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Sac Bee, Thurs, 7/19: Energy buyers ordered to divest=20 Sac Bee, Thurs, 7/19: Another contempt action=20 Sac Bee, Thurs, 7/19: PUC paves way for power rate increases SD Union, Thurs, 7/19: California selling surplus power at fraction of cost= =20 it paid=20 SD Union, Thurs, 7/19: PUC reveals plan to transfer much of watchdog role= =20 SD Union, Thurs, 7/19: Variety of plans to help Edison find friends, foes= =20 SD Union, Thurs, 7/19: Baja is hoping energy squeeze can spark boom=20 SD Union, Wed, 7/18: State deal lets SDG&E turn large profit=20 SD Union, Wed, 7/18: Davis: Legislature will save Edison from bankruptcy=20 LA Times, Thurs, 7/19: PUC May Cede Control Over Electricity Rates LA Times, Thurs, 7/19: Power Firm Is Held in Contempt by State Panel SF Chron, Thurs, 7/19: Electricity cost tops Californians' concerns=20 SURVEY: Governor now getting some credit for improving the situation=20 SF Chron, Thurs, 7/19: PG&E rebates snub longtime watt watchers=20 WHO WINS?: Reward is easier for those unaccustomed to power scrimping=20 SF Chron, Thurs, 7/19: Assembly panel OKs two bills to help Southern=20 California Edison=20 SF Chron, Thurs, 7/19: Cool weather brings California energy glut, causing= =20 state to sell surplus power at a loss=20 SF Chron, Thurs, 7/19: Investigative arm of Congress issues demand letter f= or=20 energy meetings=20 Mercury News, Thurs, 7/19: Poll: Legislators, Davis blamed more than seller= s=20 Mercury News, Thurs, 7/19: Consumers to bear costs of state's power purchas= es=20 OC Register, Thurs, 7/19: Conservation is cutting edge of power crisis =20 (Commentary) =20 NY Times, Thurs, 7/19: California's New Problem: Sudden Surplus of Energy= =20 ---------------------------------------------------------------------------= --- ------------------------------------------------------ Energy buyers ordered to divest=20 By Amy Chance Bee Political Editor (Published July 19, 2001)=20 The Davis administration on Wednesday told consultants buying electricity f= or=20 the state to sell their stock holdings in energy companies immediately or= =20 leave their jobs.=20 Nine consultants divested by a noon deadline, but critics said Gov. Gray=20 Davis acted months too late to protect the public's interest.=20 The order, issued at Davis' direction, was contained in a memo to Tom=20 Hannigan, director of the state Department of Water Resources. Legal Affair= s=20 Secretary Barry Goode wrote that it was "imperative that you give this=20 instruction immediately" to those concerned.=20 "We expect, and have always expected, the state's consultants to uphold the= =20 highest ethical standards," the memo states. "That standard is not met by= =20 those who hold a financial interest in one or more energy companies while= =20 trading on behalf of the state on energy related matters."=20 Under pressure from Secretary of State Bill Jones, a Republican who hopes t= o=20 challenge Democrat Davis for re-election next year, the administration move= d=20 last week to obtain statements of economic interest from the energy=20 consultants. The consultants were brought on earlier this year to help the= =20 Department of Water Resources buy electricity on behalf of California's=20 financially strapped utilities.=20 The economic statements revealed that several consultants held stock in=20 energy generators, including Calpine Corp. and Enron. One consultant report= ed=20 that he sold stock holdings in Edison International and Dynegy when he bega= n=20 work for the state.=20 Administration officials initially said they would review the reports for a= ny=20 conflicts, considering whether the consultants traded with companies in whi= ch=20 they held stock.=20 But Goode's memo, dated Wednesday, said each of the consultants should dive= st=20 by noon that day or "the state will sever its contract with that person." T= he=20 notice was given to the 34 people who had disclosed their interests as=20 required, nine of whom reported a current financial interest in an energy= =20 company, according to the administration. A governor's spokesman said all o= f=20 them divested by the deadline.=20 State Attorney General Bill Lockyer, whom Jones had asked to investigate,= =20 told Jones in a letter Tuesday that most of Jones' allegations, including= =20 whether the statements of economic interest were filed on time, should be= =20 dealt with first by the state Fair Political Practices Commission.=20 He noted that one section of applicable state law sets a high threshold for= =20 conflict of interest: It provides that someone holding less than 3 percent = of=20 the shares of a corporation does not have a conflict unless his or her tota= l=20 yearly income from dividends or other payments exceeds 5 percent of his or= =20 her annual income.=20 But he said he would review the statements to see whether a=20 conflict-of-interest investigation is warranted "in light of the legitimate= =20 and important public interest in the employment of public servants who are= =20 free of conflicting interests. ... "=20 Lockyer spokesman Nathan Barankin pointed out that Jones had called into=20 question the validity of state electricity contracts negotiated by the=20 buyers.=20 "What we're saying is that there's a public interest in getting to the bott= om=20 of it as quickly as possible, so there's some certainty," he said.=20 Jones said simply selling the stock doesn't solve the problem.=20 "Just divesting themselves of the stock, or even letting them go, doesn't= =20 change the conflict that's been inherent for the last five months," Jones= =20 said. "If someone who has a proven conflict of interest has negotiated=20 contracts on behalf of the state, there is no contract."=20 Jones also noted that the Davis administration says an additional 20 or mor= e=20 people it has brought on board to cope with the energy crisis have not been= =20 required to file disclosure statements. He said Lockyer should investigate= =20 whether the administration has abided by disclosure law in those cases.=20 "(Davis') record is not very good when you look at the fact that I had to= =20 make the case to even get these statements of conflict of interest filed,"= =20 Jones said. "It's up to the attorney general to be the judge, but the publi= c=20 has to have the information."=20 The Bee's Amy Chance can be reached at (916) 326-5535 or achance@sacbee.com= =20 <mailto:achance@sacbee.com<.=20 Another contempt action=20 By Kevin Yamamura Bee Capitol Bureau (Published July 19, 2001)=20 A state Senate committee held another energy generator in contempt Wednesda= y=20 and may recommend today that Enron Corp. either pay fines or be removed fro= m=20 California's marketplace if it continues to withhold documents.=20 Meanwhile, lawmakers in both houses spent Wednesday night debating three=20 plans to prevent Southern California Edison from going into bankruptcy,=20 though no one idea had broad support.=20 The committee's action against Reliant Energy marked the third contempt=20 finding in as many weeks by the special Senate committee investigating ener= gy=20 market manipulation. After reaching a legal disagreement over whether trade= =20 secrets would be protected, lawmakers voted 6-0 to push Reliant, a=20 Houston-based generator, into contempt proceedings.=20 The panel found five other generators in compliance with subpoenas after th= ey=20 signed confidentiality agreements earlier this week and promised to ship=20 thousands of files to depositories.=20 Three weeks ago, the committee found Enron and another generator, Mirant, i= n=20 contempt. Mirant has since cooperated and escaped the committee's finding,= =20 but Enron filed a lawsuit in Sacramento Superior Court seeking judicial=20 intervention.=20 Despite ongoing discussions between the committee and Enron representatives= ,=20 they have reached no deal to end the lawsuit or the contempt finding.