Energy Issues

Please see the following articles:

Sac Bee, Fri, 5/18: Energy plan generates debate: California in peril offer=
ed=20
'no relief,' governor says

Sac Bee, Fri, 5/18: Judge dims PG&E producers' shot at relief

Sac Bee, Fri, 5/18: Politicians try to stay plugged in:Fear that the power=
=20
crisis will short-circuit their jobs pushes leaders to foster an active ima=
ge.

Sac Bee, Fri, 5/18: Bush's mixed message: Fossil Fuels tomorrow don't solv=
e=20
crisis now

SD Union, Fri, 5/18: Bush energy plan greeted with avalanche of praise,=20
criticism

SD Union, Fri, 5/18: Bush warns country about California

SD Union, Fri, 5/18: Gov. Davis attacks Bush energy plan

SD Union, Fri, 5/18: Carter recalls an energy crisis that was far worse

SD Union, Fri, 5/18: Governor signs bill on energy authority

SD Union, Fri, 5/18: State to review Escondido power plant plan

LA Times, Fri, 5/18: PUC Chief alleges Price Collusion

LA Times, Fri, 5/18: Critics Say Bush Proposal Leaves California in the Dar=
k

LA Times, Fri, 5/18: Wall St. Cautious Over Energy Sector's Outlook for Nex=
t=20
Year

LA Times, Fri, 5/18: Municipals Utilities Seek Exemptions From Blackouts

SF Chron, (AP) Fri, 5/18: Californians fault Bush energy proposal
=09=09
SF Chron, Fri, 5/18: California utilities commission chief says power plant=
s=20
shut down to=20
drive up prices
=09=09
SF Chron, (AP) Fri, 5/18: Bush faces tough fight on energy strategy. =20
ANALYSIS:Californians must sweat out summer

=09=09
SF Chron , Fri, 5/18: Probe finds 'artificial' shortages Unneeded plant=20
shutsdown drove up state electricity prices, PUC chief says

SF Chron, Fri, 5/18: PG&E plans new plants outside California Higher profi=
ts=20
from building elsewhere

SF Chron, Fri, 5/18: Bush faces tough fight on energy strategy=20
REACTION: Criticism from environmentalists=20

SF Chron, Fri, 5/18:Presidential power=20
The energy problem has tested the mettle of many U.S. leaders=20

SF Chron, Fri, 5/18:Making a case for WASTE=20
President's tax credits for biomass energy development could be boon for tw=
o=20
of the state's thriving industries=20

Mercury News, Fri, 5/18:Today's energy shortages far less ominous than in=
=20
frantic '70s

Mercury News, Fri, 5/18: Bush points to California as a warning

Mercury News, Fri, 5/18: Californians fault Bush Energy proposal

Mercury News, Fri, 5/18: Bush says the Right Stuff (editorial)

Individual.com, Fri, 5/18: Bush Energy Plan Will Make California Crisis=20
Worse; Taxpayer Boondoggles, More Deregulation Equals Higher Prices, Taxes

Individual.com, Fri, 5/18: PG&E's CEO faces off with angry shareholders at=
=20
company's annual meeting

NY Times, Fri, 5/18:THE ENERGY PLAN: THE OVERVIEW=20
BUSH, PUSHING ENERGY PLAN, OFFERS SCORES OF PROPOSALS TO FIND NEW POWER=20
SOURCES

WSJ, Fri, 5/18: Power Politics:n Era of Deregulation,
Enron Woos Regulators More Avidly Than Ever

WASH Post, Fri, 5/18: Bush Issues Energy Warning; President Unveils New=20
Policy, to Praise and Attacks on Party Lines

___________________________________________________________________________=
___
_____________________________

Energy plan generates debate: California in peril offered 'no relief,'=20
governor says
By Emily Bazar and Carrie Peyton
Bee Staff Writers
(Published May 18, 2001)=20
Gov. Gray Davis on Thursday declared President Bush's newly unveiled power=
=20
plan an inadequate proposal that turns "a blind eye to the bleeding and=20
hemorrhaging that exists in this state."=20
The Democratic governor, who addressed reporters in Sacramento after Bush=
=20
formally unveiled his proposal in St. Paul, Minn., said California will not=
=20
conquer its power crisis unless the Federal Energy Regulatory Commission=20
temporarily caps the price of wholesale electricity.=20
The Bush plan -- which calls for opening more public lands to oil and gas=
=20
exploration and tax credits for the purchase of fuel-efficient cars -- woul=
d=20
do little for the state in the short term, when it needs help the most, Dav=
is=20
said.=20
"For those of us who are already in immediate peril, it offers no relief," =
he=20
said. "If those (federal) commissioners don't do anything to solve the=20
problem ... then there will be a lot of blood on the floor and a lot of=20
corpses along the way."=20
In Washington, D.C., GOP congressional leaders vowed to speed key parts of=
=20
the energy package to Bush's desk. But the strong and conflicting response =
to=20
the 163-page report, crafted over four months by a task force led by Vice=
=20
President Dick Cheney, presaged an extensive debate on Capitol Hill.=20
"We're going to have a crisis on our hands in the next two or three months,=
"=20
said Rep. Robert Matsui, a Sacramento Democrat. "I just wish the president=
=20
had attempted to address that. If he doesn't like our idea of rate caps and=
=20
price stability, then at least he should come up with an alternative to try=
=20
to get us through the next 18 months."=20
But Republicans like North Carolina Rep. Richard Burr, vice chairman of the=
=20
House Energy and Commerce Committee, were quick to praise the package.=20
"This is the most aggressive, long-term energy policy our country has seen=
=20
from an administration in a generation," Burr said.=20
As in Washington, California lawmakers split down party lines in response t=
o=20
the president's energy plan. Democrats said the proposal would do little to=
=20
help California in the short term, while Republicans applauded its focus on=
=20
increasing the power supply through expanded reliance on nuclear energy and=
=20
other sources.=20
While environmentalists found several aspects of the blueprint troubling,=
=20
utilities including Pacific Gas and Electric Co. and power generating=20
companies said they were encouraged by the president's call to speed the=20
process of building new power plants, transmission lines and natural gas=20
pipelines.=20
"It appears at first glance to be a very balanced document with combination=
s=20
of conservation as well as the need to create new ... sources of energy,"=
=20
said Keith Bailey, chairman of Williams Co., which markets electricity from=
=20
Southern California power plants owned by AES.=20
PG&E, however, which is mired in bankruptcy proceedings because of runaway=
=20
wholesale power prices, repeated its call for federally imposed price caps =
on=20
wholesale electricity, something Bush has specifically rejected.=20
On that one point, at least, the utility has found allies in Davis and othe=
r=20
California Democrats.=20
"I'm calling on you (Bush) to find some creative way to give us temporary=
=20
price relief while our new plants come on line," Davis said.=20
State Sen. Debra Bowen, D-Marina del Rey and chairwoman of the Senate Energ=
y=20
Committee, echoed the governor's plea.=20
"We can't just focus on the long term here," she said. "The patient will be=
=20
dead before we get the life-support systems in place."=20
Republican Secretary of State Bill Jones, who is running for governor, also=
=20
commended the president for proposing a "comprehensive" plan with long-term=
=20
vision.=20
"What President Bush understands that Gray Davis does not, is that the time=
=20
to propose solutions is not in the middle of a crisis, but before, when you=
=20
see the warning signs and have time to plan a thoughtful course of action,"=
=20
he said.=20
In one of more than 100 specific proposals, Bush urged the FERC to strength=
en=20
its role in electric grid reliability, partly through new laws that would l=
et=20
it oversee mandatory industry standards.=20
Such a move could strip away some of the benefits of Davis' proposal to buy=
=20
the state's transmission grid, because it could extend federal control to=
=20
transmission lines owned by public agencies, said Michael Shames, head of t=
he=20
San Diego-based Utility Consumers' Action Network.=20
It could also threaten the autonomy of municipal utilities such as the=20
Sacramento Municipal Utility District and the Los Angeles Department of Wat=
er=20
and Power, and would face a vigorous fight in Congress, Shames said.=20
Other specifics of the plan, such as its recommendation to reassess offshor=
e=20
oil drilling, troubled environmental groups.=20
The president is probably too realistic to move immediately to reinstate=20
drilling off California's coast, but opponents will have to stay vigilant t=
o=20
prevent it, said Warner Chabot, a vice president of the Center for Marine=
=20
Conservation.=20
The plan was also blasted by the California Public Interest Research Group=
=20
for over-reliance on new power plants, drilling on public lands and increas=
ed=20
subsidies for coal and nuclear power, while the Sierra Club faulted the lac=
k=20
of proposals to raise fuel economy standards for cars and sport-utility=20
vehicles. Sierra Club Executive Director Carl Pope said such standards are=
=20
"the biggest single step President Bush could have taken to cut our oil=20
dependence and curb global warming."=20

