Energy Issues

Please see the following articles:

Sac Bee, Thurs, 5/17: "Bush: Plan spells relief on energy "

Sac Bee, Thurs, 5/17: "FERC nominees open to rate caps "

Sac Bee, Thurs, 5/17: "Powerful new law for state: The public authority
could seize private plants and market bonds for projects."

Sac Bee, Thurs, 5/17: "Shareholders of PG&E vent their frustration "

SD Union (AP), Thurs, 5/17: "Governor signs power authority bill"

SD Union (AP), Wed, 5/16: "California lawmakers seek Pacific Northwest
energy cartel"

SD Union (AP), Thurs, 5/17: "Bankruptcy judge allows PG&E to pay
property taxes"

LA Times, Thurs, 5/17: "Calif. Businesses Swallow Rate Hikes Amid
Slowing Economy"

LA Times, Thurs, 5/17: "Davis Turns Up the Heat on Supplier"

LA Times, Thurs, 5/17: "FERC Issues Power Ruling"

LA Times, Thurs, 5/17: "Shareholders Lay Blame on PG&E Managers,Davis"

LA Times, Thurs, 5/17: "A Swiftian Solution to the Energy Crisis" =20
(Commentary)

SF Chron (AP), Thurs, 5/17: "California electric rates jump to second=20
highest in country"

SF Chron (AP), Thurs, 5/17: "Bay Area News Roundup=20
Local news all the time"

SF Chron, Thurs, 5/17: "California jolted by string of dreary economic new=
s=20
"

SF Chron, Thurs, 5/17: "Scheduled blackout plan gaining favor=20
LIMITING PRICES: 3-state buyers' cartel with Northwest could create leverag=
e"

SF Chron, Thurs, 5/17: "Airport accuses Texas firm of gouging=20
SFO to build plant with Hetch Hetchy"

SF Chron, Thurs, 5/17: "Judge orders PG&E to pay overdue taxes to counties=
=20
S.F. still must dip into cash reserves for energy bills"

SF Chron, Thurs, 5/17: "PG&E Corp. accused of gouging in East=20
Boston company wants federal energy regulators to intervene"

SF Chron, Thurs, 5/17: "Nuclear, fossil fuels at heart of Bush plan=20
SWEETENER: $6.3 billion in tax credits for solar and renewable power "

SF Chron, Thurs, 5/17: "Public power booster gets a top job at S.F. PUC "

SF Chron, Thurs, 5/17: "Subpoenaed documents withheld=20
Power companies say no to Lockyer "

SF Chron, Thurs, 5/17: "Green lobby hopes Bush plan offers them more in=20
final form"

SF Chron, Thurs, 5/17: "PG&E's shareholders steadfast=20
Despite fiscal misery, meeting gives thumbs up to chairman "

Mercury News, Thurs, 5/17: "Bush's national energy blueprint won't help=20
California"

Mercury News, Thurs, 5/17: "Cogeneration will get presidential spotlight"

Mercury News, Thurs, 5/17: "Conservation lab test begins" (Editorial)=
=20

=20
Mercury News, Thurs, 5/17: "Backups for energy"

OC Register, Thurs, 5/17: "2 FERC nominees pledge gas inquiry"

OC Register, Thurs, 5/17: "Illuminating alternatives"

OC Register, Thurs, 5/17: "Bush offers varied plan for energy"

OC Register, Thurs, 5/17: "Energy Notebook:
FERC won't let small generators out of state contracts -- yet"

Individual.com (AP), Thurs, 5/17: "Calif. Enters Wholesale Business"

Individual.com (Bridgenews), Thurs, 5/17: "[B] POWER UPDATE/ Bush calls
on FTC to investigate price gouging complaints"

Individual.com (AP), Thurs, 5/17: "GOP Promises Energy Package Push"

Individual.com (AP), Thurs, 5/17: "Covanta Energy to Provide California
With 500 Megawatts of New Power"

Energy Insight, Thurs, 5/17: "Northeast could have overbuilding"

WSJ, Thurs, 5/17: "Gas Pain: Nation Wants Energy, And Drillers Find it
in People's Back Yards"

NY Times, Thurs, 5/17: "IN ENERGY PLAN, BUSH URGES NEW DRILLING,=20
CONSERVATION AND NUCLEAR POWER REVIEW"

---------------------------------------------------------------------------=
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----------------------------------------

Bush: Plan spells relief on energy=20
By James Rosen
Bee Washington Bureau
(Published May 17, 2001)=20
WASHINGTON -- President Bush gave an upbeat preview Wednesday of the energy=
=20
plan he will formally unveil today, saying it will give Americans relief fr=
om=20
high gasoline and power prices -- and show the world how the United States=
=20
solves tough problems.=20
Bush gave the plan rave reviews after he and his Cabinet received a briefin=
g=20
on it from Vice President Dick Cheney and the energy task force he headed=
=20
during nearly four months of closed-door meetings.=20
"My plan helps people in the short term and long term by expediting energy=
=20
development," Bush said as he waved a copy of the blue-covered report. "Thi=
s=20
isn't just a report that's going to gather dust. This is an action plan=20
because this is an action administration."=20
Bush planned to fly to the Midwest this morning and promote the energy plan=
's=20
release at an alternative energy plant in St. Paul, Minn., and a meeting of=
=20
business leaders in Nevada, Iowa.=20
"This is an extensive report," Bush told reporters after the Cabinet meetin=
g.=20
"It provides over 100 proposals to diversify and increase the supply of=20
energy, innovative proposals to encourage conservation and ways to make sur=
e=20
that we get energy from producer to consumer."=20
Bush vehemently denied claims by California Gov. Gray Davis and congression=
al=20
Democrats that he has been indifferent to the state's plight as it endured=
=20
rolling blackouts and energy price spikes. Bush ticked off steps his=20
administration has taken to help California, including moves to expedite=20
permits for new power plants and authorizing rebates to power consumers.=20
"We're deeply concerned about the state of California, as we are with the=
=20
rest of the nation, but we haven't had an energy policy," he said.=20
"Interestingly enough, this is the first comprehensive energy policy probab=
ly=20
ever -- certainly in a long time."=20
Bush's robust defense of his reaction to the country's potential energy=20
crisis reflects how much the issue has heightened the political stakes for=
=20
him. Escalating gasoline prices, the California blackouts and a sagging=20
economy have transformed his effort to forge a national energy plan into an=
=20
early test of his leadership.=20
Rhetorically, Bush and his Democratic adversaries agree the United States=
=20
needs a balanced energy policy that combines increased production of oil,=
=20
natural gas and other fossil fuels with conservation, development of=20
alternative energy sources and creation of more efficient automobiles and=
=20
appliances.=20
But Democrats believe that Bush and Cheney are relying too much on energy=
=20
production at the expense of environmental protection, while the president=
=20
and vice president oppose mainly Democratic calls to tap the Strategic=20
Petroleum Reserve and impose temporary price controls on energy wholesalers=
.=20
Davis on Wednesday again called for price caps.=20
"What's going on here, pure and simple, is unconscionable price gouging and=
=20
market manipulation by the big energy producers and marketers -- most of=20
them, incidentally, located in Texas," Davis said.=20
But Bush was unrelenting. "Price controls do not increase supply, nor do th=
ey=20
affect demand," he said.=20
The eventual verdict on Bush's energy program may play a big role in decidi=
ng=20
which party will control Congress after next year's elections and whether=
=20
Bush himself will encounter re-election turbulence in 2004.=20
Bush has raised the political stakes by urging Congress to pass his $1.35=
=20
trillion tax-cut package to help Americans cover their energy costs. That=
=20
challenge prompted Democratic Rep. Jay Inslee of Washington state to brand=
=20
the tax plan "a money-laundering scheme for Big Oil."=20
Tom Daschle of South Dakota, Democratic leader of the Senate, criticized Bu=
sh=20
for excluding congressional leaders from the work of the task force. White=
=20
House spokesmen say the task force met with 130 representatives from a wide=
=20
range of groups -- including oil companies, other energy providers and=20
environmentalists -- but they have refused to release a list of participant=
s.=20
As described in broad outline by Bush and Cheney in the days before its=20
release, the energy plan will emphasize long-term expansion of the country'=
s=20
power supply over short-term fixes for current shortages.=20
The plan will recommend that Congress, various government agencies and Bush=
=20
use legislation, regulatory reforms and executive orders to spur the=20
construction of more oil refineries and power plants, and increase producti=
on=20
of nuclear and coal-fired energy.=20
The Cheney task force, according to briefings for interest groups and=20
congressional offices, suggests paying for its initiatives through a=20
combination of tax incentives, direct government funding and market-driven=
=20
investments by oil companies and other energy producers.=20
Democratic lawmakers and allied environmental activists have seized upon th=
e=20
plan's focus on production -- including oil and gas exploration in Alaska's=
=20
Arctic National Wildlife Refuge and other protected areas -- to question=20
Bush's commitment to conservation and his ties to Big Oil.=20
Trying to pre-empt the Bush-Cheney plan, Democratic lawmakers released an=
=20
energy program of their own Tuesday. In a clear bid to highlight the recent=
=20
gasoline price spike, House Minority Leader Dick Gephardt of Missouri and=
=20
other Democrats unveiled their package at a gas station in Washington.=20
The Democratic alternative calls for temporary price controls, a ban on=20
energy development in natural refuges and tapping the petroleum reserve set=
=20
up after the 1970s oil crisis. The proposal would give Americans as much as=
=20
$4,000 in tax credits for buying energy-efficient homes and cars, and it=20
would offer businesses tax incentives to invest in technologies or vehicles=
=20
that boost fuel efficiency.=20

