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Wednesday, April 11, 2001 Energy Cost Study Critical of Public Agencies Too
??? Power: DWP is among three government-run producers cited as driving prices up. Spokesmen deny ? ?????any market manipulation. By ROBERT J. LOPEZ, RICH CONNELL, Times Staff Writers Contra Costa Times, April 11, 2001, Wednesday, STATE AND REGIONAL NEWS, ????K4693, 736 words, State gets no promise of help, By Rick Jurgens Copley News Service, April 11, 2001, Wednesday, State and regional, 471 ????words, Price gouging could force new energy rate boost, PUC chief says, Ed ????Mendel, SACRAMENTO Los Angeles Times, April 11, 2001, Wednesday,, Home Edition, Page 8, 555 ????words, POWER CRISIS: FOG STARTS TO THIN; ??MOVEMENT TOWARD SOLUTIONS IS NOW ????VISIBLE IN THE ELECTRICITY CRISIS, A BIG ADVANCE FROM THE RECENT IMPASSE. Los Angeles Times, April 11, 2001, Wednesday,, Home Edition, Page 8, 453 ????words, LEADERSHIP IN POWER CRISIS Monterey County Herald, April 11, 2001, Wednesday, MN-CONSERVE-ENERGY, 612 ????words, California Lawmakers Demand More Energy Efficiency from Businesses, ????By Sylvia Moore The San Francisco Chronicle, APRIL 11, 2001, WEDNESDAY,, FINAL EDITION, ????NEWS;, Pg. A12, 1087 words, NEWS ANALYSIS; ???Different Ways Of Coping for ????PG&E, Edison; ???It may take years to determine if bailout or bankruptcy was ????wisest, David Lazarus The San Francisco Chronicle, APRIL 11, 2001, WEDNESDAY,, FINAL EDITION, ????NEWS;, Pg. A1, 1040 words, State Legislators Take Argument For Electricity ????Rate Cap to Feds, Lynda Gledhill The Washington Post, April 11, 2001, Wednesday, Final Edition, METRO; Pg. ????B01, 1067 words, Gas Plant's Proposal Alarms Neighbors in Calvert; Owner ????Pushes to Reactivate Facility, Raymond McCaffrey, Washington Post Staff ????Writer The Associated Press, April 11, 2001, Wednesday, BC cycle, 9:19 AM Eastern ????Time, Business News, 381 words, Report: Government utilities allegedly ????gouged California during power crisis, LOS ANGELES The Associated Press, April 11, 2001, Wednesday, BC cycle, 3:46 AM Eastern ????Time, Business News, 841 words, States say federal government needs to act ????to stem energy crisis, By H. JOSEF HEBERT, Associated Press Writer, BOISE, ????Idaho The Associated Press State & Local Wire, April 11, 2001, Wednesday, BC ????cycle, 2:19 AM Eastern Time, State and Regional, 966 words, Cheney urges ????patience for Bush's energy approach, By DAVID AMMONS, AP Political Writer, ????OLYMPIA, Wash. ABC, April 10, 2001, Pg. 48, 172 words, SPANISH GOVERNMENT PREPARES NEW SET ????OF ELECTRICITY TARIFFS TO AVOID "CALIFORNIA EXPERIENCE" (EL GOBIERNO PRAPARA ????UN NUEVO MODELO DE TARIFAS ELECTRICAS PARA EVITAR LA "EXPERIENCIA ????CALIFORNIA") AP Online, April 10, 2001; Tuesday, Domestic, non-Washington, general news ????item, 704 words, Fed Agency To Discuss Power Demands, H. JOSEF HEBERT, ????BOISE, Idaho AP Online, April 10, 2001; Tuesday, Domestic, non-Washington, general news ????item, 585 words, Calif. Gov. To Buy Power Lines, LESLIE GORNSTEIN, LOS ????ANGELES Wednesday, April 11, 2001 Energy Cost Study Critical of Public Agencies Too Power: DWP is among three government-run producers cited as driving prices up. Spokesmen deny any market manipulation. By ROBERT J. LOPEZ, RICH CONNELL, Times Staff Writers ????Government-owned utilities, including the Los Angeles Department of Water and Power, were influential in driving wholesale electricity prices to levels that helped ignite California's exploding energy crisis during the summer and fall, according to public and confidential records. ?????For months, Gov. Gray Davis, legislators and consumer advocates have chiefly blamed a few private power companies for throwing the state into darkness and economic chaos. ?????But they are just part of the equation. ?????A confidential document obtained by The Times names power providers that have allegedly manipulated the electricity market. While the document does identify out-of-state merchants criticized for gouging, it also discloses for the first time the extent to which public entities allegedly have maximized profits in the volatile spot market. ?????The document--which decodes the identities of unnamed suppliers in a recent state study--singles out three government-run agencies as consistently trying to inflate prices. They are: the DWP, the federally owned Bonneville Power Administration in the Pacific Northwest and the trading arm of Canada's BC Hydro in British Columbia. ?????Like a number of privately owned generators, these three producers offered power at a range of high prices and, sometimes, in large amounts when the state was most desperate. They also helped saddle California's three largest utilities with billions of dollars in debt--leading one, Pacific Gas & Electric, to seek bankruptcy protection last week. ?????The study by the California Independent System Operator, or Cal-ISO, analyzed thousands of hours of bidding practices for 20 large suppliers in the spot, or "real-time," market from May to November. The study accounted for factors such as rising production costs, increased demand, periods of scarcity and profits that would be earned in a healthy, competitive market. ?????Money earned above that was called excess profits. ?????No entity--public or private--earned as much in alleged excess profits as British Columbia's Powerex, the state records show. ?????"They were the most aggressive bidders," said Anjali Sheffrin, author of the coded study. ?????"They had the most amount to bid and the most freedom to bid it in," said Sheffrin, who did not discuss any companies by name. ?????The Canadian agency reaped $176 million in alleged excessive profits--several times the amount collected by all but one of the private generators. Second on the list was Atlanta-based Southern Co. Energy Marketing, now called Mirant, which collected nearly $97 million in alleged inflated earnings. ?????BC Hydro and Mirant--along with the DWP and other producers--say they played by the rules established under California's flawed deregulation plan and did not exploit the state's troubles. ?????But BC Hydro officials acknowledge that they did anticipate periods of severe power shortages and planned for them by letting their reservoirs rise overnight and then opening them to create hydroelectricity, which could be produced inexpensively but sold for a premium. ?????"It was the marketplace that determined what the price of electricity would be at any given time," said BC Hydro spokesman Wayne Cousins. "We helped keep the lights on in California." ?????And the rates low for their own customers. During the past year, BC Hydro has stashed hundreds of millions dollars in a "rainy day" account to ensure that it has among the lowest rates in North America. ?????Los Angeles' Department of Water and Power, although eighth on the list of alleged profiteers, was among those singled out for seeking high prices during periods of high demand that helped inflate costs across the entire spot market, where emergency purchases are made. ?????This, according to state documents, was accomplished by offering power at incrementally higher prices that would rise substantially with even modest increases in demand. The strategy also helped prop up prices, keeping them from falling. ?????The DWP's average hourly bid, or asking price, for electricity ultimately bought topped such private sellers as Reliant Energy of Houston and Tulsa-based Williams Cos., two major players in the national energy market. ?????In addition, the DWP submitted other bids at far higher prices that could pay off handsomely with even small bumps in demand, the report said, referring by code to DWP and four other suppliers. "The data shows they clearly exercised market power to inflate prices further at higher load conditions." ?????DWP General Manager S. David Freeman called the report's findings "outrageous," insisting that the utility never tried to inflate prices. ?????"These charges go under the heading there is