extension. Hope it makes sense to you. ----------------- What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: California Lawmakers Vote to Limit Power Costs - WSJ Body:: Look at this. Baum finally speaks up -- way too late. Can somebody tell me what SDG&E's energy rate was pre-dereg? ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Spoke with Jeff Body:: I'm glad things are moving forward. I've talked with Dave briefly and will follow up with him again. Kevin Scott on 07/13/2001 10:14:01 AM Please respond to kevinscott@onlinemailbox.net To: Steve Kean <skean@enron.com> cc: Subject: Spoke with Jeff Steve As planned I spoke with Jeff this morning. It was a great call. I am really excited about what is ahead. We discussed the title issue. I don't have any problems. We should go with what is the best way to enter the organization. Jeff said he was going to touch base with Dave this morning to move the process forward. I can't wait for my interviews and to join the team. Thanks for all of your help. 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 What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: US Conference of Mayors, and Association of Counties - In Washington DC Body:: Vista Hotel1400 M Street 202-429-1799 202-728-0530 Panel discussion - Bill Darcy is the other panelist will give overview and do a defensive speech. You can discuss opportunities and give offensive speech. He doesn't know how many people to expect but will introduce you to some of the big people there. He'll be passing out an outline of his point of view you can use overheads handouts whatever you like. Time is not yet set. **CANCELLED** What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: CA Price caps Body:: I'm afraid we have our work cut out for us. We have been working the proces at the state and federal level in the past couple of weeks. I continue to believe (hope) Susan J Mara 08/11/2000 11:56 AM To: Steven J Kean/HOU/EES@EES cc: Subject: CA Price caps I heard you've been raising a ruckus about our activities on the price caps -- asking us to do more. Thanks. I feel as if I have been a voice in the wilderness for the past six months when I was trying to get people to pay attention to the bad things happening in CA and warning that the problems (mainly a threat of reregulation) will spread elsewhere. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Nigeria Contract support Body:: Sean - is this anything we need to follow up on? What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Electricity Deregulation Report Card Body:: I think I confirmed for this already but could you check and put on my calendar and put this in the meeting file. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Enron Advertising Body:: do we have a mechanism to survey employees? Can we do a scientific poll? ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Update on House RTO Activities Body:: There are now two House hearnigs tomorrow not just one. In the morning there is a panel on reliability siting and incentive pricing for transmission. Jim Steffes is the EPSA witness. The RTO-related hearing originally scheduled on a separate day will be in the afternoon tomorrow. Peter Esposito of Dynegy is the expected EPSA witness. I am checking on the final list of other panelists and will advise. Finally Andy Black of Chairman Barton's staff advises that they will release draft RTO language as early as today. We expect that this draft will not be to our liking. Barton thinks FERC is moving too quickly and with too much force. We expect his proposal to set a deadline of something like 12 months for utilities to join an RTO. The key is in part whether he allows FERC to continue to decide what constitutes an acceptable RTO or whether he will try to grandfather in some fashion those RTOs that have been proposed by utilities to date. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: nan Body:: Mike - perhaps you can help me or forward this on to someone who can. The people in my organization support all the Enron business units but many are specifically dedicated to certain business units. As a consequence we have ended up on a variety of LANs with a variety of support people. Due to the fine efforts of your team many people in my group have migrated over to the Enron Corp LAN. We are also now enjoying great support from Russell & Russell (Servat and Mitchell). As the IT guy I'm sure you are accustomed to such profuse praise. However many of the people on my team (including me) are on the EES LAN. Historically EES has supported us with the equipment we need and they too have been doing a fine job in that regard. Historically therefore we have not budgeted for IT .... a practice which will change starting next year. In the meantime when we sought to migrate the rest of my organization to the CORP LAN we were told that we would have to pay for all of our current equipment or give it back to EES. If you need me to I can explain in detail why this makes no sense. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Phoenix/Equilon Deal; CONFIDENTIAL ATTORNEY/CLIENT COMMUNICATION AND ATTORNEYS WORK PRODUCT Body:: Joe R. will be sending out something in greater detail shortly but it appears that Equilon's management would like to pursue a deal with us on an exclusive basis and that this decision is being forwarded to the Equilon Board for approval. If this acquisition goes forward we will need to get organized---in the near term---on a number of logistical/due diligence tasks but one thing we should start thinking about now is the disclosure issue. If the Equilon Board gives the go-ahead for Equilon to pursue this transaction Equilon will probably want to sign a memorandum of understanding with us and this may put us in a disclosure posture because at that point we would be looking at a $65 million deal (approx.) with a closure probability of no less than 20% (in my judgment based upon our past dealings with these people). Even without a signed document the size/probability test would still be an issue for us to deal with. Everyone should be thinking about this issue as we await word from Equilon's Board. Thanks. SWD What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: WPTF Friday Crazy About U Burrito Body:: THE FRIDAY BURRITO=20 Ben Zycher from the RAND Corporation used the following line in his talk at= =20 the WPTF General Meeting in Phoenix a few weeks ago. The story takes place = in=20 the good ol' days of the Soviet Union when Brezhnev was Premier.? Brezhnev= =20 and the rest of the Politburo one fine May Day were watching the tanks and= =20 missiles pass by the Kremlin Wall when Leonid noticed in the middle of the= =20 parade a truck carrying a group of civilians.? He turned to Dmitri Ustinov= =20 the Defense Minister and asked Who are they?? Ustinov replied Those a= re=20 our economists.? You just wouldn't believe their destructive potential.=20 This is appropriate for our time and our situation.? The economists descend= ed=20 upon us when the California market was designed but we know not from where= .?=20 Aliens?? Since weaving conspiracy theories is a popular past time in=20 Sacramento (We just know they are gouging us them bullies) I believe th= at=20 one must do the same by following the money.? I'm not talking about the=20 campaign contributions in Gray Davis' pocket. The most money has gone from= =20 power sales in California to the Canadian Province of British Columbia.? It= =20 was a plot the Canadians hatched. I mean look at Governor Davis.? He looks= =20 kind of BC-ish.? Skinny and lanky wimpy hair and a hesitation in his=20 speech. He talks their language: a mix of misspelled French (meet me at th= e=20 centre) English and Eh(?).? One night in 1996 the BC government secretl= y=20 sent us some economists by the truckload to destroy California.? The=20 utilities probably paid for the bus tickets.? I happen to know that Frank= =20 Wolak Chair of the ISO Market Surveillance Committee once lectured at a=20 University in Vancouver B.C..? What more evidence do you need?? The BC=20 Government sent us cheap hydro power sold at inflated market prices so tha= t=20 they could do what the citizens of California wanted to do with their budge= t=20 largess =01( build roads schools and hospitals. They didn't think we coul= d=20 figure out their plot but we did.? Now is the time for California to=20 counter-attack.? We'll send them some of our politicians a bipartisan grou= p=20 including a few who can add and some of our select energy thugs from the= =20 CPUC and the Blind Oversight Board.=20 Speaking of times and situations there was a time when discussing the ISO= =20 words such as communist and Nazi were only uttered by my pal Carl=20 Imparato.? We would shake our heads and chuckle at Carl's extremism.? We= =20 aren't laughing now.? The descriptors seem to arise again and again in poli= te=20 conversation by a wider circle of people.? I watch with utter amusement=20 (because the alternative is retching breakfast) at the demagoguery of the I= SO=20 Governing Board the Market Despair Team the Governor's office and some= =20 members of the California Legislature. Like an audience watching a tragedy= =20 from hell we scream aloud These people are crazy!? And indeed they are= .?=20 Mr. President is not helping us at all by continuing to wrangle over who ge= ts=20 the musical Chair at FERC =01( Bubba Curt or Bubba Patrick.? Listen to us = Mr.=20 President.? Let Bubba Curt keep the reigns for a year or two and let Bubba= =20 Patrick take a seat at the table.? We need someone with a shockproof BS=20 detector.? Someone who can honestly field a motion to dismiss the Californi= a=20 ISO.? The time is long overdue to shoot this horse in the head.=20 Not all is evil.? This week in Houston the resource capital of California= I=20 visited the trading floor folks at Dynegy before attending the WTPF Board= =20 meeting.? The coolest thing I saw besides all the neat gadgets on each=20 trader's desk was the coffee machine.? Brother Jolly Hayden showed me how = to=20 use it.? You pick the type of coffee you want.? The contents of the coffee= =20 are in a shot-glass sized plastic tub with a foil top.? I picked Venezuelan= =20 #6 Decaffeinated Waxy Crude.? The tub is placed inside the brewing machine= =20 and the start button is pushed.? Presto coffee drips from the spout into a= =20 waiting cup.? I asked Jolly How did the hot water get mixed into the grou= nd=20 beans?? He removed the tub from the machine and showed me a pin prick hole= =20 made in the foil top and another that was made at the bottom.? Is that nea= t=20 or what?=20 I would like to buy a brewing machine just like the Dynegy coffee machine= =20 but a little larger.? I would set up a booth in Sacramento on the corner o= f=20 11th and L and bark out to passing members of the Legislature Free spa= ce=20 shuttle. Come and see life on other planets.? They would jump at the chanc= e=20 to visit other planets.? I would seat them in the machine push the start= =20 button and voila.? Dripping out would be the essence of democracy.? Don't= =20 worry about the holes needed at the top and the bottom.? They are already= =20 there and quite enlarged.=20 Back to my day at Dynegy.? Trade floors might seem similar across companies= =20 but the small differences speak to the management style embraced by the cre= w=20 and its leaders.? Each electric trading desk for various parts of the=20 country is set up a little bit differently.? For example some desks have = a=20 person doing asset-backed trading but some don't.? When I arrived at 6 a.m= .=20 Houston time the Eastern desk was busy in its trade day.? The Western folk= s=20 hadn't arrived yet.? Later I sat with Randy LeForce of the Western desk.?= =20 Captain LeForce to you he told me.? He could talk big because Dave=20 Francis who sits next to Randy and hangs witty quotes from the ceiling=20 above his head (Even a blind pig could make money in this market) was on= =20 vacation.? As the pace of the trading gathered steam Randy kept an eye on= =20 all the different people working the Western trading desk.? The Captain=20 worked it like a maestro.=20 During my visit some Dynegy folks came up to me introduced themselves an= d=20 said how much they enjoyed the Friday Burrito.? I'll tell you what.? There= =20 are few things in life that give me as much satisfaction.? Complete strange= rs=20 who tell you that something you do makes them feel good well it doesn't g= et=20 any better than that.? Garrison Keillor the well-known author of Lake=20 Woebegone Days and NPR radio entertainer once said a writer should have an= =20 audience.? Not everyone in the world should be in the audience but an=20 audience nonetheless of some people.? I now know what he means.? And the=20 people I met on the trading floor felt like they knew me and shared with m= e=20 their thoughts and opinions on a lot of things.?? Often they asked me Are= =20 those California people really that crazy?=20 Since last week you might have noticed the pace at the FERC has picked up= =20 somewhat.? Last Friday the FERC issued an Order on possible refunds for=20 alleged overcharges by parties selling to the ISO last January.? That was= =20 news worthy.? Then on Wednesday the FERC issued an Order to remove barrie= rs=20 to additional electric generation in the West.? The Order admits that it=20 won't change the dire situation in the West but these are steps in the rig= ht=20 direction.? The FERC also issued on Wednesday a show-cause order to AES and= =20 Williams regarding the maintenance of RMR units that were called by the ISO= =20 in April and May of 2000.? That is a serious case that we must watch=20 closely.? Also this week the California Senate kicked off its own=20 investigation (this will be the tenth such investigation of the California= =20 markets to uncover alleged price manipulation).? The Senate Committee will= =20 have subpoena rights and if I understand it correctly they plan to subpoe= na=20 individuals.? Sounds like a Kangaroo Court and a Three-Ring Circus to me.