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Sac Bee, Mon, 6/25: Gov. Gray Davis not to blame for energy crisis, Enron= =20 says SD Union, Mon, 6/25: 3 new plants to generate electricity within weeks SD Union, Mon, 6/25: Lucky Redding has energy to spare SD Union, Mon, 6/25: $2 billion in rebates not good enough, Davis says SD Union, Mon, 6/25: Port urged to seize Chula Vista plant LA Times, Mon, 6/25: Demand Had Minor Role in Power Crisis Electricity LA Times, Mon, 6/25: The State In the Dark, Trying to See Light at End of= =20 Crisis LA Times, Mon, 6/25: The State Power Regulators to Determine State Refunds= =20 Energy SF Chron, Mon, 6/25: BECHTEL HOLDS ITS OWN / Despite economic downturn,=20 S.F. construction giant's revenues remain steady SF Chron, Mon, 6/25: THE ENERGY CRUNCH / $9 billion showdown over power /= =20 State delegation seeking refunds SF Chron, Sun, 6/24: Direct access falls victim to crisis SF Chron, Sun, 6/24: Power players lay blame=20 Deregulation creators defend their actions Mercury News, Mon, 6/25: Pending power plants in California face some probl= ems Mercury News, Mon, 6/25: County should unplug this energy-saving idea =20 (Editorial) Mercury News, Mon, 6/25: The FERC loophole (Commentary) OC Register, Mon, 6/25: Energy talks could get hot OC Register, Mon, 6/25: College cuts electricity use 20 percent OC Register, Mon, 6/25: Cynical union ploy (Commentary) Individual.com (Businesswire), Mon, 6/25: LADWP Goes Solar, Welcomes Start = of=20 Summer With=20 Conservation Kick-Off to Help L.A. Residents Beat the Heat=20 Individual.com (PRnewswire), Mon, 6/25: Duke Energy Refutes False Charges;= =20 Plant Output Was Controlled by California ISO =20 The Oil Daily, Mon, 6/25: California Power Suppliers May Have to Refund=20 Billions The Oil Daily, Mon, 6/25: Californians Get Rude to Enron Executives (Kare= n=20 Denne quoted) LA Times, Sun, 6/24: Life After the Crisis (Opinion, OpEd) ---------------------------------------------------------------------------= --- -------------------------------------------------------------- Gov. Gray Davis not to blame for energy crisis, Enron says By Karen Gaudette=20 Associated Press Writer SAN FRANCISCO (AP) -- California Gov. Gray Davis isn't to blame for=20 California's power crisis, and neither are electricity wholesalers, a Texas= =20 energy executive told a crowd at the Commonwealth Club of California on=20 Thursday evening.=20 Jeffrey Skilling, CEO and president of Houston-based Enron Corp., wiped awa= y=20 the remnants of a pie hurled by a protester and placed the blame squarely o= n=20 California's energy regulators.=20 The state Public Utilities Commission in the early 1990s put together a=20 broken market by preventing utilities to pass along the full cost of power= =20 and discouraging power contracts that would have lowered dependence on buyi= ng=20 last-minute power, Skilling said.=20 "The regulators are now the people to whom Californians are turning to solv= e=20 the problem," Skilling said. "Because of these rules, the power consumers o= f=20 the state of California were thrown totally to the mercy of the spot market= ."=20 PUC president Loretta Lynch defended the regulators' actions last week,=20 saying utilities have been free to enter into long-term contracts. Utilitie= s=20 countered that the PUC never made clear what contracts it would accept, whi= ch=20 left open the possibility they would later be overruled.=20 Enron has come under fire after accusations from Davis and state officials= =20 that it and other energy companies forced electricity prices skyward by=20 holding back supply.=20 Enron denies such claims, and joins other power producers in arguing that t= he=20 state and utilities still owe them billions in unpaid bills. Davis=20 acknowledges that Pacific Gas & Electric, which has declared bankruptcy, an= d=20 Southern California Edison together still owe generators such as Enron, Duk= e=20 Energy, Mirant and Reliant Energy about $2.5 billion for past electricity= =20 sales.=20 State officials counter that wholesalers charged as much as $9 billion in= =20 illegal overcharges dating back to May 2000. The feuding groups are to meet= =20 in a single room next week under a federal order to try and work out=20 agreements that could determine how billions of dollars will be divided.=20 Companies have said California's claims are wildly exaggerated.=20 The Federal Energy Regulatory Commission has already estimated that=20 wholesalers owe California $124 million in overcharges for the first four= =20 months of the year. Davis and others say that's a mere drop in the bucket.= =20 Enron has also been tied to President Bush's hands-off approach to the ener= gy=20 crisis. Company chairman Kenneth Lay is a friend and one of Bush's largest= =20 campaign contributors. Several prominent members of the Bush administration= =20 hold stock in the company.=20 Enron is one of several major GOP donors accused of meeting secretly with= =20 Vice President Dick Cheney as he drafted the Bush administration's energy= =20 plan.=20 In May, Lay met secretly with California Republicans at the Beverly Hills= =20 Hotel and pushed a plan that called for ratepayers to pay the billions in= =20 debt racked up by the state's public utilities. The plan contended that=20 federal investigations of price gouging are hindering the situation.=20 The meeting drew such names as movie star Arnold Schwarzenegger, Los Angele= s=20 Mayor Richard Riordan and Michael Milken, who pleaded guilty to fraud charg= es=20 in 1990 as head of the Drexel Burnham Lambert investment banking firm.=20 Enron is one of the world's leading electricity, natural gas and=20 communications companies, with $101 billion in revenues in 2000. It owns=20 30,000 miles of pipeline, has 20,000 employees and is active in 40 countrie= s.=20 During the first quarter of this year, Enron's revenues increased 281 perce= nt=20 to $50.1 billion.=20 3 new plants to generate electricity within weeks=20 Increase in supply reduces threat of summer blackouts By Ed Mendel=20 UNION-TRIBUNE STAFF WRITER=20 June 25, 2001=20 SACRAMENTO -- Gov. Gray Davis said yesterday that three new power plants wi= ll=20 begin operating within 17 days, giving California its first new major=20 generators in more than a decade and easing the threat of blackouts this=20 summer.=20 News about the plants comes on the heels of other developments about=20 conservation and additional power supply that have given state officials=20 increasing confidence in California's ability to survive the power crisis= =20 this summer.=20 "Optimistically," said Davis, "our conservation and generation effort will= =20 help us minimize any disruptions this summer."=20 One of the new plants was scheduled to begin operating in August but instea= d=20 will come on line Wednesday. Edison International's Sunrise plant near=20 Bakersfield will supply 320 megawatts. A megawatt can provide enough power= =20 for 750 to 1,000 households.=20 In addition to the Edison facility, Calpine will open its 500-megawatt Sutt= er=20 plant near Yuba City on July 2 and its 559-megawatt Los Medanos plant near= =20 Pittsburg 10 days later. Both plants are expected to open according to=20 schedule.=20 "In the next 17 days we will put more power on line than California did in= =20 the last 12 years," Davis said.=20 During the past decade, the governor said, the state added less than 1,000= =20 megawatts with a number of small power plants, despite population growth an= d=20 increased power demand from the high-tech industry.=20 The fast-track modernization of a 450-megawatt Huntington Beach plant is=20 expected by late August. The plant was shut down about five years ago.=20 By September, Davis said, the addition of eight to 10 small plants that=20 operate during peak-load periods, as well as increased power from a variety= =20 of other small generators, will raise the total of new power coming this=20 summer to 4,000 megawatts.