The Bee's Emily Bazar can be reached at (916) 326-5540 or ebazar@sacbee.com=
.=20
James Rosen of The Bee's Washington Bureau contributed to this report.=20

Judge dims PG&E producers' shot at relief
By Claire Cooper
Bee Legal Affairs Writer
(Published May 18, 2001)=20
SAN FRANCISCO -- U.S. Bankruptcy Judge Dennis Montali delivered a sharp blo=
w=20
to a large number of small energy generators, signaling in an opinion=20
released Thursday that he'll probably require them to continue selling powe=
r=20
within California and at state-regulated rates.=20
The tentative ruling in the Pacific Gas and Electric Co. bankruptcy case=20
denied most of the relief requested by the first four generators to have=20
their cases decided. The Central Valley power-generating plants have warned=
=20
that financial pressures may force them to shut down in June, cutting into=
=20
the power needed to avoid rolling blackouts this summer.=20
They asked to be released from their contracts with PG&E or for higher pric=
es=20
for the power they sell to the utility.=20
Montali responded by sweeping beyond the technical confines of bankruptcy=
=20
law, saying, "The court cannot and will not ignore other considerations,"=
=20
such as "the need to keep (the generators) on-line, producing power for=20
California."=20
While the four facilities provide less than 1 percent of the utility's=20
electricity, the tentative opinion sent out a broad message to scores of=20
small power producers -- which together provide more than 20 percent of=20
PG&E's electricity -- that Montali will give them just enough relief to kee=
p=20
them generating.=20
Montali, however, said he isn't likely to release them from contracts to PG=
&E=20
that stand in the way of selling their electricity on the spot market --=20
possibly to the state Department of Water Resources -- at "potentially=20
extreme prices."=20
Montali's decision, posted Thursday, was dated Wednesday, the same day the=
=20
Federal Energy Regulatory Commission issued an order ensuring energy=20
producers the right to sell to the highest bidder if they can get out of=20
their contractual obligations.=20
Montali also declined to raise the price PG&E must pay under current=20
contracts. While conceding the energy producers are entitled to a reasonabl=
e=20
rate, he cited FERC findings that under certain conditions, spot market rat=
es=20
in the California market have been "unjust and unreasonable."=20
Instead, Montali held out the likelihood of far more modest relief. He=20
ordered immediate negotiations to increase the cash flow sufficiently at th=
e=20
four Central Valley power facilities -- Mid-set Cogeneration, Coalinga=20
Cogeneration, Salinas River Cogeneration and Sargent Canyon Cogeneration --=
=20
with the goal of ensuring they will be able to "perform when needed."=20
The four generators had warned in court documents of "June shutdown=20
scenario," which would have cut into the power needed to avoid rolling=20
blackouts this summer.=20
They are owed $58 million out of a total $1 billion PG&E debt to 300=20
producers of wind and solar energy, cogeneration and biomass that provide=
=20
roughly 13 percent to 22 percent of the electricity distributed by the=20
utility.=20
Most, including a plant that generates energy from rice hulls, are small or=
=20
mid-sized, but several are owned by some of the nation's largest=20
corporations, including Texaco. They're paid on the basis of various formul=
as=20
set by contracts or a formula set by the Public Utilities Commission.=20
Ed Feo, a lawyer representing the creditors' committee, which will be=20
included in the negotiations, said Montali's tentative ruling "will probabl=
y=20
be the template" for the way he deals with all of the small producers=20
operating at PUC-approved rates that don't cover their costs.=20
The committee represents thousands of businesses and individuals who are ow=
ed=20
money by PG&E. It had asked in a hearing a week ago that all of the small=
=20
generator cases be consolidated for a single ruling because of the likely=
=20
impact.=20
Montali refused, saying the complications would be "more than I can=20
comprehend" because each case presents different facts.=20
About two dozen facilities have petitioned Montali for relief so far,=20
including 15 that have curtailed or ceased operations at times this spring,=
=20
claiming PG&E's payments were insufficient to keep them on-line.=20
Several have hearings scheduled within the next three weeks, but at least t=
wo=20
-- Berry Petroleum and Crockett Cogeneration -- have reached settlement=20
agreements with the utility.=20
In response to Montali's tentative ruling on the four Central Valley=20
generators, PG&E spokesman Ron Low said only that the utility "will meet wi=
th=20
them and try to resolve the issues."=20
Lawyers representing the generators did not return phone calls.=20

