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Sac Bee, Thurs, 7/26: FERC orders hearing on power overcharges Sac Bee, Thurs, 7/26: Capitol Digest: A new proposal to rescue Edison Sac Bee, Thurs, 7/26: No bailout (Editorial) SD Union, Thurs, 7/26: FERC orders more hearings over refunds SD Union, Thurs, 7/26: Brazil's ethanol is state's trump card SD Union, Thurs, 7/26: New Edison rescue plan worked out LA Times, Thurs, 7/26: Surprise! Californians Answer the Call in Crisis LA Times, Thurs, 7/26: Power Plant Plan Hits a Snag SF Chron, Thurs, 7/26: NEWS ANALYSIS Electricity crisis lets Davis generate an image of power SF Chron, Thurs, 7/26: Martinez foes fighting power plant Area already top-heavy with industry, they say SF Chron, Thurs, 7/26: News briefs on the California power crisis SF Chron, Thurs, 7/26: PG&E cutting voltage on some circuits SF Chron, Thurs, 7/26: Regulators say $1 billion power refund is fair State sticks by $8.9 billion claim Mercury News, Thurs, 7/26: States' eyes are on Texas' model for creating power Mercury News, Thurs, 7/26: Panel to seek refunds from municipal utilities OC Register, Thurs, 7/26: Book value doesn't tell whole story (Editorial) OC Register, Thurs, 7/26: Online just in time LA Times, Thurs, 7/26: Commentary Long-Term Deals Have Chilled Electric Prices, if Not the Whiners LA Times, Thurs, 7/26: THE NATION Regulators Plan Energy Rebate Settlement; Davis Plans Lawsuit FERC: Commission opens fact-finding process into the $8.9 billion governor says is owed Californians ------------------------------------------------------------------------------ ------------------------------------------------------- FERC orders hearing on power overcharges By David Whitney Bee Washington Bureau (Published July 26, 2001) WASHINGTON -- The Federal Energy Regulatory Commission ordered hearings Wednesday to determine how much money electricity generators will have to pay in refunds to California for wholesale power overcharges. Under the process laid out by the commission, based on the recommendations of an administrative law judge who tried to negotiate a settlement earlier this month, the dollar amounts of refunds will not be set until after a hearing to be completed in September. "Market participants need to understand that the cloud of market uncertainty will lift at some point soon," said the commission's chairman, Curtis Hebert. "Suppliers and customers soon will be able to finalize their accounting ledgers and again make rational purchasing and selling decisions." But the commission's order is unlikely to result in refunds acceptable to California, meaning that lawsuits and appeals over a final commission order are virtually certain and could stretch on for months or years. "This decision shows that there is a fundamental disconnect between FERC's responsibility to protect consumers and the actions of its commissioners," said Sen. Barbara Boxer, D-Calif. "Once again, FERC has shown that it is not up to the task, and as a result, California is left paying the price." Gov. Gray Davis insists the state was overcharged some $8.9 billion from May 2000 until June 19, when the commission ordered new rules to prevent price gouging. He said Wednesday's FERC ruling validated the state's claim. "As for the energy profiteers and pirates, let me make clear that I will not rest until every dollar gouged from California businesses and residents return to California," Davis said. "If the FERC does not make California whole, we will see you in court." But power generators said the overcharges, if they occurred, were just a fraction of what the governor is demanding. In settlement negotiations before the administrative judge, the generators and marketers offered only about $700 million. In his July 13 recommendations to the commission, Chief Administrative Law Judge Curtis Wagner said refunds probably "amount to hundreds of millions of dollars, probably more than a billion dollars in aggregate sum." Despite differences between the commission's three Republicans and two Democrats over some of the methodology that will be used to calculate the refunds, the five-member panel was otherwise unanimous in its decision to send the matter for a hearing. The differences on the commission focused primarily on two issues, including the inclusion of publicly owned utilities like the Sacramento Municipal Utility District and the Los Angeles Department of Water and Power in a refund order. Under the Federal Power Act, the regulatory commission does not have authority over publicly owned utilities. But the Republican majority on the commission said it thought including the publicly owned utilities was a matter of "equity," meaning they should not be permitted to escape refunds for overcharges that the private generators will have to make. Commissioner William Massey questioned why the deliberate withholding of power by generators to incite shortages and drive up electricity costs wasn't being factored into the refund calculations. But the commission's lawyers said they had looked into that question and determined that without an explicit rule against withholding power from the market, the regulatory agency was powerless to seek economic redress on that ground. The Bee's David Whitney can be reached at (202) 383-0004 or dwhitney@mcclatchydc.com <mailto:dwhitney@mcclatchydc.com<. Capitol Digest: A new proposal to rescue Edison (Published July 26, 2001) State lawmakers Wednesday released a new proposal to save Southern California Edison from bankruptcy in another attempt to send Gov. Gray Davis an agreement by Aug. 15. The new package combines parts of plans from both houses but relies more heavily on a proposal by Assembly leaders. Some lawmakers intend to review the plan informally today, and it remains unclear whether a vote will come Friday. The plan would have the state issue $2.9 billion in bonds that customers would pay off with a portion of their electricity rates. All consumers would help pay down the debt for the first two years, while only larger users would pay thereafter. The state also would collect power generator refunds in an account with the purpose of returning them to customers. The plan would require that 10 percent of new generation involve renewable sources, such as wind or solar. The state would not purchase Edison's transmission lines, as had been specified in an April agreement between Davis and the utility. Jones seeks SEC probe California Secretary of State Bill Jones on Wednesday asked the Securities and Exchange Commission to investigate whether energy consultants to the Davis administration engaged in insider stock trading. Citing newly filed reports that show several state energy traders owned stock in energy- related companies, Jones said a federal inquiry is warranted. Gov. Gray Davis last week required energy traders to sell their energy stocks or leave their jobs. The SEC declines to comment on its investigations. --Bee Capitol Bureau No bailout (Published July 26, 2001) While most legislators are away on vacation, a few key members are meeting to put together a deal to rescue Southern California Edison. If this sounds eerily familiar, it should. California got itself into its energy mess back in 1996 when the Legislature let a few of its members, working with the utilities and business interests, write risky deregulation legislation that few lawmakers (they all voted for it) actually understood. Strangely enough, Gov. Gray Davis seeks to solve the electricity problem with the same disastrous process. He's pushing a weary Legislature to act quickly to erase Edison's debts. Worse, he is requiring the members to get Edison's blessing for any deal. Never mind that after many tortuous months of this crisis, the state and its leaders are actually in a position of strength. By giving Edison a veto power over any deal, the governor is placing the interests of an investor-owned utility before those of the public. If lawmakers return to Sacramento to revisit the