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Sac Bee, Thurs, 6/21: Davis insists on energy refunds Sac Bee, Thurs, 6/21: Energy Digest: State moves to tax plants=20 SD Union, Wed, 6/20: Davis demands nearly $9 billion for electricity=20 overcharges SD Union, Wed, 6/20: Davis spars with GOP senators over electricity rates SD Union, Thurs, 6/21: Poway not proceeding on power plant proposal SD Union, Thurs, 6/21: Campaign helps seniors bear summer Program to use stickers identifying 'cool zones' SD Union, Thurs, 6/21: Business leaders unite to back new SDG&E line Coalition to lobby for transmission plan SD Union, Thurs, 6/21: Governor adamant on refund at hearing=20 Davis, on Capitol Hill visit, deflects blame for shortages SD Union, Wed, 6/20: Little-known transmission company has billion-dollar= =20 backers LA Times, Thurs, 6/21: Davis asks for energy refund help LA Times, Thurs, 6/21: House approves utility aid for needy=20 LA Times, Thurs, 6/21: Summer starts, power doesn't stop LA Times, Thurs, 6/21: Board votes to let state tax power plants SF Chron, Wed, 6/20: Davis' spinmeisters draw heat from watchdogs State controller refuses to pay energy advisers SF Chron, Thurs, 6/21: Board wants to take back control of setting plants'= =20 property taxes=20 SF Chron, Thurs, 6/21: Tough talk on power prices SF Chron, Thurs, 6/21: Nonprofits helped with utility bills Grants pay for ways to conserve energy Mercury News, Thurs, 6/21: Federal caps chill prices, analysts say Market steadies state leaders pushing for stricter controls OC Register, Wed, 6/20: Price controls could take years to assess Factors such as weather, conservation and long-term contracts all contribut= e=20 to prices, experts say OC Register, Wed, 6/20: Cast members in the power play OC Register, Wed, 6/20: Lawmaker criticizes FERC's settlement talks OC Register, Wed, 6/20: Energy notebook: Anti-tax advocate sues to block ca= sh=20 for Davis consultants OC Register, Wed, 6/20: Fair and cloudy The energy crunch is casting a financial shadow over the state's midways th= is=20 summer. Organizers are making emergency preparations to weather blackouts OC Register, Wed, 6/20: US stocks open lower More profit warning slam market - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -= -=20 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -= -=20 - - - - - - - - - - - - - - - - - Davis insists on energy refunds=20 By David Whitney Bee Washington Bureau (Published June 21, 2001)=20 WASHINGTON -- Gov. Gray Davis demanded Wednesday that power generators refu= nd=20 California nearly $9 billion in electricity charges.=20 "It is unconscionable for the generators to profit from their egregious=20 overcharges," Davis told the Senate Governmental Affairs Committee.=20 Davis' testimony highlighted a change in political tactics in the state's= =20 power crisis after a Monday order by the Federal Energy Regulatory Commissi= on=20 expanding wholesale price relief for California and 10 other Western states= .=20 And the governor got some support from two FERC members who said Wednesday= =20 that they are prepared to order California's energy suppliers to make heavy= =20 refunds because of overcharging.=20 But the two commissioners -- Pat Wood III and William Massey -- agreed with= =20 their FERC colleagues that California officials and energy companies should= =20 be given a chance to settle the multibillion-dollar refund dispute in the= =20 next three weeks before the commission acts, the Washington Post reported.= =20 During his testimony, Davis gave tepid praise to FERC, which he said "final= ly=20 took a positive step" in imposing the limits. But he continued to press the= =20 independent agency to recover what he said were overcharges.=20 "The FERC has been on a sit-down strike ... because we haven't received a= =20 dime," Davis said.=20 The commission's action on price controls has been well-received, diminishi= ng=20 appeals among West Coast Democratic governors and lawmakers and a handful o= f=20 Republicans for congressionally mandated caps.=20 But the commission's order didn't quiet demands that generators be required= =20 to pay back overcharges, and Davis led the charge Wednesday to exploit that= =20 issue.=20 Davis said the California Independent System Operator, the Folsom-based=20 agency that manages the state's power grid, found the state was billed $8.9= =20 billion more than the competitive market would have warranted for power=20 deliveries for the 13 months ending June 1.=20 Davis insisted that FERC move promptly to "order the energy companies to gi= ve=20 back the money," and that Congress should help pressure the agency to do so= .=20 "I do believe that FERC should get a clear signal on refunds from this=20 committee," Davis told the Democrat-controlled panel during a hearing into= =20 whether FERC has responded properly to the crisis.=20 The energy commission has ordered reviews of about $124 million in potentia= l=20 overcharges in the past several months. But that amount is dwarfed by the= =20 $8.9 billion that Davis is now seeking in refunds.=20 While the commission is continuing to review possible overcharges, it has y= et=20 to order a single dollar in refunds. The power generators deny they have=20 overcharged California, saying market conditions and the utilities' shaky= =20 credit ratings warranted high prices.=20 Wood and Massey, who talked to the Post after their testimony Wednesday=20 before the committee, said they are ready to require generators and markete= rs=20 to refund revenue that exceeded the price ceilings imposed by FERC on Monda= y.=20 "We should have given (the California parties) guidance on refunds," Massey= =20 told the Post. "A good place to start was to take (Monday's) order and appl= y=20 it starting October 2000 and see what you get" in refunds.=20 Depending on the time period and whether private generators and municipal= =20 utilities would be required to pay, the refunds could exceed $1 billion, so= me=20 energy attorneys calculated Wednesday.=20 In its Monday order, the commission said it wanted all the parties to sit= =20 down with an administrative law judge to see if they could work out a refun= ds=20 settlement. The settlement conference begins Monday.=20 Commission Chairman Curt Hebert told the Senate panel at Wednesday's hearin= g=20 that if no deal is reached after three weeks, the commission would seek=20 advice from the judge on how it might order a resolution.=20 "The commission stands ready to act expeditiously," Hebert pledged.=20 While Davis took the offensive at Wednesday's hearing, Republicans didn't= =20 give him a free ride. The Republican National Committee passed out hand fan= s=20 touted as "Gray Davis' solution for summer blackouts."=20 The fans were paid for by a small Sacramento Republican consulting firm, MB= =20 Associates.=20 The questioning by the committee's chairman, Sen. Joe Lieberman of=20 Connecticut, and other Democrats was friendly. But Republicans tried to pai= nt=20 Davis as the culprit in a crisis he could have solved a year ago.=20 "How did you let things get totally out of hand?" asked Sen. Fred Thompson = of=20 Tennessee, the committee's senior Republican.=20 Davis said his administration began the push to build new generating plants= =20 to meet the impending power shortage four months after he took office in=20 1999.=20 "I make no apologies for the aggressive actions we've taken," the governor= =20 said.=20 Republican lawmakers warned that demanding refunds could actually add to=20 California's power woes if energy investors become spooked about sanctions= =20 and take their business elsewhere -- resulting in a decreased electricity= =20 supply.=20 Under pointed questioning from Thompson, Davis shot back.=20 "The people I represent are mad. They want us to fight back," Davis said.= =20 "... Obviously, we want the state to be an attractive place for investment.