no good deed that goes unpunished in this state," Freeman said, noting that DWP power helped avert more blackouts across the state. ?????He did acknowledge, however, that the agency has charged high prices for surplus power at the 11th hour but said that was only because it cost more to produce. ?????"We have consistently charged [Cal-ISO] our cost, plus 15%," he said. "It's not as though we're up there peddling a bunch of power to jam it down their throats." ?????Freeman said that when his staff reviewed the coded report, they never took it personally. "If you're innocent," he said, "you don't look at the criminal file." ?????Yet another public agency criticized for its behavior in California's deregulated market was the U.S. government's Bonneville Power Administration, a nonprofit agency that sells wholesale electricity produced at 29 federal dams in the Columbia-Snake River basin. ?????Bonneville actually bid slightly lower than the DWP, records show, but reaped millions more in alleged excessive profits, apparently because it supplied greater amounts of power during the period studied. Bonneville was in the top five accused of taking excessive profits. ?????Bonneville officials say some of its profits are used to pay back federal construction loans and fund an internationally recognized salmon recovery program. ?????Stephen Oliver, a Bonneville vice president, said his agency did not act improperly and has asked Cal-ISO for detailed information on how it reached its conclusions. He said the grid operator often came to Bonneville pleading for last-minute electricity and offering to pay high prices. ?????"From our point of view, we bid what we had when we had it and we operated precisely within the terms of their rules," Oliver said. ?????Those rules--and the bidding practices criticized by Cal-ISO--so distorted the market that Aquila Power Corp. of Missouri, which tried to act responsibly, has bailed out. ?????It offered the lowest average hourly price of any supplier studied--slightly more than $8 per megawatt-hour, compared to Mirant's $138, the highest. ?????But the spot market, as initially designed, made sure that all suppliers offering power received the highest price paid in any hour. ?????The result: Aquila collected $171 an hour for power it was willing to sell at a single-digit price. ?????"They weren't the culprits," said Cal-ISO's Sheffrin. "Someone else drove that up." ?????Aquila spokesman Al Butkus said the company pulled out of the California market because it was too unpredictable. Although the company made money, he said, it also could have lost because of possible downward swings. ?????"We looked at it and we didn't feel very comfortable with what we saw," he said. ?????The market has since been adjusted to prevent high bids from setting the price for everyone. But Sheffrin said it hasn't made much difference because the overall prices are still excessive. ?????"We're saying the patient is sick," Sheffrin said of California's electricity market. "It needs help [and] may die." ????? * * * ?????Top 10 in Profits ?????The California Independent System Operator says that a total of $505 million in extra profits was reaped by power suppliers from May to November 2000 in California's volatile spot market. The alleged excess profits were generated by high bids and high-volume sales during periods of peak demand. * * * ?????British Columbia Power Exchange: $176.2 million ?????Southern Co. Energy Marketing (renamed Mirant): $96.8 million ?????Reliant Energy Services $35.5 million ?????Dynergy Electric Clearing House $32.1 million ?????Bonneville Power Administration $30.0 million ?????Enron Energy Services $27.9 million ?????Duke Energy Trading $18.4 million ?????Los Angeles Dept. of Water and Power $17.8 million ?????Sempra Energy Trading $14.9 million ?????Pacific Corp. $13.6 million ?????Source: Public and confidential government records Copyright 2001 Los Angeles Times ?Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ??????????????????????????????Contra Costa Times ??????????????????????????April 11, 2001, Wednesday SECTION: STATE AND REGIONAL NEWS KR-ACC-NO: ?K4693 LENGTH: 736 words HEADLINE: State gets no promise of help BYLINE: By Rick Jurgens BODY: ??BOISE, Idaho _ A delegation of California legislators traveled here Tuesday to plead with federal regulators to cap soaring wholesale electricity and natural gas prices but left within a few hours without any promises of relief. ??Assembly Speaker Robert Hertzberg, D-Van Nuys, the delegation leader, urged the Federal Energy Regulatory Commission not to turn its back on the Golden State. "California is poised on the edge of an economic precipice that threatens not only our economy but the economy of the entire country," he said. ??But Commission Chairman Curt Hebert chided California for not doing enough to solve its own problems. Still, he professed his willingness to help. "It is in everyone's interest to keep the lights on at all costs," he said. ??But Hebert, a protege of Senate Majority Leader Trent Lott, R-Miss., is a vocal opponent of price caps and didn't offer the California delegation the promise it was looking for. That didn't surprise Assemblyman Fred Keely, D-Santa Cruz, a member of the delegation. Such a move would be "a dramatic and unprecedented departure" from past actions of the commission, Keely said as he left the meeting. ??California led the nation in electricity industry restructuring with a 1996 law that turned over control of the state's lifeline of electrons to a market dominated by a handful of private generating companies. ??But so far, the market hasn't delivered on the promise of cheaper power. In California, power procurement costs jumped to $32 billion in 2000, from $7.4 billion in 1999, and could go as high as $65 billion to $70 billion this year, Keely said. ??Now the state can't put its deregulation genie back in the bottle without FERC's help. And although two of the three commissioners at Tuesday's meeting said they were willing to consider price caps, the measure faces an uphill battle in the five-member commission, which will soon have two new Republican members appointed by President Bush. ??In the meantime, don't look for relief this summer from the region's hydroelectric dams, the regulators were told. "Probably the greatest energy crisis the West has experienced ever" looms after a dry winter emptied reservoirs behind the dams, U.S. Sen. Larry Craig, R-Idaho, told the commission. ??Jim Kempton, a representative of the Northwest Power Planning Council, said there is a "near-record drought in the Columbia River Basin." ??But the region's electricity crunch isn't purely an act of nature, according to the regulators from 11 Western states who were at the meeting. Complaining that electricity industry restructuring hasn't created a well-functioning wholesale market in the Western states, several blamed the control over output and prices exercised by a handful of generators and traders." "Market power continues to plague restructuring," said Constance White, a Utah regulator. ??But the call for price caps opened a fault line among the regulators and politicians at the meeting, where opponents of caps had the home-court advantage. "Price caps do not provide incentives for conservation and do not provide incentives for investment" in new power plants, said Idaho Gov. Dirk Kempthorne, a Republican. That position was backed by a letter from nine Western governors hailing the commission for its "resistance to the considerable pressure to impose 'penny wise and pound foolish' rate controls." ??The California delegation countered with its own gubernatorial letter, from Gray Davis, calling for "real and effective price restraints in what is obviously a dysfunctional electricity market in California and throughout the West." Davis noted that Oregon and Washington governors support his position. ??That call found a receptive ear in William Massey, a FERC member who supports caps. "Our passion for markets must be tempered with common sense," he said. ??Some at the meeting took the opportunity to offer California some advice on how to deal with its problems. Marsha Smith, an Idaho regulator, urged Californians to prepare to bite the bullet. "The only answer for the summer is demand reduction," she said. "If the price goes (beyond the limit you're willing to pay), don't buy it. I would rather have rolling blackouts." ??