=20 As further protection against blackouts, state power buyers revealed last= =20 week that in recent months they have been able to send some surplus=20 electricity to a Canadian utility, BC Hydro, which will return the power in= =20 July and August.=20 Despite efforts to increase the state's energy supply this summer, more=20 ultimately will be needed. California has been importing about 20 percent o= f=20 its power in recent years. Even though about a dozen power plants are=20 approved or under construction, Davis does not expect supply to match deman= d=20 until late 2003. Until then, the state will need surplus electricity=20 generation to make the deregulated market work properly, experts say.=20 Davis has said in the past that California should add 20,000 megawatts of= =20 power generation in the years ahead. A new state Power Authority has been= =20 created that could construct or buy power plants if the private sector does= =20 not build a surplus of electricity generation.=20 Also, state officials suggest the trend among Californians to conserve=20 electricity may grow.=20 The state is spending $850 million on conservation programs, including=20 funding for energy-efficient equipment and an advertising campaign. The=20 program gives refunds to customers who dramatically reduce their electricit= y=20 consumption this summer.=20 State officials also expect electricity use to be reduced by "sticker shock= "=20 from rate increases beginning this month for Edison and Pacific Gas and=20 Electric customers. Ratepayers are exempt from the increase if they use 130= =20 percent or less of the baseline level of electricity, a minimal amount that= =20 varies with regional climate zones.=20 A proposal to increase rates for San Diego Gas & Electric customers is=20 pending before the state Public Utilities Commission.=20 In addition to announcing the new plants, Davis yesterday reiterated his=20 demand that California deserves $8.9 billion in refunds from overcharges by= =20 power companies. That issue will be the subject of mediation sessions that= =20 begin today in Washington.=20 When the Federal Energy Regulatory Commission imposed regional price limits= =20 last week, the regulators asked an administrative law judge to recommend=20 possible refunds by generators for overcharging.=20 Davis said the California negotiating team will be led by Michael Kahn,=20 chairman of the Independent System Operator, which runs the state's=20 electricity grid.=20 Davis said Kahn's team will present information supporting California's cla= im=20 of overcharging. The administrative law judge, Curtis Wagner Jr., suggested= =20 last week that California may be owed a smaller amount, $2 billion to $2.5= =20 billion.=20 The governor sent Wagner a brief letter replying to the judge's request for= a=20 list of issues that should be considered in the conference.=20 "Our list is short," Davis said in the letter. "The conference must address= =20 the need to have FERC order power sellers to refund the estimated $8.9=20 billion they have overcharged the people of the State of California."=20 While that session is taking place, Davis today plans to meet in Sacramento= =20 with President Bush's two new appointees to the five-member FERC, Pat Wood= =20 III of Texas and Nora Brownell of Pennsylvania.=20 Davis said that when he met with the president last month, Bush agreed to= =20 send Wood to California to investigate natural gas prices, which are severa= l=20 times higher in California than in New York.=20 "We agreed that there is no explanation for the disparity of prices between= =20 California and New York when it comes to natural gas," Davis said. "We agre= ed=20 that was wrong."=20 The governor also said he will meet this morning with three former employee= s=20 of Duke Energy's Chula Vista power plant who have accused the company of=20 altering the plant's output to boost power prices.=20 The employees last week told a state Senate committee that they were ordere= d=20 to reduce power during peak-load periods and throw away good replacement=20 parts, which sometimes delayed maintenance.=20 "There may be another side to the story," Davis said. "But these three=20 employees worked 20 years, had no reason to mislead the state Senate, and= =20 they testified under oath."=20 Duke denied wrongdoing and said power was reduced at the request of the=20 agency that runs the power grid, the Independent System Operator.=20 A Davis spokesman said yesterday that he did not know if the former employe= es=20 could qualify for a reward. In April, state Attorney General Bill Lockyer= =20 announced a whistle-blower reward for information on price-gouging by power= =20 generators.=20 Lockyer said the reward would be based on a percentage of what the state=20 recovers as a result of the information. He said the reward could be worth= =20 $50 million or more.=20 Lucky Redding has energy to spare=20 By Steve Schmidt=20 UNION-TRIBUNE STAFF WRITER=20 June 25, 2001=20 REDDING -- How weird is this?=20 Folks in this hilly city have electricity to spare, pay little for it and= =20 will pay even less next year.=20 When it comes to the state's year-old energy fiasco, this Northern Californ= ia=20 community is an island. "And we feel very fortunate," says Violet Klaseen,= =20 who has lived here 40 years.=20 Electricity rates in the San Diego area could climb an average 19 percent= =20 this summer. The state's largest utility, Pacific Gas and Electric, is in= =20 bankruptcy court. And an energy gap could spark more rolling blackouts acro= ss=20 the state come hot weather.=20 Not here.=20 Redding runs its own power company. Redding Electric Utility operates outsi= de=20 the state's strained energy grid. It's also one of the few city-run utiliti= es=20 in California with spare power to sell.=20 The company's wholesale revenues have doubled in the last year from sales t= o=20 other utilities and the state.=20 How did this working-class town near Mount Shasta get in this enviable=20 position? Was it business savvy? Luck?=20 "It was a combination of things," says utility director James Feider.=20 First came pain. Some utilities trimmed rates in the late 1990s as the stat= e=20 moved to deregulate the energy market. But Redding Electric raised rates 23= =20 percent to pay off $300 million in power plant debt and other costs.=20 Customers came unglued. Bills rose from 8 cents per kilowatt-hour to more= =20 than a dime.=20 Today it's pocket money. Customers of San Diego Gas & Electric Co. pay an= =20 average 14.4 cents per kilowatt-hour. That figure is expected to climb in= =20 coming weeks. PG&E customers pay an average 15.6 cents, among the highest= =20 rates in the nation.=20 Redding's rate will return to 8 cents next year, once the utility pays off= =20 most debts. The company serves the city's 80,000 residents.=20 The utility is also focused on the future while many other agencies scrambl= e=20 to meet short-term demands. Redding Electric is expanding capacity of its= =20 natural gas-fired power plant by about 50 percent.=20 When the project is finished next year, Redding will produce more than half= =20 of its own electricity.=20 Enron Corp., the nation's biggest electricity trader, will also supply ener= gy=20 to the city utility at 4.5 cents per kilowatt-hour. Enron and Redding=20 Electric struck the deal last fall, before prices went from high to=20 astronomical.=20 Redding Electric is unusual among city-run power companies in California=20 because it has no direct ties to the major utilities.=20 "We've made some good strategic decisions," says Feider, who has run the=20 outfit since 1998. He's also president of the California Municipal Utilitie= s=20 Association.=20 Gov. Gray Davis recently blasted municipal power companies, accusing them o= f=20 selling energy to the state at rip-off prices. He threatened to seize their= =20 electricity, saying, "We're going to get that power one way or another."