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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:: nan Body:: Attached are my comments on the Bliley amendment to the Largent amendment. 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:: Skilling will be speaking at the National Press Club next week. He'll give an overview of Enron's business talk about what's going on in power markets and what should be done to fix the current problems. California will get covered as well. Other than what we have already discussed is there anything Jeff should know or address in his remarks? 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:: CAISO Notice - Congestion Reform Proposal - Apendix B Body:: Market Participants: As part of the Congestion Management Reform Proposal the ISO has posted Appendix B Locational Price Dispersion Study on the ISO web site at . Please be aware that the file is very large (the Word version is 5.1 mb and the PDF version is somewhat smaller at 4.3 mb) so it will take a while to download. Byron Woertz Director Client Relations 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: California Update 07.18.01 Body:: These are useful updates. Please include Whalley Lavorato Parquet Dietrich Delainey Kitchens Haedicke Sanders Kirby Sharp Leff Calger Belden etc on future updates. Thanks From: Jeff Dasovich on 07/18/2001 08:18 PM Sent by: Jeff Dasovich To: Richard Shapiro/NA/Enron@Enron skean@enron.com Susan J Mara/NA/Enron@ENRON Harry Kingerski/Enron@EnronXGate James D Steffes/NA/Enron@Enron Linda Robertson/NA/Enron@ENRON Susan M Landwehr/Enron@EnronXGate mpalmer@enron.com Karen Denne/Enron@EnronXGate Janel Guerrero/Enron@EnronXGate Paul Kaufman/Enron@EnronXGate cc: Subject: California Update 07.18.01 The Senate the Assembly and the Governor are either poised to engage in very difficult negotiations or the three are about to crash and burn and Edison's going to be left dangling. In the Senate: The Senate bill 78XX is with about 90% likelihood going to be voted out of the Senate tonight---without a vote having taking place in any committee. Burton announced during one of the two informational hearings that this is it despite the view of just about everyone who appeared before the committees the bill likely won't prevent Edison from going bankrupt. The key features of the bill are: Banks and QFs get paid in full. Edison shareholders would be responsible for debts owed to suppliers No direct access. There are conflicting reports about whether the Senate will take up the bill tomorrow de-linking the bonds from the DWR contracts and whether the Republicans will go along with it. In the Assembly: The Committee is hearing the Wright and Hertzberg bills as we speak with Hertzberg's the likely winner. That bill now provides for Direct Access under certain conditions (the amendments describing the conditions were faxed today). We're attempting to get the July 12 date changed to the effective date of the bill or later. The Assembly likely won't vote the Hertzberg bill out until tomorrow at the earliest. The Problem: The Assembly and Senate bills are diametrically opposed in the way each approaches the problem---in short the bills are two ships passing in the night. The Democratic leaders (Governor Hertzberg Burton) aren't talking and Burton hasn't expressed any interest in talking---to anybody. The likely outcome given the circumstances: Burton says he's done what he needs to do (i.e. passed out a fair bill) the Assembly and Senate can't agree they finish the budget time runs out they leave Friday and Edison's left twisting. That said there's still a chance that the Governor could call Burton and sit down with Burton and Hertzberg and work something out by Friday or begin talking and postpone the recess until they get it worked out. But given Burton the chance of that happening seems very slim. In short little has changed since yesterday. Best 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:: Fwd: Successful purchase of NBER Paper Body:: Return-Path: <Gregory_Gordon@ssrn.com> Received: from rly-xd03.mx.aol.com (rly-xd03.mail.aol.com [172.20.105.168]) by air-xd05.mail.aol.com (v77.14) with ESMTP Sun 10 Dec 2000 10:57:06 -0500 Received: from zeus.ssrn.com (zeus.ssrn.com [38.202.236.235]) by rly-xd03.mx.aol.com (v77.27) with ESMTP Sun 10 Dec 2000 10:56:51 -0500 Received: from ssrn.com ([38.202.236.235]) by zeus.ssrn.com (Post.Office MTA v3.5.3 release 223 ID# 0-61092U100L2S100V35) with SMTP id com Sun 10 Dec 2000 10:56:50 -0500 Subject: Successful purchase of NBER Paper Date: Sun 10 Dec 2000 10:56:49 -0500 From: Gregory_Gordon@ssrn.com (Gregory_Gordon) To: <vkaminski@aol.com> CC: Message-ID: X-Mailer: Unknown Dear Wincenty Kaminski: Thank you for your purchase at Social Science Research Network. Your credit card has been charged $ 5.00. This charge will appear on your statement as Social Science Electronic Publishing our parent company. The confirmation number for this transaction is NBER_103397 and a summary of your order is below. If you have any questions about this charge please email Mailto:NBERSupport@ssrn.com for assistance. If you have any comments or suggestions about how SSRN can improve this service please let me know at Thank you Gregory Gordon President ORDER INFORMATION Diagnosing Market Power in California's Restructured Wholesale Electricity Market NBER Collection Borenstein / Bushnell / Wolak BILLING INFORMATION Wincenty Kaminski 1400 Smith Houston TX 77002 USA 713 853 3848 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: Ricardo Charvel Body:: ----------------- 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:: FINAL Body:: Attached is the final letter. Please note - there was a small change at the top of page 2. 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:: Supreme court brief Body:: Good brief. I have noted a few comments and questions throughout the text. Ignore my universal change to the word transmissions. 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:: San Jose Mercury News - California Officials Investigate Electric Megawatt Laundering Body:: California Officials Investigate Electric 'Megawatt Laundering' Steve Johnson San Jose Mercury News Calif. ( October 31 2000 ) Oct. 30--While investigating this summer's stunning spike in electricity prices state authorities have heard stories about a curious phenomenon: On days when the weather is hot batches of power generated in California are sold to other states. A little later in the day similar amounts of power are sold back to California -- but at much higher prices. The question is is it the same power? If so that could be megawatt laundering -- a multi-company conspiracy to evade California's wholesale price cap which covers power generated in California but not power sold into California from elsewhere. Worried that such transactions could be costing consumers millions of dollars several energy specialists raised concerns about megawatt laundering during a Federal Energy Regulatory Commission hearing a month ago in San Diego. And earlier this month state Sen. Steve Peace D-La Mesa -- who helped lead the push to deregulate electricity sales in California -- formally asked the commission to investigate the practice which he termed potentially illegal market coordination. But an unconfirmed news report last week said the federal agency had concluded that generators had not abused the market. And others say concerns about megawatt laundering are exaggerated. Among them is Jan Smutny-Jones executive director of the Independent Energy Producers Association a power-firm trade group and chairman of the Independent System Operator which oversees most of California's power grid. While acknowledging that such laundering is possible Smutny-Jones said there is no evidence it is actually occurring or is widespread. This is one of those things that's turning into an urban legend he said. I don't want to characterize this as a significant problem. Even some critics of the way power is purchased in California concede that most of what has been labeled megawatt laundering probably reflects nothing more sinister than the ability of some entrepreneurs to take advantage of a good deal when they see one. Nonetheless they see evidence that at least some California-produced power is being sold out of and back into the state at a higher price. And they blame that on loopholes in the system that they say ought to be closed because the transactions are helping to drive up the cost of power. The Independent System Operator invites this type of activity said Frank Wolak a Stanford economist who chairs the non-profit corporation's market surveillance committee which has warned of the potential for megawatt laundering in at least two reports this year. The thing that makes all these problems go is the fact that the ISO has said `We'll pay whatever it takes to keep the lights on' and that's screwing consumers big time. In 1998 when the state's energy markets were deregulated it was generally assumed that opening up the sale of electricity to competition would make power less expensive. As a precaution however officials at the Independent System Operator instituted wholesale price caps which they lowered twice this summer to help keep a lid on costs. On July 1 this year they reduced the cap from $750 per megawatt per hour to $500 one megawatt being sufficient power for 1000 homes. Then on Aug. 7 they cut it to $250. Unfortunately things haven't worked out the way officials had hoped. Wholesale prices rose dramatically this year. And while a freeze on retail utility rates has temporarily shielded Pacific Gas & Electric Co. customers from those soaring costs home electricity prices have tripled in San Diego where a similar freeze already has come off. In the process some generators learned that all it takes to get around the state's wholesale price caps is a basic understanding of how the market works. One of the best ways to get top dollar they learned was to hold off selling their electricity until the Independent System Operator issues what is known as an out-of-market call for energy which amounts to an emergency request for electricity. From May through September this year the overall price of power in the state averaged less than $125 per megawatt hour according to authorities. But over the same period power sold in response to out-of-market calls averaged more than $430. During the summer when energy use is at a maximum California typically imports about one-fourth of the power it uses from other states. Since power generated by firms in other states isn't limited by California's price cap those companies generally are in a better position than California firms to make a killing on out-of-market sales. But by cutting a deal with a collaborator in another state energy specialists say California generators also can profit handsomely -- despite the cap. Here's how: Say a California generator has 100 megawatts. Instead of selling it in California where the firm can receive no more than $250 per megawatt hour under the current cap it finds a utility an electricity broker or a corporate affiliate with an equal amount of power in another state such as Arizona. Then -- just before an expected heat wave in California which is likely to result in an out-of-market call for power here -- it convinces the other firm to do a trade. Under the deal the California generator sends its 100 megawatts for one hour to the company in Arizona where there is no price cap and earns $300 or more per megawatt -- for a total of $300000. In return the Arizona firm ships its 100 megawatts for one hour here. Since that power isn't subject to California's cap it earns perhaps $400 per megawatt -- for a total of $400000. Presumably energy specialists say the two firms then split the $100000 difference. The potential profit from such deals is considerable. Generators in and out of California received more than $110 million from out-of-market sales this summer according to the Independent System Operator. But determining if megawatt laundering is really happening how often and who might be benefiting is difficult. One California investigator said authorities first suspected that megawatt laundering was occurring when they noticed that precisely the same amount of power was being sold to another state and then sold back into California minutes later. But other experts said the evidence has rarely been that clear. While hundreds of megawatts is sold into and out of the state on any given day they said the suspicion that firms were conspiring to sell the same power back and forth has stemmed largely from unfounded speculation. One big problem for investigators trying to learn if the system has been abused is that confidentiality rules keep many of the details about these electricity transactions private. Entities like us and others who may be suffering from the consequences of this laundering don't necessarily have the documents to prove it said Gary Stern director of market monitoring for Southern California Edison one of the state's three main utilities. We can only speculate based on things we've heard from others about the practice....It's our hope that's one of the things that's being examined by the various federal and state agencies investigating this summer's extraordinary rise in California power prices. Indeed while some people say megawatt laundering can be substantially limited by ending the practice of paying more than the wholesale cap for out-of-state power others argue that it's just as important to eliminate the secrecy surrounding electricity transactions. I'd like to see more information made public said Jim Bushnell a researcher at the University of California Energy Institute in Berkeley who specializes in analyzing the state's energy markets. There are a lot of rumors circulating around this he said of megawatt laundering and it would help clarify if this is a serious problem. ----- To see more of the San Jose Mercury News or to subscribe to the newspaper go to http://www.sjmercury.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: Senate Banking Hearing Body:: Thanks Chris. Rick - see the witness list below in case you want to try to get some points through to these witnesses. Chris Long 09/25/2000 04:14 PM To: Steven J Kean/NA/Enron@Enron Joe Hillings/Corp/Enron@ENRON cc: Amy Fabian/Corp/Enron@ENRON Maureen McVicker/NA/Enron@Enron Cynthia Sandherr/Corp/Enron@ENRON Subject: Senate Banking Hearing Steve: I got the copy of the letter on independent auditor from Ken Lay to SEC Chairman Levitt. I suggest we transmit the letter to the Senate Banking Subcommittee on Securities in preparation for their hearing noted below. I will prepare a cover letter for transmission. Let me know if this acceptable. ----------------- 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:: CA load growth 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:: nan Body:: I just saw the NYT article. Nice job. It's nicely positioned as an issue about India's resolve to encourage foreign investment and live up to contracts. 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:: <<Concur Expense Document>> - JB 002 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:: nan Body:: Please send regrets 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:: Energy Issues Body:: Please see the following articles: Sac Bee Wed 7/11: Mediator talked of a bigger refund: He reportedly suggested a $4.5 billion deal midway through the failed talks Sac Bee Wed 7/11: Davis repeats threat to sue FERC to get full refund Sac Bee Wed 7/11: Dan Walters: Davis plays in a virtual world while the= =20 energy reality continues=20 Sac Bee Wed 7/11: Energy Digest: Ratepayer panel shot down again Sac Bee Wed 7/11: Missing megawatts: Conservation saving state from=20 blackouts (Editorial) SD Union Wed 7/11: Governor tells FERC to be fair and then some SD Union Wed 7/11: Calpine says deal with state close on alleged overchar= ges SD Union Wed 7/11: Judge refuses to let ratepayers form official committe= e=20 in utility bankruptcy case LA Times Wed 7/11: Judge Bars Ratepayers Panel From PG&E Case SF Chron Wed 7/11: Developments in California's energy crisis SF Chron Wed 7/11: Enron Corp. sues to block Senate from forcing document= =20 release SF Chron Wed 7/11: Governor threatens to sue utilities for refunds=20 Davis says California won't settle for $1 billion SF Chron Wed 7/11: News briefs on the California power crisis Mercury News Wed 7/11: White House bends under energy conservation pressu= re=20 Mercury News Wed 7/11: Davis ups the voltage (Editorial) OC Register Wed 7/11: Lights go out on Davis' power show (Commentary) --- Mediator talked of a bigger refund: He reportedly suggested a $4.5 billion= =20 deal midway through the failed talks. By David Whitney Bee Washington Bureau (Published July 11 2001)=20 WASHINGTON -- Midway through the negotiations between California and power= =20 sellers to settle the myriad issues arising out of the state's energy crisi= s=20 the mediator told California's negotiating team that he thought a deal wort= h=20 more than $4.5 billion would be appropriate -- a much higher figure than he= =20 suggested after the talks ended Monday.=20 Whether the statement by Curtis Wagner the chief administrative law judge= =20 for the Federal Energy Regulatory Commission was a negotiating ploy or a= =20 reflection of his evolving beliefs is not clear.=20 Before the settlement talks began two weeks earlier Wagner said he thought= =20 Gov. Gray Davis' demand for $8.9 billion in refunds was too high and that a= =20 settlement probably would be in the range of $2 billion to $2.5 billion.=20 The disclosure that Wagner had contemplated a much higher figure midway=20 through the negotiations suggests the state had more support than the judge= =20 let on Monday when he said after the talks foundered that he thought a deal= =20 should involve hundreds of millions maybe a billion dollars.=20 While the state wants $8.9 billion $3 billion of that was for overcharges= =20 during the five months preceding last October and are beyond FERC's scope o= f=20 review. Even as a starting point then the $4.5 billion mentioned by Wagner= =20 represented 75 percent of the money the state was demanding for alleged pri= ce=20 gouging between October and May.=20 The judge's $4.5 billion figure divided between cash payments and savings= =20 from long-term power contracts was confirmed by three sources who asked to= =20 be identified only as close to the negotiations because participants had= =20 been required to sign confidentiality statements.=20 The sources gave virtually identical accounts of a July 2 meeting with Wagn= er=20 in which the judge also dismissed as inadequate a $670 million settlement= =20 offer made by power generators and marketers.=20 By Monday the settlement offer had risen to $716 million. But the state=20 refused to back off its $8.9 billion demand and there never was any seriou= s=20 back-and-forth negotiations during the 15-day period the regulatory=20 commission had given Wagner to craft a deal.=20 As a consequence of the failed talks Wagner said Monday that within a week= =20 he will send the five-member commission his recommendations on how it might= =20 approach an order refunding power overcharges.=20 Among Wagner's suggestions is that the commission convene a hearing before = a=20 different administrative judge to take testimony from generators marketers= =20 and the state on how to arrive at a fair settlement.=20 The options sketchily outlined by Wagner on Monday included limiting the ti= me=20 when refunds are allowed -- something that could reduce state claims by abo= ut=20 one-third -- and changing the way power plant costs are calculated to a=20 formula more favored by generators.=20 It is not clear whether Wagner who moved from one negotiating team to=20 another during his two-week quest for a deal ever raised the $4.5 billion= =20 settlement figure to the power marketers and generators.=20 Joel Newton who represented Dynegy Power Duke Energy Reliant Energy=20 Williams-AES and Mirant in the talks said Tuesday he was bound by the=20 confidentiality pledge to keep silent on the internal negotiations.=20 Wagner also is refusing all media calls.=20 According to the account of the negotiations confirmed by sources Tuesday= =20 Wagner was angry at the snail's pace of progress after the first week of th= e=20 talks.=20 On Friday June 29 Wagner called everyone into his hearing room and scolde= d=20 them. He condemned the California team saying they all ought to wear clow= n=20 suits because they were in the pocket of Davis and refused to show any= =20 independence.=20 He then turned to the generators and said that after a week of talks nothi= ng=20 had been heard from them. He told them he wanted them to produce real=20 numbers and hard numbers over the weekend and that if they didn't he wou= ld=20 -- and you're not going to like it.=20 Wagner's admonition apparently moved no one toward a deal. On Monday in th= e=20 meeting with the California delegation one source quoted Wagner as saying= =20 the settlement number he received from the generators and marketers is so= =20 low I can't even present it to you.=20 I'm not happy with the figures they're not adequate others quoted the= =20 judge as saying.=20 At that point the sources said Wagner said he was thinking of a settlemen= t=20 of $2.5 billion in cash $2 billion in long-term contract savings and other= =20 money from out-of-state investor-owned utilities and even the federal=20 Bonneville Power Administration which markets power from dams in the=20 Northwest.=20 But as the clock wound down on the negotiations nothing much happened unti= l=20 Friday and Saturday when the California team met with the five largest pow= er=20 generators.=20 It was at those meetings that the generators offered $510 million in refund= s=20 to settle their disputes with the state. But the money would have gone to= =20 reduce the tab for what they were owed by the state and California utilitie= s=20 and it was loaded with conditions including the state dropping all of its= =20 investigations and lawsuits.=20 Wagner declared the talks over Monday saying he was unable to bring the=20 parties together.=20 The Bee's David Whitney can be reached at (202) 383-0004 or=20 dwhitney@mcclatchydc.com. Davis repeats threat to sue FERC to get full refund=20 By Emily Bazar Bee Capitol Bureau=20 (Published July 11 2001)=20 Gov. Gray Davis shot words of caution at federal regulators Tuesday warnin= g=20 that he will sue them if they order power companies to refund anything less= =20 than the $8.9 billion he and other state officials have demanded.=20 The Democratic governor also lobbed threats at state legislators suggestin= g=20 that he may call a special session to prevent them from embarking upon a=20 monthlong summer break next week.=20 Instead of vacationing Davis said lawmakers must work to approve an=20 agreement between the state and Southern California Edison that would save= =20 the utility from bankruptcy.=20 Though the governor has indicated previously that the state may take the=20 Federal Energy Regulatory Commission to court his announcement Tuesday mad= e=20 it clear he intends to follow through.=20 Settlement talks with power generators to determine how much if any the= =20 companies overcharged California for electricity concluded Monday with no= =20 resolution.=20 Now the decision rests with the FERC's governing board and Davis said the= =20 state won't back away from the $8.9 billion figure it demanded during talks= .=20 You order what you think is fair Davis said during a news conference wit= h=20 the state's top negotiators. We'll take what you order and we'll see you = in=20 court.=20 Davis acknowledged that a legal battle could drag out for months or years.= =20 He added that he believes the disagreement -- or even a protracted court=20 battle -- will not affect a tentative agreement between the state and Ediso= n.=20 Under terms of the deal money to pay off the utility's debt would come fro= m=20 a state purchase of its transmission lines and from a portion of consumers'= =20 electricity rates.=20 According to the agreement the Legislature must approve the deal by Aug. 1= 5=20 and Davis said he intends to hold lawmakers to that date.=20 Davis said the deadline is important because creditor committees will=20 scrutinize the Legislature's every move to determine whether to force Ediso= n=20 into bankruptcy court rather than await a political deal.=20 Legislators are scheduled to leave for summer recess July 20 and return Aug= .=20 20.=20 Davis threatened to use his executive powers to force lawmakers to remain i= n=20 Sacramento and work on the Edison agreement if necessary.=20 The Bee's Emily Bazar can be reached at (916) 326-5540 or ebazar@sacbee.com= . Dan Walters: Davis plays in a virtual world while the energy reality contin= ues (Published July 11 2001)=20 California still has a very real and very severe energy crisis to wit:=20 The state is still running up massive debts as it pays more for power than = it=20 can recover from ratepayers and is having trouble borrowing billions of=20 dollars to cover the debt.=20 There is a strong possibility perhaps a probability that when summer's he= at=20 truly descends there will be severe power blackouts as air conditioners=20 demand more juice than California can generate or buy.=20 One major utility Pacific Gas and Electric has filed for bankruptcy=20 protection and a second Southern California Edison is on the brink of=20 joining it.=20 There is however a virtual energy crisis consisting of political spin=20 media leaks and made-for-television buzz words -- and it is rapidly becomin= g=20 dominant while the real situation fades into the background.=20 This week's comic opera proceedings before a Federal Energy Regulatory=20 Commission administrative judge in Washington had little to do with reality= =20 and everything to do with the virtual version.=20 Gov. Gray Davis and other officials demanded $8.9 billion in refunds from t= he=20 generators and brokers who have been selling California power for the past= =20 year alleging that California is in Davis' words being gouged and rippe= d=20 off. But the number itself was more or less plucked out of thin air -- an= =20 arithmetic exercise by the state power grid's traffic controller not intend= ed=20 for a refund proceeding. And while Judge Curtis Wagner saw it as unrealisti= c=20 Davis and other state officials insisted on its validity.=20 There are refunds due that total hundreds of millions of dollars and maybe= a=20 billion dollars Wagner said as a final negotiating session collapsed. But= =20 that's a far cry from the $8.9 billion that Davis insists is due. If you= =20 think California is going to settle for $1 billion in refunds we will see= =20 you in court Davis said Tuesday.=20 Why is Davis being so belligerent? Because it's good politics. Ever since h= e=20 began berating out-of-state generators and accusing them of ripping off=20 California Davis' approval ratings have been climbing. If he settled for= =20 substantially less -- the power generators probably would agree to a couple= =20 of billion dollars to rid themselves of the matter -- Davis would be=20 embarrassed. Politically he's served by continuing to portray himself as= =20 fighting for California and against the out-of-state generators.=20 That it's more political construct than reality is indicated by another eve= nt=20 this week Davis' release of state power purchase data from early in the ye= ar=20 -- numbers that were made public only because a judge told him he had to do= =20 it.=20 Davis and his minions have been accusing Texas-based generators and power= =20 brokers of particularly egregious price gouging -- clearly playing on=20 Californians' instinctive mistrust of anything Texan and implying that Texa= n=20 George W. Bush is a co-conspirator. But the power purchase records -- which= =20 were released only to journalists willing to pay a stiff fee -- indicate th= at=20 less than 10 percent of California's power purchase dollars were going to= =20 Texas and the private sellers in general charged the state less than such= =20 publicly owned utilities as the Los Angeles Department of Water and Power.= =20 The clearly adverse position being taken by FERC and the purchase data that= =20 undercut his jingoistic sloganeering are not however deterring Davis from= =20 continuing to operate at least for public consumption in the melodramatic= =20 virtual world.=20 One cannot however ignore reality forever. The likelihood of a=20 pro-generator decision from FERC means that there will be no easy out for= =20 Davis or for his pending deal to prevent Southern California Edison from= =20 slipping into bankruptcy court. The Legislature has refused to act on the= =20 Edison rescue plan while it awaited an indication of whether the utility's= =20 debts would be slimmed down by FERC.=20 This week's farcical events make it more likely that the Edison deal will= =20 stall out permanently in the Legislature and its creditors will force the= =20 utility into bankruptcy court later this summer. That's part of that nasty= =20 old reality that cannot simply be wished away.=20 The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.c= om . Energy Digest: Ratepayer panel shot down again (Published July 11 2001)=20 SAN FRANCISCO -- U.S. Bankruptcy Judge Dennis Montali on Tuesday reaffirmed= =20 his earlier decision to disband a ratepayers committee that would have give= n=20 consumers an official voice in the Pacific Gas and Electric Co. bankruptcy= =20 case.=20 The judge said bankruptcy court isn't the right forum for refunding rates o= r=20 settling potential future claims.=20 He eliminated erroneous statements from the opinion he originally issued=20 seven weeks ago. U.S. bankruptcy trustee Linda Ekstrom Stanley who had mov= ed=20 for reconsideration called the new version a very careful decision but d= id=20 not rule out an appeal.=20 Stanley on May 4 appointed an official committee of ratepayers to represent= =20 PG&E customers saying they might be forced to pay for the utility's massiv= e=20 losses.=20 --Claire Cooper Missing megawatts: Conservation saving state from blackouts (Published July 11 2001)=20 A public that doesn't believe that California's electricity crisis is genui= ne=20 is nonetheless acting as if it is. Experts are revising down scary=20 predictions of rolling blackout after rolling blackout as Californians have= =20 opted to conserve rather than consume.=20 During June Californians cut back on electricity use by roughly 4750=20 megawatts when it mattered the most on hot afternoons. Those decisions=20 shaved about 12 percent from the expected demand. That's equivalent to the= =20 output of nine or 10 medium-size power plants. Last June grid operators ha= d=20 to call six shortage alerts. This June which was hotter they called none.= =20 For a state that's been derided as selfish and wasteful that's nothing sho= rt=20 of amazing.=20 Some of what Californians are doing now to conserve isn't likely to become= =20 habit in the long run. Businesses may want to turn back on all the banks of= =20 lights. Homeowners may decide that 82 degrees is the right temperature when= =20 power is short but too warm when California's supply emergency is over.=20 Yet there's a huge potential payoff into the future if some of these change= s=20 become permanent. It's encouraging that the most effective forms of=20 conservation -- switching to more energy-efficient appliances or=20 manufacturing techniques -- have yet to be implemented on a large scale.=20 Subsidies for these programs have yet to translate into changes in business= es=20 and in homes that will lower demand even further.=20 For a while this spring some attempted to diminish the role of conservatio= n.=20 Conservation is a personal virtue said Vice President Dick Cheney. But= =20 Californians know it's become both a personal and public necessity. The=20 public may have thought the electricity shortage was an illusion but=20 everyone knew that the higher electricity bills that began arriving in June= =20 were real. And so was the risk that the lights would go out on hot days.=20 Yes the state needs more supply to catch up with the growth in demand. Yet= =20 long after the crisis is over there will be plenty of potential on the=20 efficiency side of the equation as well to protect the quality of life and= =20 reduce the high electricity costs that will likely plague the state for yea= rs. Governor tells FERC to be fair and then some=20 Davis firm on demand for $8.9 billion refund By Ed Mendel=20 UNION-TRIBUNE STAFF WRITER=20 July 11 2001=20 SACRAMENTO -- Gov. Gray Davis had a tough message for federal regulators=20 yesterday after the failure of settlement talks in California's bid to get = an=20 $8.9 billion refund from electricity suppliers: See you in court.=20 The governor said California will seek a full $8.9 billion refund for=20 electricity overcharges even if federal regulators award the maximum refun= d=20 of $5.4 billion allowed under their guidelines.=20 Our message is just order what you are going to order Davis said of the= =20 Federal Energy Regulatory Commission. We believe you should order $8.9=20 billion. But you order what you think is fair. We will take what you order= =20 then we will see you in court.=20 Davis joined by his negotiating team made the remarks at a news conferenc= e=20 a day after two weeks of closed-door talks with suppliers in Washington=20 failed to reach an agreement.=20 An administrative law judge made a recommendation to the regulatory=20 commission that Davis' top negotiator Michael Kahn chairman of the=20 California Independent System Operator expects to result in a refund of mo= re=20 than $1 billion.=20 Davis said that a revealing decision will be made by the commission which = he=20 hopes has embarked on a new path with the appointment by President Bush o= f=20 two new members Pat Wood of Texas and Nora Brownell of Pennsylvania.=20 Are they on the side of consumers as the federal power act envisions them= =20 being Davis asked or are they just there to do the industry's bidding = as=20 they have so often in the past?=20 Kahn said rules adopted by FERC cut off the refund period at last October= =20 trimming $3 billion from the $8.9 billion overcharge claimed by California= =20 dating to May 2000.=20 He said FERC has no jurisdiction over municipal utilities such as the Los= =20 Angeles Department of Water and Power that sold power to the state. The=20 municipal districts overcharged the state by about $600 million according = to=20 Kahn.=20 As a result he said the maximum refund that FERC could order for Californ= ia=20 is about $5.4 billion.=20 We made it clear to everyone that if we did not settle for $8.9 billion w= e=20 would seek redress in court for the remainder of the money above $5.4=20 billion Kahn said.=20 Calpine of San Jose and several other generators have expressed interest in= =20 the state's offer to negotiate one-on-one with the state while the federal= =20 regulators consider their decision Kahn said. Calpine says deal with state close on alleged overcharges=20 By Don Thompson ASSOCIATED PRESS=20 July 10 2001=20 SACRAMENTO =01) Calpine Corp. said Tuesday it is near agreement with Califo= rnia=20 officials over money the state says the company overcharged for electricity= .=20 That would make it the first company to settle a part of the $8.9 billion t= he=20 state wants in negotiations before the Federal Energy Regulatory Commission= .=20 However San Jose-based Calpine has offered far less than the $236 million= =20 the state claims it is owed.=20 We obviously disagree with that number because we disagree with some of t= he=20 assumptions used for the estimate said Calpine spokesman Bill Highlander.= =20 We don't think it's anywhere near that. We think it's a low number.=20 He wouldn't specify the company's counteroffer but noted new FERC figures= =20 showing the company did $29 million in business with the state in the first= =20 five months of this year.=20 The California Independent System Operator estimated the company owed more = in=20 overcharges than it had in total sales for the period from May 2000 to May= =20 2001 a financial impossibility Highlander said.=20 The ISO essentially multiplied what Calpine was able to produce by the amou= nt=20 it charged for electricity Highlander said without taking into account ho= w=20 much electricity the company actually sold.=20 ISO spokesman Michael Bustamante defended the projections by the state's gr= id=20 operator estimates he said were validated during two weeks of FERC=20 negotiations that ended Monday. The ISO took the methodology adopted by the= =20 federal regulator in a June 19 order capping electricity rates then worked= =20 backward to May 2000 to reach its estimate Bustamante said.=20 Generators and state negotiators were unable to reach a settlement during t= he=20 two weeks of talks overseen by FERC chief administrative law judge Curtis L= .=20 Wagner leaving Wagner to make his own recommendation to the commission.=20 Wagner said Monday the state may be owed perhaps $1 billion in overcharges= =20 but said that could be offset by money the generators are owed for the powe= r=20 they sold into the state.=20 California officials believe generators owe about $4 billion in refunds usi= ng=20 the June 19 order that Wagner adopted as his benchmark even given Wagner's= =20 determination that the commission can only consider overcharges after Oct. = 2.=20 At one point during negotiations Wagner told California officials he thoug= ht=20 an appropriate settlement should top $4.5 billion according to one=20 negotiator who spoke on condition he not be named. Wagner suggested=20 generators could pay $2.5 billion in cash and $2 billion in long-term=20 electricity contracts at cheaper rates the source said.=20 That was very different from the $670 million in refunds Wagner privately= =20 said generators were offering. For instance the source said while Reliant= =20 Energy on Monday offered $50 million in refunds California believes=20 Reliant's share of overcharges is closer to $1 billion.=20 Jan Smutny-Jones executive director of the Independent Energy Producers= =20 applauded the possibility that some generators will settle with the state= =20 without waiting for a FERC decision and likely protracted court battle.=20 We need to solve this problem and move on Smutny-Jones said.=20 ?? =01) Associated Press writer Mark Sherman contributed to this story from=20 Washington D.C.=20 Judge refuses to let ratepayers form official committee in utility bankrupt= cy=20 case=20 ASSOCIATED PRESS=20 July 10 2001=20 SAN FRANCISCO =01) The federal judge overseeing Pacific Gas and Electric Co= .'s=20 bankruptcy case ruled Tuesday the utility's ratepayers cannot form an=20 official committee to represent their interests.=20 Ratepayer advocates had sought such recognition to ensure the utility would= =20 not raise rates further as a way of paying off its debts.=20 But U.S. Bankruptcy Judge Dennis Montali agreed with PG&E and the official= =20 creditors committee and rejected the idea for the second time in two months= .=20 Montali suggested instead that ratepayers organize an informal committee to= =20 bring their concerns to the court and said the ratepayers also could bring= =20 matters before the state Public Utilities Commission.=20 A separate committee of ratepayers would have been able to vote on the fina= l=20 reorganization of the company a plan that could affect power service and= =20 rates.=20 PG&E filed for Chapter 11 bankruptcy April 6 and owes billions of dollars = to=20 more than 50000 creditors. It was brought down in part by California's= =20 botched experiment with deregulation.=20 Judge Bars Ratepayers Panel From PG&E Case Power: Customers are not creditors in the utility's bankruptcy ruling says= .=20 Action does not preclude refunds for consumers. TIM REITERMAN TIMES STAFF WRITER July 11 2001 SAN FRANCISCO -- A federal judge Tuesday reaffirmed his decision to bar a= =20 ratepayers committee from Pacific Gas & Electric Co.'s bankruptcy case and= =20 denounced the committee's attorney for suggesting that the action could=20 prevent PG&E customers from receiving refunds for excessive energy charges. Judge Dennis Montali ruled against a U.S. trustee and the ratepayers=20 committee in deciding that ratepayers as a group had no claims and were not= =20 creditors when PG&E filed for bankruptcy on April 6. But Montali criticized misguided remarks by a committee attorney on July = 5=20 and news media accounts that followed the hearing. The judge said the repor= ts=20 left the misconception that by disallowing a ratepayers committee he would= =20 reject all claims of ratepayers and they could lose out on future refunds. The judge and PG&E officials emphasized that there are no matters involving= =20 PG&E customer refunds before the state Public Utilities Commission. State officials are seeking about $9 billion in refunds however from the= =20 Federal Energy Regulatory Commission for alleged overcharges to Californian= s=20 by energy companies since last year. The distribution of any ratepayer refunds would be decided by the PUC and= =20 customers would be paid whether or not they filed Bankruptcy Court claims b= y=20 a Sept. 5 deadline the judge and PG&E attorneys said. The judge took the highly unusual step of directing PG&E and U.S. Trustee= =20 Linda Ekstrom Stanley to consider remedies to allay any confusion among=20 PG&E's 5.5 million customers. He suggested publishing clarifications in newspapers that carried the=20 erroneous information in PG&E customer bills and on Web sites. Stanley had formed a ratepayers committee of business government and=20 consumer representatives saying they will be affected by PG&E's Chapter 11= =20 reorganization. But Montali decided that ratepayers do not qualify as creditors under=20 bankruptcy law and are not entitled to official status that allows them to= =20 participate in the bankruptcy and receive funding from PG&E. Stanley said she has not yet decided whether to appeal the ruling to federa= l=20 district court.=20 Copyright 2001 Los Angeles Times=20 Developments in California's energy crisis=20 The Associated Press Wednesday July 11 2001=20 2001 Associated Press=20 URL:=20 tate1 036EDT0129.DTL=20 (07-11) 07:36 PDT (AP) --=20 Developments in California's energy crisis:=20 WEDNESDAY=3D * No power alerts Wednesday as electricity reserves stay above 7 percent.= =20 TUESDAY=3D * U.S. Bankruptcy Judge Dennis Montali again agreed with PG&E and the=20 official creditors committee saying such a committee of Pacific Gas and=20 Electric Co. ratepayers has no legal standing in bankruptcy court. Ratepaye= r=20 advocates had sought the recognition to ensure the utility would not raise= =20 rates further as a way of paying off its debts.=20 * PG&E has agreed to pay $4.1 million in tax penalties to 49 counties where= =20 the utility owns property. The utility already paid $41.2 million in overdu= e=20 property taxes in May -- the additional amount covers a 10 percent fee for= =20 paying those taxes late.=20 * Calpine Corporation says it is near agreement with California officials= =20 over money the state says the company overcharged for electricity. That wou= ld=20 make it the first company to settle a portion of the $8.9 billion dollars t= he=20 state is seeking in proceedings before the Federal Energy Regulatory=20 Commission. But the San Jose-based company is offering much less than the= =20 $236 million dollars the state claims it is owed.=20 * No power alerts Tuesday as electricity reserves stay above 7 percent.=20 * Shares of Edison International closed at $14.05 up 5 cents. PG&E Corp.= =20 drop 55 cents to close at $13.55. Sempra Energy the parent company of San= =20 Diego Gas & Electric Co. closed at $27.67 up 15 cents.=20 WHAT'S NEXT=3D * The Senate committee investigating possible price manipulation in=20 California's energy market meets Wednesday. The committee will vote on=20 contempt citations against generators Mirant and Enron which failed to=20 comply with subpoenas for documents. The committee will meet again July 18 = to=20 consider compliance by six other suppliers that have until Tuesday to turn= =20 over documents.=20 THE PROBLEM: High demand high wholesale energy costs transmission glitches and a tight= =20 supply worsened by scarce hydroelectric power in the Northwest and=20 maintenance at aging California power plants are all factors in California'= s=20 electricity crisis.=20 Southern California Edison and Pacific Gas and Electric say they've lost=20 nearly $14 billion since June 2000 to high wholesale prices the state's=20 electricity deregulation law bars them from passing on to consumers. PG&E= =20 saying it hasn't received the help it needs from regulators or state=20 lawmakers filed for federal bankruptcy protection April 6. Electricity and= =20 natural gas suppliers scared off by the companies' poor credit ratings ar= e=20 refusing to sell to them leading the state in January to start buying powe= r=20 for the utilities' nearly 9 million residential and business customers. The= =20 state is also buying power for a third investor-owned utility San Diego Ga= s=20 & Electric which is in better financial shape than much larger Edison and= =20 PG&E but is also struggling with high wholesale power costs.=20 The Public Utilities Commission has approved average rate increases of 37= =20 percent for the heaviest residential customers and 38 percent for commercia= l=20 customers and hikes of up to 49 percent for industrial customers and 15=20 percent or 20 percent for agricultural customers to help finance the state'= s=20 multibillion-dollar power buys.=20 Track the state's blackout warnings on the Web at=20 2001 Associated Press ?=20 Enron Corp. sues to block Senate from forcing document release=20 DON THOMPSON Associated Press Writer Wednesday July 11 2001=20 2001 Associated Press=20 URL:=20 tate1 212EDT0141.DTL=20 (07-11) 09:12 PDT SACRAMENTO (AP) --=20 Enron Corp. is suing state officials to stop a Senate subpoena of its=20 financial records in a dispute over alleged overcharges for its electricity= =20 sales to California.=20 They've sent two things to Texas -- our money and these documents and the= y=20 saying we can't get either one back said Laurence Drivon special legal= =20 counsel to the Senate Select Committee to Investigate Market Manipulation.= =20 The suit came hours before the committee will consider asking the full Sena= te=20 to cite the Houston-based company for contempt Wednesday. The other subject= =20 of possible sanctions Atlanta-based Mirant Inc. appears to be cooperating= =20 Drivon said.=20 Committee chairman Joe Dunn a Santa Ana Democrat said the committee's=20 investigation will continue despite Enron's pure act of intimidation. We'r= e=20 not going to back down.=20 Enron's suit said the company's financial papers are outside the committee'= s=20 jurisdiction because most of its operations and paperwork are outside=20 California.=20 That shouldn't matter Drivon said citing last year's successful of=20 out-of-state documents during the investigation into the activities of form= er=20 Insurance Commissioner Chuck Quackenbush. Previous investigations have=20 included documents subpoenaed from other nations he said.=20 Companies doing business in California cannot claim immunity from its laws = or=20 oversight Drivon and Dunn said. Houston-based Reliant Energy made the same= =20 argument but then agreed to turn over 1800 documents.=20 2001 Associated Press ?=20 Governor threatens to sue utilities for refunds=20 Davis says California won't settle for $1 billion=20 Mark Martin Chronicle Staff Writer Wednesday July 11 2001=20 2001 San Francisco Chronicle=20 URL:=20 /11/M N139275.DTL=20 Sacramento -- One day after a federal judge rebuked California's claim that= =20 energy generators owe the state $8.9 billion Gov. Gray Davis all but vowed= =20 to sue the companies to recoup the money.=20 If you think California will settle for $1 billion in refunds we'll see y= ou=20 in court Davis said yesterday.=20 Continuing his heated rhetoric on the energy crisis Davis blasted the ener= gy=20 companies for being inflexible during a 14-day negotiation session in=20 Washington D.C. that ended Monday. Both the state and power generators=20 argue each is owed money as a result of California's dysfunctional=20 electricity market.=20 Federal Energy Regulatory Commission chief administrative law Judge Curtis = L.=20 Wagner ended the talks by saying the state was owed far less than it claime= d=20 but the FERC's governing board will make a final decision on who owes what = to=20 whom in the coming months.=20 Yesterday Davis made it clear he wouldn't accept a FERC decision that=20 strayed far from the state's calculations that power companies overcharged= =20 California nearly $9 billion.=20 The ball is in the FERC's court he said. They must step up and provide= =20 the refunds we've asked for.=20 While Davis said California officials had gone to Washington prepared to=20 discuss ways to reach a settlement including renegotiating long-term=20 contracts to buy power an energy industry official faulted the state for i= ts=20 unwillingness to compromise.=20 Generators put forward an offer even though they believe no refunds are owe= d=20 said Jan Smutny-Jones executive director of the Independent Energy=20 Producers.=20 Smutny-Jones said the state needed to stop thinking it would get the $8.9= =20 billion.=20 It's clear from the way the issue was characterized by the judge that $9= =20 billion is not something the state is going to see any time in the near=20 future he added. It is not based in reality.=20 Davis also took heat from Republicans yesterday.=20 He desperately needs that refund so he can renegotiate the dreadful=20 contracts he has entered into said Rob Stutzman a consultant for the=20 California Republican Party. He's sitting at the poker table with very few= =20 chips.=20 In other energy news yesterday a judge refused to let a committee represen= t=20 the public in the Pacific Gas & Electric Co. bankruptcy case and said a=20 consumer lawyer's irresponsible position at a hearing last week could=20 mislead PG&E customers into filing needless refund claims with the court.= =20 U.S. Bankruptcy Judge Dennis Montali said any refunds owed to customers wer= e=20 unrelated to the bankruptcy case and would be determined by regulators.=20 At the hearing Thursday attorney KaarenThomas argued that unless a committ= ee=20 represented customers' interests PG&E could try to bar all refund claims= =20 that weren't filed by Sept. 5.=20 Montali ruled in May that the committee was not authorized by federal=20 bankruptcy law and reaffirmed his ruling yesterday.=20 Chronicle staff writers Lynda Gledhill and Robert Egelko contributed to thi= s=20 report.=20 E-mail Mark Martin at 2001 San Francisco Chronicle ? Page?A - 3=20 News briefs on the California power crisis=20 The Associated Press Wednesday July 11 2001=20 2001 Associated Press=20 URL:=20 tate0 738EDT0118.DTL=20 (07-11) 04:38 PDT SAN JOSE Calif. (AP) --=20 Energy supplier Calpine Corp. has reached a deal to purchase 236 billion=20 cubic feet of natural gas in Texas and New Mexico for $355 million plus=20 assumption of nearly $50 million of debt.=20 Company officials made the announcement Tuesday and said the purchase will= =20 increase its natural gas reserves.=20 This transaction meets our desire to own and operate production in a=20 strategic basin said Cathy Piece Calpine's director of land and=20 acquisitions. These assets significantly strengthen our reserve base and= =20 will help fuel our growing Western power program.=20 The San Jose-based company has agreed to purchase 35 wells in New Mexico th= at=20 produce 6 million cubic feet of gas per day from The Bayless Companies. The= =20 second transaction involves the acquisition of a majority interest of Micha= el=20 Petroleum of Houston. The Texas company produces about 43 million cubic fee= t=20 of gas per day.=20 Calpine officials said the agreements will allow them to meet their future= =20 capacity demands for both natural gas and electricity. The company wants to= =20 generate more than 70000 megawatts of electricity by the end of 2005 and= =20 have natural gas reserves of 6.7 trillion cubic feet.=20 LOS ANGELES (AP) -- Newly elected Mayor James Hahn has postponed selling th= e=20 city's surplus power to the state so he can examine how it will impact=20 ratepayers.=20 Hahn's predecessor Richard Riordan said last month the city's Department = of=20 Water and Power would sell its extra electricity -- about 500 megawatts a= =20 day_ to the state at cost between July and September.=20 The contract was supposed to have been signed last week.=20 Steve Maviglio a spokesman for Gov. Gray Davis said Tuesday that the stat= e=20 is ready to sign the contract.=20 We're ready to sign he said. Like most negotiations that aren't final= =20 things go back and forth. The new (Hahn) administration wants to review the= =20 document before it.=20 Davis had threatened to seize surplus power from municipal utilities which= =20 haven't been subjected to the California energy crisis because he claimed= =20 they were gouging the state.=20 TEMECULA Calif. (AP) -- State officials said they are studying alternative= =20 routes for a power transmission line proposed by San Diego Gas and Electric= =20 Co.=20 The utility wants to run a 500000-volt power line through southwestern=20 Riverside County connecting its power grid with Southern California Edison'= s.=20 The cost of the project is estimated at $271 million and must be approved b= y=20 the state's Public Utilities Commission.=20 But state officials listed alternative routes in papers released at a publi= c=20 hearing Tuesday. Some of the other ideas include putting the transmission= =20 line around the edges of an Indian reservation or running a route through t= he=20 Cleveland National Forest.=20 Once a final selection is made the information will be given to PUC=20 commissioners who will either approve or deny the project.=20 Many residents who live in the path of the proposed transmission line don't= =20 want the project. An attorney representing several groups that oppose SDG&E= 's=20 plans said there was no mention of alternative routes in environmental=20 documents submitted by the company.=20 Looking at the various route segments offered by SDG&E as alternatives is= =20 like trying to arrange the deck chairs on the Titanic said attorney Mark= =20 Mihaly.=20 2001 Associated Press ?=20 White House bends under energy conservation pressure=20 Posted at 6:25 a.m. PDT Wednesday July 11 2001=20 BY H. JOSEF HEBERT=20 Associated Press Writer=20 WASHINGTON (AP) -- Under pressure to include more conservation measures tha= t=20 reduce energy use congressional Republicans are moving toward a compromise= =20 to increase fuel efficiency requirements for sport utility vehicles as part= =20 of an energy package.=20 Key House GOP lawmakers said Tuesday they expect some increase in fuel=20 economy requirements especially for SUVs in energy legislation working it= s=20 way through the House. Democrats who have a majority in the Senate also= =20 favor requiring improved motor vehicle fuel efficiency.=20 At the same time the Bush administration signaled its willingness Tuesday = to=20 begin a rule-changing process that would allow the first increase in 25 yea= rs=20 in the federal corporate automobile fuel economy or CAFE standard.=20 Transportation Secretary Norman Mineta asked Congress to lift immediately a= =20 six-year prohibition that bans the department from consideration of fuel=20 economy increases. Lawmakers already agreed this year not to extend the ban= =20 beyond September but Mineta said he wants to start examining possible=20 changes right away.=20 CAFE standards which mandate fuel economy requirements for vehicle fleets= =20 have not been increased since their introduction in 1975. That year's law= =20 spurred by energy shortages in the early 1970s required passengers cars to= =20 meet a fleet average of at least 27.5 miles per gallon. Light trucks -- a= =20 category that includes SUVs vans and pickups -- have to meet a 20.7 mpg=20 fleet average.=20 With the widespread popularity of SUVs and vans in recent years many=20 environmentalists have argued that the lower truck standard has compromised= =20 the intent of the 1975 law. SUVs and vans comprise more than 40 percent of= =20 the passenger vehicles on the road today.=20 As three committees began crafting energy legislation lawmakers were=20 searching for a bipartisan compromise to increase fuel economy requirements= =20 for motor vehicles. Some increase in the CAFE requirement was virtually=20 assured several GOP lawmakers said although disagreements remain on how= =20 much of an increase whether it should apply to automobiles as well as SUVs= =20 vans and small trucks and the timetable for phasing in new requirements.= =20 Energy legislation that the House Energy and Commerce Committee was taking = up=20 later Wednesday contains no fuel economy provision.=20 But Rep. Billy Tauzin R-La. the committee chairman said discussions were= =20 under way to work out a compromise on a fuel economy proposal. He said he= =20 expects an amendment on CAFE to be added to the bill either during=20 deliberations in his committee or on the House floor.=20 Rep. Joe Barton R-Texas chairman of the subcommittee drafting the energy= =20 package saw a good chance the truck standards will be raised and said the= =20 automobile standard might be increased as well. Other GOP sources who talke= d=20 about the private discussions on condition of not being identified by name= =20 said a likely outcome is that the truck standard will be increased three or= =20 four mpg and the auto standard left alone.=20 Momentum for some CAFE increase has been growing in recent weeks as GOP=20 lawmakers came under increasing pressure to come up with additional=20 conservation proposals to those proposed in the White House's energy policy= .=20 It largely focuses on production with few specific measures to dramaticall= y=20 curb energy demand.=20 Democrats have pressed for tougher automobile fuel economy standards.=20 Automakers have fought attempts to increase the standards. They say such=20 government edicts limit consumer choice and force manufacturers to build=20 smaller cars that customers don't want. Supporters of increased fuel econom= y=20 argue that new technologies are available to increase fuel efficiency witho= ut=20 decreasing vehicle size.=20 President Bush's energy blueprint would consider CAFE increases but not=20 before a National Academy of Sciences report is issued probably this month= =20 on impact of the standard on energy savings safety and auto industry=20 competition. Davis ups the voltage=20 Published Wednesday July 11 2001 in the San Jose Mercury News=20 Vow to sue for refunds may be a bluff but he should keep pushing FERC=20 THE strategic choice facing Gov. Gray Davis in the struggle over electricit= y=20 price refunds has come down to three questions: When do you negotiate when= =20 do you demand and when do you bluff?=20 Negotiations are over Davis declared Tuesday. He demanded that the Federal= =20 Energy Regulatory Commission order refunds now. ``The case is nearly a year= =20 old'' he said. ``They have to decide which side they're on.''=20 Probably no one but Davis knew to what extent he was bluffing when he also= =20 said ``If you think California is going to settle for $1 billion in refund= s=20 we will see you in court.''=20 A FERC administrative judge said Monday that the amount due the state may b= e=20 around $1 billion or perhaps nothing at all when counter-claims against t= he=20 state are subtracted.=20 Energy experts are divided about whether the state would win a suit to=20 overturn a decision by a federal commission. The federal courts have some= =20 limited jurisdiction according to University of California Energy Institut= e=20 director Severin Borenstein but that a court would reverse a commission in= a=20 case like this is ``extremely unlikely.''=20 Frank Wolak a Stanford economist had the opposite view when asked whethe= r=20 the state has a good chance of winning: ``I think so. It happens all the=20 time.''=20 At a Sacramento press conference Davis continued to insist that there have= =20 been overcharges of $8.9 billion. But other state officials conceded that= =20 only $5.4 billion of that is actually on the table in the FERC proceedings.= =20 Davis said he'll take what he can get there and sue for the rest.=20 The state argues that because FERC has determined that wholesale prices hav= e=20 not met the Federal Power Act's requirement to be ``just and reasonable''= =20 refunds are in order. But the commission has not defined what portion=20 exceeded ``just and reasonable.''=20 Throughout his press conference Davis used the prospect of litigation like= a=20 goad to spur the federal regulators into action. But if you listened=20 carefully he also indicated he'll give them more time to consider the case= .=20 Considering the iffy odds of winning in court we suggest he keep goading t= he=20 federal commissioners -- while giving them all the time they need. Wednesday July 11 2001=20 Lights go out on Davis' power show=20 Three new developments show that some economic reality finally is being=20 applied to California's electricity crisis:=20 First The nation's chief energy judge said Monday that California is owed= =20 maybe $1 billion in refunds from power generators a fraction of the $8.9= =20 billion demanded by Gov. Gray Davis reported the Register yesterday. Even= =20 that $1 billion amount might be balanced by the amount the state still owes= =20 the power producers.=20 To suggest workable and market-oriented solutions to the California=20 electricity crisis. Judge Curtis Wagner's recommendation will be taken up by the Federal Energy= =20 Regulatory Commission which is being petitioned for the money by the state= =20 of California.=20 Because the judge's words will bolster FERC's apparent desire not to grant= =20 the refunds the state probably will go to court where the matter could = be=20 stuck for years. In the long term this may indicate that competitive electricity has a=20 future even in California but not thanks to the state Robert Michaels a= =20 professor of economics at Cal State Fullerton told us. He's referring to t= he=20 state's botched 1996 deregulation effort which has been made worse by Go= v.=20 Gray Davis and other officials since the crisis began a year ago. FERC since the 1980s favors competition within the parameters of politica= l=20 reality Mr. Michaels added. Now we're at square one: The industry doesn'= t=20 owe $9 billion to California. As this process continues he said another= =20 positive aspect will be that a lot of facts will get aired. We'll see what= =20 has been happening in the markets in which power is bought and sold. Second light already is shining on one area: This crisis was not Made in= =20 Texas'' by cronies of President Bush as Gov. Davis and other Democrats hav= e=20 been contending.=20 In May the governor attacked the president for ignoring the greed of thes= e=20 Texas energy companies such as Reliant and Dynergy. In fact according to information on state power contracts the governor=20 finally released Monday Texas companies were way down on the list of=20 producers.=20 In roughly the first five months of the year the state shelled out $1.2= =20 billion to Atlanta-based Mirant the most any company was paid for=20 electricity followed by $1 billion to Powerex the marketing arm of BC Hyd= ro=20 in British Columbia [in Canada]. It also paid $331 million to the Los Angel= es=20 Department of Water and Power reported the San Jose Mercury News. Only about 10 percent of our state's power during this period came from=20 companies with headquarters in Texas. Third and finally a new study by the Cato Institute shows what should be= =20 done next:=20 lAbolish retail rate caps allowing prices to be set by the market.=20 This would be a better system than the present one where the state buys th= e=20 electricity and passes much of the cost along through the state budget (pai= d=20 by taxpayers) and bonds paid for by long-term electricity price increases.= =20 Higher immediate prices would encourage conservation and production leadin= g=20 in time to lower prices. lMove to real-time pricing so people shift activities such as washing to=20 off-peak hours.=20 lAbolish the Independent System Operator which moves electrons around.=20 Give this function back to the utilities who did it far better before=20 deregulation. Gov. Davis should set the pace by ending his Clintonian bla= me=20 shifting and embracing these realistic solutions.