|
|
Enron Mail |
Please see the following articles:
Sac Bee, Tues, 5/29: Lodi just says no to powers that be:=20 Four times since March, the city kept the lights on as other towns went dar= k Sac Bee, Tues, 5/29: Dan Walters: Debt dilemmas plague energy executives,= =20 ordinary workers alike SD Union (AP), Tues, 5/29: Governor's rescue plan garners no support, a newspaper reports SD Union, Tues, 5/29: In power crisis, is there ray of light at end of mur= ky=20 tunnel? SD Union, Mon, 5/28: Bush, Davis on collision course SD Union, Sun, 5/27: Republicans fiddle while Californians burn SD Union (AP), Sun, 5/27: Energy executive seeks state GOP support (Enron= =20 mentioned) SD Union (AP), Sat, 5/26: State demands FERC close loopholes =20 SD Union, Sat, 5/26: Changes in Senate could offer state relief (Enr= on=20 mentioned) SD Union, Sat, 5/26: Natural gas CEO denies deal was improper LA Times, Tues, 5/29: Kern County Basks in Role as State's Blackout-Buster LA Times, Mon, 5/28: Plan to Rescue Edison Stalls LA Times, Mon, 5/28: Bush Could Boost Green Power With Buying Power LA Times, Sun, 5/27: Suddenly, Dirty Old Coal Is the Fossil Fuel of the=20 Future LA Times, Sun, 5/27: Power Firm Chief Lists Solutions for Crisis LA Times, Sat, 5/26: State Renews Demand for Power Price Relief LA Times, Sat, 5/26: El Paso CEO Admits Approving Subsidiaries' Natural Ga= s=20 Deal LA Times, Sat, 5/26: Police Support 48-Hour Alerts for Blackouts LA Times, Sat, 5/26: Outdoor Lights Still Burning LA Times, Sat, 5/26: Businesses Hopeful on Blackout Warnings LA Times, Tues, 5/29: Power Crisis Has Mileage for Bush =20 (Commentary) SF Chron (AP), Tues, 5/29: Bush announcing low-income aid, but no price ca= ps =09=09=09 SF Chron, Tues, 5/29: Bush facing Davis' heat over energy=20 In first visit to state as president, he'll hear governor's plea for help SF Chron, Tues, 5/29: Bush's first visit not so welcome=20 SF Chron (AP), Tues, 5/29: Californians revert to clotheslines, fans as th= ey=20 gear up for blackouts=20 SF Chron, Tues, 5/29: Crisis no sweat to some offices=20 Many offices keep cool in crisis=20 Air conditioners blast in state's energy centers=20 SF Chron (AP), Tues, 5/29: Stakes are high for Davis meeting with Bush SF Chron, Tues, 5/29: State gives president tepid ratings=20 Power crisis blamed for 42% approval SF Chron (AP), Mon, 5/28: Calif. pawn businesses boom as energy bills ris= e SF Chron (AP), Mon, 5/28: Californians brace for a summer of blackouts SF Chron, Mon, 5/28: New Nevada-California energy plan surfaces at last=20 minute Mercury News, Tues, 5/29: Bush feeling weight of state's energy crisis Mercury News, Tues, 5/29: New energy moves by W.House before Bush-Davis me= et OC Register, Tues, 5/29: California should try true deregulation =20 (Commentary) Energy Insight, Tues, 5/29: Look for more wellhead-power plant deals=20 ---------------------------------------------------------------------------= --- -------------------------------------------------------- Lodi just says no to powers that be: Four times since March, the city kept= =20 the lights on as other towns went dark. By Stuart Leavenworth Bee Staff Writer=20 (Published May 29, 2001) LODI -- In this old farm town, where ferment is largely confined to wine=20 bottles, leaders are staging a Boston Tea Party against California's energy= =20 crisis.=20 Lodi, population 57,000, is refusing to participate in the rolling blackout= s=20 that have swept across California. Four times since March, Lodi's electric= =20 utility has snubbed the state's power managers and kept its lights on while= =20 others went dark.=20 The rock band Creedence Clearwater Revival once derided Lodi as a=20 conservative backwater, but now, this town is leading an unlikely revolt th= at=20 is being picked up by others statewide.=20 "Lodi has something of an independent streak," said Steve Mann, a former ci= ty=20 councilman in Lodi and one of many residents who support the city's utility= .=20 "It doesn't make sense that we should participate in blackouts when we have= =20 done everything we can to make sure we can avoid that."=20 So far, Lodi has the only utility in the state to openly defy an on-the-spo= t=20 call for blackouts. They did so twice in March, then twice again this month= .=20 This week, however, Riverside's utility said it, too, would not participate= =20 in forced outages, and leaders of some other "munis" may follow suit.=20 Worried about a political snowball, Gov. Gray Davis met with leaders of the= =20 munis last week, but refused to exempt them from further blackouts. If that= =20 happened, the state's power managers would be unable to spread blackouts to= =20 25 percent of the state's households, putting the brunt on other parts of t= he=20 state.=20 "I'm sympathetic," said David Freeman, the governor's top energy adviser an= d=20 a former leader of municipal utilities in Sacramento and Los Angeles. But= =20 Freeman, speaking with uncharacteristic guardedness, said it may not be=20 practical "to separate out utilities that are an integral part of the grid.= "=20 The self-proclaimed "wine grape capital of the world," Lodi would seem an= =20 unlikely hotbed for dissent. Creedence Clearwater once bemoaned being "stuc= k=20 in Lodi." Instead of being offended by the song, many residents are glad=20 their town isn't inhabited by a bunch of long-haired rabble-rousers.=20 Even so, Lodi likes to defy convention when it comes to protecting its own.= =20 Two years ago, the city started waging battle against big insurance compani= es=20 that didn't want to pay to clean up toxic substances from local businesses= =20 that had trickled into water supplies.=20 In recent years, Lodi has spent millions sprucing up its once-dilapidated= =20 downtown, which soon will be crowned by a new 12-screen cineplex.=20 But the town's biggest source of pride is its taxpayer-owned utility, which= =20 started in the 1890s when two brothers, Ed and Fred Carey, launched a water= =20 and electric utility. In 1910, they sold it to the city of Lodi for $35,000= .=20 Now, the utility provides $4 million to the town's coffers every year, with= a=20 $30 million annual budget.=20 Like many other municipal utilities in Northern California, Lodi has more= =20 power lined up than it needs, but is dependent on Pacific Gas and Electric= =20 Co. to deliver that power to its doorstep.=20 As a result, "Lodi's relationship with PG&E has been tenuous throughout its= =20 history," said Mann. One point of contention is the interconnection agreeme= nt=20 among PG&E, Lodi and the town's fellow members in the Northern California= =20 Power Agency.=20 PG&E officials say the agreement requires Lodi to shed power during any pow= er=20 shortfall. But Lodi contends the pact obligates the utility to impose=20 blackouts only during "physical emergencies," such as a wind storm that=20 knocks out transformers.=20 "We don't see any compelling reason why Lodi should have to participate in= =20 rolling blackouts," said Alan Vallow, director of the city's utility. "You= =20 want me to turn customers off when we have the capacity to keep them on? Th= at=20 doesn't work for me."=20 During a statewide call for blackouts, PG&E conceivably could just switch o= ff=20 power for Lodi if the city's utility didn't heed the call voluntarily. But= =20 Vallow doubts PG&E would take such a step. "That would be pretty extreme," = he=20 said.=20 An engineer who used to work for Los Angeles' utility, Vallow has become=20 "something of a folk hero" because of his stance, said Mann. Vallow is=20 especially popular with Lodi's canneries, which need reliable power in the= =20 summer to pack fruit before it rots in the field. And most Lodites "are 100= =20 percent behind Mr. Vallow," said Marie Saunders, a longtime local resident.= =20 On the other hand, Lodi's City Council hasn't officially endorsed Vallow's= =20 decision, giving it an out should PG&E or state officials seek revenge.