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune ??© 2001, Contra Costa Times (Walnut Creek, Calif.). ??Visit the Contra Costa Times on the Web at http://www.cctimes.com/ JOURNAL-CODE: CC LOAD-DATE: April 11, 2001 ??????????????????????????????8 of 100 DOCUMENTS ??????????????????????Copyright 2001 Copley News Service ?????????????????????????????Copley News Service ??????????????????????????April 11, 2001, Wednesday SECTION: State and regional LENGTH: 471 words HEADLINE: Price gouging could force new energy rate boost, PUC chief says BYLINE: Ed Mendel DATELINE: SACRAMENTO BODY: ??The state's top electricity regulator told a congressional hearing yesterday that California may have to raise rates again if federal regulators do not stop price gouging by generators. ??The president of the Public Utilities Commission, Loretta Lynch, told the congressional panel that ''California is literally being plundered, with the full knowledge and consent of the Federal Energy Regulatory Commission.'' ??When the PUC adopted the biggest rate increase in California history last month for Pacific Gas and Electric and Southern California Edison, Lynch said she believed that no more rate increases would be needed. ??But Lynch had a different view yesterday as she testified at a hearing on the California electricity crisis chaired by Rep. Dan Burton, R-Ind., which continues today in San Jose and tomorrow in San Diego. ??Lynch told Burton that the two rate increases adopted by the PUC since January totaled 4 cents per kilowatt hour, enough to be a 60 percent increase if they were enacted in Burton's congressional district in Indiana. ??''It may not be enough,'' Lynch said, ''if the current price-gouging practices persist and remain unabated by federal regulators.'' ??The PUC raised the PG&E and Edison residential rate 9 percent in January. A second increase last month raised the electricity tab more than 40 percent and the total monthly bill, including transmission and distribution fees, 26 percent. ??The PUC has not acted on a request by San Diego Gas & Electric, which is in a different financial situation, for a rate increase of 2.3 cents per kilowatt hour. ??Lynch said a flawed deregulation plan pushed by former Republican Gov. Pete Wilson ''caused the utilities to sell off much of their generation to entities who now hold us hostage daily to extortionate price demands for electricity.'' ??The Republican congressmen on the panel reopened the debate about whether Lynch, an appointee of Democratic Gov. Gray Davis, and the PUC prevented utilities from obtaining cheap long-term power contracts last fall. ??Lynch said the PUC quickly approved long-term contracts last Aug. 3, two weeks after a request from the utilities. She said the utilities obtained a number of long-term contracts but declined to give details, referring the panel to the utilities. ??The San Diego-based consumer group Utility Consumers' Action Network is suggesting dramatically different solutions to the state's power crisis. ??UCAN will release a report today calling for a ''buyers' cartel'' made up of the states of California, Oregon and Washington that would buy power together, insisting on reasonable prices from power generators. ??UCAN also calls for the forced sale to the state of any in-state power generator that refuses to sell at reasonable rates. ??WAGNER-CNS-SD-04-10-01 2119PST LOAD-DATE: April 11, 2001 ?????????????????????????????12 of 100 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ???????????????????April 11, 2001, Wednesday, Home Edition SECTION: Metro; Part B; Page 8; Editorial Writers Desk LENGTH: 555 words HEADLINE: POWER CRISIS: FOG STARTS TO THIN; MOVEMENT TOWARD SOLUTIONS IS NOW VISIBLE IN THE ELECTRICITY CRISIS, A BIG ADVANCE FROM THE RECENT IMPASSE. BODY: ??California's effort to resolve its energy crisis now is headed down two radically different tracks, one through the U.S. Bankruptcy Court and the other via the state regulatory and political process. Since each route leads into unknown territory, no one knows how this is going to come out, but the divergence itself has potential benefits. State political leaders and other Californians will be able to weigh each approach as Pacific Gas & Electric's case progresses through federal court and Southern California Edison's winds through the Legislature and the state Public Utilities Commission. ??In the wake of PG&E's bankruptcy filing Friday, Gov. Gray Davis announced that accelerated negotiations with Southern California Edison had produced an agreement to help the firm out of debt with a state purchase of Edison's electricity transmission grid for $ 2.76 billion. ??There are also potential benefits in Edison's decision to deal with the state rather than go into bankruptcy. Some are spelled out in a 36-page memorandum of understanding reached with Davis. A major provision is that Edison must sell all of its power generation to the state for the next 10 years at cost, a figure to be determined by the PUC. This amounts to about 40% of the power that Edison supplies to its service area, which covers Southern California except for the San Diego region and the cities of Los Angeles, Pasadena, Glendale and Anaheim. ??One troubling question is whether it still makes sense for the state to buy Edison's share of the state power transmission grid in the absence of a similar deal with PG&E. Davis insists that even with a portion of the grid, the state will be able to expand it and make it more reliable, and therefore he is continuing negotiations with San Diego Gas & Electric for its portion. This is an issue the Legislature needs to explore, along with whether any additional rate hikes are necessary--Davis says they are not--and how much Edison's parent firm should be required to contribute to the deal. What Davis agreed to may be good for Edison, but is it too good? ??The Edison agreement won support from the investment firm Goldman Sachs, which suggested it serve as a pattern for a quick restructuring of PG&E--something the Bankruptcy Court would probably have the power to do. PG&E has summarily rejected additional talks with the state, but Bankruptcy Judge Dennis Montali should examine the Edison deal carefully for elements that might be of value in the PG&E case. ??The damage done over many months--to the utilities' financial health, to the state's coffers and credibility, to consumer confidence--cannot be repaired overnight. It will take months for electricity rate hikes to start denting the utilities' debts, for the state's financial drain to be added up and for the prospects of repayment to be clear. It is also possible that the crisis has not hit bottom yet, and that a vicious brew of summer heat, unregulated price spikes and electricity shortages will deal the state a knockout blow. Even so, forward motion toward solutions is now visible. It is an improvement over the opaque muddle that existed even a week ago. ??* ??For more information: The Edison agreement is on the Internet at www.governor.ca.gov. Click on "Issues," then "Energy" and "All latest actions." LOAD-DATE: April 11, 2001 ?????????????????????????????13 of 100 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ???????????????????April 11, 2001, Wednesday, Home Edition SECTION: Metro; Part B; Page 8; Letters Desk LENGTH: 453 words HEADLINE: LEADERSHIP IN POWER CRISIS BODY: ??