Message-ID: <4098365.1075848043005.JavaMail.evans@thyme> Date: Fri, 30 Mar 2001 01:17:00 -0800 (PST) From: miyung.buster@enron.com To: ann.schmidt@enron.com, bryan.seyfried@enron.com, dcasse@whwg.com, dg27@pacbell.net, elizabeth.linnell@enron.com, filuntz@aol.com, james.steffes@enron.com, janet.butler@enron.com, jeannie.mandelker@enron.com, jeff.dasovich@enron.com, joe.hartsoe@enron.com, john.neslage@enron.com, john.sherriff@enron.com, joseph.alamo@enron.com, karen.denne@enron.com, lysa.akin@enron.com, margaret.carson@enron.com, mark.palmer@enron.com, mark.schroeder@enron.com, markus.fiala@enron.com, michael.brown@enron.com, mike.dahlke@enron.com, mona.petrochko@enron.com, nicholas.o'day@enron.com, peggy.mahoney@enron.com, peter.styles@enron.com, richard.shapiro@enron.com, rob.bradley@enron.com, sandra.mccubbin@enron.com, shelley.corman@enron.com, stella.chan@enron.com, steven.kean@enron.com, susan.mara@enron.com, mike.roan@enron.com, alex.parsons@enron.com, andrew.morrison@enron.com, lipsen@cisco.com, janel.guerrero@enron.com, shirley.hudler@enron.com, kathleen.sullivan@enron.com, tom.briggs@enron.com, linda.robertson@enron.com, lora.sullivan@enron.com, jennifer.thome@enron.com, jkradin@marathon-com.com, rlichtenstein@marathon-com.com, syamane@marathon-com.com, ken@kdscommunications.com, hgovenar@govadv.com, sgovenar@govadv.com, bhansen@lhom.com Subject: Energy Issues Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Miyung Buster X-To: Ann M Schmidt, Bryan Seyfried, dcasse@whwg.com, dg27@pacbell.net, Elizabeth Linnell, filuntz@aol.com, James D Steffes, Janet Butler, Jeannie Mandelker, Jeff Dasovich, Joe Hartsoe, John Neslage, John Sherriff, Joseph Alamo, Karen Denne, Lysa Akin, Margaret Carson, Mark Palmer, Mark Schroeder, Markus Fiala, Michael R Brown, Mike Dahlke, Mona L Petrochko, Nicholas O'Day, Peggy Mahoney, Peter Styles, Richard Shapiro, Rob Bradley, Sandra McCubbin, Shelley Corman, Stella Chan, Steven J Kean, Susan J Mara, Mike Roan, Alex Parsons, Andrew Morrison, lipsen@cisco.com, Janel Guerrero, Shirley A Hudler, Kathleen Sullivan, Tom Briggs, Linda Robertson, Lora Sullivan, Jennifer Thome, jkradin@marathon-com.com, rlichtenstein@marathon-com.com, syamane@marathon-com.com, ken@kdscommunications.com, hgovenar@govadv.com, sgovenar@govadv.com, bhansen@lhom.com X-cc: X-bcc: X-Folder: \Steven_Kean_June2001_3\Notes Folders\California X-Origin: KEAN-S X-FileName: skean.nsf Please see the following articles: Sac Bee, Thurs, 3/29: "State seeks more money for power buys" Updated, 4:41pm Sac Bee, Fri, 3/30: "Guess again: Rate hike impact underestimated" Sac Bee, Fri, 3/30: "Bush says energy is paramount concern" San Diego Union, Thurs, 3/29: "California pulls out the stops to attract= =20 power plants" San Diego Union, Thurs, 3/29: " California utility must say where blackouts= =20 will happen"=20 LA Times, Fri, 3/30: "Raft of Bills Aimed at Energy Conservation" LA Times, Fri, 3/30: "2 Firms Start Repaying State for Power Buys"=20 LA Times, Fri, 3/30: "Ads Support Davis Actions, Legislature in Power Cris= is=20 " LA Times, Fri, 3/30: "Take-Charge Governor Forfeits on Energy " = =20 (Commentary) SF Chron, Fri, 3/30: "Blackout Warnings For Police=20 PG&E giving notice to ease traffic jams " SF Chron, Fri, 3/30: "Energy Crisis Dogs State Democrats=20 Conventioneers likely to discuss Davis' troubles " SF Chron, Fri, 3/30: "Canada seeks to grab bigger role as U.S. energy=20 supplier " Mercury News, Thurs, 3/29: "Police unsure how to enforce lights-out rule" Mercury News, Fri, 3/30: "PG&E ordered to share details about blackouts" Mercury News, Fri, 3/30: "We need power -- in our back yard " Orange County, Fri, 3/30: " 'Interruptible' penalites may be revived" Orange County, Fri, 3/30: "2 cities to be warned if blackout is imminent" Individual.com, Fri, 3/30: "Energy crisis could cost billions, says=20 California's controller" Individual.com, Fri, 3/30: "[B] FULL/ Edison Intl unit pays $43.5 mln to= =20 water resources dept" Individual.com, Fri, 3/30: "EPRIsolutions Tackles California Power Problem= s" ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- -------------- State seeks more money for power buys Updated: March 29, 2001 - 4:41 p.m.=20 Gov. Gray Davis on Thursday asked lawmakers to approve spending $500 millio= n=20 more to buy power for two struggling utilities as Republicans escalated the= ir=20 criticism of the Democrat's handling of the energy crisis.=20 Davis' request, expected to win approval from the Legislature's majority=20 Democrats, would bring the state's power purchases on behalf of credit-poor= =20 Southern California Edison and Pacific Gas and Electric to $4.7 billion sin= ce=20 the buying started in early January.=20 Both utilities said they are starting to pay the state back for the previou= s=20 power purchases, complying with an order Tuesday by the state Public=20 Utilities Commission.=20 Edison paid the state $43 million and PG&E paid $65.2 million for power=20 purchased by the state in January and February.=20 Republicans stepped up their criticism of Davis and his fellow Democrats=20 during an Assembly session Thursday morning.=20 It was the first legislative session since Assembly Republicans chose a new= =20 minority leader this week, Assemblyman Dave Cox of Fair Oaks, who pledged t= o=20 take a harder line on energy negotiations.=20 Assemblyman Jay La Suer, R-La Mesa, ridiculed Davis' offer of 20 percent ra= te=20 cuts for consumers who cut their electricity use 20 percent from last summe= r.=20 "My people can't save 20 percent. They've already cut to the bone," La Suer= =20 said.=20 He and others blamed Davis for record rate increases of up to 46 percent th= e=20 PUC ordered this week for Edison and PG&E customers.=20 Republicans noted that the PUC is dominated by Davis appointees. Davis has= =20 denied any influence and criticized the rate hike as premature.=20 Eleven Assembly Republicans filed a lawsuit in San Diego Superior Court=20 asking the court to order Davis to provide more details on the state's powe= r=20 purchases, saying they need the information for state budget decisions.=20 "Governor Davis has an information gray-out," said Assemblyman Tony=20 Strickland, R-Thousand Oaks, who led the lawsuit.=20 The lawsuit, similar to one filed last week by The Associated Press and=20 several newspapers, seeks details on long-term power contracts the state ha= s=20 signed and the short-term purchases it is making for Edison and PG&E=20 customers.=20 Davis spokesman Steve Maviglio accused Republicans of engaging in political= =20 "bomb-throwing and obstructionism," saying the information they want to mak= e=20 public would help power suppliers get higher prices from the state.=20 He joined Assembly Democrats in accusing the Republican Bush administration= =20 and Federal Energy Regulatory Commission of not doing enough to rein in=20 soaring wholesale electricity costs.=20 "When are we going to realize that we've gotten FERCed?" quipped=20 Assemblywoman Helen Thomson, D-Davis.=20 She said Californians are hearing "a giant sucking sound" as their electric= =20 payments flow to out-of-state electricity generators.=20 Maviglio said the crisis is the product of the 1996 deregulation law signed= =20 by then-Republican Gov. Pete Wilson.=20 "To think Governor Davis can clean up this mess in a matter of months is ju= st=20 ludicrous," Maviglio said.=20 Cox invited Davis to attend a GOP caucus to discuss energy. Davis spent two= =20 hours briefing Democrats on Wednesday.=20 Also Thursday, the Assembly resumed hearings in its investigation into=20 California's highest-in-the-nation natural gas prices.=20 Southern California Gas Co. Vice President Rick Morrow vehemently denied=20 allegations in a Los Angeles lawsuit that his company conspired with El Pas= o=20 Gas Co. at a 1996 hotel meeting to drive up California natural gas prices.= =20 "That allegation is absolutely absurd," Morrow told two Assembly=20 subcommittees investigating the gas price-spike.=20 The companies are defendants in a lawsuit filed last week by the city of Lo= s=20 Angeles.=20 Chris Garner, director of Long Beach Energy, said the spike has cost his=20 customers between $25 million and $30 million. Long Beach gas prices are ti= ed=20 to the cost of gas at the California border, which peaked this winter with= =20 costs up to six times as high as in neighboring states.=20 California has struggled with soaring natural gas prices, rising electricit= y=20 costs and a tight power supply for months.=20 The state was under a Stage 1 power alert Thursday, with reserves approachi= ng=20 7 percent. -- Associated Press ---------------------------------------------------------------------------= --- ------ Guess again: Rate hike impact underestimated By Carrie Peyton Bee Staff Writer (Published March 30, 2001)=20 Whoops.=20 More Californians than anyone first guessed will probably see their electri= c=20 bills go up within weeks.=20 They will be feeling the brunt of price increases that utility regulators= =20 said Thursday will soon give California the highest electric rates in the= =20 continental United States.=20 Pacific Gas and Electric Co. and the Sacramento Municipal Utility District= =20 have revised their projections about how many customers will probably be=20 paying higher prices for electricity in May.=20 For PG&E, hundreds of thousands more households could be affected, and for= =20 SMUD, a proposed surcharge could hit every one of its 525,000 ratepayers.= =20 PG&E, which in January told lawmakers that pending legislation would protec= t=20 42 percent of its residential customers from rate hikes, now says that 69= =20 percent will face an increase.=20 The shifting numbers are "amazing," said Paul Clanon, energy division=20 director at the state Public Utilities Commission. "We're still trying to g= et=20 to the bottom of it."=20 The PUC said PG&E and Southern California Edison had told it that more than= =20 40 percent of their residential customers would feel no impact from rate=20 hikes if the PUC followed a state law passed in February. That law required= =20 rates to stay level for thrifty households -- those that use less than 130= =20 percent of baseline amounts.=20 "Those were estimates. Now we've had more time to refine the estimates," PG= &E=20 spokesman John Nelson said Thursday.=20 While only 31 percent of PG&E's 4.6 million customers use less than 130=20 percent of the baseline amounts, another 13 percent use a little more. They= =20 would escape higher rates if they conserve by 5 percent, he said.=20 Edison said Thursday it still believes about 45 percent of its residential= =20 customers will feel no rate hikes.=20 "We don't have any reason to believe there is a problem with our numbers,"= =20 company spokeswoman Clara Potes-Fellow said.=20 Wall Street and power sellers have consistently hammered California for=20 charging too little. But the rate hikes approved this week by the PUC will= =20 drive average power costs statewide to about 12 cents per kilowatt-hour, th= e=20 California Energy Commission estimated Thursday.=20 With that, California will surpass New York, at 11.2 cents and holding, and= =20 New Hampshire, which is at 11.6 cents but about to drop, according to utili= ty=20 regulators in those states. Except for Hawaii, at 13.9 cents, no other stat= e=20 comes close to California's new rate, according to October statistics=20 complied by the federal Energy Information Administration.=20 "If there was any doubt in any state's mind that the California deregulatio= n=20 experiment was an ugly one, this should remove that," said Michael Shames,= =20 head of the Utility Consumers Action Network.