The Bee's James Rosen can be reached at (202) 383-0014 or=20
jrosen@mcclatchydc.com.

FERC nominees open to rate caps=20

Bee Washington Bureau
(Published May 17, 2001)=20
WASHINGTON -- President Bush's two nominees to the Federal Energy Regulator=
y=20
Commission said at their Senate confirmation hearing Wednesday that more=20
needs to be done to remedy California's "dysfunctional" energy market, and=
=20
they didn't rule out controls on wholesale rates.=20
But Patrick Wood III, the chairman of the Texas Public Utility Commission,=
=20
and Pennsylvania Utility Commissioner Nora Mead Brownell also said that=20
re-regulating wholesale prices based on the cost of production is a complex=
=20
process that might take too long to be of any help.=20
"It is no small task," said Wood, who is considered Bush's choice to replac=
e=20
Curt Hebert Jr. as commission chairman later this year. Hebert is a firm=20
price control opponent.=20
Sen. Dianne Feinstein, D-Calif., said their testimony has restored her=20
optimism that federal regulators may act to stem skyrocketing wholesale rat=
es=20
that during last week's power shortages hit $1,900 a megawatt-hour.=20
"I was encouraged," Feinstein said. "The market is broken in California and=
I=20
think they understand that. If they know all this and they are pragmatists,=
=20
then we have a chance."=20
The commission is split 2-1 against price controls. If Wood and Brownell=20
align themselves with the commission's lone price-controls advocate, Willia=
m=20
Massey, some form of temporary price re-regulation could pass.=20
But confirmation hearings are not the typical venue for nominees to part=20
company with the position of the president selecting them, and Bush and his=
=20
administration so far haven't budged in their opposition to price controls.

Powerful new law for state: The public authority could seize private plants=
=20
and market bonds for projects.
By Jim Sanders
Bee Capitol Bureau
(Published May 17, 2001)=20
Arming itself for battle, California took steps Wednesday that could lead t=
o=20
construction of public power plants, seizure of private ones and creation o=
f=20
a buyers cartel that would opt for additional blackouts rather than pay=20
exorbitant prices.=20
Faced with no control over wholesale prices and no ability to simply stop=
=20
buying electricity, supporters said drastic measures may be needed to avoid=
=20
the possibility of economic disaster to the state's budget until the market=
=20
can stabilize in 18 months to two years.=20
The Public Power Authority signed into law Wednesday by Gov. Gray Davis cou=
ld=20
market up to $5 billion in bonds for new projects. It also would have the=
=20
power to operate plants and, if necessary, seize private facilities using=
=20
eminent domain or emergency powers.=20
"California is in a war with energy companies who will use any tactic=20
possible to manipulate the market and drive up prices," Davis said. "To me,=
=20
there is strong evidence that people are manipulating the market and=20
withholding power to drive up prices."=20
But critics say pouring billions of public money into new power plants or=
=20
threatening electricity generators will do little to increase energy suppli=
es=20
this summer and could prompt private companies not to invest in badly neede=
d=20
plants far into the future.=20
"Every dollar we spend on public energy projects is a dollar not spent on=
=20
fixing schools and fixing traffic congestion," said Assemblyman Tony=20
Strickland, R-Thousand Oaks. "We need to get the state out of the power=20
business."=20
Threats and accusations are getting increasingly heated as the state, after=
=20
spending more than $7 billion on electricity, continues to struggle with=20
prospects of rising costs and increasing power blackouts this summer.=20
"Calling people pirates and gougers is a nice way of spinning the problem=
=20
away from Sacramento, but we have to work our way through this (energy=20
crisis), and calling people names doesn't help," said Jan Smutny-Jones,=20
executive director of Independent Energy Producers, an association of=20
wholesale generators.=20
The newly approved power authority, expected to be created in about three=
=20
months, will be governed by a five-member board comprising state Treasurer=
=20
Phil Angelides and four gubernatorial appointees.=20
Legislation to create the power authority was pushed by Senate President Pr=
o=20
Tem John Burton, D-San Francisco, and sponsored by Angelides.=20
Building public power plants will help California "regain control of its ow=
n=20
energy destiny," Angelides said.=20
Davis also promised Wednesday to consider, if approved by legislators, a=20
resolution to create a buyers cartel with Oregon and Washington. A cartel=
=20
would set a reasonable price for electricity and risk blackouts, if=20
necessary, rather than pay exorbitant prices.=20
Davis said Californians spent more than 400 percent in additional costs for=
=20
electricity last year than they did in 1999 -- and costs are continuing to=
=20
rise.=20
"We're at the mercy of forces that show no mercy," Davis said, adding that =
he=20
is willing to take drastic measures if generators don't do everything in=20
their power to cut costs and increase supply this summer. "I'm not ruling=
=20
anything in; I'm not ruling anything out."=20
Assemblymen Paul Koretz, D-West Hollywood, and Fred Keeley, D-Boulder Creek=
,=20
proposed the resolution to create a buyers cartel.=20
California would create such a cartel only if Washington and Oregon=20
participated, and neither state has committed.=20
Strickland said a cartel could backfire by resulting in additional blackout=
s,=20
huge business losses and increased crime as neighborhoods go dark.=20
Smutny-Jones said high electricity prices stemmed from market forces rangin=
g=20
from drought conditions in the Pacific Northwest to high prices for natural=
=20
gas needed to run power plants.=20
"There's a presumption that you have the Wizard of Oz behind the curtain,=
=20
playing with prices," he said. "That's not what is going on."=20

The Bee's Jim Sanders can be reached at (916) 326-5538 or jsanders@sacbee.c=
om
.