=20 "If we weren't supportive, we would let Alan know," said Alan Nakanishi, th= e=20 mayor of Lodi. "On the other hand, if we do get retribution, we may say to= =20 Al, 'Hey, what is all this about?' "=20 So far, PG&E hasn't threatened any action against Lodi, but experts say the= =20 town is venturing into murky legal territory.=20 "It is a legal question that hasn't been resolved," said John Fistolera,=20 legislative director of the Northern California Power Agency, a group of=20 municipal utilities that includes Lodi.=20 The Sacramento Municipal Utility District, which is not part of NCPA, also= =20 has taken a cautious approach. Earlier this year, at least one SMUD board= =20 member recommended the utility follow Lodi's example. But the idea was=20 dropped amid fears that SMUD, being a bigger utility, could face a legal=20 fight that PG&E wouldn't mount against little Lodi.=20 "I really admire what Lodi has done," said Linda Davis, a SMUD board member= .=20 "But I don't want to end up in court, and I fear SMUD would end up in court= ."=20 Instead of an open rebellion, SMUD has joined the Southern California town = of=20 Vernon and 13 other cities in appealing to the Federal Energy Regulatory=20 Commission. They want FERC to exempt them from blackouts ordered by the=20 state's grid manager, the Independent System Operator.=20 ISO officials argue that "load shedding" from the municipal utilities is=20 vital for maintaining balance on the grid during shortfalls. But SMUD and t= he=20 other municipalities say they shouldn't be penalized for lining up power=20 reserves that have eluded the state's big utilities, especially with the=20 state facing dozens of blackouts this summer.=20 "Like Vernon, SMUD has grave concerns over the prospect of sharply escalati= ng=20 the number and duration of blackout occurrences directed by the ISO on a=20 grid-wise basis over the upcoming summer months," SMUD wrote to FERC.=20 Last week, the Riverside City Council voted to stop participating in=20 blackouts ordered by the ISO. Like Lodi, Riverside says its conservation=20 programs should be taken into account in ISO's attempts to deal with power= =20 shortages.=20 Vallow says Lodi has done everything it can to help the state. In January,= =20 the city complied with blackout orders, then purchased long-term contracts= =20 that gave it a 40 percent surplus in power reserves.=20 To pay for those reserves, the utility increased customer rates by as much = as=20 15 percent.=20 Since then, the city has sold excess power back to the state to help with= =20 shortages. But Vallow also has told the state that Lodi will not participat= e=20 in further blackouts.=20 Vallow calls it the "SET" program, which stands for "System, Electric suppl= y=20 and Team."=20 "We've done everything the state should have done to avoid the crisis we ar= e=20 in now," said Vallow. "We are SET."=20 The Bee's Stuart Leavenworth can be reached at (916) 321-1185 or=20 sleavenworth@sacbee.com. Dan Walters: Debt dilemmas plague energy executives, ordinary workers alike (Published May 29, 2001)=20 The Bible, in one of its many warnings to the faithful about incurring debt= ,=20 makes this pithy observation: "The rich rule over the poor and the borrower= =20 is servant to the lender."=20 Credit may have become the essential underpinning of a modern industrial=20 society, from the billions of dollars in operational financing arranged by= =20 governments and corporations to the credit card transactions of everyday=20 consumers, but our uneasiness about debt continues.=20 California's two major utilities ran up more than $13 billion in debt to bu= y=20 power at prices far higher than consumers were paying, until lenders cut of= f=20 their credit. And the state government then stepped in and has incurred an= =20 additional $7.7 billion in debt -- with plans to nearly double its borrowin= g=20 to over $13 billion -- to keep the lights burning. One utility has sought= =20 bankruptcy protection and another is on the verge; the state's heavy power= =20 purchase debts have undermined its credit rating and its ability to finance= =20 other spending.=20 While the governor and state legislators ponder these multibillion-dollar= =20 questions of debt, they also must decide what to do, if anything, about the= =20 relatively tiny debts that poor Californians are incurring. The practices o= f=20 so-called "payday lenders" and those making home-secured loans to the elder= ly=20 and working poor are generating sharp conflicts in the Capitol.=20 The "payday loan" business has mushroomed since being expressly authorized = by=20 1996 state legislation. Storefront businesses offering short-term loans at= =20 high interest rates have exploded from almost none to more than 3,000 in th= e=20 state, often replacing pawnbrokers as lenders of last resort.=20 Critics see the trade as legalized usury, in which cash-poor borrowers not= =20 only are tapped for very high interest rates -- as much as 900 percent per= =20 year -- and are forced, in effect, to roll over the loans week after week.= =20 Sen. Don Perata, D-Alameda, is carrying a measure that would tighten up=20 payday loan practices, the latest in a long string of proposals that have= =20 died at the hands of fellow Democrats in legislative committees, thanks to= =20 the efforts of lenders and their lobbyists. Assemblyman Dario Frommer, D-Lo= s=20 Angeles, meanwhile, is carrying a measure that lenders back as a compromise= ,=20 although it's been denounced by consumerists as a smoke screen.=20 A similar battle is being waged over what critics describe as "predatory=20 lending" by home loan subsidiaries of major banks. Consumer activists argue= =20 that the lenders are enticing low-income and/or elderly borrowers into=20 pledging their homes for "subprime" loans -- even many who could qualify fo= r=20 more conventional, lower-cost mortgages. The borrowers, say critics, are=20 paying higher interest rates and higher fees, are being saddled with unneed= ed=20 mortgage life insurance and often are at risk of losing their homes to=20 foreclosures.=20 Sen. Joseph Dunn, D-Santa Ana, is carrying a consumer group-backed bill,=20 pending in the Senate Banking Committee, but bankers have mounted a stiff= =20 opposition campaign and the fate of the bill is in doubt. Dunn and his=20 supporters need five of the six Democrats on the committee to vote for the= =20 bill, and the heaviest lobbying attention is being focused on two uncommitt= ed=20 Democrats from conservative Central Valley districts -- Mike Machado of=20 Linden and Jim Costa of Fresno. Last week, consumer activists staged a=20 symbolic march on the Capitol to press their cause.=20 The questions that surround both issues are similar: Should the state prote= ct=20 borrowers from agreeing to loans that carry high interest rates and other= =20 charges, as long as they are aware of the risks and costs they are incurrin= g?=20 Are those rates and fees justified by the higher costs, including higher=20 default rates, that lenders experience in making loans to those of marginal= =20 creditworthiness?=20 They are not dissimilar to the questions that are being raised about the hu= ge=20 debts that the utilities and the state -- institutions presumably operated = by=20 sophisticated executives -- have assumed. The blue-collar worker who takes= =20 out a high-cost payday loan to keep his own lights burning is not that much= =20 different from the governor.=20 The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.c= om . Governor's rescue plan garners no support, a newspaper reports=20 ASSOCIATED PRESS=20 May 28, 2001=20 LOS ANGELES =01) Leaders of both houses are against Gov. Gray Davis' plan t= o=20 rescue Southern California Edison from bankruptcy, the Los Angeles Times=20 reported Monday.=20 Not only has the more than $3 billion plan failed to garner support but=20 efforts by lawmakers to come up with an alternative are also falling by the= =20 wayside.