Politicians try to stay plugged in: Fear that the power crisis will=20
short-circuit their jobs pushes leaders to foster an active image.
By Emily Bazar
Bee Capitol Bureau
(Published May 18, 2001)=20
Rising unemployment is one of the many dire predictions spawned by the=20
state's worsening energy crisis.=20
Among those worried about losing their jobs: California politicians.=20
Fearing for their hides, state leaders are moving forcefully into the energ=
y=20
fray, hoping both to fend off irritated voters and emerge from their=20
typically low-profile posts.=20
Lt. Gov. Cruz Bustamante recently filed suit against five energy generators=
.=20
Attorney General Bill Lockyer offered rewards of at least $50 million to=20
informants who could help prove market manipulation by power sellers. And=
=20
state Treasurer Phil Angelides has aggressively pushed for a state-run powe=
r=20
authority.=20
"We're seeing among a range of officeholders on the Democratic and Republic=
an=20
side that they want to be seen as being out front of this issue," said Mark=
=20
Baldassare, a senior fellow at the Public Policy Institute of California. "=
As=20
they go through this re-election year coming up, they don't want to be=20
accused by people who are competing for office of not doing anything."=20
Since January, legislators have introduced at least 211 energy-related bill=
s,=20
including a proposal to finance the construction of an Auburn dam and anoth=
er=20
to exempt farmers from paying sales and use taxes on diesel fuel during the=
=20
last half of this year.=20
Whenever possible, Gov. Gray Davis schedules news conferences at power=20
plants, which provide optimal backgrounds for photo opportunities.=20
Power plants also are the focus of the state's latest television and radio=
=20
ads encouraging energy conservation, which boast that California is "workin=
g=20
aggressively" to build 13 major new plants.=20
Although Davis' chief political adviser, Garry South, says it's a=20
coincidence, the Democratic governor's political consultants recently teste=
d=20
a spot that also touts the state's record on power generation.=20
The energy crisis has led lower-profile politicians to increase their=20
visibility.=20
Republican Secretary of State Bill Jones, who is running for governor, and=
=20
Democratic state Controller Kathleen Connell, who ran for Los Angeles mayor=
,=20
have both used the crisis to criticize Davis' leadership.=20
As lieutenant governor, Bustamante generally remains out of the public eye=
=20
and struggling for attention.=20
But the Democrat sponsored a bill that would make energy price gouging a=20
felony and filed a civil lawsuit against five out-of-state generators,=20
alleging a price-fixing conspiracy.=20
Bustamante said he is merely stepping up to calls from constituents who are=
=20
clamoring for him to act.=20
Political consultant Richie Ross, who works for Bustamante and other=20
Democrats, is convinced the energy crisis will have political consequences=
=20
and could ultimately ruin careers.=20
He believes those lawmakers who take action to "defend the public" will hav=
e=20
a better chance of political survival than those who don't.=20
"The public is looking for who is on their side," he said. "They're not=20
interested in all the complexity."=20
Republican political consultant Wayne Johnson recommends that all politicia=
ns=20
who want to be re-elected engage themselves and get to know the power issue=
=20
"backward and forward."=20
Consultants say pollsters are busier than usual, as politicians rush to=20
determine their standing -- and that of their opponents -- with voters.=20
So far, those who have seen the results say Republicans and Democrats are=
=20
taking an equal beating.=20
"Every politician in the state's popularity rating is lower than it once=20
was," said Davis pollster Paul Maslin.=20
Though lawmakers like to say they inherited the crisis from the previous=20
administration and Legislature, that explanation doesn't resonate with=20
Californians, who are more interested in solutions.=20
Many voters are saying they don't care who was in power at the time=20
deregulation was conceived and they don't care who is in power now, South=
=20
said. They just want it to be over.=20
"This is not a partisan thing. It's a pox on everybody's house," said David=
=20
Townsend, a Democratic political consultant. "People are basically saying,=
=20
'Fix it.' "=20
The public's level of frustration is expected to escalate in the coming=20
months, when the effects of the power crisis multiply.=20
Baldassare is in the midst of surveying Californians on the energy crisis a=
nd=20
has dropped in on a number of focus groups. Many participants reported that=
=20
they're generally unhappy with the situation but still aren't sure whom to=
=20
blame.=20
According to Sherry Bebitch Jeffe, a political scientist at the University =
of=20
Southern California, politicians are doing what they can to make sure it's=
=20
not them.=20
"Each legislator out there is trying to insulate himself or herself from th=
e=20
worst blame for the energy crisis," she said. "They're ... attempting to=20
inoculate themselves from inevitable attacks from opponents."=20

The Bee's Emily Bazar can be reached at (916) 326-5540 or ebazar@sacbee.com=
.=20

Bush's mixed message: Fossil fuels tomorrow don't solve crisis now

(Published May 18, 2001)=20

President Bush seeks to focus public attention on tomorrow's energy challen=
ge=20
while doing little to prevent a looming electricity crisis that may start i=
n=20
California this summer and spread to other parts of the country.=20
The existing crisis is so serious, and so neglected by the president, it wi=
ll=20
be hard for Californians to focus on his glossy new energy blueprint, which=
=20
he unveiled Thursday with campaign-style fanfare. Documents such as these=
=20
(this one has more than 100 specific recommendations), when successful, end=
=20
up serving the broader purpose of launching public discussion and political=
=20
debate.=20
This time, though, the president has no choice but to enter this debate in=
=20
the present, not the future. California waits, wonders and bleeds as billio=
ns=20
of dollars in excess electricity profits go to generating companies and=20
traders.=20
What's so perplexing about this president is the emerging philosophical=20
inconsistency between how he sees the energy future and the present. Line b=
y=20
line, recommendation by recommendation, Bush's long-term energy strategy=20
proposes to fully insert the government as a guiding hand of tomorrow's=20
energy marketplace. Rather than leave the market to itself, Bush seeks to=
=20
shape it via direct subsidies, tax incentives or new fossil-fuel=20
opportunities on public lands.=20
Yet today for California, the president sticks to a hands-off approach,=20
rejecting intervention in a horribly distorted electricity marketplace. Why=
?=20
Viewed as an a-la-carte menu, Bush's energy strategy offers something for=
=20
everyone. Appetizers range from tax breaks to fuel-conscious motorists who=
=20
want to buy hybrid cars to billions of dollars in new research to burn coal=
=20
more cleanly. The main course, however, is more fossil fuels and more nucle=
ar=20
power plants. And some cutting-edge stuff, such as new funds for alternativ=
e=20
fuels research, are tied to one controversial source -- royalties from new=
=20
gas and oil development in Alaska's Arctic National Wildlife Refuge.=20
The charts and graphs all speak to matching future supply with demand, as i=
f=20
the challenge is two dimensional. It is not. The third piece, barely=20
mentioned by Bush, is global warming. Energy policy must address, not avoid=
,=20
the compelling evidence that our fossil-fuel consumption is dangerously=20
warming the planet. Bush's plan doesn't mandate improvements in any vehicle=
's=20
fuel efficiency by a single mile per gallon. Viewed by other countries that=
=20
take global warming more seriously, Bush's energy plan will be the equivale=
nt=20
of political gasoline.=20
We need to have a serious discussion about the nation's long-term energy=20
future. Bush's plan, whatever its shortcomings, started the debate. But eve=
n=20
more than talk, California and the West need federal action to curb runaway=
=20
wholesale electricity prices this summer. Bush yesterday failed to step up =
to=20
the challenge.=20

Bush energy plan greeted with avalanche of praise, criticism=20

By Toby Eckert
COPLEY NEWS SERVICE=20
May 17, 2001=20
WASHINGTON =01) Battle lines hardened Thursday over President Bush's energy=
=20
policy, leaving little apparent room for compromise.=20
House Democrats began the day with a high-tech assault on the plan that=20
featured three San Diego-area residents pleading via satellite for immediat=
e=20
relief from soaring utility bills and blackouts. An environmental group=20
staged a more low-tech stunt, dumping five tons of coal in front of Vice=20
President Dick Cheney's residence.=20
Republicans, meanwhile, embraced the plan. But some cautioned that its=20
legislative elements were likely to be tinkered with and that some relief f=
or=20
consumers may have to come quicker than Bush envisions.=20

