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Today's IEP news:
The Associated Press State & Local Wire, May 1, 2001, Tuesday, BC cycle, ????9:49 AM Eastern Time, State and Regional, 840 words, Lawmakers offer bills ????aimed at cutting natural gas prices, By JENNIFER COLEMAN, Associated Press ????Writer, SACRAMENTO (Quotes Smutny) Los Angeles Times, May 1, 2001 Tuesday, Home Edition, Page 16, 1078 words, ????Davis Turns to Bankruptcy Court for Help in Plan to Buy Power Grid; ????Utility: He seeks support from panel representing creditors of PG&E. The ????firm has rebuffed state's offers., DAN MORAIN, RICHARD SIMON, TIMES STAFF ????WRITERS, SAN FRANCISCO Los Angeles Times, May 1, 2001 Tuesday, Home Edition, Page 3, 429 words, ????California and the West; THE CALIFORNIA ENERGY CRISIS; ; Power Marketer ????Ordered by FERC to Refund $8 Million; Energy: Williams Energy agrees to pay ????but admits no wrongdoing in taking plants offline., NANCY VOGEL, ROBERT J. ????LOPEZ, TIMES STAFF WRITERS Los Angeles Times, May 1, 2001 Tuesday, Home Edition, Page 3, 699 words, ????California and the West; THE CALIFORNIA ENERGY CRISIS; Power Companies Step ????Up Lobbying, JULIE TAMAKI, MIGUEL BUSTILLO, TIMES STAFF WRITERS, SACRAMENTO The New York Times, May 1, 2001, Tuesday, Late Edition - Final, Section A; ????Page 1; Column 5; National Desk, 2130 words, River's Power Aids California ????And Enriches the Northwest, By BLAINE HARDEN, GEORGE, Wash. ?(Great article!) The Orange County Register, May 1, 2001, Tuesday, STATE AND REGIONAL NEWS, ????K4842, 378 words, Power supplier to pay state, By Kate Berry San Jose Mercury News, May 1, 2001, Tuesday, STATE AND REGIONAL NEWS, K4846 ????, 814 words, Williams Energy agrees to return $8 million to state, By ????Brandon Bailey San Jose Mercury News, May 1, 2001, Tuesday, DOMESTIC NEWS, K4844, 1017 ????words, Cheney says energy plan could prevent California crisis from ????spreading, By Jim Puzzanghera The San Francisco Chronicle, MAY 1, 2001, TUESDAY,, FINAL EDITION, NEWS;, ????Pg. A1, 804 words, Feds want surcharge to pay utilities' debts; ???THE PLAN: ????Additional rate boost likely, cash would go to power suppliers, Carolyn Said The Tribune (San Luis Obispo, CA), May 1, 2001, Tuesday, STATE AND REGIONAL ????NEWS, K3262, 699 words, Professor converts manure to electricity in effort ????to save money, By Jerry Bunin The Washington Post, May 01, 2001, Tuesday, Final Edition, FINANCIAL; Pg. ????E03, 495 words, Energy Overcharge Case Settled; Williams to Pay Calif. $8 ????Million After Probe Involving AES, Peter Behr, Washington Post Staff Writer The Associated Press State & Local Wire, May 1, 2001, Tuesday, BC cycle, ????9:49 AM Eastern Time, State and Regional, 840 words, Lawmakers offer bills ????aimed at cutting natural gas prices, By JENNIFER COLEMAN, Associated Press ????Writer, SACRAMENTO The Associated Press State & Local Wire, May 1, 2001, Tuesday, BC cycle, ????9:46 AM Eastern Time, State and Regional, 619 words, Developments in ????California's energy crisis, By The Associated Press May 1, 2001, Tuesday, BC cycle ?????????????????????????????9:49 AM Eastern Time SECTION: State and Regional LENGTH: 840 words HEADLINE: Lawmakers offer bills aimed at cutting natural gas prices BYLINE: By JENNIFER COLEMAN, Associated Press Writer DATELINE: SACRAMENTO BODY: ??Gov. Gray Davis is relying on stringent conservation measures, increased electricity supply and quick Legislative authority to proceed with a $12.5 billion revenue bond issue to head off blackouts this summer. ??Davis administration officials briefed lawmakers Monday on the governor's plan to rescue Southern California Edison by buying the utility's transmission lines. ??The extra financial details Davis' representatives gave Assembly Republicans include forecasts of the Department of Water Resources' summer power purchases - the same figures the state will use to find buyers for $12.5 billion in bonds to pay for future power. ??Those forecasts, some Republicans said, count on too many things falling into place, including the assumption that all of the state's financially troubled alternative energy producers will be online. ??Though energy analysts have predicted skyrocketing energy costs for summer - up to $1,500 per megawatt hour - the governor's plan calculates an average cost of $195 per megawatt hour over June, July and August. ??That's because DWR cut long-term contracts covering a major part of the electricity needed during peak times, said Ron Nichols, senior managing director for Navigant Consulting Inc. ??Long-term contracts and conservation will minimize the effect of the expected high spot prices, Nichols said. ??In essence, Davis aides, much of the conservation will be spurred by sticker shock felt by consumers when they get their higher rates on their June bills. PG&E customers will see a 34 percent increase, Southern California Edison's will jump 32 and San Diego Gas and Electric rates will jump 44 percent. ??Davis' consultants predict the state can conserve up to 7,234 megawatts during peak demand - about 16 percent of a 45,000 megawatt load that summer weather can bring on. One megawatt is roughly enough power for 750 homes. ??Much of that conservation, 2,484 megawatts, will come from three different conservation programs through the California Independent System Operator, keeper of the state's power grid. ??Davis' "20/20" conservation plan is expected to cut another 2,200 megawatts of demand. The rest of the cuts come from the sticker shock of higher consumer rates and by estimating how much less power Californians are using this year compared to last year. ??"If we're wrong, there are certain reserves built in," said Susan Kennedy, deputy chief of staff and secretary of cabinet. Either the state borrows more or there will be blackouts, she added, and if the price of power goes higher than expectations, the state won't be able to afford it. ??By the end of 2002, Davis estimates, DWR will spend $26.9 billion to buy power for customers of the three financially ailing utilities. Of that, $12.5 billion will be paid for by revenue bonds that will add up to one cent per kilowatt hour to customer bills for 15 years. ??The Legislature approved the revenue bonds based on a formula that would set the amount of the issue. Now Davis' representatives say it's urgent that the Legislature approve a bill with a firm cap so they could begin the bond sale. ??"We need the unambiguous authority to sell bonds. We need it right now. We cannot afford any delays," Kennedy said. ??A bill putting a $10 billion limit on the bonds stalled in the Assembly last week after Republicans refused to vote for it until they received more details about Davis' power buys and long-term contracts. ??Republicans wondered about the ability of the alternative generators to be online, a sentiment shared by the industry. Currently, about one-third are off-line now because PG&E and Edison owe them more than $1 billion. ??The Public Utilities