=20 California rates had been among the 10 highest in America when big business= es=20 began calling for deregulation, saying it would force prices down, he said.= =20 The high wholesale power costs that are driving PG&E and Edison rates up al= so=20 continue to eat away at SMUD.=20 The ratepayer-owned utility district has concluded that rainfall this year= =20 was so light that every SMUD customer should have to pay a special surcharg= e,=20 which it estimates will add $2 a month to a typical household electric bill= .=20 That will come on top of a $5 monthly "customer charge" to be added to ever= y=20 standard household bill. Low-income households will see a $3 customer charg= e.=20 SMUD directors won't vote on a proposed hike until next month, but when the= =20 plan was first unveiled, the utility estimated about 70 percent of househol= ds=20 use so little power that they would face no increase. Later, it said only= =20 half the households would see no hike.=20 And now, SMUD officials are proposing that every customer pay roughly an=20 extra 3 percent for the next year -- one-quarter cent for every kilowatt-ho= ur=20 they use -- because power production will dwindle at its hydroelectric plan= ts=20 on the upper American River.=20 That decision came "about when I was able to go out and play tennis for the= =20 third weekend in a row in March," said Jim Tracy, SMUD planning director,= =20 referring to the unusually dry month. The surcharge will raise about $24=20 million and should expire in 12 months, he said.=20 Altogether, SMUD is now forecasting that an average household bill of $67= =20 would increase to $78 beginning in May.=20 If the current rate proposals are approved by directors at their April 19= =20 meeting, even those with small SMUD bills who do everything they can to=20 conserve would pay at least an extra $3 to $5 per month, and probably more.= =20 "I'm comfortable with that," said SMUD board President Larry Carr. "There i= s=20 a cost associated with serving each customer, (even) if they never turn on= =20 their electricity."=20 ---------------------------------------------------------------------------= --- ------ Bush says energy is paramount concern Bee Staff and News Services (Published March 30, 2001)=20 WASHINGTON -- Declaring that "we are now in an energy crisis," President Bu= sh=20 on Thursday defended his decision to roll back environmental measures=20 proposed by the Clinton administration and to reject a treaty designed to= =20 inhibit global warming.=20 "I'm worried about the economy; I'm worried about the lack of an energy=20 policy; I'm worried about rolling blackouts in California," he said. "It's = in=20 our national interests that we develop a strong energy policy with realisti= c,=20 common-sense environmental policy."=20 The administration's rebuff of the international agreement on climate chang= e,=20 a centerpiece of the Clinton administration's environmental agenda, brought= =20 sharp criticism from European countries, environmentalists and church group= s.=20 Negotiated in Kyoto, Japan, in 1997, the agreement has not been ratified by= =20 the Senate. International efforts last November to work out issues=20 surrounding the treaty failed because of a rift between the United States a= nd=20 Europe.=20 On another environmental matter, the president conceded for the first time= =20 that he may not be able to persuade Congress to open the Arctic National=20 Wildlife Refuge to oil and gas development.=20 "I think it's important for us to open up ANWR. Whether or not the Congress= =20 sees it that way is another matter," Bush said.=20 "I think it would be a mistake not to," he added. "We've got a shortage of= =20 energy in America. It doesn't matter to me where the gas comes from in the= =20 long run, so long as we get gas moving into the country."=20 He also said he expects to tighten the arsenic standard for drinking water,= =20 but won't do so until further scientific studies are completed. Bush recent= ly=20 withdrew new arsenic regulations issued by the Clinton administration.=20 Bush said he remains open-minded and willing to consult with other nations = on=20 how to address climate change, but he made clear that the mandatory=20 greenhouse-gas reductions stipulated in the Kyoto accord were off the table= .=20 "We will not do anything that harms our economy," declared Bush, again citi= ng=20 concerns about soaring natural gas prices and power shortages in the West.= =20 "We'll be working with our allies to reduce greenhouse gases. But I will no= t=20 accept a plan that will harm our economy and hurt American workers," said= =20 Bush.=20 Later, he expressed a similar view in a meeting with German Chancellor=20 Gerhard Schroeder, who told reporters afterward that he continues to hope t= he=20 United States would participate in climate negotiations scheduled this summ= er=20 in Bonn, Germany.=20 "We agreed on practically everything, except ... the Kyoto protocol,"=20 Schroeder told reporters during a joint press conference with Bush,=20 acknowledging the issue had put some strain on U.S.-German relations.=20 Response has been more heated in other foreign capitals.=20 "This isn't some marginal environmental issue to be ignored or played down,= "=20 said Margot Wallstroem, the European Union's environmental minister, at a= =20 news conference in Brussels, Belgium.=20 She left open the possibility of retaliation against the United States.=20 British Environmental Minister Michael Meacher called Bush's views=20 "exceptionally serious," while Sweden's environmental minister, Kjell=20 Larsson, said Bush's plan "sabotages many years of hard work" on one of the= =20 world's most pressing environmental concerns.=20 Criticism also came Thursday from a broad coalition of U.S. religious group= s.=20 Alarmed by Bush's decision to abandon the Kyoto treaty, they urged the=20 president to reconsider his approach or risk alienating a growing faith-bas= ed=20 movement committed to protecting the environment.=20 Leaders of the inter-denominational groups challenged Bush's decision on=20 religious and moral grounds as well as on scientific evidence that Earth's= =20 temperature is rising and could trigger catastrophic climate and weather=20 changes.=20 "If credible evidence exists to indicate our present course could threaten= =20 the quality of life for God's creation and God's children, this becomes an= =20 issue of paramount moral concern," the leaders said in a letter to Bush.=20 The letter from seven religious leaders is significant because of the=20 influence faith-based groups are exercising on the Bush administration and = on=20 Republican congressional leaders. Last year, for example, GOP leaders dropp= ed=20 their opposition to a Clinton administration plan to write off loans to 30 = of=20 the world's poorest countries under pressure from Pope John Paul II and an= =20 international network of religious groups.=20 The letter to Bush was signed by leaders of the National Council of Churche= s=20 of Christ in the USA, the Christian Church (Disciples of Christ), the Afric= an=20 Methodist Episcopal Church, the Metropolitan Orthodox Church in America and= =20 the Jewish Theological Seminary. The Jewish Council for Public Affairs wrot= e=20 separately to voice its concerns.=20 The Kyoto agreement calls on industrial countries to cut greenhouse=20 emissions, mainly carbon dioxide from burning fossil fuels, to below 1990= =20 levels by 2012. Critics have argued that would mean dramatic and costly=20 changes in how the United States generates energy.=20 EPA Administrator Christie Whitman, attending a meeting of environmental=20 ministers in Montreal, said Thursday that while the Kyoto accord is "deeply= =20 flawed," the president remains "absolutely committed" to being fully engage= d=20 with the international community on the issue.=20 Muriel Dobbin of The Bee Washington Bureau, the Associated Press and the=20 Washington Post contributed to this report.=20 ---------------------------------------------------------------------------= --- ------ California pulls out the stops to attract power plants=20 By Don Thompson ASSOCIATED PRESS=20 March 29, 2001=20 SACRAMENTO =01) California has jettisoned its normal air and water pollutio= n=20 controls in a desperate dash to build enough power plants to keep the light= s=20 on this summer.=20 With little notice, communities could soon find themselves home to small=20 "peaking plants" =01) typically natural gas-fired jet engines built on conc= rete=20 pads that will roar into use when power supplies run low.=20 Generators that promise to provide power by the end of summer can skip usua= l=20 environmental restrictions and reviews, win permit approval in days instead= =20 of months, and qualify for low-interest state loans and $30 million in=20 bonuses.=20 So many developers are eager to take advantage of the temporary shortcuts= =20 that state regulators are inviting them to workshops around the state=20 featuring refreshments and promises of quick approval.=20 "Believe it or not, government's here to help you," Christine Kinne, the=20 California Environmental Protection Agency's assistant secretary for permit= =20 assistance, told several hundred developers who attended a recent workshop = in=20 Sacramento.=20 Gov. Gray Davis wants to attract enough peaking plants =01) which typically= =20 produce 50 megawatts or less each =01) to gain 1,000 megawatts this summer.= =20 That's enough power for roughly 750,000 homes.=20 Some Californians question whether the benefits of swift plant approval are= =20 worth what they see as potential long-term costs.=20 Carl Zichella of the Sierra Club said regulators should take time to consid= er=20 the impact on water and air quality, the state's growing population, and=20 danger from earthquakes.=20 "These are certainly things we need to think about before we start plopping= =20 power plants across the landscape," said Zichella, the group's regional=20 director. "People are going to suffer if we relax these standards."=20 The American Lung Association of California and others want lawmakers to=20 encourage the use of renewable energy and conservation rather than relax=20 environmental standards to build new power plants.=20 "We can't afford to relax our air quality regulations and our public health= =20 standards," said Paul Knepprath, the Lung Association's vice president for= =20 government relations.=20 California is struggling with a tight power supply caused in part by scarce= =20 hydroelectricity in the Pacific Northwest, high natural gas prices,=20 California plant shutdowns for maintenance, and construction of few plants = in=20 the state over the past decade.=20 The state has had widespread blackouts four times this year, including twic= e=20 last week.=20 Power regulators fear rolling blackouts will become common this summer, whe= n=20 demand rises sharply as Californians crank their air conditioners.=20 To try to get new power plants online, regulators are crunching what once= =20 were yearlong reviews into as little as 21 days for peaker plants and four= =20 months for larger facilities.=20 The environmental portion of the reviews for peaker plants now takes just= =20 seven days, and the normal requirements of the California Environmental=20 Quality Act have been lifted by Davis under an emergency order.=20 Davis originally said only generators that have new plants online by July 3= 1=20 could take advantage of the speedy review. He moved the deadline to Sept. 3= 0=20 because few could meet the earlier one, said Roger Johnson, siting office= =20 manager for the California Energy Commission.