=20 The stakes are high, because restoring Edison to financial health and=20 requiring Edison to temporarily sell power at lower prices are vital to=20 Davis' plan to get the state out of the business of buying electricity.=20 Nevertheless, leaders in the Legislature say the governor's approach has fe= w=20 backers.=20 "I don't think the governor's (plan) has support in either party in either= =20 house," Assembly Speaker Bob Hertzberg, D-Sherman Oaks, told the Times. "Th= e=20 issue is whether we can come up with something else, and I think we can."= =20 Senate leader John Burton, D-San Francisco, has been critical of the deal= =20 Davis and Edison put together from the outset. He said it is certainly dead= =20 in the Legislature, but that a more far-reaching proposal may still emerge.= =20 "Hopefully, we will find a long-term solution" to the state's energy crisis= ,=20 Burton said. The Edison deal alone "is not going to solve anything. It is n= ot=20 going to reduce rates, and it is not going to prevent blackouts," he said.= =20 In both the Assembly and Senate, most Democrats and Republicans are convinc= ed=20 there is no way for them to save Edison without appearing to sanction a hug= e=20 bailout. Therefore, they want to get something of value in return from Edis= on=20 =01) high-voltage transmission lines, hydroelectric power plants or guarant= ees=20 that the utility will boost energy supplies =01) but are sharply split on w= hat=20 is best.=20 Democrats, who hold majorities in both houses, cannot agree on how to save= =20 the utility =01) or whether it is even proper for the government to do so. = Some=20 believe that the state would be better off letting Edison file bankruptcy= =20 like Pacific Gas & Electric.=20 Meanwhile, their efforts to forge a bipartisan solution with Republicans ha= ve=20 are not going well.=20 Despite the setbacks, Davis and many lawmakers still say some form of the= =20 Edison rescue plan will clear the Senate and Assembly this summer. But sinc= e=20 Davis announced he had reached a deal with Edison executives to save the=20 utility in April, nothing has been accomplished in the Legislature to=20 implement it.=20 The rescue deal Davis reached with Edison calls for the state to pay the=20 utility $2.76 billion for its power transmission lines. It would allow the= =20 state to issue bonds to finance the purchase, and declares that Edison is t= o=20 use the money to reduce its estimated $3.5 billion debt.=20 The deal also would set aside a portion of ratepayers' monthly utility bill= s=20 to pay off Edison's "undercollections," huge debts the utility incurred las= t=20 year and early this year because it was not allowed by the state to pass on= =20 to consumers the full cost of wholesale power.=20 In return, Edison would agree to sell the electricity it generates from its= =20 power plants at cost for the next decade, lowering the state's overall=20 power-buying expenses.=20 Lawmakers from both parties have called the deal overly generous and=20 questioned the benefit to the public.=20 In power crisis, is there ray of light at end of murky tunnel?=20 By Ed Mendel=20 May 28, 2001=20 SACRAMENTO -- Is California, at long last, about to catch a break in the=20 electricity crisis, or will the cost of power this summer short-circuit the= =20 state budget, forcing painful cuts?=20 Among the doom and gloom of blackout preparations last week, there were a f= ew=20 faint flickers of hope.=20 Some prices for summer power have dropped. State power buyers smoothly=20 handled high loads during two hot days. A big generator, Mirant, unexpected= ly=20 agreed to provide 500 megawatts through the summer at a reasonable price.= =20 Davis administration officials are sticking with their forecast, derided by= =20 some as a "hope and expectation," that the average price the state will pay= =20 for non-contracted power will drop this summer.=20 "It's very doable," said Ray Hart, head of the power purchasing unit in the= =20 state Department of Water Resources.=20 The forecast by Davis consultants expects the average of $346 per megawatt= =20 hour paid by the state for non-contracted power in April through June to dr= op=20 to $195 in July through September.=20 But skeptics fear that as heat drives up the demand for power, the state wi= ll=20 get a double whammy -- soaring spot-market prices because of a regional pow= er=20 shortage, and a series of disruptive and dangerous blackouts.=20 The state, in what Vice President Dick Cheney calls a "harebrained scheme,"= =20 began buying power for utility customers in January after a failed=20 deregulation plan forced the utilities deep into debt.=20 The Davis administration notified the Legislature last Wednesday that in 10= =20 days the state general fund will begin spending another $500 million=20 increment for power, bringing the total since January to $7.7 billion.=20 Now it's nervous time at the Capitol until the general fund is repaid by a= =20 bond issue of up to $13.4 billion, which is expected to be issued in late= =20 August and September and paid off by ratepayers over 15 years.=20 What if there is a snag? Or spending on power soars? State Controller=20 Kathleen Connell is predicting that the state will have to borrow more mone= y=20 than planned, perhaps an additional $4 billion.=20 As for the flicker of hope, a reporter for a publication that tracks power= =20 said prices at the Palo Verde hub, which serves Southern California, have= =20 dropped significantly since April for deliveries in July through September.= =20 "My personal opinion is, they probably won't get back up to where they were= =20 during the highs," said Mike Wilczek of Platts Power Market Week.=20 Another journalist who tracks power prices, Arthur O'Donnell, editor of=20 California Energy Markets, sees no trend other than volatility.=20 "It depends largely on what the weather is," O'Donnell said. "The expectati= on=20 is that August is going to be the ugly month, and that is being reflected i= n=20 the future prices."=20 O'Donnell said he was encouraged that the state Department of Water=20 Resources, which lined up some power purchases in advance, handled=20 heat-driven high loads last Monday and Tuesday without declaring an=20 emergency.=20 "What it tells me is, DWR is learning its job," O'Donnell said.=20 The state is counting on an ad campaign and "sticker shock" from rate=20 increases to reduce power use this summer. And the amount of cheaper power= =20 obtained through contracts, now less than half the total, is expected to=20 increase to about two-thirds in June through August.=20 "I think this month is a harder month to get through than those months," sa= id=20 DWR's Hart.=20 Ed Mendel is Capitol bureau chief for the Union-Tribune.=20 Bush, Davis on collision course=20 President, Cheney firm: No price caps By Toby Eckert=20 COPLEY NEWS SERVICE=20 May 27, 2001=20 WASHINGTON -- When President Bush and Gov. Gray Davis meet this week to=20 discuss California's power crisis, it will be a close-up clash of ideologie= s=20 that until now have been playing out long distance.=20 To Californians struggling with rolling blackouts and skyrocketing power=20 bills, Bush's allegiance to free-market principles and his rejection of=20 electricity price controls can seem baffling -- if not payback for the=20 state's vote against him in the presidential election.=20 Yet a look at the record shows that Bush and his energy czar, Vice Presiden= t=20 Dick Cheney, share an unshakable faith in open power markets shaped by=20 conservative politics and their long association with an industry that has= =20 benefited greatly from deregulation. It is a view fortified by energy company executives who enjoy easy access t= o=20 top administration officials and counsel against measures like price=20 controls. One company in particular, power marketer Enron Corp., appears to= =20 wield great influence with the White House on energy policy.