Commission ordered the utilities to pay those generators every other week starting April 1, but the large debts have the generators fighting to stay open, said Jan Smutny-Jones, executive director of the Independent Energy Producers. ??Davis' predictions aren't rosy, but realistic, said Joseph Fichera, a financial adviser for the governor. "It minimizes the risk of blackouts, but you can never eliminate it." ??Also Monday, an Assembly subcommittee unveiled four bills Monday designed to increase supplies of natural gas, including streamlining approvals for gas storage and new pipelines. ??After conducting hearings on the market, the subcommittee is recommending the state streamline the PUC's process to approve underground natural gas storage facilities and new pipelines, allow lower-grade California natural gas to be used by industrial users and reform tariffs to see if they discourage investments in a variety of natural gas-related ventures. ??Meanwhile, the state remained free of power alerts Tuesday morning as reserves stayed above 7 percent. ??On the Net: ??The bill numbers are: AB78x by Canciamilla; AB73x by Canciamilla and Dickerson; AB23x, by Assemblyman Dennis Cardoza, D-Atwater, and Assemblywoman Barbara Matthews, D-Tracy; and AB42x, by Diaz. ??Read the bills at www.assembly.ca.gov LOAD-DATE: May 1, 2001 Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????May 1, 2001 Tuesday ?Home Edition SECTION: Part A; Part 1; Page 16; Metro Desk LENGTH: 1078 words HEADLINE: Davis Turns to Bankruptcy Court for Help in Plan to Buy Power Grid; Utility: He seeks support from panel representing creditors of PG&E. The firm has rebuffed state's offers. BYLINE: DAN MORAIN, RICHARD SIMON, TIMES STAFF WRITERS DATELINE: SAN FRANCISCO BODY: ??Foiled in his first attempt to buy Pacific Gas & Electric's transmission grid, Gov. Gray Davis said Monday that he has tried a new tactic: bypassing the company and attempting to build support for the deal in Bankruptcy Court. ??Davis' plan to buy the grid appeared to have ended disastrously last month when the giant utility filed for bankruptcy protection. But Davis said his advisors now are trying to sell the idea to a committee of PG&E creditors that hold a stake in the utility's Chapter 11 proceeding. ??The creditors committee, representing the hundreds of companies owed money by PG&E, does not by itself hold the power to accept or reject the deal, which Davis sees as a key to his plan to restructure the state's crippled electricity system. But the committee will play an important role in any reorganization plan that is ultimately hammered out in U.S. Bankruptcy Court. ??Given that power, Davis sent advisors to brief the committee last Wednesday. The advisors told the committee about the deal they struck with Southern California Edison to buy its share of the statewide transmission grid, and the similar deal that PG&E rejected. ??"I'm not saying they embraced it entirely," Davis said, after speaking at a conference of technology entrepreneurs put on by the J.P. Morgan investment bank. "But they liked parts of it, asked good questions, and I thought it was a good beginning." ??Paul Aronzon, the lead lawyer for the creditors committee, stressed that the meeting with Davis' advisors would not lead directly to a deal. The governor's representatives "did not come out and say, 'Would you guys sell us the transmission grid?' " he said. Rather, Aronzon said, the advisors simply brought the creditors up to speed on what Davis has put on the table. ??Davis has offered more than $7 billion to buy the transmission systems of Edison, San Diego Gas & Electric and PG&E. So far, only Edison has accepted the deal. The cash infusion would help the utilities restructure their debts, and ultimately relieve the state of the need to continue buying electricity on their behalf. ??The Davis administration made public Monday its most detailed breakdown yet on the costs it expects to incur purchasing electricity over the next years. ??However, the extra information failed to satisfy Republican lawmakers, who are holding up legislation needed to repay the state budget for the billions already spent on electricity. ??California will spend $15 billion buying power this year, according to projections by Davis' advisors. ??But that total will drop to $9 billion next year and $7 billion the next as long-term electricity contracts, energy conservation efforts and new power supplies combine to lower the state's costs. ??With money from higher electric rates and a planned $12.5-billion bond, the state should be able to cover the costs of power and operate at a surplus starting in November 2002, the administration projected. ??Several Republicans took note of the date: It is the month of the 2002 gubernatorial election, when Davis is expected to seek a second term. ??The figures were based on a dizzying number of assumptions about the state's energy future. The projections assume, for example, that Californians will reduce energy consumption by 7%, and that 90% of the state's alternative energy producers will soon generate electricity again. Now only about 65% are online. ??Davis administration officials defended the figures, saying that they were conservative. ??The reaction to the figures reflects a growing rift between Democrats and Republicans over how best to solve the state's problems. Efforts have been lurching unsteadily on several fronts, including the courts, the state Legislature and Congress, with considerable political head-butting taking place in the last two. ??In Washington today, a key congressional panel is expected to take up emergency legislation intended to help California, although Davis and other Democrats have criticized the effort as useless. ??The bill's 19 provisions would, among other things, provide federal aid to relieve a bottleneck in the state's transmission system, permit governors to obtain temporary waivers of environmental rules to boost power supplies, and direct federal disaster officials to help California prepare for blackouts. ??A spokesman for Davis said the Republican-drafted legislation offers "a lot of things we don't need, and fails to address the one thing we do need," namely firm price controls on wholesale electricity sales. ??Democrats and Republicans have strong, fundamental disagreements about how best to solve the crisis, with Democrats supporting price controls, if only temporarily, and many Republicans, including President Bush, opposed to tampering with the market. ??Several Democrats who attended a White House ceremony Monday to mark Bush's first 100 days in office spoke briefly to the president about the energy situation. ??"He was not very sympathetic," said Rep. Bob Filner (D-San Diego), an advocate of price controls. "They have their minds pretty well made up." ??In one effort to seize the initiative, a divided state Senate Appropriations Committee approved a bill Monday that would impose a windfall profits tax on electricity sellers who gouge California consumers. Revenue from the tax would flow back to Californians in the form of a credit on their state income taxes, starting next April 15. ??"Our backs are to the wall," said one sponsor of the bill, Sen. Jack Scott (D-Altadena). "We believe that this is one time when we can stand up to an avaricious energy generator and say, 'No more.' " ??On a 7-3 vote, Democrats on the committee voted for the bill, SB1X, and Republicans lined up against it. The measure moved to the Senate floor, where it will require only a simple majority of 21 votes and is expected to pass. ??Davis has said he is open to signing a windfall profits bill, but he has not publicly lobbied for its passage. ??Also Monday, legislation was introduced in the Assembly to bolster natural gas supplies in the state. Tight supplies have led to soaring costs for natural gas, the fuel most commonly used to generate electricity in California. ??