= =20 Thursday Secretary Abraham stated in a congressional hearing that the West= =20 would certainly experience power outages this summer. Finally an LA Times= =20 reporter asked me if I had heard that a small QF company had filed for=20 seizure of SCE property to satisfy an outstanding debt.? That would be step= =20 one of the bankruptcy cha-cha.? All in all a typical week among crazy=20 people.=20 Let's see what else we can talk about.=20 Things in the People's Republic of California=20 ?@@@ PUC Updates Utility Liabilities=20 ?@@@ Be a Source for Energy Price Update=20 ?@@@ BPA Misquoted in the WSJ=20 Things FERC=20 ?@@@ Market Monitoring Proposal=20 Letters=20 Jobs and People=20 Odds & Ends (_!_)=20 =3D=3D=3D=3D=3D=3D=3D=20 Things in the People's Republic of California=20 ?@@@ PUC Updates Utility Liabilities=20 My favorite regulator the California PUC issued an Order in the Utilities= '=20 Rate Stabilization case to re-open the record on utility audits.? Although= =20 the text of the order is unremarkable the data tables bring up to date as= =20 of March 8 the outstanding liabilities of PG&E and SCE.=20 The PG&E commercial paper obligation due as of March 8 increased by $354=20 million since January 31 for a total default amount of $790 million.? QF= =20 purchases increased by $280 million for the same five-week period now=20 totaling $651 million.? The ISO payments increased $934 million now totali= ng=20 $1.5 billion and the direct access charge backs for negative PX credits=20 increased $214 million now totaling $433 million.? PG&E's total default=20 amount is now $3.3 billion excluding amounts yet to be collected from PG&E= =20 customers for DWR purchases.=20 The SCE balance is as follows: The commercial paper obligation that is due = as=20 of March 8 increased by $260 million since January 31 for a total default= =20 amount of $401 million. SCE defaulted on a significant amount of long-term= =20 debt principal and interest roughly $249 million.? QF purchase defaults=20 increased by $354 million for the same five-week period now totaling $835= =20 million.? The ISO obligations decreased $1.1 million and the direct access= =20 charge backs for negative PX credits increased $21 million now totaling $2= 5=20 million.? SCE's total default amount is now $1.7 billion excluding amounts= =20 yet to be collected from SCE customers for DWR purchases.=20 There is little question that the QFs are taking it on the chin big time.?= =20 In the last five weeks between January 31 and March 8 the defaulted=20 payments to the QF owners from both utilities has increased $630 million.?= =20 The total QF default for both utilities as of March 8 stands at $1.5=20 billion.? Does anyone wonder why 1500 MW of QF capacity has shut down in=20 California?? Without these payments being made very soon I would expect th= e=20 amount of shut down QF capacity to easily double or more.? Why would these= =20 projects produce without the promise of being paid?=20 Things in the People's Republic of California=20 ?@@@ Be a Source for Energy Price Update=20 Art O'Donnell editor and associate publisher of the well-known and widely= =20 read California Energy Market (CEM) is looking for traders willing to=20 participate in his survey in exchange for receiving an advanced copy.? The= =20 Survey is a regular feature in CEM. The information collected by Art is=20 matched against the responses of the other people he interviews and some=20 posted sources (Pricewaterhouse Coopers BPA=01s daily offerings for=20 instance).? It is written up in narrative form. The report goes out twice= =20 weekly once on Wednesday afternoon/evening via e-mail as a courtesy to the= =20 respondents (because the week is pretty much done by then) and a rewrite o= n=20 Friday that is e-mailed around 10 am posted on the newsdata.com Web site= =20 and published in the newsletter for general consumption. The Friday report= =20 also features a brief story about natural gas markets in the West=20 The WPTF Board of Directors has allowed me to publicize this offering and = to=20 explain that if your company is interested in participating the informatio= n=20 you provide to Art would be protected as confidential.? In Art's words Th= e=20 price survey is =01( unlike some attempts at creating a tradable index numb= er=20 (e.g. McGraw-Hill=01s Power Markets Week index or the Dow Jones indices) = is=20 more of a narrative about the state of the market d a pulse reading as=20 opposed to a blood pressure number or an EKG. As such I do not ask traders= =20 and schedulers for precise dollar figures or volumes associated with specif= ic=20 trades but rather questions like 'What=01s Mid-Columbia going for today?= What=20 about off-peak? How has that changed since this morning? Oh yeah why is=20 that? Anything else I should know?'=20 The WPTF Board asked Art to explain how the information he collects would b= e=20 protected since so many marketers and generators are under State data=20 subpoenas.? Art replied The Constitution of the State of California=20 provides for a blanket immunity against government intrusions for news=20 gathering from confidential sources and unpublished information something= =20 which we believe in strongly at Energy NewsData Corporation and which we ar= e=20 willing to go to jail to protect. So if for instance the Attorney General= =20 tried to subpoena me or anyone from my staff about power price information= =20 we would 1) refuse to divulge anything other than the already published=20 accounts 2) send back a copy of the Constitution 3) contact the attorneys= =20 for the Society of Professional Journalists and 4) start preparing a benef= it=20 party to raise legal fees. =20 If you would like to participate in Art's survey please e-mail him at=20 aod@newsdata.com.=20 Things in the People's Republic of California=20 ?@@@ BPA Misquoted in the WSJ=20 In last week's Burrito I referred to a Wall Street Journal article that=20 portrayed a BPA trader as admonishing the DWR for accepting bids over marke= t=20 prices.? I was surprised when I received the following e-mail from BPA's=20 David Mills.? His message to me copied a letter he sent to DWR's Ray Hart= =20 explaining what he meant as opposed to what he was quoted as saying.=20 Dear Ray:=20 ?=20 As per our telephone discussion I just wanted to reiterate a few things=20 re:the Wall Street Journal article and the quotes attributed to me.? At no= =20 time during the interview with Ms Smith did I state that I thought that=20 CDWR's offers were out of line with the prevailing market price in Californ= ia=20 or that your traders should check that price before entering the market.? T= he=20 reporter was quite interested in the price difference between California an= d=20 the MidC price here in the Northwest and when I asked I told her that=20 currently that price delta was roughly $50-$100 MWhr with MidC being lower= =20 than the CA prices.? I did not indicate to the reporter that I thought that= =20 CDWR was paying more than the California market price and was simply trying= =20 to make a comparison of price relativity between California and the=20 Northwest.? Lastly BPA has on occasion charged extra-regional entities= =20 less than the prevailing market price but has only done so to remain=20 consistent with our own pricing strategies.=20 ?=20 ?I apologize for any misconceptions or miscommunications that may have=20 resulted from this and look forward to a continuing working relationship=20 between CDWR and BPA.=20 ?=20 Things FERC=20 ?@@@ Market Monitoring Proposal=20 FERC Staff issued a report with Recommendations on Prospective Market=20 Monitoring and Mitigation for the California Wholesale Electric Power=20 Market.? WPTF members are taking this proposal very seriously and we inte= nd=20 to provide comments on March 22.? If you are interested in a copy of the=20 report go to General members are able to participate along with the Board members and=20 other general members working on our response.? We have retained the servic= es=20 of Dr. Ben Zycher of the RAND Corporation to help us draft the policy=20 issues.? He will be working with our counsel Dan Douglass of Arter & Hadde= n=20 to craft our reply.=20 In short our submission will point out the flaws in FERC's proposed=20 methodology and demonstrate the shortcomings of narrowly limiting the=20 definition of producer marginal cost to operating variable cost.? Further= =20 excluding measures of credit worthiness are an important missing variable i= n=20 the FERC analysis.? Next week I will include a short summary of our respon= se=20 in the Burrito.=20 Letters=20 I received a note from one of our legal beagles that drop me a line every n= ow=20 and then.? I don't have the facts of the case to which this person refers= =20 but I hope the sender provides us with an update if a judgement should occu= r.=20 Universal Studios wants FERC to find that Universal owes no penalty to SCE= =20 for not interrupting its interruptible load (under a CPUC rate schedule)=20 because SCE did not adhere to the FERC requirement in the Dec 15 order to= =20 schedule 95% of its load in the day ahead market ...... according to=20 Universal if SCE had done so then it would have had to provide Universal= =20 power at below its cost.? SCE didn't and Universal got interrupted and now= =20 Universal owes $$$$$$$$$$$$$.? Does anyone else know about this filing?=20 Lind Guerry veteran of the PX halcyon days wrote Hi Gary.? Hope you're= =20 having a nice day.? Just wanted to let you know that I'm really enjoying th= e=20 Burrito and am so glad you're sending it to my home email.? I really got a= =20 kick out of the Ten Reasons....? It's hard to believe that our wonderful= =20 state is in such incompetent hands isn't it?? And not only are they=20 incompetent they continue to remain so with such regularity you could=20 probably make a killing marketing their incompetence as a laxative.? Do you= =20 think if we tried to do that we'd get accused of exercising market power?= =20 Think of the power we'd wield as the holder of the largest amount of=20 incompetence!! ?=20 Lind we need a product name for the laxative idea.? Any ideas? How about= =20 Sane Away?=20 Jobs and People=20 The folks at Dynegy sent me a couple of job postings.? If your company has= =20 similar posting or job openings or if you are reader looking for a new gig= =20 drop me a line.? After all it's free.=20 Position Description:=20 Dynegy's position has responsibility for the development of transmission an= d=20 power markets in a geographic region of the U.S.? Duties are driven primari= ly=20 by federal regional and state activities to restructure and deregulate th= e=20 electric power industry and the need for industry participants to develop= =20 and implement market structures policies and regulations that promote=20 liquid and competitive transmission and power markets.? Significant activit= y=20 within a region to reshape the structure and operation of the transmission= =20 grid is resulting from FERC Order 2000 which directs the establishment of= =20 Regional Transmission Organizations. Extensive travel (40%-60% and higher = at=20 times) is highly probable. Primary goals of this position are to:1) Create= =20 more liquid and competitive transmission and power markets? 2) Maximize th= e=20 value of Dynegy's positions and assets by working closely with the trading= =20 and power groups to develop?? and implement commercial strategies that crea= te=20 and capture significant business opportunities and 3) Provide timely and= =20 accurate information market intelligence and recommendations to clients. = 4)=20 Maximize the value of Dynegy's positions and assets by working closely with= =20 the trading and power groups to develop and implement commercial strategies= =20 that create and capture significant business opportunities and=20 recommendations to clients.=20 Interested parties should contact Jolly Hayden at jjha@ngccorp.com.=20 Odds & Ends (_!_)=20 First I would like to welcome WPTF's newest general member Wellhead=20 Electric.? Hal Dittmer is the founder and president of Wellhead.? I have=20 known Hal for a couple of years first as a client for my over priced=20 consulting services and later as a friend and source of all kinds of usefu= l=20 information.? Wellhead is one of those QF owners who are owed a boatload of= =20 money.? However Hal's company is developing some new projects and he is= =20 looking for prospective power buyers.? Hence his interest in WPTF is=20 obvious. Wellhead is WPTF's 31st member.=20 Well the Dynegy gang has been a source of comfort and joy to me this week.= ?=20 They couldn't let me leave their abode without stuffing a song in my pocket= =20 that is a tribute to their creative skills.? Timely too.? Sing it to the tu= ne=20 of California Dreaming by the Mamas and the Papas.=20 ISO California=20 (to the tune of Hotel California) On a dark Western highway=20 No wind in my hair=20 No rain for the hydro=20 No NOX in the air=20 Up ahead in the distance=20 I saw a flickering sight=20 The load grew heavy and the lights grew dim=20 No relief in the night=20 So we stood in the darkness=20 Down at the Taco Bell=20 And I was thinking to myself=20 This could be Heaven or this could be Hell=20 We lit up a candle=20 No power in the Bay=20 There were voices down the corridor=20 I thought I heard them say? =01(=20 Welcome to the ISO California=20 Such a lovely place=20 Such a lovely place=20 Such a lovely face=20 Powering up for the ISO California=20 What a nice surprise=20 What a nice surprise=20 Bring your alibis? =01(=20 Its mind is policy twisted=20 Can=01t stop consumption trends=20 Got a lot of NIMBY boys=20 Cisco calls friends=20 How we sweat in the courthouse=20 Sweet summer sweat=20 Without the AC=20 We try to forget=20 So I called up the Gov=01nor=20 Please energize this line=20 He said=20 We haven=01t built a new plant here since 1969=20 Last thing I remember=20 We were running for the door=20 We had to find the passage back to the place we were before=20 Relax said Judge Damrell=20 California=01s programmed to receive=20 Go belly up any time you like=20 But your power can never leave=20 ?