= =20 But we don't want companies walking all over our citizens."=20 Separately, the top Republican on the Senate's Energy and Natural Resources= =20 Committee said it was unrealistic -- and perhaps unfair -- for Davis to=20 expect FERC to immediately order refunds.=20 "They're going to have to go back to court and prove these charges that,=20 indeed, there was manipulation in the marketing of power. And that's going = to=20 be very difficult to do," said Sen. Frank Murkowski, R-Alaska.=20 Even if a refund deal is reached, it's uncertain how much of an effect it= =20 might have. Of the $8.9 billion identified by the ISO, roughly two-thirds o= f=20 that was incurred by California utilities that still owe generators billion= s=20 of dollars for past power deliveries.=20 Hebert also noted that ratepayers in other Western states would have to be= =20 included in refund considerations.=20 Meanwhile, Sens. Dianne Feinstein, D-Calif., and Gordon Smith, R-Ore., said= =20 Wednesday that because of FERC's action, they were pulling back their bill,= =20 at least for now, to require that wholesale prices in the West be set at th= e=20 cost of production, plant by plant, plus a margin of profit.=20 However, House Democrats said that while they were happy the commission had= =20 taken action, they still want a vote on a tougher price-cap proposal offere= d=20 by Democratic Reps. Jay Inslee of Washington and Nancy Pelosi of San=20 Francisco.=20 The Bee's David Whitney can be reached at (202) 383-0004 or=20 dwhitney@mcclatchydc.com.=20 The New York Times contributed to this report. Energy Digest: State moves to tax plants (Published June 21, 2001)=20 In a move aimed at squeezing more tax revenue from large in-state power=20 generators, the state Board of Equalization on Wednesday edged closer to=20 stripping local governments of their authority to tax power plants.=20 State Controller Kathleen Connell, a member of the board, proposed that the= =20 state take over the assessments.=20 The amount local governments may assess power plants is limited by=20 Proposition 13, but the state is able to place higher values on the=20 properties.=20 Supporters of the move say the state could collect $70 million to $100=20 million more than local governments.=20 But the board's staff, while acknowledging that the state could extract mor= e=20 from power plants than local governments during the current energy crisis,= =20 said it is unclear what would happen to the price of power and value of pow= er=20 plants in the future.=20 Local governments, worried that the new assessment system could shortchange= =20 their revenues, opposed the move. But the board, which voted unanimously to= =20 give the plan tentative approval, said the Legislature intends to distribut= e=20 the power plant money as though it were taxed locally.=20 Plants producing fewer than 50 megawatts and co-generation facilities would= =20 be exempted from the rule change. The bill closely resembles AB 81 by=20 Assemblywoman Carole Migden, D-San Francisco, which has been approved by th= e=20 Assembly and awaits Senate action.=20 --Bee Capitol Bureau Davis demands nearly $9 billion for electricity overcharges=20 By H. Josef Hebert ASSOCIATED PRESS=20 June 20, 2001=20 WASHINGTON =01) California Gov. Gray Davis demanded that power generators r= efund=20 nearly $9 billion in electricity overcharges and complained that federal=20 regulators have "looked the other way while energy companies bilked our=20 state."=20 Davis told a Senate hearing Wednesday that the decision by the Federal Ener= gy=20 Regulatory Commission to curtail price spikes in California and 10 other=20 Western states was a step forward. "But its actions do nothing about the=20 overcharges" over the past year, he said.=20 The governor, a Democrat, has been criticized by Republicans, who charge he= =20 has allowed the California power crisis to get out of hand.=20 Customers might have to pay debt, advocate says=20 Continuing coverage: California's Power Crisis=20 ?=20 Davis defended his actions, saying the state has stepped up approval for ne= w=20 power plants and strengthened conservation programs. He also said the state= =20 has little control over price gouging by out-of-state power generators.=20 "The governor once said he could solve California's problems in 15 minutes.= =20 ... But it appears that California has continued to try and hide the true= =20 cost of power by having the state pay for it instead of the utilities,"=20 putting California taxpayers in jeopardy, said Sen. Frank Murkowski,=20 R-Alaska.=20 Murkowski said many of the alleged overcharges are by public power entities= =20 not under FERC jurisdiction=20 Sen. Joe Lieberman, D-Conn., chairman of the Governmental Affairs Committee= ,=20 said the FERC, which regulates wholesale electricity sales, has been slow t= o=20 respond and "surprisingly reluctant" to assure that electricity prices are= =20 just and reasonable, as required by the 1934 Federal Power Act.=20 The agency's response to the Western power problem "raises serious question= s=20 about whether (FERC) has or will oversee the newly deregulated energy=20 markets" not only in the West but across the rest of the country.=20 The federal agency, whose commissioners were to testify later in the day,= =20 imposed limited, market-based price caps on Monday in California and 10 oth= er=20 Western states from Washington to Arizona. The agency also ordered the=20 parties to attend a conference next week to try to work out agreements on= =20 overcharges and other issues.=20 Months ago, the FERC singled out $124 million in alleged overcharges by pow= er=20 generators. The power companies have since challenged the agency's findings= =20 and the matter remains in dispute.=20 "To date not a single penny in refunds has been returned to California,"=20 complained Davis. He said that between May 2000 and the beginning of this= =20 month power generators are believed to have overcharged California $8.9=20 billion.=20 "They must be required to give us back our money," said Davis. "It is=20 unconscionable that FERC looked the other way while energy companies bilked= =20 our state for up to $9 billion."=20 The state spent $7 billion for electricity in 1999 and $27 billion in 2000= =20 and is projected to pay nearly $50 billion this year, said Davis. "Power=20 generators have been able to exert extreme power over our energy market," h= e=20 said.=20 Davis rejected Republican criticism that the state is not addressing the=20 problem. He said newly approved power plants will provide 20,000 additional= =20 megawatts of electricity by 2003, including 4,000 megawatts by the end of= =20 this summer. "Everything that can be done to bring reliable, affordable=20 energy to California is being done ... except wholesale price relief," he= =20 said.=20 "This administration has minimized this crisis (for) more months," said Sen= .=20 Patty Murray, D-Wash., alluding to President Bush's repeated refusal to urg= e=20 the FERC to mitigate electricity prices. Bush has strongly opposed price=20 controls, although he indicated support for FERC's limited price mitigation= =20 effort this week.=20 Murray said the government should issue a disaster declaration so that=20 businesses can get low-income loans, and require that FERC press its=20 investigation into price gouging and demand refunds not only in California= =20 but in the Pacific Northwest, where electricity prices have also skyrockete= d.=20 Republicans continued their opposition to more stringent price caps based o= n=20 the cost of generation at individual power plants.=20 "Having a federal agency try to determine what is a just and reasonable pri= ce=20 is laughable," said Sen. Fred Thompson of Tennessee, the committee's rankin= g=20 Republican. Hard price caps "don't work when supply is the problem. ... The= y=20 make a bad situation worse," he said.