=20 Lawmakers therefore intend to issue a report today leading to a later Senat= e=20 vote on contempt and subsequent penalties.=20 The committee was considering two possibilities late Wednesday, said its=20 chairman, Sen. Joe Dunn, D-Santa Ana. The first would impose fines that=20 compound each successive day Enron remains in contempt. The second would=20 exclude the Houston-based marketer from selling energy in California until = it=20 hands over documents.=20 "We're reviewing the (legal) basis for such a recommendation," Dunn said.= =20 Enron spokesman Mark Palmer said he had no response to the potential=20 penalties but stressed that his company is still discussing the contempt=20 matter with lawmakers.=20 In Reliant's case, lawmakers and the company disagreed Wednesday over wheth= er=20 the committee's own confidentiality agreement affords enough protection of= =20 trade secrets.=20 Reliant attorney Charles Stevens said his company would rather have a court= =20 order to ensure that its proprietary information would be safe. But committ= ee=20 members objected to involving the state's judicial branch, charging that it= =20 would disrupt the separation of powers.=20 Several times during the hearing, Dunn conceded that Reliant, like Enron, m= ay=20 ultimately resort to a lawsuit to resolve its disagreement with the=20 committee.=20 "We have not made that decision at this time," said Stevens, the Reliant=20 attorney. "We've always preferred to resolve the dispute with the committee= =20 informally, and we continue to look for ways to do that."=20 Should Reliant work out an agreement with lawmakers by cooperating with the= =20 document requests, the contempt vote would be purged, Dunn said.=20 The Legislature last held someone in contempt in 1929, when concrete compan= y=20 officials did not comply with subpoenas in a price-fixing case.=20 In a vote late Wednesday, meanwhile, the Senate's energy committee voted do= wn=20 one Edison proposal. It will be reconsidered this morning.=20 Two competing Assembly proposals to keep Edison from bankruptcy were narrow= ly=20 approved by the Energy Costs and Availability Committee. One of the=20 proposals, by Assembly Speaker Robert Hertzberg and Assemblymen Fred Keeley= =20 and John Dutra, is scheduled for a floor vote today.=20 The Bee's Kevin Yamamura can be reached at (916) 326-5542 or=20 kyamamura@sacbee.com <mailto:kyamamura@sacbee.com<.=20 PUC paves way for power rate increases=20 By Dale Kasler Bee Staff Writer (Published July 19, 2001)=20 Sparking accusations that it's abandoning its watchdog role, the Public=20 Utilities Commission took the first step Wednesday toward promising to rais= e=20 rates as much as necessary to pay the state's electricity bills.=20 PUC President Loretta Lynch released a proposed version of the promise -- a= =20 legally binding document known as a rate agreement. Although the agreement= =20 doesn't say there will be more rate hikes, it does commit the PUC to raisin= g=20 rates when requested by the state Department of Water Resources.=20 The agreement is essential to the state's plan to sell $13.4 billion in bon= ds=20 in September to cover the water department's power purchases. The departmen= t=20 has been buying electricity for California's three troubled investor-owned= =20 utilities.=20 The bonds are to be repaid with money from customers of the three utilities= .=20 Investors would shy away from buying the bonds unless the PUC adopted the= =20 rate agreement, said Zane Mann, editor of the California Municipal Bond=20 Advisor newsletter.=20 "Everyone's been kind of waiting for it," he said of the agreement.=20 State Treasurer Phil Angelides, who is in charge of marketing the bonds, sa= id=20 in a prepared statement Wednesday that the rate agreement "must be adopted = so=20 that the (state's) general fund can be repaid, and to protect the state's= =20 fiscal solvency." Angelides has been promising potential bond buyers that t= he=20 rate agreement would be adopted.=20 The full PUC is scheduled to vote on the agreement Aug. 23.=20 It's unclear whether the agreement will lead to a rate increase any time=20 soon. The water department, which will release updated revenue requirements= =20 this week, says it doesn't think the new numbers will generate another rate= =20 hike beyond the 30 percent increase the PUC approved in March for Southern= =20 California Edison and Pacific Gas and Electric Co.=20 Still, consumer advocates said the rate agreement would represent a surrend= er=20 of the PUC's traditional job of protecting ratepayers.=20 The agreement would permit "an unaccountable state agency, riddled with=20 conflicts of interest, to unilaterally order rate hikes," said Harvey=20 Rosenfield, president of the Foundation for Taxpayer and Consumer Rights in= =20 Santa Monica.=20 The water department has been accused of conflicts of interest because some= =20 of its consultants and energy traders own stock in energy companies.=20 Rosenfield said the PUC should reject the rate agreement and "preserve thei= r=20 historic role and responsibility to protect ratepayers."=20 Geoff Dryvynsyde, Lynch's legal adviser, said the "consumer groups are=20 raising some good policy issues," but the commission's hands are effectivel= y=20 tied by legislation that put the state in the power-buying business and set= =20 in motion the bond sale.=20 "The bonds are really driving this," he said. "The bonds need to be sold."= =20 Nevertheless, Eric Woychik, a consumer advocate with the Oakland-based grou= p=20 Strategy Integration, said ratepayers shouldn't be held responsible for=20 high-priced power bought by the water department.=20 "They shouldn't pay for poorly negotiated contracts and market power abuses= ,"=20 Woychik said. State officials contend they were gouged by wholesale=20 generators, while consumer groups have criticized the water department for= =20 entering into long-term purchase contracts at prices that exceed current=20 spot-market prices. Woychik noted that the state is pursuing billions in=20 refunds from the power generators.=20 The state has committed more than $8 billion from the treasury for power=20 purchases, causing Wall Street to downgrade the state's credit rating. The= =20 bond offering -- the largest government bond sale in U.S. history -- is=20 designed to replenish the treasury and finance future purchases.=20 Despite some uncertainty about the state's finances and the effects of the= =20 energy crisis, the bonds should sell well, Mann said.=20 "Mutual funds have been accumulating money to buy the bonds," the newslette= r=20 editor said.=20 The Bee's Dale Kasler can be reached at (916) 321-1066 or dkasler@sacbee.co= m=20 <mailto:dkasler@sacbee.com<.=20 California selling surplus power at fraction of cost it paid =20 \ objattph=20 By Karen Gaudette ASSOCIATED PRESS July 19, 2001 SAN FRANCISCO =01) Calif= ornia=20 has begun selling power for a fraction of its purchase price as cool weathe= r=20 creates an abundance of electricity, spending that has been criticized by= =20 some watching the state's power crisis closely. Power the state bought at = an=20 average of $138 per megawatt is being sold for as little as $1, energy=20 traders say, though the price is disputed by state officials. The state=20 acknowleges the power sales, but says the surplus represented only a blip i= n=20 an otherwise typical scorching summer and that blackouts still could roll i= f=20 temperatures increase again.=20 However, the surplus power selloff could encourage criticism that the state= =20 bought too much power at too high a price in its haste to fend off rolling= =20 blackouts and power prices 10 times higher than the year before. "If the= =20 price is $138 on average for a month and you have to turn around and sell a= =20 chunk of it for a dollar, you're not going to look real good to a number of= =20 people," said Gary Ackerman, executive director of the Western Power Tradin= g=20 Forum in San Jose. "I just don't think many people in California truly=20 understood what their state did when they stepped into this business." =20 Unlike natural gas, extra electricity cannot be stored away for a later day= .