Shareholders of PG&E vent their frustration=20
By Dale Kasler
Bee Staff Writer
(Published May 17, 2001)=20
SAN FRANCISCO -- Their investments devastated by Pacific Gas and Electric=
=20
Co.'s financial mess, shareholders of the utility's parent brought their=20
tales of woe to the company's annual meeting Wednesday, peppering the chief=
=20
executive with questions about what went wrong.=20
Although many were supportive of PG&E Corp. CEO Robert D. Glynn Jr., choosi=
ng=20
to blame Gov. Gray Davis and other state policy-makers for the utility's=20
problems, others focused on PG&E's role in California's deregulation fiasco=
.=20
"All of you should have been fired for incompetence," Orinda retiree and=20
longtime shareholder Clyde Vaughn told Glynn during the question-and-answer=
=20
period. He said PG&E's executives became "infatuated with the fairy tale of=
=20
deregulation" and "joyfully sold all of us down the river."=20
Glynn, facing several hundred shareholders during a two-hour meeting in San=
=20
Francisco's cavernous Masonic Auditorium, defended the company's decision t=
o=20
put the utility into Chapter 11 bankruptcy protection and laid most of the=
=20
blame for the company's problems on Davis and the Public Utilities=20
Commission.=20
"No one wanted this thing to happen," Glynn said after Vaughn spoke from th=
e=20
audience. He pledged to "rebuild the value of this company."=20
Glynn appeared to have the support of most shareholders. They applauded whe=
n=20
he explained PG&E's decision to back away from negotiations to sell its=20
transmission grid to the state as part of a rescue package, saying: "We're=
=20
not interested in selling any of our utility assets."=20
But he also had to contend with shouts from the audience and barbed questio=
ns=20
about even such mundane matters as the appointment of Deloitte & Touche as=
=20
the company's accounting firm.=20
A few booed a fellow shareholder, Bob Orser of Oakland, for defending top=
=20
management's decision to forgo their traditional end-of-year bonuses as a=
=20
cost-cutting measure.=20
And three protesters from Global Exchange, the San Francisco community=20
activist group, were dragged out of the meeting before it ended and before=
=20
their leader, Medea Benjamin, had a chance to ask a question.=20
Afterward, Benjamin said she had been prevented from entering the hall=20
because, even though she had shareholder credentials, she didn't have an=20
identification card. She said she was arrested for trespassing, allowed to =
go=20
free on her own recognizance, and then returned to the hall after picking u=
p=20
her I.D. card. She said Glynn deliberately cut the meeting off rather than=
=20
take a question from her.=20
Utility stocks are traditionally so safe and sound that they're commonly=20
referred to as widow-and-orphan investments, and the companies' annual=20
meetings are usually tame affairs. But amid California's unprecedented ener=
gy=20
crisis, shareholders of PG&E and Edison International -- parent of=20
California's other fallen utility, Southern California Edison -- have seen=
=20
their dividends scrapped and their share prices fall by more than half in t=
he=20
past year.=20
PG&E shares closed Wednesday at $11, down 55 cents.=20
Particularly hard hit have been many PG&E employees and retirees, who sank=
=20
much of their savings into the company's stock. The downfall of PG&E has=20
meant "a serious shortfall in my income," said retiree Ken Lewetzow, 69, of=
=20
Saratoga.=20
Lewetzow said bankruptcy protection made sense for the utility. "Our dear=
=20
governor was running us into the ground," he said in an interview outside t=
he=20
hall.=20
Shareholder Richard Collins called on Glynn to do a better job of=20
communicating with the public, saying, "If the general public does not=20
support PG&E, and it does not now, I'm afraid it may go under."=20
A current employee and shareholder, Jim Findley, told Glynn that the=20
company's board of directors is too insular to cope with the company's=20
problems.=20
"Get some people (on the board) with some dirt under their fingernails," sa=
id=20
Findley, a mechanic in the natural gas division in San Rafael. "What you've=
=20
been doing isn't exactly successful."=20
Several in the audience applauded.=20
Glynn responded, "The rank and file people of PG&E make it what it is."=20

The Bee's Dale Kasler can be reached at (916) 321-1066 or dkasler@sacbee.co=
m.

Governor signs power authority bill=20

By Jennifer Coleman
ASSOCIATED PRESS=20
May 16, 2001=20
SACRAMENTO =01) California will no longer be held captive by energy supplie=
rs=20
charging high prices for power, Gov. Gray Davis said Wednesday as he=20
officially put California into the electricity wholesale business.=20
By signing a bill by Senate Leader John Burton, Davis created the Californi=
a=20
Consumer Power and Conservation Financing Authority =01) a new state agency=
that=20
can issue up to $5 billion in revenue bonds to build, purchase, lease or=20
operate power plants.=20
Plants financed by the authority will provide cost-based electricity to=20
California consumers, Davis said, which will help stabilize the state's=20
volatile energy market.=20
The power authority is modeled after one in New York, which has 10 power=20
plants, 1,400 miles of transmission lines and produces about 25 percent of=
=20
the state's power. Nebraska also has a power authority, which created a=20
market in which residents pay 22 percent less than the national average,=20
Burton said.=20
An increase in the number of power plant down for repairs this year "is=20
strong evidence that people are manipulating the market by withholding powe=
r=20
to drive up prices," Davis said.=20
"The only way we can fight back against this type of price gouging and=20
manipulation is to build more plants," he said at the bill signing ceremony=
=20
in front of a Sacramento Municipal Utility District power plant.=20
Having a public power authority will "supplement not supplant" private ener=
gy=20
sources, Davis said.=20
"In a deregulated world, the only way you can guarantee reliable affordable=
=20
power is to build it yourself if private companies won't do it," he said.=
=20
The bill gives the power authority the power of eminent domain, but Burton,=
=20
D-San Francisco, said if the state were to seize any power plants he would=
=20
prefer that it would be by using the governor's emergency power, because th=
at=20
process is quicker.=20
"Sooner or later the state has got to let these buccaneers know that we're=
=20
not going to tolerate what they're doing to us," Burton said. "The only thi=
ng=20
these exploiters understand is possibly a little counterterrorism."=20
Few Republicans in the Legislature supported the bill, saying the state=20
shouldn't get further into the power business. They also warned that it cou=
ld=20
discourage private companies from building plants.=20
The bill was sponsored by state treasurer Philip Angelides, who conceded th=
at=20
it won't save California from blackouts this summer but will help stabilize=
=20
the energy markets as more generators are built.=20
"This legislation will help ensure that California is never again held=20
hostage by an unregulated private energy market run amok," Angelides said a=
t=20
a news conference in Los Angeles before speaking at a Town Hall event.=20
The treasurer said the bill is the "beginning of the end for deregulation .=
..=20
which has proven to be a disaster."=20
He repeatedly blamed the crisis on out-of-state power generators.=20
"There is a tremendous drain on California because of generators' prices," =
he=20
said. "And that drain is heading straight to the heart of Texas."=20
Other key lawmakers urged Davis Wednesday to join with the governors of=20
Washington and Oregon to set a limit on the price the states would pay for=
=20
power this summer, creating a "buyers' cartel."=20
The states should set their own price ceiling on electricity in light of=20
federal regulators' refusal to set region-wide caps, said Fred Keeley,=20
D-Boulder Creek, the Assembly's point man on energy.=20
The states would refuse to pay, under any circumstances, more than a=20
predetermined price that would give electricity generators a "reasonable"=
=20
profit, under a resolution sponsored by the nine Democrats.=20
If generators refused to lower their prices, that would mean almost certain=
=20
blackouts in California this summer, said Assemblyman Paul Koretz, D-West=
=20
Hollywood, the measure's author.=20
But those will happen anyway, by all accounts, and the price cap would let=
=20
the state better predict and manage the outages, he said.=20
The resolution proposes that caps be installed for two years, until enough=
=20
power plants can be built to allow the market to function naturally.=20
The state has been buying power for the customers of three major utilities=
=20
since mid-January. The utilities' credit was cut off after they amassed deb=
ts=20
of more than $14 billion dollars due to high wholesale electricity prices=
=20
that they were unable to pass on to customers.=20