=20 [refrain]=20 =3D=20 Don't refrain.? Have a great weekend y'all.=20 gba=20 ? What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Draft Response to CPUC OII Body:: I have taken a stab at putting a draft response together indicating areas where we need more flesh. I will forward Tim/Mary's presentation to FERC EPSA's California Fact Sheet and the transcript from the hearing held on 8/23 and 8/24. Witness Wolak Market Surveillance Committee of ISO had some good points about rational behavior in markets with scarcity of supply. His comments were on 8/23. Please feel free to comment. Dan Douglass Arter&Hadden (818-596-2201) will be filing these comments on Enron's behalf which are due on Friday. I would suggest that Dan provide some of the legal view on whether the CPUC has adequate jurisdiction over retail rates not wholesale rates. We should shoot for final comments by 10:00 a.m. tomorrow if possible. This will allow an opportunity to discuss any last minute changes if necessary before filing. Seabron Adamson Frontier Economics (617-354-0060) will be providing additional drafting. Be sure to send any comments to these parties along with the internal list. Thanks. What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Oakland Trib Wed 3/7: Breakthrough made in rescue of PG&E Bakersfield Californian Wed 3/7: El Paso Energy closes six valley power plants Contra Costa Times Wed 3/7: Still undecided: Who'll pay DWR for electricity SF Chron Wed 3/7: State Taxpayers In Dark on Details Of Energy Deal Sac Bee Wed 3/7: Lawmakers pitch fixes for region's energy woes Orange Co. Register Wed 3/7: Power plan called wrong LA Times - Wed 3/7: Bill to Cut Some Power Prices Stalls Sac Bee Wed 3/7: PG&E could face mutiny on outages: SMUD others may balk if utility orders summer blackouts SF Chron Wed 3/7: PUC to Decide Fate Of Utility Workers PG&E Edison want to trim costs by laying off thousands cutting service San Jose Mercury Wed 3/7: Power prices could soar during the summer SF Chron Wed 3/7: Power Plant Plans Cause Conflicts East county residents blast supervisors Contra Costa Times Wed 3/7: Supervisors set search for power plant sites Sac Bee Wed 3/7: Peter Schrag: California's $90 billion infrastructure gap Contra Costa Times Wed 3/7: PG&E power plan debated at hearing SF Chron Thurs. 3/8: State OKs 'Peaker' Power Plant at SFO / Temporary generator could be sending electricity to 50000 homes by August WSJ Thurs. 3/8: Crossed Wires: Major Kinks Emerge In Gov. Davis's Plan To Power California --- State's Outlays for Electricity May Be Hard to Recover Without Rate Increases --- Betting on Long-Term Deals ------------------------ Breakthrough made in rescue of PG&E State ready to pay $7 billion for lines By Steve Geissinger SACRAMENTO BUREAU SACRAMENTO -- Signaling a breakthrough in secret energy crisis talks the Davis administration disclosed Tuesday it may announce the framework of a pact to rescue the teetering Pacific Gas and Electric Co. next week. Things are going very well said Steve Maviglio a spokesman for Gov. Gray Davis. The state appears to be poised to pay at least $7 billion -- and possibly billions more -- for PG&E's high-voltage transmission lines as part of a deal to financially renovate the north-state utility according to sources familiar with the negotiations. But consumer advocates insisted that even the $7 billion price is too much to pay. And experts warned that a deal with PG&E will be more complex than with other utilities. PG&E representatives declined comment in keeping with their policy on the talks even though the Davis administration said an announcement could come as early as next week or the following week. The new timetable for an announcement was substantially sooner than in Davis' original forecast. Until late last week PG&E was still resisting the sale of its power grid despite the fact that Davis had announced the framework of an agreement with Southern California Edison. Davis expects to soon announce a similar deal with the San Diego Gas and Electric Co. However any such deal still would need federal approval. The investor-owned utilities trapped between high wholesale costs and lower regulated retail rates amassed nearly $13 billion in debts and were unable to buy electricity this winter. With the onset of rolling blackouts the state began brokering billions of dollars in emergency short- and long-term power purchases. Davis' strategy to ease the energy price and supply crisis includes bolstering both conservation and generation while fiscally refurbishing the nearly bankrupt utilities. As part of the rescue deal the utilities would have to drop legal actions seeking dramatically higher electricity bills environmentally shield wildlands they own sell power from their generators to Californians for the next decade and secure help with their debts from their parent companies. Together with the cash infusion from the sale of their power 26000-mile power grids the utilities would be allowed to sell bonds to raise funds and use customer money to pay them off. The state would upgrade the high-voltage lines and lease them back to the utilities for operation. In a reflection of the negotiations with the three utilities a Davis administration official said the deal with PG&E is proving to be more complex than with the other firms. Though PG&E finally agreed late last week to sell its transmission grid the utility apparently wants more than the $7 billion that Davis has offered according to sources. The figure is more than twice the book amount or the value placed on the system for purposes of accounting. And that's the markup that lured Edison into an agreement to sell its smaller portion of the transmission grid for $2.8 billion. But PG&E which fears an erosion of its economic base may be asking as much as $10 billion. Due to complexities in the state's 1996 deregulation of the industry PG&E is more likely to lose revenue than Edison as a result of selling its transmission lines according to experts. Big customers might be able to bypass the utility's remaining local distribution lines thereby eroding its customer base. Therefore the utility may view bankruptcy and sale of its transmission lines to the highest bidder as a potentially attractive alternative to selling its share of the grid to the state at too low a price. ---- El Paso Energy closes six valley power plants Filed: 03/07/2001 By CHIP POWER Californian staff writer e-mail: ppower@bakersfield.com El Paso Energy citing non-payment from Pacific Gas & Electric Co. said it has shut down six cogeneration plants this week. The smaller plants produced about 175 megawatts of electricity and are located primarily in the San Joaquin Valley said company spokesman Mel Scott. A megawatt can supply power to 1000 homes. At least 10 plants have closed in the past two weeks as a result of non-payment according to the state Independent System Operator which manages most of the state's electrical distribution. The El Paso Energy plants are operated with various partners and had not been compensated for December January and February deliveries said Scott. He said he did not know the total amount due but said the plants would be closed until PG&E's credit worthiness is improved. A cogeneration plant common in oil fields simultaneously produces heat energy and electrical or mechanical power from the same fuel in the same facility. Typically it produces electricity and steam which can be deployed to enhance oil recovery. Kern County is the state's leading oil-producing county. El Paso owns or has interests in more than 40000 miles of interstate and intrastate pipeline connecting the nation's principal natural gas supply regions to the five largest consuming regions in the United States namely the Gulf Coast California the Northeast the Midwest and the Southeast. El Paso closed up 99 cents on Tuesday or 1.4 percent at $71.49. The Houston-based company's stock price has ranged between $36.31 and $75.30 in the last 52 weeks. ---- Still undecided: Who'll pay DWR for electricity By Karen Gaudette ASSOCIATED PRESS SAN FRANCISCO -- The price tag is $3.2 billion and counting for electricity bought by the state Department of Water Resources for the customers of two nearly bankrupt utilities. Pacific Gas and Electric Co. Southern California Edison and the state disagree over how the DWR eventually will be reimbursed for its purchases on the expensive last-minute power market. So do the state power regulators who have the final call over who gets the money when. Under a recent law the DWR went into the electricity-buying business to help keep the two utilities from sinking further into their $13 billion debt. The state plans to retrieve the money by selling $10 billion in revenue bonds. The utilities continue to collect ratepayer dollars on that electricity which the bill's author Assemblyman Fred Keeley D-Boulder Creek says is meant to help them begin paying down their debt. In a recent letter however DWR officials requested that the state Public Utilities Commission order that a portion of that money be diverted to the state. But after the utilities subtract the costs of generating electricity payments to environmentally friendly power plants and other expenses there is no money left from ratepayer dollars to give to the DWR without sinking further into debt PG&E spokesman Ron Low said Tuesday. If it passed along money to the DWR our undercollection would grow by about $2.4 billion by the end of the year Low said. The commission unable to agree on the best course of action left the issue untouched at its last meeting but expects to revisit the issue when it meets this morning. Commissioner Richard Bilas is proposing an alternate plan that would have the DWR set its own revenue requirements that would be passed on to ratepayers. The PUC also is expected to respond to complaints from laid-off workers and customers that layoffs by utilities to cut costs have been hurting service. Commissioner Carl Wood warned at the last meeting that failure to provide safe and reliable service could mean fines for the utilities. Representatives from electrical workers unions the PUC and the utilities were to discuss the issue Tuesday afternoon. I don't think we believe that utilities can find a way out of their problems by laying off workers said Mindy Spatt a spokeswoman with the Utility Reform Network. We think consumers deserve safe and reliable service and we think they deserve it at a reasonable price. ---- State Taxpayers In Dark on Details Of Energy Deal David Lazarus Chronicle Staff Writer Wednesday March 7 2001 2001 San Francisco Chronicle Few people would purchase a car simply because the dealer said ''Trust me it's a great deal.'' Yet Gov. Gray Davis essentially is telling Californians just that about dozens of long-term power contracts. Because of confidentiality agreements with power companies the governor has revealed only scant details about the state's multibillion-dollar contracts for electricity over the next 10 years. Gov. Davis has our money and we can't see how he's spending it said Doug Heller a spokesman for the Foundation for Taxpayer and Consumer Rights in Santa Monica. We've been locked out of the room. Neither Davis nor power companies would divulge specific details about the price duration or scope of individual contracts. Each cited secrecy clauses that the governor's office said had been desired by both sides. What consumers do know is this: -- California has signed 40 contracts and tentative accords valued at about $40 billion to secure enough power to light 9 million homes over the next decade. -- The average purchase price of each deal is $69 per megawatt hour -- well above the $30 to $40 charged by power generators before California's energy market went haywire last summer. -- If as is widely expected wholesale power prices fall in years ahead the state nevertheless will be locked into paying above-market rates for electricity. But it is not known which generator agreed to part with the most power at the cheapest level or the full range of the prices in concocting the $69 average. Moreover it is unclear how shrewdly the state negotiated with taxpayer money in securing power on behalf of cash-strapped utilities. These agreements are the bedrock of our long-term energy policy Davis said Monday in announcing the deals. The governor's office defended the murky nature of the contracts yesterday. It's a business transaction in which private corporate information is included said Steve Maviglio a spokesman for Davis. That's the kind of information that never gets revealed. While additional elements of the contracts will be publicized in coming months he said the contracts themselves will remain a secret. You'll never see all the details Maviglio said. This did not sit well with many observers. It's a breach of public trust said Daniel Bacon a San Francisco attorney specializing in business law. A public servant spending public money shouldn't be able to keep the spending secret. But Gary Ackerman executive director of the Western Power Trading Forum an energy-industry association in Menlo Park called confidentiality agreements a necessary evil in transactions like this. He explained that no power company would agree to a long-term contract if rival firms could learn the terms of the accord. The company would be losing too much of its competitive edge in the marketplace Ackerman said. At the same time he noted that secrecy allowed the buyer -- in this case California taxpayers -- to secure more favorable terms with individual sellers. A high price with one generator would not necessarily be sought by all power providers. Still the fact that public funds are being used makes confidentiality in this case a different matter than say Cisco Systems' quietly negotiating to take over yet another tech rival. The public is in a very awkward position said