Much of the Democratic criticism centered on Bush's failure to offer=20
immediate help for the power crisis rocking California and the high gas=20
prices plaguing motorists. They also repeated their accusation that, by=20
stressing more use of oil, coal and nuclear power, Bush was sacrificing the=
=20
environment for the sake of energy industry profits.=20
To dramatize those arguments, Reps. Susan Davis and Bob Filner, both San=20
Diego Democrats, used a satellite broadcast to beam three constituents into=
a=20
packed news conference on Capitol Hill. The lawmakers have been pressing fo=
r=20
price controls on wholesale power sold in California, a strategy Bush has=
=20
rejected.=20
"We need help now," said Patti Finnegan, who runs Niederfrank's Ice Cream i=
n=20
National City. "I understand that we need more supply, but in the meantime,=
I=20
don't think thieves should be out legally taking our money like this."=20
Finnegan said the business' power bills had quadrupled and that "rolling=20
blackouts have the potential to put me out of business" by melting her=20
inventory.=20
Michael Brucker, executive director of San Diego's Jackie Robinson YMCA, an=
d=20
San Diego resident Jaime Salazar told similar tales of soaring power bills=
=20
and sacrifice.=20
"It's a really great plan if you're a seller of energy. But if you're a=20
consumer of energy ... this is not a good energy plan," said Davis.=20
"It was crafted behind closed doors with a lot of input from energy=20
executives and in a highly secretive way that doesn't serve the public=20
interest," added House Minority Leader Richard Gephardt, D-Mo. "... It real=
ly=20
looks like the Exxon-Mobil annual report, and maybe that's really what it=
=20
is."=20
Republicans countered that the proposal was balanced. They cited Bush's cal=
l=20
for tax credits for energy conservation and efficiency and his promise to=
=20
take environmental impacts into account as domestic oil drilling is expande=
d.=20
Rep. Randy "Duke" Cunnigham, R-Escondido, called the blueprint "comprehensi=
ve=20
and mindful of the environment." While Bush "didn't talk about it in the=20
plan," the administration has taken several steps to aid to California,=20
Cunningham said, including expediting permits for new power plants.=20
"We've got to throw out the extremists on both side of this and solve the=
=20
problem," he said.=20
Republican leaders said they would start hearings on the plan as early as=
=20
next week and hope to have a bill finished by mid-summer.=20
Fearing a voter backlash if they appear to be ignoring consumer complaints=
=20
about high energy costs, some GOP lawmakers are advocating short-term=20
measures like immediate tax incentives for home energy conservation and=20
suspension of the federal gasoline tax.=20
"Congress will be working with the president to enhance his plan. ... I wil=
l=20
be offering some amendments," said Sen. Kay Bailey Hutchison, R-Texas.=20
Despite the heated rhetoric from the Democrats, Senate Majority Leader Tom=
=20
Daschle, D-S.D., refused to declare the Bush plan "dead-on-arrival."=20
"Obviously, there is a lot there ... that we can work together on. We're=20
hopeful that we can do that," Daschle said.=20
Outside interest groups will have a big influence on how the debate unfolds=
=20
and on molding public perceptions of the Bush plan.=20
Environmentalists vowed to join Democrats in a sustained attack that includ=
es=20
rallies, advertising and attention-grabbing stunts like the coal dumping at=
=20
Cheney's residence, which was orchestrated by Greenpeace.=20
Cheney led the White House task force that developed the energy policy.=20
"We are going to continue keeping up the pressure on the Bush-Cheney=20
administration over the summer because we think this is going to be a hot=
=20
issue," said Greenpeace spokesman Gary Skulnik.=20
Supporters of the Bush plan in the business community, including energy=20
companies, have organized the Alliance for Energy and Economic Growth to=20
counter the environmentalists' message and lobby for the Bush plan.=20
"What this country needs to do is diversify its energy portfolio. We've got=
a=20
huge challenge in front of us," said Bruce Josten, executive vice president=
=20
for government affairs at the U.S. Chamber of Commerce.=20

Bush warns country about California=20

By Finlay Lewis
COPLEY NEWS SERVICE=20
May 17, 2001=20
ST. PAUL, Minn. =01) President Bush took to the road Thursday to sound dire=
=20
warnings about "a darker future" for the nation if it fails to follow his=
=20
path of more oil drilling and nuclear plants.=20
After touring a power plant fired with new technology, the president urged=
=20
the country to rally around his just-unveiled energy plan or risk seeing=20
power problems now plaguing California spread.=20
"If we fail to act, this great country could face a darker future: a future=
=20
that is unfortunately being previewed in rising prices at the gas pump and=
=20
rolling blackouts in California," he said.=20
"If we fail to act, Americans will face more and more widespread blackouts.=
=20
If we fail to act, our country will become more reliant on foreign crude oi=
l,=20
putting our national energy security into the hands of foreign nations, som=
e=20
of whom do not share our interests.=20
"And," he added, "if we fail to act, our environment will suffer, as=20
government officials struggle to prevent blackouts in the only way possible=
=01)=20
by calling on more polluting emergency backup generators, and by running le=
ss=20
efficient, old power plants too long and too hard."=20
But, trying to build support for the report previewed the night before by=
=20
White House officials =01) and to stay ahead of the criticism of some of it=
s=20
politically controversial recommendations =01) the president also sounded a=
n=20
optimistic note that stressed technology and conservation as the keys to=20
avoiding California's missteps.=20
Bush called for "a new harmony between our energy needs and our environment=
al=20
concerns," arguing that energy development and environmental protection wer=
e=20
not at odds.=20
He made only passing references to the report's proposals to drill in an=20
Arctic wildlife refuge, bury the nuclear power industry's waste and=20
commandeer private lands in order to expand interstate electricity=20
transmission grids.=20
Proposals such as those have aroused the ire of many Democrats and=20
environmentalists who charge Bush and Vice President Dick Cheney, the=20
report's main author, with using the energy situation as a pretext to give =
an=20
economic boost to the energy industry that made them wealthy.=20
Meanwhile, Bush cited his own roster of villains =01) President Clinton, Ir=
aq's=20
Saddam Hussein and California.=20
He noted pointedly that the nation, beginning in the early 1970s, made=20
strides in energy efficiency, but declared that "this improvement slowed in=
=20
the 1990s" =01) during the Clinton administration.=20
He also defended his proposal to drill in Alaska's Arctic National Wildlife=
=20
Refuge by noting that doing so would produce 600,000 barrels a day "for the=
=20
next 47 years."=20
He added, "That happens to be exactly the amount we import from Saddam=20
Hussein's Iraq."=20
Bush started his visit here by dropping by a power facility that combines=
=20
innovative heat and power technologies to burn coal, natural gas, oil, and=
=20
renewable wood biomass to provide low-cost heating to 146 large buildings a=
nd=20
298 single-family residences in downtown St. Paul, Minn., and adjacent area=
s.=20
In his speech, Bush referred to the facility and noted other technological=
=20
advances that have led to a solar powered house that produces more energy=
=20
than it uses and to "hybrid cars" that can convert to battery power to redu=
ce=20
emissions and get up to 70 miles per gallon.=20
"These are our early glimpses of a future in which Americans will meet our=
=20
energy needs in ways that are efficient, clean, convenient and affordable.=
=20
That future is achievable =01) if we make the right choices now."=20
Later, he praised the state as an "impressive conservation leader," but=20
added, "California has not built a major new power plant in a decade. And n=
ot=20
even the most admirable conservation effort could keep up with the state's=
=20
demand."=20
Bush argued that his plan "will speed up progress on conservation where it=
=20
has slowed and restart it where it has faltered."=20
At the same time, he described the report as an effort to cut through the=
=20
federal government's regulatory regime to make it possible for Americans to=
=20
reap conservation's rewards.=20
Warning that the country's growing dependence on foreign oil sources poses =
a=20
national security threat, Bush described technology as a way out of the=20
dilemma and added, "New technology makes drilling for oil more productive a=
s=20
well as environmentally friendly than it was 30 or 40 years ago."=20
Bush argued that the renewal and expansion of existing nuclear facilities=
=20
"can generate tens of thousands of megawatts of electricity at a reasonable=
=20
cost without pumping a gram of greenhouse gas into the atmosphere."=20
Reprising one of his signature campaign promises, Bush said, "Just as we ne=
ed=20
a new tone in Washington, we also need a new tone in discussing energy and=
=20
the environment =01) one that is less suspicious, less punitive, less ranco=
rous.=20
We've yelled at each other enough."=20

