Message-ID: <12148667.1075852071012.JavaMail.evans@thyme> Date: Mon, 22 Oct 2001 11:17:24 -0700 (PDT) From: jeff.dasovich@enron.com To: richard.shapiro@enron.com, d..steffes@enron.com, susan.mara@enron.com, paul.kaufman@enron.com, linda.robertson@enron.com, sarah.novosel@enron.com, m..landwehr@enron.com, janel.guerrero@enron.com, sue.nord@enron.com, tim.belden@enron.com, jeff.richter@enron.com, f..calger@enron.com, david.parquet@enron.com, laird.dyer@enron.com, michael.mcdonald@enron.com, barry.tycholiz@enron.com, j..kean@enron.com Subject: CA Power Authority Faces Legislative Backlash Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Dasovich, Jeff X-To: Shapiro, Richard , Steffes, James D. , Mara, Susan , Kaufman, Paul , Robertson, Linda , Novosel, Sarah , Landwehr, Susan M. , Guerrero, Janel , Nord, Sue , Belden, Tim , Richter, Jeff , Calger, Christopher F. , Parquet, David , Dyer, Laird , Mcdonald, Michael , Tycholiz, Barry , Kean, Steven J. X-cc: X-bcc: X-Folder: \BTYCHOL (Non-Privileged)\Tycholiz, Barry\Deleted Items X-Origin: TYCHOLIZ-B X-FileName: BTYCHOL (Non-Privileged).pst FYI. If I've missed anyone who might be interested, please forward along. Best, Jeff CALIFORNIA ENERGY MARKETS Friday, October 19, 2001 [1] Power Authority Faces Legislative Backlash After a three-month honeymoon, the new California Power Authority is being shredded in the winds of politics this week with the Legislature looking into its deals, the California Energy Commission annoyed with its monopolizing ventures and the Department of Water Resources rebuffing its plan to sell its power through state contracts. Other than skepticism from legislative staff about its microturbine bid plan, the Power Authority escaped major problems in its requests for bids for photovoltaics and fuel cells at [18]. [18] Assembly to Investigate Power Authority (from [1]) Is the California Power Authority a dangerously out-of-control state agency, or is it the best hope for get-ting back some state control over electricity supplies? The Joint Legislative Audit Committee is looking into the Power Authority's role thus far in carrying out the letter and spirit of SBx2-6 in a hearing set for November 1. The move is spearheaded by the offices of Assem-blymember Fred Keeley (D-Boulder Creek), the chair of the joint committee, and Assembly speaker Bob Hertzberg (D-Van Nuys). Both members were princi-pal authors of the Power Authority's enabling legisla-tion, SBx2-6. Legislative staff are questioning the Energy Foundation's unpaid role in devel-oping the Power Authority's requests for bids, particularly the RFB for microtur-bines. Only one com-pany, Capstone, can meet the requirement written into the RBF by the Energy Foundation, and staff are looking into potential overlaps between Capstone and the Energy Foundation. Political maneuvers are swirling around the Con-sumer Power and Conservation Financing Authority. Not only elected officials are concerned; the staff and heads of other agencies the Power Authority must work with are digging in their collective heels to op-pose Power Authority overtures. Tom Hannigan, di-rector of the Department of Water Resources rebuffed Power Authority board chair David Freeman's pro-posal to have it buy peaker output. California Energy Commission members said they are at policy odds with the Power Authority's siting plans. In an October 4 letter to Freeman, Hannigan said that the Power Authority's power-wind and fossil peakers-is likely too expensive, overblown and not able to respond quickly enough to balancing power needs. "The letters of intent already approved by the Power Authority could far exceed [DWR's] ability to ab-sorb that power given the outlook for net-short need." Freeman assumes that the market for Power Authority power will be via contract, not the spot market. "Selling on the spot market is difficult to finance and risky," said Power Authority spokesperson Amber Pasricha. The Power Authority is the only agency cur-rently in the position of actually being able to acquire new energy as the state's $12.5 billion bond issue to underwrite continued DWR power purchases is in limbo and the California Independent System Operator is still not creditworthy. Still, the Power Authority cannot issue bonds until it has its own economic house in order, and an Assembly investigation might jeopardize that [J.A. Savage]. [