* ??Morain reported from San Francisco and Simon from Washington. Times staff writers Miguel Bustillo, Carl Ingram and Julie Tamaki in Sacramento, Tim Reiterman in San Francisco and Mitchell Landsberg in Los Angeles contributed to this story. GRAPHIC: PHOTO: (A3) Gov. Davis, San Francisco Mayor Willie Brown and a bodyguard after news conference at which Davis urged cities to cut energy use. Davis is trying new tactic in plan to buy PG&E's power grid. A16 PHOTOGRAPHER: ROBERT DURELL / Los Angeles Times LOAD-DATE: May 1, 2001 ??????????????????????????????10 of 58 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????May 1, 2001 Tuesday ?Home Edition SECTION: Part A; Part 1; Page 3; Metro Desk LENGTH: 429 words HEADLINE: California and the West; THE CALIFORNIA ENERGY CRISIS; ; Power Marketer Ordered by FERC to Refund $8 Million; Energy: Williams Energy agrees to pay but admits no wrongdoing in taking plants offline. BYLINE: NANCY VOGEL, ROBERT J. LOPEZ, TIMES STAFF WRITERS BODY: ??In the first action of its kind during the California energy crisis, federal regulators have ordered an out-of-state electricity marketer to refund $8 million in connection with allegations that plants were improperly shut down to hike power prices. ??Tulsa-based Williams Energy Marketing & Trading has agreed to pay the refund under an order issued Monday by the Federal Energy Regulatory Commission. ??The firm, which admitted no wrongdoing in the settlement agreement, was probed for allegedly forcing utilities to pay higher prices by taking key generating units in Long Beach and Huntington Beach offline in April and May of last year. ??Paula Hall-Collins, a Williams spokeswoman, said her company settled to end the matter. She said that the company would have been exonerated had it pursued the case. ??"We decided to go ahead with the settlement in order to put it behind us and move forward to more productive matters concerning California power issues," she said. ??While federal investigations of alleged overcharges by several firms are continuing, Monday's order marked the first time a major power merchant has been forced to pay back earnings since California forged into electricity deregulation in 1996. ??Critics and the state's independent grid operator have accused power sellers of unjustly ratcheting up electricity prices in part by taking plants offline. ??In the case of Williams, the federal energy panel investigated the shutdown of power plants that were obligated to provide electricity to the state. ??Desperate for power, California's grid operator had to turn to another provider and pay as much $750 per megawatt-hour--more than 10 times the normal price. The $8-million refund will go back to the grid operator. ??Williams markets power produced at California plants owned by AES Corp. of Arlington, Va. ??Federal investigators probed the actions of both Williams and AES, but the refund order affects only Williams. Initially, FERC had sought a refund of about $10.8 million, but settled for $8 million in the compromise agreement. ??AES spokesman Aaron Thomas said the power plants in question were shut down because of mechanical problems. He noted that his firm derived no profit from the replacement power sold by Williams. ??"We literally get paid to convert Williams' gas into Williams' electricity, which they then sell into the marketplace," Thomas said. "We're not paying any fines, and we didn't do anything wrong." ??* ??Times staff writers Rich Connell and Richard Simon contributed to this story. LOAD-DATE: May 1, 2001 ??????????????????????????????11 of 58 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????May 1, 2001 Tuesday ?Home Edition SECTION: Part A; Part 1; Page 3; Metro Desk LENGTH: 699 words HEADLINE: California and the West; THE CALIFORNIA ENERGY CRISIS; Power Companies Step Up Lobbying BYLINE: JULIE TAMAKI, MIGUEL BUSTILLO, TIMES STAFF WRITERS DATELINE: SACRAMENTO BODY: ??As California's electricity crisis exploded this year, so did lobbying by energy companies. ??Pacific Gas & Electric Co., which has filed for bankruptcy protection, spent $622,000 lobbying lawmakers and Gov. Gray Davis' administration during the first three months of the year, according to reports filed with the state Monday. ??The reports show that seven energy companies spent more than $1 million on lobbying as they ramped up their response to the crisis. Houston-based power producer Reliant Energy, for example, spent nearly $100,000 on lobbying firms through March 31--almost four times the $25,523 it spent during all of last year. ??The documents show that lobbyists for the firms were hard at work trying to influence a horde of energy-related measures, from legislation to set new rates for small power producers to a bill that put California in the electricity purchasing business. ??PG&E spokesman Ron Low said his company racked up hundreds of thousands of dollars in expenses in its unsuccessful effort to reach an agreement with the state on the purchase of its transmission lines. An unprecedented number of energy-related bills added to PG&E's need to hire lobbyists, Low said. ??"During the first quarter this year, more than 350 bills were introduced in the Legislature that deal with the energy industry," Low said. "Almost all those bills affected our customers and required staff analysis, testimony before legislative committees, and questions to be answered for legislators and their staff." ??Sempra Energy, the parent firm of San Diego Gas & Electric, spent $192,000 lobbying lawmakers in Sacramento and regulators at the Public Utilities Commission, roughly half of what it spent all of last year. ??The utility also made campaign contributions to political parties and Sacramento politicians, giving $250 to Lt. Gov. Cruz Bustamante, $750 each to Assembly members Keith Richman (R-Northridge) and George Runner Jr. (R-Lancaster) and $1,000 to Sen. Kevin Murray (D-Culver City), among others. ??A lobbying report for the parent company of Southern California Edison was not available Monday evening. The reports were required to be filed both