Gov. Davis attacks Bush energy plan=20

By Alexa Haussler
ASSOCIATED PRESS=20
May 17, 2001=20
SACRAMENTO =01) Gov. Gray Davis attacked President Bush's energy plan Thurs=
day,=20
accusing the administration of "turning a blind eye to the bleeding and=20
hemorrhaging that exists in this state."=20
The Democratic governor said Bush's pledge to speed up power plant permits=
=20
and conserve at federal facilities offers no short-term relief for=20
California's rolling blackouts and record power bills.=20
By not doing anything Bush is "allowing the price gouging energy companies,=
=20
many of whom reside in Texas, to get away with murder," Davis said.=20
"Californians wants to know if (Bush) is going to be on their side," Davis=
=20
said.=20
Davis repeated his plea for the federal government to impose caps on=20
wholesale energy prices that he says have driven the state's largest=20
investor-owned utility into bankruptcy and two others on the brink of=20
collapse.=20
"If he wants to be helpful to California, he could send a strong signal tha=
t=20
the Federal Energy Regulatory Commission should grant some kind of relief,"=
=20
he said.=20
California has been struck by six days of rolling blackouts since January,=
=20
and officials predict more as temperatures rise this summer. With little=20
notice, the outages have swept through the state snapping off power to home=
s=20
and businesses from San Francisco to San Diego.=20
Bush announced his long-term energy plan Thursday in St. Paul, Minn., and h=
e=20
has yet to visit California, the state in the grips of the nation's worst=
=20
energy crisis.=20
But shortly into the speech, Bush warned that California is previewing the=
=20
power troubles the nation could face if it doesn't boost its energy supply=
=20
and cut demand.=20
"Californians are learning, regrettably, that sometimes when you flick on t=
he=20
light switch, the light does not come on at any price," Bush said.=20
He said his 163-page energy plan provides solutions that will help ease the=
=20
state's power woes.=20
"I'm deeply concerned about the impact of blackouts on the daily lives of t=
he=20
good people of the state of California, and my administration is committed =
to=20
helping California," Bush said.=20
Davis agreed that California is likely only the first state to experience a=
=20
power crisis.=20
"We're the first one in line to suffer. We want to look out for the interes=
ts=20
of other states that could be affected in a year or two," he said.=20
He urged the president to look at "creative solutions," such as ordering th=
e=20
power generators to refund some of the recent high wholesale power prices.=
=20
"His long term approach is basically on-track, but for those of us who are =
in=20
immediate peril, it offers no relief," Davis said.=20
California is in danger of spiraling into a recession because of the high=
=20
wholesale energy costs are "literally dragging down our economy," he said.=
=20
California Senate Republican Leader Jim Brulte said he thinks the president=
's=20
plan will help California, particularly in helping to speed construction of=
=20
new power plants.=20
Brulte said it's a mistake for California to blame Bush and the federal=20
government for its problems.=20
"Gov. Davis and his administration made significant mistakes on this energy=
=20
issue and rather than trying to find a solution, he's playing the political=
=20
blame game," Brulte said.=20

Carter recalls an energy crisis that was far worse=20

By Calvin Woodward
ASSOCIATED PRESS=20
May 17, 2001=20
WASHINGTON =01) Less than two weeks into his presidency, Jimmy Carter donne=
d a=20
sweater and went on TV to tell Americans they should turn down their=20
thermostats and learn to live thriftily.=20
Now, nearly a quarter century after the energy crisis that dogged him, Cart=
er=20
says Thursday's problems are not so bad.=20
"No energy crisis exists now that equates in any way with those we faced in=
=20
1973 and 1979," Carter said Thursday in an article in The Washington Post.=
=20
He noted that world energy supplies are adequate and stable, and "automobil=
es=20
aren't waiting in line at service stations."=20
President Bush released his energy plan Thursday, emphasizing the need to=
=20
increase production and proposing incentives for energy to be used more=20
efficiently.=20
He is not proposing the tough efficiency standards or penalties for energy=
=20
waste that Carter fought for. But the former Democratic president said Bush=
=20
does not have as big a problem on his hands.=20
Two major oil crises struck the U.S. economy in the 1970s =01) first in 197=
3 and=20
then in the late 1970s, during Carter's presidency =01) as major oil export=
ers=20
reacted to the Iran hostage crisis, causing gas station lineups and high=20
prices. Carter was defeated in 1980, partly because of fallout from the=20
energy crisis.=20
Now, he says Bush should seek a balance between conservation and new energy=
=20
production, just as he did.=20
Although Carter's plan was known mostly for its push to curb demand, he als=
o=20
acted to spur coal production and speed the approval of nuclear power plant=
s,=20
as well as encourage alternative energy.=20
Carter, in his column, also renewed his opposition to Bush's plans to drill=
=20
in Alaska's Arctic National Wildlife Refuge. In 1980, Carter signed a law=
=20
that protected the refuge's 1.5 million-acre coastal plain, where the oil i=
s,=20
while opening 95 percent of Alaska's coastal areas to oil exploration.=20
Carter wrote that "some officials are using misinformation and scare tactic=
s=20
to justify such environmental atrocities as drilling in the Arctic National=
=20
Wildlife Refuge."=20
He added that drilling advocates "are careful to conceal the facts that=20
almost none of the electricity in energy-troubled California is generated=
=20
from oil."=20
In his February 1977 address to the nation, Carter said the energy shortage=
s=20
could be dealt with "if we all cooperate and make modest sacrifices, if we=
=20
learn to live thriftily and remember the importance of helping our=20
neighbors."=20
Then, in April, he declared "the moral equivalent of war" on the energy=20
crisis and outlined tough measures, including a tax on gas-guzzling cars.