California lawmakers seek Pacific Northwest energy cartel=20

By Don Thompson
ASSOCIATED PRESS=20
May 16, 2001=20
SACRAMENTO =01) California should form a "buyers' cartel" with Oregon and=
=20
Washington to rein in soaring energy prices, nine Assembly Democrats said=
=20
Wednesday.=20
The states should set their own price ceiling on electricity in light of=20
federal regulators' refusal to set region-wide caps, said Fred Keeley, a=20
Democrat who is the Assembly's point man on energy.=20
The states would refuse to pay, under any circumstances, more than a=20
predetermined price that would give electricity generators a "reasonable"=
=20
profit, under a resolution sponsored by the nine Democrats.=20
That would mean almost certain blackouts in California this summer, said=20
Democratic Assemblyman Paul Koretz, the measure's author. But those will=20
happen anyway, by all accounts, and the price cap would let the state bette=
r=20
predict and manage the outages, he and Keeley said.=20
Caps would "give these power generators a dose of their own medicine," Kore=
tz=20
said. "They've been gouging us at every opportunity =01) most of us believe=
by=20
price manipulation =01) making obscene profits at our expense."=20
It would be far better for the Federal Energy Regulatory Commission to set=
=20
Western price caps, Keeley said.=20
He and Assembly Speaker Robert Hertzberg, also a Democrat, are asking FERC =
to=20
reconsider last month's limited caps that Keeley and other Democratic=20
officials say could actually drive up power prices under some circumstances=
,=20
but are insufficient to control prices at other times.=20
However, Keeley doubted FERC and the Bush administration will reverse their=
=20
opposition to caps that they believe would hinder the development of a free=
=20
energy market. In that light, Keeley said California must find another way =
to=20
cap skyrocketing electricity prices itself, or bankrupt its budget and=20
economy.=20
The strategy won't work without Washington and Oregon, however, Keeley said=
,=20
but the three acting together can effectively set energy prices throughout=
=20
the 11 Western states.=20
The Pacific Northwest states are vulnerable this summer as well, due to dry=
=20
conditions there, said Lenny Goldberg of San Diego-based Utility Consumers'=
=20
Action Network. The group first suggested the strategy a month ago.=20
"At some point it's going to take some drastic action to deal with this=20
crisis and get us through the summer," Goldberg said.=20
Keeley and Koretz said they believe it would be easier for Gov. Gray Davis =
to=20
negotiate caps with other states if he has the backing of the Legislature.=
=20
Similar efforts have been discussed within the Davis administration, said=
=20
spokesman Steve Maviglio, but Davis had no immediate reaction.=20
The lawmakers dismissed generators' objections that capping power prices=20
would prompt them to sell their electricity for higher prices to other=20
states, or dissuade generators from building more power plants in Californi=
a.=20
California is too large a market for the power producers to ignore, they=20
said.=20
If generators refused to sell electricity because of the caps, the state=20
could respond by seizing the plants themselves, said Koretz and Goldberg,=
=20
though Keeley had reservations.=20
The resolution proposes that caps be installed for two years, until enough=
=20
power plants can be built to allow the market to function naturally.=20
The state has been buying power for the customers of three major utilities=
=20
since mid-January. The utilities' credit was cut off after they amassed deb=
ts=20
of more than $14 billion dollars due to high wholesale electricity prices=
=20
that they were unable to pass on to customers.=20

Bankruptcy judge allows PG&E to pay property taxes=20

By Karen Gaudette
ASSOCIATED PRESS=20
May 16, 2001=20
SAN FRANCISCO =01) Forty-nine California counties soon will receive roughly=
$41=20
million in late property taxes due from bankrupt Pacific Gas and Electric C=
o.=20
U.S. Bankruptcy Judge Dennis Montali approved a request from the utility=20
Wednesday to pay the counties for taxes owed before it filed for bankruptcy=
=20
on April 6.=20
"Somebody's going to have to tell me why I should hold 49 counties of=20
California hostage for taxes that are due and owing," Montali told other=20
creditors, who wanted the payment postponed until the court determines how=
=20
much PG&E will pay everyone to whom it owes money.=20
Montali also allowed the utility to spend around $260 million to fund=20
energy-efficiency programs approved before April 6 that could help=20
Californians arm themselves with vital megawatts in the state's battle=20
against rolling blackouts.=20
The utility owes the taxes to 49 Northern and Central California counties f=
or=20
the period from Jan. 1 to April 5. The taxes will be used for schools, fire=
=20
districts, police and transportation costs.=20
The taxes were listed as past debts because they were due before the utilit=
y=20
filed for Chapter 11 protection. Under federal bankruptcy law, the filing=
=20
halted the collection of past debts =01) meaning Montali had to approve the=
=20
payment.=20
PG&E already paid the 49 counties a separate $37 million for property taxes=
=20
due for the period from April 6 to June 30. Those taxes were considered new=
=20
debts, so they could be paid without Montali's permission.=20
Montali said the utility and counties had his permission to negotiate with=
=20
each other over about $8 million in late fees. If a county chooses to sue=
=20
PG&E, however, it risks losing that money when Montali decides who among=20
PG&E's 150,000-plus creditors will be paid.=20
More than 100 protesters gathered outside the court demanding low-income=20
ratepayers be represented at future court hearings, waving handmade signs=
=20
that said: "Bankruptcy court does not protect the poor."=20
Inside, John Gamboa, executive director of the Greenlining Institute, told=
=20
Montali that businesses are disproportionately represented at the=20
proceedings.=20
"Our concern is simple. No one represents the poor, disabled, minorities an=
d=20
seniors in the most important bankruptcy case in history," Gamboa said.=20
On Friday, Montali will be asked to decide whether a committee of nine=20
ratepayer groups =01) including Consumers Union and industry groups represe=
nting=20
small businesses and agriculture =01) can continue to take part in the=20
proceedings. Montali said bankruptcy law restricts him from deciding who=20
serves on a creditors committee, but said a federal bankruptcy trustee coul=
d=20
add the groups.=20
PG&E argues that bankruptcy law does not allow such a committee, and that t=
he=20
state Attorney General can represent ratepayer interests in the bankruptcy=
=20
process.=20
The state has hesitated to become involved in the bankruptcy process for fe=
ar=20
it will lose the right to regulate PG&E.=20
The utility already has challenged the authority of the Public Utilities=20
Commission, asking Montali to exempt the utility from having to make=20
accounting changes that would prevent it from collecting much of its $9=20
billion debt from ratepayers.=20

