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Enron Mail |
Here's a first-crack at a letter for the CEOs to sign. I couldn't open
Microsoft Word, so I apologize it's in the body of this email. Once we circulate a draft and get a version people are comfortable with, I'd recommend the following actions (but not by Enron): * send the letter to the governor and all members of the Legislature * run the letter as a full-page ad in key newspapers * advance the story to the media for earned coverage (possible editorial boards w/ several CEOs -- not Enron) We could have an effort in both Northern and Southern California -- w/ different CEOs to emphasize the bipartisanship and diversity of support for the solution. This media effort should target broadcast, as well. Edit away! ****************************************************************************** *************************************************** An open letter to Governor Davis and members of the Legislature: California's energy crisis has persisted and worsened over the past 12 months. We have already experienced blackouts, and with summer fast approaching, unless something is done immediately, the worst is yet to come. The North American Electric Reliability Council released a report last week that said California is expected to experience more than 260 hours of blackouts this summer -- that's ten days without power. California's economy cannot afford to grind to a halt because we have no power. Two of the state's largest companies have been thrown into financial turmoil. Pacific Gas & Electric has already declared bankruptcy, and Southern California Edison is on the brink. With California spending more than $____ a day on power and depleting cash reserves, the State's credit rating has been downgraded -- only Louisiana has a lower rating. While there has been much talk of potential solutions, none have advanced. There is too much at risk to delay another day. Therefore, we, the undersigned, are proposing a comprehensive five-step solution to solve California's short- and long-term energy crisis that includes the following: 1. Decrease demand -- There is no time to build power plants or get additional generation on-line in time for this summer. Therefore, the only option to reduce the impact of an electricity shortage this summer is to reduce consumption. This can be accomplished in several ways: Real-time pricing -- prices should reflect the cost of producing electricity, which varies throughout the day. When demand is at a peak, prices are high; when demand drops, so do prices. This will give customers a financial incentive to conserve and take simple actions, like turning the thermostat up two degrees. Demand buy-down programs -- If a customer is willing to pay for kilowatts used, he/she ought to be compensated for kilowatts saved. NEED TO SAY WHO WILL PAY FOR THIS 2. Increase supply -- The Governor has taken an important first step by using his executive powers to streamline power plant siting. While the state currently has approved 13 power plants totaling 8,512 megawatts, it's not enough. California ought to be the most attractive place to build power plants, transmission lines and pipelines; instead, it's the least. There is a backlog of turbines for power plant development, yet of the 1,000 backlogged, only 24 are earmarked for California because the state has sent an "anywhere but here" message to investors. The state's political leaders must reject action that discourages investment, including: * Legislation that would impose a "windfall profits" tax on power sold in California and make it a felony to sell power at a price that the state finds unreasonable. * Continued calls for price caps in wholesale power market -- caps only create shortages and fail to reduce prices. * Investigations into allegations that suppliers manipulated power prices. 3. Make the utilities creditworthy -- Under California law, utilities are forced to charge frozen rates, but they must buy power at higher wholesale prices. The utilities' inability to recover their costs has forced PG&E into bankruptcy and threatens Southern California Edison's solvency. The solution to restoring the utilities' creditworthiness is to set rates that cover the utilities' past debts and future costs -- and then give customers the power to reduce their bills by conserving or by choosing a competitive energy supplier. 4. Get California out of the power-buying business -- Once rate increases return the utilities to creditworthiness, the role of buying power can be returned to the utility very quickly -- within three to six months. The state should not buy the transmission grid to raise additional cash for the utilities. There are other ways to raise funds: for example, a miniscule rate increase of two-tenths of one cent per kilowatt hour could accomplish the same thing -- and keep the power expertise in the hands of the utilities. 5. Get deregulation right in California -- California never deregulated. In fact, today there is more regulation than ever before. For true deregulation to exist, every consumer and business in the state must have the right to hire and fire their energy service provider. When California passed a law this year authorizing the state to buy power, that same law (AB1X) called for an end to customer choice (also called "direct access.") California must rescind AB1X and reinstate the right of customers to choose their energy service provider. ARE WE INCLUDING CORE/NON-CORE? (i can't remember...) We urge the Legislature and Governor to enact legislation that includes these five components and sets California on the path to economic stability. The longer the delay, the bigger the problem. The time to act is now. CEO CEO etc.
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