* Michael J. Aguirre's "Use Eminent Domain as a Power Tool" (Commentary, April 9), on the lack of leadership shown in the current power crisis by Gov. Gray Davis and the Legislature, reflects the feelings of the silent majority in California. We need to have our government literally take back the power supplies for Californians. ??Why do we call these modern robber barons (PG&E and Edison) public utilities, when in reality they are private money-grabbing companies? The concept of a public utility and the associated tax breaks that go with it was designed to protect the public good. ??We need a governor and Legislature like Teddy Roosevelt, who become irate, stand up and slug it out with the robber utilities. It is time for the government to use the power of eminent domain. If our politicians lack the guts, we need to exercise our right of political recalls to protect the public interest and guarantee the new political slogan "power for the people." ??ROBERT BEALL ??Long Beach ??* ??I wonder where these "intermediary" companies that are charging PG&E, Southern California Edison and San Diego Gas & Electric such outrageous prices are in the governor's negotiations. Someone obviously has made a tidy profit from the deregulation in 1996. Who is protecting them? Surely we all have our hindsight opinions and see the pitfalls of the decisions that were made in the past decade. Population growth, no new power plants, deregulation . . . hmm. ??I am confident that there are enough politicians and clever business school geniuses who can get us back on track. But let's look at the whole picture and involve all parties in planning. Before our state government is in the throes of "electrical bankruptcy," I would invite the 1996 legislators and the intermediary power brokers (yes, that pun is intentional). There's enough room at the governor's table. ??MARY CRICHTON LEAVER ??Orange ??* ??Re Paul Conrad's depiction of the power problem, "How many companies does it take to unscrew a light bulb?" (Commentary, April 9): When will he ever get the facts straight? It is not the utilities that are at fault, but the uncontrolled power providers that caused PG&E, Edison and SDG&E to be on the verge of bankruptcy. ??RON BRANT ??Los Angeles ??* ??If Gov. Davis wants to create a significant reduction in California's energy consumption, he should implement a 35-hour workweek for all state government employees and urge all California employers to do the same. If every office building in the state powered up at 8 a.m. or 8:30 a.m. instead of 7:30 a.m., the savings would be tremendous. American workers put in the longest working hours in the industrialized world. ??JOSEPH FUCHS ??Altadena LOAD-DATE: April 11, 2001 ?????????????????????????????14 of 100 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune Business News ?????????????????????Copyright 2001 Monterey County Herald ????????????????????????????Monterey County Herald ??????????????????????????April 11, 2001, Wednesday KR-ACC-NO: MN-CONSERVE-ENERGY LENGTH: 612 words HEADLINE: California Lawmakers Demand More Energy Efficiency from Businesses BYLINE: By Sylvia Moore BODY: ??California is the nation's most energy-efficient state, but state lawmakers want businesses to conserve even more. ??Saving electricity is the point of an executive order issued by Gov. Gray Davis in February that requires California businesses to substantially reduce outdoor lighting during non-business hours. ??To make sure that all businesses in Monterey County get the message, representatives from the California Technology, Trade and Commerce Agency (TTCA) joined with local law enforcement and the Kmart Corp. on Tuesday at a news conference inside the Seaside Kmart. ??The governor's order went into effect Mar. 15, as a reaction to the state's current energy crisis and will continue to be law for the foreseeable future. ??The conference was part of an outreach effort that will include handing out informational pamphlets to businessowners. ??"This is a voluntary outreach educational effort," said TTCA Secretary Lon Hatayama. "We would like for businesses to conserve on their own." Hatayama praised Kmart Corp. as one of the businesses leading the way to energy conservation -- thanks to a $ 2 million grant from the state. ??The state is asking businesses to reduce energy consumption from outdoor lighting by 50 percent or more, but not so much that it endangers the safety of the public, employees and property. Businesses are also required to shut off lighting primarily used for decorative or marketing functions when closed. As a last resort, businesses that fail to work with law enforcement and voluntarily comply with the law may face a $ 1,000 fine. ??"We don't expect (police) officers to be counting light bulbs," said Hatayama. "We do not want to jeopardize safety -- only ensure that the reduction is reasonable." ??Hatayama said the goal is for California businesses to reduce overall energy consumption by 3,700 megawatts during peak periods, and by 10 percent over the summer. ??Both Seaside Community Liaison Officer Barry Pasquarosa and Monterey County Sheriff Lt. Mike Derbyshire said local businesses have reacted positively to the call to conserve. ??"The voluntary compliance has been remarkable," said Derbyshire. ??Hatayama added that the tremendous reduction his agency has seen among Monterey County businesses, including those once brightly-lit auto malls, has not reduced sales. ??Kmart Corp.'s divisional energy manager, Adel Suleiman, thanked Davis and the California Energy Commission for granting the company $ 2 million to reduce energy emissions in 85 of its California stores. As a result, Suleiman said, Kmart is currently retrofitting existing outdoor light fixtures at these stores with energy-efficient bulbs. So far, the company has been able to reduce indoor lighting at its stores by 40 percent and outdoor lighting by more than 50 percent. ??"We are committed to (saving) 8.2 megawatts by summer and 12 megawatts by the end of the year," Suleiman said, adding that the savings are equal to the energy needed to power 10,000 homes. ??Suleiman also pointed out the number of energy efficient products Kmart offers to customers, including compact florescent bulbs, weatherstripping and ceiling fans. The items cost a bit more, he said, but they are well worth the savings consumers will eventually see in their electric bills. ??"These innovative programs by the state and the Department of Energy Conservation have made Kmart proud to be in California," said Suleiman. "We realize the challenge that California faces, and Kmart is doing its part to conserve." ??----- ??To see more of the Monterey County Herald, or to subscribe to the newspaper, go to http://www.montereyherald.com. JOURNAL-CODE: MN LOAD-DATE: April 11, 2001 ?????????????????????????????15 of 100 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ???????????????????APRIL 11, 2001, WEDNESDAY, FINAL EDITION SECTION: NEWS; Pg. A12 LENGTH: 1087 words HEADLINE: NEWS ANALYSIS; Different Ways Of Coping for PG&E, Edison; It may take years to determine if bailout or bankruptcy was wisest SOURCE: Chronicle Staff Writer BYLINE: David Lazarus BODY: This much at least is sure: Either Pacific Gas and Electric Co. or Southern California Edison is very, very clever. ???PG&E, which filed for bankruptcy protection last Friday, believes the best way for it to return to financial health is by throwing itself on the mercy of the court ???and plodding through months or ???years of contentious litigation. ???Edison, meanwhile, agreed Monday to a sweeping bailout accord with Gov. Gray Davis that, if given final approval, would instantly restore the utility to creditworthiness but force it to sell off valuable assets and commit to bargain-basement power contracts. ???"One has a deal and the other doesn't, so today it looks like Edison made the right choice," said Michael Worms, an energy-industry analyst at Gerard Klauer Mattison in New York. ???"But we won't really know for sure until PG&E's bankruptcy thing plays out," he said. "It could be that they did this correctly." ???If nothing else, both PG&E and Edison are convinced that they have chosen wisely. ???"A negotiated, practical, comprehensive resolution is far preferable to bankruptcy," said John