=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:: Confidential Question Body:: Dear Ken I'm not sure quite were to turn but was hoping you could assist me. I would like to keep this confidential especially regarding the New York Office. As my request has nothing to do with the people in this office or the group they are wonderful I've been with Enron since '97 and I relocated up to Connecticut to work with the New Power Company when I thought that the Enron employees would stay Enron employees. Afterwards of course we all were changed to NewPower employees. After a couple of months I made the move back to Enron and went to the New York office and work with the Enron Metals group here at 53rd street. (It was never my intention to leave Enron) Since the bombing I feel very displaced and my husband and I would really like to come back to Houston and was wondering if you could help me. I was on the trading floor working with Dave Delainey's group when he was in ENA and also was the Exec Secretary/Coordinator with the MWB group in George Warsoff's group. I would appreciate it very much if you were able to assist/guide me. Sincerely Teri Teri Connor-Smith Admin Coordinator Enron Metals & Commodities Corp tsmith3@enron.com (212)715-5601 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: Gas Controllers Association speaker (California Energy Crisis) Body:: I can do it but have to be at the airport before 2:00 for a flight to NY. Sherri Sera 03/14/2001 04:17 PM To: Steven J Kean/NA/Enron@Enron cc: Maureen McVicker/NA/Enron@Enron Mary Poorman/NA/Enron@Enron Subject: Gas Controller's Association speaker (California Energy Crisis) Steve Jeff will be in Boston on this date doing 1:1s following 1Q earnings release. Is this something you would be interested in/available to do? If not who would you recommend sending it to? Thanks SRS ----------------- 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:: Energy Issues Body:: Please see the following articles: AP Wire services Tues 3/20: Calif. Officials Order Blackouts Dow Jones News Tues 3/20: California Panel to Order Utilities to Make $1= =20 Billion in Back Payments SF Chron 3/20: As Davis Seeks Money Lawmakers Want Answers=20 Members of both parties angry at lack of dialogue Fresno Bee Tues 3/20: Jones rips state on energy crisis Sac Bee Wed. 3/21: Day 2 -- Battling blackouts: Payment plan sought to= =20 restart small plants Sac Bee Wed. 3/21: Hospitals take hit seek power guarantee Sac Bee Wed. 3/21: Lodi still won't pull the plug San Diego Union Tues. 3/20: Blackouts hit for second day break seen=20 Wednesday San Diego Union Tues. 3/20: State power regulators working on energy=20 rescue=20 San Diego Union Tues. 3/20: Federal regulators scored for not ordering= =20 more California refunds LA Times Wed. 3/21: Second Day of Blackouts Disrupts 500000 Home and= =20 Businesses LA Times Wed. 3/21: Fragile Supply Network Apt to Fail LA Times Wed. 3/21: Elevator Anxiety is Riding High LA Times Wed. 3/21: State says it's accelerating plan to buy Power=20 Utilities' Grid LA Times Wed. 3/21: L.A. Long Beach File Suits Over Gas Companies'=20 Prices LA Times Wed. 3/21: Davis OKs Subsidy of Pollution Fees LA Times Wed. 3/21: As Losses Mount Companies work around outages LA Times Wed. 3/21: Commentary: A Blackout on Answers LA Times Wed. 3/21: Commentary: Rolling Blackouts: Blatant Extortion SF Chron Wed. 3/21: Utilities' Demand Blocks Bailout=20 NEGOTIATIONS HIT SNAG: PG&E Edison want end to price freeze if they sell= =20 transmission lines to state SF Chron Wed. 3/21: Utilities' Demand Blocks Bailout=20 BLACKOUTS ROLL ON: Weather increased consumption blamed SF Chron Wed. 3/21: Manners Go Out the Window=20 Pedestrians in peril as drivers turn darkened S.F. streets into free-for-al= l SF Chron Tues. 3/20: Historic Blackouts in State=20 Bay Area learns to cope SF Chron. Tues. 3/20: Second day of rolling blackouts in power-starved= =20 California Mercury News. Wed. 3/21: Bay Area Residents Learning to roll with=20 Blackouts Orange County Wed. 3/21: Powerless Again Orange County Wed. 3/21: The iceman shunneth effects of hourlong blacko= ut Orange County Wed. 3/21: Traffic officials are seeing red over blackout= s Orange County Wed. 3/21: Alternative power producers cut back or shut= =20 down as payments from big utilities lag Orange County Wed. 3/21: O.C. saves its energy -- for blaming others Orange County Wed. 3/21: Blackout readiness on agenda Dow Jones Energy News Wed. 3/21: Calif To Order Utils To Pay Small=20 Generators Up Front-Gov Dow Jones Energy News. Wed. 3/21: PG&E Says It Is Negotiating With=20 Qualifying Facilities Energy Insight Wed. 3/21: New York at the Crossroads --- Calif. Officials Order Blackouts=20 By PAUL CHAVEZ Associated Press Writer=20 LOS ANGELES (AP) - State power managers ordered rolling blackouts across=20 California for a second straight day Tuesday as demand for electricity agai= n=20 exceeded supply.=20 The same factors that collided to strap California's power supply on Monday= =20 hit again officials with the Independent System Operator said. Those inclu= de=20 reduced electricity imports from the Pacific Northwest numerous power plan= ts=20 offline for repairs and higher-than-expected demand because of warm=20 temperatures.=20 A two-unit Southern California plant that the ISO hoped would be working=20 Tuesday had not been fixed. One of its units might go online at noon to hel= p=20 the situation the ISO's Jim Detmers said.=20 In addition hydroelectric power imports from the Northwest were 800=20 megawatts lower than Monday he said. The ISO oversees most of the state's= =20 power grid.=20 --- California Panel to Order Utilities to Make $1 Billion in Back Payments By Jason Leopold 03/20/2001 Dow Jones Business News (Copyright (c) 2001 Dow Jones & Company Inc.) Dow Jones Newswires=20 LOS ANGELES -- The California Public Utilities Commission will order Edison= =20 International's Southern California Edison and PG&E Corp.'s Pacific Gas &= =20 Electric unit to pay small power generators that are qualified utilities=20 about $1 billion in past-due payments in order to keep the plant owners fro= m=20 dragging the utilities into an involuntary bankruptcy proceedings and to= =20 also ensure the generation units keep pumping out electricity people=20 familiar with the matter told Dow Jones Newswires late Monday. Gov. Gray Davis state Sen. Debra Bowen and Assemblymembers Fred Keeley an= d=20 Robert Hertzberg all Democrats spent most of the day y trying to hammer o= ut=20 an agreement with the so-called qualifying facilities alternative power=20 producers that use the wind sun steam and biomass to generate electricity= =20 for the state on supply contracts and past payments the utilities failed t= o=20 make.=20 The qualifying facilities which represent about one-third of the state's= =20 total power supply and signed contracts to sell power directly to the=20 utilities under a government mandate would then agree to sign power-supply= =20 contracts with the utilities for a period of five to 10 years for about $79= a=20 megawatt hour for the first five years and about $61 a megawatt hour=20 thereafter two sources involved in the negotiations said.=20 The PUC is expected to issue a draft resolution on the issue sometime this= =20 week one source said.=20 The lawmakers wouldn't comment on the details of their talks Monday.=20 Representatives with SoCal Ed (EIX) and PG&E (PCG) said they were unaware= =20 Gov. Davis and his administration were meeting on the issue.=20 The utilities are more than $13 billion in debt and have failed to make=20 payments on their qualifying-facilities contracts since November. PG&E has= =20 paid some of its qualified facilities just a fraction of what they are owed= .=20 Legislation To Restructure QF Rates Stalls In Senate Energy Committee=20 Mr. Keeley had recently drafted legislation along with state Sen. Jim=20 Battin a Republican from Palm Desert that would have restructured the rat= es=20 the qualified facilities charge the utilities from $170 a megawatt hour to= =20 $80 a megawatt hour for five years.=20 The bill SB47X stalled in the Senate Energy Committee of which Ms. Bowen= =20 chairs. SoCal Ed opposed the legislation saying the rates were still too= =20 high. A utility spokesman said the qualified-facilities rates should be=20 reduced to under $50 a megawatt hour.=20 But the lawmakers and the governor is trying to avoid the need for=20 legislation largely because there isn't much support in both houses for su= ch=20 a bill and the chance that it won't be passed in time to keep the qualified= =20 facilities from dragging the utilities into involuntary bankruptcy=20 proceedings the legislative source said.=20 The PUC will take over the issue from the Legislature the source said.=20 Monday about 3000 megawatts of qualified-facilities generation went offli= ne=20 because the companies that operate the power plants can no longer afford to= =20 buy natural gas used to fuel the plants due to the utilities' failure to pa= y=20 money owed to the companies said Jim Detmers vice president of operations= =20 for the state's Independent System Operator.=20 The outages triggered a major shortfall in the state which resulted in near= ly=20 eight hours of statewide rolling blackouts Monday.=20 Many owners of the qualified-facilities said without immediate relief they= =20 would likely force SoCal Ed and possibly PG&E into involuntary bankruptcy= =20 perhaps as soon as Thursday.=20 One such facility CalEnergyOperating Co. wants to be freed temporarily fr= om=20 its contract with the utility and be allowed to sell its electricity to thi= rd=20 parties until the utility is able to pay its bills. CalEnergy is an affilia= te=20 of MidAmerican Energy Holdings Co. which is majority owned by Warren=20 Buffet's Berkshire Hathaway Inc. (BRKA).=20 The company sued SoCal Ed last month and the case is scheduled to be heard= =20 Thursday in Imperial County Superior Court. If a judge delivers an=20 unfavorable ruling CalEnergy and other unsecured creditors would drag SoCa= l=20 Ed into involuntary bankruptcy three executives with the companies involve= d=20 said.=20 CalEnergy is said to be organizing a bankruptcy petition now circulating=20 among six of Southern California Edison's independent power suppliers and= =20 could file the petition very quickly if it fails in its suit Thursday said= =20 executives with three of the six companies.=20 Write to Jason Leopold at jason.leopold@dowjones.com=20 Copyright (c) 2001 Dow Jones & Company Inc.=20 All Rights Reserved --- --- As Davis Seeks Money Lawmakers Want Answers=20 Members of both parties angry at lack of dialogue=20 Lynda Gledhill Greg Lucas Chronicle Sacramento Bureau Tuesday March 20 2001=20 2001 San Francisco Chronicle=20 Sacramento -- The Legislature has warned it may block further state purchas= es=20 of electricity as lawmakers' frustration with Gov. Gray Davis' handling of= =20 the energy crisis increases.=20 A test may come soon because Davis asked yesterday for another $500 million= =20 to continue buying power.=20 Sen. Steve Peace D-El Cajon chairman of the Joint Legislative Budget=20 Committee wrote to Davis' Finance Department on Friday that the committee= =20 might deny further spending requests in the absence any discernable=20 progress from the Public Utilities Commission to ensure that the state wou= ld=20 get its money back.=20 Members of the committee both Republican and Democratic said they support= ed=20 Peace's call for more oversight of the spending given the lack of=20 information from Davis on details of the state's power purchases.=20 He's been holding things close to the chest and that bothers me said Se= n.=20 John Vasconcellos D-Santa Clara. I want to know a lot more.=20 Sen. Dick Ackerman R-Fullerton said the administration has been=20 stonewalling us about how much is being spent and how much power we're=20 getting for it. When the state is spending that kind of money at a minimum= =20 legislators should know for what.=20 The state had spent $2.6 billion on electricity through March 11. Davis'=20 request for more money would put the state at the $3 billion mark by the=20 middle of April. The state is spending an average of $49 million a day.=20 The money is supposed to be paid back through the rates collected from=20 utilities' customers. It is up to the PUC to decide how to divide that mone= y=20 among the state the utilities and the utilities' debtors. The commission i= s=20 scheduled to take up the issue at its March 27 meeting.=20 The problem is that there appear to be more demands on the money than there= =20 is money to go around.=20 The utilities have said they need the money to pay off some of their=20 creditors. Among those looking for cash are alternative-power generators th= at=20 were selling electricity to Pacific Gas and Electric Co. and Southern=20 California Edison. Half of them have shut down because they have not been= =20 paid.=20 Earlier this month the PUC granted the Department of Water Resources whic= h=20 has been purchasing electricity for the state the power to recoup its full= =20 costs through rates.=20 It's unclear whether that can be accomplished without raising electricity= =20 prices though Davis has insisted he can solve the crisis without boosting= =20 rates.=20 Lawmakers said they approved the bill that allowed the state to buy power i= n=20 the belief such purchases would be a stopgap until the Davis administration= =20 could sign long-term contracts with power suppliers. However only about 19= =20 contracts have been signed to date out of 42 agreements. If all the=20 contracts are signed they will account for about 70 percent of the power= =20 California is expected to need.=20 It was our expectation some of these contracts would kick in said=20 Assemblywoman Carole Migden D-San Francisco. This was designed to only be= =20 bridge money to avert a power disaster. We should hold firm and come up wit= h=20 a plan.=20 I recall about three weeks ago when we first asked about one of these $500= =20 million letters Migden said. We said maybe this one is necessary but=20 there won't be carte blanche approval of any future requests. I'm pleased= =20 Sen. Peace is taking that approach.=20 To Assemblyman George Runner R-Lancaster Peace's letter was another way= =20 for the Legislature to send a message we need to be in this loop. We're jus= t=20 getting a small little dribble of information which just creates more=20 questions.=20 A spokesman for the Department of Finance said officials hoped to work with= =20 the committee members about their concerns.=20 --- --- Jones rips state on energy crisis=20 Secretary of state hints that he'll take on Davis in 2002.=20 By John Ellis=20 The Fresno Bee (Published March 20 2001)=20 Officially he's Bill Jones secretary of state for California. Unofficiall= y=20 he's Bill Jones 2002 gubernatorial candidate.=20 The evidence is right there between the lines -- in the subtleties of his= =20 speeches their subject matter and the way Jones carries himself when he's= =20 in public.=20 Monday was no different as Jones addressed a Rotary Club luncheon in Fresn= o=20 full of people who are assuming -- though nothing is official -- that the= =20 Fresno native will soon announce his intention to challenge Gov. Davis next= =20 year.=20 Bill they call me governor Chas Looney a former Rotary Club district= =20 governor quipped to Jones. I look forward to the day we all can call you= =20 governor.=20 Jones then proceeded to deliver a speech to a packed house in the DoubleTre= e=20 Hotel that touched on his accomplishments as secretary of state but quickl= y=20 moved to his main topic: California's crumbling infrastructure and how the= =20 energy crisis is affecting the state.=20 Always in the background but never mentioned by name was Davis. Jones was= =20 careful to hew to the Rotary rule that speeches steer clear of partisan=20 politics.=20 Still Jones looked sounded and acted like a candidate for governor and= =20 near the end of his speech he promised his decision would come soon.=20 The Fresno Republican's speech began by highlighting his work in passing th= e=20 Three Strikes and You're Out initiative in 1994.=20 Jones also talked of his efforts to remove 2 million inactive California=20 voters from the rolls.=20 But it was clearly the energy crisis and its ramifications -- an issue=20 Republicans feel they can pin on Davis and the Democratic-controlled=20 Legislature -- that was the centerpiece of the speech.=20 Today the energy crisis is being driven he said by a lack of power plant= =20 construction. And while billions go to solve the crisis he said the state= =20 faces $100 billion in unmet infrastructure needs -- everything from school= =20 repair to road repair.=20 Doesn't that scare you? Jones asked.=20 He then recounted the warning signs -- ignored by the state he said -- of= =20 the looming energy crisis.=20 He cited the initial warnings that the deregulation bill was flawed last= =20 summer's request by Edison and Pacific Gas & Electric to allow forward=20 contracting and the Republican request for a special session to deal with t= he=20 energy crisis. All ignored Jones said.=20 Now Edison and PG&E are near bankruptcy and the state finds itself steppin= g=20 up as a creditor. And the solution now becomes California getting into the= =20 energy business he said. Or even carrying it to a greater degree not= =20 just in the short term to buy power to keep the lights on. I'm talking abou= t=20 basically socializing the energy business.=20 Jones said he prefers low-interest loans to Edison and PG&E taking the=20 electric grid as collateral.=20 I just do not believe in California getting into something it does not kno= w=20 how to do -- has never done before -- on top of all of our other=20 obligations he said.=20 It really worries me that California will not be able to endure that type = of=20 obligation.=20 Jones said polls now show increasing numbers of residents saying the state = is=20 headed in the wrong direction.=20 I feel obligated to speak out and say there is a better way Jones said. --- --- Day 2 -- Battling blackouts: Payment plan sought to restart small plants By Dale Kasler and Carrie Peyton Bee Staff Writers (Published March 21 2001)=20 Blackouts rolled across California for a second straight day Tuesday=20 snarling traffic darkening businesses and sending state officials scrambli= ng=20 to craft a payment plan to revive the wind farms and other critically neede= d=20 small energy producers that have shut down because of financial woes.=20 On a day when another 570000 customers lost power Gov. Gray Davis said th= e=20 Public Utilities Commission and the Legislature would move promptly to orde= r=20 Pacific Gas and Electric Co. and Southern California Edison to start paying= =20 those small energy producers for their electricity. Davis said the two=20 utilities will face considerable fines if they don't pay up.=20 But several of the producers known as qualifying facilities said they= =20 doubted Davis' plan would go far enough to get them back in operation. And = it=20 wasn't clear whether the plan would keep the increasingly impatient=20 alternative producers from hauling one or both of the big utilities into=20 bankruptcy court as some have threatened.=20 The shortage of power from the qualifying facilities -- plus a near-record= =20 heat wave (downtown Sacramento topped off at 83 degrees one degree short o= f=20 the 84 degree record set in 1960) a lack of hydropower and other problems = --=20 prompted the state's Independent System Operator to order a second day of= =20 blackouts starting mid-morning. But the blackouts hit only about half as ma= ny=20 Californians as Monday's with late afternoon conservation efforts helping= =20 balance supply with demand.=20 The blackouts usually about an hour long hit about 7600 Sacramento=20 Municipal Utility District customers in Elk Grove and south Sacramento=20 County. PG&E customers in suburban counties were affected as well.=20 The order darkened shops in San Francisco's Chinatown and was blamed for a= =20 crash that left two motorists seriously injured in the Los Angeles suburb o= f=20 South El Monte. A Sun Microsystems Inc. factory in Newark had to close for= =20 several hours.=20 Most Californians took the blackouts in stride though. Elk Grove High Scho= ol=20 students filed outside to play hacky sack. Coffee shop patrons in Davis=20 milled outdoors enjoying the unseasonably warm weather.=20 Yet the blackout order was met with outright defiance by one municipal=20 utility. The city of Lodi refused to cut power to its residents Monday or= =20 Tuesday saying it shouldn't have to suffer because of the financial crisis= =20 afflicting PG&E and Edison.=20 The outlook for today and the near future was brighter as several big powe= r=20 plants came back on line after repairs. ISO officials also praised=20 Californians' conservation efforts which had faltered in the morning but= =20 came on strong in the afternoon helping to prevent further blackouts. By= =20 evening the grid was in a relatively mild Stage 2 power alert.=20 But the second day of blackouts -- plus an increasing threat of utility=20 bankruptcy -- pushed Davis to the brink. The governor cobbled together a=20 payment plan to rescue the qualifying facilities -- some 600 wind farms=20 geothermal plants and other alternative-energy generators whose production= =20 has become increasingly vital in recent days.=20 Under Davis' plan the Legislature and the PUC would order PG&E and Edison = to=20 pay the qualifying facilities for power delivered after April 1. The=20 utilities are required to buy power from the qualifying facilities under a= =20 1978 federal law designed to bring cheaper and cleaner forms of electricity= =20 to market.=20 Davis said the PUC would release a proposed order late Tuesday that would= =20 require the utilities to pay the qualifying facilities $79 a megawatt hour= =20 for five-year contracts or $69 for 10-year contracts. The Legislature also= =20 would have to pass a law authorizing the PUC to issue such an order.=20 But the situation was far from resolved late Tuesday and PG&E and Edison= =20 were likely to oppose at least portions of Davis' plan.=20 Edison is willing only to make some kind of partial payments going forward= =20 said Thomas Higgins a senior vice president with parent company Edison=20 International. We have a limited amount of resources available to us in=20 rates ... and that's the constraining factor.=20 PG&E which has been making partial payments to the qualifying facilities= =20 said it could pay them in advance in full for future power deliveries.=20 But PG&E said such payments would eat up half the $400 million it has=20 available each month to buy power -- and unless it gets a rate hike there= =20 wouldn't be enough to pay the qualifying facilities and cover other expense= s=20 including the cost of reimbursing the state Department of Water Resources f= or=20 the power the agency is buying on behalf of the troubled utility.=20 PG&E's proposal could represent a challenge of sorts to state officials:=20 Accept less money for the water department or raise rates.=20 State officials need to resolve who they want to see paid PG&E spokesman= =20 John Nelson said. There is a limited pool of money.=20 For his part Davis insisted that the water department would be first in li= ne=20 to be paid and he said the PUC will issue a proposed order to that effect.= =20 We are getting paid before anybody else Davis said.=20 Hundreds of qualifying facilities are out of commission because PG&E and=20 Edison haven't paid them. The situation has robbed the state of several=20 thousand badly needed megawatts and is a key reason blackouts have been=20 ordered. In normal times the facilities produce more than 20 percent of=20 California's electricity.=20 Some of the qualifying facilities have been threatening to haul one or both= =20 of California's beleaguered utilities into bankruptcy court unless they get= =20 paid soon saying a bankruptcy filing might be the only way they can save= =20 their businesses.=20 You've got to take care of the QF problem or the whole thing blacks out= =20 said Jerry Bloom a lawyer representing one group of qualifying facilities.= =20 (State officials) are starting to understand.=20 One thing that was fairly certain about Davis' still-sketchy payment plan: = It=20 wouldn't cover PG&E and Edison's existing debt to the qualifying facilities= =20 estimated at more than $1.48 billion.=20 In their current financial state the utilities say they can't afford to pa= y=20 the existing debt. In addition paying the debt would create a major=20 complication: Other creditors including the big power generators would=20 surely haul Edison and PG&E into bankruptcy court on the grounds that they= =20 weren't being treated fairly.=20 You can't give preferential payment treatment to one class of creditors ov= er=20 another PG&E's Nelson said. You virtually assure that (the other=20 creditors) have to file an involuntary bankruptcy proceeding against you.= =20 But without full payment it wasn't clear how many of the qualifying=20 facilities would be able to restart.=20 Executives at several plants -- the ones that run on natural gas -- said=20 they're not sure their gas suppliers will deliver unless the existing debts= =20 are cleared up.=20 We need to convince a gas company to supply us said Ed Tomeo of UAE Ener= gy=20 Operations Corp. which had to shut off its 40-megawatt Kern County plant= =20 Tuesday. We're a company that already owes millions of dollars for gas=20 supplies. How do you coax them to sell you millions more?=20 It's wishful thinking ... that the gas suppliers are going to sell us gas= =20 Robert Swanson of Ridgewood Power said.=20 I>Bee Capitol Bureau Chief Amy Chance and staff writers Stuart Leavenworth= =20 Bill Lindelof Pamela Martineau and the Associated Press contributed to thi= s=20 report. --- --- Lodi still won't pull the plug By Carrie Peyton Bee Staff Writer=20 (Published March 21 2001) In a growing rebellion against blackouts the city of Lodi has twice refuse= d=20 to cut power to its residents despite an order from Pacific Gas and Electri= c=20 Co.=20 The small city-run electric system is among many disgruntled utilities=20 including the Sacramento Municipal Utility District that believe their=20 contractual pledges to cut back during emergencies were never meant for tim= es=20 like this.=20 It's been a philosophical debate up to this point. Now I guess we've drawn= a=20 line in the sand said Lodi utility director Alan Vallow.=20 PG&E said it is reviewing its interconnection contract the agreement that= =20 links Lodi to the grid through PG&E-owned high-voltage lines to determine= =20 what action it will take next.=20 It's unfortunate that while the city of Lodi has received the benefit of= =20 this agreement for years they are unwilling to bear the burden of this=20 statewide energy shortage said PG&E's Jon Tremayne.=20 One utility coalition the Northern California Power Agency believes that= =20 PG&E has already violated that agreement by not lining up enough power for= =20 customers.=20 The agency wrote PG&E on Friday saying that its members -- municipal=20 utilities and irrigation districts -- believe they aren't required to=20 participate in blackouts prompted by financial disputes.=20 And SMUD which has been considering dropping out of future blackouts will= =20 be watching the response to Lodi said SMUD board President Larry Carr.=20 Some SMUD directors say they're ready to go to court to force the issue. So= =20 is Lodi population 58000 said Vallow.=20 I've heard an Edison executive describe this as a natural disaster akin to= =20 an earthquake. That's crap. This is a man-made event he said.=20 Lodi said it will still help in genuine emergencies such as fires or toppl= ed=20 transmission lines. But it decided that on Monday and Tuesday that wasn't t= he=20 case.=20 You have 3000 megawatts of QFs (qualifying facilities) offline because=20 their bills haven't been paid. Well guess what? Somebody ought to pay thos= e=20 ... bills Vallow said. --- --- Blackouts hit for second day break seen Wednesday=20 By Audrey Cooper ASSOCIATED PRESS=20 March 20 2001=20 SACRAMENTO =01) Rolling blackouts hit California for a second straight day= =20 Tuesday closing souvenir shops in San Francisco's Chinatown snarling=20 traffic and plunging schools and offices around the state into darkness.=20 Roughly a half-million homes and businesses from San Diego to the Oregon=20 border faced outages blamed on the same factors that collided to force=20 blackouts Monday =01) unseasonably warm weather reduced electricity import= s=20 from the Pacific Northwest numerous power plants offline for repairs and= =20 less power provided by cash-strapped alternative-energy plants.=20 Five rounds of outages in San Diego affected about 74000 customers. State= =20 power grid officials expected to have enough electricity to avoid further= =20 outages through at least Wednesday although the supply remained tight.=20 State power regulators working on energy rescue=20 Federal regulators scored for not ordering more California refunds=20 ?=20 Gov. Gray Davis blamed the blackouts in part on the failure of Southern=20 California Edison and Pacific Gas and Electric Co. to pay millions of dolla= rs=20 they owe qualifying facilities power suppliers that use cogeneration =01= )=20 steam from manufacturing plus natural gas =01) or solar wind and other=20 renewable energy to generate electricity.=20 State power grid officials say California this week has lost about half the= =20 electricity QFs normally provide. Several cogeneration plants say they=20 haven't been paid by Edison and PG&E for weeks and can't afford to buy=20 natural gas to fuel their plants.=20 Davis said the utilities are taking in money from customers but still faili= ng=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 Davis said at a Capitol news conference Tuesday evenin= g.=20 They've acted irresponsibly and immorally and it has to stop.=20 Southern California Edison officials said in a written statement that the= =20 utility is intent on paying creditors and working with the PUC to pay QFs f= or=20 future power sales. PG&E representatives were out of the office late Tuesda= y=20 night and didn't immediately return calls from The Associated Press seeking= =20 comment.=20 John Harrison of the Northwest Power Planning Council a consortium that=20 monitors power use in several Western states said blackouts on the first d= ay=20 of spring are an ominous sign of what lies ahead this summer.=20 We're in trouble he said. We will likely be able to meet our needs this= =20 summer but there won't be much to send to California.=20 Tuesday's outages began at 9:30 a.m. PST and continued in 90-minute waves= =20 until about 2 p.m. when the Independent System Operator lifted its blackou= t=20 order.=20 Grid officials credited an influx of power from the Glen Canyon hydroelectr= ic=20 plant on the Utah-Arizona border.=20 The blackouts were blamed for at least one serious traffic accident.=20 Two cars collided at an intersection without traffic lights in the Los=20 Angeles suburb of South El Monte leaving two people with serious injuries= =20 California Highway Patrol Officer Nick Vite said.=20 Ventura Foods in Industry sent its employees out for an early lunch after= =20 blackouts shut down its phones and computers.=20 This is mild weather for this time of year. I don't know what's going to= =20 happen in the summer manager Frank Hynes said. This is going to have a= =20 serious impact on the state's economy. They can't just keep shutting people= =20 down.=20 Statewide demand was higher than expected because of warm spring weather.= =20 Temperatures reached record highs across California on Monday including th= e=20 80s and low 90s in Southern California. They were expected to be somewhat= =20 lower Tuesday but still in the 70s and 80s.=20 The ISO hoped demand would start to subside and conservation would kick in= =20 but that did not happen Tuesday morning.=20 We have not seen the kind of conservation we saw back in January when th= e=20 first blackouts hit ISO spokesman Patrick Dorinson said. If we don't have= =20 conservation efforts that just means that's more power we have to take off= =20 the grid.=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 It's no good for anybody =01) stores or businesses or people said Yin Su= n=20 Chan among those in line.=20 PG&E the state's largest utility accounted for most of the customers=20 affected.=20 At least 438000 PG&E residential and business customers were affected as o= f=20 early afternoon spokesman Ron Low said.=20 Edison cut power to about 50000 customers. Edison was ordered to cut less= =20 power than PG&E and saved some due to conservation programs including one= =20 that lets the utility shut off air conditioning for 118500 residential and= =20 business customers when the power supply is tight.=20 About 73400 San Diego Gas & Electric customers were hit by the blackouts.= =20 Los Angeles whose municipal utility is not on the grid that serves most of= =20 California wasn't included in the blackout order.=20 More than 1 million homes and businesses statewide experienced outages=20 Monday.=20 California's power crisis is expected to get even worse this summer when= =20 temperatures soar and residents crank their air conditioning.=20 Natural gas supplies are tight water supplies are down and the state is=20 spending tens of millions of dollars each day to buy electricity for Edison= =20 and PG&E who say they are nearly bankrupt due to high wholesale power cost= s.=20 Edison and PG&E say they have lost more than $13 billion since last June to= =20 climbing wholesale electricity prices the state's 1996 deregulation law=20 prevents them from recouping from ratepayers.=20 Adding to the problems the state this week lost about 3100 megawatts from= =20 QFs. One megawatt is enough power to serve about 750 households.=20 The plants say they are owed about $1 billion for past sales to PG&E and=20 Edison.=20 PG&E said it is offering to prepay the QFs starting next month to get them= =20 back in operation. Negotiations were expected to continue Wednesday.=20 California Co-Generation Council attorney Jerry Bloom said he supports=20 proposals that will get the Qfs paid but the promise of future payments ma= y=20 not be enough.=20 PG&E and Bloom said the utility's prepayments hinge on an upcoming Public= =20 Utilities Commission decision on whether the utility's rates are sufficient= =20 to pay its bills and cover the state's power purchases on its behalf which= =20 amount to $4.2 billion since early January.=20 Davis said the PUC planned to issue a draft order late Tuesday directing th= e=20 utilities to pay their future QF bills.=20 It plans to take action on that order next Tuesday Davis said. The=20 Legislature plans to approve a bill in the meantime giving the PUC the=20 authority to issue such an order and fine the utilities if they fail to=20 comply he said.=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 --- --- State power regulators working on energy rescue=20 By Karen Gaudette ASSOCIATED PRESS=20 March 20 2001=20 SAN FRANCISCO =01) State power regulators continue to delay the release of= =20 guidelines that will determine a portion of the money the Department of Wat= er=20 Resources can recoup from financially troubled utilities for electricity it= =20 has bought on their customers' behalf.=20 These guidelines will help the water department determine whether it must= =20 raise consumer power rates to reimburse the state for the more than $3=20 billion it has committed to buying electricity.=20 Assemblyman Fred Keeley D-Boulder Creek said Tuesday that the Public=20 Utilities Commission would likely have to raise rates by 15 percent to cove= r=20 the state's costs and the utilities' bills.=20 The PUC guidelines were most recently delayed by a letter from DWR Director= =20 Thomas Hannigan asking that the water department receive a percentage of=20 ratepayer money collected by the utilities equal to the percentage of=20 electricity it provides to utilities.=20 The DWR currently buys around 40 percent of the power used by Pacific Gas a= nd=20 Electric Co. Southern California Edison Co. and San Diego Gas and Electric= .=20 Under the DWR's proposal the utilities would have to hand over 40 percent o= f=20 the money they continue to collect from ratepayers.=20 The DWR would then also receive whatever money remains after the utilities= =20 subtract their own generation and long-term contract costs the letter said= .=20 That amount would become the California Procurement Adjustment =01) an am= ount=20 that will help the state retrieve money spent on power purchases and help= =20 establish the size of state revenue bonds that are currently estimated to= =20 total $10 billion.=20 The state plans to issue the bonds in May to help pay off the more than $3= =20 billion Gov. Gray Davis' administration has committed to power purchases=20 since January to help the utilities climb out of debt.=20 Ron Low a spokesman with PG&E said the utility objects to paying the DWR= =20 such a large sum claiming it would interfere with efforts to pay its=20 qualifying facilities =01) power plants that use the sun wind biomass o= r=20 natural gas to generate about one third of the state's electricity.=20 The nearly bankrupt utilities owe the QFs more than $1 billion for=20 electricity they have produced since November said Jan Smutney-Jones=20 executive director of the Independent Energy Producers.=20 Hannigan also said in the letter the DWR intends to use its authority to=20 raise consumer electricity rates to recoup any money not reimbursed through= =20 the CPA and other means.=20 The Public Utilities Commission expected to release the guidelines last wee= k=20 but was delayed by debates over legislation that would slash the rates of= =20 environmentally friendly power plants under contract to provide electricity= =20 to the investor-owned utilities.=20 Without knowing how much ratepayer money the utilities need to pay these=20 qualifying facilities for future electricity it's unknown how much money= =20 they'll have on hand to pay the DWR.=20 In a written statement PUC Administrative Law Judge Joseph DeUlloa said th= at=20 he would issue a temporary decision on the CPA as soon as is practical.= =20 Pacific Gas and Electric Co. and Southern California Edison Co. say they ha= ve=20 lost more than $13 billion since last June to climbing wholesale electricit= y=20 prices that the state's 1996 deregulation law prevents them from recouping= =20 from ratepayers.=20 --- --- Federal regulators scored for not ordering more California refunds=20 By H. Josef Hebert ASSOCIATED PRESS=20 March 20 2001=20 WASHINGTON =01) House Democrats asked federal energy regulators Tuesday why= they=20 are not going more aggressively after alleged overcharges for wholesale=20 electricity in California and ordering more refunds.=20 The Federal Energy Regulatory Commission has asked suppliers to justify $12= 4=20 million in sales during the first two months of the year or refund the mone= y=20 but critics charge that thousands of additional questionable sales are not= =20 being challenged.=20 The three commissioners testifying at a hearing of the House Commerce=20 subcommittee on energy were asked why they limited their refund demands to= =20 only power sales that occurred during so-called Stage 3 alerts of acute pow= er=20 shortages in California.=20 It appears to me a price is unreasonable when it is unreasonable and not= =20 just during a power alert said Rep. Rick Boucher of Virginia the panels'= =20 ranking Democrat.=20 The commission last week ordered six power generators to justify some 1000= =20 transactions during February in the California market whenever the price wa= s=20 above $430 per megawatt hour and occurred during a Stage 3 emergency alert.= =20 But the lawmakers were told Tuesday that 56 percent of another 14168=20 transactions occurring outside a Stage 3 emergency also exceeded the $430= =20 trigger but are not being questioned.=20 The line was drawn to limit the scope of the refund said agency=20 commissioner William Massey a Democrat who strongly opposed the refund=20 actions because he said they were too limited.=20 Chairman Curtis Hebert a Republican defended the way the commission decid= e=20 on what transactions to challenge saying that it sought to replicate market= =20 conditions as they existed at the time of the sales.=20 We deserve a better explanation retorted Boucher.=20 Massey said that agency's investigation of overcharges for January also=20 failed to consider thousands of transactions that exceeded the refund trigg= er=20 because they did not occur during Stage 3 supply emergencies.=20 Managers of California's electricity grid state regulators and utilities= =20 have accused the agency of refusing to aggressively investigate price gougi= ng=20 by wholesalers who have charged from $150 to $565 per megawatt hour as muc= h=20 as 20 times what prices were in 1999.=20 While Hebert and commissioner Linda Breathitt defended the commissioners=20 attempt to investigate whole electricity prices Massey has been highly=20 critical.=20 What message does the agency's scrutiny of prices send to the power=20 companies? he was asked.=20 It makes clear FERC is going to be looking for the wallet under the lamp= =20 post with the lights shining =01) and nowhere else replied Massey.=20 Meanwhile Massey and his two fellow commissioners also disagreed sharply = on=20 whether the energy agency should impose temporary price controls on the=20 wholesale power market in the West to dampen further expected price increas= es=20 this summer.=20 Massey said he fears a disasters in the making if some price restraints a= re=20 not imposed by FERC which regulates wholesale electricity sales. We need = a=20 temporary time out he said.=20 But Massey is in the minority on the commission. Both Hebert and Breathitt= =20 are against price caps arguing they will have long-term detrimental impact= =20 on power supply.=20 The Bush administration has made its opposition to interfering in the=20 wholesale markets well known for weeks. Vice President Dick Cheney's task= =20 force is to unveil an energy plan in about a month that is expected to lean= =20 heavily on energy production.=20 --- --- Second Day of Blackouts Disrupts 500000 Homes and Businesses=20 Power: Grid operators say the shortage should ease in the next few days bu= t=20 officials see a grim summer.=20 By MITCHELL LANDSBERG and ERIC BAILEY Times Staff Writers=20 A traffic signal that stopped working during Tuesday's rolling blackouts le= d=20 to this collision be tween a car and a truck at an intersection in El Monte= .=20 The outages ran from 9:30 a.m. to 2 p.m. AP ?????Electricity blackouts rolled through California for a second straight= =20 day Tuesday disrupting business in one of the world's most technologically= =20 advanced economies and leaving schoolchildren groping in the dark. ?????Jinxed by a combination of bad luck and bad decisions utilities were= =20 forced to cut off power to more than half a million homes and businesses fr= om=20 San Diego to the Oregon border. ?????By day's end there was some good news from the operators of the=20 statewide power grid who said the situation had eased and appeared likely = to=20 improve for the next few days. And Gov. Gray Davis announced a proposed=20 solution to one vexing problem: the utilities' failure to pay the state's= =20 small alternative power generators many of whom have stopped producing=20 power as a result. ?????Davis called the utilities shameful for failing to pay and praised= =20 the alternative power generators which include solar wind and geothermal= =20 energy producers as good corporate citizens who produced power although= =20 they weren't being paid. ?????We are anxious to pay the [small producers] who are dropping like=20 flies Davis said. ?????Despite the progress it was hard for some people to look on the brigh= t=20 side after enduring outages that took place when the state's hunger for pow= er=20 was almost 50% less than at its summer peak. ?????This is a taste almost like an appetizer of a really unpalatable me= al=20 that's going to be served up this summer said Michael Shames of the Utili= ty=20 Consumers' Action Network in San Diego himself a victim of a rolling=20 blackout that hit his office in San Diego early Tuesday. ?????Power officials have warned that this could be a grim summer in=20 California since demand for electricity sharply rises when people turn on= =20 air conditioners. The state has been struggling to meet its power needs in= =20 recent months because of rising prices and a flawed deregulation plan that= =20 has left the two biggest private utilities on the brink of bankruptcy. Stat= e=20 leaders have so far failed to agree on a comprehensive plan to solve the=20 problems. Wally Quirk teaches a business class in a borrowed classroom Tuesday at=20 Sonoma State after the state's rolling blackouts cut the power to his usual= =20 classroom which does not have any windows. SCOTT MANCHESTER / The Press Democrat ?????The latest round of blackouts began about 9:30 a.m. Tuesday when the= =20 California Independent System Operator which runs the statewide grid=20 determined that the demand for electricity was 500 megawatts more than the= =20 supply--an imbalance that meant the state was short on the power needed to= =20 supply electricity to about 375000 homes. ?????Grid operators blamed a confluence of events including warmer weather= =20 outages at several major power plants including one unit of the San Onofre= =20 nuclear power station a reduction in imports from the Pacific Northwest a= nd=20 the shutdown of many alternative energy producers. Similar blackouts Monday= =20 were the first since January. ?????The situation improved somewhat by late Tuesday morning with some=20 supplies restored and Californians conserving energy and Cal-ISO was able = to=20 halt the rolling blackouts at 2 p.m. ?????Once again customers of the Los Angeles Department of Water and Power= =20 were spared although the municipally owned utility said its electrical=20 surplus was smaller than usual. The DWP like Southern California Edison w= as=20 affected by an outage at the huge Mohave power plant in Nevada as well as = by=20 planned outages at several of its facilities. ?????As in the past by far the biggest impact was felt by customers served= =20 by Pacific Gas & Electric the state's largest utility which cut power to= =20 438000 homes and businesses. ?????Edison cut power to 47462 customers in about 40 cities but eventuall= y=20 was able to avoid blackouts by shutting off the air conditioners of some of= =20 the 118500 customers who participate in a voluntary cutoff program. ?????San Diego Gas & Electric cut power to 73400 customers. ?????Innovative Ways of Coping ?????As on Monday most people took the outages in stride as an annoying b= ut=20 ultimately unavoidable inconvenience. ?????In Palmdale four schools lost power during one of the hourlong=20 blackouts but teachers and students pressed on in the sunlight pouring=20 through windows and skylights. At Barrel Springs Elementary Principal Cruz= =20 Earls said the biggest problem came when students had to go to the bathroom= :=20 Hand in hand they made their way through darkened hallways with flashlight= s. ?????All in all it wasn't a terrible experience. Then again the weather= =20 wasn't that hot Tuesday with a high of 79 in Palmdale so the shutdown of= =20 air conditioners wasn't much of a hardship. I don't want to think about th= e=20 conditions this could create in May or June Earls said. ?????Businesses of all kinds complained about the lack of warning for the= =20 outages--and sometimes found innovative ways to get around the problem. ?????Rattled by news reports of Monday's rolling blackouts El Burrito=20 Mexican Food Products in the city of Industry started its Tuesday shift at = 2=20 a.m. to beat the clock in the event of an outage. That hunch paid off.=20 Workers had just finished cooking and packaging the last batches of salsa a= nd=20 masa when the lights went out at 10:20 a.m. ?????Company owner Mark Roth said the firm will continue working odd hours = to=20 avoid further outages. But he isn't buying the line from the utilities that= =20 they can't provide advance warning because of concerns about looting and=20 rioting. ?????We're ready to do whatever it takes to get through this thing he=20 said. But they've got to give us some notification. ?????At Big O Tires in Elk Grove just south of Sacramento owner Daniel Cr= um=20 had his 14 workers take an early lunch break or head to the warehouse to=20 reorganize the goods. Without electricity they couldn't repair brakes or= =20 align front ends. ?????I'd never let them be idle said Crum. ?????At least two minor traffic accidents were blamed on the outages. ?????The blackouts resulted from a convergence of factors. ?????Demand was slightly higher than expected probably because of=20 unseasonably warm weather. Supplies were tighter than usual in part becaus= e=20 of several outages including that at the Mohave plant half of which was= =20 brought back on line by the end of the day. ?????The San Onofre Nuclear Generating Station was still limping along=20 without power from one of its two 1100-megawatt units which was shut down= =20 Feb. 3 after a half-hour fire in a nonnuclear part of the plant. Edison=20 which operates San Onofre initially estimated the unit would be out for=20 several weeks but recently said extensive damage to parts of the turbine= =20 will keep the unit out of commission until mid-June. ?????Shipments from the drought-stricken Pacific Northwest which generates= =20 most of its electricity from large dams were also down. ?????Each time we take a measurement we're closer to the all-time record= =20 for the driest year said Dulcy Mahar spokeswoman for the Bonneville Powe= r=20 Administration the network of federal dams that provides the region with= =20 much of its electricity. We've been doing what we can but we simply don't= =20 have power to sell. ?????Finally there was the problem of the small and alternative energy=20 producers which have shut down plants because they haven't been paid by th= e=20 private utilities since November. Those outages have cost the state about= =20 3000 megawatts of electricity enough for about 2.3 million homes. ?????You're seeing the system freeze up said David Sokol chairman and C= EO=20 of MidAmerican Energy Holdings Co. which runs eight geothermal plants in t= he=20 Imperial Valley through its subsidiary CalEnergy. His company hasn't shut= =20 down yet but Sokol said smaller companies couldn't continue to sell their= =20 energy to utilities for free. ?????Why should we fund Edison? he asked. That's just ridiculous. ?????A Choice of 2 Rate Plans ?????Davis joined lawmakers in the Capitol on Tuesday to outline his plan t= o=20 get the producers running again. He said utilities have had no right to=20 collect money from ratepayers and then not use the funds to repay the small= =20 producers. The state has spent billions to buy power from large conventiona= l=20 producers on behalf of the utilities but has refused to pick up the tab for= =20 alternative energy. ?????The utilities acted in a shameful manner by putting money in their=20 pockets that was designed to pay the [small producers] Davis said. ?????The plan outlined by Davis would allow the generators to choose betwee= n=20 two rate plans. They could decide to be paid 7.9 cents per kilowatt-hour ov= er=20 five years or 6.9 cents a kilowatt-hour over 10 years. ?????The utilities must begin paying the generators the new rates beginning= =20 April 1 or face fines Davis said. ?????The question of how the companies will get paid the about $1.5 billion= =20 they are owed remains unresolved. That issue will be decided in coming week= s=20 as Davis' negotiators continue to work on rescue plans for the state's=20 financially hobbled private utilities. ?????PG&E spokesman Ron Low said the state's largest utility did not take= =20 kindly to Davis' criticism and noted that the governor's plan is similar t= o=20 a proposal that PG&E made last week to producers. ?????Jan Smutny-Jones executive director of a trade group that includes so= me=20 of the small generators described the plan as a positive step. ?????The governor got it right in that it's not acceptable for small power= =20 producers to continue to generate and not be paid Smutny-Jones said. But= =20 we'll need to see what the order says the devil will truly be in the=20 details. ?????Grid operators said the state's overall energy situation eased by midd= ay=20 Tuesday because of repairs at the Mohave plant and another large plant at= =20 Ormond Beach and because the Western Area Power Administration came up wit= h=20 300 megawatts of electricity from Glen Canyon Dam. ?????Also grid spokesman Patrick Dorinson said conservation savings spiked= =20 upward after earlier complaints that Californians weren't conserving. ?????We saw the people of California probably conserve 900 megawatts today= =20 he said. That was probably the difference. ---=20 ?????Times staff writers Andrew Blankstein Jose Cardenas Marla Dickerson= =20 Noaki Schwartz Nicholas Riccardi Doug Smith Rebecca Trounson and Richard= =20 Winton in Los Angeles Miguel Bustillo and Julie Tamaki in Sacramento Mari= a=20 La Ganga in San Francisco Stanley Allison Matt Ebnet Scott Martelle=20 Dennis McLellan Monte Morin Jason Song Mai Tran and Nancy Wride in Orang= e=20 County and Richard Simon in Washington contributed to this story. --- --- Fragile Supply Network Apt to Fail=20 By JENIFER WARREN and ERIC BAILEY Times Staff Writers=20 ?????A lot of people were caught off guard by the blackouts that swept over= =20 California this week. Debra Bowen wasn't one of them. ?????As chairwoman of the state Senate Energy Committee she is=20 intimately--and painfully--familiar with the state's energy supply. And she= =20 is willing to share a secret: It's a fragile system capable of collapse at= =20 any time. ?????That knowledge keeps Bowen awake at night particularly with the=20 approach of summer when power demand surges as Californians get reacquaint= ed=20 with their air conditioners. ?????I sound a bit less like Chicken Little today don't I? Bowen said=20 Tuesday as chunks of the state once again were forcibly darkened. I know = a=20 lot of people don't feel we have a problem. But we have a very very big=20 problem. ?????With the recent slowdown in Stage 3 emergencies a sense of calm had= =20 settled over the energy debate and even some legislators were speaking wit= h=20 guarded optimism about the hot months ahead. ?????On Tuesday however a creeping sense of doom was almost palpable amon= g=20 energy watchers and previous supply forecasts--which predict that the stat= e=20 may yet escape summer blackouts--were being given a second look. ?????The outages of the last two days are something that Californians are= =20 going to have to get used to for July and August said Michael Zenker=20 California director of Cambridge Energy Research Associates. The=20 Massachusetts consulting firm is predicting about 20 hours of blackouts thi= s=20 summer. ?????At the California Independent System Operator which manages 75% of th= e=20 statewide power grid officials said the energy cushion the state had in=20 recent weeks was in some ways a phantom caused by heavy imports of power. ?????Cal-ISO spokesman Patrick Dorinson said people may have been deluded= =20 into a false state of comfort: Maybe there is a tendency to think things= =20 have improved he said. In fact they haven't. ?????More than anything this week's events illustrate the delicate balance= =20 of factors that keep California illuminated from the multitude of supply= =20 sources to the weather. ?????Temperatures were higher than usual. Alternative-energy suppliers--who= =20 haven't been paid in months by the cash-strapped utilities--cut their outpu= t.=20 Suppliers in the Northwest--which faces a drought--slashed exports. Equipme= nt=20 breakdowns and maintenance at power plants--much of it unanticipated--took= =20 13000 megawatts offline. A utility-run program that gives businesses=20 discounts in exchange for cutting power during emergencies is all but dead. ?????The fragility of the system is such that a small perturbation can tur= n=20 everything upside down very easily said Gary Ackerman executive director= =20 of the Western Power Trading Forum a group of electricity generators and= =20 traders. ?????One factor receiving particular attention is the dip in supply caused = by=20 unscheduled maintenance. To help officials predict available supply=20 generators provide an annual maintenance plan that is updated regularly. ?????In addition however facilities sometimes shut down for unexpected=20 reasons: leaking tubes burnt-out transformers cracked turbines and faulty= =20 feed pumps. At one point Tuesday about 8200 megawatts were unavailable=20 because of unscheduled shutdowns. That's enough to supply about 6 million= =20 households and up from 5700 megawatts a week ago. ?????The huge 1400-megawatt Mohave power plant near Laughlin Nev. which= =20 supplies Southern California Edison and the Los Angeles Department of Water= =20 and Power was felled Monday by a transformer problem. That was enough to= =20 push the state into blackouts. ?????A growing number of skeptics however question whether those reasons= =20 are always valid accusing generators of withholding power to shrink supply= =20 and drive up prices. ?????There's no way to verify it so you've got to take their word for it= =20 said Frank Wolak a Stanford University economist who studies California's= =20 electricity market. And given that it's very profitable for these things t= o=20 occur you start to wonder if they're creating an artificial scarcity. ?????Tom Williams of Duke Energy said the Houston-based company is working= =20 hard to keep its California power plants which are capable of producing=20 3351 megawatts of electricity in operation after months of near-continuou= s=20 operation. ?????It's like riding a moped across the country he said. They're just= =20 not meant to run this hard. ?????Last week the state Senate formed a committee to investigate charges = of=20 market manipulation by power suppliers. The chairman state Sen. Joe Dunn= =20 (D-Santa Ana) says the issue of unscheduled plant shutdowns is on his agen= da. ?????The problem is: How does one prove that a particular outage was part = of=20 a deliberate strategy to deprive the state of kilowatts rather than a resu= lt=20 of normal business operations? Dunn said. ---=20 ?????Times staff writer Nancy Rivera Brooks contributed to this story. --- --- Elevator Anxiety Is Riding High=20 Emergencies: Workers in skyscrapers worry about blackouts trapping them in= =20 their buildings. Some take the risk in stride others make plans to take th= e=20 stairs.=20 By JOHN M. GLIONNA and JOE MOZINGO Times Staff Writers=20 ?????SAN FRANCISCO--In Susan Clifton's highly placed opinion sunny Tuesday= =20 would have been a picture-perfect day to work atop one of the tallest=20 buildings in San Francisco a scenic city littered with soaring skyscrapers= . ?????But Clifton--like many other high-rise office dwellers in blackout-pro= ne=20 parts of California--couldn't help but feel some high anxiety at the prospe= ct=20 of being stranded by electrical outages that were sweeping across the state= =20 for a second day. ?????I think about it all the time said Clifton a 21-year-old=20 receptionist at Deutsche Bank's offices on the 48th floor of a tower in the= =20 city's financial district who recently moved from rural Virginia. The way = I=20 see it Californians take a lot of things on faith working atop tall=20 buildings with all these earthquakes and power outages. ?????For Long Beach office worker Dave Suhada the anxiety has taken the fo= rm=20 of elevator phobia: a fear of getting stuck on an 80-degree day crammed in = a=20 pod of sweating heavy-breathing humans with no way out. ?????I'm just eyeing the buttons to see which one I could push as fast as = I=20 can if the power goes out he said.=20 ?????For 20-year-old Lisa Riley it means entering the elevator each day in= =20 her Long Beach office building with a prayer. I just could not get stuck f= or=20 an hour and a half she said nodding nervously. Often she now opts for th= e=20 stairs. ?????In San Francisco emergency services officials say that most of the=20 city's office buildings are equipped with backup generators to run elevator= s=20 and security equipment in the event of a blackout. ?????Fire Department spokesman Pete House said the city has 19 trucks with= =20 experts trained to extricate people trapped in elevators. Firefighters=20 handling blackout-related emergencies rescued a person trapped in a downtow= n=20 building Tuesday and handled five elevator mishaps Monday. ?????Christopher Stafford didn't get caught inside an elevator Monday but= =20 suffered the next-worst thing: being stranded in his 15th-floor apartment= =20 after the power failed when he went home for lunch. ?????So the 41-year-old real estate worker trooped down the stairs to the= =20 lobby and even made some new friends along the way helping a few elderly= =20 women who were struggling down the stairs. ?????It was a pain he acknowledged. But I have to tell you: I really li= ke=20 my panoramic view so it's worth the hassle. ?????Nowadays Sherrie Tellier makes sure her cellular phone is in hand whe= n=20 she gets in the elevator. She got trapped once before and the emergency=20 phone didn't work. It's amazing she said how small an elevator seems when= =20 you can't get out. It's like a broom closet.Now there's a sigh of relief= =20 every time the door opens. ?????Some high-rise office workers said Tuesday that they preferred not to= =20 think about the perils of going without power and being vulnerable and=20 isolated so high up. ?????But on the 42nd floor of San Francisco's Transamerica Tower Sasha=20 Monpere wasn't fazed by the chance that during a blackout her building's= =20 backup generators wouldn't kick in. ?????Hey I'm young and I'm healthy. I can always walk down the stairs= =20 said the 29-year-old receptionist. I've done the Statue of Liberty. It can= 't=20 be any worse than that. And walking down 42 flights is a lot easier than=20 walking up all those stairs. ?????Likewise with Phil Ip who works on the 52nd--and top--floor of San=20 Francisco's tallest skyscraper. The 25-year restaurant veteran says he has= =20 the utmost faith in modern technology. ?????We're safe even up here said Ip assistant general manager of the= =20 Carnelian Room a restaurant atop the Bank of America building. You should= =20 see the engineer's room in this building. It's like a big steamship. They'r= e=20 equipped for anything that could happen. ?????One floor below Cheryl Martin hears every day about people's fear of= =20 heights. In the year since she began answering phones in a law office she= =20 has often escorted clients afraid of express elevators that shudder and ris= e=20 so fast that passengers' ears pop from the altitude gain. ?????Everybody and I mean everybody asks 'So what happens during a pow= er=20 outage?' she said. ?????Rory Thompson said he believes in karma and is sure that if the rollin= g=20 blackouts come calling his office will be spared. In July 1993 Thompson's= =20 building was the site of an incident known as the 101 California St.=20 massacre in which gunman Gian Luigi Ferri killed eight people and wounded= =20 six before killing himself. ?????This building has already had its bad day he said. They say that t= he=20 day after a crash is the safest day to ride an airline. So I'll take my=20 chances with the rolling blackouts. --- State Says It's Accelerating Plan to Buy Power Utilities' Grid=20 Government: Talks with Edison are reported near completion but agreement= =20 with heavily indebted PG&E has a way to go.=20 By RONE TEMPEST and DAN MORAIN Times Staff Writers=20 ?????SACRAMENTO--As blackouts hit California for a second day Tuesday a ke= y=20 consultant to Gov. Gray Davis said negotiations to buy the power grid owned= =20 by the state's largest utilities are proceeding at an accelerated pace. ?????Wall Street consultant Joseph Fichera said talks with Southern=20 California Edison could be wrapped up within days although those with PG&E= =20 are much less advanced.=20 ?????The administration and PG&E have not reached even an agreement in=20 principle he said. PG&E which has more debt than Edison says its=20 transmission lines are more extensive than those of its Southern California= =20 counterpart. ?????The state wants to buy the utilities' transmission lines and other=20 assets for about $7 billion to provide cash to the utilities help stabiliz= e=20 the electricity supply and ease the power crunch that has plagued Californi= a=20 for months. To research the grid purchase Fichera said the state has had = to=20 pore over 80000 documents just to assess the utilities' liabilities. ?????We are working at a good pace said Fichera chief executive of the= =20 New York firm Saber Partners. . . . If we get to a deal-breaker it might= =20 be longer. ?????By making Fichera who is also a consultant to the Texas Public=20 Utilities Commission available to reporters Tuesday the Davis=20 administration was clearly trying to reassure the public that progress is= =20 being made on the governor's plan to pull the state out of the crisis. ?????Since mid-January when the big utilities' credit failed and suppliers= =20 stopped selling to them the state has spent nearly $3 billion buying=20 electricity from a handful of large suppliers in Texas Oklahoma Georgia a= nd=20 North Carolina. Not a cent has gone to the hundreds of alternative energy= =20 suppliers in California who provide about a quarter of the state's=20 electricity. ?????The Monday and Tuesday blackouts occurred partly because many of the= =20 cash-strapped alternative suppliers including solar biomass and wind powe= r=20 units cut their normal supply to the system in half. They say Edison and= =20 PG&E have not paid them since November the utilities say they are out of= =20 cash. ?????Assemblyman Fred Keeley (D-Boulder Creek) said the plight of the=20 alternative suppliers has dragged on because of the complexity of dealing= =20 with almost 700 individual contractors. ?????Another delaying factor said Keeley who with state Sen. Jim Battin= =20 (R-La Quinta) worked for almost three months to come up with a legislative= =20 plan to lower the small producers' prices was the huge enmity . . .