=20 Since Californians haven't been running their air conditioners as often as= =20 expected over the past week, the state hasn't needed the entire 38,000=20 megawatts it had figured it would need. The state Department of Water=20 Resources, in charge of buying power for three financially ailing utilities= ,=20 has spent the past few months arming the state with long-term energy=20 contracts while weaning itself away from buying the highest-priced power on= =20 the last-minute electricity market. Those contracts, along with last month= 's=20 20 percent boost in energy conservation and the temperate weather, mean=20 there's suddenly more power than Californians can use. Energy traders say= =20 the state has tried to sell as much as 6,000 megawatts at one time, Ackerma= n=20 said. That's around 16 percent of the 38,000 megawatts the state estimated= =20 it would use around this time of year, Ackerman said. A megawatt is enough= =20 electricity to power roughly 750 homes. "We know from traders who have=20 bought that it's gone as low as a dollar and last week we know it was as lo= w=20 as $5," Ackerman said. "When a seller shows up with an enormous amount of= =20 power for sale and the market knows it, it has a depressing effect on=20 prices." California Energy Markets, a trade weekly, said the state sold=20 power last Thursday at $25 per megawatt =01) a price that Steve Maviglio, a= =20 spokesman for Gov. Gray Davis, said was "much closer to reality." The stat= e=20 "never sold anything more than 1,000 megawatts on any single day," Maviglio= =20 said. "(Ackerman) has no evidence" of California selling power for $1,=20 Maviglio said. "California Energy Markets is much closer to reality." Osca= r=20 Hidalgo, a DWR spokesman, acknowledged the state has been trying to sell as= =20 much as 20 percent of its daily megawatts, though he would not say at what= =20 price. That could put the state at a disadvantage in the market if=20 competitors knew how much it was paying, Hidalgo said. "This is unusual, b= ut=20 it was anticipated, it is typical in the power buying operation," Hidalgo= =20 said. "It's better than doing nothing with surplus power," Hidalgo said.= =20 "Scheduling energy is a balancing act because you can't store the item." = =20 Hidalgo said the state is sending some of the extra electricity up to the= =20 Bonneville Power Administration to repay it for power it had loaned=20 California earlier this year. "This is not a bad position for us to be in= =20 every once in a while," Hidalgo said. "If someone were to make these=20 long-term contracts go away, we would fall off a cliff and be back where we= =20 were in January."=20 PUC reveals plan to transfer much of watchdog role =20 \ objattph=20 By Craig D. Rose UNION-TRIBUNE STAFF WRITER July 19, 2001 The California= =20 Public Utilities Commission laid out a framework yesterday for transferring= =20 much of its watchdog role in ensuring fair electricity rates to the state= =20 Department of Water Resources. The controversial proposal is in response t= o=20 legislation earlier this year that puts the water department in charge of= =20 state power purchases. Utilities commission action is needed to ensure that= =20 the water department has enough revenue to make the purchases and to clarif= y=20 areas of responsibility, including oversight of power rates. Under the dra= ft=20 agreement made public yesterday, the commission would guarantee that=20 consumers pay enough to cover interest payments on a planned $13.4 billion= =20 bond sale later this year. The guarantee is considered an essential element= =20 for completing the bond sale. The bonds' proceeds are needed to repay some= =20 $8 billion the water department already has spent to purchase electricity a= nd=20 to cover future payments. California began buying electricity through the= =20 water department earlier this year after the state's utilities were unable = to=20 make purchases because of credit problems brought on by the state's failed= =20 deregulation plan. No mention was made in the draft agreement of the=20 possibility of further rate increases to cover electricity purchases. Some= =20 observers have speculated that the current rate structure, even after two= =20 rounds of rate increases, may not cover all costs. On the other hand, the= =20 draft agreement states that the water department itself will determine if t= he=20 prices it pays for electricity meet the legal test of being just and=20 reasonable, a determination heretofore made by the utilities commission. = =20 Under the utilities commission's procedure, the public is invited to commen= t=20 on the draft. An administrative law judge for the commission will consider= =20 the draft before issuing a proposed decision. A full commission vote is=20 expected Aug. 23, a deadline that would have to be met if the bond offering= =20 is to proceed as planned later this year. Harvey Rosenfield, president of= =20 the Foundation for Taxpayer and Consumer Rights, said the utilities=20 commission's draft agreement would allow a "secretive agency of dubious=20 competence controlled by the governor and completely unaccountable to the= =20 public" to unilaterally order rate increases. "It was deregulation which g= ot=20 us into the mess we are in today," Rosenfield said. "Now Wall Street is=20 demanding that the (utilities commission) be forced to surrender its=20 authority and legal responsibility." He urged the commission to reject the= =20 draft proposal. Carl Wood, one of five members of the Public Utilities=20 Commission, said the draft agreement was driven largely by legislation=20 empowering the water department as an electricity purchaser. With a state= =20 department buying power, Wood said, oversight shifts to the governor and th= e=20 Legislature. Commissioner Richard Bilas said he saw the agreement as=20 empowering the water department as "prosecutor, judge and jury" in matters = of=20 electricity purchasing. "The argument is that it's better off this way tha= n=20 the way we were," Bilas said. "And that's true in the short run. But what= =20 about in the long term?"=20 Variety of plans to help Edison find friends, foes =20 \ objattph=20 Agreement in Legislature doesn't seem likely soon By Ed Mendel UNION-TRIBU= NE=20 STAFF WRITER July 19, 2001 SACRAMENTO -- Plans to aid Southern California= =20 Edison met mixed fates in legislative committees yesterday amid opposition= =20 from business, consumers and Edison itself, which said one of the plans wou= ld=20 not restore its ability to borrow money. The Senate energy committee=20 rejected a plan that is tough on Edison, but the committee plans to conside= r=20 it again today. In the Assembly, a committee approved two plans. One has t= he=20 support of Democratic leaders, is viewed more favorably by Gov. Gray Davis= =20 and has not drawn opposition from Edison. The other, crafted by the committ= ee=20 chairman, Rod Wright, D-Los Angeles, and Republicans, is supported by=20 businesses and Edison. Senate President Pro Tempore John Burton, D-San=20 Francisco, told an Edison official during a committee hearing that financia= l=20 experts have told him repeatedly that bankruptcy is the logical course for= =20 Edison. "They keep saying they don't understand why a business in your=20 situation does not avail themselves of that," Burton said. The Senate lead= er=20 told the Edison official not to expect the usual legislative compromises th= at=20 would give the utility most of what it is seeking in a rescue plan. "I wan= t=20 to disabuse you of the fact that somehow you are going to get some great bi= g=20 deal at the end of the rainbow," Burton said. "Because you are not going=20 to." The Senate and Assembly Democratic leadership plans require businesse= s=20 to pay off most or all of Edison's debt, while also preventing businesses= =20 from shopping around for cheaper power. Business groups oppose the plans=20 because of those provisions. Davis is pushing for a legislative plan that= =20 would keep Edison from joining Pacific Gas and Electric in bankruptcy. He= =20 wants an Edison rescue plan that could become a model for getting PG&E out = of=20 bankruptcy. Once their financial health is restored, the utilities could= =20 resume buying power for their customers, allowing the state to get out of t= he=20 power-buying business it entered in January, when the utilities were crippl= ed=20 by a failed deregulation plan and no longer able to borrow money. But the= =20 lengthy and sometimes emotional debates in legislative committees yesterday= =20 made it clear that reaching an agreement on an Edison rescue plan in the ne= xt=20 few days will not be easy. A plan that Davis negotiated with Edison in ear= ly=20 April found little support in the Legislature and is not being considered.