Governor signs bill on energy authority=20

Legislation allows state to build plants
By Bill Ainsworth and Ed Mendel=20
UNION-TRIBUNE STAFF WRITERS=20
May 17, 2001=20
SACRAMENTO -- Declaring California at war with price-gouging energy=20
producers, Gov. Gray Davis signed legislation yesterday that he said would=
=20
allow the state to fight back by building its own power plants.=20
"We're retaking control of our own energy destiny," Davis said. "The power=
=20
will be generated here. It will stay here, and it will be made available to=
=20
the people of California at reasonable prices."=20
The bill is the most far-reaching legislation sparked by the energy crisis.=
=20
Many cities, including Los Angeles and Sacramento, have publicly owned=20
utility districts, but the state has never owned or operated plants on a=20
large scale.=20
The legislation, which takes effect in 90 days, creates a state power=20
authority that can finance, build or seize plants and is controlled by four=
=20
appointees of the governor and the state treasurer. It's modeled on a New=
=20
York agency that operates 10 power plants.=20
California's new authority could issue up to $5 billion in bonds to pay for=
=20
the construction of new plants. The bonds would be paid off by revenue from=
=20
the power produced by the plants.=20
The goal of the new state authority is to break the state's dependence on=
=20
electricity imports controlled largely by out-of-state companies. Californi=
a=20
imports 20 percent of its electricity.=20
Davis said he believes the authority could start building peaker plants by=
=20
September. Such plants operate when power demand is at its highest.=20
Senate President Pro Tempore John Burton, D-San Francisco, who authored=20
Senate Bill 6X, said it would have the "longest and most lasting impact" on=
=20
California's ability to reduce electricity prices and end rolling blackouts=
.=20
State Treasurer Philip Angelides, who sponsored the bill, said it "will hel=
p=20
ensure that California is never again held hostage by an unregulated privat=
e=20
energy market run amok."=20
Assembly Republican Leader Dave Cox of Fair Oaks has derided the plan as=20
"socialism."=20
Davis said he was disappointed that no Republicans supported the bill, sayi=
ng=20
it's a sign that they have retreated to their "ideological point of view an=
d=20
refuse to be problem-solvers."=20
At the news conference, Davis said a California Energy Commission report=20
shows huge increases in the number of power plants out of service in the=20
first four months of 2001 over a similar period last year.=20
"To me, this is strong evidence that people are manipulating the market by=
=20
withholding the power to drive up prices," he said.=20
Energy producers have denied withholding power, saying they are maintaining=
=20
their aging plants because they have to operate them longer and harder to=
=20
provide California with more power.=20
Davis called on power companies to run their plants during the summer when=
=20
blackouts are expected routinely or face the penalties.=20
"If they don't act responsibly and do everything in their power to help us=
=20
get through the summer, which means operating at full capacity, then I'll=
=20
have no choice but to sign a windfall profits tax and seize a plant," he=20
said.=20
To curb soaring power costs, two Assembly members introduced a resolution=
=20
urging Davis to form a buyers' cartel with Oregon and Washington to limit t=
he=20
price the three states will pay for power.=20
Assemblymen Fred Keeley, D-Boulder Creek, and Paul Koretz, D-West Hollywood=
,=20
said the buyers of power must act because federal regulators have refused t=
o=20
cap the wholesale prices that generators can charge.=20
"We will pay these power generators a fair price, but we will no longer all=
ow=20
ourselves to be cash cows," Koretz said.=20
Davis said he would consider the plan.=20
The formation of a buyers cartel was proposed last month by a San Diego=20
consumer group, the Utility Consumers' Action Network, which also said the=
=20
state should consider planned blackouts to give consumers time to prepare.=
=20
A generator spokesman said state officials should have begun planning earli=
er=20
for choosing between paying high prices for power and more blackouts.=20
"In a crisis I think this kind of decision has to be made," said Gary=20
Ackerman of the Western Power Trading Forum. "It's economic triage."=20
Meanwhile, federal energy regulators, whose reaction to California's proble=
m=20
has been criticized by state officials, waded into the dispute over the rol=
e=20
of small-capacity generators yesterday.=20
The Federal Energy Regulatory Commission allowed operators of the plants to=
=20
sell electricity to third parties if they have more power than they need to=
=20
meet their contracts.=20
But FERC did not approve a plan releasing the generators, known as=20
"qualifying facilities," from long-term contracts with the state's two=20
biggest utilities, which have had trouble paying their bills.=20
California Governor Gray Davis had urged FERC to stay out of the issue,=20
saying state officials were working with small power producers and=20
cogeneration plants to solve the problem.

State to review Escondido power plant plan=20

UNION-TRIBUNE=20
May 17, 2001=20
ESCONDIDO -- The California Energy Commission was expected to start the=20
21-day review period today for a 49-megawatt power plant proposed for=20
Enterprise Street.=20
Jonathan Brindle, the assistant planning director, told the City Council=20
yesterday that CalPeak Power of San Diego had supplied all the necessary=20
paperwork to the commission.=20
The commission has scheduled a public hearing for 6 p.m. May 24 in the City=
=20
Council chambers.=20
To the dismay of Escondido officials, CalPeak withdrew its application with=
=20
the city recently and is seeking a state permit.=20
Escondido officials maintain that CalPeak will still have to obtain city=20
approval, but the commission has said it will have final say under an=20
executive order signed by Gov. Gray Davis.=20

PUC Chief Alleges Price Collusion=20
Power: She cites evidence that plants were shut down to create "artificial=
=20
shortages." An industry spokesman calls the accusation "idiocy."=20

