Message-ID: <2166794.1075846353260.JavaMail.evans@thyme> Date: Thu, 10 Aug 2000 04:59:00 -0700 (PDT) From: gavin.dillingham@enron.com To: filuntz@aol.com Subject: California Power Problem Articles Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Gavin Dillingham X-To: Joe Hartsoe@ENRON, Sandra McCubbin@EES, Susan Mara@EES, Paul Kaufman@ECT, Karen Denne@ENRON, Jeff Dasovich@EES, Mark Palmer@ENRON, James D Steffes@EES, Steven J Kean@EES, Richard Shapiro@EES, Elizabeth Linnell@EES, Jeannie Mandelker@ECT, filuntz@aol.com X-cc: X-bcc: X-Folder: \Steven_Kean_Dec2000_1\Notes Folders\Heat wave X-Origin: KEAN-S X-FileName: skean.nsf Attached are more articles that speak of the current California power crisis. Mercury News Article primarily dealing with Governor Davis' view on the situation and what he is doing to help solve the issue. Davis has a three part plan: investigate price gouging, ask PUC to set up two-year plan to cut rates in half and asked for voluntary conservation. Asking Clinton to speed up a federal probe of apparent electricity price-gouging by out-of-state power producers and called on state regulators; A spokesman for the independent energy producers said his group welcomed a federal investigation, saying it would determine that ``California simply does not have enough generating and transmission capacity.'' To stabilize skyrocketing utility bills in San Diego; Davis called upon the Public Utilities Commission on Wednesday to set up a two-year plan to cut rates nearly in half for residential and business customers of San Diego Gas & Electric. Davis described his proposal as ``a rate-stabilization plan'' designed to lower bills. ;Nettie Hoge, executive director of The Utility Reform Network, a consumer group, criticized Davis' plan. She said consumer groups want the Legislature to freeze rates in San Diego at July 1999 levels. Volunary actions: Davis joined with grocers to announce a voluntary program to conserve power on extremely hot days, meaning lights in Bay Area supermarkets would be dimmed and air conditioning dials set higher to cut power use by 10 percent. Davis contends that deregulation will work out, perhaps in three or four years, when a dozen or more power plants in the pipeline start generating electricity. Mercury News article states it is not time to re-regulate the markets and provides the following solutions to solve the crisis. Matters will improve when California has: -> More sources of power. -> A more sophisticated electricity market. -> Smarter consumers -- that is, consumers with the information they need to be thrifty. Also the article talks of the Power Exchange (PX) and the Independent System Operators (ISO) and how these two groups are making the prices higher; i.e market imperfections that result from the uniqueness of electricity as a commodity and the immaturity of the new exchanges are enabling producers to obtain higher prices than the underlying conditions dictate. Article concludes by saying the deregulated market is just beginning and with a few adjustments will work out fine Mercury News article speaking of a new report commissioned by Governor Davis on the energy crisis. The article is primarily about the following issues. A report commissioned by Gov. Gray Davis concluded that deregulation is ``not working,'' and recommended a series of actions, including asking the federal government to help control prices. The report was written by the president of the California Public Utilities Commission and the chairman of the California Electricity Oversight Board and made 30 recommendations to help ease the threat of power shortages and price spikes. Report suggested that the state-mandated freeze on utility rates, which is tentatively in place for PG&E customers through March 2002, might need to be extended further. The report also suggested the upgrading power transmission lines into San Francisco and hooking up businesses to a central command center via the Internet, so their lobby lights and air conditioning could be turned off automatically when state power supplies were low. Two key state agencies, the Independent System Operator and the Power Exchange, were criticized in the report. It accused the ISO and the Power Exchangeof being unresponsive to the needs of consumers, in part because their boards include people with ties to power companies. It also complained that they did not provide key pricing and other data requested by the report's authors to assess the state's energy problems. Also in the article is a repsonse by the ISO and PX to the claims made in the governor's report.