Calif. Businesses Swallow Rate Hikes Amid Slowing Economy=20

By STUART SILVERSTEIN and MARLA DICKERSON, Times Staff Writers=20

?????The $5.7-billion increase in power prices that will begin showing up i=
n=20
utility bills next month will hurt both business and consumers, siphoning o=
ff=20
spending that otherwise could have helped pump up a slowing state economy,=
=20
economists said Wednesday.
?????But analysts also sounded a positive note: If the higher power costs=
=20
spur enough conservation to hold down rolling blackouts this summer, they=
=20
could minimize long-term damage to the state's economy.
?????Rate increases "are part of the solution," said Stephen Levy, director=
=20
of the Palo Alto-based Center for Continuing Study of the California Econom=
y.=20
"It goes under the heading of things that aren't pleasant, and that do=20
subtract from growth, but aren't debilitating.=20
?????"If we ran huge blackouts this summer, it would be much more disruptiv=
e=20
for the economy and for our quality of life," Levy said.
?????California's $27-billion agriculture industry, already struggling, was=
=20
spared the full brunt of the increases approved Tuesday by the state Public=
=20
Utilities Commission. Others industries contend they deserve a similar brea=
k,=20
saying business can't cut back as easily as consumers.
?????"We're just kind of stuck," said Young Su Han, owner of Azteca Market =
in=20
Santa Ana, a small grocery and meat store.
?????"We'd like to conserve, but we can't really cut down our electricity=
=20
because the meats will go bad and the drinks will be warm."
?????Both business groups and consumer activists say their constituents are=
=20
bearing an unfair share of the burden. Consumers say they never sought=20
deregulation and are now being asked to bail out a failed scheme cooked up =
by=20
business interests.
?????Industry leaders counter that residential users are being sheltered fr=
om=20
the full impact of cost increases, which may come back to bite them if=20
companies are forced to raise prices or lay off workers.=20
?????Of the $5.7 billion the new rates will raise, $4.6 billion will come=
=20
from business, agriculture and street-lighting customers and $1.1 billion=
=20
from residential rate payers.
?????Carl Guardino, head of the Silicon Valley Manufacturing Group, whose=
=20
members include Cisco Systems, Hewlett-Packard Co. and Intel Corp., contend=
s=20
that most businesses already pay much more attention to conservation than=
=20
households. He said the increases won't encourage conservation by consumers=
,=20
who could do the most to help prevent blackouts.
?????Some business owners say they already are stepping up conservation and=
=20
otherwise are cutting costs to cope with electricity charges, along with=20
rising wages and workers compensation insurance premiums.=20
?????The Charlie's Trio Cafe restaurant chain, based in Alhambra, has start=
ed=20
cutting back employees' hours. It also recently increased prices for the=20
first time in two years, meaning that customers will have less to spend=20
elsewhere.
?????"This increase isn't going to kill me," said Michael Fata, a co-owner =
of=20
the chain, but he expressed concern that higher costs "are pushing the=20
customers away." "=20
?????Economists say that sort of pattern, in which rising energy costs ripp=
le=20
through the economy, has lead to serious downturns several times since the=
=20
1970s. Edward E. Leamer, director of the UCLA Anderson Business Forecast,=
=20
noted that increases in crude oil prices preceded national economic downtur=
ns=20
in the mid-1970s, early 1980s and even, less dramatically, at the beginning=
=20
of the 1990s.
?????"The argument can be made that higher energy prices are really importa=
nt=20
drivers" of the economy, he said.
?????Still, Leamer said the economy is much less dependent on energy today=
=20
than it was at the time of past oil-price-related downturns.
?????The effect is particularly limited in California, some economists say,=
=20
because the state is the second-lowest user of electricity per capita among=
=20
the 50 states. For all types of energy, California is the fourth-lowest use=
r.
?????Though he has yet to reach a final conclusion on whether electricity=
=20
rate hikes will severely hurt California, Leamer said, his impression is th=
at=20
"higher energy costs by themselves don't have that big of an effect. But th=
e=20
[blackouts] are another story."
?????For many businesses, the reliability of electricity service is far mor=
e=20
important than the cost of power.=20
?????At Lily's Florist in Monterey Park, owner Robert Yuan figures that his=
=20
electricity bill will rise from $500 to about $750 a month. Yuan doesn't ha=
ve=20
many opportunities to conserve because he needs to keep his flowers chilled=
.
?????"If we don't keep them refrigerated, they'll die," he said. "That's=20
losing even more money."
?????Yuan, 46, said he can handle the extra $250 a month in utility costs.=
=20
He's more worried that customers hit with higher utility bills of their own=
=20
or caught up in other economic problems will buy fewer flowers.
?????Yuan's concerns are widely shared. Business recruiters who have=20
descended on California since the waves of rolling blackouts began last=20
summer said reliability, rather than rate hikes, has emerged as the hot top=
ic=20
among companies that have expressed an interest in relocating.
?????"Fears of interruption are the big concern we're hearing," said Alex=
=20
Fischer, economic development chief for the state of Tennessee who recently=
=20
led a massive recruiting mission to Southern California. "Downtime and lost=
=20
production are huge expenses," compared with rate increases.
?????To avoid sudden outages, companies such as Ontario furniture=20
manufacturer Oakwood Interiors have adjusted work schedules to avoid peak=
=20
periods when rolling blackouts are most likely to occur.
?????Chief Executive Nick Lanphier said workers who used to start their shi=
ft=20
in the afternoon are now reporting at 8 p.m. and working through the night.=
=20
That has solved one problem but created others.
?????"The workers don't like it and productivity is way down," he said.
?????Utility customers such as Lanphier will be hit with a double whammy:=
=20
They not only will pay the higher rates, but they also must pay the portion=
=20
of the rate increase that was retroactive to March 27. That portion will be=
=20
spread out in electric bills over the next year.
?????Lanphier said the big jump in electricity costs would be manageable in=
=20
isolation. But over the last year he has also been hit with huge jumps in=
=20
other operating costs, including workers compensation, health insurance and=
=20
wages. Meanwhile, he said he is being undercut by cheap foreign imports,=20
hindering his ability to raise prices enough to cover the increase in costs=
.
?????Officials representing the state's agriculture industry, which receive=
d=20
the smallest rate increases, called the decision by the California Public=
=20
Utilities Commission fair. They said the industry's circumstances and=20
precarious economic condition, as its costs have risen and its products'=20
prices have fallen, justified further concessions.
?????"Agriculture is experiencing its third tough year in a row," said Hank=
=20
Giclas, vice president of Western Growers, a produce industry trade group.=
=20
"[The caps] are a positive recognition of the fact that agriculture is uniq=
ue=20
and experiencing difficult times, but it doesn't go as far as we would have=
=20
liked it to go."=20
?????Farm users are less able than other commercial customers to cut back o=
n=20
energy and adopt conservation techniques, officials say, especially during=
=20
peak growing seasons. In fact, because of this year's drought conditions,=
=20
many are using more energy to pump ground water.
?????The higher energy costs come as California is beginning to experience =
a=20
rise in its unemployment rate and a sharp decline in employment growth, two=
=20
major economic barometers. Last week the state reported that unemployment=
=20
rose to 4.8% in April, still low by historic standards, but up from a 32-ye=
ar=20
low of 4.5% in February. What's more, in the first four months of this year=
,=20
California has added jobs at less than one-third the pace of 2000.
?????Jack Kyser, chief economist for the Los Angeles County Economic=20
Development Corp., is counting on no more than a one-year slowdown for=20
California. That's partly based on his assumption that Californians will=20
adapt quickly to the energy crunch.
---=20
?????Times staff writers Marc Ballon, Sarah Hale, Melinda Fulmer and Nancy=
=20
Rivera Brooks contributed to this report.