=20 Davis argues that because the deregulation plan adopted by the state in 199= 6=20 turned out to be deeply flawed, a truly free market doesn't exist. Power=20 marketers and generators now have enough leverage to charge, on average, mo= re=20 than $330 per megawatt-hour of electricity, 10 times what they were getting= =20 just a year ago.=20 Temporary Western price controls -- based on the cost of producing the powe= r=20 and a hefty, built-in profit margin for the power sellers -- would provide = a=20 respite until the problems are fixed, Davis contends. A recent Field Poll= =20 shows that an overwhelming majority of Californians, Republican and Democra= t,=20 share that view.=20 "It would be a grave mistake for the Bush administration to allow rigid=20 ideology to stand in the way of doing what's best for our country," a=20 frustrated Davis said recently. "Deregulation is not a religion."=20 The White House flatly denies it is looking at the issue with ideological= =20 blinders on, or through an energy industry prism. Bush and other=20 administration officials argue that price controls have a proven history of= =20 backfiring -- drying up energy supplies at the same time they encourage mor= e=20 consumption.=20 "The president and this administration do not support price caps because th= ey=20 don't work," said White House spokeswoman Claire Buchan.=20 The folly of price controls is an article of faith in the oil industry, whi= ch=20 was long subjected to them. Both Bush and Cheney prospered in that industry= .=20 Bush founded an oil company in his native West Texas in 1977, shortly after= =20 graduating from business school. Arbusto Energy didn't find much oil, but= =20 Bush profited greatly in the boom-and-bust industry through mergers with=20 bigger industry players.=20 Before Bush plucked him out of the private sector, Cheney headed Halliburto= n=20 Co., a leading oil-field services firm based in Dallas.=20 "I think there's no doubt that their views have been shaped by their=20 backgrounds in the industry and their broader ideological views about=20 markets," said political analyst Stuart Rothenberg.=20 Cheney in particular has expressed a visceral aversion to price controls. H= is=20 experience helping to craft broad wage and price limits in the Nixon=20 administration left an indelible mark.=20 "The night the control regulations went to the Federal Register to be=20 published, they were 14 pages long. I know, because I typed them," Cheney= =20 said recently. "When we got through a couple years later, we had a roomful = of=20 regulations."=20 The price controls aggravated the oil shortage that plunged the nation into= =20 an energy crisis in the 1970s, Cheney argues.=20 "You could control domestic oil prices, but you couldn't control the price = of=20 imports that were set by the international market. .?.?. A lot of companies= =20 shut down, quit producing domestically," he said.=20 The new breed of power generators and marketers spawned by the nationwide= =20 move toward electricity deregulation are also, by and large, fierce opponen= ts=20 of price controls. Houston-based Enron in particular has positioned itself = as=20 a major player in the world of freewheeling power sales, including in=20 California.=20 Enron and its executives have been among Bush's biggest supporters througho= ut=20 his political career and enjoy an unusually close relationship with the=20 president. Company Chairman Kenneth Lay was one of the "Pioneers" who raise= d=20 at least $100,000 for Bush during the presidential campaign.=20 Enron's political action committee and its executives poured $113,800 into= =20 Bush's coffers and put a corporate jet at his disposal, according to the=20 Center for Responsive Politics, which tracks political spending.=20 Two top Bush administration officials -- economic adviser Lawrence Lindsey= =20 and U.S. Trade Representative Robert Zoellick -- once served on an Enron=20 advisory board.=20 As Cheney was crafting the administration's recently unveiled energy policy= ,=20 Lay was one of the handful of people who got to meet with him. Lay presente= d=20 a three-page, eight-point list of priorities for open power markets,=20 including an admonition that the administration "should reject any attempt = to=20 re-regulate wholesale power markets" with price caps or other controls.=20 Davis, by contrast, was invited to simply submit a one-page memo to the=20 energy task force, his spokesman said.=20 Lay also reportedly advised the Bush administration on appointments to the= =20 Federal Energy Regulatory Commission. The commission has the power to impos= e=20 price controls, but has so far balked at Davis' proposal.=20 Enron's clout with the administration has stoked the suspicions of critics.= =20 "It's Lay that drives the policy," said Craig McDonald, director of Texans= =20 for Public Justice, which tracks political spending in that state.=20 Enron spokesman Mark Palmer dismissed such talk as "outrageous."=20 "The Cheney task force met with dozens of trade groups, industry=20 representatives, politicians, regulators," Palmer said.=20 But in recent weeks, even the normally cautious Davis has highlighted the= =20 Texas ties of the energy companies that have profited from California's=20 travails, saying at one point that the Bush administration was allowing the= =20 companies "to get away with murder."=20 The White House says such allegations are just overheated rhetoric.=20 "That's goofy. It doesn't even merit a response," Cheney said when asked=20 about Davis' comments. "The president and I are making decisions and policy= =20 based on what we think makes sense for the country."=20 Republicans fiddle while Californians burn=20 By Bill Ainsworth=20 UNION-TRIBUNE STAFF WRITER=20 May 27, 2001=20 CALIFORNIA'S POWER CRISIS=20 SACRAMENTO -- Once upon a time, California Republicans faced a Democratic= =20 governor with ratings in the stratosphere, a Legislature dominated by his= =20 party and no popular issues to help improve their lowly status.=20 Then the energy crisis hit. As power prices jumped, blackouts hit and the= =20 governor hesitated, the formerly unbeatable candidate and his party suddenl= y=20 seemed vulnerable.=20 Yet California Republicans are having trouble taking advantage of this=20 seemingly golden political opportunity. As Davis struggles to extricate=20 himself from the energy quagmire, GOP leaders are also flailing about, mire= d=20 in contradiction, indecision and debate.=20 Although most Californians blame the power generators for the crisis, the= =20 Republicans' reflexive support of big business makes them unwilling to=20 criticize the out-of-state "entrepreneurs." Meanwhile, the party's lack of = a=20 strong leader or well-known gubernatorial candidate means that it doesn't= =20 have a loud voice in the Capitol.=20 Republican consultant Dan Schnur, whose former boss, Gov. Pete Wilson, thru= st=20 deregulation upon the state, said Republican leaders made a mistake by not= =20 offering an alternative plan once the crisis hit.=20 "Keeping their heads down did nothing but leave the playing field open to= =20 Gray Davis," he said.=20 Republicans have recently sketched out some proposals, but these appear=20 contradictory and politically dangerous.=20 The party opposes Davis' creation of a state power authority, with some=20 blasting it as "socialism."=20 "America is built on a capitalist system -- not on socialization," said=20 Assembly Republican Leader Dave Cox, R-Fair Oaks. "Socialism has failed=20 throughout the rest of the world."=20 Yet Assembly Republicans want to make it easier for San Diego County to=20 create a publicly owned municipal utility district.=20 Cox said local power isn't socialism because its board members are elected.= =20 The board of the state authority is composed of appointed and elected=20 officials.