Bryson, chairman of Edison International, parent of the Southern California utility. ???That's fine for Edison, "given its set of facts," PG&E said in a brief statement. "Given our set of facts, we continue to believe that a Chapter 11 reorganization is the most feasible means to reach a solution." ???Analysts said two factors played pivotal roles in each company's decision: money and culture. ???While both utilities hope to recover past costs for wholesale power, PG&E says it is owed $9 billion, while Edison's debt is only about half that. ???"PG&E concluded that because they're owed so much more money than Edison, they had a better chance in Bankruptcy Court," said Brian Youngberg, an analyst at brokerage Edward Jones in St. Louis. ???Culturally, analysts said, PG&E prides itself on nearly 100 years of providing electricity and gas to Northern Californians. Therefore, selling off its transmission lines would have been a blow to the company's core identity. ???Edison, for its part, is seen as a less enthusiastic player in the utility business, and its parent company had few qualms about shedding assets. ???Aside from its utility, Edison International owns power plants and, through its Edison Capital subsidiary, is involved in various investment projects. ???As California's two largest utilities pursue opposite paths to profitability, consumers have been left scratching their heads over how this will affect both the state's energy crisis and future electricity bills. ???A summer of power shortages remains virtually a sure thing. Higher electricity rates are almost certain as well. ???"At the end of the day, California consumers have gotten a raw deal," said Dan Jacobson, a spokesman for the California Public Interest Research Group in Sacramento. ???Edison customers already know a rate hike is in the works; they will pay a special charge on their bills to help cover the state's bailout agreement. ???PG&E customers must wait to see whether the bankruptcy judge will seek to pass along the utility's multibillion-dollar debt to ratepayers -- a decision that could take years to reach. ???Yet whether through bankruptcy or bailout, Jacobson said PG&E and Edison face no choice but to raise rates as the state continues to pay sky-high wholesale prices for electricity. ???Assembly Speaker Robert Hertzberg estimated yesterday that California will spend about $65 billion this year buying power, compared with just $5 billion last year. ???To cover this huge increase, "the whole state is going to see higher rates," Jacobson warned. ???Which leads to the question of the hour: As power costs soar, is the governor buying a pig in a poke with his quest to purchase the transmission lines of all three California utilities? ???Public ownership of the power grid would do little if anything to reduce electricity costs. If anything, it would place taxpayers or ratepayers -- or both -- on the hook for billions of dollars in repairs and upgrades to the system. ???Yet Davis is depicting public ownership of the power lines as a necessary step toward solving California's myriad energy problems. ???While the Edison deal awaits final approval from state regulators and the Legislature, Davis already has entered into talks with Sempra Energy on acquiring the power lines of its San Diego utility. ???"We've stabilized one of the utilities and are negotiating with another one," said Steve Maviglio, a spokesman for the governor. "This puts us in a strong position to buy the rest." ???In Edison's case, the lines will be leased back to the utility for a nominal fee. ???Maviglio said the state will file a petition with Bankruptcy Judge Dennis Montali informing him of California's interest in purchasing PG&E's transmission network, should Montali begin selling the utility's assets to pay off creditors. ???"Since it's one of their largest assets, we think it's a likely candidate," Maviglio said. ???But even if Davis succeeds in acquiring the thousands of miles of power lines of all three utilities, what then? ???"There is a notion that the state will control a government-owned power grid and somehow we will all be better off," said Harry Snyder, senior advocate at Consumers Union in San Francisco. ???However, he said the power lines may end up being little more than "a hard asset that makes it look like we weren't just giving cash away for nothing." ???Actually, there may be some upside to ownership of the transmission lines. For one thing, this could give California more clout in its dealings with power generators. ???The state theoretically could argue that if generators want their juice shipped to ratepayers' homes, they must charge more reasonable prices. ???On the other hand, generators could just as easily say that if California wants electricity for its newly purchased lines, and thus raise money in transmission fees, it should mind how it deals with its new business partners. ???Meanwhile, as the owner of power lines, California would have an easier time getting its voice heard by the Federal Energy Regulatory Commission, with oversees transmission systems nationwide. ???To date, California's entreaties to FERC for regional caps on wholesale power prices have fallen on deaf ears. Owning power lines would not necessarily make FERC more attentive to the state's interests, but it would raise California's profile. E-mail David Lazarus at dlazarus@sfchronicle.com. LOAD-DATE: April 11, 2001 ?????????????????????????????16 of 100 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ???????????????????APRIL 11, 2001, WEDNESDAY, FINAL EDITION SECTION: NEWS; Pg. A1 LENGTH: 1040 words HEADLINE: State Legislators Take Argument For Electricity Rate Cap to Feds SOURCE: Chronicle Staff Writer BYLINE: Lynda Gledhill BODY: Taking off before dawn, a delegation of California lawmakers yesterday winged its way to a stark airport hotel here and pleaded for federal regulators to intervene in the state's dysfunctional energy market. ???The lawmakers had arranged just the day before to attend a meeting of the Federal Energy Regulatory Commission, signaling just how desperate they are to gain an upper hand in California's energy crisis. ???FERC, as the body is known, has become a four-letter word among many California politicians. The panel's steadfast refusal to embrace wholesale price controls on electricity has left everyone from the governor to the state's congressional delegation fuming -- although one commissioner appeared yesterday to soften her opposition to the idea. ???After just four hours of sleep before the last-minute trip, Assembly Speaker Robert Hertzberg, D-Sherman Oaks, was in no mood to be confrontational. ???He figured that since FERC-bashing had gained little, the state might be better off showing what it had done to try to solve its own problem. ???"We didn't want to go and be Khrushchev banging his shoe on the table," he said. "We are telling FERC we're in this together. We have a role, and you have a role." ???So Hertzberg opened his five-minute remarks by acknowledging that California had created some of its own problems. But he pleaded with the three commissioners to pay attention to what was happening in the Golden State. ???'ECONOMIC PRECIPICE' ???"California is poised on the edge of an economic precipice that threatens not only our economy, but the economy of the entire country," Hertzberg said, adding that the state anticipated paying $65 billion for electricity this year, almost 10 times its power bill in 1999. ???Two of the three board members seemed to hear the request. Commissioner William Massey has long been an advocate for increased FERC intervention. And Linda Breathitt, the third sitting commissioner, appeared to further soften her reluctance to impose price controls yesterday. ???"I have increasing concerns about what the summer holds," she said. "We must find a way to calm the troubled market if a competitive market is ever going to become a reality." ???But FERC Chairman Curt Hebert is the man standing squarely in the way of California's requests. As