=20 Winston Hickox, secretary of the California Environmental Protection Agency= ,=20 said state officials are "biting our fingernails about whether we can make= =20 it," but still hope to have enough electricity this summer.=20 "We're truncating the process. We're being as user-friendly to producers of= =20 new energy as we can, but we are not abandoning our standards," said Hickox= ,=20 whose role has shifted from environmental watchdog to "permitting czar" at= =20 Davis' direction.=20 Under the previous process, the state Energy Commission took a full year an= d=20 held 13 public hearings before granting a license to Riverside County's=20 Blythe Energy power plant. Residents were given at least 10 days' notice of= =20 hearings through newspaper ads.=20 Under the accelerated review, communities can get as little as three days'= =20 notice of public hearings on plant proposals.=20 San Diego news media were told on a Monday that there would be a single=20 public hearing, three days later, on the proposed Larkspur Energy peaking= =20 plant. The commission posted the hearing on its Web site, but otherwise=20 counted on the media to let residents know.=20 The California Air Resources Board says it will overrule local air quality= =20 boards that take too long to grant permits and air pollution waivers.=20 Davis used an executive order to remove restrictions on when peaker plants= =20 can run so the state can call on them as needed, day or night.=20 The plants also will be allowed to exceed pollution standards by buying=20 "emissions credits" =01) $6,000 per ton of pollutants, which buys them a wa= iver=20 for three years. The ARB says the plants could emit a combined 3 to 10 tons= =20 of smog-producing nitrogen oxide each day, triggering complaints from the= =20 Lung Association that children and the elderly will suffer.=20 Davis also ordered the state Water Resources Control Board to remove limits= =20 on heated power plant discharge water that would prevent the plants from=20 operating.=20 The state will buy the natural gas to fire up peaking plants, and guarantee= =20 owners a "reasonable profit" on their plants' operation, said Viju Patel,= =20 executive manager of the Department of Water Resources. The state will save= =20 money with long-term gas contracts, he said, while saving operators the ris= k=20 of fluctuating gas prices.=20 The peaking plants likely to be approved most swiftly are ones without=20 apparent social or environmental problems, the Energy Commission's Johnson= =20 said.=20 "It can't go in next to a school or hospital," Johnson said.=20 The best sites are polluted commercial land with a gasline and a transmissi= on=20 station next door, he said.=20 The Sierra Club's Zichella predicts many of the plants will be built in poo= r=20 industrial communities.=20 "These peaking plants aren't going to be built on Nob Hill," he said. "Thes= e=20 communities need to have a say in what's going to affect their air=20 pollution."=20 Seyed Sadredin, permit director for the San Joaquin Valley Air Pollution=20 Control District, said the gas turbines are 200 to 300 percent cleaner than= =20 similar-sized diesel generators.=20 Engineers have found ways to cut the noise and vibration below that of a je= t=20 engine mounted on an airplane, though "it's not something you can put in yo= ur=20 backyard and sleep at night," he said.=20 ---------------------------------------------------------------------------= --- ----- Raft of Bills Aimed at Energy Conservation=20 Power: Lawmakers propose everything from loans for schools to free insulati= on=20 in bid to reduce consumption this summer.=20 By JENIFER WARREN and CARL INGRAM, Times Staff Writers=20 ?????SACRAMENTO--In their quest to cut energy use so Californians can keep= =20 their ovens and air-conditioners humming this summer, state officials have= =20 turned to a time-tested strategy: the good ol' carrot and stick. ?????The Public Utilities Commission took care of the stick earlier this=20 week, approving a record increase in electricity rates. Now the Legislature= =20 is working feverishly on the carrot. ?????More than 190 bills springing from the power crisis are buzzing around= =20 the Capitol, and a good number aim to coax or bribe us onto a low-watt diet= .=20 If we resist, state forecasters warn, summer blackouts are inevitable. ?????To ease the pain, lawmakers are proposing loans, tax credits,=20 refrigerator rebates, free insulation for low-income homeowners--even $40= =20 million for a "mobile efficiency brigade" to deliver power-saving lightbulb= s=20 to poor people and businesses. ?????Some measures had been stalled as legislators focused on the financial= =20 crisis afflicting the state's debt-ridden private utilities, which say they= =20 are on the verge of bankruptcy. But the rate increase stabilized the=20 financial outlook a bit, and now the focus is back on Sacramento. ?????Displaying newfound pep, lawmakers are shaping and blending bills in= =20 hopes that the governor can sign them by the end of next week--which also= =20 marks the start of the Legislature's spring break. ?????Energy specialists say there is not a moment to spare. Last week--a ti= me=20 when temperatures were mild and energy demand was half that of summer--the= =20 state suffered back-to-back blackouts. Hot weather is fast approaching, and= =20 some conservation measures take time to put in place and sell to consumers. ?????One estimate by the California Energy Commission says that for every d= ay=20 the Legislature delays passage of the biggest conservation bill--the sweepi= ng=20 SB 5X--the state misses the chance to save 20 megawatts of energy, enough t= o=20 power about 15,000 homes. ?????"It's extremely urgent," said the bill's author, state Sen. Byron Sher= =20 (D-Stanford). "All the experts agree that reducing demand through=20 conservation is the least expensive, most effective way we can get control= =20 quickly over the energy market." ?????While the conservation measures are the priority, dozens of other bill= s=20 addressing some dimension of the energy mess are piling up. ?????One assemblyman wants to make looting during blackouts a crime, and=20 require that law enforcement officials get a warning before blackouts are= =20 ordered. Another bill would expedite the approval process for new power=20 plants. ?????Assembly Speaker Bob Hertzberg (D-Sherman Oaks) wants to ensure that= =20 operators of new California power plants are forced to offer their=20 electricity for sale within the state before marketing it elsewhere. ?????"This is about giving California the right of first refusal," Hertzber= g=20 said before his Assembly colleagues approved the bill, AB 60X, and sent it = to=20 the Senate. Without such a requirement, Hertzberg said, California would=20 suffer air pollution and other costs of hosting plants but reap no benefit. ?????That theme--giving California more control over the power supply--also= =20 runs through a measure sponsored by Senate leader John Burton (D-San=20 Francisco). His bill, SB 6X, would put the state in the business of buildin= g,=20 financing, acquiring and owning its own power plants. ?????Burton says the bill would enable California to control its own "energ= y=20 destiny," as other states do, including New York. But Republicans warn that= =20 it would create a vast new bureaucracy and say that making and selling powe= r=20 is best done by private industry. ?????Burton's bill has passed the Senate and awaits action in the Assembly.= =20 But next week's priority, legislators say, will be passing two gargantuan= =20 conservation bills considered vital to helping California survive summer=20 without widespread power outages. ?????Analysts say the bills--Sher's and a measure by Assemblywoman Christin= e=20 Kehoe (D-San Diego)--would allocate about $1 billion to programs that could= =20 reduce summer demand by as much as 4,000 megawatts--the equivalent of what= =20 eight average-size power plants produce. ?????Forecasts of a summer power shortfall range from 2,500 to 5,000=20 megawatts, said Ralph Cavanagh, an energy expert for the Natural Resources= =20 Defense Council: "So these bills could really be decisive." ?????And although $1 billion may seem like a sizable investment for applian= ce=20 rebates, home weatherization, free lightbulbs and other conservation=20 measures, it's peanuts compared to the exorbitant price--close to $4 billio= n=20 in the last three months--the state is paying to buy energy on the spot=20 market, Cavanagh said. ?????Experts say the conservation proposals--many of which Gov. Gray Davis= =20 made in February--have a good chance of success because they build on=20 existing programs with track records. While there are "probably lots of=20 great, innovative new ideas out there, we stuck with proven programs becaus= e=20 we need certainty for this summer," said Claudia Chandler, assistant=20 executive director of the California Energy Commission, headquarters for ma= ny=20 of the conservation efforts. ?????Cavanagh said the two bills, if signed by Davis, would roughly double= =20 what California has been spending on conservation. A spokesman for Davis sa= id=20 the governor would support the $500-million worth of programs he proposed i= n=20 February, but could not predict the fate of the other $500-million worth of= =20 proposals likely to arrive on his desk. ?????"As the governor has said, conservation is our ace in the hole and a= =20 powerful tool to help us avoid blackouts," said the spokesman, Roger Salaza= r.=20 "We think the half-billion dollars in proposals the governor has put forth= =20 are prudent and will help us get through summer." ?????Among the proposals in pending legislation are: ?????* $280 million to help low-income families with everything from paying= =20 their energy bills to installing insulation, double-paned windows and=20 efficient air-conditioners.=20 ?????* $170 million to help businesses install power-saving lighting and=20 air-conditioning systems. ?????* $15 million for energy-efficient traffic signals. ?????* $7 million for a school-based campaign, tentatively called "Kids=20 Count," to teach children about energy conservation. ?????* $25 million in loans to schools to help them cut energy consumption. ?????* $10 million to the state Department of Consumer Affairs for a public= =20 outreach campaign about the need for conservation. ?????* $132 million in loans and rebates for residents and business owners= =20 who buy new appliances and air-conditioners or upgrade old systems. ---=20 ?????Times staff writer Miguel Bustillo contributed to this story. ---------------------------------------------------------------------------= --- ------ 2 Firms Start Repaying State for Power Buys=20 Electricity: Edison and PG&E give $105 million for energy supplied between= =20 Jan. 19 and Feb. 11. Also, a state agency predicts a 7% shortfall this=20 summer.