= =20 Opponents said the plan was too generous to Edison. But the alternative=20 rescue plans prepared in the Legislature also are called too generous to=20 Edison by a consumer group, the Foundation for Consumer and Taxpayer Rights= ,=20 which is threatening to put an initiative on the ballot to repeal any Ediso= n=20 "bailout." Edison, on the other hand, fears that it will be saddled with t= oo=20 much debt and placed under a regulatory system that does not assure lenders= =20 that the utility will be able to pay costs for operating and buying equipme= nt=20 and power. "We don't believe this bill in its present form would restore u= s=20 to creditworthiness," Bob Foster, an Edison vice president, told a committe= e=20 hearing the Senate plan. The plan by Wright and Republicans was supported = by=20 business groups and Edison but opposed by consumers. All ratepayers would p= ay=20 off the Edison debt and businesses would be allowed to shop for cheaper pow= er=20 as state long-term contracts expire. "What will come out of the mix is har= d=20 to tell," said Steve Maviglio, Davis' press secretary. "Everyone is working= =20 feverishly to get something passed in the next few days."=20 Baja is hoping energy squeeze can spark boom =20 \ objattph=20 New electricity, gas plants seen spurring a fresh wave of growth By Diane= =20 Lindquist UNION-TRIBUNE STAFF WRITER July 19, 2001 Energy shortages in= =20 California and Mexico are firing hopes for a new wave of industrial=20 development in Baja California, where a maquiladora slowdown has cut=20 thousands of jobs. The power squeeze has triggered a rush to build=20 electricity and natural gas projects in Baja California. Once those plants= =20 are up and running, energy experts and Tijuana boosters say, the state will= =20 be able to make an unusual pitch to global manufacturers: Come to Baja=20 California, where power is plentiful, reliable and relatively cheap. "It's= a=20 new frontier for Baja California," said Institute of the Americas president= =20 Paul Boeker, a frontier that "opens up investment opportunities that aren't= =20 possible at the moment." To seize the possibilities, Tijuana's Economic=20 Development Corp. is pushing the Baja California government to fund a study= =20 to identify the United States' biggest electricity and natural gas users. = =20 "When we saw the price of energy going up so high in California, we thought= =20 we might be able to use this as a marketing tool," said David Mayagoitia, a= =20 director of the development group. The hope is that an influx of big-energ= y=20 users, such as high-tech firms that operate clean rooms, will offset seriou= s=20 problems in the region's sputtering maquiladora industry. Since October,= =20 Baja California has lost 11,700 maquiladora jobs, 4 percent of the sector's= =20 total. In Tijuana alone, 7,600 positions have disappeared. "I've never see= n=20 so many large and small and medium companies narrow their operations in suc= h=20 a short amount of time," said Deloitte & Touche accountant Mauricio Munroy.= =20 Maquiladora insiders like Munroy blame the U.S. economic downturn, rising= =20 costs, a strong peso and a new Mexican regulatory regime for reining in the= =20 operations. Mayagoitia calls it a crisis. "Our labor costs are going up.= =20 We're not as competitive as other places in the world. We have to look for= =20 other angles." Over the past three decades, the arrival of foreign-owned= =20 maquiladoras has pushed Baja California's population to 2.5 million and=20 transformed the state into one of the world's manufacturing hot spots. The= =20 region now ranks as a top producer of televisions and other consumer=20 electronic products, and many other goods. There are 1,287 factories in th= e=20 state, employing 278,900 workers. New operators continue to come. Since=20 October, when employment began dropping, 33 companies have established=20 factories in the state. Other companies, including Korean electronics giant= =20 Samsung, the state's largest operator, are expanding. But in the past nine= =20 months, the sector's growth has dropped below its routine double-digit rate= . =20 Some companies, such as Sanyo and Day Runner, have shut factories. Others a= re=20 threatening to. And so many have trimmed operations that Munroy said, "I=20 don't think we can feel comfortable the industry's going to recover." But= =20 now, California's energy crisis and cross-border power demands could alter= =20 that picture. A natural gas pipeline and three power plants in the works wi= ll=20 boost the state's electricity output by 2,200 megawatts. As much as 1,500= =20 megawatts could flow to California consumers. Additional plants are=20 anticipated. Mexican Energy Secretary Ernesto Martens has said there's no= =20 limit to the number that could be built in Baja California. And California= =20 and Mexican officials are considering recruiting energy companies to start= =20 projects in Baja California. Meanwhile, numerous companies -- El Paso and= =20 Phillips, Sempra, Chevron and Chiyoda among them -- have expressed interest= =20 in building liquid natural gas facilities near Rosarito and Ensenada. The= =20 operations would convert into vapor form liquified natural gas imported fro= m=20 other regions for use in Mexico and the United States. Such projects could= =20 give Baja California billions of dollars in investment, thousands of=20 construction and operating jobs, and a reputation as an energy-abundant pla= ce=20 to do business. "Large energy consumers could come down here, set up=20 operations and get a big break on their utilities," Mayagoitia said. =20 Previously, such operators have shunned Baja California. "They've always= =20 said electricity down here is not constant. There are too many fluctuations= =20 on the line," Mayagoitia said. While a bigger supply would overcome that= =20 obstacle, other challenges must be met before the region can use energy as = a=20 marketing tool. At a San Diego Dialogue forum on energy last week, Boeker= =20 listed the key elements needed to attract the next wave of industrial=20 development to Baja California. As he sees it, they need at least one liqui= d=20 natural gas import facility, to allow power generators to export to=20 California and sell directly to companies in Baja California, and to upgrad= e=20 the cross-border gas and electricity transmission infrastructure. Mexico= =20 also needs to make sure its business laws and regulations, which in the pas= t=20 have restricted the energy sector, allow corporations to get the supplies a= nd=20 prices they need to be competitive, Mayagoitia said. "We think if the=20 numbers make sense, and they have confidence that Mexico can deliver what= =20 they need, then we'll have the market niche."