=20 After FERC issued its limited price control order this week, Senate Democra= ts=20 on Tuesday said they would drop legislation to require more stringent=20 cost-based price caps on Western electricity sales.=20 Democrats in the House, however, said they would continue to pursue a bill= =20 requiring the FERC to take more aggressive action.=20 Davis spars with GOP senators over electricity rates=20 By Finlay Lewis and Joe Cantlupe COPLEY NEWS SERVICE=20 June 20, 2001=20 WASHINGTON =01) California Gov. Gray Davis sparred with Senate Republicans= =20 Wednesday as he blamed federal regulators for averting their gaze from an= =20 alleged $9 billion scheme to bilk the state's electricity consumers.=20 Testifying in front of the Senate's Government Affairs Committee, Davis=20 demanded that the Federal Energy Regulatory Commission (FERC) order power= =20 companies to refund the overcharges. But the governor also found himself=20 obliged to ward off GOP claims that Davis' own policies triggered the state= 's=20 energy crisis.=20 The partisan give-and-take reflected the mounting political stakes involved= =20 in California's plight. With both parties preparing for next year's=20 congressional elections, the subtext of Davis' testimony appeared to involv= e=20 a recognition that the state's energy problems could affect the outcome of= =20 several California races.=20 "How did you let things get so totally out of hand?" asked Sen. Fred Thomps= on=20 of Tennessee, the committee's ranking Republican, as he greeted Davis who= =20 made a long-awaited appearance here after weeks of transcontinental sniping= =20 over assigning responsibility for the state's energy woes.=20 Thompson's question could have been lifted from the script of a $1.5 millio= n=20 GOP advertising campaign launched earlier this week in California that=20 attempts to put the governor on the spot for the energy crisis.=20 Davis' rebuttal involved a long recitation of his moves to bring more power= =20 on line in the state and to encourage greater conservation.=20 "We've been working on this for a very long time, and to suggest otherwise= =20 would be inaccurate," he told Thompson.=20 Saying that he is determined to hold "FERC's feet to the fire" on the refun= d=20 issue, Davis complained to the committee, "It is unconscionable that the=20 commission looked the other way while energy companies bilked our state for= =20 up to $9 billion."=20 Recent public opinion polls show that Davis has lost substantial ground wit= h=20 California voters since the electricity crisis hit, but Wednesday's round o= f=20 activities here found him on the offensive.=20 "Obviously, this is the equivalent of a political nuclear weapon for him,"= =20 observed Norm Ornstein, a congressional affairs expert at the American=20 Enterprise Institute.=20 Several hours after Davis completed his testimony, the five FERC=20 commissioners appeared before the committee, but they largely ignored the= =20 governor's accusations.=20 On Monday, FERC issued an order restricting energy prices in California and= =20 much of the West for the next 15 months and setting up a procedure for=20 reviewing refund claims.=20 "The commission is not ducking these issues," said FERC Chairman Curtis L.= =20 Hebert.=20 However, there remains a substantial gap between Davis' calculation of=20 electricity overcharges in California and the $124.5 million in refunds=20 assessed so far by FERC.=20 The struggle over refunds will enter a new phase on Monday when the review= =20 procedure outlined by FERC will begin before FERC's chief administrative la= w=20 judge, Curtis L. Wagner Jr. Pairing off against the power companies will be= =20 senior officials of the Independent System Operator, which runs the state's= =20 power grid.=20 Davis told reporters that it was the ISO that produced the $9 billion=20 estimate of California's electricity overcharge.=20 "To date, not a single penny has been returned to Californians," Davis told= =20 the committee. "It is unconscionable that the generators be allowed to keep= =20 these egregious overcharges."=20 California Attorney General Bill Lockyer is reviewing possible price gougin= g,=20 and Davis said later he would anticipate "some strong action coming out of= =20 his office before the end of the summer."=20 Davis expects to meet on Monday in Sacramento with Bush's two new FERC GOP= =20 appointees, Pat Wood III and Nora Brownell, about "natural gas discrepancie= s"=20 in California.=20 "California was paying two to three times more in natural gas, and the=20 president agreed with me this is something that could be fixed," Davis told= a=20 press conference after meeting with the California congressional delegation= .=20 Reps. Duncan Hunter, R-El Cajon, and Darrell Issa, R-Vista, were among the= =20 Republicans who met with Davis.=20 "It was a good meeting with the governor," Hunter said, adding that FERC "h= as=20 taken steps to lock down prices, and the results speak for themselves. I=20 think we are all working together, and it's a good sense of common ground."= =20 That was not the mood in the committee hearing, however.=20 Sparring with Davis, Thompson argued that there had been ample advance=20 warnings of the crisis, including a 1998 report foreseeing an imminent ener= gy=20 shortage and the fact that the state was undergoing a rapid period of=20 economic growth spurred by the energy-intensive high-tech industry.=20 "Did you see those developments?" Thompson asked. "Did they cause you=20 concern?"=20 Davis sought to shift the focus back to his predecessor, Gov. Pete Wilson,= =20 and the State Legislature that designed an energy deregulation plan now=20 widely recognized as having been seriously flawed.=20 However, he said those problems did not become apparent until last year.=20 Thompson also criticized Davis' recent rhetoric castigating the power=20 companies for price gouging and suggested that the tactic could backfire by= =20 dissuading the energy sector from making needed investments in the state's= =20 power infrastructure.=20 "The people I represent are mad," replied Davis. "They want us to fight bac= k=20 and that's what I'm doing."=20 He said he is determined that the state cease serving as "a cash cow to a l= ot=20 of energy companies."=20 Poway not proceeding on power plant proposal=20 Council worried about financial burden By Brian E. Clark=20 UNION-TRIBUNE STAFF WRITER=20 June 21, 2001=20 POWAY -- Citing financial risks, the City Council has pulled the plug on a= =20 proposed $40 million power plant in the South Poway Business Park.=20 Though there was no formal vote, Mayor Mickey Cafagna told City Manager Jim= =20 Bowersox -- who was lukewarm at best to the proposed plant -- that his staf= f=20 should not spend any more time or money on the project.=20 So-called "peaker" plants are small, less-efficient plants that can produce= =20 up to 50 megawatts of electricity. Usually they run only several hours a da= y,=20 when demand is greatest.=20 At the council meeting Tuesday night, Cafagna said he saw little reason to= =20 invest in the plant, especially since there are no guarantees that Poway=20 could claim any of the power it produced.=20 Instead, he said the city should monitor a plan put forth by Rep. Duncan=20 Hunter, R-El Cajon, that would coordinate the use of diesel generators owne= d=20 by large businesses to help avoid the blackouts that are expected to plague= =20 the state this summer.=20 If the council had chosen to proceed with the peaker-plant proposal -- an= =20 idea it first explored in March -- it would have had to pay San Diego Gas &= =20 Electric Co. up to $30,000 to go through the application process. An=20 additional $70,000 would have been authorized for a consultant.=20 Those two figures made City Council members blanch.=20 "I'm not willing to commit any of the public's money on this," said=20 Councilwoman Betty Rexford. "I think it would be better for the city to be= =20 handing out energy-efficient light bulbs to save energy."