Edison issue, they need to hold to a firm principle: a deal, maybe; a bailout, no. Residential and business customers are already on the hook to pay back billions of extra dollars for the high-priced power they used since January. They are also liable for $43 billion worth of pricey power the state has purchased in long-term contracts for the years ahead. This creates an enormous but unavoidable risk for the state's economy. But Edison is insisting that its shareholders had no risk for the roughly $3.5 billion worth of debts the utility ran up last year when its cost of buying electricity in the spiraling wholesale market exceeded the rate it charged to customers. It would be nice to live in a business world with no risks. Yet Edison assumed this risk when it championed the 1996 rewriting of the rules of electricity. A company that benefited when times were good can't shed its risk when the market goes haywire. The good news for both California and Edison is that the power situation is far more stable today than when Edison and Davis announced a bailout. In those dark days, the idea was for the state to overpay for Edison's transmission lines, to guarantee Edison too handsome a return for electricity and distribution improvements, and to force ratepayers to pay off too much of Edison's debts for years to come. None of that is necessary now. In the intervening months, the state has made some tough, but essential, choices. It has raised rates. It has purchased most of the power that Edison's customers will need for years to come. And thanks largely to conservation, demand is back in balance with supply, so prices are down. Edison's cash flow is solidly in the black, with enough to start paying off its debts. There's no reason for lawmakers to act until Edison and the governor change the rules of engagement. A deal that shifts the risk back to Edison, maybe. A hastily arranged bailout, no. The lobbyists and governor want action now. The public should want the Legislature to stay on vacation. FERC orders more hearings over refunds \ objattph Commission sets 60-day timetable to sort out claims By Toby Eckert COPLEY NEWS SERVICE July 26, 2001 WASHINGTON -- Federal regulators ordered further hearings yesterday into how much California is due in refunds for high-priced electricity, but acknowledged they expect the dispute to end up in court. Adding another wrinkle to the long-running debate, the Federal Energy Regulatory Commission, or FERC, said municipal utilities and other public power generators that sold some of the highest-priced electricity to California face the possibility of paying refunds. Those entities normally are not subject to FERC jurisdiction and are likely to mount a legal challenge. The commission set a 60-day timetable for sorting out the financial claims and counter-claims arising from the power crisis that has gripped California for more than a year. FERC will then make a ruling on the state's demand for massive refunds and the claims by power sellers that they are owed billions of dollars for electricity. State officials, who accuse the sellers of price gouging, have said FERC has more than enough information to order refunds immediately. Nonetheless, Gov. Gray Davis said the commission's decision "validates California's claim that significant refunds are due." "The remaining question for FERC to decide is how much. California's answer remains the same -- $8.9 billion -- and today's action gets us closer to realizing that refund," Davis said in a statement. Mark Stultz, a spokesman for the Electric Power Supply Association, said the process FERC outlined is "not going to come close to what California demanded" in refunds. The association represents power generators and marketers. "We don't think there's any evidence to support refund obligations, but we also recognize the need to resolve outstanding issues and move forward," Stultz said. FERC gave the California Independent System Operator 15 days to calculate how much wholesale power would have cost between Oct. 2, 2000, and June 20, 2001, using a formula based on a recent FERC order that curbed electricity prices in the West. The ISO manages most of the state's power grid. A FERC administrative law judge will then have 45 days to hold an evidentiary hearing that establishes a basis the commission can use to order refunds. "Market participants will not have to wait long for final commission determination on California refunds," said FERC Chairman Curt Hebert Jr. FERC's order largely followed the recommendations of Curtis Wagner Jr., the commission's chief judge. Wagner recently presided over two weeks of unsuccessful settlement talks between California officials and power providers. Wagner estimated that the state is due only "hundreds of millions of dollars, probably more than a billion dollars," but that power sellers are owed "even larger amounts." Davis repeated his threat to sue the power providers to recover the full $8.9 billion the state is demanding. "If the FERC does not make California whole, we will see you in court," he said. Hebert and Commissioner Pat Wood III acknowledged the issue probably is headed that way. "I want you defending this thing in court . . . because it will go there," Wood joked to FERC staff members who drafted the recommendations. Municipal utilities added to the litigation threats after FERC decided to make them subject to paying refunds. Public utilities, including the Los Angeles Department of Water and Power, sold some of the most expensive electricity to the state. "I'm pretty hard pressed, almost mystified, on how they can find they have this legal authority," said Allen Mosher, director of policy analysis for American Public Power Association, which represents municipal utilities. "I don't think we should have to litigate this, but that may be the result." Commissioners William Massey and Linda Key Breathitt partially dissented from FERC's order over the issue. Massey said he doubts the commission has the authority to order public utilities to pay refunds under the Federal Power Act. "The conclusion that this agency has the power to tell non-jurisdictional companies to pay money back will come as a shock to most observers, I think," Massey said. "If Congress had wanted this agency to have refund authority over non-jurisdictional sellers it could have easily spelled that out." But Wood called the decision "a natural extension" of FERC's move in April to apply price limits to all power sellers in the California market, including public utilities. Massey, who has been one of California's chief champions on the commission, also objected to some elements of the formula that will be used to calculate potential refunds and said the order "still fails to squarely address" allegations that generators idled power plants to drive up prices. A FERC staff member indicated the allegations are still being investigated. "Those are non-public matters," he told Massey. Meanwhile, FERC deferred a discussion of the makeup of the ISO board, which is appointed by Davis. Power sellers have questioned whether it can be a neutral manager of the state's power grid, and Hebert has raised similar concerns. Davis has promised to fight any move by FERC to replace the board. Brazil's ethanol is state's trump card \ objattph By Michael Gardner COPLEY NEWS SERVICE July 26, 2001 SACRAMENTO -- The Davis administration and oil-industry buyers are in early talks to import ethanol from Brazil, something that could avert the threat of price spikes and head off a Midwest corn cartel once California banishes the additive MTBE from gasoline. Brazil's emergence as a competitor in ethanol production could deliver more bargaining power to refiners and potentially save California motorists millions of dollars at the pump, state officials say. "The more supply the better for us," said Pat Perez, fuels manager for the California Energy Commission. Brazil opened the talks by pledging as much as 200 million gallons of ethanol, or