=20 State deal lets SDG&E turn large profit =20 \ objattph=20 By Craig D. Rose UNION-TRIBUNE STAFF WRITER July 18, 2001 When Gov. Gray= =20 Davis and SDG&E officials hailed an agreement last month to clear a $750=20 million debt owed to the utility, they neglected to publicize a key element= :=20 The deal allows San Diego Gas & Electric to earn $120 million from the sale= =20 of electricity to California. At the time the deal was announced, SDG&E sa= id=20 it was making a major concession by agreeing to refund $219 million in=20 profits from several disputed power contracts. The utility also said futur= e=20 power sales to the state from those contracts would be at a discount. SDG&E= =20 has repeatedly asserted that it earns no profit from the acquisition and sa= le=20 of electricity, only from its delivery to customers.=20 But in subsequent filings to the U.S. Securities and Exchange Commission,= =20 SDG&E said it will earn $120 million from the contracts. News of the=20 earnings brought a sharp response from Michael Shames, executive director o= f=20 the Utility Consumers' Action Network, a San Diego-based group. "What real= ly=20 irks me is that the public was told SDG&E would make a $219 million=20 concession," Shames said. "It turns out that concession was less than $100= =20 million, or less than half of what was advertised. "What we have found is= =20 that the deeper you dig into this deal, the worse it looks. It's beginning = to=20 be pattern." Casey Gwinn, the San Diego city attorney, also criticized the= =20 belated revelation that SDG&E stands to earn substantial sums under the=20 contracts. Gwinn had said that SDG&E's customers should receive the benefit= s=20 from the deals. "All of this should have been disclosed," said Gwinn, who= =20 added that it was impossible to determine the full profit SDG&E had made fr= om=20 certain power purchase agreements. Ed Van Herik, a spokesman for SDG&E,=20 reiterated the position yesterday that profit from the contracts belongs to= =20 the company's shareholders. Van Herik declined to comment about terms of th= e=20 power sales to the state. The contracts, which were signed several years= =20 ago, allow SDG&E to buy relatively low-priced power. The utility has made= =20 money by reselling that power at a higher price. The deal to clear the $75= 0=20 million debt was announced in June along with Gov. Gray Davis' plan to=20 purchase SDG&E's transmission lines for about $1 billion. The Office of=20 Ratepayer Advocates, a watchdog agency within the California Public Utiliti= es=20 Commission, said yesterday the purchase price for the transmission lines wa= s=20 "clearly excessive" and said the money might be better spent acquiring or= =20 building new power plants. Steve Linsay, a program and project supervisor = in=20 the Office of Ratepayer Advocates, said revelation of the $120 million in= =20 profits SDG&E expects to earn from the sale of power heightened "pre-existi= ng=20 concerns" about the deal to settle the $750 million account. While the=20 transmission line deal will be considered by the Legislature, the Public=20 Utilities Commission will rule on the separate debt agreement. A spokesman= =20 for the commission said yesterday the vote on the settlement is scheduled f= or=20 Aug. 2, but the issue is on hold until the commission receives more=20 information from SDG&E. The local utility says the $750 million debt=20 represents the difference between what it has paid for power and what it ha= s=20 been allowed to collect from ratepayers since last fall, when the state=20 imposed a cap on customer payments. Some feared the so-called=20 undercollection would become a balloon payment, payable by local customers= =20 when the rate cap ended next year. At a news conference last month, the=20 governor and officials of Sempra Energy -- parent company of SDG&E --=20 described an agreement to eliminate the $750 million debt. Consumer=20 advocates raised questions about whether the proposed resolution would be a= s=20 costly to consumers as the debt itself. Under the state deregulation plan,= =20 SDG&E's profit-making business is restricted to the distribution of power.= =20 The Public Utilities Commission initially ruled that the profits from the= =20 disputed contracts should be returned to customers but SDG&E had sought to= =20 overturn the ruling in court. In another key element of the deal to resolv= e=20 the debt, SDG&E agreed to pay $100 million to end an investigation into its= =20 power purchasing practices. A spokesman for the governor defended the=20 agreement despite the revelation of future SDG&E profits. "We forced them = to=20 return about 70 percent of the profits (from the contracts)," said Steve=20 Maviglio. "And if you look at the whole picture, it is a good deal." While= =20 SDG&E had said it earned no money from the sale of power, other units of=20 Sempra Energy have acknowledged selling power to the state for profit. The= =20 California Department of Water Resources said it paid Sempra some of the=20 highest prices it paid for power through the first five months of this year= ,=20 when Sempra sold $429 million worth of electricity to the state.=20 Davis: Legislature will save Edison from bankruptcy =20 \ objattph=20 Time running out for bailout bills By Ed Mendel UNION-TRIBUNE STAFF WRITER= =20 July 18, 2001 SACRAMENTO -- Gov. Gray Davis, hoping for one of his biggest= =20 legislative victories, predicted yesterday that the Legislature will send h= im=20 a plan to keep Southern California Edison out of bankruptcy. But the=20 governor's own plan, introduced more than three months ago, is not among tw= o=20 Edison rescue proposals being considered in the Assembly and a different on= e=20 is under review in the Senate. All may come up for votes in committees=20 today. The Legislature is scheduled to leave Friday for its annual monthlo= ng=20 summer recess. Davis suggested that he may try to keep the lawmakers at the= =20 Capitol by calling a special session if the Edison issue is not resolved.= =20 "We have been working with members of both houses," Davis said. "I am=20 determined to get a bill passed this week, if at all possible, to allow=20 Edison to go back into business." The state began buying power for utility= =20 customers in January after Edison and Pacific Gas and Electric were cripple= d=20 by a failed deregulation plan. Davis wants the Legislature to pass an Ediso= n=20 plan that could also be a model for PG&E, which filed for bankruptcy in ear= ly=20 April. "It's very important to get Edison and then PG&E creditworthy and= =20 back in the business of buying power," Davis said, "so the administration c= an=20 focus on the more important things it was elected to do." But the two plan= s=20 supported by Democratic leaders in both houses raise questions about whethe= r=20 they would keep Edison out of bankruptcy. The plans also are opposed by=20 businesses, which would pay higher rates. A third plan proposed by the=20 Democratic chairman of the Assembly utilities committee, Rod Wright, and by= a=20 Republican, Keith Richman of Northridge, is likely to draw support from=20 Edison and business groups but opposition from many legislators who say it = is=20 too generous to Edison. Working out a compromise by Friday will be=20 difficult. If negotiations continue during the recess, Davis would have the= =20 option of asking legislators to return for a day to vote on any proposal th= at=20 might emerge. The middle of August is regarded as a deadline. A memorandum= =20 of understanding that Davis negotiated with Edison can be waived by either= =20 side after Aug. 15. And the state Public Utilities Commission is scheduled= =20 to take rate action a few days later in support of a $13.4 billion=20 power-purchasing bond that could limit options for an Edison rescue. In th= e=20 Senate, the governor's plan, which was criticized for being too generous to= =20 Edison, was stripped from a bill and replaced with a tough plan that would= =20 allow Edison to issue a $2.5 billion bond to pay off its debt. Edison woul= d=20 have to agree to a number of things, including selling power from its=20 generators at cost-based rates, giving the state all of the output from a n= ew=20 power plant near Bakersfield at low rates for a decade and applying a $400= =20 million tax refund to its back debt. A $1 billion debt that Edison owes=20 generators, who are accused of overcharging, would be left unpaid. The Edis= on=20 bond would be paid off not by residential customers but by businesses and= =20 other large users, who would not be allowed to shop around for cheaper=20 power. In the Assembly, Wright got agreement from an Edison official when = he=20 told a hearing that a plan backed by Assembly Democratic leaders would not= =20 keep Edison out of bankruptcy. Edison would be billed for $300 million wort= h=20 of power purchased by the Independent System Operator and other obligations= =20 not specificed in the bill.