=20 Campaign helps seniors bear summer=20 Program to use stickers identifying 'cool zones' By Anne Krueger=20 UNION-TRIBUNE STAFF WRITER=20 June 21, 2001=20 During a heat wave or rolling blackout this summer, look to the polar bear= =20 for relief.=20 The bear is on a decal that will be placed at the entrances of about 60=20 buildings around San Diego County that have been designated as "cool zones.= "=20 The program kicks off today, the first day of summer.=20 The cool zones were the idea of Supervisor Dianne Jacob. She was looking fo= r=20 a way to offer relief to seniors and the disabled who are particularly=20 vulnerable to heat exhaustion and dehydration.=20 Jacob said she was concerned that many seniors might not use their air=20 conditioners this summer because of high electric bills. Or they would have= =20 to suffer through a power outage during a rolling blackout.=20 She said she wants to avoid a disaster like the one in Chicago in 1995. Mor= e=20 than 500 residents, most of them elderly, died when the power went out duri= ng=20 a heat wave.=20 The buildings identified as cool zones include senior centers, libraries,= =20 enclosed shopping malls, and even courthouses. Some of the cool zones, such= =20 as senior centers or libraries, may have planned programs, but other=20 buildings will simply provide a place to get out of the heat.=20 "If people want to read on their own or knit or chat, at least there will b= e=20 places for them to cool off," said Denise Nelesen, spokeswoman for the coun= ty=20 Office of Aging and Independence Services, which is coordinating the progra= m.=20 Many of the buildings designated as cool zones are popular spots already. A= t=20 Parkway Plaza in El Cajon, 79-year-old William Richards of North Park sat o= n=20 a bench sipping a soda. He said that although he lives closer to Fashion=20 Valley, an outdoor mall in Mission Valley, he prefers Parkway Plaza, in par= t,=20 because it's enclosed.=20 "It's more comfortable," Richards said. "It's just a nice place to walk=20 around."=20 The Lemon Grove Senior Center is getting a polar bear sticker, too. Even=20 without the air-conditioning turned on. Officials there are prudently waiti= ng=20 for the heat to hit before flipping the switch.=20 A group of women played mah-jongg there Tuesday as a breeze came through th= e=20 open door. "We'll be glad to share our space, if it's cool," said Eve Butle= r.=20 Jacob said providing transportation to cool zones is still a problem that= =20 hasn't been worked out. She said money may be available through the state= =20 Public Utilities Commission.=20 Nelesen said the county also is helping shut-in seniors through its Project= =20 Care program, in which the seniors receive a regular phone call to check on= =20 their welfare. Mail carriers and utility workers are being trained to look= =20 for signs that a senior may require assistance, Nelesen said.=20 Business leaders unite to back new SDG&E line=20 Coalition to lobby for transmission plan By Jeff McDonald=20 UNION-TRIBUNE STAFF WRITER=20 June 21, 2001=20 A group of San Diego business leaders have formed a coalition to promote a= =20 major improvement to the San Diego Gas & Electric transmission grid.=20 The utility is seeking approval for a 500,000-volt transmission line that= =20 would run from southwest Riverside County to north San Diego County. SDG&E= =20 hopes to have the so-called Valley Rainbow Interconnect in place by 2004.= =20 San Diego business executives plan to lobby state energy regulators to=20 approve the 30-mile set of looming poles and high-voltage wires in order to= =20 boost capacity along the SDG&E transmission network.=20 "The Valley Rainbow Interconnect will ensure a reliable delivery of power f= or=20 San Diegans for years to come," said Jessie Knight Jr. of the San Diego=20 Regional Chamber of Commerce.=20 The collection of business leaders includes chamber officials as well as=20 executives of the San Diego-Imperial Counties Labor Council and the San Die= go=20 Economic Development Corp.=20 Calling themselves the San Diego County Valley Rainbow Alliance, members pl= an=20 to testify at California Public Utilities Commission meetings on behalf of= =20 the project.=20 Three community hearings have been scheduled by the CPUC to solicit input o= n=20 the proposal from residents of San Diego and Riverside counties. They were= =20 scheduled in Pauma Valley and the Riverside County communities of Wincheste= r=20 and Temecula.=20 No organized opposition to the network has surfaced in San Diego County.=20 But a group of Temecula Valley area residents have spent months fighting th= e=20 project. Among other things, they worry about the effect that the=20 long-planned series of 190-foot poles might have on their property values.= =20 The CPUC held a hearing last night at the Pauma Valley Community Center.=20 Another hearing on the application will be held at 6:30 tonight at the=20 Temecula Community Recreation Center.=20 For more information, check the CPUC Web site at www.cpuc.ca.gov.=20 Governor adamant on refund at hearing=20 Davis, on Capitol Hill visit, deflects blame for shortages Finlay Lewis and Joe Cantlupe=20 COPLEY NEWS SERVICE=20 June 21, 2001=20 WASHINGTON -- Gov. Gray Davis sparred with Senate Republicans yesterday as = he=20 blamed federal regulators for ignoring what he said was a $9 billion scheme= =20 by power companies to bilk Californians.=20 Testifying before the Senate's Government Affairs Committee, Davis demanded= =20 that the Federal Energy Regulatory Commission order power companies to refu= nd=20 the overcharges.=20 But the governor was forced to respond to Republican claims that his polici= es=20 turned a solveable problem into a full-blown energy crisis.=20 The partisan give-and-take reflected the mounting political stakes involved= =20 in California's plight. The subtext of Davis' testimony involved a=20 recognition that the state's energy problems could affect the outcome of=20 several California House races next year, as well as the governor's own=20 re-election.=20 "How did you let things get so totally out of hand?" Sen. Fred Thompson of= =20 Tennessee, the committee's ranking Republican, asked Davis.=20 Thompson's question could have been lifted from the script of a $1.5 millio= n=20 GOP advertising campaign launched earlier this week in California that=20 attempts to put the governor on the spot for the energy crisis. The campaig= n=20 follows weeks of criticism by Davis of federal regulators and of President= =20 Bush for failing to address the energy problem.=20 Davis' rebuttal involved a long recitation of his moves to bring more power= =20 on line in the state and to encourage greater conservation.=20 "We've been working on this for a very long time, and to suggest otherwise= =20 would be inaccurate," he told Thompson.=20 The Democratic governor said he is determined to hold "FERC's feet to the= =20 fire" on the refund issue.=20 "It is unconscionable that the commission looked the other way while energy= =20 companies bilked our state for up to $9 billion," he said.=20 Davis' grievances received more attention here than they might have just=20 weeks ago, before Democrats took control of the Senate and its committees= =20 after Sen. Jim Jeffords of Vermont bolted the Republican Party to become an= =20 independent. A sympathetic committee chairman, Democratic Sen. Joe Lieberma= n=20 of Connecticut, made Davis the star witness of yesterday's hearing.=20 Recent public opinion polls show that Davis has lost substantial ground wit= h=20 California voters since the electricity crisis hit, but Republicans have=20 acknowledged that Davis and Democrats in recent weeks have gained the upper= =20 hand over the Bush administration in the energy debate.=20 Despite some GOP criticism yesterday, Davis was clearly on the offensive.= =20 "Obviously, this is the equivalent of a political nuclear weapon for him,"= =20 observed Norm Ornstein, a congressional affairs expert at the American=20 Enterprise Institute.