electronically and by mail, postmarked by midnight Monday. ??Electricity merchants and generators also boosted their spending. El Paso Energy Corp., which owns one of the main natural gas pipelines into California, spent nearly $22,000. It reported lobbying Davis' office and the California Energy Commission. ??Lobbyists hired by the company, according to the report, also spent $607 on dinners held in January and February with five lawmakers and an Assembly staff member to discuss energy-related issues. ??Assemblyman Roderick Wright, the Los Angeles Democrat who chairs the Assembly's Utilities and Commerce Committee, dined with a lobbyist representing El Paso on Feb. 21 at the Esquire Grill, a Sacramento restaurant, according to the report. Assemblyman Joe Canciamilla (D-Pittsburg), who heads a subcommittee exploring natural gas issues, also ate at the Esquire on El Paso's tab that night. ??The Houston-based power firm Dynegy Inc. spent $32,261 on lobbying through March 31, compared to $24,000 during all of last year. Another Houston energy company, electricity marketer Enron Corp., spent $66,994. ??Duke Energy is among the firms paying top dollar for Sacramento lobbyists as it seeks to build power plants in California to capitalize on the state's energy shortage. The company reported spending more than $62,000 on lobbying through March 31--more than it spent all of last year. ??"We would be remiss in not ensuring that our voice is heard in Sacramento," said Duke Energy spokesman Tom Williams, adding that his firm's proposed Moss Landing power plant would provide "30% of the new generation [of electricity] for the whole state of California in 2002." ??"They're [lobbyists] not speaking for us, he added. "They're helping us know exactly who to speak with to make sure we're appropriately heard--and frankly, to ensure that we can get our power plants built." ??* ??Times staff writer Nancy Vogel contributed to this story. LOAD-DATE: May 1, 2001 ??????????????????????????????12 of 58 DOCUMENTS ??????????????????Copyright 2001 The New York Times Company ??????????????????????????????The New York Times ??????????????????May 1, 2001, Tuesday, Late Edition - Final SECTION: Section A; Page 1; Column 5; National Desk LENGTH: 2130 words HEADLINE: River's Power Aids California And Enriches the Northwest BYLINE: ?By BLAINE HARDEN DATELINE: GEORGE, Wash. BODY: ??Doing something nice for California has never been a priority here in the Columbia River Basin, where high-voltage power lines lope across irrigated fields of alfalfa, potatoes and wheat. ??Politicians from California, as farmers in this area will explain at great length, have been scheming for decades to siphon off the basin's cheap electricity and water. ???Californians, however, have been noticeably less irritating as of late. Having fouled up electricity deregulation six ways from Sunday, they are skidding into the summer air-conditioning season desperately short of power. In the last year, much of their salvation has come from the Columbia River, whose monstrous dams are the largest hydroelectricity machines in North America. ??All along the river, from Portland, Ore., to British Columbia, utility companies, aluminum makers and farmers have joined to help save California -- but at a staggering price. Charging whatever California's dysfunctional power market will bear, people in this narrow stretch of the Northwest have created a kind of Kuwait along the Columbia. ??With their record profits, some public utilities are wiring the emptiness of Eastern Washington with fiber optics, buying diesel generators to make still more power and paying Wall Street-style wages to electricity traders -- while making sure that their electricity rates remain among the cheapest in North America. Just north of the border in British Columbia, a state-owned utility luxuriated in its California windfall by mailing out rebate checks to 1.6 million customers. ??Their good fortune, though, has come with a measure of ambivalence and may well be short-lived. A severe drought is already hurting farmers across the region. If it continues, utilities along the river will have to buy power and may be punished by the same market forces that gave them a windfall. ??"This is not nice money," said Alice Parker, a retired farmer who heads a group that promotes irrigation in the Columbia Basin. "It is something that is offered to us not to use water so Californians can run their air-conditioners." ??Nice or not, a whole lot of money flooded into the Columbia Basin. ??North of here in sparsely populated Chelan County, a publicly owned utility that has two dams on the Columbia made three times as much money last year than it ever had before. With just 35,000 local customers, the utility last year had a $58.2 million profit. It paid its two top power traders $285,000 each, an astonishing income in a county where per capita income is less than $25,000 a year. The utility refuses to reveal the traders' names for fear their children might be kidnapped. ??The chief operating officer of Chelan County Public Utility District acknowledged that increases in the cost of power were "huge" and "obscene." But the executive, Charles J. Hosken, added, "We would be imprudent if we did not maximize this market for our customer owners." ??Next door in equally sparse Grant County, a public utility that also owns two dams on the Columbia has made even more money maximizing the market. It had a record $88.8 million in profits last year -- more than double its best previous year. ??Grant County Public Utility District, which has just 40,000 retail customers, is using its windfall to help build a $70 million fiber optic network for local residents. It has also bought 20 diesel generators to guard against power shortages and, if possible, exploit the power gold-rush. The utility estimates that those generators could add $50 million to profits in the coming year. ??Like Chelan, Grant is using its profits as a kind of drought insurance to insulate its customers from high market prices for electricity, when, as now, local needs exceed generating capacity in the river. Power rates in Grant and Chelan Counties are about one-fifth as much as in New York City. ??Grant County's utility has rejected, for the time being, the idea of giving a share of its profits to its customers. ??"How would it look if Grant County gives away rebates while so many people are paying more for electricity?" asked Lon Topaz, director of resource management for the utility. "It would be lousy politics." An Upside-Down Economy ??The second-worst drought on record in the Columbia River Basin has combined with California's deregulation mess to further distort the energy market. Drought has not only helped increase the price at which electricity can be sold on the spot market -- 10 to 20 times as much as last year's price -- it has strengthened a compelling bottom-line rationale for conservation. Every megawatt not purchased and used in the Northwest (often at