=20 Assemblyman Mark Wyland, R-Escondido, who is pushing a San Diego utility=20 district, said he believes the difference is local control.=20 "People want to control their own energy destiny," he said. "They don't hav= e=20 any control over a statewide bureaucracy."=20 Davis chastised Republicans for putting ideology above pragmatism.=20 "They're very quick to say we need more supply, but when you have a measure= =20 that would lead to more supply, they quickly retreat to their ideological= =20 point of view and refuse to be problem solvers," he said.=20 Republicans also opposed the Democrats' plan to replenish the state treasur= y=20 for the money it has spent on buying power by floating a $13.4 billion bond= =20 that would be repaid by ratepayers. They claimed that the bond was so large= =20 it was fiscally irresponsible.=20 Yet the Assembly Republicans' alternative plan would have led to massive=20 budget cuts. They wanted the state to give away about $5 billion it had to= =20 spend to buy electricity on the spot market -- and that money would have be= en=20 a subsidy largely to business and large users of electricity.=20 Democrats passed the bond plan anyway, but the Republicans' opposition=20 delayed the sale until August. Davis charged the delay cost the state an=20 extra $50 million to $150 million in bond charges.=20 Republicans have also been hurt by their unwillingness to crack down on the= =20 mostly out-of-state generating companies and natural gas companies.=20 According to last week's nonpartisan Field Poll, the vast majority of=20 Californians believe that these companies are to blame for piling up enormo= us=20 profits at California's expense.=20 Davis and the Democratic leaders have proposed a windfall profits tax on=20 generators.=20 By contrast, Cox opposes the tax, worrying that it will hurt the business= =20 climate. Davis calls the power producers "price gougers," while Cox refers = to=20 them as "entrepreneurs trying to maximize profits."=20 A recent Assembly investigation into California's high natural gas prices= =20 highlighted the GOP's reluctance to criticize energy companies.=20 Assembly Democrats issued a report accusing a Texas natural gas company, El= =20 Paso Corp., of making a sweetheart deal with an affiliate that allowed it t= o=20 manipulate the natural gas market. That deal, the report charged, contribut= ed=20 to soaring prices for California consumers and astronomical profits for the= =20 company.=20 The key Republican committee member, Assemblyman John Campbell, R-Irvine,= =20 issued a dissenting report, attributing El Paso's profits to supply and=20 demand.=20 Assemblyman Juan Vargas, D-San Diego, said Republicans are backing the wron= g=20 side.=20 "They're siding with Texas oil interests and Texas gas interests and that's= =20 going to get them in trouble," he said.=20 Republicans may also suffer from association with President Bush, who is=20 visiting California this week. The Republican president's close ties to the= =20 oil industry and refusal to back wholesale electricity price caps have made= =20 him unpopular with California voters, said Bruce Cain, a UC Berkeley=20 political scientist whose view is backed by state polls.=20 Bill Jones, the only announced Republican candidate for governor, commended= =20 Bush's energy plan -- even without price caps.=20 Jones, secretary of state, released his plan so quietly some wondered wheth= er=20 he was trying to avoid publicity. Jones criticized Davis for "socializing t= he=20 delivery" of power and called on the state to help its utilities by loaning= =20 them money.=20 Despite their missteps, though, the Republicans still have time to develop = a=20 coherent alternative. The energy crisis isn't going away.=20 "Most voters understand that the Democratic plan hasn't worked," said Schnu= r,=20 "but at some point they'll want to see an alternative. The Republicans are= =20 starting to do that."=20 Republicans can claim credit for urging Davis to act more quickly. Last=20 summer when the price spikes hit San Diego and threatened to spread, they= =20 asked the governor to call a special session. He ignored their pleas.=20 And Republicans voted against the January measure that got the state into t= he=20 power buying business, a move that Democrats said was required to keep the= =20 lights on, but now threatens the state's fiscal health.=20 Still, if the generators remain unpopular, the GOP could suffer.=20 "The Republicans have an inability to distinguish between market manipulati= on=20 and a well-functioning market," said Cain. "The perception that the party i= s=20 tied to the big energy companies isn't helpful."=20 ANALYSIS Energy executive seeks state GOP support=20 Politicians, celebs at secret meeting ASSOCIATED PRESS=20 May 27, 2001=20 SAN FRANCISCO -- In a move to garner support from prominent California=20 Republicans, a Texas energy executive attended a secret meeting to push for= =20 the preservation of the state's deregulated power market, a newspaper=20 reported yesterday.=20 Houston-based Enron Corp. Chairman Kenneth Lay met with well-known=20 Republicans, including movie star Arnold Schwarzenegger, Los Angeles Mayor= =20 Richard Riordan and Michael Milken, who pleaded guilty to fraud charges in= =20 1990 as head of the Drexel Burnham Lambert investment banking firm, the San= =20 Francisco Chronicle reported. The 90-minute private meeting took place May = 11=20 at a Beverly Hills hotel.=20 Schwarzenegger and Riordan have both been courted as Republican candidates= =20 for California governor.=20 Enron distributed a four-page plan at the meeting calling for ratepayers to= =20 cover the billions in debt racked up by the state's public utilities and=20 contending that state and federal investigations of price gouging are=20 hindering the situation, the Chronicle reported after obtaining a copy of t= he=20 paper.=20 "Southern California Edison is very close to bankruptcy, and no one around= =20 the table wanted that to happen," Enron spokeswoman Karen Denne said=20 yesterday. "There was considerable frustration that a solution is not being= =20 advanced at the legislative level."=20 But Gov. Gray Davis' spokesman Steve Maviglio called the paper a "generator= 's=20 wish list," saying it goes against the governor's policy on the energy=20 crisis.=20 "The governor is not calling off the dogs," Maviglio said yesterday. "To=20 suggest that ratepayers should shoulder the entire burden of deregulation i= s=20 totally the opposite of what the governor is calling for."=20 Lay and Davis have disagreed about how California's power crisis should be= =20 handled, and Lay says his company is being used as a scapegoat.=20 The meeting was hosted by Kevin Sharer of biotech giant Amgen. About a doze= n=20 people attended, including chief executives Ray Irani of Occidental Petrole= um=20 and Bruce Karatz of home builder Kaufman & Broad, Denne said.=20 Lay, who is a friend of President Bush and one of his largest campaign=20 contributors, has built the world's largest energy-trading company by buyin= g=20 electricity from generators and selling it to consumers. During the first= =20 quarter of this year, Enron's revenue increased 281 percent to $50.1 billio= n.=20 State demands FERC close loopholes=20 By Jennifer Coleman=20 ASSOCIATED PRESS=20 May 26, 2001=20 SACRAMENTO -- California made new demands for tough federal electricity pri= ce=20 caps yesterday and singled out two generators that it said should roll back= =20 rates immediately.=20 The filings by several state agencies were in response to a Federal Energy= =20 Regulatory Commission order last month that offered limited price controls = in=20 exchange for concessions on control of the state's power grid.=20 "FERC's pricing plan is laced with loopholes," Gov. Gray Davis said. "It's= =20 worse than too little, too late. It's simply a fig leaf that does nothing t= o=20 address the impact of the energy crisis on California and our nation."