about a third of California's annual need in 2003. California, which consumes about 14 billion gallons of gasoline a year, is about to become a lucrative ethanol market. Brazil is the world's largest producer, converting a large share of its huge sugarcane crop to ethanol. "They have close to 1 billion gallons of idle capacity," Perez said. British Petroleum, which markets Arco gasoline in California, is among those looking south for its ethanol. "We're not committed to Brazil. Brazil came to us," said Margo Cormier, BP's West Coast business development manager. "In the short term, there will be tightness in the ethanol market." Significant imports from Brazil could reverberate from the foreign trade office in Washington to tiny rice farms in the Sacramento Valley. The United States imposes a 54-cent-per-gallon tariff on ethanol, a barrier that could protect the Midwest from lower-priced competition from abroad. An dditional major supplier -- Brazil, for example -- also could dampen investor enthusiasm for California's slowly emerging ethanol industry. Ethanol is a staple in fuel in Chicago, Denver and other smoggy cities, but it was squeezed out of the California market more than a decade ago by methyl tertiary butyl ether, or MTBE, a cheaper smog-fighting agent. While effective in cleaning the skies, the additive polluted water sources from Santa Monica to Lake Tahoe, and Gov. Gray Davis stepped in two years ago, ordering MTBE out of gasoline by 2003. The governor also appealed to the U.S. Environmental Protection Agency for a waiver of a federal mandate that requires refiners to add a cleansing agent. Air regulators in California say the state's cleaner-burning gasoline doesn't need help to comply with federal pollution limits. State officials also contend California motorists could be socked with price spikes of up to 50 cents a gallon if Midwest corn-to-ethanol plants cannot feed demand. Droughts and supply interruptions also could cause havoc, the state warned. President Bush rejected the state's appeal, bowing to pressure from agriculture and its powerful political allies. The decision, unless overturned, leaves California solely reliant on ethanol, the only proven, readily available alternative to MTBE. While still lobbying for a change in federal policy, California officials are serious about importing Brazilian ethanol to compete with producers in Iowa, said Bill Rukeyser, a Davis administration spokesman. "It would be a real distinct irony -- with some Midwesterners putting so much energy into forcing their cousins on the West Coast to buy their product -- to have the situation come back and bite them," Rukeyser said. That's unlikely, countered Monte Shaw, a spokesman for the U.S. ethanol industry. Brazil will be hard-pressed to match Midwest prices given the tariff and shipping costs, he said. High sugar prices also could divert large amounts of cane from ethanol production, Shaw said. "There's a big debate in Brazil whether they can produce enough for themselves," Shaw said. The Midwest, which is rapidly building more plants, will have more than enough to supply California in 2003, he added. But Brazil also plans to crank up production, said Bryan Caviness, oil industry analyst for Fitch Rating Service in Chicago. "Where there's demand, where there's price, supply will follow," he said. New Edison rescue plan worked out \ objattph New Edison rescue plan mapped out By Jennifer Coleman ASSOCIATED PRESS July 26, 2001 CALIFORNIA'S POWER CRISIS (or) SACRAMENTO -- The state would forgo buying Southern California Edison's transmission lines, under a rescue deal for the utility presented yesterday by Assembly leaders. The revised plan would allow the utility to issue up to $2.9 billion in corporate bonds backed by a portion of customers' rates. All customers would repay the bonds, but residential and small-business customers would have a smaller burden, paying only 20 percent of the total. Commercial and industrial customers would pay the balance. Bond-generated money could be used only to pay debts to alternative generators and banks. Edison would still owe $1 billion to other power suppliers. But staffers at a briefing at the state Capitol yesterday said the utility could whittle that down by applying a tax refund of $400 million and negotiating with generators to reduce the debt. The Assembly will likely use portions of a bill by Fred Keeley, D-Boulder Creek, and Assembly Speaker Robert Hertzberg, D-Van Nuys, and amend them into an Assembly bill. That bill, and a Senate bill approved last week, will both have to be approved to enact the full plan. The Senate bill, by Sens. Richard Polanco, D-Los Angeles, and Byron Sher, D-Stanford, would have let Edison issue $2.5 billion in bonds. That would be repaid by industrial power customers. Under the Senate plan, the state would not buy the transmission lines, but would have an option to do so for five years. A third Assembly bill, by Assemblyman Rod Wright, D-Los Angeles, would have allowed the utility to issue up to $3.9 billion in bonds and wouldn't have required it to sell the transmission lines. Though the bill was stalled in a committee, portions of that plan could be used as well. Wright proposed allowing Edison customers to opt for cheaper direct-access energy service as the state's long-term contracts for power expire. The Assembly plan now includes that provision starting next year. He referred to his bill as a "straight bailout" of the faltering utility. Wright has been a favorite of Southern California Edison since he was elected to the Assembly in 1996. The company has donated vans to his district, subsidized trips to Europe and South Africa and bought him and his staff pro basketball tickets. The company also gave Wright's campaign $22,000 last year. With Wright, "Edison is getting a lot of bang for their buck," said Doug Heller, consumer advocate for the Foundation for Taxpayers and Consumers Rights. "His single largest contributor is the one corporation that his most recent legislation would directly bail out," Heller said. Wright is unapologetic. "I take money from anyone who can legally give it and I'll disclose it (as required by law)," he said. The chairman of the Assembly Energy Costs and Availability Committee, Wright declined to say if he still takes energy contributions, which many elected officials have declined since the energy crisis started. "I don't intend to disclose my fund-raising strategy in the newspapers." Brian Bennet, Edison vice president of external affairs, said it's standard for a committee chairman such as Wright to get larger contributions from a utility. Wright is "a bright, capable member of the Legislature who is interested in promoting sound public policy," Bennett said. ON CALIFORNIA Surprise! Californians Answer the Call in Crisis Peter H. King July 26 2001 They were rooting against us in Washington, D.C., in the oil fields of Texas and pretty much all across the land. This was to be the summer in which Californians got theirs, a summer of power blackouts followed by economic collapse and maybe even moments of social breakdown. Jokes were told about hot tubs and windmills and how many Californians it might take to screw in a lightbulb in the dark. Early calls to conserve energy were derided as too little, too late. Conservation, as the vice president of the United States so condescendingly described it, perhaps was a sign of personal virtue, but certainly it was not the stuff of serious energy policy. No, this time the hole was too deep. There was no way Californians could escape by flipping off lights, turning up thermostats. No matter what, the so-called golden land was going to go dark--dozens and dozens of times, the experts were certain--and wouldn't that be something to see? Well, here we sit on July 25, pawing away at a powered-up computer, all systems go, the grid up and humming, as it has been throughout the past couple of months. What happened? Well, many things. The soaring