locked-in, long-term prices that are a fraction of the current market rate) can be sent south to California. For many utilities, conservation spells local savings and a long-distance bonanza. ??As a result, a regional economy built on half a century of cheap hydropower has been stood on its head. Irrigation farmers here are being paid up to $440 an acre not to farm. ??Similarly, aluminum companies are collecting about $1.7 billion this year by not making aluminum. Companies like Alcoa have earned profits that delight Wall Street, while keeping about 10,000 workers on their payroll, by reselling hydropower that they bought in the mid-1990's under a cheap long-term contract. ??Even residential customers are being offered a chance to make a few dollars from the power crunch. Avista Utilities has announced that it will pay its customers in Washington and Idaho 5 cents for every kilowatt they do not use, if their consumption falls more than 5 percent below last year's level. ??For utilities in the Northwest, by far the largest profits from California's electricity crisis have been secured in British Columbia. A number of private American utilities have also benefited from California's troubles. ??BC Hydro, a utility owned by British Columbia with dams on the Columbia and Peace Rivers, is the first corporation in the history of the province to exceed $1 billion in profits, as measured in Canadian currency ($712 million in United States currency). ??To celebrate, the provincial government ordered BC Hydro to do something it had never done before. The utility mailed each of its customers a check for $130. BC Hydro also guaranteed them no increases in electricity rates, which have not gone up for seven years. ??"We are just happy to be lucky that we have reservoirs and dams that were built by people of great foresight," said Brian R. D. Smith, chairman of BC Hydro. ??When reminded that a March study by the California Independent System Operator, which runs that state's power grid, accused BC Hydro of market manipulation and profit gouging, Mr. Smith was less happy. ??"All they do is scream and shout and they won't pay you the money they owe you," he said, arguing that his company has gone out of its way to help California in its hour of need. Gouging has nothing to do with it, he said, adding that it was California's "awful mess" in deregulating power markets that fueled BC Hydro's record profits. A Good Deal for Farmers ??In the beginning, that is to say when federal money began transforming the Columbia from the world's premier salmon highway into a chain of adjustable lakes, no one paid much attention to electricity. The river possessed a third of America's hydroelectric potential, but there were not enough people in the Northwest to use more than a fraction of it, and long-distance high-voltage transmission lines did not exist. ??The main intention, when New Deal dollars began raining on the Northwest in the 1930's, was to create family farms. Grand Coulee Dam, the biggest dam in North America and by far the largest hydroelectric plant, was primarily designed as a water-delivery device for farmers. ??Since then, as 6,000 miles of tunnels and concrete canals were built to shuttle water around in sagebrush country, each 960-acre farm in the Columbia Basin Federal Irrigation Project was blessed with at least $2.1 million in federal infrastructure subsidies, according to the Bureau of Reclamation, which built it. ??In addition, farmers are guaranteed access to cheap water from the Columbia and the right to buy all the electricity they needed to pump that water out of the river -- at $1.50 a megawatt. A megawatt of electricity currently sells for $375 to $400 on the spot market. As Paul Pitzer, a Columbia Basin historian, has written, farmers here have always felt that "no price is too high to pay for their water so long as someone else is paying the bill." ??This year, though, the price finally became unbearably high for the Bonneville Power Administration, a nonprofit agency that markets electricity from 29 federal dams on river. ?The agency calculated that if it could persuade farmers in the project not to irrigate 90,000 acres of land, water left in the Columbia would produce electricity worth as much as $129 million (if it had to be purchased at current market prices). ??In a buyout that is without precedent in the Pacific Northwest, Bonneville is paying 800 farmers a total of $30 million. The farmers receive $330 for each acre they do not farm. On top of that, Grant County's public utility is paying many of the same farmers about $100 an acre not to farm their land. ??On April 13, about 20 irrigators gathered for lunch at the Martha Inn Cafe here in George to discuss the buyout. Since farm prices are low this year, they agreed that it was a good deal. ??Still, the farmers, who do not like to be reminded of the federal subsidies that keep their irrigation system afloat, said they worried about the precedent they set when they traded water for cash. ??"This has to be a temporary deal," said Tom Flynt, 52, who normally farms 900 acres but has taken 150 acres out of production because of the buyout. "If anybody thought this would affect their water rights, there would be no takers." ??Several farmers said they did not like the idea of their water supporting the lifestyles of urban people, especially Californians, who, those who were interviewed said, do not appreciate the food that the farmers put on their table. ??"We feel that Americans are making decisions with their mouths full," said Tricia C. Lubach, a marketing consultant whose husband is an irrigation farmer. "Not too long ago they didn't worry about where the power comes from. Someday they may think about where the food comes from." A 'Wonderful Energy Fit' ??A couple of hundred miles northwest of George, in a penthouse conference room that overlooks Vancouver harbor, Mr. Smith, the chairman of British Columbia's most profitable company, explained in mid-April what a pain it was selling electricity to Californians. ??"People say to me what are you doing selling power to those ungrateful Californians," he said. It does not help, he added, that the state is behind on its bills by about $300 million. ??Still, neither BC Hydro nor the provincial government can afford to lose California's money. The utility has become a cash cow for the provincial budget, which in the last decade has received more than $3.7 billion from BC Hydro. ??"We have a wonderful energy fit," Mr. Smith said, referring to BC Hydro's power-trading relationship with California, if not to Californians themselves. "We have oversupply in the summer when they have got high demand, and we have got undersupply in the winter when they have got stuff to give to us." ??BC Hydro has acknowledged that it massages its hydropower system to sell power when it is most needed -- and most expensive -- in California. The utility closes the faucets on its dams at night during the summer, storing water while