=20 By MIGUEL BUSTILLO and JULIE TAMAKI, Times Staff Writers=20 ?????SACRAMENTO--For the first time since California began buying electrici= ty=20 in mid-January on behalf of the state's two biggest utilities, money is=20 coming back to the state. ?????Under order by state regulators, Southern California Edison and Pacifi= c=20 Gas & Electric began making payments this week to reimburse the state for t= he=20 billions it has spent on power. Edison paid $43.5 million and PG&E paid $61= .8=20 million for electricity supplied between Jan. 19 and Feb. 11, with more mon= ey=20 on the way, officials said Thursday. ?????California taxpayers became the biggest buyers of power in the West=20 after electricity suppliers began refusing to sell to the utilities, which= =20 had depleted their cash reserves and tarnished their credit ratings when th= e=20 cost of electricity soared above their selling price last year. ?????Since then, the state has spent or appropriated $3.8 billion on behalf= =20 of the utilities, which together serve 24 million people. The repayments=20 began Wednesday, the day after the state Public Utilities Commission approv= ed=20 consumer rate hikes of as much as 46%. ?????While the PUC action was intended to put the brakes on a runaway energ= y=20 crisis, there were new signs of disarray Thursday. ?????A group of Republican lawmakers sued Gov. Gray Davis for keeping secre= t=20 the details of long-term power contracts signed by the state. ?????One of the largest alternative power producers in the West went to cou= rt=20 to suspend its contract with Edison. ?????And operators of the state's electricity grid predicted that in June,= =20 California could fall 7% short of the power it needs to avoid blackouts. ?????"California is facing an electricity shortage of unprecedented=20 proportions," wrote the staff of the California Independent System Operator= =20 in an assessment of summer power supplies. ?????The court action against Edison came from Carson-based Watson=20 Cogeneration Co., one of nearly 700 firms contracted to supply electricity = to=20 the state's private utilities. Watson filed a complaint in Los Angeles Coun= ty=20 Superior Court seeking to suspend its contract. ?????Watson has not been paid by Edison since November and is at least the= =20 third company seeking court release from its utility contract. One such fir= m,=20 geothermal producer CalEnergy, was granted the right to sell its power on t= he=20 open market. ?????Watson's complaint comes on the heels of an order by the PUC earlier= =20 this week that Edison and PG&E begin fully paying small alternative energy= =20 producers, which together supply more than a quarter of the electricity use= d=20 by California consumers. Shutdowns by some of these small producers=20 contributed to the state's blackouts last week. ?????Tom Lu, Watson's executive director, said the PUC order failed to=20 provide the assurances his company needs that it will get paid. Many small= =20 producers have complained that the order slashes the rates that utilities= =20 must pay the producers to a level that makes it impossible for them to turn= a=20 profit. ?????"What we're looking for is the capability to be able to sell to a thir= d=20 party so that we can get paid for our power deliveries," Lu said. ?????Edison sent a letter to the small producers Thursday, promising to beg= in=20 paying them by April 16 for power supplied in April. The utility added that= =20 it expects all the alternative generators that shut down their operations t= o=20 resume deliveries by Sunday.=20 ?????The lawsuit filed by the GOP legislators demanding that Davis open the= =20 books on the state's long-term energy contracts came on the heels of a=20 similar suit filed last week by a coalition of news organizations, includin= g=20 The Times. ?????Led by Assemblyman Tony Strickland (R-Moorpark), the suit argues that= =20 under the California Public Records Act, the details of the power buys shou= ld=20 be made public. ?????Republican lawmakers, who plan to raise money to finance their suit,= =20 said Davis' withholding of the information prevented them from voting=20 responsibly on the state budget and other important financial matters.=20 California is spending between $45 million and $55 million a day on=20 electricity on the expensive wholesale spot market. ?????"The governor is asking the people in this building to drive down a da= rk=20 tunnel with the lights off," Assemblyman John Campbell (R-Irvine) said in a= =20 news conference outside the Capitol. ?????Davis administration officials contend that release of the information= =20 now would jeopardize their efforts to enter into inexpensive, long-term=20 contracts to purchase electricity because bidders would know what their=20 counterparts were offering, and would not offer a lower price. They say the= y=20 will release the information at a future date. ?????The administration position received a boost this week when Atty. Gen.= =20 Bill Lockyer issued a legal opinion saying that maintaining the integrity o= f=20 power-buying negotiations outweighed public disclosure. ?????In other developments Thursday: ?????* U.S. Energy Secretary Spencer Abraham met in Washington, D.C., with= =20 power suppliers to discuss ways to help California avert blackouts this=20 summer. ?????Abraham asked the energy companies to prepare a list of potential=20 problems, including maintenance schedules for generating units, that could= =20 reduce electricity supplies this summer, an administration official said. ?????* A state energy panel recommended the speedy restart of two gas-fired= =20 generators owned by AES Corp. in Huntington Beach, on several conditions.= =20 Power would have to be sold in California, and the company would have to pa= y=20 $1 million for an independent study into whether its plant is causing ocean= =20 and beach pollution. ?????The generators could be online by July, according to California Energy= =20 Commission staff, but area residents would have to endure construction nois= e=20 20 hours a day. The Energy Commission must still vote on the recommendation= s. ?????* An executive with Southern California Gas Co. adamantly denied=20 explosive allegations, contained in a series of lawsuits, that it conspired= =20 with a Texas energy firm to limit natural gas deliveries to California. ?????Testifying before an Assembly oversight committee in Sacramento, Rick= =20 Morrow, a vice president with the gas company, said "there was absolutely n= o=20 mystery" to a meeting at which several of Morrow's employees and=20 representatives of El Paso Natural Gas Co. are alleged to have struck an=20 anti-competitive deal. ?????The two companies are alleged to have violated the state's anti-trust= =20 law, and caused prices to spike, by agreeing not to compete with one anothe= r=20 on pipeline projects that would have brought additional natural gas supplie= s=20 into California. ?????Most power plants in California consume natural gas, and the cost of t= he=20 fuel accounts for as much as 60% of the cost of electricity. ?????* In an analysis of summer power supplies, state grid operators foreca= st=20 that imports to California from the Pacific Northwest will be halved becaus= e=20 severe drought has stressed the region's ability to supply even its own nee= ds=20 from hydroelectric reservoirs. ?????The report, to be reviewed by the Cal-ISO board of governors today,=20 warns that the state's most severe shortfall of power could occur in June,= =20 before several new power plants are expected to begin operation in July and= =20 August. ---=20 ?????Times staff writers Richard Simon, Nancy Vogel and Christine Hanley=20 contributed to this story. ---------------------------------------------------------------------------= --- ------ Ads Support Davis Actions, Legislature in Power Crisis=20 By DAN MORAIN, Times Staff Writer=20 ?????SACRAMENTO--Backers of Gov. Gray Davis are airing radio ads saying the= =20 governor and Legislature are working hard to solve California's energy=20 crisis, in what could be the beginnings of a campaign against an initiative= =20 that doesn't yet exist. ?????The ads, airing in Los Angeles and elsewhere, also offer a boost to=20 Davis, at a time when private polls suggest voter skepticism that he is=20 solving the energy crisis. ?????Backers of the ad campaign, funded with a relatively modest $100,000,= =20 say the spots were not intended to help the governor. ?????"The story here is that this group would like to see partisan politics= =20 stay out of it," said campaign consultant Rick Claussen of Goddard-Claussen= ,=20 who specializes in initiative campaigns and produced the spots. "We need to= =20 keep people focused on the solutions." ?????Claussen said the group, called Energy for California, could become a= =20 political organization that would counter initiatives aimed at undoing=20 whatever solution Davis and lawmakers come up with. ?????At least one and possibly more initiatives related to the energy crisi= s=20 will probably be on statewide ballots in 2002. Consumer activist Harvey=20 Rosenfield of Santa Monica, who has promoted several initiatives, says he i= s=20 considering entering the fray. ?????"I'm flattered," Rosenfield said. "This has to be a first: an ad=20 campaign against an initiative that hasn't been drafted." ?????The sponsoring group includes Silicon Valley venture capitalist John= =20 Doerr and entrepreneur Reed Hastings, both of whom have donated $25,000 to= =20 Davis' 2002 reelection effort and were major backers of an initiative that= =20 the governor promoted last year to ease approval of local school constructi= on=20 bonds. ?????Chris Townsend, who hosted a fund-raiser for Davis in Orange County=20 earlier this year, also is involved, as is Silicon Valley Manufacturing Gro= up=20 director Carl Guardino, a Davis appointee to the California Independent=20 System Operator, which oversees the state's power system. ?????The group also includes William Hauck of the California Business=20 Roundtable and Daniel Case of the San Francisco investment bank Hambrecht a= nd=20 Quist. ?????The ads open with voices saying there is no crisis, then switch to an= =20 announcer who says the crisis is real and that "California faces even more= =20 energy shortages and blackouts this summer if we don't all do our part." ?????"Working together, we can have adequate supplies and a secure energy= =20 future. That's what Gov. Gray Davis, the Legislature, business and communit= y=20 leaders are working to do." ?????The ad refers to steps being taken in Sacramento, including "historic= =20 statewide conservation programs like the governor's 20/20 program." Althoug= h=20 it is not final, that proposal promises to give people 20% rebates on the= =20 remainder of their electricity bills if they cut use by 20% between June an= d=20 September. ?????"They're not political ads," said Garry South, Davis' chief political= =20 advisor, who was involved in the planning. "They don't say, 'Vote for Gray= =20 Davis.' They're about the energy crisis." ?????The ads are designed to "reassure people and calm people down," said= =20 Darry Sragow, a political consultant who works for the state Assembly's=20 majority Democrats. ?????"It is a critical and dicey time for [Davis] politically," Sragow said= .=20 "It's not something from which he cannot recover. But he shouldn't be feeli= ng=20 comfortable." ---------------------------------------------------------------------------= --- ----------------------------------------------------------------- Friday, March 30, 2001=20 Take-Charge Governor Forfeits on Energy=20 By DAN SCHNUR ?????Where was Gray Davis when the lights went out?=20 ?????Where was the governor when the rates went up, when the bonds to pay f= or=20 electricity came up short, when the latest round of blackouts swept across= =20 California?=20 ?????He was doing what he does best. He was raising money for his reelectio= n=20 campaign.=20 ?????While Davis' hand-picked chairperson of the Public Utilities Commissio= n,=20 former campaign aide Loretta Lynch, was preparing to announce rate increase= s=20 of up to 40% for some of California's energy consumers, the governor himsel= f=20 was busy hitting up lobbyists for campaign contributions at a Palm Springs= =20 golf tournament. In Gray's world, when the going gets tough, the tough go= =20 country-clubbing.