prices of wholesale power finally created a policy backlash, bringing a measure of control back to what had been a runaway market. The weather has been kind, proving once again that Mother Nature is a Californian at heart. New plants have come online. And also--and perhaps this is the most important reason of all--Californians have conserved, and conserved, and conserved. In June, according to state figures adjusted to account for weather and population increases, Californians consumed 12% less electricity than they did in the same month last year. On the hottest day of that month, the so-called peak, they consumed 14% less than they had a year ago--something like 5,000 megawatts worth, or the output of two nuclear plants. Final figures for July, not yet released, are expected to show similar patterns. A poll earlier this month found that 83% of the Californians surveyed were trying to conserve energy one way or another. And while nobody can be sure what August will bring, it has become increasingly difficult to imagine anything approaching the original doomsday visions. "The fact is," said Wally McGuire, coordinator for much of the state's multiphased conservation program, "we are conserving like crazy." There are many explanations given for this. Economists insist it simply was a matter of increasing rates--higher prices produce less consumption. Policymakers, in turn, cite the incentives offered to those who use less electricity or purchase more efficient appliances. Skeptics suggest the reduced consumption merely signals a slowing economy. Fear of blackouts also is mentioned. Most likely, it was a bit of all these things together--along with one other factor that tends, oddly enough, to be overlooked: Californians did the right thing. They decided to work their way out of the hole, one light switch at a time. They came to understand that money wasted on energy was money wasted, period. They had better things to spend it on--as individuals and collectively as a state. So they quit whining and pulled together. They turned off unneeded lights and, on hot days, turned up thermostats. They unplugged second refrigerators. They purchased house fans, compact fluorescent lightbulbs and other energy-saving products as quickly as the hardware stores could stock them. They learned to do their laundry later at night, after the hours of peak demand had passed, or save it for the weekend. They paid attention. They made adjustments. As McGuire said, "They got it." And they changed the national energy debate. Remember, heading into the summer, the accepted wisdom was that California, which already consumes, per capita, less energy than most states, could not possibly conserve any more. Instead, Californians demonstrated that there is still a lot of energy to be saved on the cheap--and if it works in California. . . . To be honest, none of it has been all that difficult. In fact, that some of the most effective measures were so easy raised an embarrassing question: Why weren't we doing these things all along? Just when exactly did a second refrigerator become "essential" to quality living? Who sold us on the canard that computers must be maintained in rooms cooled down to Eskimo levels? That Californians, in a crisis, answered the call should not be a surprise. They have done it before. In fact, after the latest long drought, Californians became so adept at conservation that some water district managers started to grow nervous. They feared that the drop in demand would decrease revenue and cripple their budgets. In the same way, those engaged in the business of selling electricity to Californians must now be worried. What would happen to their bottom lines if Californians were to keep up--or, horrors, improve upon--these summer conservation levels? Of course, they don't believe this will happen. They are counting on Californians, once the crisis has passed, to return to their old ways, letting the lights blaze and the air conditioners thunder all through the day and night. Just for the pure fun of it, let's surprise them again. Copyright 2001, Los Angeles Times <http://www.latimes.com<; THE STATE Power Plant Plan Hits a Snag Energy: Developer hopes to complete Lancaster facility by spring. Delay is a minor setback for state's plans to boost production by fall. By MITCHELL LANDSBERG TIMES STAFF WRITER July 26 2001 A proposed power plant in Lancaster won't be completed as scheduled this summer, the developer announced Wednesday, dealing another small setback to the state's target of adding 5,000 megawatts of new electricity by this fall. Steve Wilburn, president of Tustin-based Electricityprovider Inc., sent a letter to the California Energy Commission withdrawing an application that had been filed under Gov. Gray Davis' 21-day emergency licensing program. Wilburn said he intended to reapply for licensing, but would not be able to complete the plant by Sept. 1, as had been originally planned. Instead, he said, it was more likely to be finished next spring. "We just basically ran out of time," Wilburn said. The biggest hurdle, he said, proved to be a study required by Southern California Edison of the demands that the 240-megawatt plant would put on the utility's transmission system. "We're realistic, and we're not going to try to jump through hoops we can't make," Wilburn said. "We're a little bit disappointed, obviously, and a little bit frustrated." It wasn't the first setback for Wilburn in his effort to build power plants in the frantic atmosphere of California's electricity crisis. His company owns La Jolla Energy Development, which recently withdrew its application to build a small power plant in the Baldwin Hills neighborhood of Los Angeles after residents there overwhelmingly opposed it. The Lancaster plant hasn't stirred as much dissent, but has been opposed by both the Planning and Conservation League and the Natural Resources Defense Council--in part on the grounds that it could not realistically open on time, and therefore wasn't eligible for the streamlined 21-day licensing process. The Lancaster delay followed another developer's decision to abandon plans to build a power plant in Chula Vista. Three major power plants have opened so far this summer in California and 10 small "peaker" plants are expected to open by the end of September. Although the state appears certain to fall short of Davis' goal of 5,000 new megawatts online this summer, the combination of new generation, mild weather and greater than expected conservation has eased the electricity crisis and staved off the blackouts that were expected to be frequent occurrences this summer. Copyright 2001, Los Angeles Times <http://www.latimes.com<; NEWS ANALYSIS Electricity crisis lets Davis generate an image of power Robert Salladay, Chronicle Sacramento Bureau <mailto:bsalladay@sfchronicle.com< Thursday, July 26, 2001 ,2001 San Francisco Chronicle </chronicle/info/copyright< URL: <http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/07/26/MN147854.DTL< Gov. Gray Davis and his current chief political strategist, Garry South, worked in politics during that other energy crisis and shared a common worry: the metaphor of cars. As chief of staff to Gov. Jerry Brown, Davis famously put Brown in a simple blue Plymouth to show his Zen-economy side. While working in the White House, South argued that President Jimmy Carter should keep using the presidential limousine to project confidence, power and optimism amid a crisis. More than two decades later, Davis is still working hard on his political imagery, as he attempts to reshape his gubernatorial office into something a little more oval. The California energy crisis and the recent 2001-02 state budget negotiations have given Davis an opportunity to elevate his position, to separate himself from the media and the California Legislature. Some believe that the process is transforming, and in some cases isolating, the governor. "The word is imperious," said Barbara O'Connor, a political