the head of the board, he has complete control over its agenda. ???California and other states believe price controls are essential for getting through the summer, while Montana, Arizona and other states believe caps would suppress supply and make the situation worse. ???Hebert believes in free markets, and as an appointee of President Bush, concurs with Bush's belief that price caps would do nothing to help and would perhaps make the situation even worse. ???THE NAYS HAVE IT ???"We've continued to have an open mind," Herbert said in a deep Texan drawl, even as he shook his head. "If you look at the landscape here, there are a number of commissioners and states that seem to be averse to any type of price cap -- it seems to outweigh those that want a price cap." ???At times, he accused California of dragging its feet and not doing enough to deserve special attention from FERC. But the two other commissioners were quick to defend the state. ???California's Assembly members went to the six-hour meeting with a proposal: "cost-base" price caps for 18 months on natural gas and electricity prices. The idea would be for the price to be capped at cost to generate the power, plus a reasonable rate of return. ???Fred Keeley, D-Boulder Creek, the Assembly's point man on the energy crisis, said, "We're pleading with FERC. ???"I don't think we're splitting hairs," Keeley said. "The cost-base price cap allows generators to make a profit while bringing stability to the market." ???But most representatives from other states passionately disagreed. ???"A FERC policy could have glorious intentions and disastrous consequences," said Nevada Public Utilities Commissioner Richard McIntire. "FERC must resist pressure to institute price caps." ???But Keeley said if the federal government did not take action, the state would have to do what it could to control the wholesale prices. ???While there has been talk in Sacramento of taking over power plants, Keeley said the more logical step would be to take over power contracts. The state could step in and take over the power before it is sold to the marketer, thus preventing huge artificial mark-ups, Keeley said. ???Assemblyman Anthony Pescetti, R-Rancho Cordova, said, however, "I have concerns about seizing anything." ???Meanwhile in Sacramento, three GOP members of Congress grilled representatives of FERC, the Public Utilities Commission and the Independent System Operator about their roles in the state's energy mess. ???Yesterday's politically tinged hearing was the first of three meetings the House Government Reform Committee will hold around the state this week. Hebert will appear at a hearing in San Jose today. ???Much of the committee's questioning fell on PUC President Loretta Lynch, who was appointed to the post by Gov. Gray Davis. ???The GOP lawmakers accused Lynch of worsening the crisis by dragging her feet on giving utilities the power to enter long-term contracts and thus avert more costly spot-market buying. ???She replied that the PUC had granted the utilities' request to enter into long-term contracts within two weeks. ???Lynch blamed FERC's lifting wholesale price caps for the astronomic rise in electricity prices. ??---------------------------------------------------------------------------- ???What's Next ???-- The House Government Reform Committee plans energy hearings today in San Jose and tomorrow in San Diego. ???-- Edison and PG&E are expected to file their 2000 earnings reports April 17. ???-- The state Senate starts hearings April 18 in its inquiry into allegations that electricity suppliers illegally withheld power to drive up California's wholesale prices. Wholesalers deny such accusations. ???-- Also April 18, the Assembly plans to resume hearings in its inquiry into California's highest-in-the-nation natural gas prices. ??Chronicle staff writer Greg Lucas contributed to this story. / E-mail Lynda Gledhill at lgledhill@sfchronicle.com. LOAD-DATE: April 11, 2001 ?????????????????????????????18 of 100 DOCUMENTS ??????????????????????Copyright 2001 The Washington Post ?????????????????????????????The Washington Post ???????????????????April 11, 2001, Wednesday, Final Edition SECTION: METRO; Pg. B01 LENGTH: 1067 words HEADLINE: Gas Plant's Proposal Alarms Neighbors in Calvert; Owner Pushes to Reactivate Facility BYLINE: Raymond McCaffrey, Washington Post Staff Writer BODY: ???The predicament they're facing has become ordinary in the outer reaches of the Washington area: a major construction project planned for the neighborhood. ???Their concerns are anything but. ???Terrorist attacks. Nuclear meltdowns. Environmental disaster. ???That's what residents in southern Calvert County fear could happen if a Tulsa-based company is allowed to go ahead with a $ 120 million project to reactivate and refurbish a liquefied natural gas storage and importation facility at Cove Point. ???At a recent public meeting hosted by the Federal Energy Regulatory Commission, which will decide the fate of the Williams Co. proposal, neighbors worried aloud about the potential for a disaster -- accidental or intentional -- either at the facility or involving one of the large tankers that would deliver imported fuel via the Chesapeake Bay. ???But their biggest fear is the effect that such a disaster would have on another facility that stands just a few miles away -- the Calvert Cliffs Nuclear Power Plant. ???"What happens if the plant goes sky-high and a lot of us go with it?" resident Mary Robinson asked federal officials at the meeting. ???In a letter to federal regulators, resident Norman Overfield urged them to consider the ramifications of a terrorist act. "It would seem that it would only require a source of ignition to transform an accidental discharge into a large firestorm," Overfield wrote. "Consider the possible consequences of a deliberate attack on a ship at the terminal similar to the attack on the USS Cole in Aden," he continued, referring to the suicide bombing of a U.S. destroyer in Yemen in 1999. ???The concerns of the residents are similar to those expressed by residents in Montgomery and Frederick counties who live near sites where companies have proposed new or expanded facilities to meet the nation's growing energy needs -- which have been highlighted by the California electricity crisis. ???Demand for energy is behind the proposal by Williams, which asked the federal commission to approve its plan by September so it can begin importing liquefied natural gas in April 2002 to an offshore pier near the Cove Point installation plant. The gas would then be piped in vapor form for 87 miles, from Calvert through Prince George's, Charles, Fairfax and Loudoun counties. Utilities would buy the gas and resell it to businesses and individuals. Utilities could also use the gas to generate electricity. ???"It gives you a new source of supply to meet the growing demand for gas and also for electricity," said Joe Fields, a Williams official who is involved with the Cove Point project. ???The Cove Point plant was built in 1974, and its former owners, the Columbia and Consolidated Natural Gas companies, operated a liquefied natural gas terminal and related pipeline facilities. In 1979, a gas explosion at the plant killed one employee and injured another. ???The importation operation ended in December 1980 because of falling domestic natural gas prices and a dispute with exporters from Algeria, the main source of the product, according to Williams officials. The onshore facilities reopened in 1994 to provide a natural gas storage service. ???Williams bought the plant in June and wants permission to reactivate the offshore facility and build a fifth storage tank with a capacity of 2.5 billion cubic feet. The four existing storage tanks are twice as large. ???The pier, which is about 1 1/4 miles offshore and connected to the plant by an underwater tunnel, will be refurbished to handle tankers that typically are about 1,000 feet long and 150 feet wide, according to a county official. ???Vouching for the