=20 The governor said city-run companies have charged the state 10 percent more= =20 than the average price demanded by private generators.=20 But Feider says the governor was out of line. Feider says Redding Electric= =20 could have sold its power elsewhere for more profit. One of the governor's= =20 top energy advisers has said outfits such as Redding Electric have played= =20 fair with the state.=20 Feider also says his utility needed to boost its sales price to cover the= =20 skyrocketing cost of natural gas.=20 "We're willing to be cooperative and bend over backward, and here we get=20 attacked by the governor," he says.=20 Redding officials stress the hometown customers come first.=20 "I don't think we owe the rest of the state anything," says council member= =20 Pat Kight. On the other hand, "we don't want to be isolationists up here. W= e=20 want to be good neighbors."=20 Redding provided the state with power late last year to help California avo= id=20 blackouts. But it stopped selling to the state in January, after state grid= =20 operators didn't pay a $5 million bill.=20 Redding is willing to help in a pinch, if the state can guarantee payment.= =20 The utility also preaches conservation despite having power to spare. Energ= y=20 usage is down about 5 percent in the city, on the northern end of=20 California's Central Valley.=20 The company was created in 1920. There are about 30 city-run electric=20 utilities in the state, including in Sacramento, Los Angeles, Palo Alto and= =20 Santa Clara.=20 Some experts say municipal utilities have advantages over other power=20 providers. Their operating costs tend to be lower and they have easier acce= ss=20 to electricity generated by the federal government.=20 City utilities were also exempted from California's now-failed deregulation= =20 law. "That turns out to be a big advantage," says Bill Ahern, an energy=20 analyst with the national Consumers Union.=20 Now there's talk in Sacramento of boosting state government oversight of ci= ty=20 utilities.=20 "I'd prefer they'd leave us alone," Feider says. "We've done fine on our=20 own."=20 $2 billion in rebates not good enough, Davis says=20 ASSOCIATED PRESS=20 June 24, 2001=20 SAN DIEGO =01) As an array of officials prepared to represent California in= =20 federally ordered talks with power companies, Gov. Gray Davis on Sunday=20 discounted suggestions that the state will accept far less in electricity= =20 rebates than he believes it's owed.=20 "We're going back to Washington with one goal, and that's to get back $9=20 billion," Davis said from San Diego in a telephone conference with reporter= s.=20 California officials contend that power generators have overcharged the sta= te=20 and investor-owned utilities utilities $8.9 billion since last May. The=20 companies argue that the charges, which have reached as high as $3,380 a=20 megawatt hour, were justified.=20 "Power providers have been taking advantage of our market; they gamed the= =20 system and ripped people off," Davis said.=20 On Monday, officials from the state, the utilities and the generators meet= =20 under orders from the Federal Energy Regulatory Commission to negotiate a= =20 settlement over the alleged overcharges.=20 The talks will be overseen by Curtis Wagner Jr., FERC's chief administrativ= e=20 law judge. Wagner said Friday that he was optimistic a settlement would be= =20 reached, but thought the amount would be closer to $2 billion or $2.5=20 billion.=20 Davis said Michael Kahn, chairman of the California Independent System=20 Operator, which manages the state's power grid, will lead California's=20 negotiating team. Also taking part in the talks will be representatives of= =20 the Attorney General's Office, the Public Utilities Commission and the=20 Department of Water Resources.=20 FERC has authority only over private power generators, but the state claims= =20 it also was overcharged by public entities =01) such as the Los Angeles=20 Department of Water and Power and the trading arm of Canada's BC Hydro.=20 Davis senior adviser Nancy McFadden said a settlement with the private=20 generators would give the state leverage with the others. "We need to use t= he=20 forum that we've got available to us," she said.=20 Davis said the state will get a little more breathing room in the power gri= d=20 over the next two and a half weeks, when three new power plants producing a= =20 total of nearly 1,400 megawatts are scheduled to go on line. A 320-megawatt= =20 plant near Bakersfield is set to begin operating Wednesday, and will be=20 followed by a 500-megawatt plant near Yuba City and a 559-megawatt plant in= =20 Contra Costa County.=20 The addition this summer of major power plants, smaller peaker plants and= =20 cleaner-burning "qualifying facilities" should add 4,000 megawatts to the= =20 state's overburdened power grid by Sept. 30, Davis said. That expansion and= =20 ongoing conservation efforts will reduce the chances of rolling blackouts, = he=20 said.=20 Davis also said that he will meet Monday with three former employees of one= =20 power generator, Duke Energy, who testified before a California Senate=20 committee Friday.=20 The former employees, who were laid off in April, say they were told to shu= t=20 units down for unnecessary repairs in a scheme to drive up electricity=20 prices. The company called the claims "baseless."=20 Port urged to seize Chula Vista plant=20 3 ex-employees tell state Senate panel Duke rigged prices By Bill Ainsworth=20 UNION-TRIBUNE STAFF WRITER=20 June 23, 2001=20 SACRAMENTO -- Two former mechanics at Duke Energy's Chula Vista power plant= =20 said yesterday that the company's operation and maintenance policies were s= o=20 shoddy and reckless that Duke may have violated its lease with the San Dieg= o=20 Unified Port District.=20 Those accusations, made before a legislative committee, prompted Sen. Steve= =20 Peace to urge the port to nullify Duke's lease and take back the plant, whi= ch=20 provides the company with huge profits.=20 The Port District owns the plant, but in 1998 entered an agreement that=20 allowed Duke to operate it for 10 1/2 years.=20 "The port has all the leverage," said Peace, D-Chula Vista. "They just have= =20 to exercise it."=20 Port officials yesterday declined to comment on whether this testimony woul= d=20 spark an attempt to take control of the plant.=20 The mechanics were part of a trio of former South Bay Power Plant veterans= =20 who repeated their explosive claims, initially made public Thursday, that= =20 Duke repeatedly throttled down generators to create power shortages to driv= e=20 up prices, even during energy emergencies.=20 Their appearance before the state Senate Select Committee to Investigate=20 Price Manipulation received national media coverage.=20 Their accusations could provide the first inside evidence that power=20 companies withheld electricity to increase their profits -- a practice stat= e=20 officials claim has cost consumers billions of dollars.=20 Duke officials denied all the accusations, saying the ex-employees do not= =20 understand the complexities of running a power plant even though all three= =20 worked at the Chula Vista facility for some 20 years. Further, company=20 officials said the plant has compiled an exemplary record of staying in=20 production.=20 "We've exceeded all our peers in North America," said Bill Hall, vice=20 president for western regional operations for Duke Energy, a North=20 Carolina-based company that owns three other power plants in California. Du= ke=20 officials will be allowed to testify at a future hearing of the committee.= =20 At one point during yesterday's hearing, Peace read from the lease that=20 allows Duke to run the 706-megawatt South Bay plant. It requires Duke to=20 operate and maintain the plant according to "prudent utility practices."