=20 PUC May Cede Control Over Electricity Rates Energy: Chief says letting the state water agency set prices would ensure= =20 that ratepayers cover costs. Others say plan would leave public unprotected= .=20 By TIM REITERMAN and NANCY VOGEL Times Staff Writers=20 July 19 2001 SAN FRANCISCO -- California's chief utility regulator proposed Wednesday to= =20 provide rubber-stamp approvals of any future electricity rate increases tha= t=20 state power buyers find necessary. This fundamental shift in the state's regulatory structure would bypass=20 procedures that currently protect the interests of consumers. The proposed agreement between the state Public Utilities Commission and th= e=20 state Department of Water Resources is designed to guarantee that consumers= =20 pay enough to cover the purchase by the state of electricity for the 27=20 million people served by three financially troubled utilities. Consumer payments will be used to repay bonds the state plans to float late= r=20 this year. The bonds will be used to reimburse the state treasury for money= =20 spent on electricity. The PUC is expected to formally ratify the agreement= =20 Aug. 23. A spokesman for the water department said that a historic rate increase in= =20 March is expected to cover all of the agency's costs and that no new hikes= =20 will be necessary. But under the terms of the proposed agreement, if that expectation proves= =20 incorrect and future hikes are needed, the PUC promises to adjust electrici= ty=20 rates to meet the department's need for revenue within 90 days, or 30 days = in=20 emergency situations. "The ruling gives carte blanche to [the department] to do whatever they wan= t=20 to do," said Richard Bilas, a PUC member appointed by former Gov. Pete=20 Wilson. "We don't have much control over them. I am uncomfortable with it." If approved, the agreement would shift the oversight of electricity rates= =20 from the PUC, an independent regulatory body whose members are appointed by= =20 the governor, to a state administrative agency that is under the governor's= =20 direct control. S. David Freeman, Gov. Gray Davis' chief energy advisor, said the agreement= =20 would essentially transform the state water department into "the equivalent= =20 of a municipal utility" that has sole discretion to raise revenue from its= =20 customers. The PUC would only have the authority to "make sure that our math is OK, an= d=20 we haven't gone out and bought the Brooklyn Bridge," Freeman said. Already, however, the state's judgment in buying power has been questioned.= =20 The Department of Water Resources has signed long-term contracts designed t= o=20 ensure stable supplies. But critics have charged that those contracts have= =20 locked the state into prices that are too high. Indeed, because of cool=20 weather and reduced demand by consumers, the state--at least temporarily--i= s=20 buying more power than California needs and has begun reselling some of it= =20 for considerably less than it costs. In another energy-related development, a top executive of Southern Californ= ia=20 Edison Co., one of the three utilities that has been flirting with=20 insolvency, criticized as inadequate a state Senate bailout bill. The bill is a thoroughly rewritten version of a highly publicized deal Davi= s=20 and Edison officials fashioned in April to restore the company's financial= =20 health. That deal called for the state to buy the utility's transmission=20 lines for $2.76 billion. At a hearing of the Senate Energy Committee, Bob Foster, an Edison vice=20 president, testified that the Senate version, which is expected to be voted= =20 on this week, would leave Edison $1 billion short of meeting its financial= =20 needs. The problems of Edison, Pacific Gas & Electric Co. and San Diego Gas &=20 Electric Co. triggered the need for the deal between the PUC and the water= =20 department. That agreement was hammered out in high-pressure negotiations= =20 that involved dozens of state officials and bonding experts. It is viewed b= y=20 state officials and bond analysts as critical to the sale this summer of th= e=20 $13.4-billion bond issue. But Harvey Rosenfield, president of the Foundation for Taxpayer and Consume= r=20 Rights in Santa Monica, said the agreement would strip away the PUC's=20 constitutional obligation to protect consumers from unreasonable rate hikes= . "This is a power play by the Davis administration, the energy companies and= =20 Wall Street to eliminate any public scrutiny over their conduct and the pri= ce=20 of electricity for the next 10 to 15 years," he said. The agreement is the latest step in implementing emergency legislation pass= ed=20 this year to allow the water department to buy power. The agency stepped in= to=20 the market after the three utilities said that rates frozen under the state= 's=20 deregulation plan were preventing them from recovering their costs and were= =20 threatening their solvency. Assembly Bill 1X, signed into law by Davis in February, provided that the= =20 water department would be able to recover its costs and directed the PUC to= =20 implement an agreement to accomplish that. The agreement also would provide assurance to Wall Street that electric rat= es=20 would provide a reliable flow of funds that could be used to pay off the=20 bonds. The state hopes to use the bonds to create a revolving fund that wou= ld=20 pay for $8 billion in current and future power costs. State Treasurer Phil Angelides said the rate agreement "must be adopted so= =20 that the general fund can be repaid, and to protect the state's fiscal=20 solvency. . . . This agreement provides the assurance that, for the term of= =20 the bonds, the law will be honored so that bonds can be sold and bondholder= s=20 repaid." Equally important is the water department's projection of how much revenue= =20 the agency needs for everything from spot market power purchases and the co= st=20 of long-term contracts to administrative costs and debt service. That=20 detailed assessment will indicate whether the increase approved in March--a= n=20 average hike of 3 cents per kilowatt/hour--will be enough to cover the=20 department's costs for the two-year period ending Dec. 31, 2002. Officials = at=20 the PUC and the department said the projection could be submitted as soon a= s=20 Friday. "We do not anticipate that [the department] will be seeking any further=20 increase beyond the increase announced by the PUC last spring," said=20 department spokesman Oscar Hidalgo. "We're well within the 3-cent increase.