plant's safety, Fields maintained that many of the residents' fears were "concerns you heard when the facility opened" in the 1970s. ???"Safety is Williams' and Cove Point's primary concern," he said. ???The Energy Regulatory Commission and the Department of Transportation "have safety guidelines," Fields said. "We build to either meet or exceed those guidelines." ???The company has received the endorsement of the Calvert County Board of Commissioners, which is eyeing the up to $ 2 million in annual tax revenue that the refurbished plant would generate. Commissioners are desperately looking for money to build schools and pay for other services in Calvert, where the population has jumped 45 percent over the last decade. Critics say that's the very reason federal regulators need to give the plan a hard look. ???Those voicing concerns are not just neighbors of the plant. The list of official interveners in the federal review includes the Maryland Department of Natural Resources, which wants time to assess the plan. While the department does not oppose the project, it is against a request by Williams that the federal commission expedite the review, said Richard McLean, a department manager of nuclear programs. ???McLean has maintained that an expedited review would not allow enough time to assess concerns such as the effect of the tankers on the Chesapeake Bay or potential risks the renewed operation might pose to nearby Calvert Cliffs, which won relicensing from the U.S. Nuclear Regulatory Commission last year. ???A three-decade-old environmental assessment is not valid today, McLean said, referring to the last time such issues were fully examined for the gas plant. ???Not only has Calvert's population nearly doubled since then, but operations have expanded at the Patuxent River Naval Air Station in nearby St. Mary's County, he said. Commercial and recreational boat traffic on the Chesapeake Bay have increased, too, McLean said. ???"There's no question in my mind that we want to revisit our prior risk assessment," he added. "The risk assessment is risk for the communities, risk for the Patuxent River Naval Air Station, which has a whole lot more people than before . . . and there is some concern that this could potentially compromise commercial freight traffic on the bay." ???Federal regulators have said that the commission has not decided whether to expedite the review. Regardless, they said, an extensive risk-assessment study would be conducted and available for public review. ???Yet some expressed concern that the growing need for fuel will force the government to speed up the review. ???"You can't compromise a process because somebody says we need this," McLean said. LOAD-DATE: April 11, 2001 ?????????????????????????????19 of 100 DOCUMENTS ?????????????????????????????The Associated Press The materials in the AP file were compiled by The Associated Press. ?These materials may not be republished without the express written consent of The Associated Press. ?????????????????????April 11, 2001, Wednesday, BC cycle ?????????????????????????????9:19 AM Eastern Time SECTION: Business News LENGTH: 381 words HEADLINE: Report: Government utilities allegedly gouged California during power crisis DATELINE: LOS ANGELES BODY: ??Private power wholesalers have been blamed for driving up California's electricity prices but even government-owned utilities allegedly manipulated the market, maximizing profits and inflaming the energy crisis, according to a confidential document obtained by the Los Angeles Times. ??The document shows that the power providers, including the Los Angeles Department of Water and Power, influenced the spiraling costs of wholesale electricity between May and November 2000. ??The DWP was eighth on the list of alleged price gougers for seeking high prices during periods of high demand, which helped inflate costs across the entire spot market, the document said. ??The document decodes the identities of unnamed power providers in a recent study by the California Independent System Operator. CISO examined thousands of hours of bidding practices for 20 large electricity providers. ??DWP General Manager S. David Freeman called the findings "outrageous." ??"We have consistently charged (CISO) our cost plus 15 percent," Freeman said. "It's not as though we're up there peddling a bunch of power to jam it down their throats." ??In addition to the DWP, the document singles out two other government-run agencies that it said consistently inflated prices: the federally owned Bonneville Power Administration in the Pacific Northwest, and the trading arm of Canada's BC Hydro in British Columbia. ??BC Hydro reaped the most in what the state's power-grid operator deemed "excess profits." The Canadian agency took in $176 million, several times the amount of allegedly excessive earnings collected by all but one private generator. Second on the list was Atlanta-based Mirant which collected nearly $ 97 million. ??The companies cited said they broke no state rules and abided by California's 1996 deregulation law, the Times reported Wednesday. ??BC Hydro officials acknowledged, however, that they anticipated periods of severe power shortages and let their reservoirs fill with water overnight, then opened them to produce cheap hydroelectric power to sell at a premium. ??"It was the marketplace that determined what the price of electricity would be at any given time," BC Hydro spokesman Wayne Cousins told the Times. "We helped keep the lights on in California." LOAD-DATE: April 11, 2001 ?????????????????????????????20 of 100 DOCUMENTS ?????????????????????????????The Associated Press The materials in the AP file were compiled by The Associated Press. ?These materials may not be republished without the express written consent of The Associated Press. ?????????????????????April 11, 2001, Wednesday, BC cycle ?????????????????????????????3:46 AM Eastern Time SECTION: Business News LENGTH: 841 words HEADLINE: States say federal government needs to act to stem energy crisis BYLINE: By H. JOSEF HEBERT, Associated Press Writer DATELINE: BOISE, Idaho BODY: ??A six-hour brainstorming session between federal and state energy regulators ended with a clear message: Western states want more help from Washington to corral the region's deepening power crisis. ??The three members of the Federal Energy Regulatory Commission flew to Idaho for what Chairman Curtis Hebert called "frank discussions" with officials from 11 Western states about the astronomical electricity prices that have spread from California to almost every corner of the region. ??And the Washington regulators got an earful. ??"Montana is taking a hell of a hit because of this market," declared Gary Feland, whose job it is to approve requests by the state's utilities to pass wholesale price increases on to their retail customers. ??"Politically we're getting beat up," added Feland. ??In many states, retail electricity sales are still regulated, but wholesale markets are not. The state officials warned that many of the electricity rate increases, stemming from wholesale price run-ups, have yet to reach consumers, but will in the coming months as states have no choice but to approve them. ??Much of the discussion focused on whether FERC, which regulates the wholesale power market, should temporarily impose price controls to ease the impact of what one of the commissioners, William Massey, called "a looming disaster" this summer if nothing more is done. ??Afterward, Hebert tallied up the results: Five states opposed such controls, three wanted them desperately and three others were not sure. Previously, the latter three had lined up in the "no" column. ??Hebert has made clear his opposition to renewed price regulation - even temporarily to address an emergency - because he argues that a free market is the only way to get people to build more power plants and transmission lines and create the "price signal" to foster conservation. ??His position drew support from Vice President Dick Cheney in a telephone