=20 ?????When it became known that Lynch was considering approving a rate=20 increase, Davis immediately tried to distance himself from her. Only a year= =20 ago, Davis had appointed Lynch, a San Francisco trial lawyer and longtime= =20 Democratic campaign staffer, as the state's top energy official. Throughout= =20 the crisis, his aides had been meeting with her on a regular basis, while= =20 portraying Davis himself as being the key player to all energy related=20 deliberations. But when Lynch stepped up to take the heat, the governor was= =20 strangely passive and distant.=20 ?????"I can't order or direct an independent body," he told reporters. "I'v= e=20 not given any advice to them on the subject of a rate increase."=20 ?????For the last several months, Davis had made it clear that a rate boost= =20 was unacceptable. When the utilities requested an increase last fall, he=20 publicly argued against it. In recent weeks, when state legislators and eve= n=20 his own advisors began to come to terms with the need for a rate hike, Davi= s=20 said no. But as the crisis worsened, and the options narrowed, he grew=20 silent. Suddenly Lynch, who is destined to go down in California political= =20 history as the Rose Bird of electricity, was in command. And Davis was a me= re=20 spectator.=20 ?????Where was the governor who announced in the first days of his=20 administration that his appointees would not speak publicly or announce=20 policy without his permission? Where was the governor who stated that it wa= s=20 the job of the independently elected state Legislature to implement his=20 vision? The governor who claimed it was the responsibility of California's= =20 judges to reflect the views he expressed in his own election? The governor= =20 who has done everything but rip the tongues out of the mouths of advisors w= ho=20 have strayed even slightly from the company line?=20 ?????It's difficult for longtime Davis watchers to reconcile such autocrati= c=20 tendencies with this new image of the governor tied to the political railro= ad=20 tracks while the evil commissioners ignore his pleas for mercy. Yet when th= e=20 full PUC prepared to vote on Lynch's proposal, Davis did not even attend th= e=20 meeting. He did not, at least publicly, urge the commissioners to reject th= e=20 rate hike. He certainly did not take to the airwaves calling for California= ns=20 to join him in opposition. He has therefore forfeited his right to rail=20 against the fates when his own appointees go ahead and pass a rate increase= .=20 ?????As Davis prepares to seek reelection, he already has about $28 million= =20 in the bank, and he has strong Democratic majorities in the state=20 Legislature. But he also has a state full of voters who have just been told= =20 that their power bills are going to increase by thousands of dollars each= =20 year.=20 ?????What's a poor governor to do?=20 ?????When faced with angry voters, a political leader has two choices. He c= an=20 talk to them honestly and directly, explain that difficult choices must be= =20 made and take responsibility for the course of action he has charted. Or he= =20 can blame their problems on someone else and go to the golf course with his= =20 contributors.=20 ?????Voters will forgive honest policy differences, especially if their=20 leaders have the courage to confront them with difficult truths. They are= =20 much less likely to forgive politicians who can't, or won't, lead.=20 ?????If Davis continues to play the part of victim, Californians will look= =20 elsewhere for a genuine leader in 2002.=20 - - - Dan Schnur, Director of Communications During Gov. Pete Wilson's First Term= ,=20 Is a Visiting Instructor at the Institute of Government Studies at Uc Berke= ley ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= - Blackout Warnings For Police=20 PG&E giving notice to ease traffic jams=20 Bernadette Tansey, Chronicle Staff Writer Friday, March 30, 2001=20 ,2001 San Francisco Chronicle=20 URL:=20 http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2001/03= /30/M N188438.DTL=20 San Francisco authorities who have been caught flat-footed by rolling=20 blackouts will get detailed information in advance from PG&E on which block= s=20 will lose their lights during any future outages.=20 Responding to San Francisco's plea for better notice to avoid dangerous=20 traffic jams, Public Utilities Commissioner Carl Wood has ordered Pacific G= as=20 and Electric Co. to share a map of its circuitry with the mayor's Office of= =20 Emergency Services.=20 The information will help police officers find out more quickly which=20 intersections will go dark. Traffic signal outages create backups and=20 potential dangers to pedestrians and motorists, said Lucien Canton, directo= r=20 of emergency services.=20 Police now get only sketchy information from PG&E about the blocks where=20 power might go out, Canton said.=20 "It's vague almost to the point of being useless," Canton said. "When the= =20 lights go out, we have to go looking for the intersections ourselves."=20 In an order made public yesterday, Wood told PG&E to give as much advance= =20 warning as possible when outages are imminent. Wood also directed Southern= =20 California Edison to meet with Huntington Beach officials to work out a pla= n=20 to address that city's request for such information.=20 But Wood said he was not inclined to issue a global order for the utilities= =20 to provide detailed information on their circuits with all cities in their= =20 coverage areas.=20 A broader notification plan may still be in the works, however. The=20 Independent System Operator, which runs the state's grid, will consider a= =20 proposal today for an "e-notification" system to help customers and=20 businesses prepare before the lights go out.=20 Under the plan by Carl Guardino, a member of the ISO's governing board and= =20 president of the Silicon Valley Manufacturing Group, utility customers and= =20 public agencies that wanted the warnings could submit their e-mail addresse= s=20 to the ISO. The ISO would advise them whenever a blackout was possible that= =20 day and identify the outage blocks that would be affected.=20 PG&E has been reluctant to publicize the exact borders of rolling outage=20 blocks, saying it was concerned that criminals would head to an area where= =20 they knew the power was going to go out.=20 To limit the number of people who learn about the outages, Wood told PG&E t= o=20 submit the block information to the PUC. The commission will then transmit = it=20 to the San Francisco emergency services division, with strict limits on its= =20 distribution.=20 The utility must also tell city officials which essential customers, such a= s=20 hospitals, are exempt from rolling blackouts and which are not. Canton said= =20 that list will help the city handle emergencies at nonexempt sites and to= =20 push exemptions for services that now could lose power.=20 PG&E spokesman John Nelson said the utility will comply with any order the= =20 commission issues.=20 But he said PG&E does not have circuit maps down to the level of specific= =20 intersections.=20 "Those maps could be developed," Nelson said. "It would certainly be very= =20 labor intensive."=20 The outage blocks are also constantly changing, he said, and are modified t= o=20 take into account different usage patterns between summer and winter.=20 Providing detailed circuit maps to all California cities would be "a most= =20 involved undertaking," Nelson said.=20 PG&E serves 49 of California's 58 counties, including hundreds of cities.= =20 Nelson said PG&E alerts cities to the possibility of outages as soon as=20 possible, but often gets little advance warning itself from the ISO.=20 The utility has also taken flak from cities that were warned of a possible= =20 outage, only to have it averted by last-minute power purchases. Some cities= =20 have threatened to sue PG&E for the extra cost of sending out public safety= =20 officers who proved not to be needed, Nelson said.=20 ,2001 San Francisco Chronicle ? Page?A - 21=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ------------------------------------- Energy Crisis Dogs State Democrats=20 Conventioneers likely to discuss Davis' troubles=20 Carla Marinucci, John Wildermuth, Chronicle Political Writers Friday, March 30, 2001=20 ,2001 San Francisco Chronicle=20 URL:=20 http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2001/03= /30/M N74478.DTL=20 It has been this kind of month for Gov. Gray Davis: Seeking to welcome=20 Democratic delegates to the annual state convention this weekend, he=20 announced a "Hollywood pictures"-style shindig at the new Disney California= =20 Adventure theme park. Then, Disney announced 4,000 layoffs.=20 In California, where residents are enduring rolling blackouts and whopping= =20 energy bill increases, Davis and Democrats are hoping for a break -- and=20 better luck -- as they gather in Anaheim, Orange County, to plan for two=20 brutal years of electioneering ahead.=20 The Democrats' goal is to develop strategies that help them contain the=20 energy crisis, showcase national party leaders like House Minority Leader= =20 Dick Gephardt of Missouri and Democratic National Committee Chair Terry=20 McAuliffe and pump up the party faithful for coming campaigns.=20 But the three-day convention that begins today will spotlight Davis, whose= =20 political problems have prompted reporters to reach for such "Jaws"-like=20 descriptions as "sharks circling" and "blood in the water."=20 THE POLITICS OF POWER OUTAGES The convention will give the governor the chance to beat back the growing= =20 perception that he is increasingly vulnerable to power outages and politica= l=20 turmoil: He is scheduled to deliver tomorrow his first major address since= =20 Californians learned their energy bills will be hiked as much as 46 percent= .=20 But Davis, while still high on the list of Democratic 2004 presidential=20 prospects, faces challenges on a variety of fronts. Consumer groups are=20 howling, TV pundits are criticizing, and some of his party faithful have=20 begun backbiting -- albeit still mostly off the record -- about his cautiou= s=20 handling of the energy situation.=20 "This is going to be a difficult several months for Gray Davis," said autho= r=20 Mark Baldassare, a pollster for the San Francisco-based Public Policy=20 Institute of California. Besides energy woes, a worsening economy and dot-c= om=20 collapses have "dramatically" changed the political landscape, "and this ha= s=20 given a lot of people second thoughts about whether there's an opportunity = to=20 make a run against Davis," Baldassare said.=20 Davis' problems, however, are coming at a high point for California=20 Democrats. Unlike state Republicans, who have been battered by internal=20 squabbling and a string of election losses, Democrats hold all but one of= =20 California's statewide offices, control the Legislature and took four=20 congressional seats from Republicans in November.=20 OPTIMISTIC IN ORANGE COUNTY Their confidence is reflected in their choice of convention location. Orang= e=20 County, for decades a Republican Party stronghold, is now home to a growing= ,=20 Democratic-leaning Latino population.=20 "We've made amazing gains in Orange County in recent years," said Bob=20 Mulholland, a party strategist. "Holding the convention in Orange County=20 shows the party's commitment to reaching everyone in the state."=20 Still, there's an uneasiness among Democrats regarding Davis' handling of t= he=20 power crunch. If the 2002 election becomes a referendum on the way=20 politicians have dealt with energy deregulation, plenty of other Democrats= =20 could get burned, and those who voted for the 1996 deregulation plan are=20 especially nervous.