= " The department's statement of its revenue needs has ramifications not only= =20 for consumers, but also for utilities. Utility officials fear that their ow= n=20 costs might not be covered after the department takes its share of the=20 revenue from monthly bills. PG&E spokesman Ron Low said the company's lawyers are assessing the propose= d=20 agreement but would have no comment on it until they can see the water=20 department's revenue requirement. He said the company hopes there will be= =20 enough left "to ensure our customers are treated fairly" and to cover the= =20 company's costs, including payments for the power it produces and purchases= =20 through contracts. Edison officials said they would not comment until they received more=20 information. The proposed agreement, though not unanticipated, would reduce the role of= =20 the PUC in one of the most pivotal chapters of the energy crisis. Normally, the PUC holds hearings and conducts "prudency" reviews before=20 making decisions on rate increases, but the water department would not be= =20 subject to the same procedures. "It will not be a review where we say you were imprudent, you goofed up and= =20 will have to eat the cost, or you badly negotiated these contracts," said= =20 Commissioner Jeff Brown, who was part of the negotiations. Brown said the two agencies had differences over issues such as whether the= =20 water department's administrative costs should be covered by the rate=20 agreement and the extent of the PUC's review. But he said the overriding=20 concern was that the state's bond sale not be delayed or otherwise=20 jeopardized by uncertainty about the water department's ability to meet its= =20 financial obligations. "I wish we were not in this situation," he said. "But when we started doing= =20 purchases, the state was the only credit-worthy entity. We're swimming=20 upstream." Commissioner Bilas said that although the bond sale is highly important, he= =20 is concerned that the water department will not be subject to governmental= =20 checks and balances because the department head reports directly to Davis. "If the governor believes the director of [the department] is doing a bad= =20 job, he can be removed," Bilas said. "But it is a matter of how much faith= =20 you have in individuals rather than faith in a system." Commissioner Carl Wood, one of Davis' three appointees on the five-member= =20 commission, pointed out that the PUC was set up to protect the interests of= =20 the customers of private utility companies with a monopoly. "When a public= =20 agency takes over [the purchase of power], things like a prudency review do= =20 not have the same meaning," he said. PUC President Loretta Lynch, who published the proposed agreement and=20 solicited comment on it, could not be reached Wednesday. Her legal advisor, Geoff Dryvynsyde, said the commission has to make a publ= ic=20 policy choice that weighs the need to sell the bonds against its own=20 authority to set rates. "There is lots to balance here," he said. "A really important consideration= =20 is the bond deal, and the rate agreement is important to getting that done.= "=20 ---=20 Reiterman reported from San Francisco, Vogel from Sacramento. Times staff= =20 writer Carl Ingram contributed to this story.=20 Copyright 2001, Los Angeles Times <http://www.latimes.com<;=20 IN BRIEF / SACRAMENTO Power Firm Is Held in Contempt by State Panel From Times Staff, Wire Reports July 19 2001 A state Senate committee voted unanimously Wednesday to hold Texas-based=20 Reliant Energy Inc. in contempt for failing to comply with a demand to=20 produce secret business records. Reliant is one of seven power generators under investigation by the Senate= =20 committee for failing to obey a subpoena for documents the companies consid= er=20 to be trade secrets or proprietary information. Reliant attorney Charles J. Stevens said that compliance with the committee= 's=20 demands potentially would expose the company's most secret information to i= ts=20 competitors.=20 Copyright 2001, Los Angeles Times <http://www.latimes.com<;=20 Electricity cost tops Californians' concerns=20 SURVEY: Governor now getting some credit for improving the situation=20 John Wildermuth, Chronicle Political Writer=20 <mailto:jwildermuth@sfchronicle.com< Thursday, July 19, 2001=20 ,2001 San Francisco Chronicle </chronicle/info/copyright<=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2001/07/19/MN199435.DTL= < =20 </cgi-bin/object.cgi?object=3D/chronicle/pictures/2001/07/19/mn_chronsurvey= .jpg& paper=3Dchronicle&file=3DMN199435.DTL&directory=3D/c/a/2001/07/19&type=3Dpr= intable<=20 </cgi-bin/object.cgi?object=3D/chronicle/pictures/2001/07/19/mn_chronsurvey= .jpg& paper=3Dchronicle&file=3DMN199435.DTL&directory=3D/c/a/2001/07/19&type=3Dpr= intable< The lights have stayed on this summer, but California residents are more=20 anxious than ever about the state's energy crunch, according to a survey=20 released today.=20 "People are still very worried," said Marc Baldassare, who directed the pol= l=20 for the Public Policy Institute of California. "They're not convinced we're= =20 totally out of danger."=20 While a record number of residents list electricity prices as the state's t= op=20 problem, Gov. Gray Davis seems to be getting some credit for improving a ba= d=20 situation.=20 The poll found only 39 percent of those surveyed approve of the way Davis i= s=20 dealing with the power problems, but that's a steady increase from the 29= =20 percent mark he had in a similar survey two months ago.=20 "As time goes by without any significant new problems, people realize that = an=20 effort has been made," Baldassare said. "If things aren't normal, they don'= t=20 seem to be getting any worse."=20 More than half those surveyed list electricity prices as the state's top=20 concern, with all other worries paling by comparison. Education, the leadin= g=20 issue just last year, was listed as the state's most important issue by onl= y=20 9 percent of those surveyed, with jobs and the economy third with 5 percent= .=20 "People need to realize that there's not an endless supply of power and oil= ,=20 " said Austin Eddy of San Francisco, one of those surveyed. "Maybe these=20 problems can serve as a wake-up call."=20 The poll of 2,007 Californians, conducted July 1 to July 10, has a margin o= f=20 error of plus or minus 2 percentage points.=20 The overall news for the governor in the survey isn't good despite the uptu= rn=20 in numbers for his attempt to ease the power crunch. Davis is still getting= =20 his share of blame, and it is showing in his approval ratings. Only 44=20 percent like the job he is doing as governor, while 45 percent are unhappy= =20 with his performance. That's down slightly from his 46 percent approval=20 rating in May and far below the 63 percent mark Davis had in a January=20 survey.=20 APPORTIONING THE BLAME Those polled still give utility companies, such as Pacific Gas and Electric= =20 Co., and former Gov. Pete Wilson and the legislators who approved utility= =20 deregulation much of the blame for the current crisis, but they are=20 increasingly calling Davis and the current Legislature to account. The=20 percentage of people who blame Davis for the power problems jumped from 10= =20 percent in May to 16 percent in the new survey.=20 "People are less likely to look in the past for blame and more willing to= =20 look at the current situation," Baldassare said. "They are moving toward=20 blaming the people in charge now."=20 But Davis seems to be winning the high-stakes public relations battle he's= =20 having with President Bush over the energy crisis. Bush saw his approval=20 rating in the state skid from 57 percent in May to 47 percent today while t= he=20 proportion of people who disapprove of the way he's handled the power woes= =20 jumped from 56 percent to 63 percent.=20 When asked who is more to blame for the state's electricity problems, 26=20 percent of those surveyed chose Davis to 12 percent who chose Bush.=20 But when asked who is providing better solutions to the problem, 34 percent= =20 chose the governor compared with 8 percent who give Bush the nod.