communications professor at California State University at Sacramento, who sees an orchestrated effort: "He's been very clear that throughout his career there always is a plan to advance to the next office, whether it's the White House or whatever is next." The current changes are a continuation of a gubernatorial makeover that started under former Gov. Pete Wilson, who hired White House aides and carefully leaked and controlled information given to the media. Wilson's White House ambitions were clear, but ultimately they were thwarted. With Davis, the anecdotes add up: EX-CLINTON AIDES HIRED As the energy crisis worsened this year, Davis hired two former Clinton White House insiders, Mark Fabiani and Chris Lehane, to manage his public relations effort. Davis soon began appearing frequently on the national stage, including a "summit" with President Bush that vaulted Davis to equal footing with the president. He hired Richard Sklar, a former Clinton administration official and envoy to the Balkans, to head a group accelerating the building of power plants. Almost every public appearance is carefully scripted, a departure from the more informal nature of previous governors. When Davis walks from his office to the press briefing room, his staff invariably rounds up schoolchildren touring the Capitol and lines them up to shake his hand -- as TV cameras roll. When Davis gets to the briefing room, he stands in front of a backdrop sign that uncannily resembles the one in the White House. Davis reached into New Hampshire, the home of the first presidential primary, to hire former legislator Steve Maviglio as his chief spokesman. He held a fund-raiser for the New Hampshire governor, Jeanne Shaheen, at the 2000 Democratic Convention in Los Angeles. DAVIS DELEGATES MORE Some of these changes are positive, political observers say. Davis has been distrustful of anyone outside a small circle of political advisers. Hiring a host of nationally known energy and communications experts -- and letting them talk to the press -- is a dramatic change for him. "It's a maturation," said Mark Petracca, chairman of the political science department at the University of California at Irvine. "It's Davis' recognition that you can't be the chief executive officer of any large corporation, whether private or public, and do it on your own. You have to be willing to trust and you have to be able to delegate." South said the only thing that has changed since Davis was elected is the demand of the job. "There is not some grand master plan to try to restructure or reposition how the governor's office functions or in some other fashion change his image, " South said. "He is what he is. He does what he does." Davis' way of doing business nevertheless is startling to legislative leaders who are used to close contact with the governor, particularly on the state budget. Davis is expected to sign the $101 billion spending plan today, more than a month after the Legislature's constitutional deadline. DEPUTY HANDLED BUDGET TALKS Senior lawmakers were relegated to negotiating with Davis' chief aide, Susan Kennedy, which some privately said they found vaguely insulting. The governor called only one "Big Five" meeting with the four top legislative leaders from both parties. During past difficult budgets, such meetings were regular and helped clarify positions among the two branches of government. Davis let the Legislature fight with itself this year, distancing his office from the fray. When a Chronicle story a few weeks ago said Davis had done little to advance the budget, Maviglio fired off an e-mail saying "even Clinton" didn't get blamed for holding up the budget. Senate President Pro Tem John Burton, D-San Francisco, openly complained during the Senate's budget session that Davis was AWOL. He found a milk carton with Davis' picture and brought it to the Senate floor and joked that he was probably watching golf. Although Davis appears to be "externalizing" his image by appearing on the national stage, the recent makeover doesn't necessarily mean Davis is gearing up for a presidential run, Petracca said. It may be just a strategy for re- election next year. And while the governor's office has become more presidential in style, California has changed as well. A nation-state with a $1.3 trillion economy and 34 million residents, California is more economically powerful than nearly every other country in the world. "The governor of California," said Petracca, "isn't like the governor of Idaho or Delaware." E-mail Robert Salladay at rsalladay@sfchronicle.com <mailto:rsalladay@sfchronicle.com<. ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 1 Martinez foes fighting power plant Area already top-heavy with industry, they say Jason B. Johnson, Chronicle Staff Writer <mailto:jbjohnson@sfchronicle.com< Thursday, July 26, 2001 ,2001 San Francisco Chronicle </chronicle/info/copyright< URL: <http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/26/ MNC239070.DTL< Martinez -- A proposal to build a 50-megawatt power plant in Martinez is drawing heat from residents who fear it would increase pollution in a region already burdened with large refineries and industrial plants. A local developer and a Southern California power firm want to team up to build build a natural gas-fired "peaker" plant on city-owned land near the former Shell Oil refinery now operated by Equilon Enterprises. Some residents fear that such a plant would reduce air quality by releasing thousands of pounds of carbon dioxide, nitrogen and sulfur dioxide. Critics complain that the county already has more than its fair share of power plants and other heavy industry. Some question the need for so many new plants, considering that the state seems to have turned a corner in its battle to stave off rolling blackouts and keep energy prices down. "The people in that area are already downwind from (Equilon)," said Kathleen Nimr, a Martinez resident and a council member with the Contra Costa Green party. Nimr said its been hard to get details about the plant from city officials, which only adds to the suspicion felt by residents. "There are just a lot of concerns that this was done behind closed doors," said Nimr. That location had been identified by the California Energy Commission as a potential plant site because it had easy access to water, a fuel source, and a way to plug into the state power grid. The peaker plant proposal comes from Evergreen Power, a partnership between Concord developer Thomas Denova, and Sterling Power Systems, of Southern California, said Richard Pearson, the city's acting community development director. About three months ago several power outfits came to city and expressed interest in building a new plant on the site, prompting officials to send out several requests for proposals. Martinez City Councilman Rob Schroder said it is much too early to tell if the city will approve construction of a new plant. He said the council first wants to gauge public support for the idea. Schroder said he has also talked with county Supervisor Mark DeSaulnier and Concord and Pleasant Hill officials about forming a committee to explore the idea of creating a local power authority. "It may come down where this isn't feasible at all," said Schroder. "We have to ask is this going to be good or bad for the city of Martinez overall. "There may be an opportunity here to provide an economic stream for the city," said Schroder. "The environmental aspects are important, and the economic aspects are important as well," he said. E-mail Jason B. Johnson at jbjohnson@sfchronicle.com <mailto:jbjohnson@sfchronicle.com<. ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 17 News briefs on the California power crisis The Associated Press Thursday, July 26, 2001 ,2001 Associated Press URL: <http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/07/26/state 0723EDT0147.DTL< (07-26) 04:23 PDT LANCASTER, Calif. (AP) -- A company has withdrawn its application to build a power plant here, saying they wouldn't be able to finish by the end of the summer. Steve Wilburn, president of electricityprovider Inc. of Tustin, notified the California Energy Commission on Wednesday about the setback. "We just basically ran out of time," said Wilburn, referring to the governor's emergency fast-track program to build more power plants by Sept. 30. "We're realistic, and we're not going to try to jump through hoops we can't make." Wilburn said the biggest hurdle was finishing a study required by Southern California Edison about the impact the 240-megawatt plant would have on the utility's transmission system. The company plans to reapply for a license and could have the plant operational next spring. It's the second major blow for the energy company, which withdrew its application to build a plant in Baldwin Hills after residents opposed it. Three major power plants have opened so far this summer in California and 10 small peaker plants are expected to open by Sept. 30. FRESNO, Calif. (AP) -- A bailout of Southern California Edison may mean a loss of up to $5 million annually in property taxes. County officials are concerned that a provision of the Edison rescue plan would put thousands of acres in eastern Fresno County into a conservation easement. The result would mean the land would be taken off the property tax rolls. Gov. Gray Davis has said counties will recoup any lost property tax revenues brought on by the Edison plan. But county officials don't believe Davis' pledge and may be forced to sue the state if necessary. "It's really arrogance on the part of the government that they would come in here and take everything they want," said Supervisor Bob Waterston. The state initially wanted to buy Edison's transmission lines but a revised plan would allow the utility to issue up to $2.9 billion in corporate bonds backed by a portion of customers' rates. Glen Cardaronella, regional manager for the Edison company in Tulare, said the state has told county officials about the conservation easement from the beginning. ,2001 Associated Press PG&E cutting voltage on some circuits Chronicle Staff Report <mailto:chronfeedback@sfchronicle.com< Thursday, July 26, 2001 ,2001 San Francisco Chronicle </chronicle/info/copyright< URL: <http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/26/ MN168593.DTL< Pacific Gas and Electric Co. will lower the voltage on about 10 percent of its circuits in the next three months, a move that will slightly reduce the number of megawatts it uses, the company said. About 300 circuits -- which deliver power to as many as 450,000 customers -- will be affected. The company says by lowering the voltage on the circuits, it could save about 30 or 40 megawatts. Customers won't notice the change, spokesman Jon Tremayne said. Some energy experts have suggested that the state could lower its energy usage by 500 megawatts if utilities lowered their voltage by 2.5 percent. That's enough megawatts to power 500,000 homes. The California Public Utilities Commission is investigating changing its rules to allow utilities to lower voltages even further. ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 3 Regulators say $1 billion power refund is fair State sticks by $8.9 billion claim Carolyn Lochhead, Chronicle Washington Bureau <mailto:clochhead@sfchronicle.com< Thursday, July 26, 2001 ,2001 San Francisco Chronicle </chronicle/info/copyright< URL: <http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/26/ MN176793.DTL< Washington -- Federal regulators largely accepted the findings of an administrative law judge yesterday who said California should receive about $1 billion in refunds for electricity overcharges. That would be far less than the $8.9 billion that California maintains it was overbilled by energy companies. The Federal Energy Regulatory Commission did not put a dollar figure on the amount of the refunds California should expect, instead ordering hearings on the issue. But the agency ordered that calculations for refunds be based on a price-control formula it imposed in June to tame wholesale power prices. That formula would call for refunds to be based on the spot price of electricity sold by the least-efficient plant during power emergencies from Oct. 2 of last year to June 20. California wanted alleged overcharges from as far back as May 2000 to be considered and disagreed with the spot-price formula. Sen. Barbara Boxer, D-Calif., said the commission's decision showed that "there is a fundamental disconnect between FERC's responsibility to protect consumers and the actions of its commissioners. Once again, FERC has shown that it is not up to the task, and as a result, California is left paying the price." Gov. Gray Davis, however, said the agency's move "validates California's claim that significant refunds are due California residents and businesses." Davis also lobbed another shot at the generators: "As for the energy profiteers and pirates, let me make clear that I will not rest until every dollar gouged from California businesses and residents returns to California." California officials had feared that yesterday's commission meeting might result in a separate move to dismantle the state's Independent System Operator, which runs California's power grid, in favor of a regional power-buying authority. However, the commission did not act on the issue. The decision on the refunds came after two weeks of settlement talks between California and power generators that ended in failure earlier this month. The generators offered around $700 million in refunds and contended they were still owed hundreds of millions in unpaid bills for power they sold to the state. Regulatory commission Judge Curtis Wagner oversaw the talks and found that the state had failed to muster evidence for the $8.9 billion. But Wagner said it was clear that "very large refunds are due," citing a figure of about $1 billion and perhaps more. Yesterday, the commission gave the ISO 15 days to produce evidence of overcharges. After that, the agency will hold 45 days of hearings to produce findings that a new administrative law judge would certify. The ruling would include money owed to the generators as well as refunds to the state. Commissioners made clear that they expected the issue ultimately to wind up in federal court. "This is going to the circuit (court) anyway," said Chairman Curt Hebert. Indeed, ISO Chairman Michael Kahn said that if the commission ordered anything short of $8.9 billion, "rest assured . . . (it) will be litigated." The commission also decided that power sales by municipal utilities should be included in considering refunds. That brought criticism from two Democratic commission members, William Massey and Linda Breathitt, who said the commission had no jurisdiction over publicly owned utilities. A Chronicle analysis of spot market purchases by the state during the first three months of the year showed that public agencies in California and elsewhere charged an average of about $344 per megawatt hour, while private companies charged less than $250. Massey called the inclusion of municipal utilities, mainly the Los Angeles Department of Power and Water, a breathtaking extension of the commission's authority, saying he thought it was going to "be a shock to the marketplace." The commission lacks regulatory authority over municipal utilities, federal hydroelectric plants and rural electricity cooperatives. But commissioner Patrick Wood argued that the prices charged to California by municipal utilities were "a natural extension" of the agency's order. E-mail Carolyn Lochhead at clochhead@sfchronicle.com <mailto:clochhead@sfchronicle.com<. ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 3 States' eyes are on Texas' model for creating power Posted at 11:26 p.m. PDT Wednesday, July 25, 2001 BY DION NISSENBAUM Mercury News Sacramento Bureau SACRAMENTO -- Californians looking for someone to blame for their energy woes have created a convenient scapegoat in their search for villains: cowboy boot-wearing Texas electricity barons who are making billions in profits. But if you look beyond the stereotype, the Lone Star state may offer California a surprising solution for its energy woes. Texas is drawing attention, not for its vast oil fields, but for its expanding acres of wind turbines -- a symbol of the state's success in fostering a homegrown alternative energy industry. A Texas initiative -- signed by then-Gov. George W. Bush -- has been so successful that California environmentalists are holding it up as a model for the state to follow. ``It's the most successful example that we've seen across the country,'' said Matt Freedman, an attorney with the Utility Reform Network, a San Francisco-based consumer group. ``Gov. Gray Davis has a chance to show that he can do Bush one better.'' On Friday, Davis administration sources said, the Democratic governor is expected to embrace a similar plan that would increase the amount of power California draws from renewable energy companies. Heightened interest California's energy crisis has sparked an increased interest in renewable energy at the state and national level not seen since the gas lines of the 1970s. From Sacramento to Washington, lawmakers are taking a new look at ways to build more plants that rely on the sun, wind or water instead of natural gas, coal or uranium. To do so, 13 states, including Texas, have passed laws that attempt to set aside a certain portion of the energy market for alternative energy companies. The Texas law commits the state to building 2,000 megawatts of renewable energy -- about 2 percent of its overall energy use -- by 2009. Texas expects to be halfway to that goal by the end of this year. To ensure a market for the power, state power providers are required to draw a slice of their energy from renewable energy companies. While California already has a much more vibrant alternative energy market -- 10 to 12 percent of its energy comes from renewable power -- the state has no similar targets. Environmentalists are joining with state leaders like Sen. Byron Sher, D-Redwood City, and Assemblyman Fred Keeley, D-Santa Cruz, to change that. Both lawmakers are trying to refine legislation that would call on California to draw 20 percent of its power from alternative energy sources by 2010. Friday, sources said, Davis is expected to unveil a new plan that would require state power providers to draw 17 percent of their energy from renewable energy companies by 2006. The governor plans to unveil the details during a visit to an alternative energy company in Berkeley. Although many agree with the idea in principle, there is heated debate over how to meet that goal. Natural gas plants The challenge has also been compounded by the $43 billion in long-term contracts the state locked in to buy 20 years worth of power. While state law called on contract negotiators to get as much renewable power as they could, they ended up relying heavily on natural-gas fired plants. More than 90 percent of the contracts are with such plants, according to a report by the California Public Interest Research Group. The contracts have come under fire from critics who contend that they will force the state into paying artificially high prices for years. There is also concern that relying so heavily on plants fueled by natural gas would leave California vulnerable to another energy crisis. Alternative energy companies said they offered good deals to the state but were shut out of the process. ``It really threatens to cut off the renewable energy industry in California,'' said Jonathan Weisgall, vice president of legislative and regulatory affairs at CalEnergy, one of the state's largest alternative energy companies. S. David Freeman, the governor's point man during the contract negotiations, conceded that the state had failed to do enough to reach out to alternative energy companies. ``They're right to criticize us now,'' he said. ``We haven't achieved the kind of results that we need. So we're playing catch-up ball.'' Critics are hoping that California will re-negotiate some of the contracts and create more room for alternative energy companies. The alternative energy debate has also heated up in Washington, where Bush has taken flak for proposing an energy policy with a heavy emphasis on boosting drilling for oil and gas. Lawmakers including Sen. James Jeffords, a Vermont independent, has proposed pushing the nation's renewable energy supplies from 2 percent to 20 percent by 2020. Holding out hope Supporters of the plan are hoping that Bush will look back on what he did as governor when he finalizes his national proposal. ``We still hold out some hope that President Bush will decide to incorporate some elements of the Texas model in federal energy policy,'' said Alan Nogee, director of the clean energy program for the Union of Concerned Scientists. Mercury News Staff Writer Brandon Bailey contributed to this report. Contact Dion Nissenbaum at dnissenbaum@sjmercury.com <mailto:dnissenbaum@sjmercury.com< or (916) 441-4603. Panel to seek refunds from municipal utilities Posted at 10:25 p.m. PDT Wednesday, July 25, 2001 BY JIM PUZZANGHERA AND JOHN WOOLFOLK Mercury News WASHINGTON -- The battle over electricity refunds for California got more contentious Wednesday as federal regulators voted to seek refunds from municipal utilities, which say they are exempted from federal regulation. The move means the state could get more than the roughly $1 billion suggested by a judge who oversaw failed settlement talks, but still less than the $8.9 billion state leaders demand. But the Federal Energy Regulatory Commission conceded any refunds are probably a long way off because the whole issue appears headed to court. The commission's controversial decision came as it set up a 60-day process to determine the full amount in refunds owed to California for electricity overcharges. Commissioners unanimously approved a judge's recommendation for a formula that California officials say would deny them $3 billion in refunds from May to October 2000. The only major change the commission made to the judge's recommendations was to include municipal utilities and other public power suppliers in the refund process. The state's Independent System Operator has estimated that public power suppliers overcharged California by about $761 million from Oct. 2, 2000, to May 2001. ``We don't think we owe anything,'' said Jerry Jordan, executive director of the California Municipal Utilities Association. Most municipal utilities buy more power than they sell and have raised rates. Palo Alto's electric utility, for example, has raised rates 43 percent in the past year. Three of the five commissioners said they had the authority to force refunds from municipal utilities because those utilities sell power in California under market rules set up by the Federal Energy Regulatory Commission. Last month, the commission set up a price-control plan for California and the West that also covered municipal utilities and other public power suppliers. But the American Public Power Association said the three commissioners are wrong, arguing that the Federal Power Act specifically exempts such utilities from regulation. Two commissioners voted against extending the refund order to municipal utilities, which have sold excess power to California during its electricity crisis and like other suppliers often received sky-high prices in the state's scramble to avoid blackouts. Robert Massey and Linda Breathitt, the two Democrats on the five-member panel, agreed with the other commissioners that it was fair to seek refunds from public power suppliers as well as private ones. But they argued the Federal Power Act doesn't give the commission any authority over municipal utilities or other public power entities, such as the Bonneville Power Administration in the Pacific Northwest. ``It seems to me that was a breathtaking reach,'' Massey said. The commission's actions