Michael Shames executive director of the Utility Consumers' Action Network in San Diego. It has to rely on the good word and expertise of the governor and he has yet to demonstrate that he has expertise or good word in this field. Shames likened consumers to passengers in a plane being flown by a pilot without a license to fly. But what choice do we have? he asked. I don't see many other options available right now. There's the rub. No matter how bad a deal California may have cut to help meet its energy demands the alternative -- blackouts disruptions economic catastrophe -- is far far worse. On the other hand it already appears that the new contracts will not shield Californians from the threat of daily outages this summer when demand surges. Davis said only about 60 percent of the state's summertime electricity needs so far had been met. Part of the reason is that many power companies already have contracted for their output this year. Duke Energy said this was why it would not begin its nine-year contract with California until 2002 while Williams Cos. said it would only gradually increase the amount of available wattage in its 10-year contract. Both companies meanwhile will continue to profit this summer by selling into the volatile spot market where wholesale power went for as much as $1 500 per megawatt hour last year. You can't sell all your power into long-term contracts said Paula Hall- Collins a Williams spokeswoman. You save some for the spot market. Consumer groups worry that consumers will be hammered again this summer with sky-high power prices and then get nailed down the road by contracts for above-market rates. If we could look at the terms of the deals we'd see that California is being gouged for 10 years said Heller of the Foundation for Taxpayer and Consumer Rights. But the governor doesn't want us to see that. Ackerman of the Western Power Trading Forum said the state had gotten the best rates it could under current market conditions. California went for long-term contracts when everyone else moved in as well he said. Californians are paying a price for not acting sooner. ---- Lawmakers pitch fixes for region's energy woes By David Whitney Bee Washington Bureau (Published March 7 2001) WASHINGTON -- California members of Congress pleaded for everything from wholesale price caps to extending daylight-saving time an extra hour to help the region cope this summer with its persistent electricity shortage but none of the ideas seemed to catch fire at a House hearing Tuesday. People will die in California because of this crisis Rep. Brad Sherman a Los Angeles-area Republican warned the House Energy and Commerce Committee. Sherman testified that his idea for saving lives is to extend daylight-saving time by an extra hour so that there would be more daylight at the end of the day when power consumption surges. One of the peak demand periods for electricity occurs between 5 p.m. and 8 p.m. when the sun sets and people come home from work Sherman testified. If people come home and it is light out there is less of an inclination to turn a light on. Sherman said the state Legislature has called for congressional approval for states to be given authority to extend daylight-saving time and he cited analyses by the California Energy Commission and other agencies suggesting that it could cut power consumption by 1 percent to 2 percent. Sherman who was one of about a dozen California lawmakers presenting their views on the energy squeeze drew no questions from committee leaders about what his legislation might do to everything from airline schedules to television programming if West Coast states didn't agree on the same time standard. Most of the committee's questioning was on the more popular idea proposed by several California and Western lawmakers primarily Democrats to require the Federal Energy Regulatory Commission to impose caps on wholesale electricity prices that have gone wild because of a regional power shortage. Rep. Bob Filner D-San Diego charged that the price spiral has little to do with power shortages but a lot to do with a small cartel of generators bilking ratepayers. Rep. Jay Inslee D-Wash. said he brought up the idea of regional price caps with President Bush who was initially skeptical. But Inslee said that Bush warmed to the idea after being told that protections could be built into the caps so as not to discourage construction of new power plants. Upon hearing that Inslee said Bush invited him to meet with the president's Cabinet-level task force led by Vice President Dick Cheney on a national energy strategy. But Inslee said he can't get the group to meet with him. It's very disappointing Inslee said. Tuesday's hearing was part of a series the panel is holding on the California crisis so far without any emerging consensus on what if anything Congress should do. ---- Power plan called wrong Wall Street analysts say the governor's approach to the problem avoids the issue that caused the imbalance. March 7 2001 By DON THOMPSON The Associated Press SACRAMENTO California's scramble to insulate consumers from the soaring price of electricity may add to the state's power problems this summer Wall Street analysts said Tuesday. Gov. Gray Davis' emphasis on buying utilities' transmission lines and negotiating long-term power contracts to help ease their debts skirts the deep imbalance between wholesale and market rates that led to the state's power problems in the first place they said. In the long run it doesn't solve anything said Michael Worms an industry analyst for Gerard Klauer Mattison & Co. In the long run you need to send the right price signals to consumers which will create its own conservation signals. Unfortunately customers were shielded from that in California. Davis said Monday that the state's first contracts to buy electricity for two financially struggling utilities will provide only about two-thirds of the power needed on a typical summer day forcing Californians to cut power use at least 10 percent to avoid blackouts. Since early January the state has been buying one- third of the power Southern California Edison and Pacific Gas and Electric Co. customers need. The two utilities denied credit by suppliers say they have lost nearly $14 billion due to soaring wholesale electricity prices that the state's industry-deregulation law says they cannot pass on to consumers. The keepers of the state power grid had enough electricity Tuesday to avoid declaring an electricity alert but have faced an almost-daily scramble for weeks due to a tight supply and high wholesale prices. Several wholesale and retail rate proposals are circulating. Among them: Free-market advocates such as Worms want an immediate end to the deregulation-imposed retail rate freeze on Edison and PG&E that will expire next year. Davis wants a Western price cap of $100 per megawatt hour on power generators he says have been prof iteering from California's short energy supply. The Bush administration and Federal Energy Regulatory Commission are cool to that idea. In December FERC imposed a soft cap of $150 per megawatt hour on wholesale rates in the state and required suppliers to justify any higher prices they charge. Consumer groups such as The Utility Reform Network or TURN want regulated rates for residential and small-business customers but free-market rates for large industrial customers which sought deregulation in the first place. TURN also advocates a tiered rate structure with higher rates for consumers who use more than a reasonable amount of electricity each month. Assembly Republicans say electricity and natural-gas prices will fall naturally if the state increases supply mainly by making it easier to build plants and pipelines. Right now you're sort of sitting partially with regulation and part with the free market said Paul Fremont an analyst with Jefferies & Co. Both these systems work. It's sort of that in-between system that you have in Califor nia that doesn't appear to be working. The system discourages generators from building new power plants because they aren't guaranteed a profit and it doesn't do enough to discourage power use by consumers because the price they pay doesn't reflect the true cost of power Fremont said. I don't think people here have much faith in the market and why should they? countered TURN's Mindy Spatt. I think there are probably better ways of encouraging consumers to conserve than by gouging them. Davis insists the crisis can be resolved without raising rates for Edison and PG&E customers beyond the existing rate structure. In January state regulators imposed temporary rate hikes of 7 to 15 percent on Edison and PG&E customers. The Legislature and Davis extended the increases for up to a decade to help pay back the estimated $10 billion in power buying the state expects to do for Edison and PG&E over the next several years and finance its purchase of the power lines owned by the two companies and San Diego Gas & Electric. Rates were already scheduled to increase next year for Edison and PG&E customers. Under the 1996 deregulation law the pair's ratepayers saw a 10 percent rate reduction but only until early 2002. That rate cut will likely expire as planned Davis spokesman Steve Maviglio has said. Davis wants those rates to cover not only the traditional cost of generating transporting and distributing power but the added cost of paying off the two utilities' massive debt and buying their transmission lines said Assemblyman Fred Keeley D-Boulder Creek the Assembly's chief power negotiator. Yet Davis has indirectly addressed the rate imbalance by signing legislation that will let regulators raise consumer rates if necessary Keeley said. The governor and lawmakers are in effect spreading out rate increases over a decade by using long-term revenue bonds to buy power for the nearly bankrupt utilities said Severin Borenstein director of the University of California Energy Institute. At some point we have to deal with the reality that all of the power that we buy has to be paid for by somebody - it's either going to come from taxpayers or it's going to come from ratepayers Bor enstein said. Raising rates now would get us a lot of conservation. Davis also wants financial incentives for conservation and power-plant construction in time to make a difference this summer. Our mouths were agape at the rapid timetable Keeley said. Legislators are rushing to pass those incentives by month's end he said allowing three months for consumers and suppliers to act before the heat of summer. Among bills considered Tuesday the Senate Energy Committee approved legislation to accelerate the siting of power plants. It also was considering a proposal to restructure rates for generators that use renewable energy to provide about 30 percent of the state's electricity. ---- Bill to Cut Some Power Prices Stalls Energy: Democrats balk at varying payment levels for alternative generators. By DAN MORAIN JULIE TAMAKI Times Staff Writers SACRAMENTO--Legislation aimed at cutting prices for more than a fourth of the power consumed in California stalled Tuesday as Democrats questioned why a few alternative energy generators--some of them campaign donors--stood to receive higher payments than others. Lawmakers working to unravel California's energy mess have been negotiating for weeks in an effort to cut the price paid to more than 600 generators of alternative power by more than half to below 8 cents a kilowatt-hour. Those alternative generators' contracts with utilities have shot up in recent months because of a rise in the price of natural gas. The cash-strapped corporations have suspended or made partial payments to the generators over the last few months causing many to shut down or reduce their outputs. But even as the lawmakers reached agreement that pushed the average price to near the 8-cent level per kilowatt-hour some generators would have received higher prices under the bill by state Sen. Jim Battin (R-La Quinta). Some of the generators that stood to benefit had donated to Battin's campaigns. One--Windtec Inc.