=20 Republicans -- emboldened -- have intensified their criticism of the govern= or=20 and, in the case of Secretary of State Bill Jones, declared themselves read= y=20 for a 2002 run against Davis.=20 Democratic faithful note that Davis may have suffered some rocky times in= =20 recent weeks, but they also admire his status as the ultimate political=20 survivor.=20 "I don't think the governor is going to have any primary challenge. A lot o= f=20 people are talking, but I don't think anyone has the courage to face him=20 down," said Democratic political consultant Robert Barnes of San Francisco.= =20 "Gray is smart and calculating and knows politics. . . . He won the last=20 election when everybody said he was roadkill. He is never to be=20 underestimated. "=20 And, he's got what insiders say it takes to beat any comers: an astonishing= =20 $26 million already collected for his next race.=20 UPBEAT REPUBLICANS But Republicans are feeling better than they have in years.=20 "I'm loving every second of (Davis' troubles)," said a high-level GOP=20 operative, who didn't want to be quoted by name. "It gives us a light at th= e=20 end of the tunnel."=20 Suddenly Davis' $26 million campaign fund isn't looking insurmountable, he= =20 said, because "$25.5 million will have to go to explaining the energy=20 crisis."=20 GOP state party Secretary Shannon Reeves, who was invited to the White Hous= e=20 this week to talk with President Bush, said, "The biggest problem for the= =20 Democrats right now is . . . we're the most unified we've been in probably = a=20 decade. And we have a president who has California on the (front burner)."= =20 What Republicans don't have is a slam-dunk candidate for governor. Jones=20 starts with less than $120,000 for his campaign, and actor Arnold=20 Schwarzenegger and wealthy businessman Bill Simon are longshots.=20 "Despite all their carping and gloating, you'll notice that not a single on= e=20 of (the Republicans) has put a viable plan on the table to solve the (energ= y)=20 problem," said Garry South, Davis' senior political strategist. "They can t= ry=20 to make hay, but they have exactly one statewide elected official. . . . If= =20 they're breaking out the champagne, more power to them."=20 Still, pollsters say the energy crisis has affected Davis' standing with=20 voters.=20 The governor's vulnerability stems from his "very public stance" against=20 utility rate increases, said Mark DiCamillo, director of the statewide Fiel= d=20 Poll.=20 "It was one of the reasons he was viewed positively, while everyone else wa= s=20 negatively perceived," he said. "Now that his position doesn't seem to be= =20 holding, (the approval ratings) are bound to wear off."=20 Alfred Balitzer, political science professor at the Claremont McKenna=20 Colleges, said the Democrats may have to worry about themselves, as much as= =20 Davis.=20 "A power crisis involves the average Californian . . . and that will hit ho= me=20 in a special way," he said. "The governor tried to blame it on (former Gov.= )=20 Pete Wilson -- but the fact is, it's his watch."=20 If the Democratics who control the Legislature perceive Davis as increasing= ly=20 unpopular, "they will run for cover . . . (because) he hasn't involved them= =20 like he should have," Balitzer said. "The strains of one-party rule are=20 beginning to show, and the question is: Can the Republicans take advantage = of=20 it?"=20 E-mail Carla Marinucci at cmarinucci@sfchronicle.com and John Wildermuth at= =20 jwildermuth@sfchronicle.com=20 ,2001 San Francisco Chronicle ? Page?A - 2=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------- Canada seeks to grab bigger role as U.S. energy supplier=20 TOM COHEN, Associated Press Writer Friday, March 30, 2001=20 ,2001 Associated Press=20 URL:=20 http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/03/30/i= ntern ational0216EST0449.DTL=20 (03-30) 02:16 EST TORONTO (AP) -- As President Bush struggles with the U.S.= =20 energy crisis, Canada said it is ready to increase the amount of oil and=20 natural gas it provides to the United States.=20 In the past, it has been too costly to tap abundant oil reserves in norther= n=20 Alberta and natural gas in the Northwest Territories. But accessing those= =20 supplies is now economically feasible because of new technology and rising= =20 energy prices south of the border.=20 ``Canada has an abundance of energy and we remain the best option as a=20 supplier for the United States,'' said Prime Minister Jean Chretien's=20 spokesman, Duncan Fulton.=20 That offer looks tempting to President Bush, who said Thursday the United= =20 States would look to Canada if Congress prevents drilling for oil and natur= al=20 gas in Alaska's Arctic National Wildlife Refuge.=20 Canada opposes U.S. drilling in Alaska, saying it would endanger a=20 significant porcupine caribou herd that migrates through the reserve. But a= =20 bigger reason could be the desire to export fuel to the ``lower 48.''=20 ``It's important for us to explore and encourage exploration, and work with= =20 the Canadians to get pipelines coming out of the Northwest Territories to t= he=20 United States,'' Bush told reporters Thursday in Washington when asked abou= t=20 expected opposition in Congress to drilling in the Alaska reserve.=20 ``There's gas in our hemisphere,'' he said later. ``And the fundamental=20 question is, where is it going to come from? I'd like it to be American gas= .=20 But if the Congress decides not to have exploration in (Alaska), we'll work= =20 with the Canadians.''=20 Chretien discussed energy issues with Bush during their meeting in Washingt= on=20 on Feb. 5, Fulton said.=20 A National Energy Board report last year that assessed supplies and demand = to=20 2025 put known natural gas reserves in Canada's ``northern frontier'' at 24= =20 trillion cubic feet with estimated reserves at almost 170 trillion cubic=20 feet.=20 The United States now consumes about 21.5 trillion cubic feet of gas per=20 year, with demand expected to grow by about 2 percent annually for the next= =20 20 years.=20 Bush administration officials announced Wednesday that they would not=20 implement the 1997 Kyoto Protocol, under which countries agreed to legally= =20 binding targets for curbing heat-trapping ``greenhouse'' gases, which=20 contribute to global warming.=20 On Thursday, Bush called natural gas a clean energy source that could help= =20 reduce greenhouse gas emissions. The problem, he said, was too little suppl= y=20 and a lack of pipelines to transport it. He said that was why he favored=20 looking in Alaska, despite opposition from environmentalists to drilling in= =20 the wilderness refuge.=20 Two major pipeline projects that would transport natural gas from northern= =20 Alaska and Arctic Canada to Alberta have been discussed for years.=20 The Alaska Highway project would build a pipeline from the North Slope near= =20 Prudhoe Bay to Alberta, following the Alaska Highway part of the way.=20 The Mackenzie Delta project -- which is shorter and would cost less -- woul= d=20 involve a pipeline from the river valley in the Northwest Territories=20 producing a projected 1.2 billion cubic feet a day.=20 Because it would require extensive negotiations to obtain all the necessary= =20 approval, the project would take at least seven years to get started, two= =20 more than the Alaska Highway project, said Glenn Herchak of TransCanada=20 PipeLines of Calgary, a major backer of the Alaska Highway project.=20 The National Energy Board report also spoke of ``accelerated growth'' in th= e=20 Alberta oil industry from sand-based deposits now accessible due to new=20 technology. Major industry players including Shell, Exxon Mobil, Gulf Oil a= nd=20 Chevron are investing in exploiting reserves believed by the energy board t= o=20 exceed the proven reserves of Saudi Arabia.=20 ,2001 Associated Press ?=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------- Police unsure how to enforce lights-out rule=20 Posted at 10:18 p.m. PST Thursday, March 29, 2001=20 BY DANA HULL=20 Mercury News=20 Two weeks after Gov. Gray Davis ordered businesses to sharply reduce their= =20 outdoor lighting or face a fine of up to $1,000, police and sheriff's=20 departments across the state say they haven't written a single ticket.=20 The reason: Almost no one has complained about energy hogs, and law=20 enforcement authorities say the governor's outdoor-lighting order is too=20 vague to enforce. They aren't being pushed particularly hard by state=20 officials, either.=20 The governor's executive order required shopping malls, auto dealers and bi= g=20 retailers to reduce their outdoor lighting by at least 50 percent, starting= =20 March 15.=20 ``How many tickets have been issued? None. And that doesn't surprise me,''= =20 said Redding Police Chief Bob Blakenship, president of the California Polic= e=20 Chiefs Association. ``There is a lot of confusion as to how to enforce the= =20 order. How do you measure what is too much light?''=20 Though the state is desperately scrambling to stabilize power supplies and= =20 rolling blackouts will likely hit with more frequency this summer, most=20 police departments have chosen to take a ``walk and talk'' approach. They= =20 remind businesses of the need to reduce energy use when out on patrol, but= =20 don't seek out or write up offenders.=20 ``We're not using any type of heavy-handed approach, that's for sure,'' sai= d=20 Lt. Rod Romano of the Union City Police Department. ``We're trying to get= =20 compliance.''=20 Many local businesses say they are conserving, and are as worried about=20 skyrocketing bills as homeowners. But they readily admit that they leave=20 lights on if they feel they need to, and have not received any complaints o= r=20 words of warning about it.=20 ``We're turning them down, but we don't turn all of them off,'' said Art=20 Wicker, general manager of Piercey Toyota in San Jose. ``We close at 9 p.m.= ,=20 and at 10 some of them go off. We've been under the impression that this wa= s=20 voluntary.''=20 State officials agree that the executive order has created a great deal of= =20 confusion, and say they regularly field calls from law enforcement officers= =20 unclear about what they are supposed to do. But they stress that the=20 intention of Davis' executive order was never to hit businesses across=20 California with hundreds of misdemeanor citations.=20 ``The intent of this was never to generate prosecutions,'' said Mike Guerin= ,=20 chief of law enforcement at the state's Office of Emergency Services. ``The= =20 intent was to encourage conservation.''=20 Thursday, state officials and law enforcement officers gathered at a Wal-Ma= rt=20 store in Bakersfield to remind businesses about the order and encourage=20 compliance. Business support is considered crucial if the state is to have= =20 enough power for the summer. And state officials say they never expected=20 full-blown energy patrols.=20 ``Nobody wants San Jose P.D. officers to take time away from solving violen= t=20 crimes to tell people about lighting conservation,'' said Guerin. ``But we = do=20 need to get the message out. Fines are in the toolbox any time an executive= =20 order is issued.''=20 Though consumers grumble about shopping centers that leave their lights on,= =20 few take the time to call either the store or police with complaints. But= =20 that could change in the coming months, as the energy crisis becomes more= =20 severe. Pressure may build for law enforcement to play a more active role.