=20 manifested between the utilities and the qualifying facilities. These peopl= e=20 just don't like each other. ?????This week's blackouts provided two painful lessons for the Davis=20 administration: ?????* When it comes to electricity size doesn't matter--every kilowatt=20 counts. During peak use a small wind power facility in Riverside County ca= n=20 make the difference between full power and blackouts. ?????* There is no such thing as a partial solution. Unless the whole energ= y=20 equation is balanced the parts don't work. ?????For the Davis plan to work several key elements need to come together= =20 or utility customers will almost certainly face rate increases above the 19= %=20 already set in motion: ?????* The cost of power purchased by the state must be reduced through=20 long-term contracts with the big out-of-state producers. ?????These contracts the details of which the Davis administration has kep= t=20 confidential are still being negotiated by Davis consultant Vikram Budhraj= a=20 of the Pasadena firm Electric Power Group. The administration says it has= =20 concluded 40 contracts with generators about half of which have been signe= d. ?????According to the most recent statistics released by the Department of= =20 Water Resources which buys power for the state current prices are still= =20 well above the rate state Treasurer Phil Angelides says is necessary for a= =20 planned $10-billion bond offering to succeed. ?????The bonds set for sale in May will be used to reimburse the state fo= r=20 the money it will have spent by that time to buy electricity. The state is= =20 currently spending at a rate of $58 million a day to buy power. If prices= =20 stay high the $10 billion in bonds will not cover the state's power=20 purchases by the end of the summer. ?????Angelides says he cannot proceed with bridge financing for the bonds= =20 until the Public Utilities Commission devises a formula to guarantee that a= =20 portion of utility bills will be dedicated to bond repayment. Angelides has= =20 estimated that under the January law that put the state in the power buyin= g=20 business the state must be reimbursed $2.5 billion annually and that $1.3= =20 billion is needed to service the debt. ?????PUC Administrative Law Judge Joseph R. DeUlloa is expected to announce= =20 his ruling on the reimbursement rate later this week leading to a PUC vote= =20 on the matter as early as next week. ?????* The rates charged for electricity by the alternative producers know= n=20 as qualifying facilities must be cut at least in half down from an averag= e=20 of more than 17 cents per kilowatt-hour. In his news conference Tuesday=20 Davis said he will ask the PUC to set QF rates at 6.9 cents for 10-year=20 contracts and 7.5 cents for five-year contracts. ?????Meanwhile PUC Chairman Loretta Lynch a Davis appointee said Tuesday= =20 that the commission will vote next week on a proposed order requiring=20 Southern California Edison and Pacific Gas & Electric to pay the QFs for=20 electricity in the future. Lynch said a recent PUC assessment showed that t= he=20 utilities have enough cash on hand for that. ?????We are trying to make sure the folks providing the power get paid= =20 Lynch said. The qualified facilities have demonstrated that they haven't= =20 been paid and that it is impairing their ability to provide power. ?????The utilities contend that if they pay the small providers what they o= we=20 them there will not be enough money left to pay other creditors. ?????There is not enough money in the current rate structure to pay the=20 [alternative producers] pay the [Department of Water Resources] and pay th= e=20 utilities for their generation said John Nelson a spokesman for PG&E. ?????* The utilities must sell to the state the power they produce=20 themselves mainly from hydro and nuclear sources at a rate only slightly= =20 above the cost of producing it. This is tied to the ongoing negotiations=20 between the Davis administration and the utilities to restore the=20 near-bankrupt utilities to solvency. ---=20 ?????Times staff writers Julie Tamaki Miguel Bustillo and Tim Reiterman=20 contributed to this report. --- L.A. Long Beach File Suits Over Gas Companies' Prices=20 Energy: Separate actions allege a conspiracy and gouging. Suppliers blame= =20 rising demand and a fluctuating market.=20 By TINA DAUNT and DAN WEIKEL Times Staff Writers=20 ?????Seeking damages that could reach into the billions of dollars the= =20 cities of Los Angeles and Long Beach on Tuesday filed separate lawsuits=20 alleging that a coalition of gas companies illegally conspired to eliminate= =20 competition drive up natural gas prices and discourage the construction of= =20 electricity generating plants in California. ?????Officials from the two cities alleged that Southern California Gas Co.= =20 San Diego Gas & Electric and El Paso Natural Gas Co. violated the state's= =20 antitrust law and engaged in unfair and fraudulent business practices that= =20 caused gas prices to skyrocket. ?????The cities are the first California municipalities to take action=20 against the gas companies. A number of similar lawsuits filed by antitrust= =20 attorneys state regulators and private citizens are pending elsewhere. ?????The energy companies deny any impropriety. They contend that Californi= a=20 is the victim of its own soaring electricity demand and overreliance on=20 fluctuating spot markets for natural gas. ?????The conspiracy theories that have been promoted have no basis in=20 reality said Denise King spokeswoman for Southern California Gas' parent= =20 company Sempra Energy which also was named in the suits. Southern=20 California Gas continues to look out for the best interest of its customers= . ?????The lawsuits filed in Los Angeles County Superior Court accuse the=20 companies of conspiring to manipulate the price of natural gas by agreeing = to=20 kill pipeline projects that would have brought ample supplies of cheaper=20 natural gas to Southern California. ?????They allege that executives for the energy companies made the pact=20 during a meeting in a Phoenix hotel room five years ago to discuss=20 opportunities arising from the state's newly deregulated electricity mark= et. ?????The fulfillment of the illicit plan has had devastating effects on=20 Southern California gas consumers according to Los Angeles' suit. Gas=20 prices in the Southern California market have skyrocketed and the Southern= =20 California gas consumers are paying the highest prices in the nation. ?????In recent months natural gas prices have tripled across the nation fo= r=20 a number of reasons including a shortage of supplies to meet demands for= =20 home heating. Prices have increased far more in California where natural g= as=20 is a central factor in the state's energy crisis. The state relies on the= =20 clean-burning fuel to generate half its electrical power. ?????This not only led to price-gouging of all natural gas consumers from= =20 homeowners to government to industry but it contributed to the current=20 electrical power crisis in California said City Atty. James K. Hahn a=20 mayoral candidate who urged the City Council to pursue the case. ?????Chris Garner Long Beach's utility director said that since November= =20 the average residential bill for gas in Long Beach has more than doubled t= o=20 $175 a month. Some customers he said have seen rate increases of 500%. ?????The people of Long Beach are being gouged by energy conglomerates who= =20 are artificially manipulating the supply of natural gas and reaping excess= =20 profits at the expense of the public said City Attorney Robert Shannon. ?????Holding a special meeting the Los Angeles City Council voted 12 to 0= =20 Tuesday to file the suit. ?????If the allegations are true they are extremely serious said=20 Councilman Mike Feuer who is a candidate to succeed Hahn as city attorney.= =20 And there appears to be some important evidence that substantiates the=20 allegations in the complaint which means that this lawsuit is I think mo= re=20 than a viable lawsuit. ?????Councilman Mark Ridley-Thomas added: We cannot tolerate this and we= =20 must use the full weight of the law to try to correct it. ?????A growing number of lawsuits around the state are targeting California= 's=20 natural gas suppliers. El Paso Corp. which owns the main pipeline=20 transporting out-of-state gas to Southern California has been targeted=20 repeatedly by utility companies state regulators and antitrust attorneys.= =20 ?????Some of the first antitrust lawsuits were filed against Sempra Energy = in=20 December. They were brought by Continental Forge Co. a Compton-based=20 aluminum forging business and Andrew and Andrea Berg who own a business i= n=20 San Diego. ?????The cities' lawsuits request that the defendant companies be barred fr= om=20 such conduct in the future and they seek civil penalties and damages. ?????Shannon estimates that Long Beach could collect more than $100 million= =20 in damages including triple penalties for antitrust violations. ?????We are filing this for our citizens Shannon said. They include the= =20 poor the elderly people living on fixed incomes and small business owners= . ?????The Los Angeles suit was filed on behalf of all Californians. Official= s=20 place damage estimates in the billions.=20 ?????Hahn however warned council members that it could take the city a ye= ar=20 or more to resolve the suit. ?????Lawsuits take time Hahn said. We are hopeful we can enter into=20 meaningful discovery to disclose what's been going on. --- Davis OKs Subsidy of Pollution Fees=20 Smog: As part of secret deal to get long-term energy contracts state would= =20 pay for some of the credits that allow excess power plant emissions. Critic= s=20 renew call for full disclosure.=20 By DAN MORAIN Times Staff Writer=20 ?????SACRAMENTO--As part of his closed-door negotiations to buy electricity= =20 Gov. Gray Davis has agreed to relieve some generators from having to pay=20 potentially millions of dollars in fees for emitting pollutants into the ai= r=20 Davis said Tuesday. ?????Davis announced two weeks ago that his negotiators had reached deals= =20 with 20 generators to supply $43 billion worth of power during the next 10= =20 years. ?????However the Democratic governor has refused to release any of the=20 contracts or detail various terms contending that release of such=20 information would hamper the state's ability to negotiate deals with other= =20 generators and therefore ultimately would raise prices Californians pay for= =20 electricity. ?????Sources familiar with the negotiations speaking on condition of=20 anonymity said the agreement reached with Dynegy Inc. a power company bas= ed=20 in Houston is one that includes language requiring that the state pay the= =20 cost of credits that allow emissions. Dynegy spokesman Steve Stengel declin= ed=20 to discuss the company's deal with the state. ?????We couldn't get them to sign contracts it was a sticking point Dav= is=20 said of the decision to pay the fees of some generators. We had to lock do= wn=20 some power so we were not totally dependent on the spot market. ?????The fees in question are part of an emission trading system known as= =20 RECLAIM. Under the system companies are allotted a certain amount of=20 allowable pollution. If their operations pollute more companies are requir= ed=20 to purchase credits on an open market. Currently the credits cost about $45= =20 per pound of pollution--an amount that can lead to a bill of well over $10= =20 million a year for a power plant. ?????The South Coast Air Quality Management District which regulates=20 pollution in the Los Angeles Basin is considering steps to significantly= =20 lower the cost of the system--a step that could considerably cut the state'= s=20 potential cost Davis said. ?????Senate Energy Committee Chairwoman Debra Bowen (D-Marina del Rey)=20 defended the decision to cover the power company's costs. ?????It is a question of whether it brings down the price of power she= =20 said. If it brings down the price of power I don't have a problem with it= . ?????Nevertheless word that the contracts could bind the state to pay=20 pollution fees caused some critics of Davis' policy to renew calls for Davi= s=20 to reconsider the secrecy surrounding the power negotiations. The payment= =20 provision underscores the fact that the contracts involve more than merely= =20 the prices the state will pay for its megawatts the critics note. ?????The Legislature should have known about it said Senate President Pr= o=20 Tem John Burton (D-San Francisco). It is going to cost taxpayers money. It= =20 makes you wonder. . . . This was a policy issue that was never discussed wi= th=20 the Legislature. ?????V. John White a lobbyist for the Sierra Club who also represents=20 alternative energy producers called the contract proposal a horrible=20 precedent. ?????Until we know exactly what the state has agreed to and how much of a= =20 subsidy this represents we can't determine how serious the breach of=20 principle this is White said. ?????Another critic of the secrecy of the negotiations Terry Francke=20 general counsel for the California First Amendment Coalition said the=20 provision in question raises the possibility that there are other=20 [concessions] that have not yet come to light. ?????In the summer when demand for power is highest some generators=20 probably will exceed pollution limits set by regional air quality managemen= t=20 districts. ?????To avert blackouts state officials might ask the companies to keep=20 plants running. In such cases some sources familiar with aspects of the=20 contracts said the contract language could be interpreted to suggest that= =20 the state would cover any fines--although Davis said Tuesday the state will= =20 not cover the cost of fines. ?????A recent Dynegy filing with the Securities and Exchange Commission=20 underscores the rising cost of pollution-related measures. The company whi= ch=20 is partners with NRG Energy in three California plants in El Segundo Long= =20 Beach and Carlsbad in San Diego County said its aggregate expenditures fo= r=20 compliance with laws related to the regulation of discharge of materials in= to=20 the environment rose to $14.3 million in 2000 from $3.6 million in 1999. ?????A South Coast Air Quality Management spokesman said Dynegy's facilitie= s=20 appear to be fairly clean--although Sierra Club lobbyist White said Dynegy= =20 has been seeking a permit at one of its plants to burn fuel oil which is= =20 dirtier than natural gas. ?????Davis said he intends to make this information public but he added= =20 that we do not want to put the public's interest in jeopardy by asking the= m=20 to pay higher prices. ?????Nobody likes the notion that [the administration is] not being fully= =20 forthcoming Davis said. But I also have a corollary responsibility that = I=20 don't stick these generators with a higher rate. --- As Losses Mount Companies Work Around Outages=20 By MARLA DICKERSONJERRY HIRSCH and NANCY CLEELAND Times Staff Writers=20 ?????As blackouts moved from theory to reality many Southern California=20 businesses spent Day 2 assessing their losses and digging in for what they= =20 expect to be a long hot summer. ?????An hour without electricity may be an inconvenience for most residents= .=20 But for manufacturers and many other businesses even a brief loss of power= =20 can generate tens of thousands in losses. ?????Whether shaping metal or making salsa businesses of all kinds=20 complained Tuesday about the lack of warning of impending outages even as= =20 they sought sometimes creative ways to work around the loss of power. ?????Rattled by news reports of Monday's rolling blackouts Industry-based = El=20 Burrito Mexican Food Products started its Tuesday shift at 2 a.m. Workers h= ad=20 just finished cooking and packaging the last batches of salsa and masa when= =20 the lights went out at 10:20 a.m. ?????We dodged a bullet said El Burrito founder Mark Roth. Losing a day= 's=20 production of salsa would have cost me $15000 to $20000. ?????But other companies weren't so fortunate. ?????Long Beach-based Delco Machine & Gear was still totaling up its losses= =20 from Monday's blackout which amounted to at least $30000 in lost wages an= d=20 production said Nick Campanelli vice president of manufacturing. The=20 company a division of Florida-based B/E Aerospace Inc. makes parts for th= e=20 aerospace industry. The sudden loss of power caused its sophisticated metal= =20 cutting and grinding machines to crash ruining precision parts in producti= on. ?????But the losses don't end there. He said employees will need to spend= =20 hours resetting the equipment. Campanelli is particularly irked that the=20 company received no warning. ?????Five minutes' notice he fumed. That's all I needed. ?????Although businesses such as Campanelli's typically receive no warning= =20 that they are about to lose power insurance companies count the rolling=20 blackouts as planned events a determination that in most cases=20 disqualifies a business from making a claim. ?????I know it must be frustrating for businesses who have the power go of= f=20 suddenly but these outages are planned by the grid operators said Pete= =20 Moraga of the Insurance Information Network of California. That means it= =20 would not be a covered peril in a traditional business insurance policy. ?????Typically business insurance covers loss of profit and damage from=20 unforeseen events such as fires or windstorms. The component of the policy= =20 that covers interruptions in business kicks in after a given amount of time= =20 elapses usually 24 to 48 hours. ?????Business polices can be written to include unusual coverages Moraga= =20 said but he has never heard of a policy that covers losses from a rolling= =20 blackout. ?????Some companies are taking measures not to get caught in a situation=20 where a blackout can hurt them. ?????The region's largest steel supplier shut down for two hours Monday aft= er=20 Southern California Edison called to warn of tight supplies. ?????We just can't take a chance said Lourenco Goncalvez president of= =20 California Steel Industries Inc. in San Bernardino County. We have a lot o= f=20 safety issues. People could get hurt. ?????Goncalvez said the plant has multiple 20-ton and 25-ton overhead crane= s=20 that operate with electromagnetic devices which would fail if they lost=20 power suddenly. Falling materials could injure workers below he said. We= =20 have been asking to be exempt from rolling blackouts he said. ?????Goncalvez said he couldn't put a price on the lost production at the= =20 24-hour plant and said he worried more about the long term. ?????Two hours is nothing he said. My concern is this thing will start = to=20 happen almost every day. If it will be like this all summer you can be sur= e=20 it will have dramatic consequences for the entire economy. . . . We're goin= g=20 to have a shortage of steel products in California. Maybe the government do= es=20 not consider this is serious. We'll see. ?????At Sport Chalet a La Canada Flintridge-based chain of 22 sporting goo= ds=20 stores in Southern California an administrative assistant monitors the sta= te=20 power situation hoping to warn any stores that are in danger of losing=20 power said Craig Levra the company's chief executive. ?????Levra said the assistant was assigned the monitoring duties last year= =20 when rolling blackouts were still only a threat. ?????The chain put in place an emergency plan--similar to what it would do = in=20 a major earthquake. Backup power will kick on emergency lights and allow th= e=20 cash registers to complete transactions. Employees are instructed to escort= =20 customers from the building safely Levra said. ?????Other businesses however have plans to remain open during the 60- to= =20 90-minute blackouts. ?????When power went out at two Cheesecake Factory restaurants in Orange=20 County on Monday afternoon the eateries switched to serving cold dishes su= ch=20 as sandwiches and salads said Howard Gordon senior vice president of the= =20 Calabasas Hills-based chain. ?????The restaurants had enough backup power to operate emergency lights an= d=20 cash registers. Large windows provided the rest of the light Gordon said. ?????So far the 99 Cents Only Stores chain has missed the shotgun pattern = of=20 the blackouts. But with nearly 100 stores in California company President= =20 Eric Schiffer believes it is only a matter of time before the lights go out= =20 at one of its outlets. ?????Though the stores have some backup power the chain has systems in pla= ce=20 to operate without it. Its cash registers can open mechanically Schiffer= =20 said. Because an item sells for a multiple of 99 cents sales clerks are=20 equipped with blackout sheets that calculate a customer's tab including= =20 tax. All the clerk has to do is count the number of items in the shopping= =20 cart and check the tables on the sheet. ?????This week's power crunch has been exacerbated by the fact that so-call= ed=20 interruptible electricity customers no longer face large penalties if they= =20 decline to shut down their operations when supplies get critically low. ?????The Public Utilities Commission suspended the fines in January to ease= =20 the burden on about 1400 businesses that found themselves bearing the brun= t=20 of the crisis to prevent rolling blackouts in the rest of the state. ?????According to Edison about 10% of its interruptible customers are=20 complying with requests to curtail electricity usage during crunch time. Bu= t=20 Scott Keller isn't among them. ?????The owner of Chino-based STC Plastics Inc. said he was forced to shut= =20 down more than 20 times since September costing him as much as $10000 in= =20 lost production per day. He ignored requests Monday and Tuesday to curtail= =20 usage and said he doesn't feel a twinge of remorse. ?????If I'm shut down I can't pay my workers he said. I'd feel more=20 guilty about that. ?????But this is one area where insurance eventually might help. Moraga sai= d=20 some carriers are developing plans that would cover penalties for continuin= g=20 to use power after they have been asked by a utility to cut back. --- Wednesday March 21 2001=20 A Blackout on Answers=20 Davis needs to do a better job in communicating to Californians about the= =20 electricity crisis. In the absence of that cynicism grows.=20 ?????The oil shocks of the 1970s from the Arab oil embargo to the Iran-Ira= q=20 war were dead simple compared with the California power shortage. Then th= e=20 problem was a lack of imported oil and the chief symptom was long lines and= =20 high prices at gas stations. Politicians urged conservation: Turn down the= =20 heat drive fewer miles buy more efficient cars. People understood the cau= se=20 of the crisis and the benefit of their actions. Today it's a different stor= y=20 and a damnably complicated one that gives consumers no place--or actually= =20 too many places--to focus their anger.=20 ?????The last two days of rolling blackouts including previously exempt=20 Southern California have not reduced power demand or at least not enough.= =20 Consumers are suspicious: Are out-of-state power companies holding back=20 production? Did utilities really not have enough money to pay alternative= =20 energy producers--the little guys who combined could produce enough power= =20 to prevent the blackouts? And what happened to long-term power contracts t= he=20 state-bargained deal that was supposed to stabilize the crisis?=20 ?????The frustrations are vast and there are too many gaps in the story. I= f=20 it's just a pack of thieves creating an artificial shortage as even some= =20 consumer organizations charge why should anyone sacrifice to conserve? Tha= t=20 in a nutshell is the problem that Gov. Gray Davis the state Legislature a= nd=20 the Public Utilities Commission face.=20 ?????Davis for one has to level with the public and stop acting as if he= =20 can fix the crisis. He has proved he can't at least not without reductions= =20 in usage and most likely rate increases. If Davis who is notoriously=20 averse to delivering bad news had leveled with the public about the=20 fragility of the current system the last two days of blackouts statewide= =20 (except in places with full municipal power like Los Angeles) might not ha= ve=20 come as such a shock.=20 ?????The Legislature tried and failed earlier to solve the alternative ener= gy=20 producers' nonpayment problems with a very complicated bill. Tuesday night= =20 Davis and legislators announced a simpler plan that would set lower more= =20 flexible rates for alternative power but also force the utilities to pay fo= r=20 future purchases.=20 ?????Which leads to the utilities themselves. With the state shelling out= =20 billions for power from the major generators how could Southern California= =20 Edison and Pacific Gas & Electric still not have the cash flow to pay the= =20 alternative producers? That motley collection of biomass solar wind and= =20 cogeneration companies has been shutting down for nonpayment--some of them= =20 because natural gas suppliers have cut them off. PG&E has made some payment= s=20 but SCE has paid zilch though a spokesman says it hopes to strike a deal t= o=20 start paying this week.=20 ?????Without enough honest information conspiracy scenarios fill the holes= .=20 Bad news is better than no news something Davis seems not to quite realize= .=20 By today or Thursday the weather will cool and some plants taken down for= =20 repair will come back online. The blackouts may cease but the crisis will b= e=20 just as deep as it was Monday and Tuesday. It is up to Davis to do a better= =20 job of persuasively explaining why. Otherwise the cynicism grows.=20 --- Wednesday March 21 2001=20 Rolling Blackouts: Blatant Extortion=20 ?????* Re Rolling Blackouts Hit Southland for First Time as Production=20 Falls March 20:=20 ?????So here we are 22 years after the notorious gas shortage having=20 another gun held to our head by an opportunistic energy consortium. Back in= =20 1979 we all had to wait in long lines just to pay more for gasoline. Now = we=20 have to face food in our freezers thawing and simmering in our homes during= =20 hot summer days just to earn the honor of paying more for electricity.=20 ?????Of course as soon as the rates are up and the environmental concerns= =20 are shoved aside watch how plentiful power will be. When is somebody in=20 government going to stand up for the consumer and stop this blatant form of= =20 extortion?=20 ?????JOHN JOHNSON=20 ?????Agoura Hills=20 * * * ?????So customers of PG&E and Edison are shielded from soaring wholesale= =20 prices? Some shield: turning off all our power without so much as a moment= 's=20 notice endangering lives and disrupting businesses just to keep our=20 electricity prices unreasonably low. Let's lift the rate caps to get the=20 lights back on. And if I need to be shielded from soaring prices I'll turn= =20 my own lights off.=20 ?????ANDREW LOWD=20 ?????Claremont=20 * * * ?????This state needs adequate reliable electricity to run a diverse=20 economy. Both political parties and business interests are at fault. This= =20 crisis demands top priority aimed at lasting solutions.=20 ?????The most immediate solution is fast-tracking of added generating=20 capacity. Freeway bridges were rebuilt in record time after the Northridge= =20 quake so we know it can be done. That is the type of effort that is needed= =20 immediately.=20 ?????Since Democrats hold the governorship and control both state legislati= ve=20 houses they are in the driver's seat. If the lights go out the Democrats = go=20 out. If this state government can't solve the problem we need a new=20 government that can.=20 ?????STEVE ANDERSON=20 ?????Huntington Beach=20 * * * ?????The alleged energy crisis in California is entirely contrived to relax= =20 environmental pollution standards and to raise energy rates. It's curious= =20 that the L.A. Department of Water and Power which was not deregulated is= =20 not currently experiencing an energy crisis. PG&E and Edison are both part = of=20 national and multinational corporations. Why should utility customers have = to=20 pay for their economic problems or gross mismanagement?=20 ?????Several power plants were taken off-line for routine maintenance=20 which may not have been so routine. Energy is a vital necessity if these= =20 companies can't provide it at a reasonable affordable rate then they shoul= d=20 be replaced by companies that can be taken over by the government or=20 de-deregulated. There is an abundance of solar energy in California of whi= ch=20 only a small fraction is being utilized. There is no shortage of energy in= =20 California only a shortage of intelligence will and honest politicians.= =20 ?????CHARLES B. EDELMAN=20 ?????Los Angeles=20 --- Utilities' Demand Blocks Bailout=20 NEGOTIATIONS HIT SNAG: PG&E Edison want end to price freeze if they sell= =20 transmission lines to state David Lazarus Chronicle Staff Writer Wednesday March 21 2001=20 2001 San Francisco Chronicle=20 URL:=20 /21/M N114450.DTL=20 California's near-bankrupt utilities are demanding that higher electric rat= es=20 be a part of any deal to sell the state their power lines The Chronicle ha= s=20 learned.=20 A rate increase -- perhaps of more than 50 percent according to earlier=20 industry estimates -- would certainly draw a firestorm of protest from=20 consumer groups and force Gov. Gray Davis to backtrack from earlier pledges= =20 that rates would remain unchanged.=20 Nevertheless sources close to negotiations on the deal said Pacific Gas an= d=20 Electric Co. and Southern California Edison are attempting to make higher= =20 rates a condition for agreeing to a bailout scheme in which they would sell= =20 the state their transmission systems and some land.=20 The sources said the talks hit a new snag this week when state officials=20 realized that fine print sought by the companies could require the Public= =20 Utilities Commission to pass along all of the utilities' costs to ratepayer= s.=20 The sources said this would end a rate freeze that shields consumers from= =20 runaway wholesale electricity prices.=20 The inclusion of potential rate increases in the talks reflects the growing= =20 complexity of a deal originally intended by Davis to stabilize the finances= =20 of PG&E and Edison so banks would resume loans to the cash-strapped=20 utilities.=20 The negotiations subsequently have expanded to involve a state purchase of= =20 the utilities' transmission networks and acquisition of utility-owned land= =20 including spectacular coastal property near PG&E's Diablo Canyon nuclear=20 power plant.=20 Now they also have embraced further deregulation of California's=20 dysfunctional electricity market.=20 Clearly one of the terms being discussed is the regulatory environment= =20 said Joseph Fichera head of Saber Partners a New York investment bank tha= t=20 is advising Davis in the talks.=20 The past situation has not worked well he added. The utilities want som= e=20 certainty about their future.=20 TENTATIVE DEAL WITH EDISON To date the governor has announced a tentative agreement with Edison for t= he=20 state to buy the utility's power lines for almost $3 billion. Discussions= =20 with PG&E for a similar accord have dragged on for weeks.=20 An Edison official asking that his name be withheld acknowledged yesterda= y=20 that an end to the rate freeze is an expected result of the power- line sal= e.=20 Once the details of the pact are complete dominoes will fall the offici= al=20 said. One of the dominoes is the rate freeze.=20 A PG&E spokesman declined to comment.=20 In fact both Edison and PG&E have been aggressively seeking an end to the= =20 rate freeze for months.=20 The two utilities have a lawsuit pending in federal court demanding that th= e=20 PUC immediately raise rates so the utilities can recover almost $13 billion= =20 in debt accrued as a result of the freeze.=20 They have been trying a lot of things to get the rate freeze ended in=20 various forms said Carl Wood who sits on the PUC. Adding it to the=20 present talks is consistent with past behavior.=20 Wall Street has taken note that the negotiations no longer appear to be=20 making progress.=20 Paul Patterson an energy industry analyst at Credit Suisse First Boston= =20 told clients on Monday that the discussions may have lost some momentum in= =20 recent days. He did not give a reason.=20 For his part the governor sounded unusually cautious about the course of t= he=20 talks when asked late last week if a breakthrough was imminent.=20 SECRET STICKING POINTS We are going to take the transmission systems and the land that's deeded= =20 and we will work out an agreement Davis said at an appearance in San Jose= .=20 But there are a number of sticking points in the talks with PG&E that I'm= =20 not going to reveal.=20 One of those sticking points apparently is an insistence that the sale of= =20 utility assets include a long-sought lifting of the rate freeze.=20 Sources said lawyers from both PG&E and Edison had inserted the related ter= ms=20 into draft accords affecting each utility and that the full impact of the= =20 additions was not realized by state officials until this week.=20 One source said the language was just convoluted enough to slip beneath the= =20 radar screen of state negotiators. But the upshot once the words had been= =20 parsed was that the PUC effectively would lose control over power rates.= =20 CREDITWORTHINESS ON THE TABLE In Edison's case the terms of the tentative deal include the governor aski= ng=20 the PUC to support the creditworthiness of the utility.=20 This would ensure that future investments in both utility distribution and= =20 utility generation plants are provided fair returns of and on capital=20 consistent with current authorized returns and capital structure provisions= =20 it says.=20 Sources said the provision could be interpreted as a guarantee from the sta= te=20 that Edison would be permitted to recoup all outstanding costs from=20 ratepayers.=20 There may be some assumptions about this language that the rate freeze end= s=20 if it is adopted the Edison official said adding that he saw no reason t= o=20 disagree with such assumptions.=20 But Fichera Davis' adviser in the talks insisted that nothing is set in= =20 stone and that the negotiations are proceeding without a hitch.=20 This is a very complex transaction he said. God and the devil are in th= e=20 details.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- --- Utilities' Demand Blocks Bailout=20 BLACKOUTS ROLL ON: Weather increased consumption blamed=20 David Lazarus Chronicle Staff Writer Wednesday March 21 2001=20 2001 San Francisco Chronicle=20 URL:=20 /21/M N156508.DTL=20 Hundreds of thousands of Californians went without electricity for a second= =20 day yesterday as unusually warm weather and a high number of idle power=20 plants prompted blackouts throughout the state.=20 State officials said electricity usage rose yesterday even though condition= s=20 were largely unchanged from a day before. They surmised that fewer=20 Californians were conserving power.=20 We need people to really focus on that implored Patrick Dorinson a=20 spokesman for the Independent System Operator manager of the state's power= =20 grid. The more people can do the better it will be.=20 Rolling blackouts were ordered by the ISO about 9:30 a.m. and were suspende= d=20 at 2 p.m. after several plants that had been down for repairs returned to= =20 service. Additional power also was obtained from a plant in Arizona.=20 Utilities estimated that about 560000 customers were affected yesterday= =20 compared with more than 1 million a day earlier.=20 This week's blackouts marked the first time that people in Los Angeles shar= ed=20 the pain with those in San Francisco. Blackouts in January were confined to= =20 the northern part of the state.=20 FEWER AFFECTED IN SOUTH However Southern California Edison's burden was considerably lighter=20 yesterday than that of Pacific Gas and Electric Co.=20 Karen Shepard-Grimes a spokeswoman for the Southern California utility sa= id=20 only about 50000 customers went without power compared with nearly 440 0= 00=20 for PG&E.=20 Affected areas in the south included Palm Springs Santa Monica Long Beach= =20 and Pomona.=20 We're not in the business of turning customers' lights off Shepard- Grim= es=20 said. We're in the business of keeping lights on.=20 In PG&E's case things were tougher because low rainfall means that less=20 power is currently available from dams throughout the Pacific Northwest.=20 Ron Low a spokesman for the utility said blackouts were experienced by PG= &E=20 customers from Eureka to Bakersfield.=20 Our goal was to carry out the ISO's order with minimal impact on customers= =20 he said.=20 For its part San Diego Gas & Electric said about 75000 customers were=20 darkened.=20 Yesterday's blackouts began with PG&E customers in Block 12 and halted midw= ay=20 through Block 14. Customers in each block -- defined by power circuits rath= er=20 than geography -- typically will lose power for about 90 minutes before the= =20 service interruption rolls elsewhere.=20 Some cutoffs can last more than two hours however because of technical=20 problems switching individual blocks on and off.=20 NEXT UP: BLOCK 14 If additional blackouts are ordered today they will commence with the=20 remaining portion of Block 14 customers. (PG&E customers can determine thei= r=20 block by looking at the bottom left-hand corner of their monthly bill.)=20 The ISO's Dorinson said it is hoped that cooler weather and increased=20 generation will help avert further cutoffs this week.=20 Units are coming back into service that have been out he said. That wil= l=20 help a great deal.=20 Roughly 15000 megawatts of generating capacity was offline yesterday=20 including half of the alternative-energy plants which are unable to afford= =20 natural gas to run their turbines.=20 Many of the plant owners say they have not been paid by PG&E and Edison sin= ce=20 November. They are asking federal regulators for permission to sell their= =20 electricity elsewhere.=20 At the same time one of two units at the Mohave Generating Station in Neva= da=20 damaged in a fire Monday returned to service yesterday easing the load on= =20 California's grid.=20 The plant partly owned by Edison is not expected to return to full output= =20 until tomorrow.=20 PROBING SHUTDOWNS Nearly a third of California's generating capacity is currently down for=20 scheduled or unexpected maintenance. State regulators are investigating=20 whether some plant owners might be deliberately shutting down to drive pric= es=20 higher or reduce operating costs.=20 Loretta Lynch president of the Public Utilities Commission on Monday call= ed=20 the number of idle plants highly suspicious.=20 Dorinson at the ISO said that about 12000 megawatts of mainstream capacity= =20 was offline yesterday compared with roughly 10000 megawatts last year at= =20 this time.=20 --=20 Tell Us What You Think=20 Can you save 20 percent on your energy usage? Gov. Gray Davis is offering= =20 rebates for Californians who save on power starting in June and if you've= =20 got a strategy for conserving The Chronicle wants to hear it. We'll be=20 writing about the hardest-working energy savers in a future story. To get= =20 involved Write to the Energy Desk San Francisco Chronicle 901 Mission St= .=20 San Francisco 94103 or e-mail --=20 THE ENERGY CRUNCH -- Blackouts: About 560000 Californians including 440000 in Northern=20 California lost electricity yesterday for 90 minutes at a time.=20 -- Areas affected: Blackouts hit parts of blocks 12 and 14 and all of block= =20 13 yesterday. In the event of further blackouts the remainer of block 14= =20 would be next followed by block 1.=20 -- Outlook: Officials say blackouts are less likely today as temperatures a= re=20 expected to cool and power plants that have been offline for maintenance=20 resume generating electricity.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- --- Manners Go Out the Window=20 Pedestrians in peril as drivers turn darkened S.F. streets into free-for-al= l=20 Steve Rubenstein Chronicle Staff Writer Wednesday March 21 2001=20 2001 San Francisco Chronicle=20 URL:=20 /21/M N173178.DTL=20 Nobody got plowed into yesterday at Fifth and Howard streets in San=20 Francisco. Many came close.=20 The power outage that darkened the traffic lights at the frenetic South of= =20 Market intersection for more than an hour also darkened the souls of untold= =20 numbers of drivers sending motoring manners into the toilet.=20 The law says motorists are supposed to treat an intersection with=20 nonfunctioning traffic lights as a four-way stop. That means everyone stops= =20 then takes turns -- one by one -- creeping through the intersection.=20 Tell that to the two people in motorized wheelchairs who were nearly creame= d=20 by two eastbound SUVs.=20 Or to the young Swedish couple who had traveled halfway around the globe= =20 only to scamper through the intersection barely ahead of an office supply= =20 truck.=20 Or to the New Jersey tourist who proclaimed that California drivers during= =20 power outages were proof positive that the Chaos Theory lives and breathes.= =20 Some motorists stopped and took turns but many didn't. Some sped into the= =20 intersection immediately behind the vehicle in front without themselves=20 stopping at the white line. Some sailed through with a rolling stop and a= =20 warning honk. Some blasted through without stopping or honking.=20 I'm scared to death said Brian Walters of Dorchester N.J. after making= =20 it across Howard Street. This is organized madness. I subscribe to the Cha= os=20 Theory and this is what it looks like.=20 Sydney Freedman a tourist from Sydney walked briskly across the darkened= =20 crossroads smiling grimly.=20 I'll chance it he said.=20 He looked back and saw a woman in a motorized wheelchair nearly get squishe= d=20 by a westbound Chevy.=20 You have to be authoritative in this town when you cross the street he= =20 said. Especially that lady.=20 Therese Anderson and Andreas Sandstrom from Sweden raced across as quickl= y=20 as their backpacks would allow.=20 In this country everyone is in such a hurry said Anderson.=20 Everybody drives like a madman added Sandstrom. They say 'I want to be= =20 home right now and I don't care what happens to anyone else.' =20 The couple paused to gaze in wonder at the intersection learning more abou= t=20 America in five minutes than a pile of guidebooks could tell them.=20 This intersection said Sandstrom reminds you not to take life for=20 granted.=20 A few minutes later Parking Control Officer Tom Butz arrived in his meter= =20 minder wagon and pulled his orange vest and whistle from the saddlebag. He= =20 strode brave and true into the center of the bullring planted himself=20 between the whizzing cars and began waving his arms as if conducting The= =20 Rite of Spring.=20 I'm all by myself he said. I know it's a little risky. I'd better keep = my=20 angels with me.=20 At that moment the angels were on duty in Menlo Park where a blacked-out= =20 intersection at El Camino Real and Santa Cruz Avenue backed up traffic so f= ar=20 that it stretched into neighboring Atherton.=20 It's a large intersection and traffic is slow anyway but now it is severe= ly=20 impacted said Police Sgt. Terri Molakides. We don't get any warning=20 either. When the power is out the power is out. It's not like we can make= =20 any plans.=20 In general motorists seemed more likely to obey the four-way-stop rule on= =20 the Peninsula and in the East Bay than in San Francisco.=20 In San Mateo County some police departments have stopped trying to make=20 advance plans to cover darkened intersections. San Mateo Police Sgt. Kevin= =20 Rafaelli said putting up signs and posting officers sometimes caused proble= ms=20 rather than solving them.=20 If people just follow the law (and) stop at the intersection they can=20 handle it better than we do if we're out there he said. People are sort = of=20 getting used to it and are dealing with it.=20 In Berkeley and Emeryville motorists stopped one at a time at temporary st= op=20 signs with no apparent problems. At University Avenue and Sacramento Stree= t=20 in Berkeley Officer Matt Meredith said motorists were behaving themselves.= =20 That wasn't the case a while back when a driver who didn't stop at an=20 intersection during a blackout was broadsided by someone who did Meredith= =20 said.=20 The thing to remember is to stop and look he said.=20 TRAFFIC TIPS To avoid a collisions during blackouts the California Highway Patrol offer= s=20 this advice to motorists:=20 -- Treat any intersection with inoperative traffic lights as a four-way sto= p.=20 Each vehicle must stop when arriving at the white limit line then proceed= =20 only when safe taking turns.=20 -- If two vehicles arrive at the intersection at the same time the motoris= t=20 on the left must yield to the motorist on the right.=20 -- Never insist on taking the right of way even if you are entitled to it.= =20 -- Follow the directions of a police officer or traffic control officer=20 whose directions take precedence over lights or signs.=20 Chronicle staff writers Henry K. Lee and Matthew B. Stannard contributed to= =20 this report. / E-mail Steve Rubenstein at 2001 San Francisco Chronicle ? Page?A - 8=20 --- --- Historic Blackouts in State=20 Bay Area learns to cope=20 Jonathan Curiel George Raine Justino Aguila and Matthew B. St Tuesday March 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/M N219412.DTL=20 Today's rolling blackouts caused concern throughout the Bay Area including= =20 Colma where the sudden lack of power apparently caused a fire.=20 A light fixture at the Home Depot store in Colma caught fire around 10:45 a= .=20 m. 15 minutes after Pacific Gas and Electric Co. ordered blackouts for the= =20 area. No one was hurt.=20 I was in the back of the store when the power outage started said Dave= =20 Cole a consultant from Pacifica who was shopping for bolts and screws. We= =20 lost maybe 90 percent of the lights then maybe 10 percent of the lights ca= me=20 up. Then I heard a guy saying 'Get a ladder get a ladder!'=20 One of the lights on the ceiling had caught on fire and a couple of peopl= e=20 were getting ladders and fire extinguishers.=20 Store managers whisked everyone out of the store and Colma firefighters=20 arrived to make sure the blaze was extinguished.=20 At 11 a.m. Cole was waiting to get back into the store which was still=20 closed.=20 I need my bolts he said.=20 Elsewhere the San Francisco Fire Department had to rescue people stuck in = an=20 elevator at 2001 Embarcadero North said fire department spokesman Pete=20 Howes.=20 Scores of residents and businesses near the Embarcadero including the Levi= =20 Strauss & Co. headquarters were affected by the blackout.=20 At Levi Strauss this morning Phil Marineau the president and chief=20 executive officer led his 1300 employees by example using only minimal= =20 lighting for a meeting in his office at 10 a.m.=20 Employees were sent e-mails minutes after PG&E's 9:30 a.m. notification tha= t=20 a blackout was possible. The e-mails said workers should frequently save wo= rk=20 on their computers and that they should remain in the building and stand b= y=20 for further instructions.=20 Emergency lighting in hallways and stairwells were operated by generators.= =20 All elevators descended to the ground floor but one remained operating=20 through a generator.=20 Worked nicely said Jeff Beckman a company spokesman.=20 Yesterday -- the first day that rolling blackouts returned -- Shannon=20 Cashman's home in Walnut Creek was a difficult place to be.=20 Cashman's 4-year-old daughter Madison suffers from a brain defect that=20 stops her from breathing during sleep. The girl depends on a ventilator tha= t=20 runs on electricity.=20 Recently hospitalized and with a weakened immune system Madison badly need= ed=20 a nap yesterday afternoon. But when the Cashmans' power went out about noon= =20 it meant reading and coloring instead of rest for the girl and a little mor= e=20 anxiety than normal for her mother.=20 If this was a major earthquake or something like that and we couldn't use= =20 the ventilator we'd take her to the hospital said the 33-year-old Cashma= n.=20 Otherwise we'll just wait for the power to come back on.=20 In a stroke of irony yesterday the lights went out and computer screens we= nt=20 dark at the San Francisco offices of the state Public Utilities Commission= =20 the agency some people blame for the energy crisis and others look to for t= he=20 solution.=20 At a Petco animal store in Redwood City nocturnal leopard geckos that=20 weren't familiar with the state's power woes thought it was night and awoke= =20 from their routine daytime slumber.=20 The geckos clung to the glass of their cages as manager Sally Daine and her= =20 employees misted lizards and watched frozen mealworms melt.=20 The worst thing is some of the reptiles need heat but it's so hot I don'= t=20 think it will matter she said.=20 At Auto Pride Car Wash a few blocks away Dan Giudici watched as the team o= f=20 employees he supervised washed cars the old-fashioned way -- with buckets a= nd=20 hoses. The company's big mechanical car wash went unused.=20 Customers didn't seem to mind the manual wash said Giudici who was chargi= ng=20 half-price. But he was running out of towels.=20 Even those who hoped they were immune to power problems were affected.=20 Palo Alto runs its own utility but the electricity began winking out about= =20 12:30 p.m.=20 The city depends on a distribution line of the state grid so it is=20 vulnerable to blackouts said Linda Clerkson public relations manager for= =20 Palo Alto Utilities. In addition the city relies on PG&E for some of its= =20 power she said.=20 Businesses were caught by surprise.=20 Well at least it happened in a better time than the morning said Nick= =20 Badiee owner of the Lytton Roasting Co. coffee house. My toaster went out= =20 and the coffee began getting cold so I lost three or four people who walke= d=20 out the door. I'm not angry yet but I would say I am concerned.=20 For one Milwaukee woman visiting San Francisco the blackout was an=20 unexpected lesson in the problems of electricity deregulation.=20 Cindy Wilburth a financial consultant who advises Wisconsin utilities cam= e=20 to the Bay Area for vacation but left yesterday with important research for= =20 her job.=20 This has been a huge learning lesson for Wisconsin Wilburth said as she= =20 waited for a bus outside the powerless Comfort Inn by the Bay in Cow Hollow= .=20 Wilburth said her state and others that once eyed deregulation are now=20 backing off.=20 It just makes me realize how we've gotten ourselves in a pinch in a free= =20 economy she said.=20 As she mused about the predicament in which the state has found itself her= =20 friend was just thankful to get out of here.=20 I love the cold compared to this said Cindy Stuckey of Milwaukee. At= =20 least I know I can stay in my home secure and warm.=20 Across the street at the Travelodge By the Bay Rolando Gutierrez had=20 already lost three guests just an hour into the blackout.=20 This is the richest state and this is a rich city -- plenty of people want= =20 to come here he said. We shouldn't be suffering these blackouts.=20 Chronicle staff writers Jaxon Van Derbeken Mark Martin Henry K. Lee=20 Michael McCabe Bernadette Tansey and Marshall Wilson contributed to this= =20 report.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- --- Bay Area residents learning to roll with blackouts=20 Posted at 9:58 p.m. PST Tuesday March 20 2001=20 JOHN=20 WOOLFOLK=20 AND STEVE=20 JOHNSON=20 Mercury News=20 As rolling blackouts swept the state for a second straight day Tuesday=20 Californians already seasoned by droughts and earthquakes were learning to= =20 live with yet another upheaval: periodic power outages.=20 Blackouts are still a novelty in Southern California -- hit for the second= =20 time Tuesday -- but they're almost routine for Bay Area residents who have= =20 seen four days of outages this year and now expect many more as temperature= s=20 rise. Toting flashlights avoiding certain roads and even shutting off thei= r=20 coveted hot tubs they're adjusting to life in California's new Dark Age.= =20 ? ? Karen T. Borchers--Mercury News When the lights went out at Grant Elementary School in San Jose on Tuesday= =20 morning teacher Renee Johnson took her second-grade students out to the la= wn=20 to read to them. Marjorie Meagher now looks at her clock before taking the elevator she need= s=20 to get around her two-story San Jose home fearing she'll get stuck during= =20 rolling blackouts.=20 ``They tend to happen on the hour or half-hour so I try not to use it=20 then'' said Meagher 74 who is disabled. ``I'm very careful. My own=20 personal fear is getting stranded in the elevator.''=20 From 750000 to about 1 million customers lost power for an hour or so in= =20 stages Tuesday as a rash of power plant outages and record temperatures in= =20 San Jose and elsewhere triggered a critical shortage.=20 As was the case Monday when 1.2 million to 1.8 million customers were=20 affected Tuesday's outages were split between the northern and southern=20 parts of the state. Blackouts began at 9:30 a.m. and lasted until 2 p.m. wh= en=20 authorities obtained extra power from other Western states. Outages were=20 considered less likely today.=20 But people are preparing anyway. Like low-flow toilets and earthquake kits= =20 flashlights and generators may be emerging as another fact of life in the= =20 Golden State.=20 In San Francisco's Inner Sunset district Han Yong Park had the satisfied= =20 smile of a well-prepared man having bought a portage generator for his Park= 's=20 Farmers Market five months ago.=20 Tuesday morning the generator churned loudly on the sidewalk positioned= =20 between the tomatoes and green beans. Inside clerks tallied purchases on= =20 electric cash registers.=20 Park motioned down the street where neon signs were dark and some=20 restaurants closed. ``No one else in the area has a generator'' he said.= =20 Energy officials say such equipment will come in handy this summer. Power= =20 supplies are expected to be so strained that Californians should expect man= y=20 more rolling blackouts.=20 ``I don't want to kid anybody'' said Patrick Dorinson spokesman for the= =20 California Independent System Operator which manages the power grid for mo= st=20 of the state. ``Supplies are very very tight. When you look at such a big= =20 state and such a large shortfall I think we have to prepare ourselves. It'= s=20 very possible that going into this spring and summer we're going to see som= e=20 very difficult days.''=20 Combination of factors=20 The multiple causes that conspired to darken California on Tuesday=20 underscored the difficulty officials face in keeping the lights on.=20 The thermometer shot to record-breaking levels at some locations in the Bay= =20 Area driving up power demand. San Jose hit 83 compared with an average 66= =20 degrees for March 20 and breaking the record high of 80 set in 1960.=20 What's more 12000 megawatts of power were unavailable because plants had= =20 shut down for maintenance or because cash-strapped utilities haven't paid= =20 them.=20 And consumer conservation has been spotty. While state energy officials say= =20 conservation rose from 5 percent in January to 8 percent in February grid= =20 managers said this week Californians weren't saving enough energy. They eve= n=20 revised their estimate of how much homes a megawatt can power down from=20 1000 homes to 750 to reflect greater consumption.=20 Improved conservation later in the day helped stave off a second wave of=20 outages they said.=20 Many shrug off the threat of rolling blackouts.=20 ``I think I've gotten used to it'' said Mary Carlson 58 of San Jose who= =20 took her granddaughter for a walk and read the paper during blackouts in=20 January. ``I just go with the flow. I'm not going to get too excited about= =20 it. If they turn the power off it's no big thing.''=20 Erica Finn secretary at Acacia Glass in San Francisco said she wasn't too= =20 upset when blackouts shut down the credit card machines electric sanders a= nd=20 phones. She bought coffee pulled a chair into the sun and popped Madonna= =20 into her portable CD player.=20 ``I have to brush up on my tan and get paid for it'' she said.=20 But for others the consequences are potentially serious.=20 At a Palo Alto dental office the blackouts interrupted root canals for thr= ee=20 patients. Dentists Darrell Dang Robert McWilliams and Kurtis Finley insert= ed=20 temporary fillings by hand rescheduled the procedures and went to lunch.= =20 The receptionist used a cell phone to cancel the afternoon's appointments= =20 frustrated that there's no way to prevent a repeat of Tuesday's fiasco if t= he=20 blackouts continue.=20 A new routine=20 Others have taken everyday steps to cope with the threat of losing power.= =20 Stephen O'Reilly a 34-year-old San Jose engineer who often drives to see= =20 clients said he avoids side streets because blackouts could darken signal= =20 lights and tie up intersections.=20 ``I used to take back roads to avoid traffic but I'm trying to use the=20 freeways more because there are no lights'' said O'Reilly adding that he'= s=20 shut down his electric hot tub to help conserve power.=20 At Pasta Primavera in San Mateo manager Chris Harris has stocked up on=20 candles and has plans to buy a generator for his restaurant. When blackouts= =20 arrived just before the lunch crowd Tuesday and cut power to ventilation=20 fans he even considered revising his menu replacing smoke-producing chick= en=20 and shrimp with simple marinaras and alfredos.=20 ``I don't know if you'd want to dine with the smell of smoke'' Harris said= =20 as customers trickled into his darkened restaurant on Fourth Avenue. ``If= =20 this is going to continue through the summer it's going to affect our=20 pockets.''=20 San Francisco International Airport which agreed months ago to shut down i= ts=20 massive air conditioners to save power during shortages is now routinely= =20 stuffy.=20 On Tuesday the temperature reached a steamy 85 degrees inside the airport's= =20 North Terminal which serves most of United Airlines' flights.=20 ``It's become uncomfortable if not intolerable'' said Ron Wilson airport= =20 spokesman. ``It's like getting in a car that's been left in the sun all day= .=20 It's much hotter inside. .?.?. We've turned on the fans but they're just=20 moving the hot air.''=20 Hospitals cut off=20 Several hospitals complained they lost power Tuesday saying they thought= =20 they were exempt. PG&E said hospitals with sufficient backup generation to= =20 power themselves can be turned off. But state regulators said they could no= t=20 confirm that statement and hospital officials scoffed at the suggestion.= =20 ``Every hospital has backup power generation but it only covers 30 to 40= =20 percent of the hospital'' said Roger Richter a senior vice president with= =20 the Hospital Council.=20 Nonetheless hospitals are coping with the situation.=20 ``Our patients are concerned for sure'' said Jackie Floyd head nurse at= =20 the Satellite Dialysis Center South in San Jose which lost power. ``But=20 while it's a pain we can handle the blackouts. We're kind of getting the= =20 idea here that this a problem and we have to adjust.''=20 But while Californians may be adjusting they're not at all pleased.=20 ``I'm frustrated with this power thing'' said Ana Rivera who manages the= =20 Wash Club in San Francisco where washers and dryers had stopped mid-cycle.= =20 ``Who do you blame? No one wants to accept blame.'' Sara Neufeld Ann Marimow Kim Vo Frank Sweeney Barbara Feder Aaron Davi= s=20 Gil Duran and Dave Beck contributed to this report.=20 --- --- Powerless again=20 Outages were lighter after generators came back online and conservation=20 efforts kicked in. Blackouts may be averted today.=20 March 21 2001=20 By TONY SAAVEDRA JOHN HOWARD CHRIS KNAP and JEFF COLLINS The Orange County Register=20 The Ridgewood Power methane-burning plant at the Olinda Alpha landfill in= =20 Brea is producing 3.3 megawatts down from five because Edison owes it $1.= 5=20 million and cranking up to full power is no longer a priority Photo: H. Lorren Au Jr. / The Register ? ? A second day of statewide blackouts ratcheted up the frustration level=20 Tuesday on the streets of Orange County and in Sacramento as consumers=20 demanded solutions from politicians unable to give them.=20 There was a bit of good news though: Blackouts may be averted for the rest= =20 of the week after temperatures moderated two stalled generators came back= =20 online and conservation efforts kicked into gear.=20 ?=20 Some Orange County residents took the blackouts in stride. In Mission Viejo= =20 above the West Coast Football Club's under-16 boys team scrimmages under= =20 gas-powered lights Tuesday. The club has been running to conserve energy=20 Photo: Kevin Sullivan / The Register ? ? Consumers were able to save 900 megawatts - enough to light about 675000= =20 homes - by cutting power usage said Patrick Dorinson spokesman for the=20 Independent System Operator which oversees 75 percent of the state's=20 electricity grid. That helped the ISO halt the blackouts Tuesday afternoon.= =20 Californians are back on the conservation trail and we appreciate it=20 Dorinson said.=20 Power regulators Tuesday morning predicted there would be twice as many=20 outages as Monday when more than 1 million consumers statewide lost power = in=20 one-hour to 90-minute increments.=20 Luis Pagan an assistant at the Santa Ana Animal Shelter waits out the=20 blackout Tuesday with one of the shelter's dogs up for adoption Photo: Paul E. Rodriguez / The Register ? ? Beginning at 9:30 a.m. Tuesday blackouts tangled intersections in Costa=20 Mesa forced Huntington Beach students to study by flashlight and stilled= =20 cash registers in Santa Ana. About a half-million homes and businesses were= =20 unplugged statewide before 2 p.m. Power was restored to most of Southern=20 California by 11:30 a.m. Outages affected more than 9200 consumers in Oran= ge=20 County.=20 The ISO had expected more severe outages to hit at the peak hour of 7 p.m.= =20 but was able to keep the lights on as downed power plants came back online= =20 and imports from other states increased.=20 While outages were lighter than Monday the blackouts aggravated consumers= =20 who doubted that Gov. Gray Davis lawmakers and electricity officials are= =20 doing enough to keep the power flowing in California.=20 ?=20 Zulema Avarez left and Erica Ramirez said they were caught off-guard when= =20 the power went out so they closed the fashion store in Santa Ana where the= y=20 work Photo: Paul E. Rodriguez / The Register ? ? I think this is insane said Charlee Lang 63 of Costa Mesa. Gray Davis= =20 didn't do his job for a long time he didn't get serious until November. We= =20 need to demand immediate action be taken.=20 Bill Brannick 65 of Costa Mesa added: There's a lot of complicity here= =20 and we're just innocent victims.=20 Davis in a Sacramento news conference said he inherited California's fail= ed=20 experiment with electricity deregulation enacted in 1996 under former Gov.= =20 Pete Wilson.=20 I think a fair assessment of this situation is that we were dealt a pretty= =20 bad hand here Davis said. No (new power) plant was approved in the 12=20 years prior to my being governor.=20 With summer peak demand expected to be 16000 megawatts higher than Monday= =20 and Tuesday more days of blackouts are forecast for coming months. Though= =20 Davis has signed long-term contracts to provide California with reliable=20 energy the deals haven't yet taken effect. Some suppliers won't start=20 providing electricity until the state reaches a so-far elusive agreement to= =20 help the utilities pay off billions in debt by buying their transmission=20 lines.=20 Assembly Republican Leader Bill Campbell R-Villa Park said that the effor= t=20 to resolve the state's energy crisis was floundering in the midst of unpai= d=20 bills stalled negotiations and rolling blackouts.=20 Tuesday began with 29 percent of California's power supply off line mostly= =20 from generating plants suddenly down for unscheduled maintenance. About 30= 00=20 megawatts was missing from so-called qualifying facilities or small power= =20 producers who have not been paid $1.8 billion by cash-strapped utilities an= d=20 say they can't afford to operate. Davis said he would ask the PUC to order= =20 utilities to begin paying the qualifying facilities for any energy supplied= =20 beginning April 1 but the payments would not apply to the outstanding debt= .=20 Some smaller producers threatened to force Edison into involuntary bankrupt= cy=20 if they are not paid soon.