=20 The state's multiple filings also said that two generators, Williams and AE= S,=20 have profited excessively by exercising market power.=20 The Electricity Oversight Board, the Public Utilities Commission and the=20 Independent System Operator asked FERC to require the generators to use=20 cost-based rates, which limit company profits to a percentage above the cos= ts=20 to produce power.=20 In order to escape charging cost-based rates, generators must prove to FERC= =20 that they don't have market power -- the ability to charge whatever price= =20 they want without consequence.=20 The ISO, keeper of the state's power grid, said the two companies have=20 exhibited that they have market power and the ability to charge market-base= d=20 rates should be revoked.=20 Aaron Thomas, spokesman for the Arlington, Va.-based AES, said the company= =20 has applied to have its ability to charge market-based rates renewed, and= =20 expects FERC to approve that request.=20 "The governor, for six months now, has been calling for a form of cost-base= d=20 rates from FERC, so I don't think anything has changed," said Thomas.=20 Earlier this month, Tulsa-based Williams agreed to pay $8 million to settle= =20 charges with FERC that the company was purposely withholding electricity fr= om=20 California's power market. The company admitted no wrongdoing, and official= s=20 said a full hearing would have cleared the company.=20 ISO attorney Charles Robinson said the agency is also considering similar= =20 requests for revocation of the market-power authority of three other=20 generators -- Duke Energy, Reliant and Mirant.=20 Sen. Joe Dunn, D-Garden Grove, chairman of the Senate subcommittee=20 investigating the electricity wholesale market, said FERC has never adopted= a=20 definition of market power, leaving open the question of how they can=20 determine if the generators don't have it.=20 "That calls into question whether FERC must revoke market-based rate=20 authority retroactively," Dunn said. "That may require a reimbursement of t= he=20 difference between what would have been cost-based rates and what they've= =20 been charging."=20 The FERC order in April establishes some price controls when the state's=20 power reserves drop below 7.5 percent. That is scheduled to take effect=20 Tuesday, unless the FERC orders otherwise over the holiday weekend, Robinso= n=20 said.=20 The state Assembly, in documents to be filed Tuesday, said those price=20 controls should cover all hours -- not just during power emergencies. The= =20 Assembly's filing calls that order "arbitrary and capricious," and says the= =20 order does nothing to curtail unreasonable prices unless reserves drop.=20 Earlier ISO studies have estimated that California was overcharged more tha= n=20 $6 billion in the last year. FERC has ordered refunds for a fraction of tha= t=20 -- $125 million -- saying it can only examine prices for power sold during= =20 Stage 3 emergencies, when reserves drop to below 1.5 percent.=20 The Assembly's filing also will object to FERC's requirement that the state= =20 join a regional transmission organization in order to get price controls.= =20 Robinson, the ISO attorney, said the ISO would make a decision next week=20 whether to file a plan to join an RTO.=20 The state agencies also objected to a FERC plan to put a surcharge on energ= y=20 rates to pay money owed to generators.=20 Changes in Senate could offer state relief=20 By Finlay Lewis and Toby Eckert=20 COPLEY NEWS SERVICE=20 May 26, 2001=20 WASHINGTON -- After weeks of impasse, a plan to bring emergency relief to= =20 California's suffering electricity customers suddenly seems likely in the= =20 Senate because a sympathetic friend unexpectedly finds himself in a positio= n=20 to help.=20 This dramatic reversal of fortune will occur when Sen. Jeff Bingaman, D-N.M= .,=20 becomes chairman of the Senate Energy and Natural Resources Committee becau= se=20 of Vermont Sen. James Jeffords' defection from the GOP.=20 Bingaman is expected to take control of the committee next week when Jeffor= ds=20 officially becomes a political independent and throws control of the chambe= r=20 to the Democratic Party. Bingaman will replace Sen. Frank Murkowski,=20 R-Alaska, a strong ally of the energy industry.=20 Unlike Murkowski, Bingaman supports a bill championed by Sens. Dianne=20 Feinstein, D-Calif., and Gordon Smith, R-Ore., to impose temporary restrain= ts=20 on wholesale power sales in the West. The bill is likely to command a=20 majority if it comes to a vote in the committee.=20 The price caps still face fierce resistance in the House and at the other e= nd=20 of Pennsylvania Avenue, where President Bush, armed with a veto pen, and Vi= ce=20 President Dick Cheney steadfastly resist movement toward any form of price= =20 controls.=20 But because of a committee chairman's agenda-setting power, Bingaman's=20 ascension would dramatically shift the prospects of the Feinstein bill and= =20 other energy issues in the Senate.=20 Bush's proposal to open the Arctic National Wildlife Refuge to oil=20 exploration already faced difficulty, but now opponents will have easier=20 means to block it. And other environmentally contentious energy proposals= =20 could face tough scrutiny from Jeffords, who is expected to become chairman= =20 of the Senate's Environment and Public Works Committee.=20 Still, the president will have the power to enact the bulk of his energy=20 program because fewer than two dozen of his 105 proposals need congressiona= l=20 action.=20 But the shift in the Senate allows Democrats to advance their own plan. At= =20 the top of the list are temporary price controls.=20 "It's a priority for Sen. Bingaman," said Jude McCartin, a spokeswoman for= =20 the senator. "He would like to act quickly to meet the challenges."=20 "Bingaman is from a Western state, unlike Murkowski," said Ashley Brown,=20 executive director of an electricity-policy think tank at Harvard Universit= y.=20 "His geographic outlook is going to be different. He is also going to be=20 sensitive to Democratic senators from California. It's going to mean more t= o=20 him than it meant to Murkowski."=20 McCartin and aides to Feinstein were guardedly optimistic about the measure= 's=20 prospects should the bill reach the Senate floor, where its bipartisan=20 parentage will likely guarantee bipartisan backing.=20 That does not mean Feinstein's bill is home-free.=20 Bush and Cheney's opposition to price caps is rooted firmly in their belief= =20 that they would discourage investment in the energy industry, thereby=20 resulting in even shorter power supplies and more California blackouts.=20 In the House, a companion bill to the Feinstein-Smith measure is snarled in= =20 complex and inconclusive negotiations in the House Energy and Commerce=20 Committee, and the House Republican leadership would be poised to bury any= =20 measure that might make it to the floor in defiance of Bush's wishes.=20 But other factors may be bolstering prospects for action to ease the=20 California crisis.=20 McCartin pointed to the Senate's unanimous vote yesterday afternoon=20 confirming two Bush nominees to posts on the Federal Energy Regulatory=20 Commission as signaling a possibly more activist bureaucratic policy in=20 dealing with the state's problems.=20 The two new members of the nation's major regulatory authority over the pow= er=20 industry are Pat Wood III, the head of the Texas Utility Commission, and No= ra=20 Brownell, a Pennsylvania utility regulator.=20 Bush reportedly plans to replace FERC Chairman Curtis Hebert with Wood.=20 While observers say it is unlikely that Wood and Brownell would defy the=20 White House, they note that the appointees have indicated they might take a= =20 more expansive view than most current FERC commissioners to bring relief to= =20 California.