=20 Several hours after Davis completed his testimony, the five FERC=20 commissioners appeared before the committee, but they largely ignored the= =20 governor's accusations.=20 On Monday, FERC issued an order to control energy prices in California and= =20 much of the West for the next 15 months and to set up a procedure for=20 reviewing refund claims.=20 "The commission is not ducking these issues," said FERC Chairman Curtis=20 Hebert.=20 However, there remains a substantial gap between Davis' calculation of=20 electricity overcharges in California and the $124.5 million in refunds=20 assessed so far by FERC, which have been contested by power generators.=20 The struggle over refunds enters a new phase Monday when the review procedu= re=20 outlined by FERC will begin before the commission's chief administrative la= w=20 judge, Curtis Wagner Jr. Facing off against the power companies will be=20 senior officials of the Independent System Operator, which runs the=20 California power grid.=20 Davis told reporters that it was the ISO that produced the $9 billion=20 estimate of California's electricity overcharge.=20 "To date, not a single penny has been returned to Californians," Davis told= =20 the committee. "It is unconscionable that the generators be allowed to keep= =20 these egregious overcharges."=20 Sen. Barbara Boxer, D-Calif., yesterday introduced legislation to provide f= or=20 refunds.=20 The power companies, although acknowledging huge profits, have denied=20 allegations of price gouging or market manipulation.=20 "There has been no evidence to suggest that suppliers bilked anyone," Mark= =20 Stultz, a vice president of the Electric Power Supply Association, told the= =20 Associated Press.=20 California Attorney General Bill Lockyer is reviewing possible price gougin= g,=20 and Davis said after the hearing he anticipated "some strong action" from= =20 Lockyer in the next few months.=20 Davis said he plans to meet on Monday in Sacramento with Bush's two new FER= C=20 appointees, Pat Wood III and Nora Brownell, about "natural gas discrepancie= s"=20 in California. Davis said California has been paying up to three times more= =20 for natural gas than elsewhere in the country.=20 "The president agreed with me this is something that could be fixed," Davis= =20 told a reporters after meeting with the California congressional delegation= .=20 Reps. Duncan Hunter of El Cajon and Darrell Issa of Vista were among the=20 Republicans who met with Davis.=20 "It was a good meeting with the governor," Hunter said, adding that FERC "h= as=20 taken steps to lock down prices, and the results speak for themselves. I=20 think we are all working together, and it's a good sense of common ground."= =20 That was not the mood in the committee hearing, however.=20 Sparring with Davis, Thompson argued that there had been ample advance=20 warnings of the crisis. He noted a 1998 report forecasting an imminent ener= gy=20 shortage and the fact that the state was undergoing a rapid period of=20 economic growth spurred by the energy-intensive high-tech industry.=20 "Did you see those developments?" Thompson asked. "Did they cause you=20 concern?"=20 Davis sought to shift the focus back to his predecessor, Republican Gov. Pe= te=20 Wilson, and the state Legislature, which approved an energy deregulation pl= an=20 now widely recognized as seriously flawed.=20 However, he said those problems did not become apparent until last year.=20 Thompson also criticized Davis' recent rhetoric castigating the power=20 companies for price-gouging and suggested that the tactic could backfire by= =20 dissuading the energy sector from making needed investments in the state's= =20 power infrastructure.=20 "The people I represent are mad," replied Davis. "They want us to fight bac= k=20 and that's what I'm doing."=20 He said he is determined that the state cease serving as "a cash cow to a l= ot=20 of energy companies."=20 ?=20 Little-known transmission company has billion-dollar backers=20 By Jennifer Coleman ASSOCIATED PRESS=20 June 20, 2001=20 SACRAMENTO =01) Through an alliance with a little-known start-up company,= =20 General Electric Co. is trying to enter California's transmission lines=20 business.=20 Although Trans-Elect, a two-year-old company based in Washington, has no=20 experience in the transmission business, it has the financial support of GE= 's=20 $66 billion financial arm, GE Capital. Trans-Elect's latest offer comes as= =20 Gov. Gray Davis seeks legislative approval for his plan to buy the=20 transmission lines of both San Diego Gas & Electric and Southern California= =20 Edison.=20 Any involvement by GE in the state's transmission grid could be a conflict = of=20 interest, said a key lawmaker involved in the efforts to end California's= =20 yearlong power crisis.=20 "You've got someone with generation and transmission systems, how do they= =20 keep them separate and do they?" said Assemblyman Fred Keeley, D-Boulder=20 Creek. "That's a concern for me. Would they have the ability to restrict=20 competitors' access to transmissions?"=20 Trans-Elect first made overtures to buy the transmission lines in February,= =20 offering more than $5 billion for those owned by SDG&E, Edison and Pacific= =20 Gas and Electric.=20 Although Davis has reached a deal with Edison to buy their lines for $2.76= =20 billion and a $1 billion pact with SDG&E, Trans-Elect has said it will offe= r=20 Edison $1.8 billion and SDG&E $700 million.=20 Bob Mitchell, Trans-Elect's vice president, said the company made its offer= =20 believing that the Legislature won't approve the deals to buy the two=20 utilities' lines.=20 GE joined forces with Trans-Elect March 14, when GE Capital Services=20 Structured Finances Group Inc. announced it had bought a minority stake in= =20 the company. Neither company would reveal the size of the investment.=20 But a GE statement said its investment enables "GE Capital Global Energy to= =20 co-invest with Trans-Elect as it acquires transmission assets throughout th= e=20 U.S."=20 Now, however, both GE and Trans-Elect are trying to downplay their=20 relationship.=20 Ken Koprowski, a GE spokesman, said the company made "a small financial=20 investment and we're not involved in the management of the company." He add= ed=20 that the company invests in many other energy projects, including power=20 plants.=20 "There's no connection with what we're doing in California and GE," Mitchel= l=20 said.=20 What Koprowski and Mitchell call a low-profile arrangement has generated=20 lobbying activity. Several lawmakers said they had met with Mitchell about= =20 Trans-Elect's offer.=20 GE Capital hired lobbyist Phillip Schott a week after investing in=20 Trans-Elect. Schott referred calls to GE's lobbyist, Kahl/Pownall Advocates= ,=20 one of California's biggest political lobbying firms. Fred Pownall,=20 Kahl/Pownall's head, referred all questions on the bill to GE Capital=20 headquarters.=20 In California, many hurdles remain for Trans-Elect. First, the Legislature= =20 would have to kill the deals with SDG&E and Edison. Then the companies woul= d=20 have to turn to Trans-Elect to buy their lines.=20 So far, utility leaders are skeptical. Edison CEO John Bryson rejected the= =20 Trans-Elect offer Tuesday, calling it a "phony" bid by an unknown company.= =20 "We don't know this company. I suppose nobody does," Bryson said at a town= =20 hall meeting in Los Angeles. The reason the transmission lines are in the= =20 deal "is that we consider it our responsibility to try to stay serving our= =20 customers as a healthy utility."=20 Other than the governor's offer, the transmission system isn't for sale,=20 Bryson said.=20 Trans-Elect remains interested in investing in California, but has postpone= d=20 sending a letter offering $1.8 billion for Edison's lines, Mitchell said.