=20 Blackouts began Tuesday two hours earlier than on Monday as the ISO called= =20 on utilities to dump 500 megawatts. It was only the second day of blackouts= =20 for Southern California but the fourth for Northern California since=20 January.=20 The Disney Resort which includes Disneyland and the new California=20 Adventure voluntarily cut back one megawatt of electricity on Monday and= =20 again Tuesday said Anaheim Public Utilities.=20 All of the reductions were in backstage areas not seen by guests said Disn= ey=20 spokeswoman Chela Castano-Lenahan.=20 In other workplaces people tried to make do.=20 Flashlight beams bobbed in aisles at a Target in Santa Ana where the power= =20 stopped at 10:30 a.m. Workers escorted customers who continued shopping an= d=20 made their purchases at battery-powered cash registers. Customers were=20 eventually asked to leave when the batteries ran low.=20 Oh well no soda no sunglasses said one woman as she headed back to her= =20 car.=20 The Metro Pointe shopping center in Costa Mesa also went dark.=20 I was in the middle of making a reservation when everything went out sai= d=20 Peggy Thomas a sales executive for Travel of America along South Coast=20 Drive. All of us here went 'Oh no it's happened to us.' =20 Said one Costa Mesa police officer as he headed for his motorcycle and a= =20 blackout-related fender bender: You can thank the governor for that one.= =20 At Hawes Elementary School in Huntington Beach Principal Marie Smith was= =20 demonstrating to her third-grade class what would happen in a blackout. But= =20 before she could flip off the light switch the power died.=20 The kids thought she was joking.=20 Register staff writers Tiffany Montgomery Sarah Tully Tapia Nancy Luna J= im=20 Radcliffe Binh Ha Hong Theresa Salinas Eric Johnson and Danielle Herubin= =20 and the Associated Press contributed to this report.=20 --- --- The iceman shunneth effects of hourlong blackout=20 March 21 2001=20 By JIM RADCLIFFE The Orange County Register=20 Ken Ackerman owner of ABC Ice House in Laguna Niguel checks on his frozen= =20 inventory during Tuesday morning's rolling blackout. The ice managed to=20 endure the hourlong power outage Photo: Jebb Harris / The Register ? ? Ken Ackerman didn't sweat much when a blackout struck his Laguna Niguel ice= =20 business at 10:30 a.m. Tuesday.=20 The walk-in freezer at ABC Ice House held 8 tons of ice. And for an hour t= he=20 temperature in there rose from 20 degrees to 45 degrees.=20 But very little melted.=20 Ackerman said most refrigerators can handle blackouts as long as outages ar= e=20 less than two hours.=20 I think people are going to get used to one-hour blackouts and realize it'= s=20 not a problem'' Ackerman said.=20 The blackouts actually were profitable for Ackerman.=20 An Irvine laboratory struck by a power outage bought 100 pounds of dry ice = to=20 preserve human tissue.=20 More blackouts through the summer could be a boon for the ice business - or= a=20 bust.=20 It could mean more ice sales -- or that his supplier has trouble filling hi= s=20 orders.=20 It's going to be an interesting summer'' Ackerman said.=20 I have no idea if we'll make more or less.''=20 Traffic will be the biggest problem if blackouts continue Ackerman said.= =20 On Monday a nearby Costco that had lost power ordered 200 pounds of ice to= =20 keep its refrigerated goods cold.=20 But dead traffic lights and congested roads made it impossible to deliver t= he=20 ice before the outage ended. Costco canceled the sale.=20 We pride ourselves on getting our deliveries made in an hour Ackerman=20 said.=20 --- --- Traffic officials are seeing red over blackouts=20 Battery backups are planned by several cities to aid confused drivers.=20 March 21 2001=20 By HEATHER LOURIE The Orange County Register=20 Traffic backs up Tuesday at Crown Valley Parkway at Forbes Road in Laguna= =20 Niguel as drivers had to navigate their own way Photo: Jebb Harris / The Register ? ? Toby Tran approached an Aliso Viejo intersection and wasn't sure what to do= .=20 Ahead of him the traffic signal was dark a casualty of the rolling=20 blackouts that struck Orange County on Monday and Tuesday.=20 So Tran kept driving smacking into an oncoming car at the corner of Aliso= =20 Creek and Enterprise.=20 It just happened a shaken Tran 29 said from his Aliso Viejo home. I= =20 tried to stop and I couldn't. There was no light. Nothing.=20 Tran's accident Monday afternoon and several others like it underscore on= e=20 of the most significant dangers looming in the threat of future blackouts.= =20 Traffic signals that fade to black when the power goes out instead of=20 converting to flashing red make wrecks far more likely because drivers=20 become confused and frustrated traffic engineers and experts said Tuesday.= =20 I didn't know what to do said Tran who was on his way to a high school= =20 jogging track. Luckily I'm alive but I'm very scared.=20 On Day 2 of Southern California's power outages worried city officials=20 across Orange County hunted for ways to respond to paralyzed intersections= =20 when state regulators pull the plug.=20 We need to be ready said Hamid Bahadori traffic engineer in the city of= =20 Orange. This thing is only going to get worse in July and August.=20 One popular idea: installing emergency battery-backup units at traffic=20 signals to keep lights flashing red during blackouts. Several Orange County= =20 cities including Irvine Laguna Niguel and Orange are already moving to= =20 install the devices as early as this summer.=20 In our minds (a flashing light) is a vast improvement over a blacked-out= =20 signal said Dave Rogers Laguna Niguel traffic engineer. On Tuesday night= =20 his city was expected to approve the purchase of the battery packs for all = 74=20 of its traffic signals.=20 Timing in this case seems to be everything Rogers said. A lot of citi= es=20 had contemplated it. We just took it that extra step.=20 John Thai an Anaheim traffic engineer cautioned that cities need to do=20 adequate research and testing before they launch into such projects.=20 There is nothing that is foolproof Thai said. All this is new territory= .=20 Some cities are also considering rolling out temporary stop signs and sendi= ng=20 police officers to more intersections.=20 Although the state's vehicle code requires motorists to treat dead traffic= =20 signals like a four-way stop motorists often blow through the intersection= s=20 police said.=20 It's dangerous said Tustin police Lt. Mike Shanahan after several=20 near-wrecks in his city during Monday's outages. People are not very good = at=20 reacting to changes in their conditions.=20 Flashing red is something that catches your eye. It's a warning that=20 something is amiss but the absence of all lights is worse.=20 RELATED STORIES=20 =01=07 How to contact your Representatives =01=07 'Current' events =01=07 The iceman shunneth effects of hourlong blackout =01=07 Powerless again =01=07 Alternative power producers cut back or shut down as payments from b= ig=20 utilities lag =01=07 O.C. saves its energy -- for blaming others =01=07 Blackout readiness on agenda --- --- Alternative power producers cut back or shut down as payments from big=20 utilities lag=20 That is a factor in blackouts=20 March 21 2001=20 By HANH KIM QUACH The Orange County Register=20 Every megawatt of electricity counts in this deregulated energy market -=20 including the five megawatts generated from the Olinda Alpha landfill in=20 Brea.=20 The methane-burning plant is producing only 3.3 megawatts now because=20 Southern California Edison owes it $1.5 million and cranking up to full pow= er=20 is no longer a priority said Martin Quinn executive vice president of=20 Ridgewood Power which runs the plant.=20 We're doing maintenance now when we ordinarily wouldn't do it. Because we'= re=20 not being paid it was a good time to cut back'' Quinn said.=20 That scenario has been playing out across the state in the past two weeks a= nd=20 was a major factor in Monday's and Tuesday's blackouts.=20 Those who provide electricity through alternative means - burning methane o= r=20 wood chips or using cleaner-burning technology with traditional fossil fue= ls=20 - are not being paid for what they sell to the big utilities. So they eithe= r=20 can't afford to produce energy or see little incentive to do so.=20 On Monday their absence from the statewide electricity grid created a=20 1300-megawatt shortfall -- enough to power 1.3 million homes.=20 Taking that much power offline meant that any burp in the system would put= =20 the state under the minimum amount of electricity needed to avoid blackouts= .=20 When one conventional Southern California plant went down because of a=20 transformer fire Monday the blackouts began.=20 If all of California's (alternative) generators were operating yesterday a= nd=20 today rolling blackouts would have been avoided'' Quinn said Tuesday.=20 Within the next couple of weeks as the weather warms and alternative energ= y=20 producers continue to try and operate without money California could see= =20 twice as many of those producers go offline further increasing the potenti= al=20 for blackouts said Jan Smutny-Jones executive director of Independent=20 Energy Producers.=20 The alternative energy producers which provide about a third of the state'= s=20 energy are deemed so crucial that Gov. Gray Davis wants the Public Utiliti= es=20 Commission to order the utilities to pay them. As drafted though the orde= r=20 would only include payment on future sales it doesn't address existing deb= t.=20 The Legislature has been working since January to halve the rates that=20 alternative producers charge utilities and to require utilities to pay for= =20 November's energy by April 1. But that bill is still moving through the=20 Legislature.=20 Small plants threaten Edison with bankruptcy=20 Smutny-Jones said that if the small generators are not paid promptly sever= al=20 will attempt to force Edison into bankruptcy probably within a week.=20 Unlike the large natural-gas generators that have been paid by the state=20 Department of Water Resources alternative energy producers are locked into= =20 contracts with utilities. Collectively Pacific Gas & Electric and Edison o= we=20 alternative energy producers about $1 billion.=20 PG&E has paid about 15 cents for each dollar it owes.=20 Obviously they're a source of generation and looking at how much load ou= r=20 customers need they're a source that has provided energy'' said Jon=20 Tremayne Pacific Gas & Electric spokesman. We've been trying in good=20 faith to make payments on energy.''=20 But Edison has not paid any money. Edison's alternative energy director La= rs=20 Bergmann said the company will not pay until larger reforms are made in ho= w=20 the producers' rates are calculated.=20 But the company recognizes that its nonpayment is causing problems.=20 To the extent that there are hundreds of megawatts that are idled here it= =20 just exacerbates the (energy) problem. ... They're facing similar problems = to=20 what we faced - they don't have sufficient (income) coming in the door''= =20 Bergmann said.=20 Plants go into mothball mode=20 Millenium Energy in Kern County is owed $40 million total by PG&E and Ediso= n.=20 On March 1 the company shut down both of its coal and petroleum coke-burni= ng=20 plants and doesn't plan to bring them back up until it is paid.=20 Millenium's plants which use a special technology to reduce emissions=20 generate 150 megawatts of energy.=20 We've gone into mothball mode our machinery just sits there on cold=20 standby'' said President Mike Hawkins. We've been delivering free electro= ns=20 to the system in the hope that the system would resolve itself. But we can'= t=20 do that anymore.=20 One biomass plant in Lassen County has scaled back from 31 megawatts to=20 eight. Burney Forest Power burns wood chips to produce energy and has only = a=20 couple weeks' supply of chips left.=20 When you don't even know what you'll get paid it's hard to say 'Let's go= =20 out and get a bunch of fuel''' said Milt Schultz the plant's general=20 manager.=20 The sad thing is (the state) really can't afford to lose us.''=20 --- --- O.C. saves its energy -- for blaming others=20 March 21 2001=20 By RICHARD CHANG The Orange County Register=20 Darkened stores were forced to turn away customers as stock manager=20 Bridgette Kelly left does here at a Linens 'n Things in Costa Mesa. The= =20 store closed for 45 minutes Tuesday morning Photo: Michael Kitada / The Orange County Register ? ? Orange County residents are making efforts large and small to conserve=20 electricity as they face rolling blackouts and surging energy bills.=20 Reactions to the early spring crisis - with blackouts throughout the state= =20 Monday and Tuesday - are ranging from confusion to rage.=20 Many residents have taken practical steps such as turning off lights they'= re=20 not using waiting until off-peak hours to do their laundry and opening=20 windows instead of using air conditioning.=20 My house is full of Philips energy-saving light bulbs said Ray Rutledge= =20 48 of Buena Park. Our light bill has dropped 7 1/2 percent. We use=20 low-voltage outdoor lighting. We've got an energy-saving thermostat. It's s= et=20 back to 65 (degrees) in the wintertime.=20 Kim Wilson who lives in an unincorporated area of Orange County near Santa= =20 Ana and Tustin said he has cut down on lighting in his house and has reduc= ed=20 by half the time his pool cleaner runs. Still his energy bill remains abou= t=20 $400 a month.=20 I don't know what ... to do Wilson 57 said. We've cut back.=20 Wilson added that he is not pleased with the way government or the energy= =20 companies have handled the crisis.=20 I think it's disgusting. It's such political garbage. Who was it that made= =20 these decisions? Who got us into it?=20 'TRYING TO CONSERVE'=20 Jenny Hann 60 of Costa Mesa said her workplace has devised an emergency= =20 plan for conservation and future blackouts.=20 We're definitely trying to conserve as much as we can the bank=20 administrator said. Hann expressed frustration with the energy companies.= =20 When you see these executives that have been running the show and the mone= y=20 they're making it's bothersome she said.=20 Jennifer Souto 27 of Tustin said even though she's a stay-at-home mother= =20 she keeps the lights off all day. She doesn't use her air conditioning=20 either.=20 Souto said she was locked out of her house for 90 minutes Monday because a= =20 blackout cut power to her garage door. She says she's not sure who to blame= .=20 Paul Finch 38 of Westminster blames Edison and Gov. Gray Davis.=20 I don't believe info I get from Edison or from our illustrious governor= =20 Finch said. There's more to it than how they've represented it.=20 --- --- Blackout readiness on agenda=20 O.C. companies braced for outages Tuesday in different ways. Not all were= =20 struck but they felt the effects.=20 March 21 2001=20 By TAMARA CHUANG The Orange County Register=20 In case of a power failure Tuesday the Fluor Corp. in Aliso Viejo stocked= =20 elevators with homemade blackout kits filled with cookies flashlights and= =20 bottles of water.=20 They're in the elevators although we've been told not to use the=20 elevators said Lori Serrato a company spokeswoman. We're using the=20 stairwells waiting for our time of darkness.=20 Tales of anxious preparation were more common than actual blackouts for=20 Orange County businesses Tuesday.=20 Edison told some companies as special power users who've agreed to cut bac= k=20 when asked to expect to do so. Conexant Systems Inc. got a warning from=20 Edison and immediately shut down air conditioning and equipment not in use= =20 and stopped production. The blackout never came.=20 Kingston Technology Co. when notified by Edison on Tuesday morning=20 broadcast the warning on the company intercom. The company also e-mailed=20 employees a guide explaining the blackout.=20 It's already affected productivity. We've been busy getting all our e-mail= s=20 out before it happens said Heather Jardin a spokeswoman for the Fountain= =20 Valley computer memory maker.=20 Kingston still had power by day's end but in an emergency the company's= =20 manufacturing plants revert to Kingston's own power generators Jardin said= .=20 Heart valve maker Edwards Lifesciences turned on its backup generators=20 Tuesday morning because of the potential for there to be a blackout in ou= r=20 area said company spokesman Scott Nelson. But (as of 3:30 p.m.) the=20 blackout didn't materialize Nelson said.=20 At the regional office in Irvine Verizon Wireless implemented conservation= =20 efforts such as motion sensors that shut off lights after 30 minutes of=20 inactivity and separate heating and air conditioning units on all floors.= =20 Some of the company's cell sites in Orange County and Los Angeles did lose= =20 power Monday and Tuesday but they automatically switched to backup battery= =20 sources.=20 Other companies - PacifiCare ICN Pharmaceuticals Beckman Coulter and=20 Allergan - said they took precautions turning out some hallway lights and= =20 communicating safety procedures to employees.=20 Disneyland Ingram Micro in Santa Ana and Western Digital Corp. in Lake=20 Forest all were prepared.=20 But none reported blackouts by day's end.=20 Some county businesses did get hit.=20 Businesses along the 900 block of South Coast Drive - including 14 stores a= t=20 the Metro Point shopping center in Costa Mesa - went dark about 10:20 a.m.= =20 All of a sudden it was dark said Henry Gonzalez manager of Boudin Baker= y.=20 We ran out of coffee. We couldn't bake anything. We tried to accommodate a= s=20 best as we can.=20 Other stores simply closed during the blackout frustrating shoppers.=20 We walked over to (Marshalls) and it was dark and there was a sign on the= =20 door that said 'Due to the blackout we're closed' said shopper Roberta= =20 Allison a West Virginia tourist. Don't they warn people here? Do they jus= t=20 whack the power off?=20 Marshalls employees escorted customers out of the store when the power went= =20 out. Other stores including Nordstrom Rack and Best Buy were not affected= .=20 Across the street from the center employees spilled out of office building= s=20 cheering and waving their hands in victory as power outages forced them to= =20 halt work.=20 Lots of people just walked out of the office to run errands said Amy=20 Bateman a loan officer at Capital Funding Group in Costa Mesa.=20 She said her office building at 940 South Coast Drive went dark for about= =20 70 minutes. Like dozens of others in the building she was working at her= =20 desk when the computers and lights went dark.=20 We've just been sitting around. We can't do anything said Bateman.=20 The blackout hit other businesses on Monday.=20 Buy.com employees spent their hour without power using their wireless=20 Blackberry pagers to answer and send e-mail.=20 The Crazy Horse Steakhouse in Irvine lost power after the lunch rush said= =20 Donna Mulkey the restaurant's manager. Since the broilers remained hot th= e=20 cooks kept cooking and the customers kept eating. When they finished waite= rs=20 calculated the bills by hand.=20 At Broadcom Corp. in Irvine the power went out just before Rep. Christophe= r=20 Cox was to tour the facility.=20 It struck me as particularly ironic Cox told members of the House=20 subcommittee on energy and air quality Tuesday that Broadcom's co-founder= =20 Henry Samueli spent the hour before the meeting using a letter opener to= =20 open his paper mail and sitting by the window so he could get some sunlight= =20 to read.=20 Cox R-Newport Beach told the panel which was holding a hearing on=20 California's electricity crisis that the entire company could not functio= n=20 during this period of time and the same was true for more than a million=20 people he said. It's a Third World experience in California.=20 Register reporters Chris Farnsworth Dena Bunis Bernard Wolfson Nancy Lun= a=20 Eric Johnson Elizabeth Aguilera and Jennifer Hieger contributed to this=20 story.=20 --- --- Calif To Order Utils To Pay Small Generators Up Front-Gov 03/21/2001=20 Dow Jones Energy Service=20 (Copyright (c) 2001 Dow Jones & Company Inc.)=20 SACRAMENTO Calif. (AP)-- California regulators will order the state's two= =20 largest utilities to pay small independent power generators in advance a= =20 move Gov. Gray Davis hopes will bring a quick end to the blackouts that=20 darkened California this week.=20 Davis accused PG&E Corp. (PCG) unit Pacific Gas & Electric Co. and Edison= =20 International (EIX) unit Southern California Edison of taking in money from= =20 customers while failing to pay the generators known as qualifying=20 facilities which produce up to one-third of the state's power. As a result= =20 he said the utilities are partly responsible for this week's blackouts.=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 The state lost about 3100 megawatts or enough electricity to power 3.1=20 million homes on Tuesday from alternative energy plants that say they can'= t=20 afford to keep operating because the utilities haven't paid their bills in= =20 weeks. The utilities which are near bankruptcy owe the QFs about $1=20 billion. Pacific Gas & Electric has made partial payments.=20 As reported by Dow Jones Newswires Southern California Edison met with=20 representatives of the governor Tuesday to discuss plans to begin making=20 partial payments to the QFs. Pacific Gas & Electric which called Davis'= =20 statements inappropriate and unjustified said it has informed the QFs an= d=20 the governor's office that it plans to begin paying the QFs in full going= =20 forward.=20 Davis said the PUC planned to issue an order next week directing the=20 utilities to prepay future bills to the QFs.=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. California has been spendi= ng=20 about $45 million a day since January to buy power for the utilities'=20 customers but hasn't included QF-generated power in its purchases.=20 Keepers of the state's power grid were cautiously optimistic that Californi= a=20 might get through Wednesday without another day of rolling blackouts after= =20 two idle plants were returned to service. A Stage 1 power alert the mildes= t=20 of three forms of alerts was called around 6 a.m. Wednesday as power=20 reserves fell to around 7 percent.=20 About a half-million customers were hit by Tuesday's blackouts which snarl= ed=20 traffic and plunged schools and businesses into darkness from San Diego to= =20 the Oregon border. Tuesday's outages began at 9:30 a.m. and continued in=20 90-minute waves until about 2 p.m. when the ISO lifted its blackout order.= =20 They were blamed for at least one serious traffic accident.=20 The blackouts were caused by a combination of problems including=20 unseasonably warm weather reduced electricity imports from the Pacific=20 Northwest numerous power plants being shut down for repairs and the loss o= f=20 power from QFs.=20 Meanwhile a leading lawmaker on energy issues said the PUC may soon have t= o=20 raise rates by about 15% to cover the state's costs and its utilities' bill= s.=20 My sense is that people will appreciate having some certainty and being ab= le=20 to plan for it said Assemblyman Fred Keeley. They don't have to like it= =20 but I think they'll appreciate it.=20 Davis has said he is confident the utilities and the state can pay their=20 bills without further rate increases.=20 --- --- PG&E Says It Is Negotiating With Qualifying Facilities 03/21/2001=20 Dow Jones Energy Service=20 (Copyright (c) 2001 Dow Jones & Company Inc.)=20 (This article was originally published Tuesday)=20 =20 LOS ANGELES -(Dow Jones)- PG&E Corp. (PCG) unit Pacific Gas and Electric Co= .=20 said Tuesday it is offering small generators or qualifying facilities= =20 prepayment of $200 million per month so they will have the funds to return = to=20 the state power grid.=20 But high level sources at the qualifying facilities who are involved in the= =20 negotiations said PG&E's proposal is incomplete and doesn't address the iss= ue=20 of past due payments.=20 The sources said PG&E had discussions with some qualifying facility operato= rs=20 last week regarding the plan and it wasn't accepted at that time.=20 About 3000 megawatts of power from qualifying facilities or QFs have bee= n=20 off the state's grid since Monday because the generators weren't being paid= =20 by utilities and couldn't afford to continue operating. The QFs unavailable= =20 power was partly responsible for Monday and Tuesday's statewide rolling=20 blackouts.=20 Also Tuesday California Gov. Gray Davis will hold a press conference to=20 discuss progress made in negotiations with the QFs to revise their contract= s=20 with the state's two nearly-bankrupt utilities so that the utilities pay le= ss=20 for power.=20 Edison International (EIX) unit Southern California Edison also said Tuesda= y=20 it intends to make partial payments on an ongoing basis to some QFs.=20 Edison executives met with Gov. Gray Davis' negotiating team Tuesday to=20 discuss how and when SoCal Ed can begin to make payments and a spokesman= =20 said they hope to have a plan in a matter of days.=20 Pacific Gas & Electric Co. has made partial payments of about $51 million t= o=20 the QFs it contracts with but owes much more. Edison owes the QFs hundreds= =20 of millions of dollars and hasn't paid the QFs since November. Together th= e=20 two utilities owe QFs about $1 billion.=20 PG&E said it has been collecting about $400 million per month from ratepaye= rs=20 to pay QFs and other generators with which it has bilateral contracts the= =20 state grid operator for spot power purchases and costs of its own=20 generation.=20 The average combined bill for those costs exceeds $1.4 billion per month= =20 PG&E said.=20 This mismatch between revenues and costs requires tough choices. Since the= re=20 isn't enough money in rates to cover all these costs the Public Utilities= =20 Commission decision on how this $400 million will be allocated going forwar= d=20 will determine our ability to make advance payments to QFs said Gordon R.= =20 Smith the utility's president and CEO.=20 The PUC is responsible for implementing the legislation which allows the=20 state to buy power and will decide how much of utilities' ratepayer revenue= =20 will go to the state for power purchases and how much will go to the=20 utilities.=20 For several weeks a number of QFs have taken their generating units offlin= e=20 because they can no longer afford to buy fuel needed to run their units.=20 QFs supply California with one-third of its total power supply.=20 PG&E and SoCal Ed have almost $13 billion in purchased power undercollectio= ns=20 because they cannot collect full costs from customers protected by a=20 state-mandated rate freeze.=20 -By Jessica Berthold Dow Jones Newswires 323-658-3872=20 -(Jason Leopold contributed to this article.)=20 --- -------------------- Wednesday March 21 2001=20 By Dave Todd=20 dtodd@ftenergy.com=20 U.S. Energy Secretary Spencer Abraham declared this week that the Big Apple= =20 is on the verge of being bitten hard by power cuts and rising energy prices= . Delivering the keynote address at the U.S. Chamber of Commerce's national= =20 energy summit in Washington Monday Abraham said California is not the on= ly=20 state facing a mismatch between supply and demand what with electricity= =20 shortages predicted for New York City and Long Island this summer and low= =20 capacity margins threatening electricity reliability elsewhere across the= =20 country. But how likely is it that New Yorkers will face blackouts of the= =20 sort confronting Californians?=20 Not very says energy trade specialist Edward Krapels managing director of= =20 Boston-based METIS Trading Advisors. Krapels a consultant helping major=20 Northeastern utilities such as Consolidated Edison design market-hedging= =20 programs adamantly decried what he said are facile comparisons between=20 conditions in New York and California there being more differences than= =20 there are similarities between those two industrial cornerstones of the=20 country's economy in respect to energy security management.=20 First of all New York has a more varied portfolio of energy generation=20 sources than California he said. California has hydro nuclear and gas b= ut=20 when it lost a lot of hydro the state needed gas to pick up the slack and= =20 the capacity just wasn't there. In New York's case the state has oil and= =20 coal still in the mix and its overall dependence on gas is much lower than= =20 California's Krapels added.=20 New York avoids making same mistakes Portfolio diversity is one pillar of any effective plan to help New York=20 avoid the same errors made in redesigning California's marketplace. New=20 York's Independent System Operator (ISO) in a new report warning that the= =20 state is at an energy crossroads in terms of its capacity adequacy in the= =20 immediate future argues that a concerted effort is required to arrest=20 declining in-state generation capacity reserve margins and a strategy must= =20 be put in place whether or not new generation comes on-line in accordance= =20 with current anticipated scenarios.=20 A measure of New York's essential difficulty is that between 1995 and 2000= =20 statewide demand for electricity grew 2700 MW while generating capacity= =20 expanded by only 1060 MW. With no major new generating plants in downstate= =20 New York fully approved the gap is expected to continue to widen. To avoid= =20 a replication of California's market meltdown the New York ISO calculates= =20 the state's daily generating capacity needs to grow by 8600 MW by 2005 wi= th=20 more than half of that located in New York City and on Long Island.=20 Expressing concern this may be too big a burden for the current bureaucrati= c=20 process to bear the ISO wants to see a state-appointed ombudsman named to= =20 help would-be merchant power plant investors plow through red tape.=20 Increasing New York's generating capacity will also lessen the state's=20 escalating and risky reliance on out-of-state sources of electricity the= =20 ISO added. Since 1999 New York State has been unable to cover its reserve= =20 requirements from in-state sources.=20 Not everyone agrees with that analysis insofar as it argues for circling t= he=20 wagons inward. Some analysts believe the ultimate solution lies not in tyin= g=20 in more inwardly dedicated power but in expanding the marketplace by=20 breaking down inter-jurisdictional barriers. In any case New York energy= =20 regulatory authorities and those responsible elsewhere in the U.S. Northeas= t=20 such as PJM (Pennsylvania-New Jersey-Maryland) Interconnection and the New= =20 England Power Pool are in vastly better shape in terms of cross-border= =20 cooperation than California and its neighbors in that efforts are being mad= e=20 among various authorities toward developing an integrated regional=20 electricity market. In California by contrast the state's focus=01*for=20 example in the case of new gas-fired power plant development=01*has been t= o=20 ensure dedicated supply to the California market alone rather than on a=20 regional marketplace.=20 The New York ISO's new broad-based analysis of market-restructuring needs= =20 argues that the relatively stronger health of its reformed environment is= =20 due in large part to the ability of New York's utilities to enter into=20 long-term power contracts.=20 What needs to be done most it says is to move aggressively to build some = of=20 the more than 29000 MW of proposed new generation in the siting pipeline.= =20 In the meantime the 30200 MW of electricity New Yorkers used on a peak da= y=20 last summer shouldn't be eclipsed on too many days this coming summer (give= n=20 early long-range weather forecasts). Demand however is expected to increa= se=20 at an annual average rate of up to 1.4%.=20 So while New York City the rest of the state and adjacent parts might=20 breathe easy this year it could be a brief rest from the fray. Meanwhile = a=20 4% shortfall is still being planned for this summer that is not yet provide= d=20 for as authorities hurriedly seek to arrange new generation plants around= =20 Manhattan on Long Island and even on barges offshore.=20 One way or another whether it is the weather or the politics of siting new= =20 energy facilities it's going to be a hot time in the city.=20 Long-term solutions hit brick wall Meanwhile attempts at longer-term solutions continue to run into trouble.= =20 Last week Connecticut state regulators came out against a proposal to run = a=20 new underwater cable under Long Island Sound that Hydro-Quebec subsidiary= =20 TransEnergie U.S. Ltd. wants to build to pump more juice into Long Island= =20 Power Authority's load pocket. Despite strong promises from TransEnergie to= =20 be diligent in avoiding damage to oyster beds in Long Island Sound the=20 proposal failed to convince authorities who were persuaded the pipeline=20 project could lead to diversion of electricity from Connecticut.=20 In similar fashion private companies wanting to build 10 small independent= =20 power plants and temporary generators offshore New York City are running in= to=20 intense opposition from environmental groups and citizen organizations=01*s= ome=20 of whom have taken their cases to the state assembly in Albany.=20 The David vs. Goliath nature of such controversies has further alerted ener= gy=20 companies to the difficulties of addressing complex energy supply issues th= at=20 may ultimately devolve to people not wanting things in their backyard=20 regardless of what the alternative might mean to their fellow citizens or t= he=20 greater public good.=20 But suddenly in New York California's troubles=01*while still distant in = their=20 intensity=01* may not be so far away. By some estimates this summer's bill= s for=20 Consolidated Edison customers could be up as much as one third or more over= =20 last year's charges.=20 Letting the time slip when it comes to building new infrastructure isn't=20 going to make the pain go away.=20 =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:: nan Body:: Attached are FERC reports 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:: Breakfast presentation at MASS Plastics 97 conference, per Jennifer Arnold. Body:: 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: Patent attorney Body:: Larry Thanks 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: Rice Body:: Nelson I don't see any problems with #1. For number 2 mention that the paper was written when you were a studentt at Rice. 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:: Inventory of Skills Confidential Inquiry: Joe Jamail Body:: VERY CONFIDENTIAL The following member has asked for help from the Inventory of Skills (IOS). You have been identified as one of the few members who has the skill to assist in this area. You may or may not have completed an IOS enrollment form. All information gathered for IOS is done on a confidential basis and will remain confidential. This member has no knowledge regarding who has been contacted. If you choose to help the necessary information follows so that you may contact this member directly. If you cannot assist this member please contact them or IOS. IOS asks that you please respond within 72 hours of receiving this request. Thank you Brenda Worley IOS does not evaluate the validity of any request. Name: Ted L. Dub Snider Jr. Chapter: Lone Star-Dallas Phone: 501-401-7601 Fax: 501-401-7628 Email: dsnider@connect.com Other: * Indicated preferred method of contact. My company has been severely damaged by $50 billion (revenues)Texas based company 1) refusal to pay monies owed under a contract. 2) misrepresenting information used to calculate amounts owed under the contract 3) appears to have instigated an FBI investigation of our company regarding a pending civil and regulatory dispute. I am looking for an introduction to Joe Jamail by someone who knows him. We need an attorney with the courage confidence and track record to successfully pursue our claim against a powerful adversary. Thank You. 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:: ----------------- 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:: 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:: Barton Subcommittee Passes Energy Bill Without Electricity Amendments Body:: Late tonight the Barton Subcommittee passed an energy policy package (without any electricity provisions other than those related to conservation) on a bipartisan vote of 29-1. The subcommittee approved an amendment by Mrs. Wilson to conduct a national assessment and inventory of possible renewable energy projects. During consideration of the bill several amendments of interest and concern to Enron were offered and withdrawn they are likely to be offered when the full Energy and Commerce Committee meets to consider the package next Tuesday and Wednesday. The amendments in this category are: 1. Mr. Waxman has an amendment he called the blackout and price gouging prevention amendment that would require FERC to modify its June 19 price mitigation order within 15 days of enactment to impose cost-of-service based rates (with a rate of return of 15 percent) if an entity is found to be withholding power from the grid during an emergency. The cost-of-service rates would thereafter apply to all of the offending entity's sales in the Western U.S. Several of us were rounding up opponents to the amendment when it was clear he was going to offer it and before he decided to withdraw it until full committee. We will continue those efforts before the full committee vote. 2. Mr. Ganske has an amendment on net metering that he said would promote wind in Iowa and other renewables (he may wait until an electricity bill rather than full committee on this bill). 3. Mr. Shadegg has an amendment to exempt natural gas pipelines from the requirements of the National Registry of Historic Places. He said that currently this process holds up much needed pipeline expansions that are FERC approved. 4. Mr. Waxman has an amendment that would require the President to develop and implement a plan to achieve the greenhouse gas reductions called for in a UN agreement that President George Bush (41) agreed to in 1992 (reducing these emissions to 1990 levels). Chairman Barton indicated that the Subcommittee will take up an electric restructuring bill either later this month or early in September depending on how long it takes to process this first energy package in the full committee and in the full House. 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:: Customers Body:: You may want to forward this to your customers. ----------------- 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:: Feedback from KL/JS CA Memo Body:: Perhaps we should consider putting something together on India? 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 Pricing Body:: For the call with Davis this am..... 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: India And The WTO Services Negotiation Body:: fyi ----------------- 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:: Enrons policy on Libya Body:: I assume we avoid Libya completely. The question though may be how we proceed if we are doing business with someone who has activities in Libya. Your views please. 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: Next Corporate Policy Committee Offsite Body:: I think wholesale will be well covered. Enron Capital & Trade Resources Corp. From: Sherri Sera 04/26/2001 02:51 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: RE: Next Corporate Policy Committee Offsite How much of an issue is this? So far Mark is the only one that has responded with a conflict. Please advise. Thanks SRS ----------------- 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: confidential employee information-dutch quigley Body:: thx Jeanie Slone 12/19/2000 04:51 PM To: John Arnold/HOU/ECT@ECT cc: Subject: confidential employee information-dutch quigley Dutch requested a meeting with me today and I gave him the scoop on the promotion. I will follow-up with him after our meeting the first week of Jan. He was ok with everything. let me know if you need anything else. ----------------- 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:: Confidential & Proprietary - PanNat Valuation Update (7.24.01) Body:: Jeff As requested below find the updated valuation assuming the contract is amended beginning September 1 2001 based on July 23 2001 curves Let me know if you have any questions. Eric <Embedded Picture (Metafile)> 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:: Carin Energy Rumor 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: Test Message Body:: Mike Thanks for your message. The meeting on Tuesday at 7 is confirmed. 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:: Re: HP -- confidential internal document Body:: Good plan. I agree re SJ. She is on the ball. mh Patrick Tucker 12/14/00 04:28 PM To: Matt Harris/Enron Communications@Enron Communications cc: Dale Clark/Enron Communications@Enron Communications Subject: Re: HP -- confidential internal document I agree. Sarah-Joy and I had a detailed follow-on conversation today about this topic and we're in agreement as to how things can move forward. I'd definitely like to have Bill rejoin our conversation with our new overall commercial contact at HP whose name Greg Pyle and Bill Lovejoy will supply in the very near future. I understand that Peter Goebel was quite clear with HP in today's meetings regarding the imminent nature of his wireless decision the breadth of vendors with whom he could conceivably do business and the fact that the wireless deal and the Enron sell side are inextricably linked. Sarah-Joy mentioned that Gerry has not been present in the more recent conversations which we're taking to indicate that Bill and Greg understand that his focus was different than ours. Sarah-Joy has brought immense focus and organization to this process. I have certainly found her involvement invaluable. Patrick Matt Harris 12/14/00 10:51 AM To: Sarah-Joy Hunter/NA/Enron@ENRON cc: Dale Clark/Enron Communications@Enron Communications Jennifer Medcalf/NA/Enron@Enron Patrick Tucker/Enron Communications@Enron Communications Peter Goebel/NA/Enron@Enron Subject: Re: HP -- confidential internal document This is an excellent update. Thanks for putting this together. Dale/Patrick - lets regroup on how we want to move this onward. Seems like SJ's suggestion of our spending more time with Bill Dwyer is a good one. Thanks Matt Sarah-Joy Hunter@ENRON 12/12/00 02:42 PM To: Matt Harris/Enron Communications@Enron Communications cc: Patrick Tucker/Enron Communications@Enron Communications Peter Goebel/NA/Enron@Enron Dale Clark/Enron Communications@Enron Communications Jennifer Medcalf/NA/Enron@Enron Subject: HP -- confidential internal document Matt: As GSS Business Development transitions the HP relationship for broadband to your team there are several issues I wanted to clarify in terms of how the relationship has been developed and who the contacts have been to date. Additionally I outlined the discussion points/action items from this morning's meeting you held with Jennifer Medcalf and myself. Per your request the HP presentation complete with a listing of HP's business partners was e-mailed to you this morning. HP contacts to date: Bill Lovejoy Western Gulf Area Sales Manager Houston TX #(713)-439-5587 (Gerry Cashiola's boss) Gerry Cashiola sales representative Houston TX #(713)-439-5555 (To date HP person coordinating the relationship--seeking a short term play) Greg Pyle Solution Control Manager Southeast Region Austin TX (#(512)-257-5735 (Pyle has been playing the business developer role but continues to defer leadership of the process to Gerry Cashiola) Daniel Morgridge Manager of Internet - E-Services long term alliances Austin TX #(512)-257-5736 (Interested in E-services/wireless longer term alliances) Bill Dwyer Chief Architect e-Services Solutions Cupertino CA #(408)-447-5240 (To date clearly the most knowledgeable person on HP's business propositions strong technical financial background to craft value propositions. Gerry Cashiola and Greg Pyle deferred to his judgement in the 11/16th meeting) Matt On November 10th GSS Business Development took HP through a tour of Enron's trading floor the gas control center and the peaking power plant unit center on the trading floor. This tour was one meeting amongst several held in October and November to provide HP a full overview of Enron's products and services and introduce them to appropriate contacts at Enron (EBS GSS buy side -- Peter Goebel). On November 16th GSS Business Development Patrick Tucker and Dale Clark outlined 3 possible EBS/HP focus areas -- connectivity storage and wireless. Three EBS action items were defined in that meeting: 1) HP was to provide an HP contact on connectivity (to date Gerry Cashiola has stalled on providing this). Sarah-Joy will continue to pursue this information and get a sense from Gerry Cashiola of what he means by short term opportunity. What is HP's time horizon for short term? 2) EBS and GSS/BD was to facilitate a conference call on Storage with Ravi to explore size and potential scope of opportunity (completed 12/8) 3) GSS/BD was to facilitate a conference call with Peter Goebel GSS IT Sourcing Portfolio Leader (set for 12/14) In conversations with you Jennifer Medcalf and myself this morning several decisions on forward-looking strategy with HP/EBS were confirmed: Gerry Cashiola has been unable to take control of the process. More importantly despite numerous visits to Enron in which he has had overviews of Enron's products and services met with Peter Goebel and his team on the GSS buy side and participated in an Experience Enron tour Gerry has been unable to define an HP business proposition. The coordination between Cashiola (short term initiative) Morgridge (long term 12-24 months) has remained unorganized. These initiatives need to be developed separately. Clearly the conversations with HP need to be elevated to a more senior level so EBS can work with HP decision makers who can move the relationship forward at a strategic level. As the relationship is developed at this strategic level shorter term opportunities will crop up along the way. But Gerry's short term plans will not be the focus of the EBS/HP relationship rather a by-product. To facilitate this process of elevating the relationship Jennifer Medcalf and I are following up with Bill Lovejoy and Greg Pyle. Lovejoy's boss is Dan Sytsma VP of HP's America's Central Region. In the conference call Thursday 12/14 with Peter Goebel and HP regarding wireless initiatives Peter will support the GSS/BD push for the HP/EBS initiative by reiterating the following two points: a) Enron is already an HP customer the onus is on HP to move forward on the process of building a strategic relationship (IBM and Lexmark are only some of the HP competitors who could push them out of the running) b) HP's ability to bring the right people to the table will influence HP's business relationship process with Enron Patrick Tucker and Dale Clark could build their relationship with Bill Dwyer Chief Architect e-Services Solutions (met at the meeting 11/16) in the near term. Perhaps plan a visit to Cupertino California to see Dwyer in person. We look forward to continuing close collaboration with your team on this and other opportunities. Sarah-Joy Hunter Enron Corporation Global Strategic Sourcing - Business Development #(713)-345-6541 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: AP Wires Thurs 3/22: Report: Power wholesalers overcharged California $5.= 5=20 billion Dow Jones Newswires Thurs 3/22: Reliant To Appeal Fed Judge Ruling To Sel= l=20 Pwr To Calif Sac Bee Thurs 3/22: Federal judge orders major power wholesaler to sell t= o=20 California San Jose Mercury News Thurs 3/22: State falling short on pacts that provi= de=20 low-cost energy Contra Costa Times Thurs 3/22: Crisis saps state surplus Sac Bee. Fri 3/23: Bill to pay small energy firms stalls Sac Bee Fri. 3/23: House panel ends energy hearings -- will it step in? Sac Bee Fri 3/23: Dan Walters: Crisis deepens: politicos panic San Diego Union Fri. 3/23: Report says power wholesalers overcharged=20 state $6 billion San Diego Union Fri 3/23: Disappearing state surplus sparks alarm San Diego Union Fri. 3/23: Outages darken economic outlook in state so= me=20 say San Diego Union Fri. 3/23: Out-of-state generators question power=20 regulators' authority San Diego Union Fri. 3/23: Allegheny Energy makes big California=20 connection LA Times Fri 3/23: Judge Frees Small Firm From Edison Contract SF Chron Fri 3/23: Lodi Defies Order for Blackouts=20 Utility tells PG&E to 'pay the bills' SF Chron Fri 3/23: Coming Down to the Wire=20 State legislators battle over alternative energy bills SF Chron Fri 3/23: Grid Operators Push to Prevent Overcharging=20 They say regulators must be aggressive to stop billing abuses=20 Mercury News Fri. 3/23: State's bill for energy could double this year Mercury News Fri. 3/23: Plan for alternate power plants stalls --- --- Report: Power wholesalers overcharged California $5.5 billion=20 DON THOMPSON Associated Press Writer Thursday March 22 2001=20 2001 Associated Press=20 (03-22) 11:41 PST SACRAMENTO Calif. (AP) -- Electricity wholesalers have= =20 overcharged California more than $5 billion since May by manipulating the= =20 energy market according to a report prepared for power grid managers.=20 The Independent System Operator will file the findings with federal=20 regulators and ask for a refund ISO spokesman Patrick Dorinson said.=20 The state auditor also said Thursday that the state's 1996 deregulation law= =20 encouraged both buyers and sellers of electricity to ``manipulate wholesale= =20 prices to their advantage'' by underestimating supply and demand.=20 The auditor's report lays out what it calls ``a complex combination'' of=20 deficiencies and misjudgments it says led to the state's power problems.=20 According to the ISO report five in-state power suppliers and 16 importers= =20 frequently offered electricity at prices higher than it cost them to produc= e=20 -- effectively withholding supplies -- or didn't bid at all when they were= =20 able to generate power.=20 ISO Director of Market Analysis Anjali Sheffrin presented the findings at a= =20 conference in Berkeley last week.=20 The companies have denied overcharging California and have said they expect= =20 the Federal Energy Regulatory Commission will determine their prices were= =20 justified.=20 The commission has recently stepped up scrutiny of power companies' behavio= r=20 during California's power crisis asking suppliers to justify $124 million = in=20 sales during the first two months of the year or refund the money. Critics= =20 claim thousands of additional questionable sales are not being challenged.= =20 California has been spending about $45 million a day -- $4.2 billion since= =20 January -- to purchase power for Pacific Gas and Electric Co. and Southern= =20 California Edison. Both utilities the state's largest have been cut off b= y=20 electricity wholesalers because their credit is almost worthless.=20 Edison and PG&E say they are nearly $14 billion in debt due to soaring=20 wholesale power costs. The state's deregulation law blocks them from=20 recovering the costs from customers.=20 State Controller Kathleen Connell said Wednesday that the state's=20 power-buying is gutting its budget surplus.=20 Since the state started making emergency power buys the surplus has fallen= =20 from $8.5 billion to about $3.2 billion she said.=20 Connell ordered an audit of the power buys saying Gov. Gray Davis is=20 withholding key financial information from her office and the Legislature.= =20 She said she would refuse to transfer $5.6 billion into a ``rainy day fund'= '=20 she said was set up to impress Wall Street as the state prepares to issue $= 10=20 billion in revenue bonds to cover its power buys.=20 Transferring the money would leave the state general fund $2.4 billion in= =20 debt Connell said.=20 Sandy Harrison spokesman for the state Department of Finance and Keely=20 Bosler of the Legislative Analyst's Office said such transfers are routin= e=20 and required by law.=20 ``The law says she has to do it. The law does not give her the power to=20 demand that kind of audit information'' Harrison said.=20 Davis spokesman Steve Maviglio said the administration has released the=20 financial information it can without jeopardizing negotiations for long-ter= m=20 power contracts with wholesalers.=20 Also Wednesday a federal judge ordered a major wholesaler Reliant Energy= =20 Services to continue selling power to California despite its fear that it= =20 will not be paid.=20 The ISO buys power from companies like Reliant on behalf of utilities in=20 attempts to fend off rolling blackouts like those that hit the state this= =20 week and during two days in January.=20 --- Reliant To Appeal Fed Judge Ruling To Sell Pwr To Calif 03/22/2001 Dow Jones Energy Service (Copyright (c) 2001 Dow Jones & Company Inc.) LOS ANGELES -(Dow Jones)- Reliant Energy Inc. (REI) said Thursday it will= =20 immediately file with the 9th Circuit Court of Appeals in San Francisco in= =20 response to a federal judge's ruling late Wednesday that the company contin= ue=20 selling power to California regardless of whether it is paid.=20 U.S. District Court Judge Frank Damrell granted California's Independent=20 System Operator which makes last minute power purchases in the spot market= =20 a preliminary injunction against Reliant saying Californians were at risk = of=20 irreparable harm if Reliant stopped selling power to the state. The ISO manager of the state's electricity grid said the judge's ruling= =20 will allow the agency to keep the lights on in California.=20 Reliant which is owed more than $300 million from the state's cash-strappe= d=20 utilities supplies California with about 3000 megawatts of electricity fr= om=20 power plants it owns in the state.=20 Reliant spokesman Richard Wheatley said the state Department of Water=20 Resources the agency that buys California's bulk power needs on behalf of= =20 PG&E Corp. (PCG) unit Pacific Gas & Electric Edison International (EIX) un= it=20 Southern California Edison and Sempra Energy (SRE) unit San Diego Gas &=20 Electric should back the ISO's last minute power purchases.=20 In a filing with the Securities and Commission Reliant said it is owed $10= 8=20 million by the DWR for last minute power purchases the ISO made during the= =20 six weeks prior to the agreement Reliant made with the DWR.=20 Damrell dismissed Reliant's claim saying he does not have the authority to= =20 force the DWR to pay for that power.=20 We're going to immediately appeal Judge Damrell's order Wheatley said.= =20 Clearly the judge understands the implications of his order. We are requir= ed=20 to do business with creditworthy entities. Unfortuantely the judge did not= =20 force the ISO to post a surety bond which would allowed us to do business= =20 with the ISO.=20 Gov. Gray Davis has said the state is not responsible for the last minute= =20 power purchases the ISO makes despite a law passed authorizing the DWR to= =20 buy power on behalf of the utilities.=20 Wheatley added that the company will also seek relief on the issue at the= =20 Federal Energy Regulatory Commission. Damrell's ruling remains in effect=20 until the Federal Energy Regulatory Commission rules on the matter.=20 Separately Wheatley said a short-term power supply contract that Reliant= =20 signed with the DWR expired Monday and the DWR has not renewed the contract= .=20 A spokesman for the DWR would not comment on the issue.=20 -By Jason Leopold Dow Jones Newswires 323-658-3874=20 jason.leopold@dowjones.com --- --- ----------------------- Federal judge orders major power wholesaler to sell to California Updated: March 21 2001 - 8:23 p.m.=20 A federal judge issued a preliminary injunction Wednesday ordering a major= =20 electricity wholesaler to continue selling to California despite its fear= =20 that it will not get paid.=20 U.S. District Judge Frank C. Damrell Jr. said Californians were at risk of= =20 irreparable harm if Reliant Energy Services stopped selling power to the=20 Independent System Operator which oversees the state's power grid. The ISO= =20 buys last-minute power on behalf of utilities to fill gaps in supply to try= =20 to fend off blackouts.=20 Damrell dismissed Reliant's attempt to force the state Department of Water= =20 Resources to back the ISO's purchases for the state's two biggest utilities= .=20 The state has been spending about $50 million a day on power for Pacific Ga= s=20 and Electric Co. and Southern California Edison both denied credit by=20 suppliers after amassing billions of dollars in debts. The judge said he had no authority to force the DWR to pay for that power.= =20 Gov. Gray Davis has said the state isn't responsible for purchasing the=20 costly last-minute power ISO buys for Edison and PG&E despite a law=20 authorizing state power purchases on the utilities' behalf.=20 ISO attorney Charles Robinson said the ruling gives ISO operators a tool t= o=20 assist them in keeping the lights on in California.=20 Had the decision gone the other way one could expect other generators to= =20 simply ignore emergency orders Robinson said.=20 Damrell's preliminary injunction will remain in effect until the Federal=20 Energy Regulatory Commission rules on the matter.=20 Damrell denied the ISO's request for preliminary injunctions against three= =20 other wholesalers Dynegy AES and Williams who agreed to continue selling= =20 to the ISO pending the FERC ruling.=20 Spokesmen for Reliant Dynegy AES and Williams were out of the office=20 Wednesday night and didn't immediately return calls from The Associated Pre= ss=20 seeking comment on the ruling.=20 The ISO went to court in February after a federal emergency order requiring= =20 the power sales expired. The judge then issued a temporary restraining orde= r=20 requiring the sales but dropped it after the suppliers agreed to continue= =20 sales to California pending his Wednesday ruling.=20 The ISO said it would lose about 3600 megawatts if the suppliers pulled ou= t=20 enough power for about 2.7 million households. One megawatt is enough for= =20 roughly 750 homes.=20 Grid officials said Reliant's share alone is about 3000 megawatts. Reliant= =20 said the amount at issue actually is less than a fourth of that because mo= st=20 of the power is committed under long-term contracts.=20 Reliant which provides about 9 percent of the state's power worries it=20 won't get paid due to the financial troubles of PG&E and Edison.=20 PG&E and Edison say that together they have lost about $13 billion since Ju= ne=20 due to soaring wholesale electricity costs that California's 1996=20 deregulation law bars them from passing onto customers.=20 At the same time the state has faced a tight electricity supply due in pa= rt=20 to California power plant shutdowns for maintenance and to a tight=20 hydroelectric supply in the Pacific Northwest.=20 Managers of the state power grid imposed rolling blackouts across the state= =20 Monday and Tuesday as supply fell short of demand. Wednesday cooling=20 temperatures and the completion of repairs at several power plants allowed= =20 the state to avoid blackouts. State Controller Kathleen Connell said Wednesday that the energy crunch als= o=20 imperils California's financial health. Connell said the state's power-buying on behalf of Edison and PG&E is is=20 gutting its budget surplus. Since the state started making emergency power= =20 buys in January the surplus has fallen from $8.5 billion to about $3.2=20 billion she said.=20 Connell ordered an audit of the state's power-buying saying Davis is=20 withholding key financial information from her office and the Legislature.= =20 She is refusing a request by Davis and the Legislature to transfer $5.6=20 billion into a rainy day fund she said was set up to impress Wall Street = as=20 the state prepares to issue $10 billion in revenue bonds to cover its=20 power-buying.=20 Transferring the money would leave the state general fund $2.4 billion in= =20 debt Connell said.=20 Sandy Harrison spokesman for the state Department of Finance and Keely=20 Bosler of the Legislative Analyst's Office said such transfers are routine= =20 and required by law.=20 They put the state's budget surplus at $5.6 billion.=20 The law says she has to do it. The law does not give her the power to dema= nd=20 that kind of audit information Harrison said.=20 He said the state's budget isn't in danger because it will be repaid with t= he=20 $10 billion in long-term debt.=20 Wells Fargo & Co. chief economist Sung Won Sohn said he sees little progres= s=20 in efforts to fix the state's power problems and end state electricity=20 purchases.=20 If we're going to pour money into a bottomless pit I would worry about th= e=20 state's finances he said. At some point we're going to run out of money.= The controller's criticism of fellow Democrat Davis won support from Assemb= ly=20 Republicans and Secretary of State Bill Jones a Republican considering=20 challenging Davis next year.=20 Jones said he wants to announce his own plan to solve the state's energy=20 woes but can't unless Davis releases more financial details.=20 Davis spokesman Steve Maviglio dismissed the criticism. Political grandstanding doesn't generate one more kilowatt of energy for= =20 California in this time of emergency he said.=20 Maviglio said the administration has released the financial information it= =20 can without jeopardizing negotiations for long-term power contracts with=20 wholesalers.=20 Also Wednesday a report by Davis' chief power negotiator appears to show= =20 that as much as 75 percent of the state's power purchases will have to be o= n=20 the expensive short-term market this summer said Sen. Debra Bowen D-Marin= a=20 del Rey chairwoman of the Senate Energy Committee.=20 The prices may be phenomenol she said particularly given predicted=20 hydroelectric shortages due to drought in the Pacific Northwest.=20 The report by David Freeman who is negotiating the state's long-term power= =20 contracts shows California has finalized 19 contracts and has 25 agreement= s=20 in principle. Freeman said DWR is continuing to negotiate other contracts. Bowen said FERC should impose short-term price caps or let generators to=20 charge enough to make a reasonable profit or we could be subject to enormo= us=20 price-gouging this summer.=20 -- Associated Press --- State falling short on pacts that provide low-cost energy=20 Published Thursday March 22 2001 in the San Jose Mercury News=20 BY CHRIS O'BRIEN AND JOHN WOOLFOLK=20 Mercury News=20 The state has signed low-cost contracts for just a third of the energy it= =20 needs this year raising the prospect that California could be forced to bu= y=20 much of its electricity this summer on the expensive spot market.=20 A spokesman for Gov. Gray Davis conceded Wednesday that the state will be i= n=20 trouble without more contracts but insisted California will meet its needs= =20 through conservation and additional long-term deals for cheap electricity.= =20 The state according to a report released Wednesday has fallen far short o= f=20 the governor's goal of filling almost all its electricity needs through suc= h=20 deals. In fact the state has lined up contracts for about half the amount= =20 Davis had projected earlier this month.=20 If the state has to rely heavily on the volatile spot market where the pri= ce=20 of electricity this summer could reach five times the state's contract pric= e=20 pressure could mount to raise the cap on the electricity rates consumers pa= y.=20 But Steven Maviglio the governor's spokesman said ``The governor has sai= d=20 he's committed to work this in the existing rate structure so that's the= =20 plan.''=20 In the report sent to state lawmakers the state Department of Water=20 Resources indicated that it had secured just more than 20 million=20 megawatt-hours for this year leaving it far short of the 60 million=20 megawatt-hours needed.=20 ``This is just a progress report'' Maviglio said. ``They did all this in= =20 three weeks which is pretty amazing when you think about it and we have a= =20 lot more to do.''=20 The state got into the power buying business in January supplying it to th= e=20 state's nearly bankrupt utilities.=20 The state negotiated long-term contracts with generators to supply that pow= er=20 at a reduced rate. Based on the report the state will pay an average of $6= 8=20 per megawatt-hour over the next 10 years -- significantly less than in=20 December when prices spiked higher than $300 per megawatt-hour but not as l= ow=20 as the $55 Davis hoped to reach.=20 Most of this power however won't be delivered until 2004. From 2004 to=20 2006 the Department of Water Resources estimates it has enough power unde= r=20 contract. Until then the amount falls short.=20 In 2001 it appears the state has about one-third of the power it needs. Th= e=20 gap closes to about half in 2002 and two-thirds in 2003.=20 At a news conference in Los Angeles two weeks ago Davis said the state wou= ld=20 have to buy only 30 to 45 percent of the power it needs this summer on the= =20 open market.=20 At the time critics said with only two-thirds of the power under contract= a=20 rate increase was almost inevitable. Even Davis' chief negotiator S. David= =20 Freeman offered a bleak assessment for the summer saying that all availab= le=20 electricity has already been sold.