=20 Peace asked the mechanics whether Duke met these standards.=20 Both mechanics, Ed Edwards Jr. and Glenn Johnson, said no.=20 "It's prudent to making money," Johnson said of Duke's practices. "It's not= =20 prudent to operating it safely."=20 The mechanics said Duke powered the turbines up and down so often the=20 equipment was in jeopardy of breaking down. They also testified that=20 supervisors required them to throw away new spare parts, a practice they=20 believe led to longer outages because they had to keep generators offline= =20 while more parts were ordered.=20 Johnson testified that Duke reduced the maintenance staff at the South Bay= =20 plant to seven or eight mechanics from 35. He said when he started with=20 SDG&E, the company took special pride in careful maintenance policies=20 designed to keep the equipment operating smoothly.=20 That all changed, he said, under deregulation. It changed even more when Du= ke=20 took control of the plant about April 1999.=20 "We were told we were no longer a family," Johnson said. "We were a=20 business."=20 And the business was lucrative, company officials had told the former=20 employees, even before prices started soaring last year.=20 About three months after the company took over the lease in April 1999, Duk= e=20 held a party at which plant manager Tom Guthrie told workers the plant had= =20 made as much money in three months as the company had expected in a year,= =20 according to the former employees.=20 Last year, the company held a similar party to mark the first anniversary o= f=20 the lease. Executives again were ecstatic. They told workers they had made = as=20 much money in the first year as they had expected to make in five years, th= e=20 former employees testified.=20 The company's prosperity has continued. During the first quarter of this=20 year, Duke reported that profits increased 208 percent from energy sales an= d=20 trading.=20 Johnson also testified that Guthrie had told employees they weren't in the= =20 electricity business, but the money-making business. As a result, he said, = if=20 Duke could make more money selling the natural gas that powers the=20 electricity turbines, the company would shut the turbines down.=20 Guthrie's comments seem to contradict the plant's status as a "must-run"=20 plant that is required to take direction from the Independent System=20 Operator, which manages the state's electricity grid.=20 Attorney Michael Aguirre, who has criticized the Duke lease as a "sweethear= t=20 deal," said he hopes the new information will help the public gain control = of=20 the South Bay plant. Aguirre is suing Duke and other power companies, and h= e=20 persuaded the former plant employees to testify.=20 "It's huge, because this means we can take back the plant," he said. "We ca= n=20 operate the plant for the people of San Diego and lower utility bills."=20 Hall, the Duke vice president, said he does not expect the testimony to lea= d=20 to a challenge of the lease.=20 "We're meeting all the contractual obligations with the Port of San Diego,"= =20 he said. "We expect to be there for the duration of the agreement."=20 Port Commissioner Paul Speer yesterday said it was premature to discuss=20 voiding the lease.=20 During the first two years of the lease, Duke was required to retain all th= e=20 SDG&E employees. The three former employees who testified yesterday,=20 including plant operator Jimmy Olkjer, were among the workers that Duke cho= se=20 not to rehire in April, when the company gained full control over plant=20 employees.=20 Johnson yesterday provided new evidence that Duke withheld power to create = a=20 shortage that would produce bigger profits. He said perfectly functioning= =20 steam turbines frequently would be powered down, even during times of high= =20 demand.=20 When he asked why the units were taken offline, he said, supervisors told h= im=20 they were "down for economics."=20 "Sometimes a unit would be down for economics for two or three days.=20 Sometimes it would be down for two weeks," he said. "In my opinion, it was= =20 down to boost prices."=20 Duke officials denied they withheld power to manipulate prices. They say th= e=20 Chula Vista plant powered up and down to help balance the state's electrici= ty=20 grid -- that is, to make sure demand met supply.=20 Hall did say that sometimes the Chula Vista plant would alter its output in= =20 response to the energy market. "There are times when all the units aren't= =20 needed in the marketplace," he said.=20 A state report released in March accused the company of withholding power 8= 0=20 percent of the time last year from May to November to drive up prices.=20 Recently, the Federal Energy Regulatory Commission ordered the company to p= ay=20 a $10 million refund on power it sold to the state at $3,900 per=20 megawatt-hour. By comparison, power on the spot market is now selling for= =20 between $40 and $70 per megawatt-hour. It was selling for about $30 about o= ne=20 year ago.=20 The company previously had been ordered by federal officials to refund $20= =20 million in overcharges.=20 The state Senate committee, chaired by Joseph Dunn, D-Laguna Niguel, made a= =20 point of highlighting the heroic military backgrounds of two of the former= =20 plant employees.=20 Olkjer received five Purple Hearts for wounds in Vietnam. And during a brea= k=20 in the hearing, Johnson went up to the ornate chambers of the Senate to=20 receive a Medal of Valor he was awarded by the National Guard but had not= =20 received.=20 Johnson earned the medal, the state's highest military honor, in 1987 when = he=20 and two colleagues in the Guard risked their lives to dispose of dynamite= =20 they found while fighting a brush fire.=20 Gov. Gray Davis plans to meet with the former power plant workers Monday.= =20 California ; Metro Desk=20 Demand Had Minor Role in Power Crisis Electricity : Consumption has been=20 predictable, and rose less quickly than in other Western states. But supply= =20 grew hardly at all, and reserves melted away. ROBIN FIELDS ?=20 06/25/2001=20 Los Angeles Times=20 Home Edition=20 Page B-1=20 Copyright 2001 / The Times Mirror Company=20 California has been depicted as a power addict whose growing habit led=20 inexorably to the crisis that has roiled the state since May 2000.=20 Yet the state's electricity yen is the wrong target for blame--the least=20 volatile and least decisive piece of a larger puzzle, an analysis of=20 consumption patterns shows.=20 California consumption has been as regular as a heartbeat in the last decad= e,=20 sloping upward gently with a blip each summer. In the last year, demand's= =20 predictability made it the lone calm spot within a hailstorm of dizzying=20 price peaks and supply lurches.=20 Moreover, California 's power consumption increased far less than that of i= ts=20 Western neighbors, on whose excess supply it had come to depend.=20 "Yes, demand grew in California , but what people who have that discussion= =20 ignore is that demand in the rest of the West grew even faster," said Sever= in=20 Borenstein, director of the UC Energy Institute in Berkeley. "We're all par= t=20 of the same grid."=20 Within the complex, sometimes murky power picture, demand was a problem=20 hiding in plain sight.=20 Starting in 1998, energy agencies began to warn that its slow swell, couple= d=20 with stagnant supply, had left California with wafer-thin power reserves. I= n=20 retrospect, these agencies say, deregulation left them powerless to prevent= =20 the impending collision between supply and demand.=20 When they hit head-on last summer, the amount of power used day to day by= =20 Californians often had no relationship to the periods when the state=20 experienced blackouts or the highest wholesale prices, analysts said.