meeting local electricity needs with cheap off-peak power brought from across the West. In the morning, when prices peak, it opens the faucets and zaps electricity off to California. ??"We spill water during the day," Mr. Smith said. "Why? Is it because we can make more money? No. It's because that is when everybody wants electricity, for God's sake." ??Questions about profit gouging on the part of dam-dependent utilities in the Northwest may soon be moot. Drought has reduced the Columbia River runoff so far this year to about half of what is considered normal. ??The shortfall dovetails with higher costs for natural-gas-fired power plants and a growing gap on the West Coast between demand for electricity and capacity to generate it. ??"Absent being successful in getting loads down, we could be looking at quadrupling of the power rates," said Paul Norman, head of power operations at Bonneville. ??Unless conservation increases or the drought eases, Mr. Norman warned that by late summer, the Northwest's era of cheap power could come to a sudden and painfully expensive end. ??http://www.nytimes.com GRAPHIC: Photo: Electricity generated by Rock Island Dam in Chelan County, Wash., helped the county's public utility earn a record $58.2 million in profits last year. (Larry Davis for The New York Times)(pg. A20) Graph: "The Public Utilities" NET OPERATING PROFITS Graph tracks operating profits since 1995 for the following: Grant County Wnapum and Priest Rapids Dams Chelan County Rocky Reach and Rock Island Dams BC Hydro All major hydroelectric dams in British Colombia (Source: The public utilities)(pg. A20) Chart/Map: "One River's Bonanza" Some public utilities that own dams along the Columbia River, which has one third of the hydroelectric potential in North America, are selling power to California and making record profits. Map of the United States and Canada follows the path of the Columbia River. (pg. A20) LOAD-DATE: May 1, 2001 ??????????????????????????????13 of 58 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ??????????????????????????The Orange County Register ?????????????????????????????May 1, 2001, Tuesday SECTION: STATE AND REGIONAL NEWS KR-ACC-NO: ?K4842 LENGTH: 378 words HEADLINE: Power supplier to pay state BYLINE: By Kate Berry BODY: ??SANTA ANA, Calif. _ An energy company accused of withholding power to drive up prices in California's electricity market agreed to pay $8 million in a settlement approved Monday by federal energy regulators. ??The settlement is the first by a company accused of charging excessive electricity prices in the state. ??The Federal Energy Regulatory Commission accepted the settlement in which Williams Cos., of Tulsa, Okla., will refund the state's grid operator $8 million for power sold at more than 10 times what it otherwise would have cost. ??The purchases were made in a 10-day period last April and May. Regulators said Williams deliberately kept generating units in Long Beach and Huntington Beach offline to raise prices. The California Independent System Operator, which manages the state's electric grid, designated those units to supply power during periods of peak demand at contracted prices. ??The FERC order stated that "Williams had a financial incentive to prolong outages," at the two plants, which are owned by AES Corp. ??Williams would have been paid $63 a megawatt hour if the two power plants had been online, the FERC order stated. Instead, the company was paid $750 a megawatt hour for electricity from other AES generating units during that period. ??AES had said that the units were taken offline for repairs. AES, which sells all power generated at its three plants in Southern California to Williams under a contract, did not share in the profits from the power sales. ??Officials at Williams have repeatedly denied that the units were deliberately shut down. As part of the settlement, the company did not admit wrongdoing. ??Federal officials had required Williams and AES to justify more than $40 million charged to the ISO. The companies faced paying a maximum of $10.8 million in refunds. ??In a separate matter, Williams is one of several power providers accused by federal regulators of overcharging the ISO $124 million for power in January and February. The power providers are still disputing those charges. ??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune ??© 2001, The Orange County Register (Santa Ana, Calif.). ??Visit the Register on the World Wide Web at http://www.ocregister.com/ JOURNAL-CODE: OC LOAD-DATE: May 1, 2001 ??????????????????????????????14 of 58 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ????????????????????????????San Jose Mercury News ?????????????????????????????May 1, 2001, Tuesday SECTION: STATE AND REGIONAL NEWS KR-ACC-NO: ?K4846 LENGTH: 814 words HEADLINE: Williams Energy agrees to return $8 million to state BYLINE: By Brandon Bailey BODY: ??SAN JOSE, Calif. _ For the first time in California's current energy crisis, a power supplier accused of gouging the state's wholesale electricity market has agreed to return a slice of its profits. ??Under a consent agreement with the Federal Energy Regulatory Commission, Oklahoma-based Williams Energy has agreed to refund $8 million that the company earned by selling replacement power at top dollar after two generating plants in Southern California went offline for several days last spring. ??But Williams admitted no wrongdoing and FERC specifically stated that it was not finding any violation of its rules. The $8 million will be returned to the California Independent System Operator, which bought the power from Williams last April and May. ??The agreement was promptly criticized by state officials who contend that Williams and other power suppliers have made billions in excess profits by selling in California's troubled wholesale market. ??"An $8 million refund is nothing in the context of the excessive rates that these marketers, like Williams, have been receiving," charged Carl Wood, a member of the California Public Utilities Commission. ??"The broader issue is like somebody walking out of a bank having robbed them of $1,000 and the cops stop them at the door and tell them: 'You're going to have to hand back $10,'" Wood complained. "FERC is acting as the collector for the cartel." ??California authorities had urged the federal commission to impose $33 million in penalties, or three times the $11 million in revenue that federal authorities initially estimated Williams had made from the two plant shut-downs. Federal officials weren't available for comment Monday and it wasn't clear how the $8 million refund was determined. ??"Our purpose in settling was so we could move on and focus on the energy issues that are facing California, and not extend this through a lengthy hearing process," said Paula Hall-Collins, a Williams spokeswoman, who declined to discuss specifics of the case. "We're confident that if we had a full hearing of the facts, we would have been exonerated