By RICH CONNELL and ROBERT LOPEZ, Times Staff Writers=20

?????State investigators have uncovered evidence that a "cartel" of power=
=20
companies shut down plants for unnecessary maintenance to ratchet up prices=
,=20
the head of the California Public Utilities Commission asserted Thursday.
?????PUC President Loretta Lynch said her agency, working with the state=20
attorney general's office, is probing patterns of plant outages that have=
=20
created "artificial shortages," particularly when the state has issued=20
emergency alerts because of seriously low levels of electricity.
?????"There are instances where plants could have produced, and they chose=
=20
not to," Lynch said in an interview at The Times.
?????"And it is clear that there are instances that plants, when called to=
=20
produce, chose not to produce," even when they were obligated to do so unde=
r=20
special contracts with the state and utility companies.
?????Lynch said the ongoing investigation has already produced enough=20
information for the PUC and attorney general's office to take legal action=
=20
against the generators next month. The exact nature of that action, she sai=
d,=20
is still under review.
?????Lynch, who is an attorney, did not name specific suppliers or provide=
=20
documentation of her assertions. She said that information will remain=20
confidential until court proceedings are undertaken.
?????Generators have long denied any attempt at manipulating the power mark=
et=20
in any unlawful way, including orchestrating plant shutdowns. They say the=
=20
facilities are so old and have been run so hard during the power crisis tha=
t=20
breakdowns are a recurring problem.
?????Lynch and Gov. Gray Davis, who has been particularly critical of=20
out-of-state generators, have not suggested that every plant shutdown has=
=20
been unwarranted.
?????In fact, the governor's top advisor on power plants released a stateme=
nt=20
last week saying inspectors determined that a Bay Area plant shutdown was=
=20
justified and that the company's officials were "accommodating."
?????State Atty. Gen. Bill Lockyer was not available for comment on his joi=
nt=20
investigation with the PUC. A spokesman would only confirm that Lockyer's=
=20
office is investigating plant shutdowns as part of a wide-ranging probe of=
=20
possible civil and criminal violations.
?????So far, the attorney general's office has subpoenaed documents in 91=
=20
categories from generators, including records of plant operations, pricing=
=20
practices and information the merchants may have shared with one another=20
about California's power market.
?????"We're looking for behavior that would violate antitrust or unfair=20
business practice laws," Lockyer has told The Times.
?????Although he has not provided details of his office's findings, he=20
recently said the inquiry is "beginning to get interesting."
?????Lynch said evidence of allegedly unnecessary plant shutdowns was amass=
ed=20
during interviews by investigators and in a review of the voluminous=20
subpoenaed records, obtained after intense legal battles with the power=20
companies.
?????In addition, investigators have been entering plants where unplanned=
=20
shutdowns have occurred to examine operations and maintenance records, Lync=
h=20
said. At times, the investigators have been denied access and have had to=
=20
exert legal pressure to get in, she said.=20
?????The plant shutdowns are a key factor in the soaring power prices, whic=
h=20
have gone from $200 a megawatt-hour in December to as high as $1,900 last=
=20
week.
?????"I would argue it's no accident," Lynch said of the high prices. "That=
=20
in fact it's [due to] the coordinated behavior of a cartel."
?????The power generators have repeatedly said they have acted within the=
=20
rules of California's flawed deregulation program, which allowed them to bu=
y=20
power plants formerly run by the state's three largest utilities.
?????Gary Ackerman, a spokesman for a trade association of large power=20
producers, said Lynch's allegations were "the height of idiocy."
?????The reason many plants have been down in recent months, he said, is th=
at=20
power producers must perform maintenance now in anticipation of heavy summe=
r=20
demand.
?????He said he doubted that state investigators could prove wrongdoing=20
because there was no conspiracy to turn off supplies.
?????"My members do not make money by shutting down their plants so their=
=20
competitors can make money," said Ackerman, executive director of the Weste=
rn=20
Power Trading Forum.
?????State analysts have argued, however, that power traders can reap=20
extraordinary profits by withholding power because the prices for the power=
=20
that is sold are so high.
?????According to Lynch, investigators have found that some companies were=
=20
more aggressive than others in allegedly using plant shutdowns to manipulat=
e=20
the state's power market.
?????She said investigators have also found a suspicious pattern: When=20
operators of the state electricity grid declare a Stage 1 alert--meaning th=
at=20
electricity reserves have dropped below 7%--plants that do not need repairs=
=20
suddenly are yanked offline. That, she said, aggravates the shortages, and=
=20
the cost of wholesale electricity soars.
?????Before December, state analysts alleged that power traders had driven =
up=20
prices primarily through bidding. At the time, the market was designed to p=
ay=20
all power suppliers the highest amount accepted by the state's grid operato=
r.
?????That changed in December, when new federal regulations restructured=20
California's wholesale power market to loosen price controls, Lynch said.=
=20
Since then, a new pattern of plant shutdowns has emerged--"not coincidental=
ly=20
in my view," she said. Now, she added, the state has endured "historically=
=20
high levels of unplanned plant outages."
?????The investigation is not focusing on power plants still operated by=20
utility companies because they have not been "going off [line] at record=20
levels," Lynch said.
?????The California Energy Commission reported last week that the state's=
=20
electrical grid has been sorely tested by plant shutdowns at a rate several=
=20
times higher than in the last two years.
?????A Times analysis of state data found that, throughout the last two=20
months, about 12,000 megawatts of production was offline, more than a third=
=20
of the peak power used in California on a typical day. That has been about=
=20
evenly divided between scheduled and sudden plant shutdowns.
?????By contrast, shutdowns in the same period of 1999 and 2000 took only=
=20
3,300 to 5,700 megawatts offline.
?????Last month, the Federal Energy Regulatory Commission ordered electrici=
ty=20
supplier Williams Energy Marketing and Trading to pay $8 million in=20
connection with allegations that plants were improperly shut down to raise=
=20
prices. The company agreed to settle the case without admitting any=20
wrongdoing.
?????However, FERC released a study in February of closures at three other=
=20
California plants that it concluded were not undertaken to create a scarcit=
y=20
of power.
?????After talking to plant operators by telephone, reviewing documents and=
=20
visiting the three plants, federal inspectors concluded that "the companies=
=20
appeared to have taken whatever steps were necessary to bring the generatin=
g=20
facilities back online as soon as possible by accelerating maintenance and=
=20
incurring additional expenses."
---=20
?????Times staff writer Nancy Vogel in Sacramento contributed to this story=
.

Critics Say Bush Proposal Leaves California in the Dark=20
Effect: President's energy plan may not even offer a silver lining for the=
=20
power-deprived Golden State.=20