=20 In the last 10 years, California 's power consumption has moved subtly, nev= er=20 advancing more than 3.7% a year and, even at its height, lagging behind suc= h=20 other measures as job growth and economic output.=20 In the early 1990s, recession savaged heavy-duty power users, ranging from= =20 manufacturers to agricultural interests to the aerospace industry. The=20 industrial sector's usage actually declined from 1990 to 1995.=20 Overall, consumption inched up so slowly in the decade's first half--just= =20 1.3%--that demand was of little concern as policymakers assembled the=20 mechanisms of deregulation, current and former industry officials say.=20 The system's reserve cushion--the extra supply available at peak times--was= =20 estimated in 1993 at a robust 12% to 14.5%, without a single electron=20 imported from beyond California 's borders. With pressure off, utilities=20 shifted resources out of programs promoting conservation and redistributing= =20 peak-hour consumption. Instead, they focused on new technologies that had= =20 little immediate payoff.=20 "There was less emphasis on demand management," said Barbara Barkovitch, an= =20 Oakland-based consultant who served on the California Independent System=20 Operator's board from its formation in 1998 until last June. "There was=20 nothing nefarious about it, but people always assume the future will be lik= e=20 the present."=20 As the economy rebounded, consumption growth averaged about 3% a year. That= =20 slight escalation--which fell within the expectations of forecasters at the= =20 California Energy Commission--took on out-sized significance because it=20 occurred as supply stagnated.=20 "The problem was not one of demand in isolation, but that our demand kept= =20 growing steadily, supply did not grow much at all, and the gap just shrank= =20 progressively," said Ahmad Faruqui, the Palo Alto-based Electric Power=20 Research Institute's area manager for retail and power markets.=20 Regionally, the expansion was uneven, weighted toward the fast-developing S= an=20 Diego area and Northern California 's tech corridor. Consumption in San Die= go=20 Gas & Electric's service area rose more than 17% from 1995 to 2000 and, for= =20 the decade, increased almost twice as much as in the state overall.=20 The commercial sector's usage grew twice as fast in the decade's last five= =20 years as it had in its first half as the economic mix shifted toward servic= es=20 and offices loaded up on energy-eating technology.=20 The heady affluence of the late '90s also inflated residential consumption.= =20 Consumers splurged on bigger houses, pools and spas, more appliances and=20 up-to-the-minute gadgetry, said Sean Randolph, president of the Bay Area=20 Economic Forum. Fixed retail prices meant consumers had little incentive to= =20 rein themselves in, analysts said.=20 "We decided we were not going to have a process for adjustment on the deman= d=20 side," Borenstein said. "We relied entirely on the supply side and that=20 turned out to be a huge mistake."=20 Still, even as consumption grew, businesses became more efficient. Measured= =20 per capita, California 's consumption remained modest compared to that of= =20 less efficient, more weather-intensive states.=20 But gradually and quietly, the system's reserve margin shrank to 4% by 1998= ,=20 a third or less than they had been at their fattest. Even that depended=20 heavily on seasonal help from the other states that share California 's gri= d,=20 help they were increasingly less able to give.=20 Electricity consumption in Arizona, Colorado and Utah grew at about twice= =20 California 's rate from 1988 to 1998. It expanded three times as fast in=20 Nevada. In these states, too, supply did not keep up.=20 The collapse that started in May 2000 could have begun a year earlier if no= t=20 for cool weather and plentiful rain, yielding cascades of Pacific Northwest= =20 hydroelectric power.=20 At least six state, regional and federal energy agencies issued reports fro= m=20 late 1998 to early 2000 warning that California 's reserve margin had=20 shriveled, that help from other Western states might decrease, and that the= =20 state was one hot summer away from disaster.=20 "The Arizona-New Mexico-Southern Nevada and the California -Mexico areas of= =20 [the Western transmission grid] may not have adequate resources to=20 accommodate a widespread severe heat wave or a higher-than-normal forced=20 outage rate for generation," wrote the North American Electric Reliability= =20 Council in its June 1999 summer assessment. "Those areas are experiencing a= =20 continuing trend of peak demand growth exceeding the addition of new=20 generation facilities."=20 But in the deregulated system, regulators no longer had a decisive hand in= =20 balancing supply and demand. Officials at the California Energy Commission= =20 say even analyzing the situation became harder as utilities became less=20 methodical in submitting their consumption data.=20 "Things got sloppier," said Michael Jaske, the commission's chief forecaste= r=20 since 1980. "The utilities started letting that stuff slide, poorer data wa= s=20 coming in to us, and our management wasn't going after them the same way."= =20 Marketplace incentives were supposed to replace government control, but new= =20 supply did not materialize even though rising demand had created a clear-cu= t=20 opportunity.=20 Private generators say the system's uncertainties, plus California 's=20 environmental fervor and slow regulatory process, prevented the market from= =20 working. Borenstein's assessment is blunt: "The reason that no one built=20 power plants was that no one thought you could make money at it."=20 Ultimately, the flurry of studies predicting an oncoming crisis circulated= =20 among regulators and power industry insiders, but prompted little urgency= =20 when it came to curtailing demand. The Davis administration focused on supp= ly=20 instead, taking steps to expedite the approval process for power plants,=20 Davis spokesman Steve Maviglio said.=20 "Hindsight is always 20-20," he said. "We weren't having blackouts in '99, = so=20 it didn't pop up on anyone's radar."=20 Summer 2000 took care of that, hitting like a sonic boom.=20 Hot weather caused consumption to jump almost 4% year-over-year, double the= =20 decade-long average. Peak demand from May through August was consistently= =20 about 10% higher than in summer 1999, averaging an extra 3,200 megawatts pe= r=20 day--enough to power more than 3 million homes.=20 On Aug. 16, the day with the year's highest peak, Cal-ISO's so-called=20 spinning reserve--the amount of capacity that can be brought on line within= =20 10 minutes--was 1.2%.=20 The causal link between heightened usage and other pressure signals, from= =20 higher spot-market prices to staged emergencies, seemed clear.=20 Or was it? Peak demand still fluctuated within a narrow range only marginal= ly=20 above long-standing forecasts. The so-called superpeak--the moment of highe= st=20 usage on summer's most brutal day--was lower than in uneventful 1999.=20 Moreover, after summer's heat ebbed, California 's consumption tapered.=20 Still, the power crisis' other symptoms raged on.=20 In November and December, wholesale power prices soared, California paid fa= r=20 more for natural gas than the rest of the nation, and the first rolling=20 blackouts hit. Yet peak demand traced an almost identical line as it had th= e=20 year before, averaging a few megawatts less.=20 Peak demand was down again from January to April when rolling blackouts=20 returned, averaging about 1,600 megawatts less than in the same stretch of= =20 2000, which passed without a single emergency.=20 State officials were quick to blame suppliers, but many industry analysts= =20 point to the region-wide supply-demand equation.=20 These forces may continue to dominate, they acknowledge, even though=20 Californians have cut back on consumption faster and more this year than=20 state officials had dared to hope.