= =20 "I think it's potentially an attractive deal, when we can create the right= =20 climate for it," Mitchell said. "From the perspective of the people of=20 California, it's one less financial obligation they have to take on."=20 The Memorandum of Understanding between Edison and the governor needs=20 legislative approval by August, and many lawmakers have balked at the plan.= =20 Keeley said he isn't convinced that selling the assets to a private company= =20 is the best long-term solution for the state.=20 "I'm not prepared at this stage to believe that we should sell something as= =20 significant as the transmission system to an entity that is not regulated b= y=20 the state and where our ability to have anything to say about the=20 transmission system is in the Federal Energy Regulatory Commission's venue,= "=20 he said.=20 Should the Davis plan fail, Mitchell says his offer would remain.=20 "It appears to me and many other people that the Legislature is not going t= o=20 allow the people of California to pay an excessively high price," he said.= =20 The $1.8 billion offer is "a very strong price."=20 Mitchell said he doesn't blame the utilities for rejecting his initial=20 offers, since the governor has promised more. But he stressed that the=20 company has a future in the industry, and plans to go public eventually.=20 Formed in 1998, Trans-Elect is trying to be the country's first national=20 transmission company. As utilities deregulate, they are allowed to sell=20 assets, including the transmission lines.=20 The American Transmission Company, a private transmission company based in= =20 Wisconsin, has a similar mission as Trans-Elect, but not the level of=20 financial backing, said ATC spokeswoman Maripat Blankenheim.=20 "They're out there out with a really big check book," she said.=20 Davis Asks for Energy Refund Help=20 Power: Governor urges U.S. Senate action to get "back the money that was=20 wrongly taken from us."=20 By RICHARD SIMON, Times Staff Writer=20 ?????WASHINGTON--California Gov. Gray Davis, seeking to shift the focus of= =20 the energy debate, urged Congress on Wednesday to turn up the political hea= t=20 on federal regulators to help California recover $9 billion in estimated=20 overcharges by power generators. ?????Davis told a Senate panel that the order issued Monday by the Federal= =20 Energy Regulatory Commission to limit Western electricity prices was "a ste= p=20 in the right direction." But more aggressive action is needed, he said, to= =20 "give us back the money that was wrongly taken from us." Gov. Gray Davis wipes his brow outside the Capitol after discussing his=20 remarks to the Senate Governmental Affairs Committee. AFP ?????Davis' remarks to the Senate Governmental Affairs Committee suggest th= at=20 the political warfare between Sacramento and Washington did not end with=20 FERC's decision to police wholesale electricity prices more aggressively. ?????By demanding federal intervention to recover money already paid to pow= er=20 generators, Davis continued to insist that the Bush administration and=20 federal regulators must share responsibility for solving the state's energy= =20 problems. ?????"Yes, they have provided some relief," Davis said of FERC's price=20 mitigation mandate. "But that's only half the job. The other half of the jo= b=20 is give us back the money that was wrongly taken from us."=20 ?????On his first trip to Capitol Hill since Democrats took control of the= =20 Senate, Davis appeared before a Governmental Affairs Committee that display= ed=20 more sympathy toward his administration than it did when Republicans ruled = it. ?????One committee member, fellow Democrat Robert Torricelli of New Jersey,= =20 bluntly warned FERC: "We are watching how the people of California are=20 treated, and we are watching very, very closely." ?????Davis noted that federal regulators have already determined that=20 wholesale power rates charged to California were "unjust and unreasonable."= =20 Even so, he said, "not a single penny in refunds has been returned to=20 California." ?????Governor Calls Rates 'Egregious' ?????"It's unconscionable if generators are allowed to keep these egregious= =20 overcharges," Davis said, imploring the committee to "hold FERC's feet to t= he=20 fire." ?????California's electricity grid operator has calculated that the state= =20 paid about $9 billion more than a competitive market would warrant for=20 electricity from May 2000 to May 2001. So far, FERC has only identified abo= ut=20 $124 million in possible overcharges, which were confined to January and=20 February. ?????To some extent, FERC has already agreed to play a bigger role in seeki= ng=20 refunds, although not necessarily the full $9 billion that Davis is seeking= .=20 ?????Next week, representatives of the state, electric utilities and power= =20 generating companies are scheduled to begin talks in Washington on possible= =20 refunds.=20 California Gov. Gray Davis testifies before a Senate committee. He implored= =20 its members to "hold FERC's feet to the fire." AFP ?????The settlement conference, which begins Monday, is scheduled to run fo= r=20 15 consecutive days, including weekends, which is unusual for a regulatory= =20 proceeding. ?????Presiding over the conference will be Chief Administrative Law Judge= =20 Curtis L. Wagner Jr., who admonished participants Wednesday to make sure th= at=20 they send representatives who have authority to approve any agreements=20 reached during the negotiations. Wagner can extend the conference if=20 necessary. ?????The purpose of the conference is to settle past accounts and structure= =20 "new arrangements for California's energy future," Wagner said in a=20 scheduling order. To reach those goals, the parties must agree on how much = of=20 the electricity load will be shifted away from the volatile spot market for= =20 immediate delivery into stable, long-term contracts, refunds and=20 "credit-worthiness matters," the order said. ?????Edison General Counsel Stephen E. Pickett said the utility is pleased= =20 that regulators set up the meeting with power generators to discuss refunds= =20 to the utilities dating back to Oct. 2. ?????"Certainly, it is a positive step toward resolving many of these=20 issues," Pickett said in a conference call Tuesday with creditors. ?????San Diego Gas & Electric expressed similar muted optimism. ?????"SDG&E has been a supporter of customer refunds, and we're encouraged= =20 that the FERC is working toward a settlement," SDG&E spokesman Art Larson= =20 said. ?????But Reliant Energy spokeswoman Pat Hammond expressed skepticism about= =20 the $9-billion overcharge figure cited by Davis. "That number sounds like t= he=20 price of all the power they've bought in the last year in California, and w= e=20 obviously don't feel that is owed" by Reliant and other power producers. ?????Donato Eassey, a Houston-based energy analyst for Merrill Lynch, said = he=20 expects the FERC-mediated conference to produce a compromise in which all= =20 parties--generators, utilities and consumers--get "a haircut." But that=20 outcome, he suggested, might beat the alternatives. ?????"You've got to put this problem behind you," he said, "because if you= =20 don't, you'll have a problem of biblical proportions." ?????FERC Members Also Before Senate Panel ?????Adding to the pressure for refunds, Sen. Barbara Boxer (D-Calif.)