entirely." ??She said the $8 million would simply be applied against the $252 million that Williams is owed for other energy purchases by the ISO and the state's now-defunct Power Exchange. ??The refund marks the first time that any power supplier has agreed to return profits made in California since federal officials began investigating charges that the state's wholesale electricity market has been rife with manipulation and abuse. In three other cases that don't involve plant outages, FERC has ordered suppliers to justify their prices or refund up to $125 million in profits. Those cases are still pending. ??In a separate proceeding, state authorities are urging FERC to reject Williams' application for permission to continue selling electricity in California at unregulated wholesale rates. Hall-Collins said she doesn't expect the consent agreement to affect that application. ??The agreement stems from an investigation launched last year, following temporary shutdowns at the Huntington Beach and Alamitos power plants owned and operated by Virginia-based AES Inc. Williams has an exclusive agreement with AES to sell all of the output from AES's California plants. In turn, Williams also had a special contract with the Independent System Operator to make certain units of those plants available when the ISO needed them to ease localized energy shortages. ??The episode occurred shortly before wholesale power prices began to skyrocket statewide last summer. When one unit went off-line for repairs in late April and another unit was shut down in early May, the ISO was forced to buy replacement power from two other AES units in the area. But because those units weren't subject to the same contract, a FERC statement said the ISO was forced to pay Williams a spot market price of nearly $750 per megawatt hour _ much higher than the contract rate of roughly $63. ??Both units were taken off-line for emergency maintenance and repairs, according to the consent agreement. But the document also says that a Williams employee offered AES a financial incentive to extend the outage at one of the units. ??Williams never actually paid any incentive to AES, according to the FERC document, which says Williams has taken steps to prevent any similar offers in the future. ??AES isn't required to make any restitution under the consent agreement. An AES spokesman said his firm has no reason to manipulate plant outages because it has contracted to sell all of its power to Williams at a pre-determined rate. ??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune ??© 2001, San Jose Mercury News (San Jose, Calif.). ??Visit Mercury Center, the World Wide Web site of the Mercury News, at http://www.sjmercury.com/ JOURNAL-CODE: SJ LOAD-DATE: May 1, 2001 ??????????????????????????????15 of 58 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ????????????????????????????San Jose Mercury News ?????????????????????????????May 1, 2001, Tuesday SECTION: DOMESTIC NEWS KR-ACC-NO: ?K4844 LENGTH: 1017 words HEADLINE: Cheney says energy plan could prevent California crisis from spreading BYLINE: By Jim Puzzanghera BODY: ??WASHINGTON _ The energy woes of California and the nation cannot be solved with price controls or conservation, but only by increasing the country's supply of oil and natural gas and using more coal and nuclear power, Vice President Dick Cheney said Monday. ??Cheney was laying the groundwork for the announcement later this month of a major energy proposal. The vice president argued that without adopting the Bush administration plan, California's energy crisis may spread to the rest of the country. ??"A few years ago, many people had never heard the term 'rolling blackout.' Now everybody in California knows the term all too well. And the rest of America is starting to wonder when these rolling blackouts might roll over them," Cheney said in a Toronto speech to the Associated Press. ??"Without a clear, coherent energy strategy for the nation, all Americans could one day go through what Californians are experiencing now, or worse," warned Cheney who heads the administration's high-level energy task force. ??Cheney's speech was notable more for its tone than its substance. Much of the detail he offered is similar to what Energy Secretary Spencer Abraham laid out last month. He reiterated the need for more than 1,300 new power plants and 38,000 miles of additional natural gas pipeline. And Cheney repeated an administration claim that the area to be opened for drilling in Alaska's environmentally sensitive Arctic National Wildlife Refuge would be smaller than Washington's Dulles airport. ??But Cheney, who ran a Texas firm that provided services to the energy industry, used blunt language to dismiss the idea that conservation could be a major solution to the problem. ??"The aim here is efficiency, not austerity," Cheney said, rejecting the notion that Americans should be told to "do more with less." ??"Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy," he said. ??Large-scale conservation is one of California Gov. Gray Davis' efforts for getting through this summer without extensive blackouts. Earlier this month, Davis approved an $850 million energy conservation plan that offers incentives to try to shave at least 2,000 megawatts a day off the state's electricity usage. ??Davis on Monday blasted Bush and Cheney for belittling conservation programs. ??"It's clear that the Bush administration has an energy bias. Both the president and the vice president come from an oil and gas producing state. That is their bias," Davis said, referring to Bush's Texas oil roots and Cheney's tenure as the head of Texas-based Halliburton Co. "And I do believe we should build more plants and produce more energy, but at the same time, we must become more energy efficient." ??Davis and other California officials have also pushed the administration to limit the price of electricity throughout the West this summer. Although federal regulators approved measures last week designed to rein in the cost of electricity in California, the plan fell far short of hard price caps. ??Cheney on Monday restated the White House's opposition to price caps, saying they were among a number of the "usual quick fixes" that have failed to solve the problem over the years. ??"Price controls, tapping strategic reserves, creating new federal agencies _ if these were any solution we'd have resolved the problems a long time ago," Cheney said. ??The Vice President rejected the idea that alternative sources of energy could replace our dependence on fossil fuels such as oil, gas and coal, at least for a long time. ??"The reality is that fossil fuels supply virtually a hundred percent of our transportation needs and an overwhelming share of our electricity requirements," he said. "For years down the road, this will continue to be true." ??The solution, he said, was to find more oil and natural gas by increasing drilling in the United States, making more use of coal by finding new ways to