=20 ``We'll be subject to extremely high prices'' said Frank Wolak a Stanford= =20 professor who sits on a market committee for the Independent System Operato= r=20 the agency that runs the state power grid.=20 Wolak said there are two main hopes for avoiding a price increase this=20 summer: Federal officials could cap the wholesale price a step they've=20 resisted or Californians can conserve an unprecedented amount of power. --- --- ----------------------- Crisis saps state surplus POWER CRISIS=20 Controller moves to block a transfer of funds saying the $8.5 billion=20 surplus has been cut more than half since January=20 By Mike Taugher TIMES STAFF WRITER=20 The energy crisis has bled California's once-touted budget surplus by more= =20 than half since taxpayers began buying electricity two months ago leading = a=20 top state finance official Wednesday to order an audit of the power purchas= es=20 and block Gov. Gray Davis' plan to transfer funds into a reserve account.= =20 A booming economy last year produced a budget surplus that totaled $8.5=20 billion in January. But that figure now stands at about $3.2 billion=20 according to Controller Kathleen Connell.=20 We started this year with a generous budget surplus Connell said in a=20 statement announcing her decision to block what Davis administration=20 officials described as a routine transfer of surplus money. The energy=20 crisis has taken much of that away and this transfer on top of the=20 electricity purchases would put the fund at risk.=20 Meanwhile the Davis administration released a report by David Freeman the= =20 governor's chief negotiator on power purchases on the progress of executin= g=20 long-term agreements meant to stabilize the power buys.=20 According to the report only about 40 percent of the electricity needed fr= om=20 the open market this year has been lined up. That means the state could be= =20 forced to continue buying a substantial amount of power on the highly=20 expensive spot market and further drain its coffers.=20 And a key regulatory panel is scheduled next week to issue a ruling that=20 would determine how quickly state funds will be replenished when it decides= =20 what portion of electric bill payments should be allocated to the state=20 treasury a decision that could include a rate increase to fully repay=20 taxpayers without further crippling the state's two largest electric=20 utilities.=20 The Public Utilities Commission also will consider whether it will force th= e=20 utilities to pay alternative energy producers whose shutdowns this week=20 contributed to blackouts.=20 Connell's action underscores a growing nervousness over the sheer volume of= =20 money that is being poured into energy buys despite the fact that state=20 officials plan to replenish the treasury with up to $10 billion in loans th= at=20 will be repaid by electricity consumers.=20 The state has committed to spending $4.2 billion to date to keep lights on= =20 since taxpayers were forced in mid-January to take over electricity buys fr= om=20 the financially crippled utilities Pacific Gas & Electric Co. and Southern= =20 California Edison. Tax money is going out at a clip of about $50 million a= =20 day.=20 High prices already have brought PG&E and Edison to the brink of bankruptcy= =20 and now the state's surplus is at risk according to Connell.=20 In addition to requesting an audit and announcing her intention to delay th= e=20 transfer to the reserve account Connell said she wanted the administration= =20 to send her office more information about the electricity purchases.=20 Davis' representatives questioned Connell's authority in trying to block th= e=20 funds transfer which they called a routine accounting procedure and accus= ed=20 her of making political hay.=20 It is not helpful to the taxpayers or ratepayers or the people who just wa= nt=20 to keep the lights on it isn't helpful to have the situation muddied like= =20 this said Sandy Harrison a Finance Department spokesperson. We're sorry= =20 it came up in this manner.=20 Connell and the administration have butted heads in recent weeks. The=20 controller wants to post details of the state's electricity purchases on he= r=20 Web site a plan that have been delayed under pressure from Davis because o= f=20 the governor's concerns that releasing those details will allow power=20 generators and traders to sell at higher prices.=20 Harrison said administration officials believe Connell lacks the authority= =20 either to block the funds transfer to a reserve account or to audit the sta= te=20 water resources department.=20 Two days of widespread blackouts this week show how vulnerable the power gr= id=20 is to financial glitches. Although several factors combined to produce the= =20 blackouts state power officials say the outages could have been avoided if= =20 the utilities were paying their bills to alternative energy producers.=20 Many of those producers including clean-burning natural gas power plants= =20 wind solar and geothermal energy developers shut down enough production t= o=20 spell the difference between grid reliability and blackouts Monday and=20 Tuesday.=20 Davis called the utilities' failure to pay bills to those producers known = as=20 qualifying facilities immoral. The QFs were either unable to buy gas fro= m=20 their suppliers or were frustrated with the utilities' failure to pay them.= =20 The utilities hoarded billions of dollars since November without paying an= y=20 money out said Davis spokesman Steve Maviglio. They've got the money --= =20 we're pulling the trigger to make them pay it.=20 The utilities however say they are doing all they can to conserve enough= =20 cash to continue operating. Together they owe the QFs about $1.5 billion.= =20 Next week the PUC is scheduled to consider whether to force the utilities = to=20 heed Davis' demand to pay the QFs and it might also decide how much of=20 ratepayers' bill payments will be used to refund taxpayers for power buys.= =20 PG&E says that under a formula proposed by the administration the water=20 resources department would receive about 40 percent of the money collected= =20 from ratepayers for power purchases.=20 The rest of that money about $240 million would have to be divided among= =20 QFs existing power contracts operating PG&E's nuclear and hydroelectric= =20 plants and what hour-by-hour purchases the utility still must make on the= =20 spot market according to PG&E spokesman John Nelson.=20 There isn't enough to do that he said.=20 That is making it increasingly likely that electric bills will be hiked=20 according to a growing chorus of officials and experts.=20 Unless rates are raised Nelson said the only entity that can absorb a lac= k=20 of payment or a partial payment is the state treasury. Cutting off any othe= rs=20 will lead to electricity becoming unavailable and more blackouts he said.= =20 If they do it under existing rates -- given that the existing pool of mone= y=20 is not enough -- who doesn't get paid or who gets a partial payment? Nelso= n=20 said. What's the only entity left with wiggle room? The state.=20 Rate hikes are also a sticking point in negotiations to bail out the=20 utilities through purchase of their transmission lines and other assets=20 Maviglio said.=20 They want rate increases of significant magnitude and we're not going=20 there he said.=20 WE CAN TRIM STORY HERE IF NECESSARY BUT KEEP TAGLINES AT BOTTOM=20 About one-third the electricity needed by the customers of California's thr= ee=20 major utility companies is produced by the companies themselves one-third= =20 comes from alternative producers who use environmentally friendly technique= s=20 and one-third is bought on the open market.=20 The state stepped in to buy the one-third needed from the open market after= =20 the utility companies ran out of cash and credit in January to make the=20 purchases themselves.=20 But that electricity has proven to be enormously expensive and Davis has= =20 planned to lower those prices by committing to long-term purchases.=20 Freeman's report on the progress of those long-term purchases dated March = 15=20 but released this week said the state has finalized 19 contracts with seve= n=20 suppliers and reached 25 additional agreements.=20 Mike Taugher covers the environment and energy. Reach him at 925-943-8324 o= r=20 mtaugher@cctimes.com.=20 Staff writer Andrew LaMar contributed to this story. --- --- ----------------------- Bill to pay small energy firms stalls By Kevin Yamamura Dale Kasler and Jim Sanders Bee Staff Writers (Published March 23 2001)=20 A quickly melded proposal that would assure payments for alternative energy= =20 suppliers whose money woes contributed to power blackouts this week stalled= =20 Thursday in a divided Legislature.=20 The state Senate passed the bill AB 8x but with Republicans balking it w= as=20 rejected in the Assembly along party lines. Assembly leaders said they may= =20 try again today.=20 For most of Thursday lawmakers scrutinized legislation they had overhauled= =20 the night before to include Gov. Gray Davis' plan to force utilities to pay= =20 solar wind and small gas-fired suppliers. Such providers called qualifie= d=20 facilities or QFs provide more than 20 percent of California's=20 electricity and their shutdowns were partly to blame for rolling blackouts= =20 Monday and Tuesday.=20 Under the Democratic governor's plan the state Public Utilities Commission= =20 would determine prices at which alternative generators may sell power but= =20 legislation is needed to authorize the PUC action.=20 Lawmakers faced time pressures Thursday. They wanted to pass the bill quick= ly=20 so the PUC could act next week and legislators could embark Monday on an=20 annual three-day lobbying trip in Washington D.C.=20 Assembly Speaker Robert Hertzberg D-Sherman Oaks said the Republicans'=20 rejection of AB 8x could jeopardize more than $4 billion the state has spen= t=20 or allocated for electricity during the energy crisis.=20 Hertzberg said producers of alternative energy which are owed more than $1= =20 billion have threatened to drag debt-ridden utilities into involuntary=20 bankruptcy if the Legislature failed to pass the measure.=20 They said it and I believe it Hertzberg said. If such bankruptcies occu= r=20 he added the state with its multibillion-dollar debt would become just=20 another creditor in a pile of creditors.=20 But Assembly Republican leader Bill Campbell of Villa Park said the=20 finger-pointing is unfair. Passage of AB 8x would not necessarily prevent= =20 bankruptcies he said.=20 One alternative energy provider won a crucial court ruling Thursday that=20 staved off at least for a while threats by some creditors to haul one or= =20 both big utilities into bankruptcy court for nonpayment of bills.=20 CalEnergy Co. Inc. won the right to sell its geothermal power which was=20 contracted to Southern California Edison on the open market. CalEnergy sai= d=20 it is owed $45 million by Edison.=20 If the Imperial County judge hadn't ruled in CalEnergy's favor the company= =20 and seven other QFs were fully prepared to file an involuntary bankruptcy= =20 petition against Edison this morning said David Sokol chief executive of= =20 CalEnergy's parent MidAmerican Energy Holdings Co. of Des Moines Iowa.=20 That is currently off the table.=20 An involuntary bankruptcy proceeding would take California's energy crisis= =20 into uncharted territory although a bankruptcy judge would have the leeway= =20 to reject the filing.=20 Freed from its contract with Edison CalEnergy will move to sell its=20 electricity to people who will pay for it Sokol said.=20 Besides calming the bankruptcy movement temporarily the ruling also could= =20 prompt other alternative energy providers -- hundreds of which have shut do= wn=20 because of nonpayment by Edison and Pacific Gas and Electric Co. -- to foll= ow=20 CalEnergy's example and find other buyers for their electricity said Gary= =20 Ackerman of the Western Power Trading Forum an association of generators.= =20 Assembly Republicans said they felt the Senate's decision to package three= =20 important energy issues into a single bill was an attempt to ramrod=20 legislation through both houses.=20 We have to stand and say no Campbell said during floor debate.=20 Besides determining alternative generator payments the bill would change a= n=20 earlier law by capping the value of bonds the state may sell for power=20 purchases at $10 billion. It also would extend to large businesses an=20 existing rate cap in the San Diego Gas and Electric Co. service area.=20 And it would earmark a portion of rates paid by utility customers to fund t= he=20 state's ongoing power purchases. Within a week the state will have spent= =20 $4.2 billion on power since January.=20 Without the bill some legislators fear Pacific Gas and Electric and=20 Southern California Edison would be reimbursed before the state.=20 They have got (some) gall to go to the PUC and say they're going to go to= =20 court to keep our money -- to keep our money to pay off their creditors= =20 said Senate President Pro Tem John Burton D-San Francisco.=20 Most of the bill's controversy however centered on how the PUC would trea= t=20 gas-fired alternative generators.=20 The commission issued a revised draft decision Wednesday that would impose= =20 prices for qualifying facilities at $79 a megawatt-hour for five-year=20 contracts or $69 a megawatt-hour for 10 years.=20 But those producers that use natural gas -- representing about two-thirds o= f=20 the alternative energy providers in California -- spent Thursday arguing th= at=20 Davis' plan to rescue them would all but guarantee that they would go out o= f=20 business instead.=20 The plan -- ordering Edison and PG&E to pay them a fixed price for their=20 power -- would set rates well below the cost of natural gas they said.=20 Democratic lawmakers tried to assure such producers that the PUC would set= =20 prices that make business sense even obtaining a letter to that effect fro= m=20 Loretta Lynch who heads the commission.=20 Davis has vowed to fine Edison and PG&E if they don't pay alternative=20 producers for future deliveries. But Sokol said his company isn't convinced= =20 that Edison will pay.=20 Calling Edison a confrontive in-your-face nasty organization Sokol sai= d=20 the utility was sitting on $2 billion and not paying its bills. Edison i= n=20 a Securities and Exchange Commission filing Thursday said its debts outwei= gh=20 its cash reserves by $722 million.=20 The Senate sent the Assembly two other bills that deal specifically with=20 supply and demand. The first SB 5x would spend about $1 billion on energy= =20 conservation and low-income assistance programs. The other SB 28x would= =20 streamline siting procedures for power plant construction.=20 In separate energy-related matters Thursday the Assembly approved:=20 AB 21x which would allow businesses industries or other electrical=20 customers to negotiate private contracts with energy providers.=20 Nine energy bills designed to generate or save 665 megawatts of electricity= =20 -- including 345 megawatts this summer. One megawatt is enough electricity = to=20 light about 1000 homes.=20 The state put power emergencies behind it after dropping out of a Stage 1= =20 alert late Wednesday. The California Independent System Operator which=20 manages the state's power transmission grid was predicting no further aler= ts=20 this week. It expected cooling temperatures and a regular dropoff in=20 electricity use on Fridays to lessen demand at the same time that more pow= er=20 plants were returning to service.=20 Bee staff writer Carrie Peyton contributed to this report.=20 --- House panel ends energy hearings -- will it step in? By David Whitney Bee Washington Bureau (Published March 23 2001)=20 WASHINGTON -- A key House panel wrapped up a series of hearings on the=20 California electricity crisis Thursday and now will decide whether to come = to=20 the state's aid with legislation.=20 But the panel's Texas chairman made clear that West Coast price controls=20 won't be on the table.=20 Caps will not be in anything I am submitting said Rep. Joe Barton=20 chairman of the House Energy and Commerce Committee's energy and air qualit= y=20 subcommittee.=20 Some form of federal controls to hold down escalating wholesale prices this= =20 summer because of power shortages has been the most frequent appeal of=20 witnesses who testified before the panel during roughly 30 hours of hearing= s=20 over five days.=20 Such controls have been sought by the governors of California Oregon and= =20 Washington. As power shortages are forecast for other regions states like= =20 New York also have appealed for temporary price controls to halt gouging.= =20 But the Federal Energy Regulatory Commission which is responsible for=20 enforcing reasonable wholesale rates under the Federal Power Act has refus= ed=20 to impose them and the Bush administration is bolstering that decision by= =20 opposing any legislation that would compel such action.=20 Barton in a brief hallway interview declined to say what other legislativ= e=20 remedies he might propose to address the worsening California situation.=20 He said he expects to submit a list of ideas to the White House today and= =20 after receiving comment on it sit down with other committee Republicans an= d=20 Democrats next week to see if any legislation is in order.=20 If we are going to do anything to help California or the West this summer= =20 we have to make it law within the next month or six weeks Barton said.=20 Even the panel's senior Democrat Virginia Rep. Rick Boucher was urging a= =20 careful and deliberate approach to the California crisis which he said w= as=20 largely of the state's own making.=20 There are steps Congress might take to provide some help to the West such = as=20 more money for conservation and relaxed federal regulation of air quality= =20 standards. That would permit older more polluting generators to operate=20 through a long hot summer when electricity demand could exceed supply by= =20 about 3000 megawatts roughly the amount needed to power 3 million homes.= =20 But Alan Lloyd chairman of the California Air Resources Board said power= =20 production already is being maximized without sacrificing air quality.=20 Simply put no essential electricity generation has been curtailed due to= =20 air emission limitations he said. California's programs to protect publi= c=20 health are not major factors in the electricity shortages experienced to=20 date.=20 The concern is that as shortages turn into more rolling blackouts wholesal= e=20 prices will jump even higher and steadily bleed the economies of California= =20 and the West Coast.=20 William L. Massey the lone member of the energy regulatory commission who= =20 supports price controls said at a Tuesday hearing that without them the We= st=20 Coast faces economic catastrophe this summer.=20 It was evident from the comments of some Republicans that they think their= =20 party could capitalize politically from a difficult summer.=20 If they had a bad summer it could show up in the polls said Rep. Charli= e=20 Norwood R-Ga. And sometimes that's not a bad idea.=20 One of the most dramatic exchanges during the weeklong hearings came Thursd= ay=20 with S. David Freeman the former general manager of the Sacramento Municip= al=20 Utility District who now heads the Los Angeles Department of Water and Powe= r.=20 He recently was named Gov. Gray Davis' chief negotiator with power generato= rs=20 for long-term contracts to stabilize future deliveries.=20 Don't feel sorry for California Freeman said. We're going to come out o= f=20 this stronger than ever.=20 But Freeman said it will be a year or two before all the fixes are in place= =20 and in the meantime the region desperately needs Congress' help to force th= e=20 FERC into controlling wholesale prices which witnesses said are likely to= =20 rise from $7 billion last year to as much as $70 billion or more this year.= =20 We recognize that the current administration and various legislators have= =20 their own opinion as to the California situation Freeman said. But my=20 personal plea is that if the federal government is not going to help us th= e=20 least it should do is refrain from legislation that attempts to tell us wha= t=20 to do.=20 Barton perked up at that idea.=20 Leave California alone huh? Barton said. That might be a good motto.= =20 --- --------------------- Dan Walters: Crisis deepens: politicos panic (Published March 23 2001)=20 That choking sound you hear is California's political class shifting into= =20 near-panic mode as it realizes that the energy crisis is on the verge of=20 becoming a full-scale meltdown with utilities forced into bankruptcy and= =20 consumers hammered by severe and prolonged power blackouts and soaring=20 electricity bills.=20 The Legislature which had been content to allow Gov. Gray Davis to handle= =20 the crisis on his own suddenly came to life Thursday jolted by this week'= s=20 unexpected rolling blackouts and threats by creditors to force the utilitie= s=20 into bankruptcy court. Lawmakers quickly fashioned a basketful of legislati= on=20 aimed -- or so they hope -- at increasing power supplies promoting=20 conservation and relieving the financial pressure on utilities and=20 electricity generators. But it may be too little too late -- and Davis and= =20 other politicians are already pointing fingers of blame aware that a=20 political price will be paid if the apocalypse strikes.=20 While Davis chants his mantra that he inherited a fatally flawed utility=20 deregulation scheme from predecessor Pete Wilson Republicans are blaming= =20 Davis for moving too slowly after the crisis first surfaced last summer an= d=20 even some of Davis' fellow Democrats are distancing themselves from the=20 governor.=20 Deregulation was a product of a Republican governor a Republican author a= nd=20 a Republican PUC (Public Utilities Commission) that was unduly impatient= =20 Davis said at one point this week as the Capitol buzzed with private=20 negotiations and public posturing.=20 A day later however state Controller Kathleen Connell a Democrat issued= a=20 warning that Davis' power purchases running at $50 million a day had=20 already drawn down state budget reserves by nearly two-thirds and she=20 refused to authorize additional transfers. It was a direct shot by Connell = at=20 Davis an old rival and came just a day after the governor had endorsed a= =20 Connell foe Antonio Villaraigosa in the duel for mayor of Los Angeles.=20 Other Democrats didn't join Connell's direct challenge to Davis but there= =20 is nevertheless a growing concern among Democratic legislators that the= =20 power purchases are costing many billions of dollars more than the governor= =20 had projected and could place the state budget in jeopardy. They're nervous= =20 because Davis has refused to reveal even to legislators exactly how much= =20 power the state is buying each day and how much it is paying.=20 From the few details that have been disclosed it's clear that the state is= =20 spending about $1.5 billion a month which would wipe out the state's=20 reserves by midsummer. It's also becoming increasingly clear that Davis=20 probably can't make good on his promise to avoid major consumer rate=20 increases unless the state is willing to plunge deeply and semi-permanentl= y=20 into debt to underwrite wholesale costs or unless federal authorities orde= r=20 huge refunds from power suppliers.=20 Rates in areas served by private utilities have risen only slightly while t= he=20 costs first to utilities and later to the state soared. Data from the=20 administration and utilities when collated indicate that the state is in= =20 line to collect just 20 cents for every dollar it's spending on power=20 purchases and the gap will increase as summer heat drives up demand.=20 Privately some economists say that private utility rates will have to rise= =20 33 percent to 50 percent to cover costs of current power supplies plus=20 utilities' past debts to generators and the state's purchase of the=20 utilities' transmission system if that deal is made final.=20 It's ultimately going to break down and the ratepayer is going to pay for= =20 it one way or the other Republican Sen. Jim Battin said during one of=20 Thursday's many committee hearings on utility legislation. No one disagreed= =20 with him.=20 DAN WALTERS' column appears daily except Saturday. Mail: P.O. Box 15779= =20 Sacramento CA 95852 phone (916) 321-1195 fax: (781) 846-8350 E-mail: dwalters@sacbee.com Recent columns: --- Report says power wholesalers overcharged state $6 billion=20 By Don Thompson ASSOCIATED PRESS=20 March 22 2001=20 SACRAMENTO =01) Electricity wholesalers have overcharged California more th= an=20 $6.2 billion by manipulating the energy market according to a report by an= =20 economist working for power grid managers.=20 The Independent System Operator planned to file the findings with federal= =20 regulators Thursday and ask for a refund said ISO spokesman Patrick=20 Dorinson.=20 In a related development the state auditor said Thursday that the state's= =20 1996 deregulation law encouraged both buyers and sellers of electricity to= =20 manipulate wholesale prices to their advantage by underestimating both=20 supply and demand.=20 Disappearing state surplus sparks alarm=20 Outages darken economic outlook in state some say=20 Out-of-state generators question power regulators' authority=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 The auditor's report lays out what it calls a complex combination of=20 deficiencies and misjudgments it says led to the state's power problems.=20 The ISO's filing came a day after the state controller complained that a=20 relentless energy crisis is jeopardizing California's financial future.=20 Since May the companies manipulated the market by bidding at excessive=20 prices effectively withholding supplies or by not bidding at all when they= =20 had generation capability available according to the ISO study.=20 ISO Director of Market Analysis Anjali Sheffrin presented the findings at a= n=20 energy conference at the University of California Berkeley last week.=20 The companies have denied overcharging California and have said they expect= =20 the Federal Energy Regulatory Commission will determine their prices were= =20 justified.=20 In a burst of activity after weeks of delay both houses of the Legislature= =20 approved bills Thursday designed to ease the energy crisis.=20 The state Senate approved measures to encourage energy conservation and spe= ed=20 up power plant construction.=20 Topping that the Assembly sent the Senate 14 energy-related bills includi= ng=20 $455 million in loans and grants to encourage energy efficiency and=20 conservation and alternative energy projects by this summer.=20 One of the Assembly bills would require new energy plants approved by the= =20 state to sell their power within California before they offer it to other= =20 states.=20 The (California) Energy Commission says for every day we delay this bill= =20 there are 20 megawatts that could be saved that we're not saving said sta= te=20 Sen. Byron Sher D-Stanford as senators voted 28-10 to send his conservati= on=20 measure to the Assembly.=20 Senators also approved another Sher bill speeding up the siting of power=20 plants. It went to the Assembly on a 37-1 vote.=20 Meanwhile a federal judge issued a preliminary injunction Wednesday orderi= ng=20 one of the companies named in the ISO filing Reliant Energy Services to= =20 continue selling to California despite its fear that it will not be paid.= =20 U.S. District Judge Frank C. Damrell Jr. said Californians were at risk of= =20 irreparable harm if Reliant stopped selling power to the ISO which buys at= =20 the last minute on behalf of utilities to bolster supplies and try to fend= =20 off blackouts.=20 Such blackouts struck the state twice this week shutting off power to=20 hundreds of thousands of people from San Diego to Oregon snarling traffic= =20 and shutting down businesses.=20 The state remained free of any power alerts Thursday morning as power=20 reserves stayed above 7 percent.=20 Damrell dismissed Reliant's attempt to force the state Department of Water= =20 Resources to back the ISO's purchases for the state's two biggest utilities= =20 Southern California Edison and Pacific Gas and Electric Co.=20 The judge said he had no authority to force the DWR to pay for that power.= =20 The utilities have been denied credit after amassing billions of dollars in= =20 debt paying high prices for power that the state's energy deregulation law= =20 prevents them from passing on to consumers.=20 Gov. Gray Davis has said the state isn't responsible for purchasing the=20 costly last-minute power the ISO buys for Edison and PG&E despite a law=20 authorizing state power purchases on the utilities' behalf.=20 ISO attorney Charles Robinson said the ruling gives ISO operators a tool t= o=20 assist them in keeping the lights on in California.=20 Had the decision gone the other way one could expect other generators to= =20 simply ignore emergency orders Robinson said.=20 Damrell's preliminary injunction will remain in effect until the Federal=20 Energy Regulatory Commission rules on the matter.=20 In another development Wednesday state Controller Kathleen Connell=20 complained that the energy crunch is imperiling California's financial=20 health.=20 Connell said the state's power buying on behalf of Edison and PG&E is gutti= ng=20 its budget surplus. Since the state started making emergency power buys in= =20 January the surplus has fallen from $8.5 billion to about $3.2 billion sh= e=20 said.=20 Connell ordered an audit of the state's power buying saying Davis is=20 withholding key financial information from her office and the Legislature.= =20 She is also refusing a request by Davis and the Legislature to transfer $5.= 6=20 billion into a rainy day fund she said was set up to impress Wall Street = as=20 the state prepares to issue $10 billion in revenue bonds to cover its power= =20 buying.=20 Transferring the money would leave the state general fund $2.4 billion in= =20 debt Connell said.=20 Sandy Harrison spokesman for the state Department of Finance and Keely=20 Bosler of the Legislative Analyst's Office said such transfers are routine= =20 and required by law.=20 They put the state's budget surplus at $5.6 billion.=20 Davis spokesman Steve Maviglio dismissed the criticism.=20 Political grandstanding doesn't generate one more kilowatt of energy for= =20 California in this time of emergency he said.=20 Connell is a candidate for mayor of Los Angeles in next month's election.= =20 The ISO study meanwhile covered five major in-state power suppliers =01)= =20 Reliant Dynegy Williams/AES Duke Energy and Mirant as well as 16 power= =20 importers. All deliver power to customers of Edison PG&E and San Diego Gas= &=20 Electric Co. the state's three largest investor-owned utilities.=20 All overcharged but some excessively and some by moderate amounts said= =20 ISO's Sheffrin.=20 According to the report the overcharging took place beginning last May wh= en=20 the energy crisis began and continued through last month.=20 During that time according to the report energy suppliers commonly offere= d=20 their electricity at twice the amount it cost them to produce.=20 FERC member William L. Massey said he wasn't shocked to hear the amount=20 overcharged added up to more than $5 billion.=20 Prices over the past 10 months in California have greatly exceeded the=20 federal standards of just and reasonable prices and I think they have=20 exceeded the standards by possibly billions of dollars he said.=20 Chuck Griffin spokesman for Atlanta-based Mirant said the company would=20 justify their charges to FERC officials.=20 I think we're missing sometimes just how basic the problem is in Californi= a.=20 Supply and demand are out of whack and some basic rules of economics kick i= n=20 when that happens he said.=20 --- ------------- Disappearing state surplus sparks alarm=20 Controller puts hold on transfer of $5.6 billion to reserve funds By Karen Kucher and Ed Mendel=20 UNION-TRIBUNE STAFF WRITERS=20 March 22 2001=20 The state's general fund surplus has dropped to $3.2 billion from $8.5=20 billion since January largely because California's power purchases are=20 devouring the money state controller Kathleen Connell said yesterday.=20 Connell said she wants to see more documentation about state power spending= =20 before approving the transfer of $5.6 billion from the general fund to a=20 special reserve fund requested by Gov. Gray Davis.=20 Connell said the state would have to borrow $2.4 billion to cover the=20 transfer.=20 Report says power wholesalers overcharged California $5.5 billion=20 Outages darken economic outlook in state some say=20 Out-of-state generators question power regulators' authority=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 We started this year with a generous budget surplus. The energy crisis has= =20 taken much of that away and this transfer on top of the electricity=20 purchases would put the (general) fund at risk Connell said in a statemen= t.=20 Her action came on a day when state power supplies improved. After two days= =20 of forced outages this week no rolling blackouts were ordered yesterday.= =20 Several power plants came back on line and imports from the Pacific Northwe= st=20 provided enough electricity to meet demand yesterday said Stephanie=20 McCorkle a spokeswoman with the California Independent System Operator=20 which manages most of the state's power grid.=20 Gradually more (electricity) generation comes on every day McCorkle said= .=20 By Monday we should see somewhere around 2200 megawatts back in service= =20 that was not on this Monday. That's if no other generation falls off.=20 Meanwhile Connell's move took some by surprise.=20 A spokesman for the state Department of Finance said Connell is denying a= =20 routine transfer that is required by law. It was just a routine accounting= =20 measure that we didn't anticipate becoming controversial Sandy Harrison= =20 said.=20 Connell announced the denial of the transfer a day after Davis endorsed one= =20 of her opponents former Assembly Speaker Antonio Villaraigosa in the race= =20 for Los Angeles mayor.=20 Connell who monitors California's cash flow said she was deeply concerne= d=20 about putting the state's general fund in a deficit situation in light of t= he=20 energy crisis.=20 About two months ago the state began spending about $50 million a day to b= uy=20 power after Pacific Gas and Electric and Southern California Edison nearly= =20 went bankrupt. It is also purchasing power for customers of San Diego Gas a= nd=20 Electric.=20 The Davis administration said earlier this week it soon will begin spending= =20 an additional $500 million on power purchases bringing the total to $4.2= =20 billion.=20 As that staggering sum continues to grow the state won a court battle with= =20 an electricity supplier yesterday. A federal judge in Sacramento sided with= =20 the state and ordered the wholesaler to continue selling to California=20 despite its fear that it will not get paid.=20 Judge Frank C. Damrell Jr. said Californians were at risk of irreparable ha= rm=20 if Reliant Energy Services stopped selling power to the Independent System= =20 Operator. The ISO acquires last-minute power on behalf of utilities to fill= =20 gaps in supply to try to fend off blackouts.=20 Damrell dismissed Reliant's attempt to force the state Department of Water= =20 Resources to back the ISO's purchases for the state's two biggest utilities= .=20 The judge said he had no authority to force the DWR to pay for the power.= =20 Davis has said the state isn't responsible for purchasing the costly=20 last-minute power the ISO buys for Edison and PG&E despite a law authorizi= ng=20 state power purchases on the utilities' behalf.=20 Meanwhile those who manage the power grid say the forecast for power=20 supplies this week looks good although conditions can change quickly.=20 ISO managers continue to stress the importance of conservation. Utility=20 customers across the state conserved about 900 megawatts of power Tuesday= =20 which kept blackouts from being ordered that night.=20 As the power crisis worsened this week ISO managers wished aloud that they= =20 still could rely on business customers to shut down in exchange for lower= =20 energy rates.=20 Such interruptible customers saved as much as 2100 megawatts last spring= =20 a figure that dropped to about 1700 last summer and 1400 at the end of th= e=20 year. But in January the state Public Utilities Commission told utilities= =20 they could no longer impose fines on business customers who refuse to shut= =20 down when asked.=20 ISO managers realize the program was harming businesses with frequent=20 interruptions of service -- but they still miss having that option McCorkl= e=20 said.=20 It would have made an enormous difference but at the same time we=20 understand the impact it was having on businesses McCorkle said. --- -------------- Outages darken economic outlook in state some say=20 By Dean Calbreath? UNION-TRIBUNE STAFF WRITER=20 March 22 2001=20 Until this week the San Diego Regional Chamber of Commerce was predicting= =20 that the county was well-insulated from the growing threat of economic=20 recession.=20 But that was before the lights went out in the chamber's downtown=20 headquarters Monday.=20 Working by window light in his darkened office chamber economist Kelly=20 Cunningham rapidly erased his previous projections for 3.5 percent growth f= or=20 San Diego County. Cunningham now feels the local economy could fall into a= =20 recession thanks to its shaky supply of energy.=20 Report says power wholesalers overcharged California $5.5 billion=20 Disappearing state surplus sparks alarm=20 Out-of-state generators question power regulators' authority=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 Blackouts are very disruptive to the economy Cunningham said. A busines= s=20 can absorb rising energy prices by cutting costs or raising its own prices.= =20 But an energy shutoff is much less predictable. It cuts into productivity.= =20 Those sentiments are being echoed throughout California as business leader= s=20 and economists worry that rolling blackouts will darken the state's=20 previously glowing economy.=20 At the University of California Los Angeles for instance leading financia= l=20 theorists will meet April 4 to discuss the question Can California grow in= =20 the dark? Although the topic was chosen before the recent string of power= =20 outages the blackouts have given the issue new urgency.=20 These blackouts are not just a single episode said UCLA economist Tom=20 Lieser. They are a bridge to what will happen this summer. If we don't fal= l=20 into a recession in the second half of the year we will fall pretty close.= =20 Tapan Munroe an economist formerly with Pacific Gas and Electric this wee= k=20 crossed out his projection for 2 percent statewide growth. After blackouts= =20 rolled toward his consulting offices in the Bay Area city of Moraga Munroe= =20 decided the state will be lucky if it manages zero growth.=20 I'm a pretty optimistic guy by nature but this has been sobering Munroe= =20 said. On Tuesday one restaurant alone in San Francisco lost $20000.=20 Multiply that by all of the businesses that lost power in the state and=20 you've got a serious problem.=20 Two days of blackouts in San Diego County have hurt businesses large and=20 small. Among the industries under threat is the local biotechnology sector= =20 which requires a steady supply of electricity to power areas of laboratorie= s=20 that must remain temperature-controlled and sterile.=20 Continued blackouts could have a huge impact not only in dollars but=20 multiple millions of dollars said Tom Oster vice president of operations= =20 for BioCom the leading trade organization for the more than 200 biotechs i= n=20 San Diego County.=20 Idun Pharmaceuticals a biotech near La Jolla Village Drive that has 67=20 employees had its power cut for about 40 minutes Tuesday. Though the compa= ny=20 has a back-up generator some segments of its laboratories and lab equipmen= t=20 were not supported by it. Chemists also had to turn off some sensitive lab= =20 equipment to avoid the possibility of a damaging power surge once the=20 blackout was over.=20 We're not in a position as a small company to back up the whole facility= =20 said Steven Mento Idun's chief executive. We haven't done a survey yet to= =20 determine whether we had losses either in experiments or equipment damaged= =20 -- but we're hoping because the blackout was so short that damage will be= =20 minimal.=20 Mento said rolling blackouts coupled with continuing high energy costs=20 could cripple many small biotechs -- and even take a bite out of bigger mo= re=20 established companies.=20 We generate new compounds in controlled environments on a daily basis and= =20 when power goes off you can lose samples because of contamination and other= =20 issues Mento said. We are fortunate that our losses would be in having t= o=20 repeat an experiment -- but this could be really critical for companies wit= h=20 drug manufacturing and issues of quality control.=20 The wireless firms along Sorrento Valley have not been immune from blackout= s.=20 The lights went out at Qualcomm early this week although executives declin= ed=20 to comment about the impact.=20 No blackouts hit the big shipbuilding operations on the waterfront this wee= k.=20 But the National Steel and Shipbuilding Co. -- one of San Diego's largest= =20 employers -- already experienced a voluntary loss of power this year its= =20 first since World War II. Since the shipyard does not have its own power=20 supply NASSCO executives fear the effect of unplanned outages.=20 Our average payroll totals half a million dollars a day said NASSCO=20 spokesman Jim Scott. When you have a day's work disrupted that can be=20 pretty serious. We're currently in discussions about the possibility of=20 buying from independent power suppliers or setting up a power plant of our= =20 own.=20 Small businesses which constitute the bulk of employment in San Diego=20 County were hurt by disruptions as well -- costing them vital revenue at a= =20 time when their power bills have skyrocketed.=20 At Fantastic Sam's a hair salon in Chula Vista Angelica Alcala estimated= =20 that business dropped 60 percent when the blackouts hit Tuesday. Among othe= r=20 things Alcala had to alter her planned haircuts because she was relying on= =20 scissors instead of electric clippers.=20 At the Family Fun Center in El Cajon the management gave vouchers or refun= ds=20 to the 15 or so video-game players who were in the midst of killing aliens = or=20 fighting ninja warriors as the power went down.=20 Papa John's Pizza estimates that it may have lost several thousand dollars = in=20 business after six stores were blacked out Monday and four others lost powe= r=20 Tuesday. Brian Mills who runs 23 Papa John's stores in the county said hi= s=20 main concern was shutting down the computers so they would not be damaged b= y=20 a power surge when the electricity was restored.=20 Paul Ecke III a member of the West Coast advisory panel for the Federal=20 Reserve said the potential impact of the energy crisis is worse than any= =20 downturn in the stock market.=20 Ecke who runs the Paul Ecke Ranch flower operation in Encinitas said the= =20 crisis could be particularly harmful for the state's agricultural sector= =20 since farmers need electricity to pump water and natural gas to heat=20 greenhouses.=20 What I'm really worried about is the energy thing is going to cast a shado= w=20 on California he said. If you're a business person thinking about moving= =20 to California right now you're probably not going to do it because you're= =20 not sure you're going to have your lights on this summer.=20 Besides the disruption to businesses the energy crisis is also hurting the= =20 pocketbooks of hourly workers who have been sent home during the crisis.=20 Under state law employers are free to send hourly workers home without pay= =20 during such emergencies although salaried workers must still be paid.=20 Susan Kemp an attorney with the California Chamber of Commerce said there= =20 are ways of minimizing the impact on hourly workers.=20 You have to look at what time it is when the blackout occurs and how long= =20 you think it's going to last Kemp said. If it's around a meal time you= =20 might send the workers out for a longer meal period if you think it's going= =20 to be an hour or hour and a half delay.=20 But the potential for losing wages doesn't sit well with the hourly workers= .=20 When you get sent home early and lose your wages you have even less money= =20 to pay your inflated energy bills said an hourly worker who was sent home= =20 during Monday's blackout.=20 --- ---------- Out-of-state generators question power regulators' authority=20 By Karen Gaudette ASSOCIATED PRESS=20 March 22 2001=20 SAN FRANCISCO =01) At least three major out-of-state electricity generators= are=20 challenging the authority of the California Public Utilities Commission to= =20 investigate whether they deliberately reduced power supplies to drive up=20 prices.=20 The PUC has asked for power plant maintenance records as it tries to=20 determine whether Duke Energy Dynegy Inc. Mirant Corp. and other=20 wholesalers have manipulated the energy market at California's expense.=20 At issue is who ultimately controls oversight of in-state plants that provi= de=20 most of California's electricity. The plants once owned by the state's=20 largest utilities were sold off as part of the state's 1996 attempt at=20 deregulation.=20 Report says power wholesalers overcharged California $5.5 billion=20 Disappearing state surplus sparks alarm=20 Outages darken economic outlook in state some say=20 Allegheny Energy makes big California connection=20 Enron stock slides despite earnings reassurance=20 California's electricity crisis at-a-glance=20 ?=20 PUC President Loretta Lynch said the public deserves to know whether=20 generators have unnecessarily taken plants off-line to create artificial=20 shortages forcing the utilities and now state bureaucrats to buy much high= er=20 priced power on the spot energy market.=20 What I do know is we have historically high levels of outages across the= =20 board Lynch told The Associated Press. Dynegy and Duke have been fightin= g=20 the PUC in the PUC's quest to obtain documents about these outages.=20 The PUC has the authority to regulate facilities within its borders she=20 added. It doesn't matter where the headquarters of the company is.=20 Duke based in North Carolina says it does matter =01) and that since it a= nd=20 other wholesalers aren't headquartered in California the PUC can't require= =20 it to turn over the maintenance records.=20 We have not given them proprietary information because they do not regulat= e=20 us said Duke's spokesman Tom Williams.=20 Dynegy did not return calls for comment Wednesday.=20 The PUC also faces a new challenge in the legislature. A bill sponsored by= =20 Assemblywoman Carole Migden D-San Francisco which would have granted the= =20 PUC greater inspection authority over out-of-state generators was amended= =20 this month to grant the authority to Independent System Operator instead.= =20 The ISO has managed the delivery of energy through most of the state's powe= r=20 grid but historically has done little regulating and has had no policing=20 authority.=20 This board created during the state's 1996 attempt at deregulation was=20 redesigned in January. Now it has a five-member board appointed by Davis= =20 replacing a 26-member ISO board composed of utility executives marketers= =20 power plant owners and others.=20 The latest version of Migden's bill requires wholesalers to report monthly = to=20 the ISO about any plants that are off-line or working at reduced capacity= =20 and gives the ISO power to audit these reports.=20 But because the ISO board historically has made key decisions behind closed= =20 doors and is exempt from certain open-government regulations government=20 watchdogs are outraged by the switch.=20 The PUC's been no friend of ratepayers but at least under the constitutio= n=20 and state law they're required to conduct their process in the open and the= =20 public can intervene said Harvey Rosenfield of the Foundation for Taxpaye= r=20 and Consumer Rights.=20 Davis ordered last month that the ISO take the lead among state agencies to= =20 ensure adequate energy supplies. Alan LoFaso an aide to Migden said the= =20 amendment follows Davis' lead.=20 Both LoFaso and the governor's spokesman Steve Maviglio downplayed the=20 change. I don't know if we have a preference as to which state agency get= s=20 the authority to continue the probe Maviglio said.=20 The challenge by Duke Energy Houston-based Dynegy Inc. and Mirant Corp. of= =20 Atlanta came in filings March 12 asking for a rehearing of the PUC's Februa= ry=20 resolution reasserting its legal authority to examine the books accounts= =20 memoranda contracts and records of generators selling energy to utilities= =20 already subject to PUC regulation.=20 Those utilities include Pacific Gas and Electric Co. and Southern Californi= a=20 Edison Co. which have been nearly bankrupted buying power from wholesalers= =20 as well as the financially troubled San Diego Gas and Electric -- Allegheny Energy makes big California connection=20 ASSOCIATED PRESS=20 March 22 2001=20 HAGERSTOWN Md. =01) Allegheny Energy Inc. said Thursday it has agreed to s= ell=20 $4.5 billion worth of power to California's electricity-purchasing agency= =20 over the next 10 years.=20 The company said the contract call for Allegheny to provide up to 1000=20 megawatts that the Hagerstown-based company has secured from western=20 generating plants through its new energy trading division Allegheny Energy= =20 Global Markets =01) formerly Merrill Lynch Global Energy Markets.=20 This is a win-win for both the state of California and Allegheny Energy. I= t=20 provides a long-term source of fixed-price energy and should help to=20 stabilize prices in California said Michael P. Morrell president of the= =20 Allegheny Energy Supply division.=20 --- ----------- Judge Frees Small Firm From Edison Contract=20 By KEN ELLINGWOOD and DAN MORAIN Times Staff Writers=20 ?????EL CENTRO--California's balance of electrical power shifted slightly= =20 Thursday when an Imperial County judge temporarily freed a small geothermal= =20 energy producer from its contract with Southern California Edison allowing= =20 it to sell power on the open market. ?????The ruling by Superior Court Judge Donal B. Donnelly could lead to a= =20 mass exodus by hundreds of small energy producers that have been selling=20 power to the state's financially troubled utilities for months without=20 getting paid. ?????At the same time it may have staved off plans by a group of the small= =20 generators to send Edison into involuntary bankruptcy as early as today. ?????In Sacramento energy legislation pushed by Gov. Gray Davis passed in= =20 the state Senate but foundered in the Assembly. The measure was intended to= =20 ensure that the state gets repaid for the electricity that it has been buyi= ng=20 on behalf of Edison and Pacific Gas & Electric which say they lack the cas= h=20 and credit to purchase power. The bill also was supposed to guarantee that= =20 the small alternative energy producers--which together provide nearly a=20 third of the state's power--get paid. But Assembly Republicans opposed it= =20 saying it hadn't been given sufficient scrutiny. ?????The impact of the small producers was made clear in Imperial County= =20 where Edison's failure to pay CalEnergy the county's biggest property=20 taxpayer had outsize implications. CalEnergy had put county officials on= =20 notice that it was about to miss a $3.8-million property tax payment. The= =20 uncertainty had prompted the tiny Calipatria Unified School District to=20 postpone a bond issue for badly needed school repairs. ?????Among CalEnergy Chairman David Sokol's first acts after the judge's=20 ruling Thursday was to promise Imperial County Supervisor Wally J. Leimgrub= er=20 that the company would pay its property taxes on time. ?????That is great news Leimgruber said. ?????Within hours of its court victory CalEnergy had stopped transmitting= =20 geothermal power to Edison and begun selling it to El Paso Energy a=20 marketing company that purchased the energy at prevailing rates and resold = it=20 on the spot market. ?????Some of the more than 700 other small energy producers in the state sa= id=20 they were considering similar action against Edison and Pacific Gas &=20 Electric. ?????We absolutely need the right to sell to third parties said Dean=20 Vanech president of Delta Power a New Jersey company that owns five small= =20 gas-fired plants in California and is owed tens of millions of dollars by= =20 Edison. ?????Sokol praised the Imperial County judge and said his company simply=20 wanted the authority to sell its power to a credit-worthy company that in= =20 fact pays for the power. ?????An Edison spokesman said the company was disappointed with the ruling= =20 but sympathized with CalEnergy and other small producers because=20 California's power crisis has placed [them] in financial distress just as= =20 it has placed utilities in financial distress. ?????Edison expressed concern that the ruling would prompt CalEnergy and=20 other small producers to sell their power out of state. Sokol said CalEnerg= y=20 had specifically told El Paso Energy that it hoped its power would remain i= n=20 California but if someone wants to pay a higher price out of state we=20 can't stop them. ?????Sokol said that Edison still owes CalEnergy $140 million and that the= =20 company--along with seven other small producers--had been prepared to file = a=20 petition in federal bankruptcy court in Los Angeles today forcing the utili= ty=20 into involuntary bankruptcy. He said his company no longer intends to do so= =20 and he believed--but wasn't certain--that the other companies would shelve= =20 their plans. ?????Edison filed papers Thursday with the federal Securities and Exchange= =20 Commission showing that it owed $840 million to various small electricity= =20 producers many of which rely on renewable energy sources such as geotherma= l=20 steam solar energy or wind. ?????The alternative energy producers--and utilities--strenuously objected = to=20 the legislation considered in Sacramento on Thursday. The bill spelling ou= t=20 how the utilities are to pay the state and the small producers passed the= =20 Senate on a 27-9 vote the exact two-thirds margin required. But it stalled= =20 in the Assembly on a 46-23 party-line vote well short of two-thirds. ?????When I was a citizen back in Lancaster I heard these stories about= =20 pieces of legislation that were cooked up late at night that . . . were cu= t=20 and pasted together and were rammed through by the Legislature Assemblyma= n=20 George Runner (R-Lancaster) said. That's exactly what we have before us. ?????The alternative electricity generators including oil companies warne= d=20 that they would lose money under the Davis proposal while representatives = of=20 Edison and PG&E which have amassed billions in debt in the worsening energ= y=20 crisis said the legislation would push them deeper into the hole. ?????There isn't enough money Edison attorney Ann Cohn testified at a=20 Senate hearing on the bill Thursday. It is a very simple question: Dollars= =20 going out cannot be greater than dollars coming in. ?????The bill AB 8X combined several proposals. First it sought to clari= fy=20 earlier legislation by spelling out that Edison and PG&E must pay the state= =20 all money collected from consumers for electricity that the state has been= =20 buying. ?????Additionally the bill would turn over to the California Public=20 Utilities Commission the thorny issue of how much to pay alternative energy= =20 producers for their electricity. ?????Wind solar and geothermal producers might agree to the prices offered= =20 by the administration. But most of the alternative energy producers=20 including Chevron and British Petroleum use natural gas to generate=20 electricity through cogeneration a process of creating steam for both=20 electric generation and heat. With natural gas prices high they contend= =20 they would lose money at the prices Davis is offering. ---=20 ?????Ellingwood reported from El Centro Morain from Sacramento. Times staf= f=20 writers Mitchell Landsberg in Los Angeles and Jenifer Warren Nancy Vogel a= nd=20 Carl Ingram in Sacramento contributed to this story. --- ------------------- Lodi Defies Order for Blackouts=20 Utility tells PG&E to 'pay the bills'=20 Alan Gathright Chronicle Staff Writer Friday March 23 2001=20 2001 San Francisco Chronicle=20 URL:=20 /23/M N171303.DTL=20 Let history show that the rebellion against rolling blackouts started when= =20 the Central Valley town of Lodi defied PG&E and refused to unplug its=20 customers this week.=20 Like several cities that own their own utilities Lodi saw the energy crunc= h=20 looming last fall and spent millions for long-term power contracts in an=20 attempt to avoid blackouts.=20 Now Lodi and a Northern California municipal utility cooperative that=20 includes Palo Alto Santa Clara and Alameda are telling Pacific Gas and=20 Electric Co. that it's unfair to force their customers to endure blackouts= =20 triggered by the near-bankrupt utility's failure to pay its debts.=20 The problem is not paying bills so pay the bills said Alan Vallow=20 director of the utility serving Lodi's 58000 residents. I won't arbitrari= ly=20 screw my customers . . . so 5000 PG&E customers can turn on their lights= =20 somewhere else.=20 When PG&E relayed an order from state power regulators Monday and Tuesday f= or=20 Lodi to black out some of its customers a strategy intended to keep the=20 West's power grid from collapsing Lodi said no.=20 So far other cities in the Northern California Power Agency say they will= =20 continue to participate in rotating outages.=20 But in a letter last Friday to PG&E members of the agency and four other= =20 utility districts including Sacramento's warned they didn't believe long-= =20 standing agreements that allow them to use PG&E transmission lines to conne= ct=20 to the grid obliged them to endure rolling blackouts because of PG&E's=20 failure to pay its power obligations.=20 They say the agreements require them to reduce power demand only in respons= e=20 to natural disasters or malfunctions damaging power lines or plants.=20 The agencies asked for a meeting with PG&E President Gordon Smith before=20 anticipated summer blackouts hit to develop a more rational program for= =20 allocation of risks associated with (power demand) load shedding before you= =20 call on us to participate in load shedding again.=20 REFUSING TO SHARE BURDEN PG&E officials accused Lodi of selfishly refusing to share the burden of th= e=20 statewide energy crisis.=20 It is regrettable that after reaping the benefits of the (power grid)=20 interconnection contract for many years Lodi is suddenly unwilling to bear= =20 their share of the burden of the statewide energy crisis said PG&E=20 spokesman Ron Low. When cities like Lodi do not follow the (state=20 Independent System Operator's) order to curtail power it hurts all of=20 California and jeopardizes the entire power grid.=20 Low also disagreed with accusations that this week's blackouts were trigger= ed=20 by PG&E's failure to pay its bills noting that the ISO stated that 12000= =20 megawatts of power were offline because of plant maintenance.=20 But ISO spokeswoman Lisa Szot confirmed assertions by the municipal utiliti= es=20 that power generators had kept an additional 3000 megawatts offline becaus= e=20 they feared PG&E couldn't pay.=20 Lodi's Vallow said he was legally obliged to serve city customers. Lodi=20 residents are facing rate increases of as much as 15 percent under a power= =20 contract that the city secured in hopes of avoiding blackouts. The contract= =20 required Lodi to pay a $10 million premium above its typical $23 million=20 annual energy bill.=20 'THAT'S NOT FAIR'=20 I've been hearing (PG&E say) 'Gee that's not fair. Where's the equity if= =20 everybody is doing rolling blackouts and you're not?' Vallow said. Well= I=20 put my customers at financial risk to the tune of $10 million. And if they'= re=20 not going to get to use that power they paid for then by God give us that= =20 money back.=20 Vallow said he was willing to sell PG&E some of Lodi's power surplus knowi= ng=20 Lodi might not be paid.=20 But I'm not willing to turn off 5000 customers so 5000 customers=20 somewhere else can turn their lights on Vallow said. The objective here= =20 people is to keep as many lights on as possible.=20 Other city-owned utilities while annoyed with the rolling blackouts aren'= t=20 going as far as Lodi.=20 WEATHERING BLACKOUTS I certainly understand the frustrations of utilities like Lodi and actuall= y=20 share those frustrations in many cases said John Roukema assistant=20 director of Santa Clara's utility.=20 But he stressed that his agency had been able to weather blackouts without= =20 hurting residents or small business because 17 major industrial power user= s=20 had agreed to curtail demand during energy alerts.=20 The prudent thing to do at this time is to continue to do our share and=20 participate in rolling blackouts because a single problem could cause a=20 catastrophic failure in the statewide system Roukema said.=20 In Alameda residents endured blackouts this week despite the fact that cit= y=20 has secured reliable power supplies said Matt McCabe spokesman for Alamed= a=20 Power & Telecom.=20 It was in the best of interests of Alamedans to maintain the stability and= =20 integrity of the grid he said. Now if it becomes evident that the syste= m=20 is being jeopardized for financial reasons then we should not have to=20 subject Alamedans to rolling blackouts.=20 In Palo Alto which also had blackouts this week utility officials told th= e=20 City Council they were expecting a 30 to 40 percent rate hike this spring t= o=20 pay new contracts guaranteeing a stable power supply said Councilman Bern= =20 Beecham. The city hopes to avoid giving customers the double whammy of rate= =20 boosts and more blackouts with a program that gets industrial users to cut= =20 demand voluntarily during alerts.=20 When there's not enough generating capacity in the state to protect the=20 integrity of the grid that is in fact everybody's problem Beecham said= =20 but that doesn't mean Palo Alto is willing to endure blackouts to prop up= =20 PG&E's ailing finances.=20 We need to have some very frank discussions with PG&E about mutual=20 obligations Beecham said.=20 Energy Tips=20 With Californians facing electricity and natural gas shortages PG&E has=20 several tips to help conserve both:=20 -- Set the furnace thermostat at 68 degrees or lower health permitting.=20 -- Wash only full loads in a dishwasher. If operating instructions allow= =20 turn dishwasher off before the drying cycle and let dishes dry naturally.= =20 -- Use low-wattage or fluorescent lights.=20 -- Fix defective plumbing and dripping faucets which waste water and=20 increase the gas or electric bill for heating the water.=20 -- Plug gaps around pipes ducts fans and vents that go through walls=20 ceilings and floors.=20 -- Keep furnaces clean and clean or replace the filter regularly.=20 -- Turn heaters down when using a fireplace and close the damper when not= =20 using the fireplace.=20 -- On sunny days open drapes on windows facing south and let the sun shine= =20 in. At night close the drapes to retain indoor heat.=20 Source: www.pge.com=20 E-mail Alan Gathright at 2001 San Francisco Chronicle ? Page?A - 1=20 --- Coming Down to the Wire=20 State legislators battle over alternative energy bills=20 Greg Lucas Robert Salladay Chronicle Sacramento Bureau Friday March 23 2001=20 2001 San Francisco Chronicle=20 URL:=20 /23/M N113351.DTL=20 Sacramento -- After several weeks of slow to no progress in attacking the= =20 state's energy mess the Legislature erupted yesterday into a frenzy of=20 energy activity.=20 The sudden action on a series of energy bills -- including one to let=20 businesses buy power directly from generators -- stemmed initially from the= =20 fear of bad publicity lawmakers might receive for a planned three-day junke= t=20 next week to Washington D.C.=20 When a key bill bogged down in the Assembly late yesterday Speaker Bob=20 Hertzberg D-Sherman Oaks announced the trip was canceled.=20 Another reason for the flurry of action was recognition that time is runnin= g=20 out.=20 Several alternative energy producers -- like wind farms and biomass plants = -=20 - said they were one day away from forcing the state's two biggest utilitie= s=20 into bankruptcy because they were owed more than $1 billion.=20 The Legislature's action and a court ruling that could free alternative=20 producers from unpaid contracts.=20 This is triage members of the Senate said Sen. Jim Costa D-Fresno. Th= is=20 is crisis activity we're engaged in.=20 The Senate approved a bill aimed at helping state regulators get cash to so= me=20 alternative energy producers. Most of them have been paid little or nothing= =20 since November by the utilities they sell electricity to.