--gave Battin a $20000 campaign donation in 1999. Others contributed from $3000 and $5000 last year. Battin acknowledged that he has received campaign contributions from some wind power generators but said there is no connection between the donations and the bill's provisions. It is illegal it is unethical and it's not how I do business he said. Battin noted that 25% of the state's alternative energy producers are in his district. As Democrats on the Senate Energy Committee blocked the bill Battin warned that some alternative energy producers might react to the delay by trying to force Southern California Edison and Pacific Gas & Electric into bankruptcy. We will be the cause of bankruptcy Battin said. That prompted Energy Committee Chairwoman Debra Bowen (D-Marina del Rey) to retort: I'm really tired of being threatened with bankruptcy. Alternative energy producers including those that use wind solar power biomass and other means produce 27% of the energy used in California. They sell the electricity to the utilities which in turn transmit it to retail consumers. But with the utilities facing multibillion-dollar debts the alternative energy producers under contract with Edison have not been paid since November. Scores of alternative energy producers supported the measure. Edison International and the San Francisco-based consumer group the Utility Reform Network opposed it. Michael Florio of the Utility Reform group said the deal could result in higher consumer prices an Edison representative said the same thing. Battin and Assemblyman Fred Keeley (D-Boulder Creek) worked out an arrangement with many of the generators. Keeley took the lead in the early negotiations and then turned to Battin to introduce the legislation SB 47X. Rather convoluted language would have allowed higher payments to a select few generators that produce electricity from wind and biomass. Most of California's wind suppliers for instance would have received about 6 cents per kilowatt-hour. But a handful of them about half a dozen wind farms--mostly in the Palm Springs area represented by Battin--would have received 7.8 cents. Battin contends that other wind producers receive additional payments that boost them to the same level as Windtec and others that would get the higher payments. They get the same deal Battin said of the handful of generators that would benefit from the provisions he added to the bill. In California's overall energy market the amount of money that would have flowed to the favored generators is minor. But the added prices that would have been paid to the generators would have translated to at least $19 million in the next five years to be absorbed by Southern California Edison customers according to one analysis. Also Tuesday more details were disclosed about another leg of the state's effort to escape from the energy crunch--the deals with large power generators to supply electricity to California for as long as 10 years. Those arrangements were announced by Gov. Gray Davis Monday as the bedrock of California's energy policy. But some consumer advocates warned that the deals could lock the state into excessively high-priced contracts. S. David Freeman the general manager of the Los Angeles Department of Water and Power and Davis' negotiator said that the state guarded against that by varying the time spans of its deals. About 6000 megawatts are expected to be available this summer about one-third of the energy needed by the state Freeman said. The amount of power under contract swells until more than 9000 megawatts are contracted in 2004 half of the needed amount before dipping to 8000 megawatts in 2010. What we're doing here is what everybody said had to be done Freeman said. We deliberately bought 50% so we'd have a good mix between long-term contracts which may turn out to be somewhat higher or somewhat lower than the spot market and purchases on the spot market. ---- PG&E could face mutiny on outages: SMUD others may balk if utility orders summer blackouts By Carrie Peyton Bee Staff Writer (Published March 7 2001) Sacramento's electric utility wants out of a deal that imposes rolling blackouts locally on PG&E's command. So do a lot of other utilities. They've been writing letters lobbying lawmakers and launching informal talks with Pacific Gas and Electric Co. to get off the hook before summer. Who dodges the blackout bullet is going to play out as a political hot button around the state said George Fraser head of the Northern California Power Agency a coalition of municipal utilities. In Sacramento the next volley is expected soon with the Sacramento Municipal Utility District reportedly poised to notify PG&E that it will no longer black out homes and businesses on the larger utility's command. We are absolutely trying to fight off the requirement for rolling blackouts for the Sacramento area said Linda Davis one of seven elected members of the SMUD board of directors. Saying they don't want to be dragged down by somebody else's problems two Southern California utilities have written grid operators asking to be exempted from any blackouts caused by PG&E's or Southern California Edison's financial woes. But in PG&E's view California is in an energy crisis (and) ... we're all in this together said spokesman John Nelson. The maneuvering comes amid bleak forecasts for power supplies this summer. Although Gov. Gray Davis has said conservation new power plants and moderate weather could avert blackouts officials at the Independent System Operator which runs much of California's grid expect frequent rotating outages. One consulting firm Cambridge Energy Research Associates predicts 20 hours of rolling blackouts during July and August and about 200 hours of especially intense calls for voluntary cutbacks. Before blackouts hit the jockeying over just whose lights air conditioners and assembly lines will be shut down is growing. The outcome could affect millions of people statewide. The state Public Utilities Commission is probing rolling blackout programs run by the for-profit utilities it regulates including PG&E and Edison. A PUC analysis has suggested that PG&E's program which currently exempts about 40 percent of its customers should spread the burden more broadly. For example it said 1.9 million homes and businesses are spared just because they share a circuit with a customer deemed essential. But not-for-profit utilities such as SMUD which answer to their own elected boards or city councils have other worries. Many have already lined up their power supplies for summer. Some have raised rates or are considering raising rates. Some have taken extra conservation steps. They think those preparations ought to give them leverage to ease blackout clauses in their contracts with PG&E. SMUD general manager Jan Schori is going to use every avenue ... any avenue to put pressure on including lobbying the ISO the governor and others said utility director Davis. The Northern California Power Agency a joint-powers authority that owns and operates power plants for municipal utilities has begun informal negotiations with PG&E to change blackout rules according to Fraser its top executive. It is preparing to write PG&E asking that its members be exempted from outages altogether. Failing that it wants them to face fewer outages or to be compensated for cutting off power he said. At SMUD the utility board has met in closed session to discuss exactly what it is required to do during electric emergencies under terms of the interconnection contract that links SMUD's lines to PG&E's. The contracts are being inspected with a fine-tooth comb said SMUD director Howard Posner. Schori declined to comment on any specifics. Sources indicated that the main option being considered is notifying PG&E that because of changed circumstances SMUD believes it no longer is required to routinely comply with outage requests. Other options being explored include re-negotiating existing agreements with PG&E. Posner said that ever since two days of rolling blackouts in January constituents have been asking him 'Why are we participating when we're not the problem?' And I don't have a good answer to that. Several directors said SMUD has already spent a lot of money -- and is considering 16 percent rate increases -- to ensure that it has enough electricity under contract to meet its customers' summer demands. They believe PG&E should do the same. We're almost like a David against Goliath here said board vice president Genevieve Shiroma. The huge investor-owned utilities next door have severe problems that they need to get under control. In addition SMUD plans to argue that because it can cut usage through its Peak Corps program which remotely turns off air conditioners at volunteer households it has already done its part without rotating outages director Davis said. PG&E believes the interconnection agreements that govern smaller utilities' ties to its transmission lines have benefits and burdens to both sides said Nelson. It wouldn't be fair or good policy for just one provision to be altered without taking a look at how that affects the entire contract he said. Interconnection contracts generally have clauses that require utilities to help each other out to avert greater emergencies. Sometimes reducing demand -- called load shedding -- can be the only way to stabilize the electric grid in the seconds after a major power plant or transmission line fails. It's been around in the electrical fabric forever said Jim Pope head of Silicon Valley Power Santa Clara's city-run utility. In addition to legal requirements you have a moral obligation so you don't bring the system to collapse. Like other city-run utilities Silicon Valley Power has a contract with PG&E that requires it to shed load during an electric emergency. But its contract allows it to work with big users to reduce their demand so no one has to be completely shut off. Such agreements formed long before deregulation when PG&E ran the north state's grid now are complicated by the 1997 creation of the state Independent System Operator. The ISO today runs pieces of the grid owned by PG&E Edison and San Diego Gas & Electric Co. If it believes power use is about to surge past supply potentially triggering a grid collapse across the western United States the ISO notifies the three utilities that they have to shed a certain number of megawatts. The big utilities meet that requirement two ways. They cut circuits to some of their own customers and they tell smaller connected utilities to cut a proportionate share. In Northern California about 80 percent of the outages are borne by PG&E customers and the rest by customers of SMUD and other municipal utilities and irrigation districts. In one sense we are all in this together. If SMUD were in danger of going down we would hope others would help us out said SMUD's Posner. But that's if we're in danger from circumstances beyond our control not from mismanagement or lack of financial wherewithal. It is unclear what penalties if any a utility would face for violating an interconnection agreement. In the long run the issue would be fought either in the courts or before the Federal Energy Regulatory Commission grid officials said. As a practical matter in the seconds when the risk to the grid is greatest if one utility refused to shed load the ISO would probably solve to problem by calling on PG&E Edison or others who are willing to make deeper cutbacks they said. ---- PUC to Decide Fate Of Utility Workers PG&E Edison want to trim costs by laying off thousands cutting service Bernadette Tansey Chronicle Staff Writer Wednesday March 7 2001 2001 San Francisco Chronicle State regulators are set to decide today whether debt-ridden Pacific Gas and Electric Co. and Southern California Edison can conserve cash by laying off thousands of workers and letting service standards slip. Union officials who protested the layoffs before the California Public Utilities Commission warn that if the cuts go through neighborhoods hit by power outages could stay dark for hours and more customers could face busy signals when they call about their bills. An administrative law judge agreed advising the commission in February to order the utilities to restore 725 positions already cut and block the elimination of an additional 2125 jobs. Judge John Wong said PG&E and Edison have acknowledged the layoffs will not substantially improve their shaky financial condition which arose from skyrocketing wholesale electricity costs the utilities could not pass on to consumers under a rate cap. The savings would barely make a dent Wong said in his draft decision. The two companies together claim that their debt from power purchases amounts to more than $13 billion. PG&E says it has saved $18 million from the first wave of 325 layoffs. Wong's recommendation is already running into resistance on the PUC. Commissioner Richard Bilas said the five-member panel should not be micromanaging the utilities in a time of crisis. Bilas has proposed an alternate ruling that would allow the utilities to make the cuts but provide for PUC monitoring of service in case the commission wants to step in later. We're in a situation where the utilities are not collecting the revenues they need to operate and yet we may be guilty of not letting them cut expenses where they can cut expenses Bilas said. PG&E spokesman Jon Tremayne said savings from the layoffs are helping to keep electricity running and gas flowing. It keeps cash in our accounts so we can keep doing day-to-day business Tremayne said. In addition to the 325 positions dropped so far PG&E is proposing to cut an additional 675 during the next three to six months. The cuts affect temporary and contract workers who read meters handle new service hookups and replace equipment. PG&E has no plans to eliminate permanent positions. The company is struggling to keep up with a higher workload at its call center as customers deluge the lines with inquiries about their rising bills and the effects of deregulation. Calls to PG&E ballooned from 1.3 million in January 2000 to 2.3 million in January 2001. Bilas advocates granting PG&E's request to temporarily relax standards requiring the utility to respond swiftly to customer calls and to read customers' meters once a month. PG&E wants to read meters bimonthly and send bills based on the estimated use between readings. Discrepancies could be corrected later. Wong called those measures unacceptable. He said customers need to know immediately if their efforts to conserve power are working. Wong also said the utilities' own experts have said the workforce reductions will lengthen the time required to restore power after nonemergency equipment failure. Eric Wolfe communications director for the International Brotherhood of Electrical Workers Local 1245 said some customers have already been left without power overnight because PG&E is trying to avoid the use of overtime on nonemergency power outages. It hurts a lineman to walk away from the job leaving a customer without power Wolfe said. Tremayne said PG&E is trying to minimize overtime costs but denied the company has allowed customers to go without power out of financial concerns. He said crews were pulled out when darkness and falling trees made the work too dangerous. ---- Power prices could soar during the summer Posted at 10:35 p.m. PST Tuesday March 6 2001 BY STEVE JOHNSON Mercury News Unless Gov. Gray Davis arranges significantly more long-term electricity contracts or persuades people to turn off a lot more lights California's unpredictable spot market for power could wreak havoc this summer. Even with the 40 long-term deals announced by Davis on Monday experts interviewed Tuesday said up to 43 percent of the state's daily needs may have to come from this highly volatile market in which power is bought within a day of need. That could could prove hugely expensive because some spot market energy has cost five to six times what it would under the long-term contracts. It's