=20 BAD MARKS FOR BUSH "The energy problem has hurt Bush," Baldassare said. "Very few people think= =20 he's come up with good solutions."=20 Much of Bush's proposed energy plan runs contrary to California's=20 preferences. The president's program backs oil drilling in environmentally= =20 sensitive areas, calls for the possibility of more nuclear plants and oppos= es=20 oil price controls.=20 "I don't think Bush has his priorities straight," Eddy said. "He's not=20 concerned about finding alternative ways of doing things and changing the w= ay=20 things are done."=20 The new poll shows 56 percent of those surveyed favoring price controls, 57= =20 percent opposed to nuclear power plants in their region and 71 percent=20 against oil exploration in federally protected areas.=20 More than two-thirds of those surveyed, including half the Republicans,=20 believe that the environment must be protected, even if it means higher=20 prices for gas and electricity.=20 "Bush has talked about the need to increase the energy supply, but his idea= s=20 have not gained any traction in California," Baldassare said. "A lot of=20 people here oppose a trade-off with energy and the environment."=20 CHART 1: E-mail John Wildermuth at jwildermuth@sfchronicle.com=20 <mailto:jwildermuth@sfchronicle.com<.=20 Worried Top three concerns of Californians, according to a new poll: Electricity prices, deregulation 56% Schools, education 9% Jobs, economy, unemployment 5% Source: Public Policy Institute of California CHART 2: Approval ratings For the first time, a majority of state residents view the energy crunch= =20 as=20 California's No. 1 problem, according to a Public Policy Institute of=20 California poll. At the same time, the public's view of Gov. Gray Davis'=20 handling of the energy crisis has improved since May while residents are mo= re=20 critical of President Bush's actions than they were two months ago. -- Do you approve or disapprove of the way that Gray Davis is handling t= he=20 issue of the electricity problem in California? May 2001=20 Approve 29% Disapprove 60% Don't know 11% July 2001=20 Approve 39% Disapprove 51% Don't know 10% CHART 3 -- Do you approve or disapprove of the way that President Bush is handli= ng=20 the issue of the electricity problem in California? May 2001=20 Approve 33% Disapprove 56% Don't know 11% =20 July 2001 Approve 28% Disapprove 63% Don't know 9% The survey of 2,007 California residents was conducted July 1-10. It has= a=20 margin of error of plus or minus 2 percentage points. =20 Source: Public Policy Institute of California=20 Chronicle Graphic ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 1=20 PG&E rebates snub longtime watt watchers=20 WHO WINS?: Reward is easier for those unaccustomed to power scrimping=20 Joe Garofoli, Chronicle Staff Writer <mailto:jgarofoli@sfchronicle.com< Thursday, July 19, 2001=20 ,2001 San Francisco Chronicle </chronicle/info/copyright<=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2001/07/19/MN144662.DTL= < If you've spent months squinting through dimly lit nights and still didn't= =20 get a 20 percent rebate on your most recent utility bill, you're going to= =20 hate hearing about Anne Crawford.=20 Conserving enough electricity to get a refund from Pacific Gas and Electric= =20 Co. was "too easy" for the resident of San Francisco's Noe Valley. She mere= ly=20 replaced a handful of high-wattage bulbs, turned off her computer, and voil= a=20 --=20 her electricity usage dropped 29 percent over last year.=20 That makes Crawford a winner in Gov. Gray Davis' new program that cuts 20= =20 percent off the bills of customers who reduce their usage 20 percent.=20 Crawford's payoff: $6.09, less than the average residential rebate of $10.7= 8.=20 Like most winners, Crawford endured little hardship to receive a credit on= =20 her bill.=20 "I hear all these stories about all these heroic things people did," Crawfo= rd=20 said, "but I didn't really do anything special."=20 If only it were that easy. Nearly a third of PG&E customers have opened the= ir=20 bills this month to find a credit for conserving, but many of the 71 percen= t=20 who didn't are ticked. They complain that the program rewards watt hogs who= =20 needed to conserve instead of the conservationists who have been doing the= =20 right thing for years.=20 But that is of little consequence to the 510,000 PG&E residential customers= =20 who have received $5.5 million in rebates so far. (The utility is nine days= =20 through its 21-day billing cycle.)=20 Chip Gibbons knows how he's going to spend the $4.03 burning a hole in his= =20 pocket.=20 "It's not enough to buy a bargain movie ticket, so I think I'm going to get= a=20 10-pound bag of Kitty Litter," said Gibbons, who cut his electricity=20 consumption at his Castro apartment by half.=20 Gibbons' secret: "My roommate moved out."=20 NO REWARD TOO SMALL Some rebate winners were glad to see huge conservation investments pay off.= =20 Robyn Simonett dropped $700 on a new energy-efficient refrigerator to repla= ce=20 the 15-year-old model in her Berkeley bungalow. That, combined with keeping= =20 the thermostat at 62 degrees, made all those days of typing in gloves with= =20 the fingertips removed and doing jumping jacks on the hour worth the strugg= le=20 once she opened her PG&E bill.=20 Her cash reward: $3.=20 "I went, 'Woo-hoo, yeah,' " Simonett said. "Hey, it's something."=20 Psychically, it's good to get cash back from PG&E after months of soaring= =20 rates, agreed Leonard Graff, winner of a $7 rebate for conservation at his= =20 San Francisco home. And while it may look like he's in the hole after=20 spending $150 on fluorescent bulbs and a new lamp to replace a watt-sucking= =20 torchere, "those bulbs will pay for themselves soon. I'll have them for 10= =20 years."=20 If only Gretchen Beck had rebate cash to spend on cat box filler. She saved= =20 19 percent -- just missing the rebate threshold. She couldn't have done muc= h=20 more. She didn't watch TV for three months, used only the lights she needed= ,=20 turned off all the right things. Maybe if she unplugged her electric mattre= ss=20 warmer, she might have. . . .=20 "No way," said the resident of San Francisco's Bernal Heights. "I'd unplug = my=20 refrigerator first."=20 WATT WASTERS CASHING IN Beck wasn't bitter about not getting a rebate. Some also-rans, however,=20 complained about the unfairness of rewarding watt hogs while overlooking=20 PG&E's good energy citizens.=20 Privately, one PG&E official said, "We tried to tell the governor's office= =20 that when they came up with this program."=20 "It's unfair to people who have been efficient all along," said Marc Acheso= n,=20 an Oakland resident who bundled up, bought energy-efficient bulbs and did a= ll=20 the right things long before there was an energy crisis. The downside to=20 doing the right thing: Acheson doesn't think he'll get a rebate when his bi= ll=20 arrives.=20 "There should be something for people like my wife and I, who won't get a= =20 refund. But I guess this program is meeting its target: people who were=20 wasting a lot."=20 A PAT ON THE BACK Don't look to the governor's office for a reward for longtime=20 conservationists. Davis feels they've already received one.=20 "Their reward is the years of savings they've had for doing the right thing= ,=20 " said Davis spokesman Roger Salazar. "The governor considers them the real= =20 heroes of this crisis."=20 Being called a hero is nice, but many customers said they would prefer cold= =20 hard cash.=20 The program had to make targets of watt hogs, as Salazar said, because that= 's=20 where the most waste was. Besides, he said, the hogs will be hit by the new= =20 rate increases approved by the state Public Utilities Commission.=20 PG&E estimated that 65 percent of its residential customers would be paying= =20 hi
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