=20 Senators passed a bill to help the Public Utilities Commission order=20 utilities to pay solar wind and other alternative energy producers who sig= n=20 lower-priced contracts with the utilities.=20 The bill failed in the Assembly because of GOP opposition fanned in part b= y=20 price concerns by the oil industry a major co-generation producer. The=20 Assembly is set to meet again today to try again pass the bill which the P= UC=20 needs to issue its final order.=20 The PUC's proposed order offers the first hint of financial relief for=20 hundreds of alternative energy producers known as ''qualified facilities = in=20 the energy industry who have been paid just pennies on the dollar by cash-= =20 strapped Pacific Gas & Electric and Southern California Edison.=20 Lack of payments has caused many alternative generators to shutter their=20 operations.=20 The PUC's proposal which will be considered at the commission's meeting=20 Tuesday offers generators a choice of agreeing to a five-year contract at= =20 $79 per megawatt or a 10-year deal at $69 per megawatt Davis said. The goi= ng=20 rate now is about $150 a megawatt hour.=20 The order does not address money already owed to the more than 600=20 alternative energy producers.=20 Under the order utilities would have to pay any generator who signed the n= ew=20 contracts within two weeks.=20 But PG&E said it might not be able to afford do that.=20 Operators of co-generation facilities say the contracts contemplated by the= =20 PUC don't cover their cost of producing energy because the sale price no=20 longer would be pegged to the the price of natural gas.=20 In a significant court decision affecting generators one geothermal energy= =20 supplier in Imperial County won a lawsuit yesterday against Edison allowing= =20 the company to escape a contract requiring it to sell electricity to the=20 utility.=20 A superior court judge said CalEnergy operator of the geothermal plant=20 could suspend deliveries to Edison and sell the 268 megawatt hours it=20 generated on the open market.=20 CalEnergy is owed $75 million by the utility.=20 The court victory may ease mounting pressure from some qualified facilities= =20 including CalEnergy to drive one or both of the utilities into involuntary= =20 bankruptcy.=20 The Assembly and Senate meanwhile rushed through a series of bills aimed = at=20 increasing energy conservation and rushing the building of new power plant= s.=20 Most significant for bigger residential and commercial utility customers is= a=20 measure passed by the Assembly to allow energy customers to buy power=20 directly from generators.=20 That right was eliminated in January when the state began buying power for= =20 the cash-strapped utilities.=20 The bill approved unanimously yesterday would impose a yet to be determined= =20 exit fee on customers who leave the power grid to help cover the state's=20 financial exposure.=20 Tell Us What You Think=20 Can you save 20 percent on your energy use? Gov. Gray Davis' administration= =20 is offering rebates for Californians who save on power starting in June an= d=20 if you've got a strategy for conserving The Chronicle wants to hear it.=20 We'll be writing about the hardest-working energy savers in a future story.= =20 To get involved write to the Energy Desk San Francisco Chronicle 901=20 Mission St. San Francisco CA 94103 or e-mail energysaver@sfchronicle.com= .=20 E-mail the reporters at glucas@sfchronicle.com and bsalladay@sfchronicle.co= m.=20 2001 San Francisco Chronicle ? Page?A - 14=20 --- State's bill for energy could double this year=20 Posted at 9:34 p.m. PST Thursday March 22 2001=20 BY=20 STEVE=20 JOHNSON=20 AND=20 JOHN=20 Warning that California is imperiled by the prices it is paying for=20 electricity a report Thursday said the state's annual power tab could wind= =20 up being 10 times what it was two years ago.=20 At the current rate of spending the report estimated that the total=20 electricity bill in California this year could hit $70 billion which is mo= re=20 than twice what it was last year and about 10 times what was paid in 1999 a= nd=20 1998.=20 ``The California electricity market has gone from being `dysfunctional' to= =20 precipitating a crisis'' according to the report from the Independent Syst= em=20 Operator.=20 It added that the price being charged ``threatens any semblance of just and= =20 reasonable consumer rates the financial viability of California's=20 investor-owned utilities the financial stability of California of its=20 neighboring states and of the nation.''=20 While power suppliers denied any wrongdoing the report said the state=20 appears to have been hit with ``excess'' charges totaling $6.87 billion sin= ce=20 May based on an assessment of the typical operating costs of power plant= =20 owners. Out of that total $6.2 billion appeared to be excessive charges=20 during times when power was not in particularly short supply the agency=20 said.=20 The cost of power has become a growing concern now that the state has stepp= ed=20 in to buy it on behalf of Pacific Gas & Electric Co. and Southern Californi= a=20 Edison which claim to be so strapped for cash that they are on the verge o= f=20 bankruptcy.=20 In making public the report which was sent to the Federal Energy Regulator= y=20 Commission officials at the Independent System Operator were careful not t= o=20 accuse any power companies of price gouging. While the prices appeared to b= e=20 unreasonable they said the state needs to learn more about the specific= =20 operating costs of power plant operators before they could determine whethe= r=20 California was cheated.=20 The officials said they were considering asking the federal agency which= =20 oversees power wholesalers to order the suppliers to make refunds. In the= =20 past two weeks the federal agency has warned a number of suppliers that th= ey=20 may have to refund $135 million in apparent overcharges during January and= =20 February.=20 But many experts question whether the federal agency is serious about=20 demanding such refunds so California officials also are reviewing the=20 possibility of suing the suppliers or seeking criminal charges against some= =20 of them. ``We're working very closely with a number of agencies to review t= he=20 information we currently have to determine what remedies may be available'= '=20 said Charles Robinson the Independent System Operator's general counsel.= =20 The report's suspicions were partly bolstered by another study made public= =20 Thursday by the state auditor. It said California's market structure=20 encouraged bidding gamesmanship by both utilities and power sellers ``in an= =20 effort to manipulate wholesale prices to their advantage.'' But it stopped= =20 short of accusing power generators of profiting illegally.=20 ``There's clearly some evidence of market abuse'' said state Auditor Elain= e=20 Howle. Even so she added ``that's not to say it's anything illegal. We=20 hired consultants they looked at some of the bidding and they weren't=20 comfortable going that far.''=20 Although no power companies were named in either report officials with=20 several suppliers insisted they have done nothing wrong.=20 ``We've conducted our business legally and ethically'' said Richard=20 Wheatley spokesman for Reliant Energy which runs five major California=20 power plants. ``The ISO report appears to be nothing more than just another= =20 attempt to put blame at someone else's doorstep when there's been very=20 little action out of Sacramento to resolve the problems in the California= =20 marketplace.''=20 Duke Energy spokesman Jeremy Dreier said the company which runs plants in= =20 Moss Landing and Morro Bay sold most of its power last year and this year = in=20 relatively low-cost long-term contracts and was among the first to offer= =20 such deals to the state. He added that Duke increased production from its= =20 aging plants to meet surging demand.=20 ``The fact that we were among the first to bring long-term contracts to the= =20 table speaks volumes about how we're trying to serve this market'' Dreier= =20 said.=20 John Sousa of Dynegy Inc. which co-owns three major California plants add= ed=20 that ``given the market conditions the rates we charged were just and=20 reasonable.''=20 --- Plan for alternate power plants stalls=20 Posted at 10:03 p.m. PST Thursday March 22 2001=20 BY DION NISSENBAUM AND JENNIFER BJORHUS=20 Mercury News=20 SACRAMENTO -- The state's prospects for plugging a critical electricity gap= =20 dimmed Thursday when the state Assembly rejected a rescue plan for=20 alternative power companies and a state judge ruled that one such firm coul= d=20 stop selling energy in California.=20 Both actions threaten the plan Gov. Gray Davis announced just Tuesday to ke= ep=20 these companies running and stave off more blackouts. With the state's=20 troubled utilities failing to pay for their electricity many alternative= =20 energy plants have been shutting down.=20 The dual blows came on a day when tempers flared in the Capitol as lawmaker= s=20 jarred by back-to-back blackouts launched bipartisan attacks on Pacific Gas= &=20 Electric Co. and Southern California Edison which aren't paying wind sola= r=20 biomass geothermal and small gas-fired plants for their electricity.=20 After Republicans shot down the measure meant to keep alternative energy=20 companies in business Assembly Speaker Robert Hertzberg D-Van Nuys warne= d=20 that the restless companies might act on their threat to force the utilitie= s=20 into bankruptcy.=20 ``They said it and I understood them to mean it'' he said.=20 The failure overshadowed a burst of action in Sacramento where lawmakers=20 approved a host of other measures. The Senate approved two key bills: one= =20 that would spend more than $1 billion to encourage Californians to conserve= =20 energy and one that would make it easier to build power plants. The Assembl= y=20 approved 14 incremental bills.=20 Six votes short=20 But the Assembly fell six votes short of passing a hastily prepared bill=20 meant to help prop up the nearly 700 alternative energy companies many of= =20 which are now idle.=20 Those closings sapped California of energy this week and helped cause two= =20 days of rolling blackouts -- the first since January.=20 In response Davis and lawmakers cobbled together a plan to set new lower= =20 rates for alternative power and to fine the utilities if they refuse to pay= =20 these companies which supply up to a third of the state's power.=20 But Republicans refused to back the measure and said it contained too many= =20 complex parts that needed more time to analyze.=20 ``Everyone in this room knows that this piece of legislation has not had a= =20 good look'' said Assemblyman George Runner R-Lancaster.=20 Assemblyman Fred Keeley D-Santa Cruz castigated the Republicans and=20 implored them to accept an imperfect solution.=20 ``Ladies and gentlemen: Welcome to the NFL'' he said. ``Welcome to the wor= ld=20 where large complex issues don't have a simple solution.''=20 Approval is needed before state regulators at the Public Utilities Commissi= on=20 can vote on the fine points of the plan. That was supposed to happen Tuesda= y.=20 Much of the criticism focused on concerns raised by power plants that use= =20 natural gas to produce energy. Administrators from those plants said the=20 Davis price caps would make it impossible for them to break even.=20 The derailment came hours after the measure narrowly won approval in the=20 state Senate.=20 Hertzberg plans to search for a compromise today and canceled plans for the= =20 Assembly's annual trip to Washington.=20 Thursday's actions were highlighted by angry attacks on the utilities by=20 frustrated lawmakers.=20 ``I hope they do go bankrupt'' shouted Senate President pro tem John Burto= n=20 D-San Francisco during a debate on the energy crisis. ``Let them go belly= =20 up. I don't care any more.''=20 Legal decision adds twist=20 The legislative failure was compounded by a legal decision in Southern=20 California that further complicated the picture.=20 A Superior Court judge in Imperial County cleared the way for CalEnergy=20 Operating Corp. to break its contract with Edison and sell its 268 megawatt= s=20 of power on the open market. The judge concluded that Edison had breached i= ts=20 contract by failing to pay CalEnergy since November.=20 That ruling could pave the way for hundreds of others to follow suit and=20 drain off power California needs to prevent blackouts.=20 ``It's not good'' said V. John White director of the Center for Energy=20 Efficiency and Renewable Technologies. ``This is potentially going to chang= e=20 the dynamics of the situation and probably not for the better.''=20 Jan Smutny-Jones executive director of the Independent Energy Producers=20 Association said it was unclear whether other companies would sue.=20 ``I think this is a very significant development'' he said. ``We're sort o= f=20 at a period where the industry's reaching the end of the rope.''=20 The ruling did have one silver lining: CalEnergy Chairman David Sokol said= =20 his company and seven others had planned to force Edison into bankruptcy if= =20 they lost in court.=20 But he also warned ``You stick a sharp stick in enough people's eyes and= =20 they get pretty tired of it.''=20 The situation with generators supplying PG&E isn't as dire since the compan= y=20 has been making partial payments.=20 Kent Burton senior vice president for Covanta Energy Corp. in New Jersey= =20 said ``They've tried to be responsive.''=20 Mercury News Staff Writer Mark Gladstone contributed to this report. Contac= t=20 Dion Nissenbaum at dnissenbaum@sjmercury.com or (916) 441-4603 or Jennifer= =20 Bjorhus at jbjorhus@sjmercury.com or (408) 920-5660. 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: Dereg Articles Body:: yes Mark Palmer@ENRON 09/26/2000 08:51 AM To: Steven J Kean@EES James D Steffes/NA/Enron@Enron cc: Subject: Dereg Articles Should we ask the guy that did the deal with Champion Paper to write a response? 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: Contribution to Sacramento Womens Campaign Fund Body:: Let's process this request. I think it's justified. ----------------- 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: Return of Confidential Materials Body:: Jeff. I have no docs on this transaction. Thus have nothing to destroy. 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:: nan Body:: Joe - there is no announcement today. I tried to leave you a voicemail but apparently the system is down there. Before we can offer an outside person a VP position the Executive Committee must sign off. We are going to be going through that process in a few minutes. Then we begin the offer extension and negotiations. The person we are recommending is Linda Robertson one of the two people I mentioned to you before. Please guard the information carefully. Last time we talked when the list had been narrowed to two DeLay's office called with the exact two names and started pushing us to hire a Republican. As you know we interviewed candidates of both political affiliations and just settled on the best person. Ken told DeLay's office that's how we do things and Ken is comfortable (actually enthused) about the choice. When some external announcement is done you will be involved and your considerable contributions will be prominently mentioned. 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 - Decision tree on projects Body:: We will discuss at the next Staff meeting. Thanks for bringing it up. Any= feedback from the floor meeting yesterday would be appreciated. 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: NEW DRAFT OF ENRON STATEMENT Body:: I know we are holding for a later filing but I have attached further comments anyway. The document is still too rough to send out. We need to take the opportunity as soon as possible to get a hard hitting thoroughly researched and carefully written document in front of the Commissioners. California's reaction to the Judge's recommendation is likely to give FERC (especially the new commissioners) a feel for how irrational the California politicians can be. We will have a limited opportunity to take advantage of that realization. We need to hit it hard in the pleading our conversations at the Commission the Hill and the media. Linda Robertson 07/09/2001 09:58 AM To: James D Steffes/NA/Enron@Enron cc: Alan Comnes/Enron@EnronXGate Carole Hodge/ETOL/EU/Enron@ETOL dwatkiss@bracepatt.com Jeff Dasovich/NA/Enron@ENRON Richard B Sanders/Enron@EnronXGate Richard Shapiro/NA/Enron@ENRON Robert Frank/NA/Enron@ENRON Sarah Novosel/Corp/Enron@ENRON Steven J Kean/NA/Enron@ENRON Susan J Mara/NA/Enron@ENRON Subject: Re: NEW DRAFT OF ENRON STATEMENT Let me emphasize that these comments are to be filed COB TODAY. James D Steffes 07/09/2001 10:50 AM To: Robert Frank/NA/Enron@Enron Steven J Kean/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron Linda Robertson/NA/Enron@ENRON Sarah Novosel/Corp/Enron@ENRON Carole Hodge/ETOL/EU/Enron@ETOL Richard B Sanders/Enron@EnronXGate dwatkiss@bracepatt.com Alan Comnes/Enron@EnronXGate Susan J Mara/NA/Enron Jeff Dasovich/NA/Enron@Enron cc: Subject: NEW DRAFT OF ENRON STATEMENT HERE IS THE MOST RECENT STATEMENT WITH STEVE'S COMMENTS. 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:: On Sunday: Natural Gas in the 21st Century: The Shape of Things to Come Body:: Ken Lay speaking and James J. Hoecker 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:: Energy Issues Body:: Please see the following articles: Sac Bee Wed 6/6: Businesses vie for blackout exemptions:=20 The PUC must decide who should be spared and the applicant list is very lo= ng Sac Bee Wed 6/6: PG&E ISO agree to court order on power bills Sac Bee Wed 6/6: Peter Schrag: Turning up the heat in Houston and=20 Washington (Editorial) SD Union Wed 6/6: Is trading an insider's game? SD Union Wed 6/6: Daily energy costs for state fall in past weeks=20 SD Union Wed 6/6: Five tiers sought in proposed rate boost SD Union Wed 6/6: Port budget large but power bills loom SD Union Wed 6/6: Continuous use urged for planned power plant=20 SD Union Wed 6/6: Rising energy prices threaten Poway troupe=20 SD Union Wed 6/6: Fair to use generators for midway attractions LA Times Wed 6/6: 'Hi My Name Isn't Justice Honey' and Shame on Lockye= r =20 (Editorial) LA Times Wed 6/6: U.S. Probes Alleged Pact Not to Build New Plants Power:= =20 Justice officials focus on Southland operations of two firms which deny=20 wrongdoing LA Times Wed 6/6: Natural Gas Power Prices Drop Sharply Energy:=20 More conservation mild weather are among factors keeping costs down exper= ts=20 say LA Times Wed 6/6: The State Utility Averts $1 Billion in Costs Courts:=20 PG&E and Cal-ISO agree to recognize Department of Water Resources as=20 purchaser of the power SF Chron Wed 6/6: Dramatic drop in cost of electricity=20 LOWER BILLS: Cheaper fuel milder weather credited SF Chron Wed 6/6: San Jose council gives green light to generating plant= =20 VOTE REVERSAL: Officials pressured to OK project SF Chron Wed 6/6: Developments in California's energy crisis SF Chron Wed 6/6: California conserves SF Chron Wed 6/6: L.A. power customers awash in cheap energy SF Chron Wed 6/6: PG&E doesn't want to pay for energy to avert blackouts Mercury News Wed 6/6: Metcalf plant gets preliminary approval=20 OC Register Wed 6/6: Feds probe AES Williams Individual.com (PRnewswire) Wed 6/6: Calpine Begins Construction of=20 Peaking Energy Center in Gilroy Calif.=20 Individual.com (PRnewsire) Wed 6/6: Reliant Urges FERC to Drop or Amend= =20 California Price Caps to Avoid Additional Shortages and More Blackouts Energy Insight Wed 6/6: Farm-fresh biopower --- Businesses vie for blackout exemptions: The PUC must decide who should be= =20 spared and the applicant list is very long. By Carrie Peyton and Dale Kasler Bee Staff Writers (Published June 6 2001)=20 Mixes for milkshakes and frozen coffees could spoil at ice cream parlors= =20 sickening customers.=20 Seniors getting their hair done would have to leave their dryers and go hom= e=20 with wet heads risking a chill.=20 Mall escalators could come to a sudden halt endangering shoppers who lose= =20 their footing.=20 Those are among the health and safety risks cited by more than 10000=20 businesses and government bodies asking state regulators to exempt them fro= m=20 rolling blackouts.=20 It is a list that mixes nursing homes and grocery stores outpatient surgic= al=20 clinics and beauty salons dialysis centers and country clubs.=20 A lot of people are treating this like a lottery said Subodh Medhekar of= =20 Exponent Inc. the consulting firm sorting through exemption requests for t= he=20 state Public Utilities Commission.=20 For many Medhekar said the rationale seems to be 'I'm pretty sure I won= 't=20 get exempted but what's the down side? Let's put in an application.' =20 Amid predictions that Californians could face dozens of rolling blackouts= =20 this summer state regulators are trying to update a decades-old list of wh= o=20 should be spared if the lights go out.=20 The Alta Sierra County Club in Grass Valley should be among those whose pow= er=20 stays on Sean O'Brien the club's golf course superintendent told=20 regulators in a nine-page application.=20 The country club telephones could go out making it harder to phone for hel= p=20 if someone has a medical problem while golfing he said in an interview.=20 And if the golf course's irrigation pumps shut down it would lose the=20 ability to quell small blazes -- leaving it to rely on a fire station O'Bri= en=20 said is about one-quarter mile away.=20 Placerville Dialysis wants an exemption too. As many as a dozen people the= re=20 can be having their blood pumped through an artificial kidney that cleans i= t=20 when their own kidneys no longer function properly.=20 When the power goes out everything just stops said manager Shirley=20 Carpenter. There is a way to manually return the blood by hand before it= =20 clots in the line. ... It would just be hectic.=20 It takes about five minutes of manual pumping to fully disconnect someone= =20 from a dialysis machine Carpenter said. And some patients can help by=20 operating their own pumps.=20 But she said I'm sure it would be kind of frightening to have your blood= =20 out in the line and the power off and they're pretty much tied to the=20 machine.=20 Pam Chin a hairdresser at the Loomis Beauty Salon said the owner sought a= n=20 exemption because people could get overheated if the air conditioning went= =20 out and older customers getting their hair set could be chilled if the=20 dryers shut off.=20 With about half the state already exempt from rolling blackouts the questi= on=20 of who else should stay connected has become a delicate one for utilities= =20 regulators and legislators.=20 Carl Wood the PUC commissioner who has taken the lead on blackout issues= =20 estimates that fewer than 1000 more utility customers can be exempted befo= re=20 they overload the rolling outage system designed to take stress off the=20 electric grid.=20 While about 6000 customers are classified as essential by the state's tw= o=20 largest utilities keeping them out of the blackout rotation also spares=20 about 5 million other customers who are served by the same circuits.=20 That multiplier effect will have to be weighed by the consulting firm by= =20 utilities and eventually by PUC commissioners who are scheduled to vote in= =20 early August on who should be added to existing standards.=20 The rules will apply to the state's investor-owned utilities Pacific Gas a= nd=20 Electric Co. Southern California Edison and San Diego Gas & Electric Co.= =20 but not to municipal utilities.=20 The Sacramento Municipal Utility District already rejected pleas for specia= l=20 exemptions from a medical lab a veterinary hospital nursing homes medica= l=20 facilities businesses and residents. SMUD believes they can weather=20 blackouts because they are not critical to public safety.=20 People have counted on having dependable electricity for so long that some= =20 have widely varying ideas of who can do without it safely Medhekar said.= =20 Of the more than 500 Baskin Robbins ice cream parlors that dot California= =20 only five are listed on the PUC Web site as applicants for exemptions.=20 The site cautions that its list of 9239 electronic applicants hasn't been= =20 checked for duplicates -- or fiction. It includes hundreds of outlets of th= e=20 same drug store and supermarket chains dozens of related nursing homes and= =20 more than 400 dentists. Another 1200 commercial power users have applied b= y=20 fax.=20 Among those who have confirmed they want out of outages are the grocery=20 chains operated by West Sacramento-based Raley's which said it took the=20 action as part of united effort with all California grocers who are worrie= d=20 about food spoilage.=20 Others in the mix are Fairfield's Westfield Shoppingtown Solano formerly t= he=20 Solano Mall where officials sought the exemptions out of fear that shopper= s=20 would get injured if escalators came to a sudden halt.=20 The Yolo County Housing Authority asked for an exemption on behalf of its 7= 00=20 dwellings in the belief that the utilities offer exemptions for low-income= =20 Californians Executive Director David Serena said.=20 Serena added that many of the authority's occupants are older or disabled a= nd=20 could be endangered by a blackout.=20 Chevron Corp. acknowledged it couldn't show that a blackout at its refineri= es=20 would present imminent danger to public health or safety but it asked Go= v.=20 Gray Davis to support legislation exempting makers and transporters for=20 critical fuels saying a refinery shutdown would cut into the state's=20 gasoline supply.=20 Some businesses acknowledged that their applications are a long shot.=20 It's probably a stretch said Amanda Leveroni who owns Bacio Catering Co= .=20 of Chico about her request to the PUC. The public wouldn't be in danger.= =20 But we're a catering company -- somebody has planned for a year-plus for a= =20 wedding or some big event she added. I would be in such a huge situation= .=20 I'd have to send out for pizza.=20 The Bee's Carrie Peyton can be reached at (916) 321-1086 or=20 cpeyton@sacbee.com. PG&E ISO agree to court order on power bills By Claire Cooper Bee Staff Writers (Published June 6 2001)=20 SAN FRANCISCO -- Pacific Gas and Electric Co. and the operator of=20 California's power grid agreed Tuesday to a preliminary court order providi= ng=20 that the utility will continue to receive -- but not pay -- generators' bil= ls=20 for the state's purchases of the most expensive wholesale electricity.=20 The tab has been running at about $300 million a month.=20 The order which U.S. Bankruptcy Judge Dennis Montali said he'll sign will= =20 specify that the Independent System Operator will not procure power except= =20 for a creditworthy buyer who has agreed to pay the generator.=20 In California the only such potential buyer is the state Department of Wat= er=20 Resources. However the department which has avoided PG&E Co.'s bankruptcy= =20 proceedings by claiming sovereign immunity will not be controlled by the= =20 agreement. Montali pointed out that the department still could demand=20 reimbursement from PG&E.=20 Under the agreement the ISO will not press any claims against PG&E on beha= lf=20 of generators if they are not paid.=20 The proposed preliminary injunction was based on an April order by the=20 Federal Energy Regulatory Commission which forbade the ISO from purchasing= =20 power on behalf of any non-creditworthy buyer such as PG&E.=20 The ISO is appealing the FERC order. If the appeal succeeds the injunction= =20 will end.=20 Peter Schrag: Turning up the heat in Houston and Washington (Published June 6 2001)=20 Behind all the palaver about the predictable standoff at last week's energy= =20 summit between President Bush and Gov. Gray Davis one major political=20 development was missed.=20 Put simply in the past month the focus of the California energy crisis an= d=20 maybe the onus as well has moved east: from the state's (and Davis')=20 handling of the mess to the generating companies energy marketers and gas= =20 pipeline companies that have richly profited from it and thus to FERC the= =20 do-next-to-nothing Federal Energy Regulatory Commission and the Bush=20 administration.=20 That wasn't all Davis' doing -- far from it -- though it's been at the hear= t=20 of his message about energy industry pirates and profiteers. Bush's=20 misbegotten energy plan and the administration's political clumsiness also= =20 contributed mightily not least by inadvertently giving Davis the chance to= =20 get media exposure he could only have dreamed about.=20 More important there's the defection of Sen. James Jeffords from the=20 Republican Party and the resulting shift of control in the U.S. Senate whe= re=20 the next chair of the Energy Committee will be Sen. Jeff Bingaman of New=20 Mexico a co-sponsor of Sen. Dianne Feinstein's bill capping wholesale=20 electric rates for the next two years. And chairing the Committee on=20 Governmental Affairs will be Sen. Joseph Lieberman of Connecticut who's=20 already asked for an audit of energy prices.=20 Those changes will draw a lot more attention to recent studies showing that= a=20 handful of big generators -- Duke Power Reliant Mirant Dynegy and the hu= ge=20 energy-marketing firm Enron -- have gamed the market to drive wholesale=20 prices to levels that in the year 2000 sometimes reached 40 times the=20 prices of the year before.=20 The findings come not merely from economists at the California Independent= =20 System Operator the agency that manages the state's grid who estimate=20 overcharges resulting from market power at $6.2 billion for last year alone= .=20 They come also from Severin Borenstein and his colleagues at the University= =20 of California Energy Institute who conservatively calculate the=20 overcharges at $4.5 billion from Paul Joskow a widely respected energy=20 economist at MIT and from Edward Kahn an economic analyst in San Francisc= o.=20 In a recent paper published by the National Bureau of Economic Research=20 Joskow and Kahn conclude that there's considerable evidence that the high= =20 prices experienced in the summer of 2000 reflect the withholding of supplie= s=20 from the market by suppliers [generators or marketers] exercising market=20 power. That those high prices occurred not merely during peak usage but al= so=20 at off-hours when no one had ever seen a price spike before makes those= =20 spikes even more curious.=20 There is in addition the powerful suspicion that the huge increase in=20 natural gas prices that a subsidiary of El Paso Energy Co. now the largest= =20 gas company on Earth was charging on the California side of the=20 California-Arizona border wasn't merely the result of an innocent imbalance= =20 between supply and demand.=20 None of that may be illegal. If there's no collusion there are no violatio= ns=20 of antitrust laws. But it adds plenty of steam to the political argument. I= n=20 the 2000 election cycle alone energy companies kicked in some $64 million = in=20 political contributions 75 percent of it to Republicans. At a time when=20 those companies many of them located in the same Houston neighborhood are= =20 racking up astronomical profits and when their collective coziness with Bus= h=20 and the Republican Party is a lot more than rhetoric their vulnerability t= o=20 a vigorous Senate investigation ought to be obvious.=20 The clincher is Blackout a Frontline program that both symbolizes the= =20 shifting emphasis and reinforces it. (The program is scheduled to be aired = at=20 8 p.m. Friday on Sacramento cable Channel 7.) It isn't another recital of= =20 Californians worrying about their electric bills or about the stupidity of= =20 the state's deregulation scheme or how Davis dithered in addressing the=20 crisis. It is about those generators and marketers in Houston and North=20 Carolina men (and a few women) who regard themselves as the heroes of the= =20 new energy markets.=20 The piece is reported by Lowell Bergman who in working for both Frontline= =20 and the New York Times has already broken major print stories about Duke=20 Power's secret approach to Davis offering unspecified energy refunds in=20 return for an end to state investigations and lawsuits. Bergman also report= ed=20 private conversations between Enron chairman Kenneth Lay a major Bush=20 supporter and FERC chairman Curt Hebert regarding the influence that Lay= =20 could exercise with Bush to allow Hebert to keep his chairmanship if Hebert= 's=20 supported certain decisions Enron badly wants.=20 None of these recent events is likely to end Davis' political woes and the= y=20 may not produce the wholesale rate caps Feinstein wants and that most=20 economists think necessary -- or maybe any significant reduction in the=20 industry's predatory pricing. But they will surely help turn up the heat= =20 both in Houston and Washington. Six months ago FERC found wholesale prices= =20 were not fair and reasonable as federal law requires but did little abou= t=20 them. It will now have a lot more questions to answer.=20 Peter Schrag can be reached at Box 15779 Sacramento CA 95852-0779 or at= =20 pschrag@sacbee.com. Is trading an insider's game?=20 Buying selling of electricity is a growth business but some say deck is= =20 stacked against consumers By Craig D. Rose=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 While Californians decry deregulation's failure to deliver a competitive=20 market electricity wholesalers have quietly developed a vast and rapidly= =20 growing business of buying and selling power among themselves.=20 The deals take place on high-tech trading floors in Houston and elsewhere= =20 around the country as well as on Internet-based trading systems.=20 Some experts say this electricity trading is a key mechanism for raising=20 consumer power prices yet it's largely unregulated.=20 Electricity trading is like buying stock -- when you have ability to chang= e=20 the stock price said Frank Wolak a Stanford University economics profess= or=20 and member of the state grid operator's market surveillance group.=20 Energy companies say the buying and selling of contracts to deliver power= =20 provides risk management allowing plant owners to presell their electricit= y=20 lock in prices and avoid fluctuations. The rough and tumble of the free=20 market they add is the most efficient means of allocating a resource like= =20 electricity.=20 But industry critics say trading is far from a competitive market paradigm.= =20 In their view it's a means of communication -- a way for energy insiders t= o=20 collude and raise prices under the guise of competition.=20 To be sure the trading arms of major energy companies have emerged as star= s=20 in an industry where profit surges of 300 percent or 400 percent are not=20 uncommon.=20 The transactions shrouded in secrecy can leave ownership of a critical=20 commodity in unknown hands. Consider the case of power generated by AES=20 Corp.'s California plants.=20 In 1998 AES made a bold move. Immediately after purchasing power plants th= at=20 gave it control of 10 percent of the state's electric generating capacity= =20 the company sold the output from its plants for the next 20 years to Willia= ms=20 Cos.=20 Williams did not sit on this treasure trove of electrons. The Tulsa Okla.= =20 company soon sold 80 percent of what it bought.=20 It is difficult to say who owns that power now. Some might be owned by Semp= ra=20 Trading a sister company of SDG&E. Or some could be owned by Enron Corp.= =20 the nation's biggest electricity trader.=20 A spokeswoman for Williams conceded that Williams itself may have repurchas= ed=20 some of the electricity it sold earlier. But trading companies closely guar= d=20 their positions.=20 This much can be said with certainty: Electricity that AES sold for less th= an=20 5 cents per kilowatt-hour to Williams changed hands perhaps 10 times in the= =20 wholesale market and emerged at times in recent months with a price tag for= =20 consumers that was 300 percent higher.=20 Williams' trading profits increased by 523 percent in the first quarter thi= s=20 year. Advance sales All this buying and selling creates curious confluences.=20 In their attempt to deflect criticism over high prices generating companie= s=20 such as Duke Energy -- operator of the South Bay Power Plant in Chula and= =20 others in the state -- frequently note that they sell most of their=20 electricity far in advance. But they acknowledge less often that their=20 trading units may also be buying power which could boost the company's=20 electricity inventory.=20 Duke was the fourth biggest electricity trader last year and cited its=20 trading activity as a prime contributor to its wholesale business profits= =20 which soared 324 percent in the first quarter to $348 million.=20 It is a company's power traders who frequently direct plant operators to=20 increase or decrease the generation of power in response to market=20 conditions.=20 Energy companies have little option but to turn to trading for profits. One= =20 of the better kept secrets of electrical deregulation and its promise of=20 competition is that there is remarkably little competition in the productio= n=20 side of the business.=20 For one thing electricity is a commodity power from one company is=20 indistinguishable from that generated by others.=20 More important nearly all modern plants generate power from turbines built= =20 by a handful of manufacturers. The result? Modern plants owned by different= =20 companies produce power at nearly identical cost.=20 The cost of power produced by modern plants is all within a mil=20 (one-thousandth of a dollar) said Michael Peevey an adviser to Gov. Gray= =20 Davis and former president of Southern California Edison.=20 So the extraction of profit in the electricity business relies much more on= =20 trading. Traders' profits rise when prices are volatile -- plunging or eve= n=20 better rising sharply. Little regulation But despite the obvious temptation to manipulate the market the burgeoning= =20 electricity trading business has remained largely unregulated.=20 The Federal Energy Regulatory Commission does require quarterly filings fro= m=20 energy traders but these often provide incomplete information or at least= =20 little that has been of concern to FERC.=20 In fact although the trading of electricity grew more than a hundredfold= =20 from 1996 to 2000 FERC has taken no major enforcement action against a=20 trader. After the onset of the California crisis last year FERC has acted= =20 once. That was against Williams which agreed to pay $8 million without=20 admitting guilt to resolve an allegation that it withheld supply to pump up= =20 prices.=20 FERC's record of enforcement in the area of power trading stands in contras= t=20 to a long list of enforcement actions within other markets taken by the=20 Securities Exchange Commission and the Commodity Futures Trading Commission= .=20 FERC has recently added staff to its market oversight operations. But Willi= am=20 Massey a FERC commissioner says the agency's effort is still inadequate.= =20 Electricity can be flipped stripped and chopped up Massey said. It's a= n=20 extraordinarily complicated market.=20 The sophisticated marketers and traders have simply moved past us. We're= =20 kind of horse and buggy in our approach and they're out there in rocket shi= ps=20 flying around ... The problem is that sophisticated traders don't necessari= ly=20 produce reasonable prices. They produce profits.=20 Before deregulation electricity trading was a low-key affair. Regulated=20 utilities dealt power back and forth on a reciprocal basis to fill=20 electricity shortfalls in their control areas. There was little trading for= =20 profit until the mid-1990s after federal legislation and FERC rulings open= ed=20 the market.=20 Major traders include large energy companies sister companies of=20 California's major utilities and Wall Street firms. Market volatility In many ways the trading of power is similar to that of other commodities.= =20 But there are important differences. Because it cannot be stored and its us= e=20 is so fundamental the price of electricity is the most volatile of all.=20 When supplies are tight a single supplier can rapidly raise prices to=20 budget-busting levels as evidenced by Duke Energy's recent admission that = it=20 charged California nearly $4000 for a megawatt-hour of power a quantity= =20 that probably sold hours earlier for one-tenth of that sum or less.=20 Wolak the Stanford economist and state Sen. Joseph Dunn D-Garden Grove= =20 who is investigating the state power market say trading allows companies t= o=20 collude under the guise of competition. Instead of wringing out lowest cost= s=20 the wholesale trading market serves to raise prices they say.=20 As I trade to you and you trade to me we communicate to each other what= =20 price we would like to get said Wolak. It's not collusive. It's just=20 communicating price.=20 Mark Palmer a spokesman for Enron the nation's biggest power trader said= =20 California's problem is not the result of trading.=20 It's a result of shortages Palmer said.=20 Underscoring its emphasis on trading Enron's new headquarters tower in=20 downtown Houston rises from a six-story block of new trading floors=20 including expanded space for electricity trading.=20 Enron also pioneered trading in cyberspace and its Enron Online site claims= =20 to be the most active computer-based trading market.=20 The Houston company argues that consumers won't fully benefit from power=20 trading and deregulation until they have greater choice in choosing their= =20 power supplier. And the company says FERC has not done enough to open acces= s=20 to transmission lines which would allow traders to move power around the= =20 country. To that end Enron has lobbied hard for President Bush's plan for = a=20 national electricity grid.=20 Palmer says the notion that the price of electricity rises each time it is= =20 traded is mistaken.=20 The market is always looking for the real price of a commodity Palmer=20 said.=20 Dunn the California state senator says his investigation found a differen= t=20 function for trading. At a time when supply barely meets or falls short of= =20 demand he noted companies with electricity to sell have to worry only abo= ut=20 how high to set their price.=20 The trader is a pawn in the generator's game to drive up prices said Dun= n.=20 Trading develops a level of trust. You my alleged competitor will bid in= =20 the same patterns and I will respond not in a competitive pattern but in a= =20 complimentary pattern.=20 The state senator said his investigation found evidence that on several day= s=20 energy companies appeared to test their ability to drive prices up without= =20 being undercut by competitors.=20 This ability to drive up prices without competitive consequence is a key te= st=20 of market power the technical term for manipulation or price fixing.=20 But Dunn also conceded that antitrust violations can be hard to prove in=20 court. He suggested that even if the trading behavior falls short of=20 antitrust violations it remains anti-competitive and devastating for the= =20 California economy.=20 To Harry Trebing a utility industry expert and professor emeritus at=20 Michigan State University wholesale electricity trading is reminiscent of= =20 what took place in the 1920s and early '30s. Back then utility companies= =20 created complex networks of holding companies that traded stock among=20 themselves driving up prices in the process.=20 Undoing that scheme was a focus of President Franklin Roosevelt's=20 administration. Congress ended up barring national power companies and=20 tightening regulation of utilities in an effort to counteract their tenden= cy=20 to create markets that work only for insiders.=20 The broad goals of trading are the same Trebing said.=20 The goal is to maximize profits through raising prices.=20 Daily energy costs for state fall in past weeks=20 By Ed Mendel=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 SACRAMENTO -- In some of the first good news of the electricity crisis the= =20 Davis administration said yesterday that the daily cost of power purchased = by=20 the state for utility customers has dropped in recent weeks.=20 The price-drop news comes after an announcement that Californians conserved= =20 more energy than expected last month 11 percent and amid Davis=20 administration optimism that the Legislature may finally begin to move on a= =20 plan to keep Southern California Edison out of bankruptcy.=20 The developments if they turn out to be a trend and not temporary could b= e=20 among the first signs that Gov. Gray Davis' plan to end the electricity=20 crisis is beginning to work. But the administration isn't saying that.=20 We have had a few good days here lately said S. David Freeman a Davis= =20 power adviser. I don't think that I want to project.=20 Some power-market watchers began to speculate last month that prices may ha= ve=20 peaked earlier this year. Platts an energy information service said=20 yesterday that spot prices for the natural gas used by power plants are=20 falling this month.=20 The governor's press secretary Steve Maviglio told reporters yesterday th= at=20 the daily amount spent on power is now well below $50 million which was= =20 the average cost earlier this year.=20 A 12-day gap in the most recent notice to the Legislature that another $500= =20 million increment will be spent on power suggests that the daily average=20 during the last two weeks may have dropped down around $42 million.=20 Oscar Hidalgo a spokesman for the state power purchasing agency said that= =20 the average cost of power was under $40 million during the first four days = of=20 this month.=20 Maviglio attributed the lower cost to conservation the phasing in of cheap= er=20 long-term power contracts fewer power plants off-line for maintenance and= =20 cooler weather.=20 However he said The average cost is still way over what we paid last=20 year.=20 There was widespread skepticism in late April when the governor's consultan= ts=20 predicted that the $346 per megawatt-hour average paid by the state for=20 non-contracted power from April through June would drop to an average of $1= 95=20 from July through September.=20 We are still very comfortable with the projection that Mr. Fichera and=20 company estimated Maviglio said referring to Joseph Fichera of Saber=20 Partners in New York.=20 During a briefing on May 21 Fichera told reporters that the amount of powe= r=20 that the state would obtain under long-term contracts for May was expected = to=20 be about 43 percent of the total required the so-called net short.=20 Fichera said contracts already signed were expected to cover 66 percent of= =20 the net short in June 48 percent in July and 42 percent in August. He sai= d=20 contracts that had been agreed on in principle could increase those amounts= =20 to 73 percent in June 67 percent in July and 60 percent in August.=20 We are still on target. There are risks Fichera said yesterday among th= em=20 extended hot weather and power plant outages. No one is popping the=20 champagne corks until Sept. 30.=20 The governor's consultants based their forecast of power demand this summer= =20 on an estimate that Californians will reduce their electricity use by 7=20 percent.=20 The 11 percent reduction last month as compared to May of last year came= =20 before the sticker shock of rate hikes that begin this month for customers = of=20 Edison and Pacific Gas and Electric. And a $35 million ad campaign urging= =20 conservation has not hit full stride.=20 Maviglio said the administration plans to release some detailed information= =20 on Monday about the roughly $8 billion the state has spent buying power. Th= e=20 general fund will be repaid by a bond of up to $13.4 billion that ratepayer= s=20 will pay off over 15 years.=20 Legislative leaders have demanded detailed information about power purchase= s=20 before proceeding with the Edison plan. Assembly Democrats are working on a= =20 plan that de-emphasizes state purchase of the Edison transmission system an= d=20 would put most of the burden for paying off Edison's debt on businesses and= =20 large users not residences. Five tiers sought in proposed rate boost=20 Conservation would be promoted SDG&E says By Karen Kucher=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 A proposed rate increase for SDG&E customers to cover the high cost of=20 electricity should be imposed in five tiers to encourage conservation the= =20 company is advising state utility regulators.=20 The more electricity a customer uses the higher the rate would be.=20 SDG&E needs to raise its rates to bring in an additional $502 million=20 annually to pay the state for power purchases.=20 The state Public Utilities Commission is expected to rule on San Diego Gas = &=20 Electric's rate-increase proposal June 28.=20 The rate changes would remove a cap that has shielded most SDG&E customers= =20 from rising electricity prices for a year. The cap enacted by state=20 lawmakers in September 2000 and retroactive to June 2000 set rates at 6.5= =20 cents per kilowatt-hour.=20 Higher rates would mean the average SDG&E residential and small-business=20 customer's electricity bills would go up by 18 percent. Large commercial=20 users' bills would average 29 percent more.=20 Public hearings on the issue will be held next Monday and Tuesday in San=20 Diego El Cajon Escondido and San Clemente. These sessions will focus on= =20 small-business and residential consumers. Hearings on large commercial user= s=20 were held last month.=20 Earlier this year the PUC decided to allow the state's two largest=20 utilities Pacific Gas and Electric and Southern California Edison to char= ge=20 customers an extra $5.7 billion annually for electricity.=20 The state Department of Water Resources which has been buying power for=20 SDG&E customers since February asked SDG&E to generate a total of $915=20 million annually to cover the cost of electricity purchases.=20 With the proposed rate increases SDG&E could do that.=20 Large commercial customers would pay about 30 percent of the overall increa= se=20 and residential and small-business customers would pay about 70 percent sa= id=20 Ed Van Herik a spokesman for the utility company.=20 If the increase can be tiered as many as 60 percent of residential custome= rs=20 will see no rate increase if their electricity usage remains the same Van= =20 Herik said.=20 But customers who use more than 130 percent of their baseline -- considered= =20 the minimum amount of electricity needed by a household -- will be billed a= t=20 increasingly higher rates.=20 Residential and small-business customers who use a lot of electricity could= =20 pay as much as 17.89 cents per kilowatt hour for some power they consume.= =20 Consumer advocate Michael Shames said he is concerned the utility's proposa= l=20 does not spread the increases evenly among different types of users. He als= o=20 called for more scrutiny of the state's request.=20 People should tell PUC officials that this increase should not be a carte= =20 blanche or blank check approval said Shames the head of Utility Consumer= s'=20 Action Network. The PUC needs to ensure that the rate increase requested b= y=20 the (state) is reasonable.=20 The public hearings are scheduled for:=20 ?Monday 1 p.m. San Diego Concourse Copper Room 200 C St. San Diego.=20 ?Monday 7 p.m. El Cajon Community Center 195 E. Douglas Ave. El Cajon.= =20 ?Tuesday 1 p.m. Country Inn Hotel 35 Via Pico Plaza San Clemente.=20 ?Tuesday 7 p.m. Center for the Arts 340 N. Escondido Blvd. Escondido.= =20 Port budget large but power bills loom=20 Slowing economy also cause for worry By Ronald W. Powell=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 The rock is rolling financially but there are indications that the blues= =20 lurk on the horizon.=20 Officials of the San Diego Unified Port District -- headquartered in a=20 block-shaped building some employees call the rock -- are happy with a=20 projected 2001-2002 budget that is 5.1 percent larger than the current one.= =20 Total revenue is expected to reach $208.7 million $10.2 million above what= =20 is expected in the fiscal year that ends June 30.=20 Port commissioners gave preliminary approval to the budget yesterday and ar= e=20 scheduled to take a final vote July 10.=20 But a slowing economy and surging electric bills are causes for concern.=20 Electricity costs are expected to rise from $5 million to $8.2 million in t= he=20 coming fiscal year.=20 As far as trends we see a continuation of the growth we've experienced ov= er=20 the past five years said Bruce Hollingsworth the port's treasurer. But= =20 our percentage of growth will not rise as sharply.=20 Port revenues have grown steadily since the 1997-1998 fiscal year when $16= 3=20 million was generated.=20 The proposed budget calls for adding 24 employees to the port's 730-member= =20 work force. New hires will include three Harbor Police officers 10 employe= es=20 in the aviation division and four in maritime services.=20 The port operates Lindbergh Field and administers nonmilitary tidelands alo= ng=20 San Diego Bay. It is landlord to more than 600 waterfront businesses and=20 operates two marine cargo terminals and one cruise ship terminal.=20 The budget calls for growth in each of the port's primary revenue centers:= =20 aviation real estate and maritime services.=20 Passenger and cargo activity at Lindbergh Field is expected to generate $90= .7=20 million or $5 million more than expected in the current year. Most of that= =20 increase is expected to come from parking-rate increases at the airport and= =20 at the port's long-term parking lot on Pacific Highway.=20 Rent from hotels and other businesses that are port tenants are expected to= =20 total $63.1 million up $1.8 million from the current budget.=20 Increases in cargo and cruise ship traffic are expected to boost maritime= =20 income by $2.7 million to a total of $18.4 million.=20 The port expects to spend $157 million on construction projects. They inclu= de=20 $8.5 million to relocate the General Services Department from Eighth Avenue= =20 and Harbor Drive in San Diego to National City and more than $5 million for= =20 paving and improvements at the 10th Avenue Marine Terminal.=20 Rent revenue could grow substantially in future years. Four hotel projects = on=20 port property have won approval or are seeking it.=20 Jim Bailey president of Manchester Resorts told commissioners yesterday= =20 that he expects to break ground on a second Hyatt tower of 750 rooms by Jun= e=20 26. Port officials said revenue from that hotel would bring in an additiona= l=20 $3.7 million a year. It is scheduled to open in the summer of 2003.=20 Hollingsworth the treasurer said that if all four hotels are built the po= rt=20 could receive as much as $15 million a year in new revenue.=20 Continuous use urged for planned power plant=20 Escondido facility originally proposed for peak demand By Jonathan Heller=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 ESCONDIDO -- A proposed power plant in southwest Escondido that initially w= as=20 expected to run only during times of peak electricity demand probably will = be=20 allowed to run full time.=20 A state energy official who recommended approval of the plant yesterday has= =20 said the plant could operate as often as the state deems necessary.=20 The California Energy Commission was scheduled to vote on the project today= .=20 CalPeak Power of San Diego has asked the commission to approve a 49-megawat= t=20 plant on Enterprise Street near Vineyard Avenue. Referred to as a peaker= =20 plant such facilities typically are designed to supply energy only during= =20 times of peak demand.=20 The state limits the number of hours some plants can operate to keep=20 pollution at a minimum. A 44-megawatt peaker plant being built on West=20 Mission Avenue in Escondido by Ramco Inc. will be allowed to operate no mor= e=20 than 16 hours per day.=20 That plant is permitted to emit up to 5 parts per million of nitrogen oxide= =20 although its actual emissions are expected to be slightly lower said Dale= =20 Mesple a Ramco consultant. Nitrogen oxide is a component of smog.=20 The CalPeak plant if approved would be restricted to 2 parts per million = of=20 nitrogen oxide.=20 It was generally assumed that the CalPeak plant would operate under similar= =20 time restrictions as the Ramco plant. The potential for air pollution was= =20 among the chief concerns of residents who spoke at the City Council hearing= s=20 on the Ramco project and at the energy commission hearings about the CalPea= k=20 plant.=20 But under the terms of approval recommended by Energy Commission Chairman= =20 William Keese CalPeak's plant would be able to operate up to 8760 hours= =20 per year typically when the demand for electricity is high. That number= =20 equals 24 hours a day.=20 The actual number of hours would depend on the requirements of the state's= =20 Independent System Operator which manages the energy grid.=20 We certainly want to have the flexibility to run whenever we're needed= =20 said Mark Lyons CalPeak's development director. Exactly how often we will= =20 run is anybody's guess.=20 Escondido Councilwoman June Rady said she was frustrated by the possibility= =20 of the plant running full time. In Ramco's case the city and the county Ai= r=20 Pollution Control District made it clear how often the plant could operate.= =20 CalPeak chose to bypass the city's permitting process and went through the= =20 state Energy Commission which offers an expedited 21-day approval put in= =20 place by Gov. Gray Davis as an emergency measure.=20 I think Escondido has been absolutely ignored and there's a total lack of= =20 due process Rady said. It boils down to an issue of local control.=20 Although city officials objected to the commission pre-empting the city's= =20 land-use authority the commission maintained that Davis' order gave it the= =20 final say on this type of project.=20 If the commission gives final approval today the only remedy available to= =20 the city would be in court. At least three council members must vote to=20 initiate legal action.=20 Keese's recommended approval did take into account several city concerns=20 regarding landscaping. The CalPeak plant would be built near the entrance o= f=20 a planned high-tech business park and city officials were worried the=20 plant's appearance might hinder the ability to attract high-quality tenants= =20 to the park.=20 Mayor Lori Holt Pfeiler said she was not surprised by the commission's=20 recommendation.=20 I expected they would want to approve the project and that's why it was= =20 important for the city to weigh in with conditions we have in this=20 community Pfeiler said.=20 Rising energy prices threaten Poway troupe=20 By Brian E. Clark=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 POWAY -- Rising electricity rates may extinguish the stage lights this summ= er=20 for the Poway Performing Arts Company.=20 I'm afraid that if SDG&E gets the price increase it's asking for -- from 6= .5=20 cents per kilowatt-hour to 8.9 cents -- that we'll go under said Kathy=20 McCafferty spokeswoman for the nonprofit theater.=20 The volunteer organization produces its plays in a building at a Poway Road= =20 shopping center. It held three fund-raising performances over the weekend= =20 but officials were uncertain yesterday how much money was raised.=20 The group is not affiliated with the Poway Performing Arts Center and has= =20 been in business for 20 years.=20 McCafferty said the group built up a $2000 surplus last summer before ener= gy=20 prices began to surge.=20 That $2000 was a big reserve for us she said. It seemed like a ton of= =20 money but boy it went fast. And we're really energy-dependent. Our light= s=20 use a lot of power. And we're in Poway on the second floor of our building.= =20 It gets hot here and we have to use air conditioning.=20 But McCafferty acknowledged that the cost of power isn't the group's only= =20 problem.=20 In a recent letter to backers President Nan Katona said the organization= =20 also needs new blood to keep operating.=20 The truth is that lack of funding is just a symptom of the deeper problem= =20 which is lack of community support she wrote. Ironically audiences and= =20 reviewers recognize the Poway Performing Arts Company as one of the premier= =20 community arts theaters in San Diego.=20 Katona said some new volunteers had stepped forward to take leadership role= s=20 in the theater company since she wrote her letter last month. But she said= =20 rising electricity prices could still bring the group down.=20 If our energy bills double or triple we could be in dire straits she=20 said. It could push us over the edge financially.=20 McCafferty said it would be difficult for the theater to cut costs.=20 We can't run a much leaner operation she said. If our power prices go u= p=20 again we may still be forced out of business.=20 The theater is at 13250 Poway Road in the Lively Shopping Center. For more= =20 information call (858) 679-8085.=20 Fair to use generators for midway attractions=20 By Michael Burge=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 DEL MAR -- The Del Mar Fair will generate its own electricity for thrill=20 rides on the midway this year instead of using energy from SDG&E.=20 In case there are planned or unplanned outages we still will be operating= =20 fairgrounds General Manager Timothy J. Fennell said.=20 Fennell decided to put the midway on generators because he didn't want the= =20 fairgrounds pulling power from the grid while county residents are coping= =20 with rolling blackouts at home and at work he said.=20 And the fair does not want to take a chance that a rolling blackout will=20 leave some people stranded in rides high above the grounds forcing an=20 evacuation.=20 The fairgrounds has been told it is exempt from rolling blackouts but rath= er=20 than take such a risk it will rent 13 diesel-fuel generators and produce=20 electricity on the midway. The rest of the fairgrounds will use power from= =20 San Diego Gas & Electric Co.=20 Fairgrounds operations manager Larry Baumann estimated it would cost the=20 fairgrounds $20000 more to generate its own electricity than to buy it fro= m=20 SDG&E.=20 Midway manager Donna Ruhm said it will be worth it.=20 Rides that require evacuation have to have backup power and they do Ruhm= =20 said. Now our service won't be interrupted.=20 It is not unusual for carnivals to generate their own power and the=20 fairgrounds has done so in the past. Fair officials removed the generators = 10=20 to 15 years ago to reduce noise on the midway.=20 The fair opens June 15 and ends July 4.=20 While the rest of the fairgrounds is on the SDG&E grid Baumann said backup= =20 generators can kick in during a typical 60-or 90-minute blackout allowing= =20 the fair to operate without serious difficulty. Those generators are not=20 linked to the midway.=20 All the generators are licensed by the state and meet emission standards= =20 fair officials said so they do not expect the noise and odor to be=20 excessive.=20 The fairgrounds is taking the precaution of providing its own power despite= =20 the fact that it probably will not go dark during a rolling blackout.=20 SDG&E has assured me that .?.?. the fairgrounds and the racetrack will not= =20 be on the curtailment (blackout) list during the fair and the races said= =20 Del Mar Fire Chief Jack Gosney.=20 The Del Mar Thoroughbred racing season begins July 18 and ends Sept. 5.=20 Gosney said SDG&E told him earlier this year that the fairgrounds was not= =20 subject to a forced outage because it shared a circuit with the Del Mar Fir= e=20 Station which is a 911 dispatch center and exempt from a blackout. But he= =20 said recent research showed that the fairgrounds is on a separate circuit.= =20 Nonetheless Gosney said SDG&E is exempting the fairgrounds and racetrack= =20 during the busy summer season.=20 The fairgrounds paid $137152.95 for its electricity usage from March 12 to= =20 April 10. It paid $51845.39 for electricity during the same period last ye= ar. ?=20 Wednesday June 6 2001=20 'Hi My Name Isn't Justice Honey' and Shame on Lockyer=20 By TOM G. PALMER ?????Here's what California Atty. Gen. Bill Lockyer said at a press=20 conference about Enron Corp. Chairman Kenneth Lay: I would love to=20 personally escort Lay to an 8-by-10 cell that he could share with a tattooe= d=20 dude who says 'Hi my name is Spike honey.'=20 ?????Here's why Lockyer should be removed from his office of public trust:= =20 First because as the chief law enforcement officer of the largest state in= =20 the nation he not only has admitted that rape is a regular feature of the= =20 state's prison system but also that he considers rape a part of the=20 punishment he can inflict on others.=20 ?????Second because he has publicly stated that he would like to personall= y=20 arrange the rape of a Texas businessman who has not even been charged with= =20 any illegal behavior.=20 ?????Lockyer's remarks reveal him to be an authoritarian thug someone whol= ly=20 unsuited to holding an office of public trust.=20 ?????But his remarks do have one positive merit: They tell us what criminal= =20 penalties really entail.