Subject: Fwd: FW: Calif DWR Cut Off From Using State Funds To Buy Power
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Subject: FW: Calif DWR Cut Off From Using State Funds To Buy Power
Date: Mon, 19 Mar 2001 07:47:04 -0800
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> ----------
> From:  Chu, Henry
> Sent:  2001 March 19 7:35 AM
> To:  Christopher O'Riley; David Wong; Joan Hutchinson; Powerex - ETA;
> Powerex - Middle Office; Powerex - Trading; Renata Kurschner; Sheena
> MacDonald; Teresa Conway
> Subject:  FW: Calif DWR Cut Off From Using State Funds To Buy Power
>
>
>
> ----------
> From:  Onukogu, Ernest[SMTP:[email-masked]]
> Sent:  2001 March 19 7:07 AM
>
> Calif DWR Cut Off From Using State Funds To Buy Power   08:16 ET  Dow
> Jones
> Energy Service  (Copyright (c) 2001, Dow Jones & Company, Inc.)  (This
> article was originally published Friday)      LOS ANGELES (Dow Jones)--The
> California Department of Water Resources will no longer be allowed to dip
> into the state's General Fund to borrow money to buy electricity for the
> state, the chair of the state's budget committee said Friday.  The budget
> committee will deny further requests for state funds to buy electricity
> unless state regulators immediately carve out a revenue stream to allow
> the
> Department of Water Resources to recover the money, according to a letter
> state Sen. Steve Peace sent to state Department of Finance Director Tim
> Gage.  In a copy of the letter, obtained by Dow Jones Newswires, Peace,
> D-El
> Cajon, said that he is "concerned about the prospect of continuing to
> approve deficiency requests for electricity purchases...in the absence of
> any discernible progress by the California Public Utilities Commission to
> provide for the recovery of these funds."  Gage was not available for
> comment late Friday.  A PUC Administrative Law Judge was expected to
> release
> guidelines Friday on the size of rate revenues that the DWR must collect
> from the state's three investor-owned utilities.  The guidelines were not
> released as of late Friday, and a spokeswoman for PUC President Loretta
> Lynch said she did not know the reason behind the delay.  PUC Commissioner
> Richard Bilas said the commission is expected to discuss at its March 27
> meeting exactly how much money the DWR will receive from PG&E Corp. (PCG)
> unit Pacific Gas & Electric, Edison International (EIX) unit Southern
> California Edison and Sempra Energy (SRE) unit San Diego Gas & Electric.
> Last Friday, the DWR secured another $500 million from the state's General
> Fund to buy power. The state has authorized $3.7 billion to purchase
> wholesale electricity and has already burned through more than $3 billion,
> spending upwards of $50 million a day on electricity in the volatile spot
> market.  AB1X, the legislation that authorized the DWR to purchase the
> state's bulk power needs on behalf of the cash-strapped utilities, was
> signed into law two months ago.  A provision in the bill also authorized
> the
> state to issue $10 billion in revenue bonds to finance the long-term power
> supply contracts the DWR has entered into with generators. But first, the
> PUC must carve out a a revenue stream for the DWR before the bonds can be
> issued.  State Treasurer Phil Angelides said that the $10 billion will
> finance wholesale power purchases through September if the average price
> for
> power paid since January, when the DWR first began buying electricity in
> the
> spot market, is $250 a megawatt-hour.  However, California has paid well
> above $300/MWh average in January and about $228/MWh at the end of
> February,
> Gov. Gray Davis said recently.  The PUC approved a measure last week that
> allows the DWR to recover all of the money it spends on power, even if it
> means raising electricity rates.  Peace, one of the lawmakers who helped
> push through the state's deregulation law, said in the letter that he will
> meet with the Joint Legislative Budget Committee on a daily basis "for the
> purpose of denying any such future deficiency requests unless immediate
> actions are taken to resolve this situation."  -By Jason Leopold, Dow
> Jones
> Newswires; 323-658-3874; [email-masked]      (END) Dow Jones
> Newswires 19-03-01  1316GMT
>
>
>