= =20 ``The proof of the pudding will be this summer, when the need for=20 conservation goes up,'' said officer Don Cox, a press officer for the Los= =20 Angeles Police Department. ``But we haven't even really developed a policy= =20 yet about how we will do it. The governor mandated this thing, but wasn't= =20 specific on how it should be done.''=20 Stanislaus County Sheriff Les Weidman, president of the California State=20 Sheriffs' Association, met with the governor's staff when the outdoor=20 lighting order was first being drafted, and supports the massive conservati= on=20 effort. But he made it clear that his membership is already stretched thin.= =20 If rolling blackouts become more frequent, sheriffs will need to respond to= =20 any safety problems or accidents that arise.=20 ``I don't have the resources to divert my sheriffs to running around tradin= g=20 in pistols for an electric meter,'' said Weidman. ``But by the same token, = I=20 think the public is real concerned about someone who is wasteful. Ultimatel= y,=20 if there are a lot of complaints, they may get a ticket.''=20 Weidman also worries about the potential for an increase in crime in darken= ed=20 alleys or parking lots. The order allows businesses to keep lights on for= =20 safety reasons, but police say it's difficult to determine when outdoor=20 lights are excessive or crucial: It's subjective.=20 ``For years we've told people to turn the lights on to protect themselves,= =20 and now we're asking them to turn them down,'' said Weidman. ``So we have t= o=20 be careful. We don't want people to jeopardize their safety.''=20 Though many businesses in the region appear to be complying with the lighti= ng=20 edict, some say that it's not enough.=20 ``Turning down the lights late at night is not going to be the solution to= =20 rolling blackouts,'' said Assistant Sheriff Bob Maginnis of Alameda County.= =20 ``People are going to have to do other things. If I were in the driver's=20 seat, I'd do scheduled blackouts.''=20 Contact Dana Hull at dhull@sjmercury.com or (510) 790-7311.=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ------------------------------------- PG&E ordered to share details about blackouts=20 Published Friday, March 30, 2001, in the San Jose Mercury News=20 BY KIM VO=20 Mercury News=20 Say you're in charge during rolling blackouts and you have 10 minutes'=20 warning that an outage will hit the Mission district. Should you send a=20 traffic cop to 16th and Valencia? Or Folsom and Cesar Chavez? Which light= =20 might go out?=20 Such decisions can make the difference between inconvenience and chaos, sai= d=20 Lucien Canton, director of San Francisco's Office of Emergency Services. An= d=20 that is why his office had been pressing Pacific Gas & Electric Co. to shar= e=20 detailed information about which streets and buildings would be affected=20 during rolling blackouts.=20 State Public Utilities Commissioner Carl Wood this week ordered PG&E to giv= e=20 the information to San Francisco so it can better prepare for the blackouts= ,=20 which are expected to continue through summer.=20 ``It is difficult to provide adequate emergency response protection for=20 citizens without knowing, with great specificity, which customers will be= =20 affected,'' Wood wrote in his opinion. He also instructed Southern Californ= ia=20 Edison to provide the city of Huntington Beach with similar information.=20 San Francisco first requested the information last summer, Canton said. PG&= E=20 was reluctant to provide street-by-street details, citing confidentiality.= =20 ``If someone said Block 12 is out and it includes this street, this street= =20 and that street, you'll be letting criminals know where the power's out,=20 where the burglar alarms are off,'' said Ron Low, a PG&E spokesman.=20 Wood has ordered San Francisco to share the information on a ``need-to-know= ''=20 basis. PG&E must submit the information to the PUC within five days. The=20 state regulatory agency will review it before passing it along to San=20 Francisco.=20 Canton dismissed Low's concerns about lawlessness, saying there has been no= =20 looting during the power outages. Indeed, the biggest problem is traffic=20 backups as drivers negotiate intersections with signals out.=20 If Canton knows exactly which signals are on the circuits affected, he can= =20 send traffic officers to those intersections -- perhaps even before the pow= er=20 goes out. He wants to avoid a repeat of a citywide blackout in the winter o= f=20 1998 during which a pedestrian was killed on Van Ness Avenue.=20 While he can't say the power outage caused the death, orderly traffic might= =20 have prevented it, Canton said.=20 A team will review the information and craft new emergency response plans,= =20 such as how to warn schools and nursing homes in advance of a blackout.=20 Contact Kim Vo at kvo@sjmercury.com or (415) 477-2518.=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ---------------------------------- We need power -- in our back yard=20 Published Friday, March 30, 2001, in the San Jose Mercury News=20 THE San Jose City Council, which unanimously opposed a major power plant in= =20 Coyote Valley, is poised to approve an Internet server farm that will=20 eventually consume as much electricity as 180,000 homes.=20 This does not compute.=20 San Jose cannot aspire to be at the center of e-commerce, home to the=20 computers that are its heart, without supplying more of the electrons that= =20 are its lifeblood. Only a tenth of the energy consumed in Silicon Valley is= =20 generated here.=20 The 600-megawatt Metcalf generating plant, fought by Mayor Ron Gonzales and= =20 the council, would provide enough power for 600,000 homes, using some of th= e=20 cleanest technology available. Located within the Bay Area distribution gri= d,=20 it would enhance the reliability of the power supply.=20 Instead, Gonzales is hoping to find numerous sites throughout Silicon Valle= y=20 for smaller power plants. Some proposals have surfaced. Santa Clara is=20 looking to build four new new plants. The mayor of Gilroy hopes a large pow= er=20 plant can be built there. Still, Gonzales's plan has not progressed much=20 beyond the idea stage.=20 Tuesday, the council will consider the application of U.S. DataPort to buil= d=20 a server farm along Highway 237 in Alviso. It demonstrates that compensatin= g=20 for the lack of an assured power supply in the region could be worse for ai= r=20 quality than a major power plant, unless the city and Bay Area air regulato= rs=20 are vigilant.=20 U.S. DataPort plans to grow in stages over five years, ultimately needing 1= 80=20 megawatts of power. It will generate 50 megawatts with a natural gas power= =20 plant on site. No problem there.=20 When the facility outgrows that plant, however, and relies on the regional= =20 grid as well, it plans diesel generators as a backup. Diesel is much dirtie= r=20 than natural gas.=20 There's reason to hope diesels will not be needed. Better technology could= =20 reach the market soon. In addition, the siting process for larger power=20 plants has been streamlined since U.S. DataPort first designed its facility= .=20 Far better than diesels would be a gas-fired plant sufficient for all U.S.= =20 DataPort's needs.=20 The city and the Bay Area Air Quality Management District should cut the=20 company absolutely no slack on exceeding strict pollution limits on operati= ng=20 diesels, in the event of blackouts. The company knows perfectly well the=20 uncertainty of the power supply.=20 Electricity is not the sole issue. The council should also insist on a layo= ut=20 of the buildings that preserves a third of the land for open space and=20 habitat for burrowing owls.=20 The electricity drought should pass in a couple years. San Jose need not sh= ut=20 down in the meantime. But it can't act as if the juice to power Silicon=20 Valley will always come from someplace else. The Metcalf plant is needed, a= s=20 well as on-site power for U.S. DataPort. ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- ----------------------------------- 'Interruptible' penalties may be revived=20 PUC to weigh reinstating fines under the conservation pact.=20 March 30, 2001=20 By ANNE C. MULKERN The Orange County Register=20 To help prevent rolling blackouts this summer, state regulators want to giv= e=20 businesses a powerful financial incentive to turn off their electricity in = an=20 energy emergency.=20 The Public Utilities Commission on Tuesday will consider reinstating Southe= rn=20 California Edison's right to levy huge fines against companies that don't= =20 unplug when asked.=20 Those financial penalties - which totaled $200 million from November throug= h=20 late January -- were suspended Jan. 26 after businesses were asked to=20 disconnect 37 times in 10 months.=20 If the penalties are reinstated, it likely will mean millions in new costs= =20 for Orange County companies in the program.=20 Businesses not only face fines when they don't unplug, they also lose=20 productivity when they do.=20 And fines for not interrupting in the future will come on top of the higher= =20 electricity rates businesses will be paying. Some of those costs could be= =20 passed on to consumers.=20 "In this fragile economy and stock market, a company's operational losses= =20 cannot simply be absorbed," Julie Puentes, spokeswoman for the Orange Count= y=20 Business Council, said in a protest letter to the PUC.=20 "If this crisis is not managed properly, there will be job layoffs, employe= e=20 work furloughs, salary cuts, spending cutbacks and companies curtailing=20 investment in California," Puente said.=20 Prior to last fall, companies in the interruptibles program were allowed to= =20 exit during a 30-day window each November. But after the energy crisis=20 escalated last summer, the PUC in October barred companies from leaving the= =20 program. Interruptibles contracts expire Sunday, and the PUC wants to have= =20 new contracts quickly in place.=20 The exact penalties and how the program will be structured have not been=20 determined. The PUC released a draft laying out some proposed changes. But= =20 revisions to that were being made Thursday and today to address some of the= =20 comments made by businesses.=20 The draft decision proposes letting customers out of the program under=20 certain conditions, but those conditions are too oppressive for most=20 businesses, Puentes said.=20 Businesses would have to either pay back the discounts they received in 200= 0=20 and 2001 with interest; install energy-efficient equipment equal in price t= o=20 the total discount they received during that same period; or join a volunta= ry=20 interruption program in which they cut power just as much, but with=20 more-flexible timing. Under that plan, they'd interrupt but get no rate=20 discounts.=20 "Getting out is extremely punitive to the companies," Puentes said. "If you= =20 opt out, you're really paying twice. You pay back the discounts, and you=20 still pay the penalties (you've already paid)."=20 Under the plan, public schools, universities, hospitals and prisons could o= pt=20 out without any repayment obligation.=20 Businesses say they need more options.=20 "You need reliability, and you need flexibility because, frankly, people's= =20 livelihoods depend on this," said Andrew De Cicco, vice president of ITT=20 Industries, a Santa Ana electronics maker. The interruptibles program, whic= h=20 began in the mid-1980s, gives some 1,500 large businesses discounts of 15= =20 percent to 20 percent off their power bills for agreeing to cut off power= =20 when asked.=20 In the program's first 13 years, companies unplugged just once. But in 2000= ,=20 they were asked to unplug some 24 times. In January alone, they faced 13=20 interruptions including two in the same day. Many complained that the=20 interruptions and fines were significantly hurting their businesses.