=20 ?????Contrary to some depictions of prisons as country clubs they are=20 violent and terrible places. More and more politicians propose criminal=20 sanctions for more and more alleged misdeeds and as a result ever more kin= ds=20 of behavior are sanctioned by criminal penalties perhaps now even selling= =20 electricity. Those found guilty of such crimes are put into cages where th= ey=20 are deprived of their liberty and dignity and as Lockyer so clearly=20 acknowledged raped and brutalized. What's worse Lockyer has indicated tha= t=20 he believes that rape is an appropriate part of the system of punishments h= e=20 administers.=20 ?????Should it matter that Lay is a businessman? Imagine the outcry if the= =20 head of Enron were female. What would Lockyer's fellow Democrats have said = to=20 that?=20 ?????Should it matter that Lay is chairman of an electricity generator? Doe= s=20 the nature of his business justify threats to escort him to his own rape?= =20 Lockyer told the Los Angeles Times that he had singled out Enron's chairman= =20 because the Houston-based company is the world's largest energy trader.=20 ?????So apparently singling out a man for a heinous threat is OK because he= 's=20 the chairman of the world's largest energy trading company. That's accordin= g=20 to the man who as a state senator sponsored California's 1984 hate-crimes= =20 law. Evidently the crusader against intimidation on the basis of race=20 religion and sexual orientation feels no hesitation at all about intimidati= ng=20 someone and threatening him with the brutal use of physical force simply=20 because he heads the world's largest energy trading company.=20 ?????Lockyer and Gov. Gray Davis seem to think that the best way to keep th= e=20 lights on is to threaten electricity producers with brute force rather tha= n=20 to offer to pay competitive rates in competitive markets. Are energy=20 producers to blame for California's energy problems? No. Bad policies=20 including rigid controls on retail prices of electricity are the cause of= =20 the problem not the people who generate energy. Scapegoating producers and= =20 threatening them with violence is an old ploy of authoritarians. California= ns=20 should not stand for it.=20 ?????An Enron spokesman said that Lockyer's chilling stated desire to arran= ge=20 the rape of Lay does not merit a response. The spokesman is wrong. Lockyer'= s=20 remarks merit public disgrace and removal from office. After all rape is n= ot=20 a form of legal justice in America--is it?=20 - - - Tom G. Palmer Is a Senior Fellow at the Cato Institute in Washington. E-mai= l:=20 Palmert@cato.org Copyright 2001 Los Angeles Times=20 California Metro Desk=20 U.S. Probes Alleged Pact Not to Build New Plants Power: Justice officials= =20 focus on Southland operations of two firms which deny wrongdoing. MYRON LEVIN NANCY RIVERA BROOKS ?=20 06/06/2001=20 Los Angeles Times=20 Home Edition=20 Page B-1=20 Copyright 2001 / The Times Mirror Company=20 The U.S. Department of Justice has launched an investigation into whether t= wo=20 companies that control a large swath of Southern California 's electricity= =20 supply agreed to limit power plant construction potentially hindering=20 crucial energy production according to federal records and interviews.=20 The civil antitrust probe of Williams Energy Services and AES Southland=20 represents the Justice Department's first foray into the activities of ener= gy=20 suppliers who have reaped huge profits in California 's price-shocked marke= t.=20 AES disclosed the investigation which began last month in a filing with t= he=20 Securities and Exchange Commission on Tuesday. In its papers AES said the= =20 Justice Department is focusing on whether its agreement with Williams could= =20 constrain future power plant construction in Southern California .=20 The investigation comes at a time when the state is scrambling to get new= =20 generators built and running to avoid blackouts and economic problems.=20 The government alleges that AES and Williams agreed to limit the expansion = or=20 construction of new power plants near three facilities purchased by AES in= =20 1998 from Southern California Edison under the state's new deregulation pla= n.=20 The plants--in Long Beach Huntington Beach and Redondo Beach--are owned by= =20 AES but the electricity is sold by Williams. Under a 3-year-old deal know= n=20 as a tolling agreement Williams essentially rents out the capacity of the= =20 plants for annual payments to AES. Williams supplies natural gas to fire th= e=20 plants and sells the electricity under long-term contracts and in the costl= y=20 spot market.=20 Williams and AES have similar tolling agreements at plants in Pennsylvania= =20 and New Jersey. However AES spokesman Aaron Thomas said the Justice=20 Department's investigative requests have focused only on agreements between= =20 Williams and AES in Southern California .=20 Thomas would say only that the agreement at the center of the investigation= =20 is simply a delineation of how expansion or repowerings are done at the=20 facilities.=20 The three plants have a combined capacity of more than 3900 megawatts=20 enough to supply about 3 million homes. This summer AES is bringing anothe= r=20 450 megawatts on line by reactivating two mothballed generators in Huntingt= on=20 Beach.=20 Paula Hall-Collins a spokeswoman for Tulsa-based Williams Cos. said she= =20 believes that the investigation is unrelated to a recent inquiry by the=20 Federal Energy Regulatory Commission into whether AES and Williams=20 unnecessarily shut down plants to jack up prices. A portion of that=20 investigation was settled in April when Williams without admitting any=20 wrongdoing agreed to pay about $8 million.=20 We've always maintained that we've operated within the law and we're=20 certain the investigation by the DOJ will find we are operating legally= =20 Hall-Collins said.=20 Williams and AES are among the power plant owners and marketers that have= =20 been lambasted by Gov. Gray Davis because of gold-plated electricity prices= =20 that have pushed the state's biggest utilities to the edge of ruin and are= =20 steadily draining the state's budget surplus.=20 State officials are asking FERC to revoke the rights of AES and Williams to= =20 sell electricity at whatever price the market will bear. That right was=20 granted for three years beginning in 1998 by federal regulators when=20 California 's $28-billion electricity market was opened to competition.=20 Under that plan the rights of AES and Williams to sell into the market are= =20 the first to come up for renewal.=20 AES Southland and Williams Energy Services are both arms of large energy=20 companies--AES Corp. of Arlington Va. and Williams Cos. of Tulsa Okla. California Metro Desk=20 Natural Gas Power Prices Drop Sharply Energy: More conservation mild=20 weather are among factors keeping costs down experts say. RICARDO ALONSO-ZALDIVAR NANCY VOGEL ?=20 06/06/2001=20 Los Angeles Times=20 Home Edition=20 Page B-1=20 Copyright 2001 / The Times Mirror Company=20 WASHINGTON -- The wholesale prices of electricity and natural gas in=20 California have fallen sharply in recent weeks and experts said Tuesday th= at=20 the relief could be the harbinger of an energy turnaround.=20 Or it may be just a blip.=20 In the last couple of weeks California power prices have plunged to the=20 lowest levels since April 2000 traders say with electricity selling on so= me=20 days for less than $100 per megawatt-hour.=20 At night when demand slackens power sometimes sells for less than $20 per= =20 megawatt-hour. That is reminiscent of the days before prices went haywire= =20 last summer.=20 It is a drastically different scenario than the $500 to $800 the state paid= =20 during a spate of hot weather last month.=20 Meanwhile wholesale natural gas prices at a bellwether pipeline junction o= n=20 the Southern California -Arizona border dipped last week to their lowest=20 levels since November according to a publication that tracks the industry.= =20 Separately Southern California Gas Co. and Pacific Gas & Electric Co.=20 reported June rate cuts for their residential gas customers of 16% and 38%= =20 respectively.=20 Experts credited a combination of conservation mild weather a burst of=20 increased hydroelectric generation and lower natural gas prices for the dro= p=20 in electricity costs.=20 Conservation is starting to worry the generators which is nice to see= =20 said Severin Borenstein director of the University of California Energy=20 Institute in Berkeley. Californians used 11% less energy last month than in= =20 May 2000 according to the state Energy Commission.=20 I'm worried that if we don't push harder on conservation [prices] won't= =20 stay down Borenstein added.=20 On the natural gas side experts said the price decline is due to replenish= ed=20 storage within California a nationwide drop in the cost of the fuel and= =20 easing demand from power plants.=20 The number of shippers competing to get natural gas to the state has also= =20 increased with the expiration of a controversial contract on the El Paso= =20 pipeline system last week.=20 But economists were reluctant to make sweeping predictions based on the=20 latest indicators.=20 It's hard to draw specific conclusions said Bruce Henning who tracks th= e=20 natural gas markets for Energy and Environmental Analysis Inc. an Arlingto= n=20 Va. consulting firm.=20 How the summer turns out depends on the weather in the state Henning said= =20 adding The weather represents the balance in the Southern California=20 market.=20 Natural gas fuels most California power plants. With wholesale prices=20 recently averaging three to four times the rates charged elsewhere in the= =20 country state and federal officials have despaired of chances for=20 controlling electricity costs.=20 Last Friday however the daily price for immediate delivery of natural gas= =20 in Topock Ariz. a pipeline junction near the California border dipped to= =20 $7.85 per million British thermal units.=20 According to Natural Gas Week it was the first time since mid-November tha= t=20 the price at that location had fallen below $8 per million BTUs. One millio= n=20 BTUs is what a typical Southern California home uses in five or six days.= =20 Considered a bellwether for other pipeline systems serving California the= =20 Topock price reached a record $56.54 per million BTUs on Dec. 8. It stood a= t=20 $9.36 per million BTUs at the close of business Tuesday still below recent= =20 weekly averages.=20 Other industry publications have also picked up signals of price declines.= =20 Platts the energy information division of McGraw-Hill Cos. reported Tuesd= ay=20 that the price for monthly gas delivery contracts to California fell 22% in= =20 June following a nationwide trend.=20 But Henning said the drop in California prices is attributable to both lowe= r=20 prices around the country and a decline in the high markups for shipping ga= s=20 to California . Those markups which far exceed the cost of transporting ga= s=20 have drawn the attention of state and federal investigators.=20 Henning said the markups are declining as depleted storage levels in=20 California are replenished. Storage levels have been filling very rapidly= =20 and that fact is reflected in prices coming down he said.=20 The link between natural gas and electricity prices is a hotly debated=20 subject. Some experts say high-priced natural gas is driving up the cost of= =20 electricity . Others believe that record prices for power are raising the= =20 prices that generators are willing to pay for their fuel.=20 Electricity prices that range from $20 to $200 per megawatt-hour--instead o= f=20 the $150 to $500 per megawatt-hour paid in recent months--are great news fo= r=20 Gov. Gray Davis.=20 Average daily power prices in California for transactions through the=20 Automated Power Exchange have dropped from $149 per megawatt-hour last Frid= ay=20 to $110 per megawatt-hour Tuesday. The exchange is a private company that= =20 brings together electricity buyers and sellers and accounts for less than 1= 0%=20 of the state's market.=20 Davis spokesman Steve Maviglio said Tuesday that average daily power=20 purchases by the state have recently dipped below $50 million.=20 The state has sometimes had to pay more than $100 million a day since it=20 started buying power in January through the Department of Water Resources.= =20 The state stepped in because California 's two biggest utilities became too= =20 financially crippled to withstand the prices being charged by generators.= =20 Davis' plan to pay for past and future energy purchases with a $12.4-billio= n=20 bond issue hinges on an assumption that power prices will be driven down th= is=20 summer through long-term contracts conservation and the construction of ne= w=20 power plants.=20 UC Berkeley's Borenstein said conservation efforts have not gone far enough= .=20 You walk into most buildings and you still need a sweater he said. That= =20 ain't the way to hit the target.=20 If Californians conserved an additional 10% off their peak usage on hot=20 afternoons he said we could really break the backs of the generators we= =20 could really collapse the price.=20 Prices tend to skyrocket in California 's electricity market on hot=20 afternoons when demand soars and grid operators must scramble to purchase= =20 enough electricity . Cool weather which reduces demand for air conditionin= g=20 and conservation help keep the state from reaching such crisis situations.= =20 Borenstein said he believes generators are also asking less money for their= =20 electricity in part because of a federal order that took effect last month.= =20 The order limits the price power plant owners can charge when California 's= =20 supplies are strained.=20 Power sellers say there are more fundamental forces at work.=20 There's more supply relative to demand which is softening prices said= =20 Gary Ackerman executive director of the Western Power Trading Forum. The= =20 market is working and it's providing cheaper wholesale power more quickly= =20 than any regulatory scheme could ever do.=20 *=20 Times staff writer Dan Morain in Sacramento contributed to this story.=20 RELATED STORY=20 PG&E wins: The utility averted a $1-billion bill for power buys. B6=20 (BEGIN TEXT OF INFOBOX / INFOGRAPHIC)=20 A Blip or a Trend?=20 Daily natural gas prices at the California border with Arizona--considered = a=20 bellwether of the state's costs--have been declining in the last two weeks.= =20 *=20 Natural gas price per 1 million Btu=20 $9.36=20 Source: Natural Gas Week California Metro Desk=20 The State Utility Averts $1 Billion in Costs Courts: PG&E and Cal-ISO agree= =20 to recognize Department of Water Resources as purchaser of the power. TIM REITERMAN ?=20 06/06/2001=20 Los Angeles Times=20 Home Edition=20 Page B-6=20 Copyright 2001 / The Times Mirror Company=20 SAN FRANCISCO -- Pacific Gas & Electric Co. and the state's power grid=20 operator reached an agreement Tuesday that insulated PG&E at least=20 temporarily from more than $1 billion in power purchases the state made for= =20 its customers.=20 The California Independent System Operator sent $1.26 billion in invoices t= o=20 the utility for power purchases by the state Department of Water Resources= =20 for PG&E customers from January through March.=20 But the utility contended in Bankruptcy Court proceedings that it was not= =20 liable for such purchases and that continued purchases would cause annual= =20 losses of $4 billion.=20 After arguments before Judge Dennis Montali PG&E and Cal-ISO agreed that t= he=20 Department of Water Resources not PG&E purchased the power. Cal-ISO had= =20 argued that it was making the purchases on PG&E's behalf.=20 PG&E wants to be a utility and have obligations to serve customers but th= ey=20 don't want to pay for it Cal-ISO general counsel Charles Robinson said=20 later.=20 If PG&E refuses to pay the invoices Robinson said Cal-ISO will send the= =20 bills to the Department of Water Resources and officials there can decide= =20 whether to pursue claims in Bankruptcy Court. A spokesman for department= =20 which has authorization to sell $13 billion in bonds for power purchases= =20 said the agency will have no comment until the matter can be studied.=20 State agencies have stayed out of the bankruptcy proceedings hoping to=20 preserve their immunity from suits in federal court.=20 The agreement will be submitted for Montali's approval Monday but the judg= e=20 said it would not be binding on the department because no one represented t= he=20 agency in court.=20 PG&E's own production and contracts provide the majority of the power for i= ts=20 customers. But state legislation adopted this year allows the department to= =20 secure power contracts to serve customers of ailing utilities. When a=20 shortage threatens the power grid the department purchases additional powe= r=20 through Cal-ISO on the spot electricity market.=20 PG&E filed for Chapter 11 protection from creditors on April 6 saying it w= as=20 $9 billion in debt.=20 Dramatic drop in cost of electricity=20 LOWER BILLS: Cheaper fuel milder weather credited=20 David Lazarus Chronicle Staff Writer Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL: .DTL=20 California electricity prices have plunged unexpectedly to their lowest lev= el=20 in more than a year partly as the result of a simultaneous drop in prices= =20 for natural gas which fuels most power plants.=20 Make no mistake: Gas and electricity prices could surge upward again in=20 months ahead.=20 But for the first time since California's energy markets went haywire last= =20 summer industry experts are beginning to ask whether the state finally may= =20 have turned a corner in its battle with runaway power costs.=20 California is not yet out of the woods said Kelley Doolan who tracks=20 natural gas prices for energy market researcher Platts. But this is a very= =20 significant decrease in costs.=20 Along with lower gas prices the decline in electricity costs was attribute= d=20 by state and industry officials to milder weather which reduces demand for= =20 power. They also credited recent conservation efforts by consumers and=20 better-than-expected runoff at dams for hydroelectric plants.=20 Gary Ackerman executive director of the Western Power Trading Forum an=20 energy-industry association said these factors came together to produce th= e=20 lowest wholesale electricity prices since April 2000.=20 Electricity on the spot market could have been purchased yesterday for as= =20 little as $50 per megawatt hour he noted compared with more than $500=20 earlier this year.=20 If the weather stays this way we could have reasonable prices all summer= =20 Ackerman said. We may also have fewer blackouts.=20 It is tempting for Californians to be suspicious of virtually any swing in= =20 energy prices. If power companies manipulated prices on the way up as=20 critics have alleged might they not be up to some trick as prices head in= =20 the opposite direction?=20 Nettie Hoge executive director of The Utility Reform Network in San=20 Francisco speculated that generators are allowing electricity prices to fa= ll=20 so they can discourage federal regulators from taking a more active role in= =20 the dysfunctional California market.=20 They're trying to take the heat off she said.=20 Others cautioned that the lower prices may be nothing more than a statistic= al=20 blip.=20 This was just one month's decline said Michael Shames executive directo= r=20 of the Utility Consumers' Action Network in San Diego. We really have to s= ee=20 how this plays out in the future.=20 Steve Maviglio a spokesman for Gov. Gray Davis said the governor was very= =20 encouraged by the lower energy prices. Davis announced Sunday that=20 California's power use was down 11 percent last month from a year before.= =20 We're not there yet Maviglio said of whether an end to the state's power= =20 woes is in sight. But the trend is pointing in the right direction.=20 WHITE ELEPHANT Yet this sudden drop in energy prices does have a dark side: California cou= ld=20 end up with a huge white elephant after spending about $40 billion in publi= c=20 funds on long-term power contracts.=20 The logic behind the contracts which are at an average price of $69 per=20 megawatt hour over 10 years is that the state expected to pay below-market= =20 rates for electricity for a number of years before prices came down and=20 California found itself paying above-market rates.=20 If current trends continue though California will find itself paying=20 consistently above-market rates much sooner than expected making the long-= =20 term contracts a sweet deal for the same power companies that profited so= =20 handsomely during the state's darkest hours.=20 The contracts look really ugly right now said Shames at the Utility=20 Consumers' Action Network. They may be way overpriced.=20 Maviglio the governor's spokesman said it is too early to conclude that t= he=20 state did poorly negotiating dozens of long-term power contracts.=20 No one has a crystal ball on this he said.=20 CUSTOMERS' BILLS TO DROP In any case Pacific Gas and Electric Co. said yesterday that customers'=20 average gas bills will drop 26 percent this month to $26 and should stay ne= ar=20 that level all summer.=20 Platts which monitors average monthly spot prices found that the wholesal= e=20 price of gas at the California-Oregon border has tumbled nearly 42 percent= =20 since the beginning of May -- from $9.98 per million British thermal units = to=20 $5.81.=20 The wholesale gas price at the California-Arizona border fell 45 percent= =20 from $11.91 to $6.50. This compares with a 25 percent monthly decline in=20 average natural gas prices nationwide.=20 However California gas prices are still about 50 percent higher than they= =20 were a year ago whereas national prices are now below year-ago levels for= =20 the first time since last spring.=20 While cooler weather nationwide helped push gas prices down overall Doolan= =20 attributed the especially steep drop in California to a commensurate surge = in=20 prices last month related to fears of a long hot summer of rolling=20 blackouts.=20 You had state officials all but promising rolling blackouts this summer = he=20 said. That created enormous demand for electricity generation.=20 What has changed is that we've had weeks of mild weather Doolan observed= .=20 The electricity generators have not come out of the woodwork buying up all= =20 the gas.=20 This allowed utilities like PG&E to beef up gas inventories which eased=20 demand and resulted in substantially lower prices he said.=20 'BACK ON TRACK'=20 We're back on track to be completely full for winter said Staci Homrig = a=20 PG&E spokeswoman. That's a very good thing.=20 Gas prices historically dip in the spring and summer and then rise again in= =20 the winter. PG&E is forecasting that customers' average gas bills could ris= e=20 to as high as $75 in December if current trends continue.=20 However the precipitous drop in gas prices in recent weeks suggests that= =20 California's unusually high costs at last may be abating.=20 Individual power companies so far are reluctant to speculate on whether the= =20 drop in gas prices will have a lasting effect on electricity costs.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 San Jose council gives green light to generating plant=20 VOTE REVERSAL: Officials pressured to OK project=20 Marshall Wilson Chronicle Staff Writer Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL: .DTL=20 In a clear sign that the political landscape has shifted because of the=20 state's power crisis the San Jose City Council gave a green light yesterda= y=20 for construction of a generating plant it had unanimously opposed in=20 November.=20 Yesterday's 10-to-1 vote came after months of mounting pressure for the cit= y=20 to reverse course and approve the controversial 600-megawatt Calpine plant = at=20 Coyote Valley.=20 That pressure -- increased by the occasional rolling blackout -- has come= =20 from nearly every corner of the state from elected officials to high-tech= =20 businesses and labor unions worried the power crisis will drain away jobs= =20 ruin the economy and lead to voter backlash over skyrocketing energy bills.= =20 Even the local branch of the NAACP and environmentalists pushed the council= =20 to approve the Calpine proposal -- despite overwhelming opposition from the= =20 plant's neighbors.=20 Council members did not hide their disdain yesterday for being forced to=20 reconsider their opposition to the so-called Metcalf Energy Center.=20 I'm holding my nose to vote for this thing said Councilwoman Linda=20 LeZotte.=20 I'm just as unhappy as everybody else Vice Mayor George Shirakawa said. = I=20 feel like no matter what happens we can't win.=20 GOVERNOR OFFERED HIS SUPPORT After the council's solid opposition in November Calpine appealed to the= =20 California Energy Commission which has the final say. The controversial=20 plant then received a huge boost in April when Gov. Gray Davis threw his=20 support behind it.=20 San Jose officials conceded yesterday that the energy commission was likely= =20 to override their opposition and grant approval within a few weeks. They sa= id=20 the commission's likely approval was stripping them of their power to decid= e=20 local land-use issues.=20 What I think has happened . . . is the governor and the Legislature at the= =20 state level have taken this out of our hands said Councilwoman Pat Dando.= =20 I don't think there's any chance at all the California Energy Commission i= s=20 going to turn down the Metcalf Energy Center Councilman Chuck Reed said.= =20 CONSTRUCTION MAY BEGIN SOON If given the go-ahead by the state Calpine could begin construction as ear= ly=20 as next month. The natural-gas fired plant would generate electricity by=20 mid-2003 company spokesman Kenneth Arbeu said.=20 At the urging of Mayor Ron Gonzales the council yesterday approved a new= =20 cooperation agreement with Calpine. The vote with Councilman Forrest=20 Williams casting the lone nay is preliminary while a final vote that is=20 scheduled for June 26.=20 Gonzales argued that the agreement did not amount to a flip-flop because it= =20 differs from what Calpine proposed in November.=20 The agreement approved by the council calls for increased monitoring of air= =20 pollution the use of treated wastewater to cool the plant which will redu= ce=20 discharges into San Francisco Bay and a $6.5 million community benefits= =20 package with the bulk going toward parkland acquisition Gonzales said.=20 This council has not changed its decision he said. What we've done is= =20 change the facility.=20 Critics incensed that the city was buckling to outside pressure vowed to= =20 change the council at the next election.=20 CONCERNS OVER HEALTH RISKS They raised concerns that boiled wastewater steam wafting over their homes= =20 from Calpine's plant could pose health risks. Jona Denz-Hamilton said more= =20 controls are needed to ensure the safety of neighbors like herself and her= =20 family and argued that new cleaner-burning technologies should be installe= d=20 at the plant.=20 It's too great of a risk she said.=20 Other critics said the state's energy woes will be solved and largely=20 forgotten by the time the plant opens in two years while the Santa Teresa= =20 neighborhood will be stuck with pollution for decades.=20 Approval seemed a given at the start of the more than three-hour hearing.= =20 Much of the afternoon's debate focused around plans to extend a pipeline fo= r=20 treated wastewater to the new plant.=20 Critics said Calpine was receiving a sweet deal by paying only $10 million = of=20 the $50 million cost of extending the pipeline. Several council members ask= ed=20 for a more detailed report into the financing plan before the final vote is= =20 taken June 26.=20 Chronicle staff writer Bill Workman contributed to this report.=20 E-mail Marshall Wilson at 2001 San Francisco Chronicle ? Page?A - 1=20 Developments in California's energy crisis=20 Wednesday June 6 2001=20 2001 Associated Press=20 URL:=20 tate1 053EDT0177.DTL=20 (06-06) 07:53 PDT (AP) --=20 Developments in California's energy crisis:=20 WEDNESDAY: * No power alerts Wednesday as reserves stay above 7 percent.=20 TUESDAY: * Gov. Gray Davis' administration says the state's electricity costs are=20 dropping substantially even as it asks state legislators for another=20 half-billion dollars for power purchases. That brings to $8.2 billion the= =20 amount the state is paying for electricity on behalf of three financially= =20 strapped utilities.=20 Spokesman Steve Maviglio says the cost to the state treasury has dropped in= =20 the last few weeks well below the $50 million dollars the state had been=20 paying on a typical day. He credits cooler weather conservation more powe= r=20 plants online and more long-term contracts with helping drive down the cost= .=20 * A state Senate committee agrees to issue subpoenas to eight out-of-state= =20 electricity generators demanding they hand over documents on bidding prici= ng=20 and other aspects of power sales in the state. The subpoenas would help a= =20 special Senate committee's investigation into whether the companies are=20 illegally profiteering from California's power crisis. The committee's=20 chairman says he expects the companies to resist setting the stage for a= =20 court battle.=20 * Oil giant Chevron threatens to cut gasoline production in California unle= ss=20 it is exempted from rolling blackouts. The San Francisco Chronicle says it= =20 has a copy of a letter sent Friday from Chevron chairman David O'Reilly to= =20 Davis. In the letter O'Reilly says the company will scale back gasoline=20 production at its Richmond and El Segundo plants operating those refinerie= s=20 only with power produced by generators at the sites.=20 * New U.S. Senate Majority Leader Tom Daschle D-S.D. supports Federal=20 Energy Regulatory Commission price caps. FERC must meet its obligation und= er=20 current law to ensure 'just and reasonable' prices for wholesale electricit= y=20 in the state of California. FERC has failed to meet this responsibility...= =20 Daschle says in a letter to Davis. Unless FERC acts soon Senator (Dianne)= =20 Feinstein's legislation should be taken up and passed to direct FERC to tak= e=20 action. I will support all necessary efforts to meet that goal.=20 * House Subcommittee on Energy Policy Natural Resources and Regulatory=20 Affairs Chairman Doug Ose R-Sacramento cites Electric Utility Week figure= s=20 that FERC's limited price caps helped cut California's power rates from $30= 0=20 to $108.47 per megawatt hour within an hour after taking effect last week.= =20 While he says more information is needed Ose uses the figures to tout his= =20 pending bill to impose the price caps around the clock and to all Western= =20 states.=20 * Pacific Gas & Electric Co. asks U.S. Bankruptcy Judge Dennis Montali to= =20 stop the manager of the state's power grid from buying electricity for=20 utility or charging it for any electricity bought after the utility filed f= or=20 bankruptcy on April 6. Separately the utility's creditors support its=20 request to the bankruptcy court to pay out $17.5 million in bonuses to the= =20 management team that guided the utility into bankruptcy.=20 * California Department of Water Resources reveals it is negotiating with= =20 municipal utilities to buy their surplus power. Department spokesman Oscar= =20 Hidalgo says talks began last week but no agreements are imminent.=20 * State lawmakers criticize a $3 million lobbying campaign by Southern=20 California Edison. The utility is telephoning shareholders to describe the= =20 dire consequences if the utility goes bankrupt. The call is then transferre= d=20 to the state Capitol so shareholders can implore lawmakers to support a=20 controversial plan to help the utility. Legislators and their staffers say= =20 the shareholders often are confused and scared their investments will be=20 degraded or wiped out.=20 * State Treasurer Phil Angelides joins an advocacy group for the poor in=20 urging the state's huge pension funds to use their economic power to levera= ge=20 power companies. The Pacific Institute for Community Organization says the= =20 two pension funds own at least $1.2 billion in stocks and bonds in most of= =20 the firms that sell electricity to California.=20 * The Assembly by a 69-0 vote approves a bill to spend $10 million on=20 environmental studies needed before Path 15 the inadequate transmission-li= ne=20 group between Northern and Southern California can be expanded. The bill= =20 moves to the Senate.=20 * Pacific Gas and Electric announces a decrease in natural gas prices down= =20 38 percent from May's rates and 66 percent lower than January's rates. The= =20 decline will bring the average residential gas bill to $26 when it goes int= o=20 effect June 7. Market analysts predict the rates will remain stable until= =20 December when demand is expected to increase with winter heating loads.=20 * No power alerts Tuesday as electricity reserves stay above 7 percent.=20 * Shares of Edison International closed at $10.05 down 53 cents. PG&E Corp= .=20 closed at $11.25 down 15 cents. Sempra Energy the parent company of San= =20 Diego Gas & Electric closes at $26.91 down 43 cents.=20 WHAT'S NEXT: * Davis' representatives continue negotiating with Sempra the parent compa= ny=20 of San Diego Gas and Electric Co. to buy the utility's transmission lines.= =20 THE PROBLEM: High demand high wholesale energy costs transmission glitches and a tight= =20 supply worsened by scarce hydroelectric power in the Northwest and=20 maintenance at aging California power plants are all factors in California'= s=20 electricity crisis.=20 Edison and PG&E say they've lost nearly $14 billion since June to high=20 wholesale prices the state's electricity deregulation law bars them from=20 passing on to consumers. PG&E saying it hasn't received the help it needs= =20 from regulators or state lawmakers filed for federal bankruptcy protection= =20 April 6.=20 Electricity and natural gas suppliers scared off by the two companies' poo= r=20 credit ratings are refusing to sell to them leading the state in January = to=20 start buying power for the utilities' nearly 9 million residential and=20 business customers. The state is also buying power for a third investor-own= ed=20 utility San Diego Gas & Electric which is in better financial shape than= =20 much larger Edison and PG&E but also struggling with high wholesale power= =20 costs.=20 The Public Utilities Commission has approved average rate increases of 37= =20 percent for the heaviest residential customers and 38 percent for commercia= l=20 customers and hikes of up to 49 percent for industrial customers and 15=20 percent or 20 percent for agricultural customers to help finance the state'= s=20 multibillion-dollar power buys.=20 2001 Associated Press ?=20 California conserves=20 Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL:=20 /06/E D86597.DTL=20 WHEN RAIN fails to fall from the sky Californians know why there is a=20 drought. But when rolling blackouts suddenly appeared in the dead of winter= =20 many of us wondered who was responsible for and who has profited from what= =20 now seems like an artificially created power shortage in the state.=20 Our skepticism proved to be right. Windfall profits were reaped by=20 electricity generators while natural gas importers extracted prices far abo= ve=20 the national average.=20 Timid federal overseers exact only wrist-slap penalties on the offending=20 energy firms. The White House scoffs at temporary controls for a=20 malfunctioning market. California's state government has ended up as the bi= ll=20 payer for the sickly utilities forking over $8 billion to generators. This= =20 number may hit $40 billion by year-end.=20 It's an infuriating tangle. All the more remarkable then that skeptical= =20 Californians have managed within two months to reduce their use of=20 electricity by 11 percent. The public's response to the governor's appeal f= or=20 energy conservation has exceeded expectations. Although many businesses hav= e=20 suffered enormous losses ordinary people have made relatively painless=20 sacrifices. People turned off their lights purchased energy-efficient=20 lightbulbs used air conditioning less and shut off their computers when no= t=20 in use.=20 Despite this remarkable civic compliance we still face an unconscionable= =20 lack of leadership. President Bush seems perfectly willing to allow Texas= =20 power companies to pummel the once-powerful California economy. He repeats = a=20 mantra about creating more supply -- which California is doing with 15 powe= r=20 plants under construction -- while ignoring the outsized sums paid to a=20 handful of energy generators.=20 At the same time Gov. Gray Davis who has given new meaning to the word=20 dithering has failed to make the tough and transparent decisions. He delay= ed=20 an inevitable rise in power rates. Davis also dragged his feet in openly=20 announcing new power contracts that commit California to billions in spendi= ng=20 over the next decade.=20 To Davis' credit he has urged California to conserve by laying out an $800= =20 million plan to cut power use and invest in energy-saving programs. The=20 message is getting out as higher rates take effect this month.=20 Despite a woefully unbalanced market and shortsighted leadership the peopl= e=20 of California have demonstrated that if there is a will there is a way.=20 Now it is time for our leaders to follow the wisdom of their constituents.= =20 2001 San Francisco Chronicle ? Page?A - 20=20 L.A. power customers awash in cheap energy=20 John Wildermuth Chronicle Staff Writer Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL:=20 /06/M N133438.DTL=20 Los Angeles -- These are flush times for the city's Department of Water and= =20 Power and the energy executives are loving every minute of it.=20 As are their customers.=20 Private power companies throughout California have been raising rates and= =20 warning customers about a long hot summer filled with blackouts but the= =20 city- owned DWP has been keeping prices stable and the lights on for 1.2=20 million Los Angeles customers.=20 Our customers are being really nice to us said Angelina Galiteva the=20 utility's strategic planning director. They love the DWP.=20 Although Gov. Gray Davis' administration announced that the state had reduc= ed=20 its energy consumption 11 percent from a year ago those in Los Angeles had= =20 cut back less than half that -- and polls show they view the energy situati= on=20 less seriously than other Californians.=20 Public utilities such as Los Angeles water and power have seen their revenu= es=20 increase during the energy crunch because they can sell their excess power = at=20 higher prices than ever before in a market tilted toward sellers.=20 The rest of the state doesn't always feel that same warm glow. Davis has=20 accused the DWP and other California public utilities of putting exorbitant= =20 price tags on the excess electricity they sell to the rest of the energy-= =20 starved state.=20 It's a charge Los Angeles utility executives deny arguing that their exces= s=20 power is sold at cost plus 15 percent which they say is a fair return for= =20 their customers.=20 Without our support a million more homes (elsewhere in California) would= =20 have suffered rolling blackouts which is a powerful message Galiteva sai= d.=20 It wasn't supposed to be this way. When the power industry was deregulated = in=20 the late '90s energy giants like Pacific Gas and Electric Co. and Southern= =20 California Edison were expected to be the big winners. Now PG&E is in=20 bankruptcy and Edison is a short step away.=20 When deregulation came the experts said that the investor-owned utilities= =20 would become lean mean machines that would be better able to operate in th= e=20 new environment Galiteva said. But now public power has shown it can ser= ve=20 customers more efficiently at lower rates.=20 While much of the state worries about electrical supply Los Angeles=20 residents have been saved many of those concerns.=20 In a survey done last month by the Public Policy Institute of California 4= 8=20 percent of the people in the Bay Area thought that electricity cost and=20 availability were the most important issues facing the state. In Los Angele= s=20 however only 33 percent put the energy crunch on top. When questioned abou= t=20 the size of the power problem and the effect it would have on the state's= =20 economy Los Angeles residents were consistently less concerned than people= =20 elsewhere in California.=20 People in Los Angeles have been somewhat isolated from the energy crisis= =20 concluded Mark Baldassare who conducted the survey.=20 That doesn't mean the state's energy problems haven't had an effect. The DW= P=20 has seen a 3 percent to 5 percent reduction in some uses which officials= =20 have dubbed sympathy conservation. The utility also is offering its bigge= st=20 customers financial incentives to cut back on their power use.=20 Our average annual load growth is about 80 megawatts Galiteva said. By= =20 this summer we expect to have saved 40 megawatts through conservation. By= =20 December we expect 60 megawatts in savings.=20 The utility also is making a major attempt to create a conservation ethic= =20 among its customers. DWP's comfortable situation has made it possible to=20 offer them the carrot without the need to show them the stick.=20 Conservation no longer means doing without Galiteva said. Beer can be= =20 just as cold with a superefficient refrigerator. Rooms can be just as brigh= t=20 with superefficient light bulbs.=20 A Green Power program also is promoting the use of renewable energy=20 resources such as solar wind and hydroelectric power. About 75000 custome= rs=20 are paying an extra $3 per month to increase DWP's use of renewable power= =20 sources.=20 We're trying to give our customers a choice and a voice in determining the= =20 mix of power they use Galiteva said. They know they can do (conservation= )=20 now or see it being mandated later.=20 Los Angeles power officials -- and their customers -- know the DWP isn't=20 always going to continue as an island of tranquility in a sea of energy=20 turmoil. The utility's aging gas-fired plants have been affected by the=20 rising price of natural gas. Demand for energy continues to rise. In a deba= te=20 last month both candidates for mayor of Los Angeles agreed that increases = in=20 local power bills are inevitable.=20 But the DWP has been supplying power to Los Angeles since 1916 and its=20 executives believe that the state's deregulation disaster has shown the=20 advantages of the city-owned utility.=20 It's nice to be the lean mean green efficient machine that no one ever= =20 expected us to become Galiteva said.=20 E-mail John Wildermuth at 2001 San Francisco Chronicle ? Page?A - 13=20 PG&E doesn't want to pay for energy to avert blackouts=20 DAVID KRAVETS Associated Press Writer Wednesday June 6 2001=20 2001 Associated Press=20 URL:=20 tate0 306EDT0102.DTL=20 (06-06) 00:06 PDT SAN FRANCISCO (AP) --=20 Pacific Gas & Electric Co. has told a bankruptcy judge it should not have t= o=20 pay for what could amount to billions of dollars in spot-market energy cost= s=20 to avert blackouts.=20 The company's position was one of two developments that emerged Tuesday as= =20 the bankrupt utility tries to cope with fallout from California's power=20 crisis. The other development saw a group of creditors that PG&E owes=20 billions endorse $17.5 million in bonuses for top managers at the utility.= =20 San Francisco-based PG&E filed for bankruptcy protection in April after=20 racking up an $8.9 billion debt which under state law it could not recoup= =20 from customers.=20 Tuesday's court dispute centered on who pays for energy bought at the last= =20 minute to avoid blackouts.=20 PG&E said an April federal regulatory decision requires that electricity ca= n=20 only be sold to those with the ability to pay electricity generators. The= =20 state is the only player with such ability said PG&E attorney Jerome Faulk= =20 who argued that the utility shouldn't have to pay the $330 million in month= ly=20 spot-market energy bills.=20 Judge Dennis Montali said he may craft such an order. But he said the order= =20 would not preclude the state from suing PG&E to recover the cost.=20 In a separate but related development a committee charged with devising a= =20 payment plan for those creditors owed billions by PG&E said it will sign of= f=20 on the utility's plan to pay $17.5 million in bonuses to PG&E's management= =20 team.=20 Attorney Allan Marks who represents the committee said such payments are= =20 normal during large bankruptcy cases. Under the agreement which Montali wi= ll=20 consider at a June 18 hearing the company must quickly produce a debt=20 payment plan that passes judicial muster.=20 The utility said it needs the bonuses for a management retention program.= =20 Marks agreed. While the $17.5 million leaves less for creditors without a= =20 financial incentive PG&E's key top brass may not be willing to cooperate wi= th=20 a payment plan Marks said.=20 The main goal for the creditors' support here is to move the bankruptcy as= =20 quickly and smoothly as possible Marks said.=20 The Utility Reform Network a consumer watchdog group says PG&E is simply= =20 rewarding managers of a failed business effort.=20 They're just showering money on the same people who got them in this mess= =20 said TURN's Mike Florio.=20 The proposed bonuses would come on top of $50 million in bonuses and raises= =20 PG&E awarded just before the April 6 bankruptcy filing.=20 The case is In Re Pacific Gas & Electric Co. 01-30923 DM.=20 2001 Associated Press ?=20 Metcalf plant gets preliminary approval=20 Posted at 12:21 a.m. PDT Wednesday June 6 2001=20 BY MIKE ZAPLER=20 Mercury News=20 As the San Jose City Council approached its 10-1 vote Tuesday to give an=20 initial nod to Calpine's big power plant in South San Jose Councilwoman=20 Linda LeZotte perhaps captured the body's mood best.=20 ``I'm holding my nose to vote for this thing'' she said. ``Without faultin= g=20 the mayor or his staff quite frankly I think this deal stinks.''=20 Caught in what some members called a bind beyond their control the council= =20 gave preliminary approval to an agreement negotiated by Mayor Ron Gonzales= =20 and Calpine on the company's proposed 600-megawatt Metcalf Energy Center.= =20 Councilman Forrest Williams who represents the Santa Teresa neighborhood= =20 near the site cast the lone vote against the deal.=20 The agreement is scheduled to come back before the council for a final vote= =20 on June 26 but Tuesday's vote effectively shifts the battle to the courts= =20 where residents are expected to lodge a lawsuit in one final attempt to blo= ck=20 the plant.=20 Still Councilwoman Pat Dando and some of her colleagues raised questions= =20 about the deal they said they want answered before the final vote. Their=20 issues could be incorporated into the final deal.=20 Many of the concerns focused on a $50 million recycled water pipeline=20 Gonzales agreed to have the city build to accommodate the project $10=20 million of which would be reimbursed by Calpine over 30 years.=20 Pipeline possibility=20 Dando said that a private company Great Oaks Water may be willing to buil= d=20 the pipeline extension itself saving the city the $50 million expense.=20 Officials at Great Oaks were unavailable Tuesday.=20 Council members peppered staff with other questions. Many were alarmed by= =20 claims of the Silicon Valley Toxics Coalition which said that using treate= d=20 sewage water to cool the power plant could allow dangerous chemicals to see= p=20 into drinking water aquifers. An environmental services director said the= =20 recycled water meets federal specifications but that there is no protocol= =20 for testing other chemicals not included in those standards.=20 Councilman Ken Yeager asked why Calpine should be allowed to spread a $3.9= =20 million water connection fee over 10 years -- an arrangement that would=20 mandate an amendment to city law.=20 LeZotte meanwhile said she wants to hold Calpine accountable to install= =20 ammonia-free technology at the plant. Ammonia is highly hazardous and=20 residents say the use of the chemical to clean the plant is among their chi= ef=20 concerns.=20 The agreement requires the company to install technology to reduce or=20 eliminate the use ammonia when it becomes ``technologically and economicall= y=20 feasible.'' LeZotte said she wants a clear definition of ``feasible''=20 included in the deal.=20 Tuesday's vote marked a stark departure from the council's November vote to= =20 deny Metcalf. At the time council members said a power plant was=20 inappropriate for the area and many members said Tuesday that they still= =20 believe that.=20 Bowing to pressure=20 But with Gov. Gray Davis endorsing Metcalf in April and the California Ener= gy=20 Commission widely expected to override the city's denial this month counci= l=20 members said they had no choice but to cut the best deal it could and allow= =20 the project to proceed.=20 That explanation however didn't sit well with residents of the Santa Tere= sa=20 neighborhood adjacent to the Metcalf site one of whom accused Gonzales and= =20 the council of ``switching sides when the opposing team gets too close to t= he=20 goal line.''=20 Contact Mike Zapler at mzapler@sjmercury.com or at (408) 275-0140.=20 Feds probe AES Williams=20 Antitrust investigation looks into allegations of manipulated energy prices= =20 through reduced power-plant construction.=20 June 6 2001=20 By JAMES ROWLEY Bloomberg News=20 WASHINGTON - The U.S. Justice Department opened an antitrust investigation= =20 into California's electricity shortage by probing allegations that AES Corp= .=20 and Williams Energy Services Co. are limiting power-plant expansion to driv= e=20 up prices.=20 AES Corp. the biggest U.S. power-plant developer disclosed the=20 investigation in a filing with the U.S. Securities and Exchange Commission.= =20 The Justice Department is looking into a supply-and-marketing agreement=20 between AES' California power-plant unit and a Williams unit that supplies= =20 natural gas.=20 Williams owner of the second-largest U.S. natural-gas pipeline system als= o=20 markets the power produced by AES' three electricity plants in the state.= =20 The department alleges the agreement limits expansion of generating capacit= y=20 near some AES plants.=20 AES said it was cooperating with the Justice Department investigation whic= h=20 began last month into possible violations of Section 1 of the Sherman=20 Antitrust Act.=20 That provision outlaws any restraint of trade that stifles competition.=20 A shortage of generating capacity in California has led to soaring wholesal= e=20 prices and rolling blackouts and prompted Pacific Gas & Electric the state= 's=20 largest utility to seek bankruptcy protection in April.=20 Aaron Thomas a spokesman for AES based in Arlington Va. said the U.S.= =20 investigation started no more than a couple of weeks ago.=20 Williams spokeswoman Paula Hall-Collins said the Tulsa Okla.-based company= =20 is cooperating.=20 Gina Talamona Justice Department spokeswoman said the agency had no=20 immediate comment.=20 The investigation was opened several weeks after the Federal Energy=20 Regulatory Commission investigated AES plants in Long Beach and Huntington= =20 Beach designated must run under the Federal Power Act did not produce= =20 electricity for 10 days in April and May 2000. Williams agreed to pay the= =20 operator of California's electric grid $8 million to settle allegations tha= t=20 it overcharged for power.=20 FERC charged in March that the companies had a financial incentive to keep= =20 the units out of service to force the California Independent System Operato= r=20 to buy power from AES' plant in Redondo Beach at prices close to the=20 FERC-imposed cap of $750 per megawatt-hour.=20 AES said it was complying with a Justice Department demand for documents=20 about the agreement between its AES Southland LLC unit and Williams Energy= =20 Services Co. AES Southland which operates the three power plants was also= =20 asked to respond to interrogatories the company said.=20 The Williams unit supplies the natural gas to fuel the AES plants and marke= ts=20 the power they produce.=20 AES and Williams jointly produce and sell about 4000 megawatts in Californ= ia=20 -- 6 to 8 percent of the state's power -- enough electricity to light about= 3=20 million typical California homes.=20 AES shares dropped $2.05 to $42.54. Williams Cos. shares dropped $1 to=20 $38.20. Calpine Begins Construction of Peaking Energy Center in Gilroy Calif.=20 June 6 2001=20 SAN JOSE Calif. June 5 /PRNewswire/ via NewsEdge Corporation -=20 Calpine Corporation (NYSE: CPN) the San Jose Calif.-based independent pow= er=20 company today announced that initial construction of 135 megawatts (mw) of= =20 peaking generation capacity will begin during this week adjacent to its=20 existing Gilroy Power Plant in Gilroy Calif. Through an Application for=20 Certification (AFC) filed with the California Energy Commission (CEC) on=20 April 25 2001 Calpine proposed to add three 45-mw simple-cycle gas turbin= e=20 peaking units in the first of a two-phase process. The California Energy=20 Commission approved the project on May 21 2001.=20 Because the required natural gas water and transmission infrastructure=20 exists at our Gilroy plant it is an ideal site for the addition of peaking= =20 generation allowing for rapid installation of needed capacity. The first= =20 three units are expected to begin generating electricity this September= =20 commented Bryan Bertacchi Calpine Vice President - Western Region.=20 Upon completion the two-phase build out the Gilroy Energy Center will be a= =20 270-mw natural gas-fired simple-cycle peaking generation facility located= =20 on approximately 9.5 acres at 1400 Pacheco Pass Highway in Gilroy. Commerci= al=20 operation of Phase One is scheduled for September 2001. An additional three= =20 45-mw gas turbine generators will be installed in Phase Two with full=20 build-out estimated for May 2002. Phase Two requires the filing of an=20 additional application with the CEC and is subject to a four-month review= =20 process.=20 Initial construction will begin this week with site and civil engineering= =20 activities occurring for approximately six weeks at which time the site wil= l=20 be cleared and leveled. Foundation work and the installation of generation= =20 equipment will follow shortly thereafter and commissioning and testing wil= l=20 take place for a two to three week period prior to commercial operation in= =20 September 2001.=20 The Gilroy Energy Center web site has been created to host all information= =20 and updates related to this project. For additional information please vis= it=20 www.gilroypower.com.=20 Calpine Corporation based in San Jose Calif. is dedicated to providing= =20 customers with reliable and competitively priced electricity. Calpine is=20 focused on clean efficient natural gas-fired generation and is the world'= s=20 largest producer of renewable geothermal energy. Calpine has launched the= =20 largest power development program in North America. To date the company ha= s=20 approximately 32200 megawatts of base load capacity and 7200 megawatts of= =20 peaking capacity in operation under construction pending acquisitions and= =20 in announced development in 29 states and Canada. The company was founded i= n=20 1984 and is publicly traded on the New York Stock Exchange under the symbol= =20 CPN. For more information about Calpine visit its Website at=20 www.calpine.com.=20 This news release discusses certain matters that may be considered=20 forward-looking statements within the meaning of Section 27A of the=20 Securities Act of 1933 as amended and Section 21E of the Securities=20 Exchange Act of 1934 as amended including statements regarding the intent= =20 belief or current expectations of Calpine Corporation (the Company) and i= ts=20 management. Prospective investors are cautioned that any such forward-looki= ng=20 statements are not guarantees of future performance and involve a number of= =20 risks and uncertainties that could materially affect actual results such as= =20 but not limited to (i) changes in government regulations including pendin= g=20 changes in California and anticipated deregulation of the electric energy= =20 industry (ii) commercial operations of new plants that may be delayed or= =20 prevented because of various development and construction risks such as a= =20 failure to obtain financing and the necessary permits to operate or the=20 failure of third-party contractors to perform their contractual obligations= =20 (iii) cost estimates are preliminary and actual cost may be higher than=20 estimated (iv) the assurance that the Company will develop additional=20 plants (v) a competitor's development of a lower-cost generating gas-fired= =20 power plant and (vi) the risks associated with marketing and selling power= =20 from power plants in the newly competitive energy market. Prospective=20 investors are also cautioned that the California energy environment remains= =20 uncertain. The Company's management is working closely with a number of=20 parties to resolve the current uncertainty while protecting the Company's= =20 interests. Management believes that a final resolution will not have a=20 material adverse impact on the Company. Prospective investors are also=20 referred to the other risks identified from time to time in the Company's= =20 reports and registration statements filed with the Securities and Exchange= =20 Commission.=20 MAKE YOUR OPINION COUNT - Click Here=20 SOURCE Calpine Corporation=20 CONTACT: media Lisa Poelle ext. 1285 or investors Rick Barraza ext.=20 1125 both of Calpine Corporation 408-995-5115=20 Web site: http://www.gilroypower.com=20 Web site: http://www.calpine.com (CPN)=20 Reliant Urges FERC to Drop or Amend California Price Caps to Avoid Addition= al=20 Shortages and More Blackouts=20 June 6 2001=20 HOUSTON June 5 /PRNewswire/ via NewsEdge Corporation -=20 Reliant Energy (NYSE: REI) filed an emergency motion with the Federal Energ= y=20 Regulatory Commission (FERC) on Monday urging the agency to drop the=20 California price caps first applied May 29 or at a minimum amend them to= =20 reflect the true costs they are attempting to control. The current price=20 caps which send inaccurate market signals are actually decreasing supply= =20 and increasing demand thus worsening an already dire situation.=20 FERC has been publicly dedicated to an open market from the beginning of t= he=20 California power crisis. We encourage FERC to reexamine these price caps an= d=20 continue that dedication said Joe Bob Perkins president and chief=20 operating officer Reliant Energy Wholesale Group. Reliant is committed to= =20 helping keep the lights on in California this summer and wants to ensure th= at=20 if caps must remain part of the picture they actually help increase supply= =20 and fix the problem.=20 Although the price caps were first imposed less than a week ago they have= =20 already begun to damage the market by decreasing supply. The price caps are= =20 creating a myriad of problems:=20 -- Creates Misleading Signals - The price cap methodology is misleading=20 the public on the actual cost of power. Reported dispatch costs in=20 Southern California during emergencies is far below what the actual=20 financial settlements will be under the FERC's final market mitigation=20 order. This confusion results from the proxy price used for=20 dispatch utilizing an extremely distorted blended fuel cost index.=20 This index averages gas costs in northern and southern parts of the=20 state an impossibility in the actual market. This authorizes the=20 California Independent System Operator (ISO) to require that=20 generators dispatch power at reported market clearing prices well=20 below actual cost when back-up generation capacity begins to dip below=20 7.5 percent.=20 -- Depletes Power from Peaking Plants - The price caps distort dispatch=20 signals on peaking plants which in some cases may be run only a few=20 days of the year because of emission regulations. The current FERC=20 price controls encourage the ISO to purchase power from emergency=20 peaking plants before it is really needed even in the absence of a=20 stage three emergency. This depletes supplies that will by law run=20 out when blackout season intensifies later this summer. This power=20 from peaking units should only be purchased when blackouts are=20 imminent -- not in stage one or two emergencies.=20 -- Eliminates Price Signals for Retail Customers - Price caps remove=20 price signals for retail customers. Customers particularly=20 industrial companies which should be encouraged to curtail during=20 shortages are not encouraged to conserve power when dispatched price=20 caps keep prices below the actual cost to produce electricity.=20 -- Discourages Supply from Out-of-State - Suppliers outside of=20 California who are under no legal obligation to dispatch power during=20 an emergency in the state are not encouraged to increase available=20 production when reported market clearing prices are below their cost=20 to produce. During times of emergencies utilities across the Western=20 region are not likely to take on additional risks and costs if they=20 don't believe they will be fully compensated - a situation the current=20 price caps create.=20 MAKE YOUR OPINION COUNT - Click Here=20 SOURCE Reliant Energy=20 CONTACT: Maxine Enciso of Ketchum Public Relations Los Angeles=20 310-444-1303 for Reliant Energy or media Richard Wheatley of Reliant=20 Energy 713-207-5881=20 Photo: NewsCom: AP=20 Archive: http://photoarchive.ap.org PRN Photo Desk 888-776-6555 or=20 212-782-2840=20 Company News On-Call: or fax=20 800-758-5804 ext. 419090=20 Web site: http://www.reliantenergy.com (REI)=20 By Kathleen McFall kmcfall@ftenergy.com President George W. Bush's energy package encourages the use of biomass fue= ls=20 for both transportation purposes and electricity generation. They can=20 provide a reliable source of energy at a stable price and they can also=20 generate income for farmers landowners and others who harness them his= =20 administration's report said.=20 Despite this warm and fuzzy language however the administration offered n= o=20 tangible funding for the fledgling biofuels industry=01*other than an exten= sion=20 of an existing ethanol tax credit that was not due to expire until 2007=01*= a=20 significant disappointment and surprise to advocates of renewable=20 transportation fuels. The report did recommend expanding tax credits for biomass energy projects = to=20 include forest-related and agriculture fuel sources and threw its weighty= =20 support at a new credit for electricity produced from biomass co-fired with= =20 coal. These recommendations are already included in the president's 2002=20 budget.=20 We are pleased that the administration included expansion of the biomass t= ax=20 credit and hope that with congressional leadership we will see this=20 expanded provision signed into law this year said Katherine Hamilton=20 co-director of the American Bioenergy Association (ABA).=20 Unlike other portions of the recommended energy policy biomass energy=20 probably will not suffer under the recent change in Senate composition giv= en=20 Senate Majority Leader Tom Daschle's (D-S.D.) agricultural constituency and= =20 his previous support of the biofuels industry.=20 According to the National Energy Policy Development report biomass account= s=20 for about 76% of non-hydropower renewable electricity generation=20 representing a total of about 1.6% of total U.S. electricity supply.=20 Biopower advocates however envision an even greater market penetration in= =20 the coming decades and point to its environmental and ancillary advantages.= =20 For example given that biomass combustion can be carbon dioxide-neutral (i= f=20 the growth and use cycle is managed sustainably) environmental groups=20 support an expanded role. Farmers with marginal lands that could grow bioma= ss=20 fuel could enjoy economic benefits. With large amounts of wood residue the= =20 forest industry also stands to benefit from wider use of wood as a power=20 source.=20 Renewable energy offers a particular advantage to the lumber and paper=20 industry and many analysts project that the industry may soon become a net= =20 seller of electricity.=20 In the lumber and paper industries wood scraps are sometimes directly fed= =20 into boilers to produce steam for their manufacturing processes or to heat= =20 their buildings. For that reason renewable energy offers a particular=20 advantage to the lumber and paper industry and many analysts project that= =20 the industry may soon become a net seller of electricity said the energy= =20 policy report.=20 Co-firing with coal Biomass=01*usually wood or wood residue=01*has traditionally been burned di= rectly=20 in the industrial sector for heat or on-site electricity generation.=20 According to the U.S. Department of Energy (DOE) the existing 10 GW of=20 installed capacity are based on this direct-combustion technology.=20 For utilities and power-generating companies with coal-fired capacity=20 however biomass co-firing may represent one of the least-cost renewable=20 energy options said the DOE. The process involves blending different=20 materials in varying amounts with coal.