=20 Once the Democrats take formal control of the Senate, probably about June 5= ,=20 there could be other actions affecting California's power problems.=20 Feinstein yesterday urged the likely chairman of the Senate Governmental=20 Affairs Committee, Sen. Joseph Lieberman, D-Conn., to investigate whether= =20 energy companies are improperly influencing the FERC.=20 She cited a report in yesterday's New York Times that Kenneth Lay, the head= =20 of Enron Corp., a Houston-based power marketing company, had offered to bac= k=20 Hebert in his effort to remain at the commission's helm if Hebert supported= =20 Enron's positions on electricity deregulation.=20 Enron outpaced all other energy companies last year in contributing to GOP= =20 campaigns, while Lay has personally been one of Bush's most generous=20 financial backers.=20 "Since FERC has refused to fulfill its legally mandated function under the= =20 Federal Power Act to restore 'just and reasonable' electricity rates, we ne= ed=20 to ask whether undue influence by the companies that FERC regulates has=20 resulted in its failure to act," Feinstein wrote in a letter to Lieberman.= =20 Senate passage of the Feinstein-Smith bill would send the measure to the=20 House, where some Republican House members from California face close=20 re-election races next year.=20 A Field Poll recently showed that 75 percent of state residents view the=20 electricity situation as "very serious" and that 59 percent say it was caus= ed=20 by energy companies seeking to increase profits.=20 Democratic strategists, citing those findings, say some California lawmaker= s=20 visiting their districts over the Memorial Day recess may come under pressu= re=20 to take strong action to restrain energy prices.=20 Natural gas CEO denies deal was improper=20 By Joe Cantlupe=20 COPLEY NEWS SERVICE=20 May 26, 2001=20 WASHINGTON -- The head of a Texas energy company that is accused of=20 wrongfully driving up California's natural gas prices told a federal=20 administrative law judge yesterday that he approved a deal between two=20 subsidiaries, but denied that it was an improper, sweetheart arrangement.= =20 William Wise, the chief executive officer of El Paso Corp., said the=20 Houston-based company has "stringent" rules that separate the operations of= =20 its pipeline subsidiary, El Paso Natural Gas, from its gas marketing=20 division, El Paso Merchant Energy.=20 "Functionally, that is the way they perform," said Wise of the corporate=20 subsidiaries. "They can be very autonomous from each other and the parent= =20 company."=20 Wise defended the corporation's practices in testimony before Curtis L.=20 Wagner, Federal Energy Regulatory Commission administrative law judge.=20 Wagner is examining allegations by California officials that El Paso and it= s=20 divisions entered into improper business practices before the deal was=20 struck. California officials charge that El Paso bolstered profits by=20 withholding natural gas capacity, costing the state about $3.7 billion. El= =20 Paso officials deny the allegations.=20 FERC's governing body has dismissed allegations of an improper relationship= =20 between the subsidiaries, but Wagner said he is still examining the issue= =20 before making recommendations to FERC.=20 Wise was hastily summoned to testify yesterday, a day after Wagner sharply= =20 criticized the credibility of another top El Paso Corp. executive about=20 Wise's involvement in discussions about the Merchant bid.=20 In his testimony, Wise said he gave the OK, on Valentine's Day 2000, to all= ow=20 Merchant Energy officials to bid on the natural gas capacity within the El= =20 Paso Natural Gas Co. pipeline. Wise said he was unaware of details about th= e=20 bid.=20 The El Paso Merchant Energy subsidiary eventually won the $38.5 million bid= =20 on the pipeline, which supplies about one-sixth of the natural gas that=20 California imports from throughout the Southwest. The company earned more= =20 than $180 million in profits.=20 If El Paso is found to have manipulated the power market, it could face=20 hundreds of millions of dollars in penalties.=20 Kern County Basks in Role as State's Blackout-Buster=20 Electricity: Six new plants will bolster its status as energy center.=20 By MITCHELL LANDSBERG, Times Staff Writer=20 ?????McKITTRICK, Calif.--You could think of this as California's own little= =20 slice of west Texas. ?????Here in the scruffy brown hills of western Kern County, oil rigs grow= =20 more easily than trees, pickups are more common than cars, and chicken frie= d=20 steak is the most popular dish at Mike and Annie's McKittrick Hotel. Tom Romesberg, general manager of La Paloma plant being built in Kern Count= y,=20 stands next to the unit's cooling tower. AL SEIB / Los Angeles Times ?????The hotel--which no longer offers lodging, just food and drink, and=20 plenty of it--is bustling these days with the roustabout energy of a Lone= =20 Star construction camp. Just down the road, a mammoth electrical power plan= t=20 is rising out of the sagebrush, its generators housed in four boxy building= s=20 the size of airplane hangars. ?????It is one of six new major gas-fired power plants expected to be built= =20 in Kern County over the next several years, an electrical construction boom= =20 unmatched anywhere in California. Kern, which already has a large surplus o= f=20 electricity, is cementing its place as California's energy capital, assumin= g=20 far more than its share of the burden in recharging the state's drained pow= er=20 supplies. ?????Over the next several years, the county will add nearly 5,000 megawatt= s=20 of power to the statewide grid. That is more than California now imports, o= n=20 average, from out-of-state suppliers. It's enough to supply about five=20 counties the size of Kern, which fills the dusty southern rim of the San=20 Joaquin Valley and has a population of 662,000. ?????In some parts of the state, a proposal to build a new power plant is a= =20 call to throw up the barricades. In recent months, intense community=20 opposition has forced developers to pull back proposals to build major plan= ts=20 in South Gate and San Jose, although Gov. Gray Davis has tried to revive=20 plans for the San Jose plant. ?????You don't hear a lot of not-in-my-backyard talk in Kern County. ?????"There should be power plants in everybody's backyard," said Paul Gipe= ,=20 chairman of the Kern chapter of the Sierra Club, which did not oppose any o= f=20 the new plants. "If people are concerned about having too many power plants= ,=20 they should think twice when they flip on the light switch." ?????New, natural gas-fired power plants, Gipe reasoned, are relatively cle= an=20 and will not add significantly to the county's serious air pollution=20 problems. Ideally, he said, they will allow the state to close some older,= =20 dirtier plants that cause considerably more environmental damage. ?????If environmentalists don't oppose the plants, it's not too much of a= =20 leap to guess that some people might be positively thrilled about them. ?????Just try, for instance, asking somebody in Taft, an oil center south o= f=20 McKittrick. "It's more money coming into Kern County--that's the way I look= =20 at it," said Pamela Dunlap, who runs a downtown thrift shop. ?????An Economy Rooted in the Oil Industry ?????She stood in the twilight outside her shop, on a street that embodies= =20 many of the most attractive attributes of small town Americana--with one=20 small difference. Where some towns might have statues of their founders or= =20 war heroes in prominent public places, Taft has erected small oil rigs and= =20 other pieces of drilling machinery, a reminder of its economic roots. ?????That Kern County has stepped up as California's blackout-buster is,=20 perhaps, not surprising. ?????To begin with, there's geography. Kern stands astride California's