came after two weeks of talks in Washington ended July 9 with no settlement on refund amounts. The commission's chief administrative judge, Curt Wagner, oversaw those talks and said the state failed to prove its $8.9 billion claim. Wagner estimated the amount is closer to $1 billion. On Wednesday, commission Chairman Curt H,bert offered no estimate of how much in refunds the state might get. ``A lot'' is all H,bert would say. So far, the commission has ordered $125 million in refunds for overcharges during selected periods this past winter. California Gov. Gray Davis said the commission's decision validates the state's claim it is due significant refunds. ``The remaining question for FERC to decide is how much. California's answer remains the same -- $8.9 billion,'' Davis said. ``As for the energy profiteers and pirates, let me make clear that I will not rest until every dollar gouged from California businesses and residents returns to California. If the FERC does not make California whole, we will see you in court.'' Julie Simon, vice president of policy for the Electric Power Supply Association, said no refunds are due California. ``We don't think anybody engaged in behavior that's inappropriate,'' Simon said. The commission is ``responding to political pressures not economics or market realities.'' Contact Jim Puzzanghera at jpuzzanghera@sjmercury.com <mailto:jpuzzanghera@sjmercury.com< or (202) 383-6043. Book value doesn't tell whole story July 26, 2001 By JONATHAN LANSNER The Orange County Register California's state Senate believes that paying more than book value is a crime. In mud wrestling better known as legislation before summer vacation, the Senate last week passed an Edison bail out bill that says the state will pay only book value for its transmission lines. That contrasts to a deal between the governor and the utility for a price of $2.8 billion, twice book value. The potential shortfall created by the Senate's lower price could toss Edison into bankruptcy. Seems lawmakers think only fools pay above book value. Maybe they haven't eyed their stock portfolios recently. Did you know that the U.S. stock market, as measured by the Standard & Poor's 500, trades today at five times book value? Let's remember that book value ain't often what it sounds like. It's a quirky part of the art - not science - of accounting. Very simply, many companies keep book values of assets they own low - near acquisition or building costs - because raising book values can cause tax headaches. Book values vary widely by industry and companies. Old-economy businesses, such as capital-intensive manufacturing, usually own huge factories. These assets tend to sell for modest premiums to book value. So, according to Morningstar data, steel stocks have traded at 1.4 times book value for the past five years. Conversely, industries where intangible brainpower, not tangible machinery, is key - or ones that may own few assets, such as retailers - typically sell at high multiples of book value. Thus, biotech stocks trade at 12 times book value; computer software shops at 15. Heck, even battered electric utilities traded at two times book during the past five years, Morningstar says. Let us stroll down Wall Street. I looked at five-year average price-to-book ratios among 800 or so firms that had growing profits and revenues the past three years. Those trading at about book value are a thin group - largely real estate trusts, which often keep book values near market levels. At two times book you see financial service outfits such as Countrywide and Irvine's Fidelity; homebuilders including KB Homes; and national players in tough businesses such as lumber's Weyerhaeuser or brewer Coors. When you get near triple book value, giants like Alcoa, Chevron, Merrill Lynch and Southwest Air show up. At five times book, you enter rarefied air. Hilton. Jack In The Box. American Express. Starbucks. And AES, buyer of Edison's Southern California power plants. Once you reach 10 times book and above, it's the Hall of Fame. Names like Procter & Gamble, Merck and Charles Schwab. Plus, this is the province of technology. Microsoft and BMC and Dell. Even Orange County's QLogic and Emulex. Plus, this survey's best - communication-gear maker Plantronics - at 19 times book. If state senators think Edison's getting too sweet a deal from the governor, then fine. But claiming that the deal stinks because the state might pay above book value doesn't add up. FRIDAY: What Lansner thinks the state should really ask Edison for. Online just in time Companies scramble to build new power plants while mild weather and conservation help Californians avoid blackouts. July 26, 2001 By MARY ANN MILBOURN The Orange County Register It's a race against time and so far California's winning - so far. Heading into the summer, the state's electricity situation looked dire. Experts projected that on peak-demand days, the state would fall 5,000 megawatts short of supply - enough to supply nearly 3.8 million homes. But an unusually mild summer and stepped-up conservation by consumers has bought the state time - time it's used for a pull-out-all- the-stops effort to get new power plants approved and built. The effort is slowly beginning to pay off: Three major new plants are already online, producing 1,415 megawatts. One megawatt supplies 750 homes. By the end of the month, two so-called peaker facilities - those authorized to run only during periods of peak demand - will start coming online, providing another 225 megawatts. Next month, the refurbishment of two mothballed units at the AES Huntington Beach plant will be completed, adding another 450 megawatts to the power grid. Also, two more peaker plants totaling 80 megawatts will begin coming online. If all goes according to schedule, four full-time plants and 10 peaker facilities capable of producing a total of 2,729 megawatts - about half the state's shortfall - are expected to be online by Sept. 30. And that's just for the conventional power plants. State energy officials say other renewable energy projects like wind, geothermal and biomass will bring the total available to about 3,000 megawatts by the end of September. "This is a huge step in the right direction," says Severin Borenstein, an economist at the University of California Energy Institute in Berkeley. "If we continue with the very aggressive conservation, we could get through the summer without blackouts." But things are still dicey and changing almost daily. "We don't know what's going to happen with the weather," said Bob Therkelsen, who oversees plant construction for the California Energy Commission. National weather forecasters predict slightly higher than normal temperatures for the next two months, a time when California often sees its peak power demand. "If we have a heat storm that affects not only California, but the rest of the Western states, it's still going to be a regional as well as local challenge," Therkelsen said. And the easy part of plant construction may be over as planned plants face a variety of hurdles: La Paloma, a 1,048-megawatt plant in Kern County, was to have its first units up by December. Construction delays have pushed that back to next March. The Energy Provider Inc. on Wednesday withdrew its application for a 21-day approval for its 240-megawatt peaker plant in Lancaster because a technical study of how it will connect to the grid was delayed. It will now have to go through a four-month approval process. The Pegasus Chino plant, a 180-megawatt facility, was delayed this week by the South Coast Air Quality Management District, making it unlikely that it will make the Sept. 30 completion deadline for plants approved under an emergency order issued by the governor. Plant approvals are expected to further slow after the governor's executive order expires because they will once again be subject to a more lengthy California Environmental Quality Act review. And ev
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