=20 In May, peak demand dropped 10.4% below its 2000 level and consumption fell= =20 11%, marking the fifth straight month of reductions.=20 (BEGIN TEXT OF INFOBOX / INFOGRAPHIC)=20 Electricity Demand=20 Electricity use in California has shown no dramatic shifts over the last=20 several years, increasing at an average of about 2% a year. In the last yea= r,=20 its predictability has stood in stark contrast to the gyrations of supply a= nd=20 wholesale prices. Total consumption of electricity in the state, in thousan= ds=20 of gigawatt-hours:=20 *=20 Source: California Energy Commission=20 California ; Metro Desk=20 CAPITOL JOURNAL=20 The State In the Dark, Trying to See Light at End of Crisis GEORGE SKELTON ?=20 06/25/2001=20 Los Angeles Times=20 Home Edition=20 Page B-7=20 Copyright 2001 / The Times Mirror Company=20 SACRAMENTO -- It's dusk in the Capitol office of state Sen. Debra Bowen.=20 Actually, it's midafternoon. But she has the lights off to save electricity= =20 and not much sun is coming through a shaded window.=20 Her thermostat is set at 76 degrees, but it feels warmer because outside it= 's=20 100 and she's up on the fourth floor.=20 There's a bright red, oversized cover framing a shiny white light switch by= =20 the door. You can't miss it leaving the room. "That's for the people who ha= ve=20 trouble turning off lights," she says.=20 Bowen, 45, a Marina del Rey Democrat and environmental lawyer, represents t= he=20 good side of term limits. Conscientious and cutting-edge. She replaced a=20 termed-out, octogenarian senator, Ralph Dills, first elected to the=20 Legislature in the Great Depression.=20 Since coming to the Assembly in 1992, Bowen has focused on environmental=20 protection, foster children and high-tech--most recently trying,=20 unsuccessfully, to guard the privacy of Internet consumers.=20 But now, like the Legislature itself, she's bogged down with an all-consumi= ng=20 issue that won't go away. The senator has been thrust into the middle of a= =20 tangled energy mess she and other lawmakers unwittingly helped create with= =20 their lemming-like votes five years ago.=20 This time, however, Bowen is a major player as head of the Senate energy=20 committee.=20 Something must be going right, I note. We haven't had any of those rolling= =20 blackouts everybody had predicted for June.=20 "My biggest concern," she replies, sitting in the twilight, "is that we're= =20 being fooled right now because of the early snowmelt. We've got more power= =20 than we need."=20 Hydroelectric power being generated by the Sierra runoff, she explains, is= =20 being sent to British Columbia. BC is using the California power and keepin= g=20 its own water stored behind dams. Later in summer, as this state runs dry, = BC=20 will generate hydro and send it to us.=20 Thus every kilowatt California saves today can be banked in Canada and late= r=20 withdrawn during tough times.=20 "I don't want people to get the idea that just because we haven't had Stage= =20 2s or blackouts we shouldn't be concerned," Bowen says. "We're still going = to=20 be short power this summer. . . .=20 "But how do you expect Jane Citizen to figure all this out?"=20 Especially when Joe and Janice Legislator are having such a difficult time.= =20 There is one vexing problem still facing the Legislature on energy. It has= =20 passed bills promoting conservation, expediting power plant construction,= =20 authorizing the state to sign long-term contracts for wholesale electricity= ,=20 creating a state power authority and approving bond sales to finance it all= .=20 What's left is how--and whether--to save Southern Cal Edison from bankruptc= y.=20 The Legislature faces an Aug. 15 deadline to approve a memo of understandin= g=20 between Gov. Gray Davis and Edison. After that, the MOU presumably goes poo= f=20 and Edison collapses.=20 But the Legislature has a cocky way of ignoring and testing deadlines. Righ= t=20 now there must be 100 ideas about how to handle Edison. Decision-making is= =20 diffused. Bowen's energy committee, for example, is just one of three that = is=20 holding Senate hearings on the Edison bailout.=20 "There's not much consensus," she acknowledges.=20 The governor's proposed Edison rescue involves state purchase of the=20 utility's transmission lines for about $2.8 billion. Democrats seem=20 ambivalent and Republicans are opposed. Long ago, the MOU was diagnosed as= =20 DOA.=20 Senate leader John Burton (D-San Francisco)--the most powerful=20 legislator--thinks the MOU is a giveaway to Edison.=20 In the Assembly, Speaker Bob Hertzberg (D-Sherman Oaks) has been pushing a= =20 unique alternative he believes could also work for PG&E, now struggling in= =20 Bankruptcy Court. Under his plan, only the "core" residential and small=20 business users would be served by private utilities. Electricity would be= =20 generated by the utilities themselves and regulated by the Public Utilities= =20 Commission. Like the good old days before disastrous deregulation.=20 The "noncore" big power users who wanted deregulation in the first place=20 would buy electricity directly from the generators and marketers, presumabl= y=20 at a savings. "They're the ones who brought this on us," Hertzberg says.=20 But, he adds, "there's a billion moving parts" and they're not fitting well= .=20 For one, there may not be enough power to buy directly now that the state h= as=20 cornered so much in long-term contracts.=20 Bowen is one of the better ones. But not even she is sure what the=20 Legislature's next step should be. "We don't have a lot of room to move," s= he=20 says.=20 Nor a lot of time. If Edison goes bankrupt, it truly will be a dark day in= =20 the Capitol.=20 California ; Metro Desk=20 The State Power Regulators to Determine State Refunds Energy: Generators an= d=20 California officials will work together for 15 days to solve the huge=20 mathematical problem. MEGAN GARVEY ?=20 06/25/2001=20 Los Angeles Times=20 Home Edition=20 Page B-7=20 Copyright 2001 / The Times Mirror Company=20 WASHINGTON -- Starting today, federal power regulators will begin trying to= =20 solve one of the riddles of the energy crisis: How much of a refund will=20 California get?=20 One thing seems clear: The reduction will be a lot more than the $125-milli= on=20 refund ordered to date, in all likelihood soaring to more than $1 billion.= =20 Over the next 15 days--the Federal Energy Regulatory Commission is mandatin= g=20 no weekends off--warring representatives from power companies and the state= =20 of California will sit at the same table in a government conference room=20 while a FERC task force wrestles the question to the ground.=20 The task is to determine the price that power would have cost if FERC's=20 decision to impose soft caps had been made not last week, but last fall.=20 It is a daunting mathematical problem, factoring in hourly charges during t= he=20 last eight months. To come up with a total, federal regulators, state=20 electricity officials and power generators must determine what the highest= =20 price for a megawatt should have been under the soft price caps now in=20 effect. Then they have to figure out which companies--if any--were charging= =20 more.=20 Under the recent FERC ruling, the price of electricity during any given hou= r=20 cannot exceed the actual cost of generating the least efficient--or most=20 expensive--power coming into the grid.=20 Curtis L. Wagner, the 72-year-old chief judge for FERC who is overseeing=20 negotiations on California 's overcharges, said of this morning's events: "= It=20 will be a zoo."=20 Wagner, who headed into the weekend with three inches of documents to sort= =20 through, explained that Gov. Gray Davis wants $9 billion knocked off the=20 amount the power generators charged California . "I don't really think it's= =20 that high," said Wagner, predicting the refund will be more than $1 billion= =20 but probably far from $9 billion.