Copyright 2001 Los Angeles Times=20

Davis Turns Up the Heat on Supplier=20
Power: Reliant Energy says escalating rhetoric might be leading toward=20
seizure of a plant.=20

By DAN MORAIN and NANCY VOGEL, Times Staff Writers=20

?????SACRAMENTO--After months of broadly vilifying California's energy=20
suppliers, Gov. Gray Davis has launched a new offensive, taking aim at a=20
single firm: Houston-based Reliant Energy, whose executives believe the=20
governor may be building a case to confiscate the company's power plants.
?????Intensifying his assault, Davis on Wednesday called Reliant=20
"obstructionist." He warned that actions taken by Reliant and other=20
independent generators this summer will determine whether he signs a windfa=
ll=20
profits tax bill or, in the extreme, commandeers the electricity produced b=
y=20
a plant or seizes the facility itself.
?????"I've made clear to the generators that they can influence my decision=
,"=20
Davis said in an interview. "We have a very tough summer ahead of us. We ne=
ed=20
their full cooperation. . . . I reserve the right to do what is in the=20
state's best interest. I think it is fair to say that Reliant is not off to=
a=20
good start."
?????Earlier in the day, after signing a bill creating a power authority in=
=20
California, the governor warned electricity suppliers: "If they don't want =
to=20
see their plants seized, they should make sure their plants are up and=20
running this summer."
?????The increasingly hostile barbs have grabbed Reliant's attention. Some=
=20
executives believe they are being set up by the administration--for what,=
=20
they're not sure. But the company is reviewing contingency plans, ranging=
=20
from what plant operators should do if their facilities are picketed and wh=
o=20
they should call if state officials show up unannounced.
?????"We would hope," Reliant spokesman Richard Wheatley said, "that=20
draconian measures and political rhetoric and finger-pointing would not be=
=20
pursued. But there is a history of confiscatory actions, including seizure =
of=20
power contracts with other companies."
?????Earlier this year, Davis used his emergency authority to seize long-te=
rm=20
power contracts that Southern California Edison and Pacific Gas & Electric=
=20
had signed with power sellers. Those contracts were about to be auctioned b=
y=20
California's power market to reimburse generators owed money by the hobbled=
=20
utilities.
?????By seizing the contracts--estimated to be worth nearly $1 billion--Dav=
is=20
was able to ensure that power would be sold to California at relatively low=
=20
prices, rather than resold on the costlier spot market. Under his emergency=
=20
authority, Davis could use the same tactic to seize power plants, or the=20
power produced by the facilities.
?????But such an act would pose huge risks. Perhaps most troublesome, other=
=20
private companies might react by pulling investments out of California or, =
in=20
the case of out-of-state generators, stop sales here.
?????Still, as the power crisis worsens and public frustration grows, calls=
=20
for the governor to seize power plants have become more intense.
?????"Sooner or later," Senate President Pro Tem John Burton said Wednesday=
,=20
"we've got to let these buccaneers know that we're not going to tolerate wh=
at=20
they're doing to us. The only thing these exploiters would understand is=20
possibly a little counterterrorism."
?????Reliant got involved in California's deregulated market in 1998, buyin=
g=20
five power plants from Edison for $292 million. Combined, the plants are=20
capable of supplying 3,700 megawatts of electricity, enough to serve 2.8=20
million homes.
?????In the first quarter of 2001, Reliant's wholesale energy sales increas=
ed=20
by 171%, producing income of $216 million, compared to a loss of $22 millio=
n=20
for the same period last year.
?????Reliant is not alone in making huge money off California's deregulatio=
n=20
debacle. Also profiting have been Duke Energy, Williams Cos., Mirant Corp.=
=20
and Dynegy Inc.--all based outside California.
?????In the past, Davis has used an assortment of inflammatory terms to=20
broad-brush the generators. He recently called them "the biggest snakes on=
=20
the planet Earth."
?????But Reliant in particular has drawn the governor's wrath for allegedly=
=20
being more recalcitrant than the others in working with the administration.
?????"They just want to bleed us dry," Davis said in his interview with The=
=20
Times. "I'm not saying they're unique in that capacity. But they are unique=
ly=20
obstructionist."
?????Davis said that, among other things, Reliant has opposed court and=20
federal orders that it sell power to the state and recently refused to=20
forgive a portion of the hundreds of millions of dollars it is owed by=20
California's utilities.
?????Reliant also informed Davis that it is asking higher prices in part=20
because it added a credit charge, essentially questioning the state's=20
credit-worthiness.
?????Last Thursday, the governor decided to go public--to "name names," in=
=20
the words of his chief political strategist, Garry South.
?????"The reason these generators have gotten away with murder is because=
=20
people in California don't know who they are," South said. "They aren't=20
household names. . . . People are not familiar with their names, their logo=
,=20
or what they do."
?????Breaching confidentiality surrounding the state's power purchases, Dav=
is=20
announced at a press conference that the state paid $2,000 per megawatt-hou=
r=20
to avert blackouts last week, and named Reliant as the seller.
?????The price--actually $1,900 per megawatt-hour--was five times recent=20
market prices.
?????The governor continued his attack on ABC's Sunday morning news show,=
=20
"This Week." He again cited the amount Reliant had charged but this time pu=
t=20
a partisan spin on it.
?????"That is obscene," Davis said of the price. "No one can defend that. T=
he=20
company is named Reliant. It's in Texas. It's a big buddy of President Bush=
=20
and Vice President Cheney, and they can't just sit back there and say, 'Hey=
,=20
it ain't our problem.' "
?????Reliant is a major political player nationally, particularly in the=20
Republican Party, giving more than $250,000 to various national GOP=20
committees last year. Steve Letbetter, Reliant's chief executive, was one o=
f=20
President Bush's so-called "pioneers"--donors who committed that they would=
=20
raise at least $100,000 for his presidential campaign.
?????Like most independent power generators, Reliant has become a more=20
significant player in Sacramento, contributing $52,900 to state lawmakers=
=20
last year--including $10,000 to Davis last May--and spending $106,000 on=20
lobbying, plus $40,000 so far this year.
?????Reliant spokesman Wheatley said that despite the governor's invective,=
=20
his company is committed to seeking solutions to California's problems and=
=20
that it has "operated legally and ethically."
?????"Regardless of what happens," Wheatley said, "we're going to make ever=
y=20
effort to keep our contacts with the state on a high plane, despite the=20
political rhetoric, despite the name-calling and despite all the allegation=
s=20
that have been made."=20
?????In fact, Reliant executives wonder whether the state is playing fairly=
=20
itself, possibly paying the record $1,900 a megawatt hour to give the=20
governor ammunition against the company.
?????Reliant Vice President John Stout said he never expected the state to=
=20
pay that amount. He said the company bid exceptionally high in the hopes th=
at=20
it would not have to run one of its so-called peaker plants, which the=20
company uses for reserve power.
?????Reliant prefers to use it as a backup in case one of its main power=20
plants breaks down. That allows the company to avoid buying high-priced=20
replacement power on the open market in order to fulfill its obligations to=
=20
the agency that manages most of California's transmission grid.
?????But grid operators at the California Independent System Operator=20
concluded that they needed extra power to stabilize the grid and avoid=20
blackouts, and state power buyers agreed to pay Reliant's asking price.
?????Stout questions whether that was the lowest bid available or whether i=
t=20
was deliberately chosen.
?????Oscar Hidalgo, spokesman for the power-buying branch of the state=20
Department of Water Resources, said there was nothing political about the=
=20
purchase.
?????"It was a split-second decision made on the real-time market to fill=
=20
some voids we were having in our power supply at the time," Hidalgo said.=
=20
"The intent was very clear: to keep the lights on."