widely expected that consumers ultimately would have to pay that tab which could amount to billions of dollars. And because that power won't be locked up in contracts there is no guarantee it will be available when it's needed which could lead to blackouts according to a recent report to the California Independent System Operator which oversees three-fourths of the state's power grid. ``The situation in California could reach catastrophic proportions'' the report concluded adding that unless things change dramatically ``it is a virtual certainty that peak demand will go unmet during many hot summer days.'' Steven Maviglio Davis' press secretary conceded Tuesday that the spot market could be troublesome. ``It's a major concern'' he said which is why the state is trying to line up more power contracts speed up power plant construction and promote conservation. During the normally hot month of August peak daily demand for power in the Independent System Operator's territory is expected to hit about 47700 megawatts -- enough for nearly 48 million homes. The state's three main utility firms generate about 8200 megawatts and have long-term contracts from wind solar and other energy sources for about 11700 megawatts more. That totals about 20000 megawatts. Add in the 7000 megawatts of long-term power that Davis has announced for this summer and the state is still nearly 21000 megawatts short. Costly proposition If all that power has to be obtained on the spot market the price could be high. On Friday last-minute purchases on the market averaged $411 per megawatt-hour compared to about $150 per megawatt-hour for all power obtained by the Independent System Operator and $69 per megawatt-hour on average under Davis' long-term contracts. It's possible that not all 21000 megawatts would have to be purchased on the market. Assuming Davis is successful in getting people to save 10 percent -- which could prove difficult -- conservation could reduce peak demand by nearly 5000 megawatts. California also might be able to trade for another 5000 megawatts with the federal government's Bonneville Power Administration and a hydroelectric operator in British Columbia said Arthur O'Donnell editor of California Energy Markets a trade publication. Under such deals those two outfits often send that much power to California when they don't need it and California returns the same amount or more when its demand is low. But O'Donnell said it wasn't clear whether 5000 megawatts would be available this summer because ``they still haven't gotten the snowpack they need in the Pacific Northwest'' which could limit that region's generating capacity. Still falling short Even if those hydropower imports are available and conservation works as Davis hopes it's likely California would still require the spot market for 11000 megawatts to meet the August demand. That's more than 20 percent of the state's overall power needs. ``All of the surrounding states are buying probably less than 5 percent at most of their energy on the spot market'' said Frank Wolak a Stanford economist who monitors electricity prices for the Independent System Operator. He worries about how much that power could cost and is disturbed that state officials haven't adequately addressed the issue. ``No one has any idea what they are going to do and that is part of the problem'' he said. Officials at Pacific Gas & Electric Co. are particularly concerned. They fear that their company -- which is nearing bankruptcy -- could get stuck for much of the spot market purchases by the Independent System Operator which has threatened to bill the utilities for the cost. Fearing the annual bill for that power could hit $2.4 billion this year PG&E wants the tab sent to the Department of Water Resources which also is buying power on the spot market for the state. But the Department of Water Resources has objected to that idea and the matter is expected to be heard today by the California Public Utilities Commission. ``We're looking for clarity on a number of issues'' regarding how the spot market will work ``and certainly that's one of them'' said Thomas Hannigan the water agency's director. ``I don't think anybody knows the answer of who's going to pay for it'' added PG&E spokesman John Nelson. But Nettie Hoge executive director of the Utility Reform Network in San Francisco said she suspects consumers ultimately will foot the bill. The unfortunate likelihood about spot market purchases is that ``ratepayers are responsible for all of it eventually'' Hoge said. ``It's a very big problem.'' ---- Power Plant Plans Cause Conflicts East county residents blast supervisors Jason B. Johnson Chronicle Staff Writer Wednesday March 7 2001 Industry dreams of building new power plants in east Contra Costa's hills are prompting an angry reaction among residents and elected officials who say they don't want more plants. The conflict was sparked by a vote by county supervisors yesterday to aggressively explore possible sites for new power plants throughout the county. The measure by Supervisors Mark DeSaulnier and Federal Glover which passed on a 4-to-0 vote directs the county administrator and Department of Community Development to compile a report on possible sites within 45 days. Supervisor Donna Gerber abstained after criticizing the plan for potentially repeating the same mistakes that plagued the state's energy deregulation effort by not considering how much energy the state region and county will need in future years and how much power is slated to come online. Gerber said alternative power sources such as solar should also be examined. A site drawing much attention is on top of a deposit of natural gas near the Concord Naval Weapons Station off Highway 4. The owners of 70 acres of land near the station recently formed a company Golden State Power Co. to pursue construction of at least one small peaker plant and a much larger facility capable of producing 600 megawatts. The site could hold up to three small 50-megawatt peaker plants and a larger 15-acre natural gas plant said Steve Thomas managing partner with Golden State. No land use applications have been filed. Thomas said 30 acres could be kept as open space to form a buffer around the project. Both (facilities) are state of the art said Thomas. We believe that the site is ideal. But east county residents at yesterday's meeting blasted the supervisorial measure and the power plant proposal complaining that more plants could put people's health at risk. The region already is home to six power plants. We're going to get a good dose of poor air quality and (negative) health conditions from this said Concord resident Evelyn Frietas. I think we need to stop and think about what we're doing to our quality of life. Dan Torres said the home he bought in 1995 at a new Bay Point development would be alarmingly close to the proposed Golden State site. It will be dragging emissions over our home said Torres. I didn't buy a home on that hill to be surrounded by power plants. There are six power plants in operation in east Contra Costa. Pittsburg already has two power plants and two more under construction. City Council members Frank Aiello and Yvonne Beals said the Antioch-Pittsburg area has done more than its share of energy production. Aiello said Pittsburg will soon produce enough energy to power three million homes in California. When is enough enough? asked Aiello. Pittsburg has shouldered responsibility for a land-fill and two more power plants. At some point you have to say enough. Beals said that while power plants have added millions to the city's general fund the negatives of additional plants could outweigh the benefits. I don't think that Pittsburg or east county should be the dumping ground for energy for California said Beals. ---- Supervisors set search for power plant sites The board also heard from the potential developers of a 650-megawatt plant between Bay Point and Concord By Thomas Peele TIMES STAFF WRITER MARTINEZ -- Contra Costa County supervisors took tentative steps Tuesday toward allowing the construction of at least one small power plant before summer ordering that its staff identify potential sites in unincorporated areas within seven weeks. The board voted 4-0 to search for locations. Third District Supervisor Donna Gerber abstained saying her colleagues lacked a comprehensive context'' to identify sites. I think the board knows just enough to be dangerous'' she said. Gerber said the county should examine the potential for additional power plants within its borders but not investigate individual sites yet. But Fourth District Supervisor Mark DeSaulnier said the action was necessary because of the energy crisis and because of Gov. Gray Davis' call for local governments to help speed the construction of so-called peaker plants before July and August. I wouldn't do this except under an emergency DeSaulnier said after the vote. There are unusual circumstances. We're not talking about putting this in a residential area. Fifth District Supervisor Federal Glover backed DeSaulnier but said he hoped for a location outside his heavily industrialized East County district. There's a lot of concern in East County as to the number of plants he said. DeSaulnier said though that the only logical place for a small plant remains the industrial belt'' stretching along the waterfront from West County to Antioch. He declined to provide specifics but said the only other potential site outside the industrial areas was the Concord Naval Weapons Station property. But he quickly added that he believes the U.S. Department of Defense would never go for it. Also DeSaulnier said he could not rule out the county building the plant itself and entering the electricity-selling market during peak demand times. Board Chairwoman Gayle Uilkema called that idea extremely premature and unlikely. That's a very powerful decision. I do not think we are ready'' she said. The California Energy Commission listed the Equilon refinery in Martinez as one of 32 potential peaker plant sites in the state last week. Peaker plants kick in during peak usage times. Davis called for their quick construction before the height of summer and its energy demand for air conditioning. Plants that generate as much as 50000 megawatts don't need Energy Commission approval. DeSaulnier said he believed a peaker plant could be built about a month after final approval. Supervisors also heard from the potential developers of a 650-megawatt plant between Bay Point and Concord. Walnut Creek commercial real estate developer Steve Thomas announced his intentions for the site north of Highway 4 last week. Construction could take two years. Eric Hasseltine a consultant representing Thomas and what he described as a brand new company for the site the Golden State Power Co. told supervisors that if they intended to speed peaker plant construction they should do what they can to expedite the larger plant. The Thomas site could house a peaker plant until the proposed larger one goes online. A large natural gas line passes under the site. DeSaulnier seemed cautious about the larger proposal which he had described last week as a good site. Uilkema too said she knew too little about it to comment. A resident who lives near the Thomas property asked the board to build it (the larger plant) closer to where you have industrial areas. You have to carefully consider the people who live nearby said Dan Torres 39. Evelyn Freitas of Concord said she lives downwind of the proposed site. Our air quality is going to be worse then it is now she said. Gerber played on the environmental issues saying the county already ranks second statewide to Los Angeles in volume of hazardous materials and amount of electrical generation. ---- Peter Schrag: California's $90 billion infrastructure gap (Published March 7 2001) By now California's surreal energy mess has grown from a crisis to a condition. It may not be quite as permanent as say death and taxes but it's still something that could get a whole lot worse before it gets better. Until there's more realistic pricing no gubernatorial pea-under-the-shell buyout scheme will solve it. Beyond the energy crisis however and in many ways similar to it California faces a whole range of other infrastructure problems -- in transportation in water resources and sewer systems in school and university buildings -- that seem once again to be all but forgotten. The Business Roundtable has estimated the need at roughly $90 billion though no number can possibly be exact. What's certain is that after a burst of high-level investment in public facilities during the 1950s and 1960s California's annual capital investment has sunk precipitously -- from an annual $150 per capita in the 1960s according to a set of recent studies for PPIC the Public Policy Institute of California to about $30 in the 1990s. But you probably don't need to tell anyone driving Bay Area or Los Angeles freeways or looking at the ubiquitous portable classrooms those dreary brown boxes that house a fourth of our public school students. Ever since passage of Proposition 13 in 1978 we have been flying the flag of deferred maintenance. As in the state's electricity crisis however there's no way California can effectively address those problems merely by building or bonding itself out of them. In highway construction in developing water resources in finding enough university space to accommodate the Tidal Wave II of students managing demand is likely to be as crucial to any solution as new construction. In the energy market -- and in electricity particularly -- it's been a familiar principle ever since David Roe of the Environmental Defense Fund first persuaded Pacific Gas and Electric that a dollar invested in conservation may be worth as much as the same investment in new generation. But in most other sectors of California's infrastructure state and local it's a lesson still to be learned. There have been scattered attempts to encourage conservation and reduce demand -- significant reduction