=20 introduced a bill Wednesday that would require FERC to order rebates if=20 federal regulators determine that prices charged were "unjust and=20 unreasonable." ?????The five members of FERC's governing board also appeared Wednesday=20 before the Senate panel but were scheduled later in the day to avoid a publ= ic=20 confrontation with Davis. ?????The governor met privately Wednesday with two new board members,=20 including Patrick H. Wood III, a Bush ally from Texas who, according to=20 Davis, has indicated a "more aggressive approach to refunds might be in=20 order." ?????Still, there was no shortage of partisanship at the committee hearing. ?????Republican aides passed out hand-held fans bearing the inscription:=20 "Gray Davis' solution for summer blackouts." Davis handed out a slick=20 177-page book detailing steps his administration has taken to ease the powe= r=20 crunch. The Bush administration issued a Department of Energy study asserti= ng=20 that California would face twice as many rolling blackouts if hard price ca= ps=20 were imposed on wholesale electricity. ?????Davis did not escape a scolding from Republican senators for his=20 criticism of the Bush administration's refusal to impose firm price control= s. ?????Sen. Fred Thompson (R-Tenn.) pointedly asked Davis "how he let things= =20 get totally out of hand" and excoriated the governor for assigning blame fo= r=20 the state's problems to the Bush administration, federal regulators, former= =20 Gov. Pete Wilson and various "corporate pirates." He also faulted Davis for= =20 not acting sooner to pass on higher wholesale costs to consumers. ?????"If I passed on a 700% increase to the citizens of California, there= =20 would be an outrage the likes of which you have never seen," Davis responde= d. ?????Republican senators also challenged Davis on how he hopes to stimulate= =20 more power plant construction in California if state officials continue to= =20 attack generating companies. They noted that the state attorney general eve= n=20 suggested that the chairman of one power company deserved to be locked in a= =20 cell with an amorous inmate named Spike. ?????"This is a rough business," Davis responded. "The people I represent a= re=20 mad."=20 ?????He also told his Republican critics: "If you were in my shoes and faci= ng=20 the extraordinary price increases, you would feel as I do. Our first=20 obligation is to fight back."=20 ?????Davis urged the committee to keep pressure on FERC to rein in natural= =20 gas prices, which until recently have been as much as eight times higher th= an=20 the national average. ?????FERC Chairman Curtis L. Hebert Jr. assured the committee that his agen= cy=20 is aggressively pursuing remedies to California's energy price spikes and= =20 supply shortages. "We have been engaged," he said, citing more than 60 orde= rs=20 issued by the agency to address the power crisis. ?????Commissioner William L. Massey, a Democrat who has urged stronger=20 federal intervention in the electricity markets, said he regrets the=20 commission did not act sooner. ?????"Businesses have closed down, putting thousands out of work and hurtin= g=20 the Western economy, and all because of a broken electricity market," he=20 said. "By acting 10 months ago, we could have prevented much of the economi= c=20 carnage." ?????Despite the tensions, Davis elicited some sympathy from even his=20 Republican critics.=20 ?????"I wouldn't wish your problems on my worst enemy," Thompson told Davis= .=20 ---=20 ?????Times staff writers Nancy Rivera Brooks in Los Angeles and Thomas S.= =20 Mulligan in New York contributed to this story. House Approves Utility Aid for Needy=20 Congress: Bill would add $300 million to program that helps families pay=20 their bills. Strict price caps are blocked.=20 By JANET HOOK, Times Staff Writer=20 ?????WASHINGTON--In its first direct legislative response to the nation's= =20 burgeoning energy crisis, the House on Wednesday approved legislation that= =20 would provide an additional $300 million to help low-income families pay=20 their power bills. ?????The bill amounts to a midyear increase of 21% for the $1.4-billion=20 energy assistance program--twice as much as President Bush had proposed=20 adding to help the poor cope with increases in utility bills. ?????Before final action on the bill, House Republican leaders blocked=20 Democratic efforts to force votes on a broader response to the energy crisi= s=20 in the West: strict energy price caps that reach beyond the restraints=20 imposed Monday by federal regulators. ?????Republicans argued that price caps would not solve California's energy= =20 problem, while Democrats accused the GOP of being cavalier about the crisis= =20 faced by consumers. ?????"This says to the people of the West, 'Your emergency doesn't count to= =20 us,' " said Rep. Nancy Pelosi (D-San Francisco). ?????But such assertions were countered by House Majority Whip Tom DeLay=20 (R-Texas), who said: "Members should reject the siren song of price caps an= d=20 remember this: Government price controls will mean more blackouts." ?????The issue erupted during debate on a $6.5-billion midyear appropriatio= n=20 bill to cover unanticipated costs and emergency expenditures, including $5.= 5=20 billion for the Defense Department and $116 million to help the Internal=20 Revenue Service pay the cost of sending out rebate checks authorized by the= =20 recently enacted tax cut law. ?????The measure passed, 341 to 87. ?????In an earlier vote, Bush barely escaped an embarrassing slap when=20 Democrats moved to cut the proposed IRS increase by $29 million--the cost o= f=20 a letter the agency is sending to tell taxpayer of their impending tax reba= te. ?????Democrats complained that the letter, which prominently mentions Bush,= =20 reads like a piece of campaign literature. Republicans said it was needed t= o=20 save people from calling the IRS about their checks. The amendment failed,= =20 216 to 212. ?????The bill now goes to the Senate, where Democrats are considering an ev= en=20 bigger increase in energy aid for the poor. ?????Overall, the House bill would provide the $6.5 billion requested by=20 Bush. But it would change some spending priorities. For instance, Bush's=20 Office of Management and Budget objects strongly to provisions that would= =20 rescind $389 million in money appropriated for the Federal Emergency=20 Management Agency--just as the disaster relief agency is facing big outlays= =20 to cope with damage caused by Tropical Storm Allison. ?????That provision to rescind the money came under attack from Democrats a= nd=20 Republicans, posing the debate's most serious challenge to the bill. But an= =20 effort to send the bill back to the Appropriations Committee and restore th= e=20 money was defeated on a party line vote of 218 to 209. ?????The energy aid for the poor is provided through the Low-Income Home=20 Energy Assistance Program, which helps the poor and elderly pay heating and= =20 air-conditioning bills. In California, a family of four must earn less than= =20 $33,125 to be eligible, and the average benefit is $326 a year. ?????Although Republicans and Democrats have been divided over broad=20 questions of energy policy, there has been a bipartisan consensus on more= =20 help for needy consumers. So, despite pressure to hold down the cost of the= =20 supplemental spending bill, House Republicans doubled Bush's request for $1= 50=20 billion in additional energy aid. GOP leaders blocked, on procedural=20 technicalities, Democratic amendments to increase the funding even more. ?????Republican leaders also fought efforts by Democrats to turn debate on= =20 the spending bill into Congress' first broad-gauged discussion on the=20 nation's energy crisis. Democrats wanted to offer major energy amendments,= =20 including one to impose strict cost-based price caps on wholesale electrici= ty=20 in California--stricter price restraints than the policy announced Monday b= y=20 the Federal Energy Regulatory Commission. ?????Proponents of the stricter caps, echoing complaints by California Gov.= =20 Gray Davis and others, said FERC's order did not go far enough to guarantee= =20 relief for consumers against blackouts, shortages and price gouging. ?????Republicans argued that price caps would be counterproductive and that= =20 California's problems will be solved only by increasing the energy supply. ?????Democrats lost a 222-205 procedural vote that blocked their amendments= =20 from coming to a vote.It was an important victory for Republican leaders wh= o=20 had feared mounting support for price caps even within their own party.