=20 Not only does mixing biomass with coal reduce emissions it is likely to be= =20 cost-effective. Southern Co. estimates that a biomass plant alone could=20 generate power depending on its location at 4 to 11 cents/kWh. Given that= =20 the lower range of this corresponds to coal generation costs there are=20 clearly circumstances where biomass-coal co-firing would be economically=20 attractive today. Plus the environmental public relations benefit for=20 utilities with coal-fired capacity would be valuable.=20 Domestic biomass generation capacity could reach 20-30 GW by the year 2020 = by=20 co-firing at existing U.S. coal-fired power plants.=20 According to a recent report prepared by five National Laboratories domest= ic=20 biomass generation capacity could reach 20-30 GW by the year 2020 by=20 co-firing at existing U.S. coal-fired power plants.=20 A recent report by the United Nations Intergovernmental Panel for Climate= =20 Change (IPCC) also cites the potential of coal co-firing with biomass. The= =20 IPCC report concludes that co-firing in coal boilers results in the lowest= =20 cost and least technical risk of the examined approaches for biomass=20 conversion to electricity.=20 Working out the technical kinks Already said the DOE six power plants in the U.S. are currently co-firing= =20 coal and wood residue products on a regular basis. Another 10 plants have= =20 successfully tested co-firing over the last decade and at least six more= =20 plants are now conducting or planning tests.=20 For example Southern Co. is working with DOE the Southern Research=20 Institute and the Electric Power Research Institute to study ways to grow a= nd=20 harvest switchgrass to blend with coal as a fuel for power generation.=20 Ideally suited for the southeastern U.S. switchgrass is a rugged grass tha= t=20 can be grown on marginal agricultural land. Reaching heights of up to 12=20 feet it requires little fertilization and herbicide and can be harvested= =20 twice a year.=20 Harvesting methods co-milling of switchgrass and pulverized coal=20 pilot-scale co-firing tests and a full-scale demonstration of co-firing at= =20 Alabama Power Co.'s Plant Gadsden are part of Southern Co.'s collaborative= =20 project.=20 The U.S. Agriculture Department is also taking a role in exploring the=20 potential of biomass and coal co-firing as a means to give farmers new=20 markets especially for currently idle land. The agency recently authorized= =20 funding for three co-firing demonstration projects.=20 In Iowa the Chariton Valley Biomass Project is a cooperative effort to=20 develop warm and cool season grasses (such as switchgrass) to co-fire with= =20 coal at Alliant Energy's Ottumwa Generating Station. The project is designe= d=20 to generate a sustained supply of 35 MW of biomass energy. Eventually the= =20 grass could substitute for as much as 5% of the coal currently burned at th= e=20 plant.=20 In addition to reducing coal emissions the Chariton Valley Biomass Project= =20 will support the local farm economy.=20 In addition to reducing coal emissions the project will support the local= =20 farm economy because the grass and trees will come from acreage taken out o= f=20 production under the Agriculture Department's Conservation Reserve Program= =20 (CRP). CRP land is generally marginal land that the government subsidizes= =20 farmers to leave idle to both prevent erosion and protect commodity prices= =20 from product surpluses.=20 The Pennsylvania Switchgrass Energy and Conservation Project will produce= =20 switchgrass on CRP land for sale to a local cooperative's coal-fired=20 fluid-bed combustors.=20 In New York the Agriculture Department project will fund willow biomass=20 crops and switchgrass on CRP acreage in the central and western part of the= =20 state. The primary markets for the willow biomass are two coal-burning powe= r=20 plants and a small university central heating facility.=20 Land conflicts transportation may be obstacles As these pilot projects illustrate biomass conversion efforts may have the= =20 most significant potential in rural areas. Since biomass is widely=20 distributed it has good potential to provide rural areas with a renewable= =20 source of energy. The challenge is to provide =01( conversion and delivery = of=20 bioenergy to the marketplace in the form of modern and competitive energy= =20 sources said the IPCC report.=20 A potential drawback to co-firing is transportation. Transportation of=20 wood-based energy products is more costly per unit of energy than coal f= or=20 example and most analysts believe it will prove most economical to site=20 generation plants near biomass sources.=20 The generating plant or biorefinery must be located near to the resource t= o=20 minimize transport costs of the low-energy-density biomass as well as to=20 minimize impacts on air and water use the IPCC report said. However note= s=20 the report's authors economies of scale may be significant enough to offse= t=20 the transport costs involved.=20 A potential drawback over the long term however for biomass conversion is= =20 land use conflicts. The IPCC report notes that by 2100 the global land=20 requirement to feed the growing world population will increase substantiall= y.=20 Up until this time there may well be sufficient land to supply all demands= =20 for food fibre and energy but at some stage after that land-use conflict= s=20 could arise and before that competition for water and irrigation may be a= =20 constraint.=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:: nan Body:: Here it is What should this email be categorized as? [/INST] Empty message (due to missing attachment) <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: Important - CPUC Motion - Confidential Attorney Client Privil ege and Work Product Body:: I just spoke with Mary to make sure we have the same information. Here are the facts we have so far. On November 4th the CPUC filed a motion with FERC to adopt the form of protective order that the CPUC entered to compel the production of documents and to shorten time to answer. According to Exhibit B (read to me by Nancy Pickover at Bracewell) the following CPUC moved against the following entities: AES Williams Duke Dynegy Reliant and Southern. Enron entities were NOT named in exhibit B. This is not to say that we could not be easily added to the group. While the motion reads as if the CPUC was moving against everybody in fact in footnote 2 they state they are only moving against the entities named in Exhibit B. We will have Exhibit B in hand first thing tomorrow via FEDEX to confirm this. To repeat Enron is not named yet. Thanks Gary 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: October London meeting Body:: Attached is a draft of the Agenda we discussed. Irwin - I show Joskow on here but he has already declined (his wife is having surgery right before our meeting date). We may want to consider someone like Seabron Adamson (Frontier Economics) or perhaps someone else. 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: call to Sen Kinder Body:: Nice work Kerry and Barb. I think we should do the follow up work on setting a follow up meeting with the Senator. Ken left it open whether he would be available when the Sen is in Houston so we have made no commitment in that regard. Janine Migden 04/27/2001 08:32 AM To: Steven J Kean/NA/Enron@Enron cc: James D Steffes/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron Susan M Landwehr/NA/Enron@Enron Kerry Stroup/NA/Enron@Enron Barbara A Hueter/NA/Enron@Enron Subject: Re: call to Sen Kinder Thanks Steve. That's great news. Just as an FYI the memo that Ken worked from was prepared by Kerry Stroup and Barbara Hueter who are the leads on Missouri. As a follow-up will Sen. Kinder be contacting Ken Lay directly or should Kerry and Barbara contact Sen. Kinder's office as the date gets closer to make arrangements? Please advise. Thanks Janine Steven J Kean 04/26/2001 08:07 PM To: Susan M Landwehr/NA/Enron@Enron Janine Migden/NA/Enron@Enron cc: Richard Shapiro/NA/Enron@Enron James D Steffes/NA/Enron@Enron Subject: call to Sen Kinder Ken talked to Sen Kinder. He made the points you had prepared. Kinder agreed to shelve the legislation for this session. He said he had been hearing from several others including Proctor and Gamble (which has a big facility in his district) that the legislation was not going to help competition develop in the state. He expressed willingness to work with us on a better package and also expressed interest in coming to Enron's offices. He is going to be in San Antonio in August and would like to come to Houston around that time. 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: Cal PUC Subpoenas - confidential attorney client communicatio n Body:: Mike Richard and Gary: What I was suggesting was that we would produce the limited items that we are proposing under the terms of the existing protective order (which are inadequate but we are not giving up any of the crown jewels at this point) while conditioning our production on two points first that we reserve the right to seek stronger protection in the order (a la Williams' motion) for any subsequent materials we do agree to produce or which are compelled to be produced and two that the materials we are currently producing which are entitled to confidentiality (the trading data at a minimum) shall be subject to the most stringent protective order which the Commission issues in this proceeding i.e. we get the benefit of any additional protections Williams can secure. I only suggest this so we can stay out of the limelight by not being one of the bad guy generators who are actively taking on the protective order when we know that at least four generators are producing nothing until their motion is resolved and one marketer (Coral/Shell Energy) has refused to produce transactional data and has objected to most of the document request. I have also recently learned that Calpine has gotten an extension until Oct. 13 and will try to delay and hold off producing much data. I will get getting a copy of Coral's objections to the commission shortly. Mike Day 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:: REMOVE Body:: What do you think? If you think this would be useful go ahead and order it. 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:: Confidential for Dan Watkiss Body:: Jim If you are able to provide this to Dan for the meeting I would appreciate it. He may not want to circulate it to the group. It is intended as a work product for attorney. This e-mail and the attachments were prepared at the request of counsel. <<NOTES FOR DISCUSSION.doc>> Jan Paul Acton Vice President Charles River Associates 1201 F St. NW Suite 700 Washington DC 20004-1204 Voice: (202) 662 3902 Fax: (202) 662 3910 ***** This electronic message contains information from the consulting firm of Charles River Associates Inc. which may be confidential or privileged. The information is intended for the use of the individual or entity named above. If you are not the intended recipient be aware that any disclosure copying distribution or use of the contents of this information is prohibited. If you have received this electronic transmission in error please notify us by telephone (617 425-3582) or by e-mail (postmaster@crai.com) immediately. ***** - NOTES FOR DISCUSSION.doc 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:: Re: New Computer for Handling Stock Awards Body:: Do what you need to do the system has to work. The only question I have is: why doesn't IT just take care of this without a charge? This is not an extraordinary item or special request. This ought to be something IT simply takes care of without us having to get involved or pay extra. Am I missing something? From: Aaron Brown/ENRON@enronXgate on 04/16/2001 09:41 AM To: Steven J Kean/NA/Enron@Enron Mary Joyce/ENRON@enronXgate cc: Subject: New Computer for Handling Stock Awards Steve The IT group put it like this...Justification: Current Server is PL1850 and has reached it's capacity and is non-redundant. That means that our current system: (1) has a slow processor (2) is nearly out of memory for stock award administration (3) doesn't have a real-time back up in case the hard drives fails (4) needs to be upgraded The IT group has quoted about $19000 for a new system that brings this server up to Enron's current server standards and takes care of the above issues. Let me know if this expense is a problem and whether you need to be involved with these types of decisions in the future. Thanks Aaron 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:: Status of Discussions on Electricity Legislation -- No Agreement Reached Body:: Once again today I participated in the discussions on possible electricity legislation held in the offices of Majority Whip Tom DeLay with other interested parties including industry segments public power and state regulators. The other congressional participants were staff to Reps. Steve Largent and Chip Pickering. After meeting all week (except Wednesday) the group was unable to reach an agreement or even a provisional consensus on what could be placed in an electricity title that could be added to the comprehensive energy package that the House Energy and Commerce Committee will begin to process next week. Congressional staff will report to their bosses on the status of the discussions as of this afternoon and from there the Members will determine whether to proceed further. There is a general perception that committee leaders will elect NOT to take up electricty legislation at this time and in the context of the broader package in the absence of broadly supported legislation. In the end the discussions did not bear fruit because divisions remained over the usual issues and along most of the usual fault lines. As the drafts progressed during the week we succeeded in deleting the original language that would have had Congress weigh into the bundled/unbundled and federa/state jurisdictional rules at the very time that likely adverse action in Congress could in turn adversely impact the Supreme Court case. A last minute attempt was made by the congressional staff to stitch together a minimalist electricity title that would have included reliability (with the understanding that the NERC discussions could produce modifications more to our liking) PUHCA repeal PURPA reform interconnection language and federal siting. However in each instance there were one more politically relevant interest groups not willing to go along. Cong. DeLay's staff also tried to link PUHCA repeal to those who had joined an RTO. There was also an attempt to strip it down to reliability interconnection and siting (eminent domain) -- but again there was either disagreement on the details or objection from those who favorite subject was left out of the minimalist package. There was one rather interesting discussion when the public power folks floated language on market power that included a sentence that would have made the filed rate doctrine inapplicable to antitrust challenges to market rates. Needless to say I strongly objected as did EPSA and others. As noted the lack of an agreement reduces our exposure when the mark up occurs. In the absence of an electricity title refund price control and other issues should not be germane to the package that the subcommittee will take up on Tuesday and the full committee next Friday. That package will have five issues addressed: conservation clean coal hyrdo nuclear and reformulated gasoline. Details to follow once legislative language is released. 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: Politics and Enron Body:: The plan was to hit the issue twice -- once in the short format of Ebiz and at greater length in the longer format of the October issue of Enron Business. Please let Paul know. ----------------- 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: Jamaica forecast for JMD and inflation, dated 6/25/01 Body:: Gwyn Thanks for this msg and other updates. 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:: Re: Daily Update/ Legislative activity - 08/24/00 Body:: I agree that we should not be opposing rate caps for small customers and schools but I think we should be pounding on the fact that market participants have been putting offers in front of sdge and that allowing the market to provide this solution is superior to legislated caps that require the creation of huge deferrals (and more problems in the future). Can we make that argument work? Mona L Petrochko 08/24/2000 09:45 PM To: Bruno Gaillard/SFO/EES@EES cc: West GA Edward Hamb/HOU/EES@EES Jennifer Rudolph/HOU/EES@EES Chris Hendrix/HOU/EES@EES Greg Cordell/HOU/EES@EES Harold G Buchanan/HOU/EES@EES Martin Wenzel/SFO/HOU/EES@EES Douglas Condon/SFO/EES@EES James M Wood/HOU/EES@EES Gary Mirich/HOU/EES@EES Dennis Benevides/HOU/EES@EES Roger Yang/SFO/EES@EES David Parquet@ECT mday@gmssr.com Paul Kaufman/PDX/ECT@ECT Marcie Milner/Corp/Enron@ENRON Mary Hain@Enron Harry Kingerski/HOU/EES@EES James D Steffes/HOU/EES@EES Richard Shapiro/HOU/EES@EES Peggy Mahoney/HOU/EES@EES Karen Denne@Enron Mark Palmer/Corp/Enron@ENRON Steven J Kean/NA/Enron@Enron Tim Belden/HOU/ECT@ECT Subject: Re: Daily Update/ Legislative activity - 08/24/00 I attended Cmmr. Wood's two-day hearing on Wholesale Markets which concluded today (8/24) in San Diego. Three Commissioner's were present (Wood Lynch and Neeper) with Duque and Bilas participating by phone. Administrative Law Judge Wetzel was present and a transcript was taken. The quasi-legislative hearing was the beginning of a record developed for the investigation into the workings of wholesale/retail markets. This session focused on Wholesale markets. There will be subsequent sessions on retail issues market structure and other related issues in the future. My conclusion from this session is that Wood is looking for support for increasing regulatory intervention in the market. Dan Larcamp Director of the Office of markets Tariffs and Rates FERC was present. He relayed FERC's concern of this matter and a desire to hold hearings in San Diego. He also relayed that Hoecker held a press conference announcing the opening of a 206 investigative proceeding into the operation of the wholesale markets in California which carried with it refund authority. The format of the hearing was to respond to pre-filed questions developed by Wood/Lynch. Each member of the panel would respond to the questions and any questions posed by the Commissioners the Judge or the CPUC Attorney. No questions were posed by members of the audience. Yesterday's panel of academics were comprised of: 1. Dr. Timothy Duane-UC Berkley 2. Dr. William Hogan-Harvard 3. Dr. Frank Wolak-Stanford (ISO Market Surveillance Committee) 4. David Marcus-Energy Consultant for the Coaltion of Utility Employees 5. Dr. Gene Coyle 6. Dr. Jean-Michel Glachant Universite Paris I Pantheon Sorbonne The panel was asked to speak as individuals and not on behalf of any institutions they may represent. While the purpose of the panel seemed to be to determine that market power was being exercised and that prices were too high and therefore not just and reasonable the panelist stopped short of blaming generators and market participants in behaving illegally. The concensus generally was that market power did exist at various times but the mere existence did not constitute bad behavior. None with the exception of Dr. Wolak who is in the process of doing a study using recent data as part of his role for the Market Surveillance Committee had done a study. There was some discussion though not much of the monopsony power of the utilities. I think ultimately the group conceded that scarcity of supply amplified concerns about the exercise of market power as even the increase in gas costs did not fully explain the recent spikes. Wolak believes that encourage utilities to enter into forward purchases will reduce the exercise of real-time market power. Hogan seemed to be there with Sempra's interests in mind. He continued to promote expansion of the ISO's abilities to dispatch load as well as maintain system reliability. There was alot of discussion about forward purchase ability for utilities so as to be less subject to volatile market prices. The concerns were also discussed about the appropriateness of a distribution utility making purchasing decisions on behalf of its customers. This included discussion of separation of these functions and the default provider role. Most everyone agreed that rolling back to a regulated market was not feasible without raising other major and serious concerns however there seemed to be support for some interim measures where cost-of-service regulation may be a good idea and that was during peak periods. All agreed that a demand response and price signals are important in the long-run although not to the extent currently experienced in San Diego. Today's panel included representatives from SDG&E SCE and PG&E TURN UCAN and ORA. While yesterday's panel maintained objectivity as to whether or not generators were exercising market power to the detriment of the system today's panel made no bones about the generators being to blame. SCE/PG&E indicated their need for relief for recovery of market costs in excess of the rate freeze. SDG&E was still on the hot seat for their inaction in hedging any of their supply. SDG&E brought up their failed PBR proposal and ORA and UCAN thought that that may be one way to incent the utility to be more responsible with their purchases. UCAN discussed the Governor's direction and the potential for putting rate caps into affect for residential and small commercial. He mentioned that C&I customers are experience difficulties as well. TURN raised the need for cost-based bid caps and cost-based peaking contracts. Mike Florio TURN urged against any further divestitute of assets and alleged market concentration on those assets that had been divested. In fact TURN urged the Commission to seek legislation to clarify the Commission's authority to order retention of assets. Neeper urged that part of the solution should be changing the current requirement to use the PX as the only authorized exchange although TURN disagreed. Bruno Gaillard 08/24/2000 06:09 PM To: SF Directors Edward Hamb/HOU/EES@EES Jennifer Rudolph/HOU/EES@EES Chris Hendrix/HOU/EES@EES Greg Cordell/HOU/EES@EES Harold G Buchanan/HOU/EES@EES Martin Wenzel/SFO/HOU/EES@EES Douglas Condon/SFO/EES@EES James M Wood/HOU/EES@EES Gary Mirich/HOU/EES@EES Dennis Benevides/HOU/EES@EES Roger Yang/SFO/EES@EES David Parquet@ECT mday@gmssr.com Paul Kaufman/PDX/ECT@ECT Marcie Milner/Corp/Enron@ENRON Mary Hain@Enron Harry Kingerski/HOU/EES@EES James D Steffes/HOU/EES@EES Richard Shapiro/HOU/EES@EES Peggy Mahoney/HOU/EES@EES Karen Denne@Enron Mark Palmer/Corp/Enron@ENRON Steven J Kean/NA/Enron@Enron Tim Belden/HOU/ECT@ECT cc: Subject: Daily Update/ Legislative activity - 08/24/00 Siting related bills 1. Good new - The Williamson Act passed the Senate 34-1 It should be heard at the assembly Saturday or Monday if it is not redirected to a Committee hearing. 2. There was a long meeting with Ducheny with regards to AB 970. The enviro's boycotted they want to draft a bill with Keeley. Labor was obstructionist - they wanted to gut all the expediting siting language with regards to all facilities except for the peaking plants. Rate Cap related bills 1. The Edison Language on Rate Stabilization may not go anywhere. Edison has not found an author because of the efforts of Enron and others lobbying against it. Furthermore there are signs that Gov. Davis opposes it. 2. The Governor's office has issued a proposed language for a rate cap bill. The language however is not available as of yet. It may be released today or tomorrow. SDG&E has shown concerns over the content of the bill. They seem to think that it is worse than initially proposed by the Governor in his press release. The bill includes retroactive rate caps through 6/1/00. The rate cap could reflect Wood's rate cap proposal (6.5 cts cap on the energy component The bill does not specify who or how the costs associated with the cap will be recovered. (The reasoning is that UDCs will be more cautious in their procurement if there is uncertainty on who is responsible for the costs.) All of this is speculative. We hope to see the actual language soon. 3. Enron has been working with the Republican leadership to promote a rate cap proposal similar to the amended language we have proposed for AB2290. The bill focuses only on SDG&E customers and our major principals are the following. The Interim Rate Cap should be limited to residential and small commercial customers plus specific institutions that have a significant public role such as schools and hospitals. The Interim Rate Cap should be limited to the period ending December 31 2001. The Interim Rate Cap must be structured so that any undercollection is eventually recovered from the same customers who benefit from the lower rates provided by the rate cap. 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: o:\Research access list Body:: Sandeep This is the list of the groups that have access to Research directory. Martin compiled this list. Please review it and let's talk about the recommendations regarding changes and restrictions we have to make. 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:: Data request Body:: Eliz- can you handle? ----------------- 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 employee information Body:: Oxley asked that I send you a few bullets on Tom Martin. Please see below and let me know if you need further info. Feedback from two exit interviews from voluntary terminations in regard to Tom is as follows: was treated as inferior by my manager was lied to and insulted by my supervisor Tom berates employees in front of others and blames underlings for his mistakes. Additionally he second guessed every position I put on sold me out of positions (which turned out good) and used all our allocated VAR for his own benefit. Tom has a reputation for not representing employees well in the end of year review process. I found this to be the case as well. Tom is difficult to communicate with Additionally we had an incident w/ an employee when Tom offered her an employment agreement. She felt that she was being forced to sign the agreement When she declined the agreement and turned in resignation she said that Tom said he would make it difficult for her to leave She said that she felt threatened by Tom Her boy friend called Tom and threatened him As a result Legal asked Tom not to have further contact with the employee. 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:: Confidential - May 2001 HR At A Glance Body:: Attached is the May 2001 At A Glance report. A couple of additions this month which include a section on Capital Expenditures with Pay Backs and some analysis of the recent new hire survey that we set up. Please call if you have any questions. DCL 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:: How should this be handled - rather touchy Body:: Is this someone in the analyst/associate program? ----------------- 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:: novak column Body:: More indications that the power angle may be fruitful 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:: Fenosa and Enron to Invest $550 Million in Dominican Republic 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: Body:: I just checked with Jeff and Ken. They are both out of the office that day. Sorry it didn't work out. gilbert whitaker <grwhit@rice.edu> 03/06/2001 07:14 PM To: skean@enron.com cc: Subject: Steve - With respect to CK Prahalad's visit to Rice. As you know we are having a breakfast for the business community the morning of March 19 and he gives the Neuhas Lecture on Campus at 9:45 am. Following the lunch there is a lunch with Mrs. Neuhas the donor of the fund and faculty. That should be over by 1:15. He has a date from two to five at Enron with Yeager (Steve or Scott). He would like to meet with Ken or Jeff sometime that afternoon if at all possible. Thanks for your help. gil 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:: Tom DeLay CA Aug Dinner & Golf event Body:: Jeff I spoke to Joannie this afternoon and asked for your e-mail to send this invitation. Here is the initial information on the event. We are expecting additional members of Congress to attend both events. If you have any questions or comment please let me know. I have attached a word doc. as well: Tom DeLay / ARMPAC Guest Speaker - David Horowitz Four Seasons Aviara - Dinner & Golf Tournament The event will take place: Wednesday August 15 Four Seasons Aviara (Northern San Diego CA) Golf Lunch will start at 11am Tee times at 12:15pm An informal reception afterwards Limited to 40 people Cost is $5k per person Dinner Reception 6 to 6:45pm Dinner 7 to 8:30pm Speakers Tom DeLay and David Horowitz $1500 per person $2500 per couple There are four levels of sponsorship: $100K $50k $25k and $15k. Contribution levels will also transfer from the dinner and/or Golf Tournament to the ARMPAC contributor sponsorship program. Bill Gowan Election Day Consulting LLC 1947 Camino Vida Roble suite 104 Carlsbad CA 92009 760 929.1203 electiondayconsulting.com - Aug 15 Golf dinner.doc 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:: LOGISTICAL INFORMATION FOR THE MAY 22-23, 2001 FORUM Body:: meeting folder ----------------- 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:: Protecting Confidential Information: New European Restricted List Procedure Body:: As you know we are now launching EnronCredit.com which will involve credit derivatives trading in Europe and North America both on Enron Online and off-line. This will involve quoting prices for buying and selling bankruptcy protection in respect of reference entities many of whom are our counterparties in a variety of different commercial and financial contexts. This exciting cocktail of credit derivatives and Enron Online raises significant novel legal risks for Enron. Probably the most significant risk would arise in a situation where Enron has confidential information about a reference entity and wrongfully uses that information in pricing the credit derivative on that entity. This could well result in legal proceeding against Enron. In practice an allegation of misuse of confidential information can be very difficult indeed to defend without adequate procedures in place to safeguard that information. In fact Enron's credit trading will rely strictly on publicly available financial information and will not involve the use of confidential information unless the reference entity has specifically consented. Nevertheless to avoid the appearance of impropriety we are taking additional steps to consider confidentiality agreements we have in place with potential reference entities before deciding whether or not we will quote prices on such entities. Against this background is the ever-present risk of insider dealing. This crime - which carries a maximum prison sentence of 7 years and an unlimited fine - is committed where a person (or member of their family etc) deals in the securities (shares bonds or derivatives on them) of a listed company on the basis of unpublished (confidential) price-sensitive information. We do not expect at this time to deal in publicly traded bonds as part of EnronCredit.com but insider dealing is relevant to the conduct of Enron staff and could affect other parts of our business. In addition SFA rules require the safeguarding of confidential information the misuse of which is a serious disciplinary matter. In order to ensure the success of this new business and that confidential information is not misused either by Enron or its staff we are now introducing new policies and procedures (attached) which include a simple Restricted List procedure. In essence they require you - to take prudent steps to safeguard confidential information within Enron to notify Michael Brown Mark Elliott or myself if you become aware of confidential or sensitive information (or circumstances) about a counterparty which you think might make it appropriate for that counterparty to be placed on the Restricted List. To make life easier numerous examples of the types of information which might be relevant are set out in the attached procedures. Please familiarise yourself and anyone else in your group you think appropriate with these procedures. As you will see you are not expected to make difficult determinations about whether an entity should or should not be added to the Restricted List just to let us know if you think there is a possibility that it should be added. We will also provide quick briefing sessions to ensure that each of you is comfortable with these new procedures. Many thanks for your co-operation. 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:: Several employees have asked about the exercise policy on stock options. Specifically they want to know what the exercise policy is on i) termination eg as a result of the prc process ii) voluntary departure iii) retirement or iv)resignation and to what extent do the rules vary across plans: i) AESOP LTIP deferred bonus etc. The main focus is on the length of time to exercise. I am concerned that there may be some odd incentives in the structure -- eg are severed employees allowed more time to exercise than employees who just leave voluntarily ( ie if you want to have a full three years to exercise options are you better off becoming a performance issue and getting severed than you would be if you simply left the company? 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:: Fw: Confidential - Decision tree on projects 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: Some Background on California Gas Price Spikes--The Other Side of the Story Body:: Could you coordinate with Cindy Stark on the meeting with Massey in a couple of weeks? Stan has asked me if I would like to attend. I would but don't know when exactly it is scheduled for. ----------------- 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:: Ken Lays email to Sen. Brulte Body:: nan 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:: Re: CI at EBS Body:: Thanks for the message. Rita Hartfield@ENRON COMMUNICATIONS 07/17/2000 02:52 PM To: Steven J Kean/HOU/EES@EES cc: Anthony Mends/Enron Communications@Enron Communications Subject: CI at EBS Steve I have heard through the grapevine that Amy Oberg has relayed to you that EBS will not be doing competitive intelligence and that you were dismayed to hear this. Amy is correct in the fact that EBS is not likely to buy the software Strategy that provides a strategic top-down focus on competitive intelligence. However EBS is doing tactical competitive analysis and market research. We are providing the business units with the information that they need to make intelligent decisions at the business unit level. Amy's view is that competitive intelligence (CI) belongs at the corporate level and that CI should drive the strategic direction of the company. You and I both know this is not the way Enron operates. I hope this e:mail does not sound negative but I did want you to know that EBS is providing information and intelligence to its business units -- it is just not in the context that Amy thinks it should be in. If you have any questions please let me know. Rita Hartfield Phone: 713-853-5854 Cell: 713-304-5428 Fax: 713-646-8861 rita_hartfield@enron.net 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:: Board presentations Body:: nan 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: CONFIDENTIAL - Residential in CA Body:: Jim / Karen - Thank you. We are not going to pull the trigger to turn back these customers without a full review and the agreement of all appropriate teams at Enron. Thanks - Dan Karen Denne@ENRON 04/13/2001 12:30 PM To: James D Steffes/NA/Enron@Enron cc: Jeff Dasovich/NA/Enron@Enron Paul Kaufman/PDX/ECT@ECT Sandra McCubbin/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron Janel Guerrero/Corp/Enron@Enron Mark Palmer/Corp/Enron@ENRON Susan J Mara/NA/Enron@ENRON Peggy Mahoney/HOU/EES@EES Harry Kingerski/NA/Enron@Enron Dan Leff/HOU/EES@EES Subject: Re: CONFIDENTIAL - Residential in CA Before any decision is made I think we really need to weigh in with EES on the ramifications (both PR and legislative) of turning back 16000 residential customers. I strongly believe that the public hit we will take will be far greater than our actual out-of-pocket losses. We will be crucified by the public media consumer groups legislators governor attorney general etc. and this action will reaffirm our reputation of packing up and leaving when it's not in our interest. The impact of this action would be exacerbated since it is on the heels of UC/CSU. I would also argue that this hurts our national dereg efforts. If we're advocating that competition and choice benefits consumers and then we turn around and pull out of a market and abandon customers when we're not profiting we'll kill any chances we have of ever serving retail customers in California -- or in any other state. We look foolish advocating for direct access when we're not willing to serve our existing -- let alone future customers What about a preemptive strike that engages these 16000 customers to weigh in on direct access -- i.e. a letter that says Enron may be forced to cancel its contract -- call/write/send the enclosed postcard to your legislator and tell them you want to keep your right to choose your energy service provider. Our credibility is on the line. Before we take this action we need to be cognizant of all the long-range strategic implications and we need to seriously weigh the negative impact this will have on our corporate reputation on our legislative abilities and on our commercial success going forward. kd James D Steffes 04/12/2001 09:05 PM To: Jeff Dasovich/NA/Enron@Enron Paul Kaufman/PDX/ECT@ECT Sandra McCubbin/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron Janel Guerrero/Corp/Enron@Enron Mark Palmer/Corp/Enron@ENRON Karen Denne/Corp/Enron@ENRON Susan J Mara/NA/Enron Peggy Mahoney/HOU/EES@EES Harry Kingerski/NA/Enron@Enron cc: Dan Leff/HOU/EES@EES Subject: CONFIDENTIAL - Residential in CA 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:: Meeting to discuss U of H 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:: nan 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:: Confidential Stuff Body:: Here it is What should this email be categorized as? [/INST] Empty message (due to missing attachment) <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 AND LEGALLY PRIVILEGED Body:: CONFIDENTIAL AND LEGALLY PRIVILEGED Vicki Many thanks for your assistance yesterday. Clinton Energy Management Services Inc. because it holds a current power marketing certificate is an entity which we would like to move to being a direct subsidiary of Enron Corp. to take effect today. This is considered to be an essential part of restructuring to meet our current and future needs. While the day to day control will remain where it is and all the efforts assign contracts and other work should progress as planned since the value to Enron Corp. is the power marketing certificate nothing should be done to jeopardize this. In addition we will be changing the charter and will need copies of the existing charter to effect those changes required. Please call me if you need to discuss this further. Kind regards Marcus 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: DRAFT - PRC Follow Up Memo Body:: Looks fine to me. Maureen - please keep on file From: Billy Lemmons/ENRON@enronXgate on 06/13/2001 07:08 AM To: Stanley Horton/ENRON@enronXgate Steven J Kean/NA/Enron@Enron cc: Ted C Bland/ENRON@enronXgate Teresa Bosien/ENRON@enronXgate Subject: DRAFT - PRC Follow Up Memo Stan and Steve Below is a short email that I suggest we send as a follow up to each PRC meeting. Please adjust as you feel appropriate and I'll ask Terry Bosien to provide your assistant with a list of attendees after each meeting for distribution. I'm traveling today but will be back in the office Thursday. If you'd like to discuss my asst Maxine (x33499) knows how to reach me or you can contact Ted or Terry. Regards Billy ___________________ Thank you for participating in the [EES] Analyst & Associate PRC meeting [last Friday]. The Western Hemisphere final PRC meeting for Analysts & Associates is set for July 18. The purpose of this meeting will be to review the collective ranking distributions and to discuss the performance of individuals in categories 1 and 5. A subset of those who participated in [Friday's] meeting will be selected to participate on July 18. After the July 18 meeting you will receive the ok to provide feedback to those you represented. If you are not the direct supervisor of those you represented it is critically important that you work with the supervisor to insure consistent and clear feedback and ownership of the ranking results. If you have any questions please feel free to contact Terry Bosien (x35230). Thank you again for your contributions to this important process. 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:: Comp Committee Meeting - April 30th Body:: calendar ----------------- 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:: FCEL Body:: fyi - there has been some concern that this deal was being put together without Connecticut authorities knowing the full extent of our interest in FCEL. 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: Pension Reform Bill Body:: I think it's a good idea but we will need a different summary ... either limit the summary to a couple of key points or provide an explanation in layman's terms of the practical effect of each of the changes. Cindy Olson 04/26/2001 01:46 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: Pension Reform Bill Steve what do 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:: Peer Group Mapping Body:: I saw your e-mail response. Did it go to Oxley too? ----------------- 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: Eeegads... Body:: hey when are you scheduled to go in for your attitude labotomy? Paul Kaufman/ENRON@enronXgate 05/10/2001 01:51 PM To: Jeff Dasovich/NA/Enron@Enron Susan M Landwehr/NA/Enron@Enron cc: Subject: RE: Eeegads... I'll be there as will Sandi McCubbin. Are you interested in going? I thought not. 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:: Confidential Information and Securities Trading Body:: I need to get the form to show compliance but I cannot get it online--I cannot remember all my passwords. Can you get this form for me? Thx. 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: VACATION Body:: Kevin Enjoy your vacation. 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:: Energy Issues Body:: Firsst article attached refers to the 1946 Nebraska case I mentioned to you= =20 in DC 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 Folder to safely pass information to Arthur Andersen Body:: Please read and follow below: Thanks ----------------- 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:: Report on POWER Conference Body:: I attended the U.C. Berkeley POWER (Program on Workable Energy Regulation) Conference on March 16. Here is a brief report on the relevant parts. Notably the Lieff Cabreser duo of Bill Bernstein and Barry Himmelstein were there listening carefully. The program consisted of the presentation of 8 economic studies followed by comments from two discussants followed by audience questions/comments. The following is a list of the papers and the discussants who presented with slides taken from the website of the U.C. Energy Institute You can click on this to see the slides in PDF format. The papers in green are not particularly relevant for our purposes and I won't say more about them beyond the note in brackets. The presenter's name is in bold. Bidding Asymmetries in Multi-Unit Auctions: Implications of Bid Function Equilibria in the British Spot Market for Electricity by Greg Crawford Duke University Joe Crespo NERA and Helen Tauchen University of North Carolina Pricing and Firm Conduct in California's Deregulated Electricity Market by Steve Puller UC Berkeley Discussion by Anjali Sheffrin California Independent System Operator Identification and Estimation of Cost Functions Using Observed Bid Data: An Application to Electricity Markets by Frank Wolak Stanford University [A paper about economic tools to study power markets.] Forward Contracts and the Curse of Market Power by Jeffrey Lien University of Maryland The Impact of Retail Rate Deregulation on Electricity Consumption in San Diego by James Bushnell and Erin Mansur UC Berkeley [This looks at whether consumption declined with price increases. Not much.] Consumption and Home Energy Costs: How Prevalent is the 'Heat or Eat' Decision? by Julie Berry Cullen University of Michigan Leora Friedberg University of Virginia and Catherin Wolfram UC Berkeley [A macro study on how consumers change overall spending patterns when they have to shell out more $$ for power.] A Quantitative Analysis of Pricing Behavior in California's Wholesale Electricity Market During Summer 2000 by Paul Joskow MIT and Edward Kahn Analysis Group Electricity Restructuring and the Cost of Pollution Reduction by Dallas Burtraw Karen Palmer Ranjit Bharvirkar and Anthony Paul Resources for the Future Before I discuss the specific papers and presenters one big picture point needs to be made. There was an unchallenged consensus at this conference that the generators have exercised market power to the tune of billions of dollars. The focus was on how and how much not whether. The good news is that I heard no evidence supporting any collusion theory the thought was that generators are making independent output and pricing decisions knowing they could influence the market price given the auction rules and the completely inelastic demand. On the other hand I would have to say that the economic work on the tacit collusion hypothesis in incomplete at best. The bad news is that the scale of potential overcharges is pretty staggering -- >$5 billion. The plaintiffs will be able to put together quite a damage study. Crespo Bidding Asymmetries in UK: This is a marginally relevant paper examining whether bidders in the UK electricity auction markets behaved in a leader-follower mode i.e. asymmetrically. Crespo's model shows that in a uniform price-setting auction with clearing price rules a price setter will emerge and take all prices above marginal cost. Thus above marginal cost pricing does not require coordination. Crespo (from NERA) appeared knowledgeable but is not an inspiring speaker. His paper also got roughed up a bit in the audience questioning segment. Puller Pricing and Firm Conduct in California's Deregulated Electricity Market: This is a very relevant paper as it tries to determine whether market power (presumably) exercised in California was static or dynamic meaning the product of individual firm decisionmaking (static) or tacit collusion (dynamic). The period studied was 4/98 to 12/99. Puller found evidence of static market power consistent with so-called Cournot pricing. This theory posits that in an oligopoly firms will take their rivals' observed price/output decisions as a given and decide how to maximize profitability given that behavior. He then tried to determine whether any dynamic games were occurring meaning a game where firms recognize their interdependence and try to follow a supergame trigger strategy in which firms try to induce favorable responses from rivals. It's quite complicated how he goes about this but fundamentally he tries to correlate observed output decisions with how a firm at that time might have expected a change in its behavior to affect its future share of the market. With this methodology Puller finds what he called weak evidence of forward-looking dynamic pricing for a brief time in 1998 but not otherwise. My impression was that the evidence for 1998 was very weak and the logic used to arrive at this conclusion was also weak. Puller then went at this a second time with a theory that attempts to determine what a firm's supply function would look like if it was exercising static and dynamic market power and then comparing this to an estimate of that firm's actual supply function. I found this even more speculative than the first theory. Nonetheless the results are basically the same: evidence of static but not dynamic market power. Puller took a lot of heat for the methodology of this paper during the questioning segment. He's not a dynamic speaker and does not appear to me to be a strong expert candidate. Anjali Sheffrin's commentary was very important. She is the Director of Market Analysis for CAISO. After general comments on Crespo and Puller she launched in to a discussion of whether their models explained the California experience. This turned out to be a preview of the CAISO FERC filing of last week in which they allege $5.5 billion in market power-related overcharges from May 200 to Feb. 2001. That filing and Sheffrin's report follow. They are essential reading. Sheffrin maintains that it was the absence of imports during this period that left the market power of the California generators unchecked. This permitted the in-state generators to engage in either economic or physical withholding of power. (Economic withholding is bidding a higher-than-needed supply curve physical withholding is cutting output at the plant.) Her study was intended to (1) Identify individual firms engaging in market power activity and (2) Analyze how each firms' actions set market clearing prices. She utilized full bidding data in CA ISO real time market for each hour between May and Nov 2000 defined and categorized bidding patterns and identified economic or physical withholding and then calculated bid-cost mark-up and a monopoly rent. She found what she claimed was strong evidence of both types of withholding but that economic withholding is the dominant bidding pattern used by the five large California generators. While Sheffrin's study does not name names it claims that most of the five in-state suppliers and many of the [16] large importers displayed bidding patterns which were consistent with the exercise of market power. Bernstein and Himmelstein were positively gleeful during this presentation. On the question of collusion Sheffrin's study is not terribly illuminating. She maintains that the dominant bidding pattern is consistent with two characteristics of a supply function equilibrium model of oligopolist pricing. I take that to mean Cournot which is a static non-collusive model. However when you read her study you'll see the picture is not entirely clear. Lien The Curse of Market Power: This is only marginally relevant for us as its thesis is that forward-looking supply contracts are better for both producers and society. Everyone seemed to agree -- and were confused why we needed a paper to prove it. Lien (U. Md.) is young and not expert material. Joskow and Kahn: (paper) (Kahn's slides). I'm sure many of you have already read this everyone should. Prepared for SoCal Edison it contends that 4 in-state generators (Reliant Dynegy AES/Williams and Southern/Mirant) exercised market power by withholding capacity during the summer or 2000. J&K use publicly available data on loads market prices and generation to (a) quantify combined effects of market fundamentals on market prices (b) calculate price gap (difference between actual prices and competitive market benchmarks) (c) account for quantify effects of ISO's ancillary services requirements and forced outages and then (d) calculate the output gap for high priced hours meaning the difference between observed and maximum profitable levels of generation. They conclude that prices were far in excess of the competitive benchmark and that the 4 in-state generators could have produced more power at competitive prices but chose not to. Hence market power was exercised. Kahn the Analysis Group economist who presented is a very colorful and rather undisciplined advocate of his position. He threw around allegations of conspiracy rather casually but mostly to be funny. I couldn't tell whether he believed his study proved that I don't think it even speaks to it. But Bernstein and Himmelstein applauded him when he finished grinning ear to ear. Severin Borenstein UC Berkeley and the conference director was supposed to comment on J&K but hardly did. He said that the generators would have been stupid not to exercise market power given the supply/demand conditions and the market rules and argued that permitting long term contracts and requiring real-time residential pricing were the solutions to all of this. Borenstein was the best expert material I saw at this conference and the fact he took a pass on the details of the J&K paper is puzzling to me. It made me wonder whether he already has a horse in this race or perhaps is trying to stay above it all. Hope this is useful. Regards Dan Daniel M. Wall Latham & Watkins 505 Montgomery Street Suite 1900 San Francisco CA 94111-2562 Direct: (415) 395-8240 Main: (415) 391-0600 Fax: (415) 395-8095 dan.wall@lw.com This email may contain material that is confidential privileged and/or attorney work product for the sole use of the intended recipient. Any review reliance or distribution by others or forwarding without express permission is strictly prohibited. If you are not the intended recipient please contact the sender and delete all copies. - 2001032214541122276.pdf.pdf - 2001032214585222924.pdf.pdf 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 Body:: depelschen children's home dinner 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:: Fwd: IS TRADING AN INSIDERS GAME? Body:: Enclosed is an article in this morning's San Diego Union written by one of their reporters that I know. As indicated it focuses on Enron. Of particular interest are the comments by Senator Dunn which are at odds with his statements to the Sacramento lobbyists that he has no idea what Enron does. 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 the Systems Administrator at admin@pkns.com and immediately delete this message from your system. Content-Transfer-Encoding: quoted-printable Date: Wed 06 Jun 2001 08:53:28 -0700 From: Cindy Frederick <cfred@pkns.com> To: Michael Kirby <mlk@pkns.com> Subject: IS TRADING AN INSIDER'S GAME? Mime-Version: 1.0 Content-Type: text/plain charset=us-ascii Content-Disposition: inline IS TRADING AN INSIDER'S GAME? Buying selling of electricity is a growth business but some say deck is stacked against consumers By Craig D. Rose STAFF WRITER June 6 2001 While Californians decry deregulation's failure to deliver a competitive market electricity wholesalers have quietly developed a vast and rapidly growing business of buying and selling power among themselves. The deals take place on high-tech trading floors in Houston and elsewhere around the country as well as on Internet-based trading systems. Some experts say this electricity trading is a key mechanism for raising consumer power prices yet it's largely unregulated. Electricity trading is like buying stock -- when you have ability to change the stock price said Frank Wolak a Stanford University economics professor and member of the state grid operator's market surveillance group. Energy companies say the buying and selling of contracts to deliver power provides risk management allowing plant owners to presell their electricity lock in prices and avoid fluctuations. The rough and tumble of the free market they add is the most efficient means of allocating a resource like electricity. But industry critics say trading is far from a competitive market paradigm. In their view it's a means of communication -- a way for energy insiders to collude and raise prices under the guise of competition. To be sure the trading arms of major energy companies have emerged as stars in an industry where profit surges of 300 percent or 400 percent are not uncommon. The transactions shrouded in secrecy can leave ownership of a critical commodity in unknown hands. Consider the case of power generated by AES Corp.'s California plants. In 1998 AES made a bold move. Immediately after purchasing power plants that gave it control of 10 percent of the state's electric generating capacity the company sold the output from its plants for the next 20 years to Williams Cos. Williams did not sit on this treasure trove of electrons. The Tulsa Okla. company soon sold 80 percent of what it bought. It is difficult to say who owns that power now. Some might be owned by Sempra Trading a sister company of SDG&E. Or some could be owned by Enron Corp. the nation's biggest electricity trader. A spokeswoman for Williams conceded that Williams itself may have repurchased some of the electricity it sold earlier. But trading companies closely guard their positions. This much can be said with certainty: Electricity that AES sold for less than 5 cents per kilowatt-hour to Williams changed hands perhaps 10 times in the wholesale market and emerged at times in recent months with a price tag for consumers that was 300 percent higher. Williams' trading profits increased by 523 percent in the first quarter this year. Advance sales All this buying and selling creates curious confluences. In their attempt to deflect criticism over high prices generating companies such as Duke Energy -- operator of the South Bay Power Plant in Chula and others in the state -- frequently note that they sell most of their electricity far in advance. But they acknowledge less often that their trading units may also be buying power which could boost the company's electricity inventory. Duke was the fourth biggest electricity trader last year and cited its trading activity as a prime contributor to its wholesale business profits which soared 324 percent in the first quarter to $348 million. It is a company's power traders who frequently direct plant operators to increase or decrease the generation of power in response to market conditions. Energy companies have little option but to turn to trading for profits. One of the better kept secrets of electrical deregulation and its promise of competition is that there is remarkably little competition in the production side of the business. For one thing electricity is a commodity power from one company is indistinguishable from that generated by others. More important nearly all modern plants generate power from turbines built by a handful of manufacturers. The result? Modern plants owned by different companies produce power at nearly identical cost. The cost of power produced by modern plants is all within a mil (one-thousandth of a dollar) said Michael Peevey an adviser to Gov. Gray Davis and former president of Southern California Edison. So the extraction of profit in the electricity business relies much more on trading. Traders' profits rise when prices are volatile -- plunging or even better rising sharply. Little regulation But despite the obvious temptation to manipulate the market the burgeoning electricity trading business has remained largely unregulated. The Federal Energy Regulatory Commission does require quarterly filings from energy traders but these often provide incomplete information or at least little that has been of concern to FERC. In fact although the trading of electricity grew more than a hundredfold from 1996 to 2000 FERC has taken no major enforcement action against a trader. After the onset of the California crisis last year FERC has acted once. That was against Williams which agreed to pay $8 million without admitting guilt to resolve an allegation that it withheld supply to pump up prices. FERC's record of enforcement in the area of power trading stands in contrast to a long list of enforcement actions within other markets taken by the Securities Exchange Commission and the Commodity Futures Trading Commission. FERC has recently added staff to its market oversight operations. But William Massey a FERC commissioner says the agency's effort is still inadequate. Electricity can be flipped stripped and chopped up Massey said. It's an extraordinarily complicated market. The sophisticated marketers and traders have simply moved past us. We're kind of horse and buggy in our approach and they're out there in rocket ships flying around ... The problem is that sophisticated traders don't necessarily produce reasonable prices. They produce profits. Before deregulation electricity trading was a low-key affair. Regulated utilities dealt power back and forth on a reciprocal basis to fill electricity shortfalls in their control areas. There was little trading for profit until the mid-1990s after federal legislation and FERC rulings opened the market. Major traders include large energy companies sister companies of California's major utilities and Wall Street firms. Market volatility In many ways the trading of power is similar to that of other commodities. But there are important differences. Because it cannot be stored and its use is so fundamental the price of electricity is the most volatile of all. When supplies are tight a single supplier can rapidly raise prices to budget-busting levels as evidenced by Duke Energy's recent admission that it charged California nearly $4000 for a megawatt-hour of power a quantity that probably sold hours earlier for one-tenth of that sum or less. Wolak the Stanford economist and state Sen. Joseph Dunn D-Garden Grove who is investigating the state power market say trading allows companies to collude under the guise of competition. Instead of wringing out lowest costs the wholesale trading market serves to raise prices they say. As I trade to you and you trade to me we communicate to each other what price we would like to get said Wolak. It's not collusive. It's just communicating price. Mark Palmer a spokesman for Enron the nation's biggest power trader said California's problem is not the result of trading. It's a result of shortages Palmer said. Underscoring its emphasis on trading Enron's new headquarters tower in downtown Houston rises from a six-story block of new trading floors including expanded space for electricity trading. Enron also pioneered trading in cyberspace and its Enron Online site claims to be the most active computer-based trading market. The Houston company argues that consumers won't fully benefit from power trading and deregulation until they have greater choice in choosing their power supplier. And the company says FERC has not done enough to open access to transmission lines which would allow traders to move power around the country. To that end Enron has lobbied hard for President Bush's plan for a national electricity grid. Palmer says the notion that the price of electricity rises each time it is traded is mistaken. The market is always looking for the real price of a commodity Palmer said. Dunn the California state senator says his investigation found a different function for trading. At a time when supply barely meets or falls short of demand he noted companies with electricity to sell have to worry only about how high to set their price. The trader is a pawn in the generator's game to drive up prices said Dunn. Trading develops a level of trust. You my alleged competitor will bid in the same patterns and I will respond not in a competitive pattern but in a complimentary pattern. The state senator said his investigation found evidence that on several days energy companies appeared to test their ability to drive prices up without being undercut by competitors. This ability to drive up prices without competitive consequence is a key test of market power the technical term for manipulation or price fixing. But Dunn also conceded that antitrust violations can be hard to prove in court. He suggested that even if the trading behavior falls short of antitrust violations it remains anti-competitive and devastating for the California economy. To Harry Trebing a utility industry expert and professor emeritus at Michigan State University wholesale electricity trading is reminiscent of what took place in the 1920s and early '30s. Back then utility companies created complex networks of holding companies that traded stock among themselves driving up prices in the process. Undoing that scheme was a focus of President Franklin Roosevelt's administration. Congress ended up barring national power companies and tightening regulation of utilities in an effort to counteract their tendency to create markets that work only for insiders. The broad goals of trading are the same Trebing said. The goal is to maximize profits through raising prices. 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:: Governor Davis Power Grab Body:: per my voicemail ----------------- 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:: meeting Body:: ----------------- 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:: RE: Application for Financial Engineer Body:: Shriram We have suspended hiring for the next few months till we shall sort our physical space problem (we have no space left in our old building). Please feel free to contact me again in September. Vince Kaminski 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:: <<Concur Expense Document>> - April American Express 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: Risk 2001 Australia Body:: Philip Frank's E-mail: wolak@zia.stanford.edu Vince 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:: Confidential 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: 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>