Copyright 2001 Los Angeles Times=20

FERC Issues Power Ruling=20
Energy: Agency says order will help some firms bring electricity to market.=
=20
Davis says it will hurt state.=20

By MEGAN GARVEY, Times Staff Writer=20

?????WASHINGTON--An order issued Wednesday by federal regulators may make i=
t=20
easier for California's alternative energy generators--considered a crucial=
=20
component of the battle against blackouts--to bring their electricity to th=
e=20
market this summer.
?????The Federal Energy Regulatory Commission order, which came a day after=
=20
Gov. Gray Davis asked the commission to "stay its hand" on matters relating=
=20
to electricity producers known as "qualifying facilities," or QFs, granted=
=20
parts of the emergency relief sought by the cash-strapped facilities.
?????The commission said the action was "designed to ensure the maximum=20
amount of QF power will be available to the California market this summer."=
=20
An industry group predicted this week that the state will face 260 hours of=
=20
electrical blackouts this summer, a situation federal regulators say their=
=20
provisions could help alleviate.
?????But the move was greeted angrily by Davis, who has been holding his ow=
n=20
negotiations with the QFs and said the effect of FERC's order is to expedit=
e=20
the sale of QF power "on the outrageously expensive spot market.
?????"I want to send a simple message to FERC: Read the Hippocratic oath:=
=20
First, do no harm," Davis said.
?????Nearly 700 alternative energy producers provide California with about=
=20
one-fourth of the power it uses. But many of those companies have reduced=
=20
their output or taken their plants offline in recent months as utilities ha=
ve=20
failed to pay their bills.
?????The nonpayment and an inability to get their electricity to market hav=
e=20
caused California producers of solar, wind and biomass energy and smaller=
=20
gas-fired generators to cut production by as much as 3,000 megawatts a day.=
=20
The companies estimate they are owed more than $1.5 billion by Pacific Gas =
&=20
Electric, which has filed for bankruptcy, and Southern California Edison.
?????"Clearly, we want to make sure the QFs get paid, but we also don't wan=
t=20
them to be going to the open market to get paid 10, 20 times the contract=
=20
rate," said Davis spokesman Steve Maviglio.
?????The governor's concern, he said, was that any action by FERC might har=
m=20
ongoing discussions between his office and the alternative energy generator=
s,=20
who have been meeting for a week to hammer out an agreement to get them bac=
k=20
online by summer.
?????The FERC action ensured that QFs have the right to sell excess=20
power--electricity they generate above their contractual obligations with=
=20
utilities--to third-party purchasers, such as traders, who could sell it to=
=20
the highest bidder.
?????FERC also said that if QFs could persuade a court to release them from=
=20
contractual obligations to the utilities, they could sell all their power t=
o=20
such third parties.
?????Davis vowed to ask state Atty. Gen. Bill Lockyer to "intervene in ever=
y=20
state court case where a QF attempts to get out of its contractual=20
obligation."
?????Federal regulators declined to void long-term contracts between the=20
state's alternative power generators and utilities, despite the fact that t=
he=20
QFs haven't been fully paid since November.
?????Federal regulators also took steps to increase the power supply in=20
Western states in the next few months by removing obstacles to rapid=20
completion of pipeline projects.=20
?????In another matter, FERC declined to order refunds for high prices paid=
=20
for power in California in April. The commission said that because Stage 3=
=20
emergencies were not called that month, no potential refunds are called for=
,=20
citing that was the condition set in an earlier order issued by federal=20
regulators.
?????Although California officials have said the state has been overcharged=
=20
$6 billion for electricity since the crisis began, federal officials have=
=20
instructed generators to refund only about $124 million or explain why the=
=20
higher prices were justified.
?????The issue of price-gouging continues to be a point of contention betwe=
en=20
federal regulators, who have said time and again they do not believe price=
=20
caps are the answer, and California officials, who say the state needs reli=
ef.

Copyright 2001 Los Angeles Times=20

Shareholders Lay Blame on PG&E Managers, Davis=20
Energy: Investors at company's annual meeting grew contentious over its=20
recent bankruptcy filing.=20