=20 Astech Manufacturing Inc. of Santa Ana said it lost $480,000 in productivit= y=20 during the late fall and winter interruptions.=20 ITT Industries shut down four days in January rather than face penalties of= =20 $700,000 per day. The company said it lost an additional $2 million in=20 revenue in one week.=20 A state lawmaker has proposed forcing Edison to repay or forgive those fine= s.=20 That bill passed the Assembly but has not yet been scheduled for Senate=20 committee hearings.=20 With those onerous financial penalties intact, the interruptibles program w= as=20 a key tool for preventing blackouts last summer and through the fall. If al= l=20 the businesses in the program shut off power, they save enough electricity = to=20 power 1.5 million homes.=20 Without the fines, businesses have lacked any strong incentive to cut power= .=20 Though they were asked to unplug voluntarily when the state reached a new= =20 crisis level last week, most did not. That made rolling blackouts necessary= .=20 "The participation without the penalties was certainly much less," Edison= =20 spokesman Steve Conroy said. "It was only about 5 percent (of the customers= =20 in the program)."=20 That unfairly shifts the burden of blackouts to all other customers who hav= e=20 not benefited from reduced rates, Commissioner Carl Wood said.=20 ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------------= --- --------------------------- 2 cities to be warned if blackout is imminent=20 Huntington Beach and San Francisco sought details.=20 March 30, 2001=20 By KATE BERRY The Orange County Register=20 In a ruling that could open the door for advance notification of where=20 blackouts could strike, the Public Utilities Commission ordered two utiliti= es=20 to give detailed information to Huntington Beach and the city and county of= =20 San Francisco, so police, fire and medical workers can prepare for=20 power-related emergencies.=20 The utilities affected, Southern California Edison and Pacific Gas &=20 Electric, already have systems in place to automatically notify cities when= =20 blackouts occur.=20 But San Francisco and Huntington Beach requested more-detailed information,= =20 such as specific city blocks that would be affected and names and addresses= =20 of customers who depend on life- support systems in their homes.=20 Edison was ordered to meet with Huntington Beach officials and PG&E to meet= =20 with city and county officials in San Francisco in the next 15 days to=20 resolve the information requests. The cities and county would be required t= o=20 sign confidentiality agreements to keep the information from being publicly= =20 disclosed.=20 The commission said disclosure "can be accomplished with necessary protecti= on=20 of confidential data."=20 The PUC confined its order, issued Wednesday, to the two cities and county= =20 that requested the information. It said releasing the information to all th= e=20 cities in California would be "unreasonably burdensome" to the utilities.= =20 In the past six weeks, both Edison and PG&E have briefed emergency service= =20 officials at cities in their territories on steps they can take to improve= =20 safety in case of an outage.=20 But cities don't get much advance notice. Because electricity is produced a= nd=20 delivered instantaneously (it cannot be stored), the utilities have only 10= =20 minutes' warning from the state's grid operator before imposing rotating=20 blackouts.=20 As a result, it is difficult for cities to prepare ahead of time, said Stev= e=20 Conroy, an Edison spokesman.=20 "Ideally, we would like to give the cities as much notification as possible= ,"=20 he said. "We also don't want the information to fall into the wrong hands."= =20 Edison also is considering notifying customers of the group number for thei= r=20 areas. The utility, based in Rosemead, has divided its territory into more= =20 than 110 groups. Under the proposal, it would broadcast prior to an outage= =20 the group numbers that would be affected, so that consumers could prepare f= or=20 a blackout.=20 ---------------------------------------------------------------------------= --- -------------------------------------------------------------------- Energy crisis could cost billions, says California's controller By STEVE LAWRENCE Associated Press Writer SACRAMENTO, California (AP) via NewsEdge Corporation - Even with customers paying up to 46 percent more for electricity, California's financial controller says the state faces a dlrs 7.4 billion shortfall over the next 18 months if it keeps buying power. But a state Department of Finance spokesman dismissed Kathleen Connell's dire financial projection, saying it doesn't take into account the governor's efforts to reduce electricity costs by signing long-term purchasing contracts with power wholesalers. Connell estimated California will spend dlrs 26.8 billion buying electricity the next 18 months for the state's two largest utilities, which are on the brink of bankruptcy. Despite the rate increase approved this week and the dlrs 12.4 billion the state is authorized to sell in bonds, she said Wednesday that California would find itself billions of dollars in debt by October 2002. Connell said the problem is that Gov. Gray Davis and lawmakers failed to examine the state's ledgers before buying power for Southern California Edison and Pacific Gas and Electric Co. ``We must all work together so the left hand knows what the right hand is doing. You have to look at the books before attempting to solve the energy crisis,'' she said. Department of Finance spokesman Sandy Harrison said California normally has cash flow problems in October because most of the state's revenue comes in April. Just how much California's energy crisis will cost the state has been hotly debated by state officials, financial experts and business people. Some predict the power crisis and rolling blackouts will have a ripple effect through all segments of the state's economy and even into neighboring states. ``Remember that trends start in California,'' said Jack Kyser, chief economist for the Los Angeles Economic Development Corporation. ``I think this is definitely going to create inflationary pressures, and that is something the Federal Reserve Bank can't do anything about.'' California's dlrs 1.3 trillion economy accounts for 13 percent of the nation's gross domestic product and 16 percent of U.S. consumer demand. The energy crisis has been blamed mainly on California's 1996 deregulation law, which forced the state's investor-owned utilities to shed their power plants and buy electricity from wholesalers while capping the rates they could charge consumers. SoCal Edison and PG&E say that forced them to the brink of bankruptcy when energy prices spiraled upward over the past year. The two utilities say they owe nearly dlrs 13 billion to power wholesalers who have shut off their credit, forcing the state to step in and buy electricity. ---------------------------------------------------------------------------= --- ------------------------------------------------------------------------- [B] FULL/ Edison Intl unit pays $43.5 mln to water resources dept New York, March 29 (BridgeNews) - Edison International's Southern California Edison unit paid $43.5 million to the California Department of= =20 Water Resources, pursuant to a California Public Utilities Commission order. This payment is for power purchased by the agency for Southern California custom= ers from Jan. 19, 2001 through Feb. 11, 2001. --Sanjib Dutta, BridgeNews * * * The following is the text of today's announcement, with emphasis added by BridgeNews. BridgeStation links to company data have been inserted at the e= nd: Southern California Edison Makes Payment to California DWR ROSEMEAD, CALIF., MARCH 29 /PRNEWSWIRE/ -- SOUTHERN CALIFORNIA EDISON (SCE) ANNOUNCED THAT, PURSUANT TO A CALIFORNIA PUBLIC UTILITIES COMMISSION (CPUC) ORDER ADOPTED YESTERDAY, A PAYMENT OF $43.5 MILLION WAS MADE TO THE CALIFOR= NIA DEPARTMENT OF WATER RESOURCES (CDWR). THIS PAYMENT IS FOR POWER PURCHASED B= Y THE AGENCY FOR SCE CUSTOMERS FOR THE PERIOD JAN. 19, 2001 THROUGH FEB. 11, 2001. BASED ON THE CPUC'S ORDER, THE RATE APPLIED TO PURCHASES BETWEEN JAN. 19 AND JAN. 31 IS 6.277 CENTS PER KILOWATT-HOUR. FOR THE PERIOD OF FEB. 1 THRO= UGH FEB. 11, THE RATE APPLIED IS 7.277 CENTS PER KWH. THE CPUC ORDER ALSO REQUI= RES SCE TO MAKE DAILY PAYMENTS TO THE CDWR GOING FORWARD FOR POWER PURCHASED FO= R SCE CUSTOMERS. PAYMENTS WILL BE FOR POWER PURCHASED 45 DAYS PRIOR TO PAYMEN= T AND WILL BE BASED ON THE 7.277 CENTS PER KWH RATE AND ACTUAL DELIVERIES. An Edison International (NYSE: EIX) company, Southern California Edison is one of the nation's largest electric utilities, serving more than 11 millio= n people in a 50,000-square-mile area within central, coastal and Southern California. SOURCE: Southern California Edison CONTACT: Corporate Communications of Southern California Edison, 626-302-22= 55 Web site: http://www.edisonnews.com End ---------------------------------------------------------------------------= --- -------- EPRIsolutions Tackles California Power Problems PALO ALTO, Calif.--(BUSINESS WIRE)--March 29, 2001 via NewsEdge Corporation= - Power companies and their business customers need reliable electricity right now, and Palo Alto-based EPRIsolutions is helping them assess their options. A subsidiary of the renowned Electric Power Research Institute, EPRIsolutions is in a unique position to offer its services to stakeholders in the California power crisis. The year-old company takes advantage of the strides made by its parent company in developing technologies to solve domestic and global energy problems for electric and gas utility clients. "We help clients understand the pros and cons of advanced large central station power systems; we analyze transmission and distribution bottlenecks; and we offer an assessment of new options like distributed generation, co-generation, energy efficiency, and micro-grids," explains EPRIsolutions' CEO, Philip Curtis. EPRIsolutions' work takes them to all parts of the country, but California's energy supply and delivery issues provide fertile ground for their expertise. The state's energy consumers are looking for answers to their immediate concerns about reliability and premium power. Distributed generation (DG) -- the siting of small power systems within cities or near industrial and commercial sites or at critical load centers -- is a popular suggestion. "We can provide an objective assessment of all distributed generation options, including small gas turbines, microturbines, diesel generators, and fuel cell systems," says Dan Rastler, area manager for distributed resources. "With our supporting analysis, we can also help local power providers target the best sites and evaluate interconnection requirements and power flow impacts." Rastler believes that DG solutions are here today and can complement California's plans to invest in large central power stations. Cities, municipal power systems, and industrial and commercial companies interested in learning more about EPRIsolutions services are encouraged to contact Dan Rastler, 650/855-2521 or e-mail drastler@epri.com. EPRIsolutions, a subsidiary of EPRI, the collaborative science and technology organization for the power industry, provides application and consulting services in the areas of generation, transmission, distribution, energy efficiency and distributed resources. CONTACT: EPRI | Christine Hopf-Lovette, 650/855-2733 |=20 chopf@epri.com