maj= or=20 north-south electrical transmission lines at precisely the spot at which th= ey=20 divide between the service areas of Pacific Gas & Electric, which serves=20 Northern California, and Southern California Edison. That spot can be=20 pinpointed as the Midway substation, a vast jungle of humming wires,=20 transformers and circuit breakers that lies a short distance west of=20 Interstate 5 in the town of Buttonwillow. ?????Already, massive new circuit-breakers--they look like Frankenstein=20 helmets sprouting 5-foot-long sparkplugs--are being erected at Midway to=20 handle the power from two major plants that will be revving up in the comin= g=20 months: PG&E National Energy's La Paloma plant, the one near McKittrick; an= d=20 Edison Mission Energy's Sunrise plant, just south of Taft. ?????The county is served by two major natural gas pipelines, which will be= =20 tapped to run the plants. In fact, Kern contains the state's largest known= =20 reservoirs of natural gas. ?????Another of Kern's geographic advantages? ?????"You look around, and you'll see there aren't a lot of people living= =20 around here," observed Stephen Whaley, who is overseeing construction of th= e=20 Sunrise plant. In the surrounding hills, an orchard of oil rigs bobbed in t= he=20 morning haze. Dirt roads cut crudely across the landscape, bisecting a=20 crisscross of steam pipes, fuel lines and electrical wires. ?????"This area is all about oil," Whaley said. Casting a glance at the=20 modular 560-megawatt plant rising behind him, he added with a wry smile, "Y= ou=20 know, I guess you could look at this from the road, and you could make the= =20 argument that it improves the looks." ?????The Sunrise plant, a relatively simple single-cycle plant, is expected= =20 to fire up 320 megawatts of its total output by Aug. 1, a scant nine months= =20 after construction began. The other plants--more complex and efficient=20 dual-cycle operations--will be opening over the next several years, assumin= g=20 all receive final approval. ?????The lack of major opposition to the plants is, of course, another reas= on=20 developers see Kern County as a good place to build. The county has long ha= d=20 a more intimate relationship with energy--oil, gas, electricity--than most= =20 places. To people here, the link between a natural gas well and a lightbulb= ,=20 or an oil derrick and a gas pedal, is neither theoretical nor especially=20 threatening. They're comfortable with energy. ?????Kern produces more crude oil than any other county in the United State= s=20 outside Alaska. Property taxes from oil companies have helped build handsom= e=20 new schools in Bakersfield, the county seat and largest city. The companies= '=20 big payrolls have helped populate elegant subdivisions with names that soun= d=20 vaguely Houstonian: Seven Oaks, River Oaks, Landmark Estates. ?????Which brings us to the Texas connection. ?????It's hard to overlook it, in a county that runs on oil and cotton and= =20 boasts a country music scene to rival Austin's. Conversations in the finer= =20 Bakersfield restaurants are filled with references to trips to Texas, of=20 colleagues in Midland and Odessa. A Bakersfield radio station was running a= =20 contest recently: The winners would be flown to a bull riding championship = in=20 Houston. ?????Until December 1999, American Airlines offered direct jet service=20 between Bakersfield and Dallas. It stopped after Occidental Petroleum moved= =20 its headquarters from Bakersfield to Houston. ?????This is a county where President Bush received more support in the=20 November election than he did in Texas, his home state. But then, Bush=20 already had a Bakersfield connection: He lived there briefly as a child whe= n=20 his father, former President George Bush, worked in the Kern oil fields. ?????"You look at the topography around Bakersfield, and the county's moral= s=20 and ethics--that predominantly conservative attitude that we have around=20 here--and you look at the oil, and you could be in Midland," said John Alle= n,=20 the general manager of Occidental of Elk Hills, which is developing a power= =20 plant in tandem with Sempra Energy of San Diego. ?????A lot of people in Kern County will tell you they don't mind being an= =20 energy farm for the state. It's a living, after all. ?????"It's good to be working at home," said Joe Ryan, a Bakersfield pipe= =20 welder who has spent years on the road seeking the heavy construction work= =20 that seemed to have vanished in his hometown. Now he's working at the La=20 Paloma plant, a 1,048-megawatt behemoth that will come online in phases=20 beginning in December. ?????About 800 people are at work on the plant, and several hundred more wi= ll=20 be employed in the coming months. And after that plant is done, there will = be=20 others to build. ?????"This is a good job here, I tell you what," said Ryan, 47, who has bee= n=20 banking his overtime on six 10-hour days a week--sometimes more. ?????County Sees Itself as 'Part of the Solution' ?????But there are some signs of simmering resentment, especially among=20 county leadership. After all, if every other county produced just half the= =20 electricity that Kern generates, California wouldn't have an energy crisis.= =20 And people in Kern County are getting hit with the same spring-loaded=20 electricity bills, the same rolling blackouts as everybody else. ?????"I think the people of California are either going to be part of the= =20 solution or part of the problem," said Assemblyman Roy Ashburn=20 (R-Bakersfield). "And in Kern County, we have a long history of being part = of=20 the solution, especially when it comes to energy issues." ?????Elsewhere in the state, Ashburn sees "a lot of arrogance--people who= =20 enjoy the benefits of a very high quality of life, enjoy the benefits of=20 electric power for jobs and for their personal life, but with an exclusivit= y=20 that it's someone else's problem to create that for them. We don't have tha= t=20 attitude in Kern County." Copyright 2001 Los Angeles Times=20 Plan to Rescue Edison Stalls=20 Power: Few lawmakers back Davis in the deal he reached with the utility.=20 Alternatives are being crafted, but legislators are wary of being blamed fo= r=20 new failures. Some see benefits in bankruptcy.=20 By MIGUEL BUSTILLO and CARL INGRAM, Times Staff Writers=20 ?????SACRAMENTO--Despite months of negotiations, Gov. Gray Davis' plan to= =20 save Southern California Edison, one of California's biggest utilities, is= =20 effectively dead in the state Legislature, leaders of both houses now agree= . ?????Not only has Davis failed to garner support for his more than $3-billi= on=20 plan to keep the utility out of bankruptcy--in part by having the state=20 purchase its transmission lines--but follow-up efforts by leading lawmakers= =20 to fashion an alternative are also falling flat. As a result, any alternati= ve=20 proposal to rescue Edison will probably have to be approved on a party-line= =20 vote by Democrats. ?????The reasons are complex, according to legislators working to close the= =20 Edison deal, but ultimately come down to simple politics, and are emblemati= c=20 of what has been a plodding, partisan response in the state Capitol to the= =20 energy crisis. ?????The stakes are high, because restoring Edison to financial health and= =20 requiring the utility to temporarily sell power at lower prices are linchpi= ns=20 of Davis' plan to get the state out of the business of buying electricity. ?????Nevertheless, leaders in the Legislature say Davis' approach has few= =20 backers. ?????"I don't think the governor's [plan] has support in either party in=20 either house," said Assembly Speaker Bob Hertzberg (D-Sherman Oaks). "The= =20 issue is whether we can come up with something else, and I think we can." ?????Senate leader John Burton (D-San Francisco), who has been critical of= =20 the deal Dav
|