in water use for example through the installation of low-flow faucets and low-flush toilets some reduction in traffic by using rush-hour diamond lanes or by adjusting highway or (as in New York) bridge tolls to levels of congestion. But as pointed out by David Dowall an urban economist at Berkeley state policy-makers have not really begun to consider how demand management strategies can be applied to infrastructure service areas or how the more efficient use of facilities and more realistic pricing -- highway tolls say or parking fees -- can reduce demand for scarce infrastructure resources. In any case says Dowall in one of the PPIC reports we should pick which major projects we will build not just according to per capita estimates of how much we need but according to how much consumers are willing to pay for them. To avoid hurting the poor congestion-related highway tolls and other tariffs can be rebated on the basis of income. University fees can be means-tested. In California they also could be adjusted to encourage summer school classes and other off-peak uses rather than (as in the past) making UC summer courses more expensive. Given the political and economic uncertainties there's no way to know how far such demand management can be taken. But there's not much doubt that as Dowall and others point out the state's infrastructure planning is a jumble of uncoordinated agency agendas and wish lists. The Legislature last year passed a bill AB 1473 by Assembly Speaker Robert Hertzberg that requires the governor beginning next year to submit an annual five-year infrastructure plan for state agencies and public schools along with recommendations on how to fund it. In addition Gov. Gray Davis' infrastructure commission is expected to recommend better coordination of infrastructure and land-use planning when it issues its report this spring. That would be a start. As California State Treasurer Phil Angelides has pointed out the state desperately needs to start joint planning -- regional planning -- for housing roads and other resources to reduce the need for long commutes to preserve open space and to bring jobs to where people live and housing to where the jobs are. That would itself reduce demand for more freeway lanes and equally important improve the quality of life. At present most planning for housing roads water systems and other facilities rarely recognizes the regional impact of local decisions. In the East Bay slow-growth forces push well-intended initiatives that would force more development into Tracy or Modesto and further tax the transportation systems to Silicon Valley. In city after city there are beggar-thy-neighbor efforts to grab yet another shopping mall that produces a little extra sales tax revenue for the city that gets it and that often compounds traffic and revenue problems in adjacent communities. In higher education we divide bond proceeds evenly among UC the California State University and the community colleges even though the community colleges serve eight times as many students as UC. We plan road projects according to county not regional priorities. It is all done according to antiquated political and fiscal formulas that often no longer make sense. We don't just need better capital planning we need a whole new planning system. ---- PG&E power plan debated at hearing A PUC meeting on the utility's capacity expansion project for the Tri-Valley follows weeks of protest from officials residents Power upgrade in valley debated By Megan Long TIMES STAFF WRITER SAN FRANCISCO -- Dublin officials and the developer of a Livermore subdivision faced questions Tuesday about their opposition to alternative routes of PG&E's controversial Tri-Valley power upgrade plan -- and answered by restating their long-standing objections. Tuesday's cross-examination came during the third and likely final week of the California Public Utility Commission's evidentiary hearings on the utility's $91 million Tri-Valley 2002 Capacity Increase Project. It has followed weeks of protests of PG&E's upgrade plans by officials and residents of Livermore Pleasanton Dublin and San Ramon. And before the questioning started Dublin Vice Mayor Janet Lockhart reiterated concerns about an alternative route deemed environmentally superior that would place a substation just 1000 feet north of Interstate 580 between Tassajara and Fallon roads. She said that would undermine the results of a 15-year process to plan the eastern development of the city. It's extremely important to the residents of our community to follow a plan we worked hard to produce she said. Dublin officials favor PG&E's proposed placement of the station three miles north of the freeway away from new high-tech company offices and housing developments. Besides the Dublin substation the project calls for construction of a substation in North Livermore expansion of the Pleasanton substation and installation of 23.5 miles of new lines. In response to questions from PUC Administrative Law Judge Michelle Cooke Dublin's public works director Lee Thompson confirmed that the Lin family the owner of the property where the alternative substation would go wasn't interested in selling the land to PG&E. Cooke also asked Thompson to define a discretionary permit which is how city officials said they might treat a permit for a substation. Lee said that type of permit is one the city has the right to approve or not depending on the project's impact. Eddie Peabody Dublin's community development director testified that the zoning for the Lin property accommodates uses such as commercial business research and development and light manufacturing. It would not he said be appropriate for a power substation. He said parcels within the East Dublin area that could host a station would include those zoned for public and semi-public uses including land recently bought by Oracle and Sun Microsystems for new campuses. While Dublin officials testified that one buyer of land in that area paid $86 per square foot others suggested land prices would be inflated to help make a PG&E land buy look prohibitively expensive. An executive of Centex Homes the developer of new houses near Isabel Avenue and Concannon Boulevard objected to an alternative route that would place high-voltage transmission lines overhead along Isabel and Stanley Boulevard. David Barclay president of Centex's Northern California division said that the 80-foot to 150-foot towers would have a severe visual impact on residents of the Prima tract. Ed O'Neill a lawyer for the Kottinger Ranch Homeowners Association pointed out that existing distribution lines on 50-foot poles on Isabel already mar the view for residents. The Foley family has been ranching on land south of Pleasanton city limits for years said their attorney Kennedy Richardson. The utility's project would place overhead lines and a transmission station on rolling hills that the family envisions as one day being public open space with limited development Richardson said. Lawyers for Pleasanton Livermore Kottinger Ranch and Centex are scheduled to cross-examine a PG&E engineer today about the project's routing. That testimony should be the most controversial of the hearings. Judge Cooke is expected to recommend an alignment by July to the PUC which will make the final decision. ---- NEWS State OKs 'Peaker' Power Plant at SFO / Temporary generator could be sending electricity to 50000 homes by August Marshall Wilson 03/08/2001 The San Francisco Chronicle FINAL Page A.20 (Copyright 2001) State energy officials yesterday approved plans to build a temporary electrical plant at San Francisco International Airport that should generate enough juice to power 50000 homes by August. Meeting in Sacramento the Energy Commission voted 4-0 to give the green light to the gas-fired plant. It will operate during peak summer and winter demand to help the state avoid Stage 3 power alerts and rolling blackouts. Texas-based El Paso Merchant Energy Co. won approval under a new state law mandating speedy four-month reviews of so-called peaker plants. It was the only one of seven applications statewide to win approval. The other proposals were withdrawn for various reasons. The 51-megawatt plant formally called the United Golden Gate Power Project is scheduled to be built at the northwest corner of the airport near the United Airlines maintenance center. Within the next few weeks El Paso plans to apply to build a 571- megawatt $400 million plant in the same area company spokesman Jesse Frederick said. It would undergo a separate review by state energy officials. The small peaker plant approved yesterday is to generate electricity beginning around Aug. 1 for up to three years. After the end of three years the plant would be closed or converted to a cleaner-burning system. Under state law a temporary peaker plant is permitted to spew more air pollution than a permanent plant. El Paso's temporary plant is to be built next to a co-generation plant operated by United Airlines. It would use existing connections for natural gas and water supplies and tap into existing power transmission lines. Electricity generated by the plant would be pumped into the state's electrical grid Energy Commission spokesman Gary Fay said. It would also serve as a backup for San Francisco Airport in case of a blackout. No one spoke against the proposed plant at yesterday's commission meeting. The proposal however has been criticized by area residents and environmentalists worried about air pollution. Scott Buschman a professional photographer and San Bruno resident said yesterday it was unjust that state officials 100 miles away in Sacramento approved a Texas company's proposal to put a power plant on land owned by San Francisco. The fact that they approved it without considering the public's concerns foremost air quality is very disturbing he said. Fay said the plant complies with clean-air standards. Answering the criticism about the location of yesterday's deliberation he said three hearings and several workshops were held in communities near the airport. Copyright 2000 Dow Jones & Company Inc. All Rights Reserved. ---- Crossed Wires: Major Kinks Emerge In Gov. Davis's Plan To Power California --- State's Outlays for Electricity May Be Hard to Recover Without Rate Increases --- Betting on Long-Term Deals By Wall Street Journal staff reporters Rebecca Smith Mitchel Benson and John R. Emshwiller 03/08/2001 The Wall Street Journal A1 (Copyright (c) 2001 Dow Jones & Company Inc.) SACRAMENTO Calif. -- Earlier this year Gov. Gray Davis made what may be the biggest bet in the history of the nation's biggest state: that he could tame an out-of-control electricity market and avoid devastating blackouts without busting the state's budget antagonizing its consumers or derailing his own political career. His wager is still on the table but the assumptions that underlie it are looking increasingly shaky these days. The governor has already spent around $2 billion of public money buying hugely expensive wholesale power taking over the role formerly played by the state's near-bankrupt electric utilities. And California will probably be obliged to spend billions more before its electricity market stabilizes and those utilities are restored to some semblance of financial health. Under the governor's plan California aims to recoup the money it is using to buy electricity by issuing $10 billion in bonds. That way it would still have a healthy budget surplus to finance new spending on roads schools and other public services. But there's a potentially big obstacle to this plan. The state Legislature worried about racking up billions in new debt has put limits on the size of any bond offering. In broad terms the Legislature's action would allow the state to borrow only four times as much as it can recover annually from utility customers. Right now that doesn't appear to be much. Under the current rate structure essentially set in place by California's flawed 1996 electricity-deregulation plan consumers pay far less for power than the cost of acquiring it on the wholesale market. Preliminary estimates submitted by utilities last month to the California Public Utilities Commission show the state's share of the proceeds from electricity sales this year could be as little as $241 million -- not enough to support even $1 billion in bond sales under the Legislature's formula. That would leave the state on the hook for much of the money it has already paid for power -- not to mention the billions more Gov. Davis will need to spend. That in turn raises the prospect that California's economy and its credit rating both could deteriorate significantly. But state finance officials say that based on their own projections they will be able to extract enough money to support a $10 billion bond issue. Walking a careful line between fiscal prudence and political survival Mr. Davis and others in his administration are scrambling to come up with ways to get around the legislative restrictions without raising rates for consumers. If I wanted to raise rates I could solve this problem in 20 minutes Mr. Davis says. The governor says he believes that the state can obtain enough affordable power through long-term power-supply contracts to avoid the need for a big rate increase. The billions of dollars the state hopes to borrow would be used to help pay for power until electricity prices drop as they are expected to do when new power plants come online over the next few years. The Davis administration fears that what may be its only other option -- a big increase in retail electric rates -- could prompt angry consumer groups to seek new electricity laws through a statewide ballot initiative during next year's election. That's when Mr. Davis is expected to run for a second term as governor. But trying to save California without rate increases is forcing Mr. Davis to make some colossal gambles with the state's money. State officials estimate that in the next several months California will need to spend as much as $6 