=20 "We have folks trying to do some adding now and some work on what the numbe= r=20 should be," he said.=20 Wagner said the money at stake will be the most he has worked on in his=20 nearly three-decade career at the agency.=20 Until recently, the likelihood of massive refunds seemed nil. Although=20 California lawmakers--led by Davis--had demanded relief for costs that ran = as=20 high as 10 times or more than the rates a year ago, FERC officials had not= =20 agreed.=20 And their minds seemed set. When FERC first proposed remedies for the=20 California price increases late last year, commissioners said: "Refunds may= =20 be an inferior remedy from a market perspective and not the fundamental=20 solution to any problems occurring in California markets."=20 To date, FERC has ordered $125 million in refunds for alleged overcharges i= n=20 January and February.=20 But with the recent appointment of two new commissioners by President=20 Bush--Republicans Patrick H. Wood III of Texas and Nora M. Brownell of=20 Pennsylvania--FERC's position softened, leading to the price mitigation=20 ordered last week.=20 Now FERC is taking a closer look at the prices already charged.=20 California lawmakers have pegged overcharges at nearly $9 billion since the= =20 California market went haywire last summer--a number that comes from a stud= y=20 done by Cal-ISO, the operator of California 's electricity grid. Cal-ISO=20 officials acknowledged last week that the study might have significant flaw= s.=20 Among companies that may be required to reduce their bills are energy giant= s=20 Enron Corp., Mirant Corp., Duke Energy Corp., Williams Cos. and Reliant=20 Energy Inc.--all of which are expected to have representatives at the=20 negotiations. The companies have hotly disputed the amount of overcharges= =20 alleged by Davis and other California lawmakers and point out that they hav= e=20 yet to be paid for the vast majority of electricity sold in the state in=20 recent months.=20 Today, Wagner said he plans to make opening statements to the media. After= =20 that, he said he hasn't determined how much of the wangling will be done=20 behind closed doors. If the parties don't come to an agreement in 15 days,= =20 Wagner will have seven days to make a recommendation on refunds to FERC's= =20 five commissioners.=20 It is a process that may be repeated down the road if Sen. Barbara Boxer=20 (D-Calif.) and other California politicians get their way. Boxer has=20 introduced legislation that would give FERC retroactive power to order=20 refunds--all the way back to July 2000, when San Diego first faced huge=20 spikes in electricity costs.=20 BUSINESS=20 BECHTEL HOLDS ITS OWN / Despite economic downturn, S.F. construction giant'= s=20 revenues remain steady Todd Wallack ?=20 06/25/2001=20 The San Francisco Chronicle=20 FINAL=20 Page B.1=20 (Copyright 2001)=20 The economy is skidding. Tech firms are shutting plants and reining in=20 expansion plans. And two major engineering and construction firms, Stone &= =20 Webster and Washington Group (formerly Morrison Knudsen) sought bankruptcy= =20 protection during the past 13 months.=20 So, it would come as no surprise to hear that the world's largest engineeri= ng=20 and construction firm, San Francisco's Bechtel Group, is getting pinched by= =20 the downturn.=20 Only it isn't.=20 Despite the slowdown in the economy and in some areas of construction,=20 Bechtel and many rivals are still busy upgrading cellular networks, buildin= g=20 railroads and airports, and completing new power plants.=20 "Our guys are working 80 to 100 hours a week completing deals," said John= =20 Siegel, vice president of marketing and strategy for Bechtel's power plant= =20 construction division. "You walk around at 9 p.m. and everyone is still=20 here."=20 Overall, Bechtel's sales dipped 5 percent last year to $14.3 billion, but= =20 that's still up 13 percent from 1999 and a healthy 74 percent from 1996. Th= e=20 company said operating margins improved last year. And employment jumped by= a=20 quarter during the past five years to 41,000 worldwide, including 1,300 in= =20 San Francisco. Both employment and sales are holding firm so far this year.= =20 (The privately held firm doesn't release earnings figures.)=20 Bechtel isn't alone. Shares in Fluor, the second-largest engineering and=20 construction firm, and Jacobs Engineering Group nearly doubled in value=20 during the past 12 months. And some analysts are bullish on the future.=20 "We could be on the front end of a multiyear up-cycle," Merrill Lynch analy= st=20 Fritz von Carp predicts.=20 CONTRARY CYCLES=20 Although the engineering and construction industry has long been vulnerable= =20 to sharp downturns, von Carp said the cycles often differ from the rest of= =20 the U.S. economy.=20 For instance, high energy prices usually spell bad news for most domestic= =20 businesses. But an energy shortage could help spur a boom in new power=20 plants, refineries and pipelines -- lifting the petroleum sector out of a= =20 decade-old funk. That has long been a major business for firms such as=20 Bechtel.=20 In addition, von Carp points out that government agencies typically garner = a=20 large share of transportation revenue from gasoline taxes -- which aren't a= s=20 sensitive to downturns as income taxes and capital gains. California and=20 other states have also increasingly walled off those funds, so politicians= =20 can't raid the transportation war chests to pay other bills when budgets ar= e=20 tight.=20 Government agencies and big businesses also tend to initiate major projects= =20 when times are good. But because the projects often take years to start and= =20 complete, they often wind up ramping up after the economy has already slid= =20 into recession. "It is really a late cycle," von Carp said.=20 This isn't to say that Bechtel's business is humming across the board.=20 Bechtel Executive Vice President Jude Laspa said sales remain lackluster in= =20 its mining and chemical division. (And despite von Carp's predictions of an= =20 upswing in the petroleum industry, Laspa said sales haven't picked up so=20 far.)=20 "We have some very robust businesses, and some that are in a cyclical=20 downturn," Laspa said.=20 TIGHT MARGINS=20 Engineering and construction companies also have to be content with lower= =20 profit margins than those in many other industries. Like its rivals, Bechte= l=20 typically pockets about 3 to 5 percent of revenues after taxes, Laspa said.= =20 Operating margins are closer to 7 to 9 percent. (By contrast, anything unde= r=20 20 percent is considered anemic in the newspaper industry.)=20 "This is a low-margin business," von Carp said.=20 Industry players are also increasingly taking on more risk, bidding on=20 fixed-price contracts to compete. In the past, many firms charged by the ho= ur=20 and profits soared when projects became mired in delays. Now that companies= =20 are getting only a lump sum for a development, major setbacks in a project = or=20 two could sink a firm.=20 Stone & Webster of Boston, for instance, filed for Chapter 11 bankruptcy=20 protection last year, largely because of delays in building a gas-fired pow= er=20 plant in Tiverton, R.I. Shaw Group later acquired most of the firm's assets= .=20 Meanwhile, Washington Group of Boise, Idaho, foundered after it acquired=20 Raytheon's Engineers and Constructors unit, igniting a nasty court battle.= =20 Washington accused Raytheon of concealing problems with several of the=20 projects and demanded compensation; Raytheon blamed Washington for=20 mismanaging the projects and insisted it owed nothing.=20 Although Bechtel doesn't let outsiders review its books, analysts say they= =20 believe the firm has largely avoided such problems and is financially solid= .=20 Bechtel executives point out that the company is 50 percent larger than its= =20 next-biggest competitor.