By JENIFER WARREN and ROBIN FIELDS, Times Staff Writers=20

?????California lawmakers, analysts and others waist-deep in the state's=20
power crisis reached a single conclusion Thursday about the White House=20
energy plan:
?????By the time many of President Bush's proposals kick in, it will be too=
=20
late to do the Golden State much good.
?????"This plan does absolutely nothing to help California get through the=
=20
next critical 18 months," groused state Sen. Debra Bowen (D-Marina del Rey)=
.=20
"You can't focus just on the long term here. Because the patient will be de=
ad=20
before we get the life-support systems in place."
?????Gov. Gray Davis and others say the single best step Bush could take to=
=20
help the state is to impose controls on runaway electricity prices that are=
=20
draining California's treasury and forcing massive utility rate increases.
?????Instead, the president has offered an energy blueprint anchored by an=
=20
expansion in drilling for natural gas and oil, increased reliance on nuclea=
r=20
power and more than $10 billion in tax credits for conservation and energy=
=20
development.
?????Most of Bush's proposals, however, are slow-acting remedies, and many=
=20
others already are being applied in California, which was hit by energy woe=
s=20
far ahead of other states.
?????The plan's dozens of incentive programs designed to boost output or=20
promote conservation cannot be ramped up in time to protect the state from=
=20
blackouts and painful spikes in electricity prices, experts say.
?????"Overall, the message in this plan is, 'Drop dead, California,' " said=
=20
Eric Heitz of the Energy Foundation, a San Francisco-based research and=20
advocacy group.
?????"I don't think it delivers another megawatt to California," added=20
Loretta Lynch, president of the California Public Utilities Commission.
?????State economic analysts say the plan fails California by viewing the=
=20
power crisis as an ongoing emergency, rather than a temporary one.=20
California's supply crunch should ease dramatically by summer 2003, once 27=
=20
new power plants--15 of them licensed, 12 in the pipeline--start churning.
?????"It's not that we don't have long-term problems," said Stephen Levy,=
=20
director of the Palo Alto-based Center for Continuing Study of the Californ=
ia=20
Economy. "It's just that energy isn't among them."
?????Others, including many environmentalists, say Bush could have made a=
=20
noticeable impact by, for example, beefing up energy efficiency programs--a=
=20
quick, clean and relatively inexpensive way to cut demand.
?????"Why not provide aggressive incentives [rebates] to get people to=20
purchase more efficient air conditioners?" asked Dan Reicher, assistant=20
Energy secretary in the Clinton administration. "Over the course of the yea=
r,=20
a program like that can make a dramatic difference" because air conditionin=
g=20
consumes nearly one-third of California's peak energy supply.
?????Instead, Reicher noted, Bush earlier this year rolled back efficiency=
=20
standards for air conditioners, a move that critics say will require the=20
country to build 43 new power plants.
?????Even the few elements of the plan that looked promising for California=
=20
were clouded by doubt.
?????Bush, for example, directed the Energy secretary to explore ways to=20
relieve a key transmission bottleneck, known as "Path 15," between Northern=
=20
and Southern California. But he specified that the upgrade, which requires=
=20
building a 90-mile line at an estimated cost of $225 million, be funded by=
=20
"nonfederal contributions"--meaning the financially strapped utilities migh=
t=20
be expected to bear the cost.
?????Gov. Davis, who lately has stepped up his pleas for help from=20
Washington, said the Bush plan offers too little too late for California an=
d=20
criticized the president for allowing "the price-gouging energy companies,=
=20
many of which reside in Texas, to get away with murder."
?????Davis said the state is "doing everything possible to build and conser=
ve=20
our way out of the problem," but it desperately needs federal price control=
s=20
on energy costs. In 1999, California energy users spent about $7 billion;=
=20
this year, even with consumption down 5%, the bill could top $50 billion.
?????But Bush and Vice President Dick Cheney, who led the task force that=
=20
prepared the plan, are opposed to price caps, preferring to let market forc=
es=20
reign.
?????Davis said that laissez faire approach puts California's economy in=20
peril.
?????"Just saying, over the long haul, everything will work out is turning =
a=20
blind eye to the bleeding and hemorrhaging that exist in this state," Davis=
=20
said. "Small businesses . . . literally will go out of business because the=
y=20
can't afford these rates."
?????Analysts who studied the Bush plan say they are particularly=20
disappointed because it covers a lot of ground already plowed by California=
.
?????Bush recommends building 1,900 power plants over the next 20=20
years--about eight plants a month. But California is already on a=20
plant-building spree that will give it a comfortable supply within two year=
s.
?????The president also wants to streamline approval of plants and is pushi=
ng=20
for a renewed commitment to nuclear power. The California governor, however=
,=20
has already ordered expedited licensing of new plants under an executive=20
order issued in February.
?????There is little evidence, meanwhile, that Californians are eager to=20
approve an expansion in nuclear power. Nationwide, not one new nuclear plan=
t=20
has been licensed in more than 20 years. And a Times Poll in February found=
=20
that 60% of Californians oppose more nuclear reactors in the state.
?????"You can barely build clean-burning gas plants here, let alone nuclear=
=20
plants," said Edward Kahn, a San Francisco-based energy consultant with=20
Analysis Group/Economics.
?????Among other elements of the plan that could affect California is a=20
proposal to allow federal authorities to take private land for power lines.=
=20
Currently, the U.S. government's power to forcibly acquire private property=
=20
applies only to highways and gas pipelines. Expanding that power is likely =
to=20
enrage property owners and property-rights advocates, who typically expect=
=20
backing from Bush-style conservatives.
?????"I'm just surprised that this administration would want to preempt the=
=20
state's [authority] over its own land," said Lynch of the PUC.
?????The issue is already heated in California. Communities in southwestern=
=20
Riverside County have mobilized to resist San Diego Gas & Electric's attemp=
ts=20
to use eminent domain to obtain private land for 31 miles of transmission=
=20
lines. The Legislature is considering a bill that would require state energ=
y=20
officials and utilities to grab public land first before reaching for priva=
te=20
acreage.
?????Bush also proposed a unified, private national electricity grid, an id=
ea=20
that seems at odds with Southern California Edison's effort to sell its=20
transmission lines to the state. But Edison officials said they hope to hav=
e=20
their deal worked out long before the president's idea comes to fruition--i=
f=20
it ever does.
?????Unveiling his energy program in St. Paul, Minn., Bush said he is "deep=
ly=20
concerned about the impact of blackouts on the daily lives of the good peop=
le=20
of the state of California."
?????But S. Davis Freeman, the former Los Angeles Department of Water and=
=20
Power chief who is now the governor's energy advisor, said Bush has let dow=
n=20
the state by failing to "answer the 911 call."
?????"It's like your house is on fire," Freeman said. "You call the fire=20
department, and they say, 'No, we're not coming, but we're building a=20
super-duper firetruck that will be ready five years from now.' "
---=20
?????Times staff writers Dan Morain and Richard Simon and researcher Patti=
=20
Williams contributed to this story.

Wall St. Cautious Over Energy Sector's Outlook for Next Year=20
Stocks: Earnings for many oil and natural gas producers are expected to top=
=20
out in 2001 as prices stabilize.=20

By JOSH FRIEDMAN and TOM PETRUNO, Times Staff Writers=20

?????President Bush's energy plan, unveiled Thursday, helped spark a broad=
=20
rally across the energy sector and among firms that stand to benefit by=20
selling equipment and services to oil and natural gas companies.
?????Yet Wall Street has been taking a cautious stance toward energy shares=
=20
in recent months, and Thursday's rally doesn't change much, some analysts a=
nd=20
money managers say.
?????Despite the long-term earnings boost the sector could get under Bush's=
=20
plan, many oil and gas companies are expected to post lower earnings in 200=
2=20
than in 2001, analysts estimate.
?????That reflects expectations that crude oil and natural gas prices will =
at=20
best stabilize at current levels--which are down sharply from their 2000=20
peaks--or head lower.
?????Thus, after heady gains in 1999 and 2000 as oil and gas prices rockete=
d,=20
many energy stocks have stalled this year.
?????The American Stock Exchange index of 15 major natural-gas-related=20
stocks, for example, is down 4% year to date. The Standard & Poor's index o=
f=20
six large oil and gas exploration and production companies has lost 5.3%.
?????Schlumberger (ticker symbol: SLB), a leading oil-field services compan=
y,=20
has seen its shares pull back 15% since Jan. 1, even with a gain of $1.78 t=
o=20
$67.99 on Thursday.
?????By contrast, the blue-chip S&P 500 index is down 2.4% this year.
?????Craig T. Callahan, manager of Icon Energy stock mutual fund and chief=
=20
investment officer at the Icon Funds group, said investors need to be choos=
y=20
to find good buys today in the energy sector.
?????"We're leaning more toward the refiners than the drillers because=20
they're the better bargains," he said. "And at this point the good news loo=
ks=20
fully priced into the services and equipment group."
?????After betting big on the energy sector in early-1999, Callahan took=20
profits earlier this year. "We just don't see energy as a leader anymore--i=
ts=20
leadership days are done," he said.
?????Callahan shrugged off any potential windfalls from Bush's proposal. "W=
e=20
look at these companies from the bottom up and pretty much ignore the macro=
=20
trends," he said.
?????For the near term, investors have to cope with the prospect that=20
earnings at many energy companies will decline in 2002.
?????Chevron (CHV), for example, is expected to earn $7.20 a share this yea=
r,=20
according to analysts' consensus estimate as tracked by IBES/Thomson=20
Financial. But next year the company's earnings are expected to fall to