billion on power purchases -- equivalent to the state's entire fiscal surplus. Mr. Davis is also looking to spend several billion more to buy the transmission assets of three investor-owned utilities in order to restore two of them to credit-worthiness. He also has announced plans to spend several hundred million dollars more on conservation programs designed to reduce demand while new power plants are being built in the state. In order to limit the state's financial exposure in the meantime the governor and his aides have in some cases ignored state law. They have threatened appointed officials who have stood in the way. And they have sharply restricted the flow of information to the public. None of those steps is expected to do much to reduce state spending on power in the coming months. In a few weeks power usage is expected to begin a sharp seasonal rise as Californians switch on their air conditioners with the coming of warmer weather. By various estimates demand during peak periods this summer could outstrip supply by 10% or several thousand megawatts. That could produce more rolling blackouts like the ones that hit Northern California earlier this year. It is also likely to put strong upward pressure on wholesale electricity prices. Steven Zimmerman managing director of Standard & Poor's Corp. says Mr. Davis and his aides don't have a lot of time to put a cap on the state's financial exposure to the crisis. The credit-rating agency has put the state on credit watch for a possible downgrade which would affect the value of all of California's outstanding public debt. Moody's Investor Service Inc. is also concerned. It said in a recent report that the power crisis could soon seriously threaten the health of the state's economy. Mr. Davis a Democrat and career politician was dealt a bad hand when he took office in 1999. The deregulation plan that sparked the state's electricity crisis was enacted under his predecessor Republican Pete Wilson. But Mr. Davis was slow to react to early signs of trouble this past summer and alarms sounded by members of the state Legislature. By the time Mr. Davis finally sprang into action earlier this year a troublesome power-supply squeeze had escalated into a crisis. In a Jan. 17 declaration of emergency the governor designated the state Department of Water Resources to take the utilities' place as the daily buyer of huge quantities of electricity. His hope: that by making the state the dominant player in California's power sector he would ease electricity producers' concerns about getting paid and give the state enough clout to negotiate lower long-term power prices. Earlier this week Mr. Davis announced final or tentative agreements with 20 power suppliers to furnish the state with a total of 8900 megawatts for periods of as long as 20 years. But the supply situation remains extremely uncertain for this summer when demand probably will top 45000 megawatts. If the state can secure enough power under contract and push down demand through aggressive conservation it might be able to squeak through the summer season. If not it will be forced to keep buying huge amounts of costly power in the cash market. Under deregulation retail electric rates were frozen for several years while wholesale-power costs were free to fluctuate. When the plan was conceived wholesale prices were low and expected to go lower. However a combination of unexpected growth in power demand and a lack of new generating capacity helped produce a supply squeeze. Average wholesale prices more than tripled last year from 1999. And in January those prices were up 10-fold from a year earlier. By then California's two biggest investor-owned utilities -- the Pacific Gas & Electric unit of PG&E Corp. and the Southern California Edison subsidiary of Edison International -- faced imminent financial collapse. They had racked up billions of dollars in wholesale power bills they couldn't afford to pay. As generators began shying away from selling to the two utilities the Clinton administration forced them to sell power into the California market an order left in place during the first weeks of the Bush administration. Still northern California was hit by rolling blackouts on several days in early January. Since then the DWR which does some electricity trading as an adjunct to its main mission of managing the state's giant system of aqueducts and reservoirs has had to learn the ins and outs of power markets on the run. It hasn't been easy. David Mills trading-floor manager for the federal Bonneville Power Administration says the water agency has at times offered to pay $50 to $100 per megawatt hour more than the available market price. They agree to prices that make you wonder says Mr. Mills whose organization markets electricity from federal dams in the Pacific Northwest. You'd at least think they'd check to see what the prevailing price is before throwing out their offer. Mr. Mills says that to cut California some slack he occasionally has instructed his traders to sell at prices lower than the DWR had offered to pay. Ray Hart the water agency deputy director responsible for the power purchasing says he isn't aware of any cases in which the DWR has overpaid. He says his team has been extremely successful by all measures. Ultimately the DWR's trading acumen is far less important than the overall arithmetic of power supply and demand in California. With the price of natural gas that feeds many of the region's generating plants at near record levels and some suppliers reluctant to sell into the troubled California market wholesale electric prices remain stubbornly high and in recent days have again been rising. The Legislature has advanced the DWR about $3 billion from the state's general fund for power purchases. Under emergency legislation passed by the Legislature and signed by Mr. Davis on Feb. 1 the general fund is to be reimbursed from a planned bond sale later this year. But under terms of the emergency law the water agency would have to wrest $2.5 billion a year in revenue from retail electricity rates in order to sell the $10 billion worth of bonds sought by Mr. Davis. Assembly Speaker Robert Hertzberg a Southern California Democrat says the formula was created to ensure that there would be a way to repay the bonds without draining the state's coffers. We didn't want to just open our wallets he says. According to the language of the Feb. 1 law the water agency gets what's left of revenue collected from ratepayers after the utilities pay certain of their own power-supply bills and other expenses. And in their filings with the PUC last month the utilities reckoned under their worst-case scenarios that there would be only $241 million available to the DWR this year. State officials are quietly pushing the PUC to rejigger the formula so that the water department gets more money -- even though that would clash with terms of the Feb. 1 law. Robert Miyashiro deputy director of the Department of Finance says the emergency law was drafted poorly and has led people to believe the DWR only gets the leftover money. He predicts there will be cleanup legislation. At the request of the Davis administration the PUC is considering a plan to use a different revenue-sharing formula than the one in the state law. The proposed new formula was written in close consultation with Mr. Davis's Finance Department says PUC President Loretta Lynch who supports the initiative and is hoping to rush it through. The effort has drawn some opposition. Commissioner Richard Bilas at a recent PUC meeting questioned the legality of the commission attempting to change a formula set by the Legislature. PG&E is even more emphatic since the DWR's extra money could come at the utility's expense. The formula threatens to undo the very financial protections for the utilities that [the new law] attempted to provide the utility said in a recent filing with the PUC. As politicians and regulators wrestle with that issue the Davis administration has taken a step to reduce the outflow of state cash that also seems to conflict with the Feb. 1 law. It was widely assumed that the law required the DWR to buy any electricity the state needed to keep its lights on. However on many occasions the DWR has refused to buy power on the grounds that it was too expensive citing a portion of the new law that urges the agency to hold down costs. The task of covering any remaining shortfall has passed to the California Independent System Operator which manages the state's energy grid and is charged with buying power when necessary to avert shortages. However the ISO doesn't have any power-purchasing money of its own and the major parties it would normally bill are PG&E and Edison whose inability to pay their power bills was the reason the state started buying electricity in the first place. Amid criticism of its stance from generators utilities and Wall Street the DWR says it has started covering more of the utilities' electricity costs. The water agency is now buying 95% to 99% of what California needs in a given day says the agency's Mr. Hart. But increased buying only adds to the uncertainty about the eventual tab. The state's legislative analyst Elizabeth Hill recently recommended that lawmakers hold off considering more than $2 billion in state spending on items ranging from college construction to beach cleanups because of continuing questions about the financial impact of the electricity crisis. Like others Ms. Hill complains that the governor's office and state agencies haven't been forthcoming with information. Indeed the DWR refuses to say precisely how much power it is purchasing and at what prices though it has on several occasions gone back to the Legislature for more money. State officials say that data on its purchasing activities would give suppliers an advantage in continuing electricity-supply contract talks. State Controller Kathleen Connell who is running for mayor of Los Angeles in an April election recently announced plans to post state power-spending information on her department's Web site. But within 24 hours Ms. Connell suspended that plan after discussions with senior Davis administration officials. I feel very strongly that this information should be publicly released says Ms. Connell. I just don't want to do anything that would weaken the state's effectiveness in negotiating. In an effort to more tightly control events the governor obtained legislative approval to abolish the 26-member ISO board which was made up of everyone from utility executives to representatives of consumer groups. He then appointed a new five-member board. To ensure a quick transition the California attorney general threatened the old board members with fines of as much as $5000 each if they didn't immediately relinquish their positions. All did. I was offended at the heavy-handed treatment says Karen Johanson a former ISO board member. One of the first acts of the ISO's new board was to close a meeting about the electricity crisis. The former ISO board routinely held such meetings in public. ISO attorneys say the meeting was largely designed as a private briefing for new board members and that the organization is committed to keeping its deliberations as open as possible. The Wall Street Journal and other news organizations have unsuccessfully challenged the closure in Sacramento state court. Copyright 2000 Dow Jones & Company Inc. All Rights Reserved. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: On Market Power in California Body:: fyi. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Public Policy Contacts for California Body:: Please respond to kevinscott 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 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Can you help me? Body:: ----------------- What should this email be categorized as? [/INST] Empty message <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RED Index shows Texas, NY, and Maine advance on retreating Pennsylvania Body:: ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Western Wholesale Activities - Gas & Power Conf. Call Privileged & Confidential Communication Attorney-Client Communication and Attorney Work Product Privileges Asserted Body:: PLEASE MARK YOUR CALENDAR Date: Every Thursday Time: 7:30 am Pacific 9:30 am Central and 10:30 am Eastern time Number: 1-888-271-0949 Host Code: 661877 (for Ray only) Participant Code: 936022 (for everyone else) The table of the on-going FERC issues and proceedings is available to all team members on the O drive. Please feel free to revise/add to/ update this table as appropriate. Proposed agenda for tomorrow: CAISO filed Amendment No. 40 which would suspend the use of preliminary invoices and disbursements. CA refund proceeding status. Please feel free to communicate any additional agenda items to the group . What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Liberalisation of Italys Energy Markets Body:: Any interest? ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Invitation to speak at September Pricing conference Body:: Forward to whomever you see fit. It looks like an opportunity to explain price risk management to large customers. ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: UC/CSU press release Body:: fyi ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Regulatory issues memo: Revised Body:: Additional information on the regulatory context. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential Due Diligence Info - GS Body:: There is a lot of confidential information here (in items 1and 2) Detailed monthly P&L covering all trading activity for the last three years Potential Exposure by sector (eg gas and electricity utility) Detailed monthly P&L covering all trading activity for the last three years. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Energy & Powers Financial Mathematics to Energy Derivatives Seminar Body:: Eugenio It's more or less the same. No big changes. Vince What should this email be categorized as? [/INST] Personal but in professional context <s>