=20 "Bechtel is considered in the industry to be the pre-eminent engineering an= d=20 construction company," von Carp said. "It is a very good competitor with a= =20 strong franchise in many markets."=20 ON TOP IN TELECOM=20 Bechtel has also enjoyed some luck lately.=20 For instance, some telecommunications equipment firms are doing so poorly= =20 that one analyst compared it to a "nuclear winter." Dozens of data service= =20 providers, such as NorthPoint Communications in Emeryville, have shut down.= =20 Others have severely reined in their expansion plans.=20 But Bechtel's revenues are up 20 to 25 percent this year. George Conniff,= =20 president of Bechtel's telecommunications and industrial business unit, sai= d=20 his firm mainly serves financially solid firms, such as AT&T Wireless, whic= h=20 are still going ahead with plans to add 8,000 new towers, despite the=20 slowdown. He also said the unit has picked up some consulting business=20 abandoned by equipment firms trying to narrow their focus to weather the=20 downturn.=20 "We're having a great year," Conniff said. "When the river is muddy, the fi= sh=20 start to bite."=20 But no part of the business is doing as well as Bechtel Power.=20 A POWERHOUSE IN ENERGY=20 "The power business is doing spectacular," von Carp said. "It is the=20 strongest part of the market now, bar none."=20 Siegel said the company has 22 plants under construction worldwide -- up fr= om=20 about nine four years ago -- and many more in the pipeline, particularly in= =20 the United States. Siegel said the unit's revenue rose 15 to 20 percent las= t=20 year and is on pace to match that this year. He said the firm could probabl= y=20 land even more business if it had the ability to pursue and handle more=20 projects.=20 Through another unit, Bechtel is also investing in power plants under=20 development in Hayward, Pittsburg and San Jose. The company struck a deal= =20 with San Jose's Calpine in 1998 to spend $1 billion building several plants= =20 in the Bay Area. Under the deal, the companies will jointly own the plants= =20 and split the profits down the middle. Because of the strong demand for=20 electricity in California , Bechtel spokesman Jeff Leichtman said it will= =20 probably wind up spending at least $500 million more than originally=20 announced.=20 Bechtel doesn't own any existing plants in the United States, so it isn't= =20 among those accused of gouging consumers in the recent energy crisis. But= =20 that's partly an accident of fate.=20 The firm's investment arm teamed with PG&E in the late '80s to start buildi= ng=20 plants. But in 1996, PG&E offered to buy out Bechtel for most of the U.S.= =20 operations; Bechtel sold the rest of its U.S. stakes shortly thereafter.=20 But Bechtel kept the shares in its overseas plants and bought out PG&E a ye= ar=20 later. Bechtel now operates the foreign plants through a division called=20 Intergen. It also owns more than half of Nexant, an energy consulting firm= =20 based in San Francisco.=20 Now, at a time when many Bay Area firms are being hurt by the energy crisis= ,=20 Bechtel stands to cash in.=20 And Laspa said word is already leaking out. He said the firm is getting=20 inundated by resumes. "Potential employees know where the business is=20 strong," he said.=20 ------------------------------------------------------------------ --------= =20 ----------------------------------------------------------=20 BIG JOBS=20 Bechtel has completed more than 20,000 projects and has 1,100 under way in = 66=20 countries. Here are some notable landmarks Bechtel helped build:=20 -- Completed=20 Hoover Dam=20 Bay Area Rapid Transit subway=20 San Francisco Museum of Fine Arts building=20 Bay Bridge=20 Chunnel linking France to England=20 Hong Kong International Airport .=20 -- Current=20 Boston Central Artery (Big Dig)=20 AT&T Wireless (adding 8,000 cell sites)=20 Korea High-Speed Rail, South Korea=20 Antamina Copper and Zinc Mine, Peru=20 Alcan Alma Smelter, Quebec=20 ----------------------------------------------------------------=20 CHART (1): BECHTEL AT A GLANCE Bechtel is the world's largest engineering a= nd=20 construction firm. Despite a U.S. economic downturn, the San Francisco=20 company's sales and employment remain relatively healthy. . Headquarters: S= an=20 Francisco Local employment: 1,300 in San Francisco and 2,000 in California= =20 Founded: 1898 Stock: Privately held CEO: Riley Bechtel . -- Revenues Bechte= l=20 gets most of its revenue from building power plants and running government= =20 facilities. . Power $3.1 billion Civil=20 (bridges, tunnels, airports, etc.) $2.1 billion =20 Petroleum and chemicals $1.5 billion =20 Pipeline $1.2 billion =20 Mining/metals $1.7 billion =20 Telecom $1.5 billion =20 Bechtel National Inc. (Federal gov.t facilities management) $3.1 billion=20 Sources: Bechtel ----------------------------------------------------------= =20 CHART (2): BECHTEL LEADS THE PACK -- Construction/Engineering Firms=20 Rank/Company/HQ Revenue(x) . 1. Bechtel Group Inc., San Francisco $12.42 2.= =20 Fluor Corp., Aliso Viejo (Orange County) $7.83 3. Kellogg Brown & Root,=20 Houston $5.34 4. The Turner Corp., Dallas $5.85 5. CENTEX, Dallas $5.4 (x) = -=20 In billions; includes revenue from construction/engineering contracts only.= .=20 -- Top Power Construction Firms Rank/Company Revenue(y) 1. Bechtel Group In= c.=20 $1,100=20 2. Duke Engineering & Services $303 =20 3. Sargent & Lundy $292 =20 4. Black & Veatch $241 =20 5. Stone & Webster Engineers and Constructors $234 (y) - In millions; Includes revenue from energy contracts only. . Sources:= =20 Engineering News-Record=20 NEWS=20 THE ENERGY CRUNCH / $9 billion showdown over power / State delegation seeki= ng=20 refunds Lynda Gledhill, Christian Berthelsen ?=20 06/25/2001=20 The San Francisco Chronicle=20 FINAL=20 Page A.1=20 (Copyright 2001)=20 A critical showdown in California 's energy crisis starts this morning, as= =20 state officials meet with energy companies to demand $9 billion in refunds.= =20 A 15-day settlement conference, ordered as part of the Federal Energy=20 Regulatory Commission's decision last week to put price controls on wholesa= le=20 electricity prices, will bring together the parties that have been squabbli= ng=20 for the past year.=20 "We are going to Washington with one goal, and that is to bring back $9=20 billion," Gov. Gray Davis told reporters yesterday. "The fact is that peopl= e=20 have taken advantage of the market, gamed the system and ripped people off.= "=20 But Davis' crusade may be dampened by challenges to the study the state use= d=20 to arrive at the $9 billion figure and by a FERC mediator's prediction that= =20 California will walk away with less than it is demanding.=20 The Democratic governor's figure is based on an update of a March study by= =20 the California Independent System Operator, which manages the sate's power= =20 grid. Some energy experts argue the study is flawed, but the ISO stood firm= =20 behind its methodology yesterday.=20 Curtis L. Wagner Jr., the FERC administrative law judge who will oversee th= e=20 meeting, said in an interview with The Chronicle yesterday that he was=20 optimistic a settlement would be reached.=20 Wagner said the $9 billion "seems a little high. And the generators' number= s=20 seem low. We'll probably come out somewhere in between."=20 The veteran mediator, who spent yesterday reviewing spreadsheets submitted = by=20 the parties, said he will look at applying last week's commission price=20 control order back to October.=20 "I think we should put the refund issue to rest," Wagner said. "I'm sure we= =20 can agree on a structure that is fair to everybody." Enron Corp, Reliant=20 Energy Inc., Duke Energy Corp., Williams Cos., Dynegy Inc. and Mirant Corp.= =20 are among the com
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