interview with the Associated Press in Olympia, Wash. ??"The problem with price caps is that they don't solve the problem," said Cheney. "Just look at California, where they had caps applied at the retail level that, coupled with the requirement to buy power on the spot market, has driven PG&E into bankruptcy." ??Pacific Gas & Electric, California's largest utility, said last week it had debts of $9 billion and filed for Chapter 11 bankruptcy protection. ??Like the state officials, FERC is deeply split on the issue of price controls. ??"It is wrong to put the entire Western economy in harm's way solely to protect a price signal arising from a dysfunctional market," Massey said. "Our passion for the market must be tempered with commonsense." ??A contingent from California submitted a proposal calling for cost-based price caps for 18 months on wholesale electricity and natural gas sales across the West. Only FERC can impose such caps. ??"We have done our part. We cannot do it alone," Bob Herzberg, speaker of California's Assembly, told the three FERC commissioners. The Californians listed the state's response to its power problems so far: Actions to boost conservation, increase retails electricity rates and speed up power plant construction. Still, they bemoaned that California this year was expected to spend $65 billion on electricity, nearly 10 times its power bill in 1999. ??Hebert insisted that the FERC "is doing everything it can" to ensure just and reasonable prices and cited the commission's action to seek $124 million in refunds on California power sales. He also said the commission plans soon to approve a new system of tracking market abuses. ??Officials from Washington state and Oregon joined California in the plea for temporary price regulation. The Northwest has been hit by a severe drought, making less hydro-generated electricity available and forcing greater reliance on the high-priced spot market. On Monday the Bonneville Power Authority said it may have to nearly triple what it charges for its power if demand doesn't drop sharply and reduce the need of spot market purchases. ??But in a surprising development, Wyoming, Utah and New Mexico said they no longer were sure that price controls would be such a bad thing. And even those opposed to price caps, like Montana's Feland, criticized FERC for not being more aggressive in challenging prices - many of them now 10 times what they were a year ago - as unreasonable. ??"In the real world, in the world of the West, the ideal market doesn't exist," Marilyn Showalter, a Washington state utility regulator said. She disputed the contention that price caps would discourage investment, arguing that the uncertainties brought to soaring prices already were doing that. ??"The lack of action (from FERC) is threatening to undermine the commission's own credibility" and eroding political confidence in electricity deregulation and competition, she said. ??Associated Press Writer David Ammons in Olympia, Wash., contributed to this report. LOAD-DATE: April 11, 2001 ?????????????????????????????21 of 100 DOCUMENTS ???????????????????The Associated Press State & Local Wire The materials in the AP file were compiled by The Associated Press. ?These materials may not be republished without the express written consent of The Associated Press. ?????????????????????April 11, 2001, Wednesday, BC cycle ?????????????????????????????2:19 AM Eastern Time SECTION: State and Regional LENGTH: 966 words HEADLINE: Cheney urges patience for Bush's energy approach BYLINE: By DAVID AMMONS, AP Political Writer DATELINE: OLYMPIA, Wash. BODY: ??Vice President Dick Cheney is urging fellow westerners to give the Bush administration more time before judging its record on energy and the environment. ??Cheney, in a telephone interview with The Associated Press from the White House, said the administration is barely under way, but over time it will become clear that President Bush has a balanced and smart view on the environment and will help the nation weather the short-term energy crunch. ??Cheney was responding to criticism from western Democrats, including Washington Gov. Gary Locke and Rep. Jay Inslee, D-Wash., who gave the two most recent Democratic responses to Bush's weekly radio addresses. ??Locke accused Bush of pushing policies that will harm the environment, specifically mentioning the recent decision to roll back regulations limiting the amount of arsenic in drinking water. Inslee said the administration offers only "excuses and inaction" on the West's deepening energy woes. ??Cheney, who heads Bush's energy task force, defended the administration's strong opposition to energy price caps, which all three West Coast Democratic governors have advocated. ??"The problem with price caps is that they don't solve the problem - just look at California where they had caps applied at the retail level that, coupled with the requirement to buy power on the spot market, has driven PG&E (Pacific Gas & Electric) into bankruptcy," he said Tuesday. ??California's energy deregulation has price caps for customers, but not wholesalers. ??"To say the solution is price caps shows that they haven't spent much time studying the problem," Cheney said. "Caps provide some short-term political relief to the politicians, but (are) no long-term answer." ??Conservation, permit streamlining and more power production are what the West needs, he said. ??Much of the region faces a drought, with snowpack only half the normal level, he noted. ??"We will have to find ways to do everything we can to conserve, to only use the power we absolutely have to have," he said. ??Beyond that, "The main thing is to try to build our long-term generating capacity if we can get beyond the next year or two." ??Locke stood by his earlier criticism of the White House. ??"We hear a great deal of talk about drilling and digging and burning, but not a great deal of talk about renewable sources of energy," said Dana Middleton, the governor's communications director. ??Temporary price caps are essential, she said. ??"People need relief right this minute," she said. "Temporary limits can stabilize the market and allow all the western states to put their plans into effect, to let everyone get their houses in order, especially California. ??"We're just asking for a little assistance so we can catch our breath and our companies can start to build more generating capacity." ??Middleton said the administration's new budget cuts conservation programs, "So what is Mr. Cheney talking about?" ??Locke took part in groundbreaking for a 248-megawatt power plant about 30 miles south of the Capitol on Tuesday. ??Cheney denied Inslee's contention that the White House has refused to meet on the energy problem. "That is fundamentally not true," he said. ??Inslee later shot back that two dozen members of Congress have been repeatedly denied a joint meeting with Cheney to press their support for price caps. ??"This is a hornet's nest that needs to be stirred," Inslee said in an interview. "What I am trying to get this administration to understand is that this is the beginning of the energy crisis, not the end. They see it as some sort of 45-day problem and it's over. ??"They hope some sort of weather fairy will take care of it. They feel they can draw a wall around California and let it sink into the Pacific Ocean. The administration does not understand the depth of this crisis, nor do they understand the potential of it spreading to the entire nation. Alan Greenspan is saying that the energy shocks are affecting consumer confidence." ??Cheney said environmental groups are jumping to an ill-founded conclusion that Bush will be an enemy. ??"I think we will be perceived as having a balanced approach over time," he said. "These tend to be emotional issues and people get buzzed up in short order." ??Environmental groups should take a deep breath, he said. ??"I don't want to discourage people's expression of what they believe, but
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