By JOSEPH MENN, Times Staff Writer=20

?????SAN FRANCISCO--Angry PG&E Corp. shareholders vented their frustration=
=20
during the company's annual meeting Wednesday, blaming management for a=20
bankruptcy filing that could wipe out their investments.
?????Dozens of retired company employees and other stockholders cheered at=
=20
calls for the resignation of Chief Executive Robert Glynn at the contentiou=
s=20
meeting in a Nob Hill auditorium as police barriers kept activists at a=20
distance outside.
?????While many of the hundreds who attended described themselves as compan=
y=20
loyalists furious at bungling by Sacramento lawmakers and Gov. Gray Davis,=
=20
others said PG&E bore responsibility for backing the state's 1996 attempt a=
t=20
electricity deregulation.
?????"The PG&E management, infatuated with the fairy tale of deregulation,=
=20
joyfully sold us down the river," shareholder Clyde Vaughn said to applause=
.=20
"The very top managers who led us into this mess were recently given=20
multihundred thousand dollar raises. The truth of the matter is you all=20
should have been fired for incompetence."
?????Profit taken in by PG&E's utility unit, Pacific Gas & Electric Co.,=20
after 1996 was sent to the parent company, which is not in bankruptcy. PG&E=
's=20
stock fell 55 cents to $11 Wednesday on the New York Stock Exchange, down=
=20
from more than $30 in September.
?????As at virtually all annual meetings of public companies, the actual=20
balance of power was never in doubt. The company's nominees for director ra=
n=20
unopposed, and management's proposals for enlarging a stock-based incentive=
=20
plan and other measures passed by a 5-to-1 ratio.
?????But Glynn was careful to avoid seeming arrogant, professing=20
disappointment with the past year's performance and treating most of his=20
sometimes voluble critics with respect.=20
?????"No one wanted this to happen," Glynn said of the bankruptcy filing.
?????Certainly not the shareholders, many of whom had regarded PG&E shares =
as=20
among their safest investments.
?????"They shouldn't have filed," said E.C. Nielsen, 84, adding that much o=
f=20
her income had been from PG&E holdings. "I've lived through two depressions=
.=20
You don't give up."
?????Of those that spoke against the management, a 28-year rank-and-file=20
employee got the warmest response from the crowd for suggesting that=20
perception had become more important than reality at PG&E and that regular=
=20
workers should be appointed to the board.
?????"Put someone up there that can get you away from a policy of plausible=
=20
deniability," mechanic Jim Findley said. "Someone with dirt under their=20
fingernails."=20
?????In his opening remarks and in answering questions from the floor, Glyn=
n=20
accused Davis, state regulators and others for the mess now threatening to=
=20
cut power to California homes and businesses on a routine basis this summer=
.
?????At its core, the problem is that the prices Pacific Gas & Electric cou=
ld=20
charge for electricity were capped by the state, while the wholesale prices=
=20
it paid for electricity were not. Those prices rose much higher than=20
envisioned when the deregulation plan was approved, and the utility's=20
attempts to win approval to charge more were rebuffed.
?????"If the state had approved the comprehensive rate stabilization plan w=
e=20
filed last November, Pacific Gas & Electric would still be credit worthy an=
d=20
not in Chapter 11" as the third-largest U.S. bankruptcy, Glynn said. The=20
filing six weeks ago listed $18 billion in liabilities.
?????He said a last-ditch plan to sell the company's transmission lines to=
=20
the state fell apart when Davis' negotiators backed off earlier commitments=
.=20
He said that the idea could be revived in bankruptcy court.
?????"We are not seeking a rescue, a bailout or a handout from the state or=
=20
anyone else," Glynn said. "We are simply asking the state to follow the law=
,=20
which allows us to recover wholesale power costs in retail rates."
?????Pacific Gas & Electric intends to file a proposed reorganization plan =
to=20
pay creditors and begin moving out of bankruptcy court by August, he said. =
In=20
the meantime, more power plants are being built.
?????Glynn said the company will fight to recover the multibillion-dollar h=
it=20
it has taken because of the skewed prices, in part from electricity supplie=
rs=20
that federal regulators say overcharged. If the government doesn't sue thos=
e=20
firms, he said, other interested parties, including consumer groups, will.
?????A few shareholder activists at the meeting proposed a raft of measures=
,=20
including steps to increase the size of the board. One such reform measure=
=20
passed, recommending that the board allow a majority of shareholders to=20
approve any takeover even if company directors object.
?????The leader of a consumer and human rights activist group said she was=
=20
initially barred from the meeting despite having proxies carrying the right=
=20
to vote on behalf of four shareholders.
?????Medea Benjamin of Global Exchange later reentered and shouted criticis=
m=20
of the company as the two-hour meeting ended before she and others were=20
recognized to speak. She was removed by security guards and charged with=20
trespassing.
?????As shareholders left, PG&E staffers handed out miniature flashlights=
=20
bearing the company's logo.
?????A spokesman said the trinkets were a tradition predating the energy=20
crisis and weren't intended either as commentary or as tools to cope with=
=20
rolling blackouts.

Copyright 2001 Los Angeles Times=20

Thursday, May 17, 2001=20
A Swiftian Solution to the Energy Crisis=20
By PAUL JOSEPHSON

?????Some skeptics criticize the plans of the Bush administration to ignore=
=20
conservation, start drilling for oil in pristine parks and renew nuclear=20
reactor construction with a program so aggressive it would put the Russians=
=20
and the French to shame. I think these plans don't go far enough, especiall=
y=20
concerning nuclear power.=20
?????With the right mix of geography, hubris and uranium, we can be energy=
=20
self-sufficient and forget about conservation entirely.=20
?????Over the next 10 years, let's build hundreds of 1,000-megawatt nuclear=
=20
power stations in Wyoming. This would end our dependence on foreign oil onc=
e=20
and for all.=20
?????Building so many simultaneously would lower capital and labor costs an=
d,=20
in 10 years, make serial production of reactors possible. Wyoming has a hig=
h=20
unemployment level, so construction of scores of reactors will provide=20
thousands of jobs. It also has plenty of open space, so it's a win-win=20
situation.=20
?????Some critics worry that nuclear power will remain costly, even if we g=
ut=20
the ability of the Nuclear Regulatory Commission to set the highest safety=
=20
standards in the world. They point out that most reactors have reached the=
=20
end of the operating lives, have never ran as efficiently or cheaply as=20
promised and will soon be decommissioned. They claim that old reactors, wit=
h=20
the spent fuel that has accumulated since the 1960s, have created a=20
multibillion dollar clean-up and waste disposal problem that will have to b=
e=20
left for another administration to solve. And they obsess about the=20
difficulty of providing workable evacuation plans in the event of an=20
accident.=20
?????But, hey, we've come a long way since Three Mile Island. Anyway, Wyomi=
ng=20
is sparsely populated, so there would be only minor health risks in the eve=
nt=20
of an accident, and mostly to coyotes, wolves and bears.=20
?????Just imagine: Given the population densities and geology of Wyoming, w=
e=20
could even site nuclear fuel fabrication and waste storage facilities in th=
e=20
same spot. Let's create National Nuclear Park, bringing technology and natu=
re=20
together in a way that satisfies conservationists, tourists and=20
businesspeople alike. A triple-win situation!=20
?????The North Platte, Green and Bighorn rivers would provide more than=20
enough water to cool the reactors, and for the dry seasons we could build=
=20
huge holding reservoirs for winter runoff. Granted, effluent cooling water=
=20
from the stations would raise river water temperatures several degrees,=20
endangering flora and fauna. But if the tundra of Alaska can take the risk,=
=20
so can the Rattlesnake Hills of Wyoming.=20
?????We can call them hot springs! Ichthyologists could study which fish an=
d=20
game to introduce in the warmer waters, making Wyoming a year-round=20
wonderland for sportsmen.=20
?????And why worry about how to get electricity from Wyoming to California=
=20
and New York? It's a heck of a lot easier to transmit electricity from Casp=
er=20
to the Bronx than to pipe and tank oil from the Arctic Circle to refineries=
=20
in the lower 48. And no need to worry about how to finance all this;=20
President Bush's alternative energy research budget was cut to the bone, so=
a=20
few billion dollars for superconductivity research is up for grabs.=20
?????A major objection to nuclear power has been the siting of stations on=
=20
coastal waters from Seabrook, N.H., to Diablo Canyon, Calif., not far from=
=20
big cities in states that have largely voted for Democratic candidates. So=
=20
let's give the states that tend to vote Republican the opportunity to have=
=20
nuclear power stations, too