=20 However, momentum flagged this week after the FERC decision. ?????The House bill also includes: ?????* $45 million for a Defense Department plan to make military bases in= =20 California self-sufficient and get them off the state's power grid during= =20 shortages. ?????* $1.5 million for planning and environmental studies for a proposed= =20 upgrade in an electrical transmission line in Central California known as= =20 Path 15. Summer Starts, Power Doesn't Stop=20 Energy: Consumers show they can take the heat, with their conservation=20 helping to limit demand. But experts remain wary.=20 By MITCHELL LANDSBERG, Times Staff Writer=20 ?????As unwelcome as the killer bees, as hyped as "Pearl Harbor," the big,= =20 bad summer of 2001 officially arrived today and--did someone forget to turn= =20 out the lights? ?????After months of dread, the Blackout Summer began on a curiously bright= =20 note. Despite several days of summer-like weather, there was barely a whisp= er=20 about blackouts. The state that couldn't plug in a night light in January= =20 without tripping electrical shortage alarms managed to enter the summer wit= h=20 electricity to spare.=20 ?????For the moment, power supplies look healthy. Wholesale electricity=20 prices are a sliver of what they were just a month ago. Demand for power is= =20 down, apparently the result of a successful conservation campaign. And=20 California officials appear to have won their months-long battle with the= =20 Federal Energy Regulatory Commission, which imposed price and supply contro= ls=20 on the Western electricity market beginning at midnight last night. ?????All in all, an auspicious beginning for what many have warned would be= a=20 dreadful summer. So why aren't California energy officials blowing up=20 balloons for the big end-of-crisis party? ?????"We are not out of the woods," said Richard Sklar, the state's energy= =20 supply czar. "We are not out of the woods on price, and we are not out of t= he=20 woods on availability." ?????His view is echoed by most of those who closely watch the state's=20 electrical market. So far, California's supply-demand balance is coming=20 closer to best-case predictions than to the worst. But it is a delicate=20 balance. ?????On Wednesday, with temperatures hovering around summer norms, operator= s=20 of the statewide power grid managed to maintain--if just barely--the 7% of= =20 operating reserves they strive for. When reserves dip below that, the state= =20 begins ascending the ladder of staged emergency declarations that eventuall= y=20 lead to blackouts. ?????Total electricity use in the state peaked about 4 p.m. at 39,156=20 megawatts--a high for the year, but well below the state's all-time record = of=20 45,884 megawatts, which was set on July 12, 1999. ?????State officials credit conservation with shaving off about 4,000=20 megawatts, an amount that easily means the difference between blackouts or = no=20 blackouts on most days. ?????"There is no doubt in my mind that conservation . . . has led directly= =20 to the situation that we're in now," said Mike Sloss, who tracks conservati= on=20 for the California Energy Commission. ?????Richard Roher, who crunches conservation numbers for the commission,= =20 said consumers appear to be continuing to cut their electricity use by abou= t=20 11%. ?????There also has been good news on the supply side of the equation. Afte= r=20 months in which power plant breakdowns and shutdowns were costing the state= =20 as much as 15,000 megawatts of electricity at a time, most plants are now= =20 online and outages were down to 4,300 megawatts Wednesday. ?????Most small, alternative energy suppliers finally reached agreement thi= s=20 week in their epic contract battle with Southern California Edison, putting= =20 that vital segment of the state's energy production back in business. And i= n=20 the next two weeks, the state's first two new major power plants in a decad= e=20 are scheduled to open, adding more than 1,000 megawatts to the power=20 stream--enough to serve about 750,000 typical homes. ?????State officials are also hoping that the FERC ruling, which limits=20 prices in the 11-state Western region and requires generators to sell=20 available power to California, will ease the situation further. ?????"Everyone is very interested to see how tomorrow unfolds, price-wise a= nd=20 supply-wise," Stephanie McCorkle, a spokeswoman for California's grid=20 operator, said Wednesday. ?????For all the positive signs, no one is predicting that the state will= =20 weather the summer without blackouts. No one knows how many power plants wi= ll=20 break down. Nor does anyone know the extent to which Californians' best=20 intentions to conserve will melt away in a sustained heat wave. ?????While the past few days have been hot, they haven't been searing. It w= as=20 81 in downtown Los Angeles on Wednesday, 94 in Riverside, 102 in Sacramento= ,=20 109 in Palm Springs--toasty, but far from the hottest weather any of those= =20 places can expect this summer. ?????Nor was it unusually hot in surrounding states, whose ability to sell= =20 power to California depends in part on their own energy needs. Electricity= =20 use generally rises with the thermometer, because air conditioners use more= =20 power than most other appliances. ?????"If it gets hot in California, and it's also hot in the Northwest . . = .=20 and it's hot in Phoenix, we could run into some significant problems," said= =20 Jan Smutney-Jones, executive director of the Independent Energy Producers= =20 Assn., a trade group for power plant owners in California. ?????The state has benefited recently from imports of electricity from the= =20 Northwest, where snow runoff is cascading through electrical turbines. But= =20 those imports are expected to dry up later in the summer as stream flowswhi= ch=20 have been kept high to assist salmon runs--are scaled back to levels that= =20 reflect the region's winter drought. ?????So the summer of 2001 could still be interesting. And it may begin wit= h=20 a blackout after all. For weeks now, an e-mail campaign has spread through= =20 the Internet, calling on people to voluntarily cut off most or all of their= =20 power between 7 p.m. and 10 p.m. tonight. ?????The protest, called the "Roll Your Own Blackout," is the idea of a=20 Southern California artist who worked in tandem with a software engineer fr= om=20 Berkeley. Their intention is to protest the energy policies recently=20 announced by President Bush and Vice President Dick Cheney. ?????"When you hear Mr. Cheney, who drafted the energy plan, deriding=20 conservation as merely a personal virtue, it is as though he believes virtu= e=20 has no place in government policy, and that would be a very dangerous thing= ,"=20 said Dave Aragon, the software engineer. ?????The California crisis gave birth to their campaign, but Aragon said he= =20 is hoping that the protest goes beyond the state's borders. ?????"Worldwide would be fine," he said. Board Votes to Let State Tax Power Plants=20 Proposal: Levies on property currently are made by counties. The revenue=20 would increase, say proponents of change.=20 By NANCY VOGEL, Times Staff Writer=20 ?????SACRAMENTO--State tax collectors endorsed a proposal Wednesday that=20 could force power plant owners to pay tens of millions of dollars more in= =20 taxes next year. ?????The five-member Board of Equalization voted unanimously to assert=20 jurisdiction over the property taxes paid by companies with power plants th= at=20 produce more than 50 megawatts. Under the board's proposal--which faces=20 public hearings before it takes effect--the state would seize from counties= =20 the authority to tax these plan
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