burn it more cleanly, and a renewed emphasis on nuclear power. ??"Fortunately for the environment, one-fifth of our electricity is nuclear generated," he said. "If we're serious about environmental protection, then we must seriously question the wisdom of backing away from what is, as a matter of record, a safe, clean and very plentiful energy source." ??Carl Pope, executive director of the Sierra Club, said the White House is trying to convince people that their plan to ramp up energy production, even at the expense of environmental concerns, is the only way to solve the energy problems. ??"From the beginning, the administration has wanted to tell the American people that they didn't have any choice, that the only way they could transport themselves to work, heat their houses, toast their toast was to ruin the environment," he said. ??The environmental leader saw a sign of desperation, however, in Cheney's speech. "They've been out pushing this agenda for a hundred days and the American people are rejecting it," Pope said. ??Several recent polls have shown Bush scoring low on his handling of environmental and energy issues. A Wall Street Journal/NBC News poll released last week, showed 61 percent of respondents rated Bush's performance on energy as "only fair" or "poor." ??U.S. Rep. Anna Eshoo, D-Calif., said the administration was going backward with its proposals. She joined with more than 30 of her colleagues from California and Washington to write to Abraham Monday and criticize the handling of the energy crisis. ??"We can do much better than this," Eshoo said of the crystallizing White House plan. "I don't think we need to sacrifice our environment in order to move ahead." ??(staff writer Michael Bazeley contributed to this report.) ??ARCHIVE GRAPHIC on PressLink-NewsCom: ??20010428 ENERGY FORECAST, 1 col x 5 in, shows projected increase in gasoline, heating oil and natural gas prices between now and 2010, according to a new analysis of government data. ??© 2001, San Jose Mercury News (San Jose, Calif.). ??Visit Mercury Center, the World Wide Web site of the Mercury News, at http://www.sjmercury.com/ JOURNAL-CODE: SJ LOAD-DATE: May 1, 2001 ??????????????????????????????16 of 58 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ?????????????????????MAY 1, 2001, TUESDAY, FINAL EDITION SECTION: NEWS; Pg. A1 LENGTH: 804 words HEADLINE: Feds want surcharge to pay utilities' debts; THE PLAN: Additional rate boost likely, cash would go to power suppliers SOURCE: Chronicle Staff Writer BYLINE: Carolyn Said BODY: Federal energy regulators have proposed a surcharge on wholesale electricity sales in California to compensate generating companies, angering state officials who say the idea amounts to gouging consumers. ???The Federal Energy Regulatory Commission suggested collecting the money to reimburse electricity suppliers who have debts from Pacific Gas and Electric Co., Southern California Edison and San Diego Gas & Electric Co. Power companies accrued some $6 billion in unpaid bills from California's struggling utilities in late 2000 and early this year, until the state stepped in to take over the purchasing of power. ???"Under the pretense of helping California, (FERC) is proposing to steal additional money from California ratepayers to pad the pockets of the greedy energy companies," Gov. Gray Davis said in a statement. "FERC does not care one wit about the ratepayer. Their plan is a total capitulation to the energy companies." ???Sen. Dianne Feinstein, D-Calif., who has been an outspoken critic of FERC's policies in California, said the surcharge would "ensure that power generators get paid fully for their price gouging. That is outrageous and will further alienate Californians." ???The surcharge presumably would be levied on the California Department of Water Resources, which, as the state's purchasing agent, has already spent more than $5 billion on power since January. The DWR's costs, in turn, are likely to be borne by California's consumers and taxpayers. ???FERC would require the California Independent System Operator, which runs the state's power grid, to collect the surcharge. But state regulators could challenge the surcharge. ???"We have 30 days to comment to FERC and are considering our options," said Sean Gallagher, state counsel at the California Public Utilities Commission. ???"If (FERC's) concern is public policy and maintaining just and reasonable prices for consumers, I don't quite understand why they would get into the middle of a legal wrangle about past bills' getting paid," said Severin Borenstein, director of the University of California Energy Institute in Berkeley. "It is true the firms would like to get paid. I'm not sure what FERC has to do with helping them collect their money." ???A 'GOUGING TAX' ???Consumer advocates characterized the surcharge as a "gouging tax" that underscores the Bush administration's close ties to energy firms, many of which are based in President Bush's home state of Texas. ???"This is evidence that FERC and the administration are more interested in protecting the energy industry than the consumers or taxpayers of California," said Doug Heller, a consumer advocate with the Los Angeles-based Foundation for Taxpayer and Consumer Rights. "It's back-billing us to pay prices that were unjust and unreasonable per the FERC's own analysis." ???FERC's Curt Hebert, a Mississippi Republican whom President Bush appointed chairman of the commission, was behind the surcharge proposal, which he told the Wall Street Journal was a way "to stabilize the market." Hebert did not return calls for comment. ???The surcharge was proposed in FERC's 39-page "mitigation" plan to alleviate wholesale electricity prices in California during power emergencies; the plan was released last week. FERC said it would accept public comment on the proposal for 30 days, after which it would decide whether to implement it. ???COMPLICATED ISSUES ???Even the power industry, the presumptive beneficiary of the surcharge, did not express whole-hearted support for it. ???"I'm glad they brought it up," said Gary Ackerman, executive director of the Western Power Trading Forum, which represents all major buyers and sellers of wholesale electricity in California. "But it skirts the issue of what's state regulated and what's federally regulated. I'm not sure how federal regulators can pass a charge on wholesale costs which then ends up on consumers, without the state saying it's OK." ???Some of the proposal's wording is unclear. It discusses, for example, whether the surcharge money "should cover all past-due amounts or only future unpaid bills starting from the date the plan is begun." ???The reference to "future unpaid bills" is puzzling since, with the state of California picking up the tab, electricity suppliers no longer are accumulating unpaid bills from the utilities. ???"That could become a self-fulfilling prophecy; we don't want to go there," Ackerman said about the idea of "future unpaid bills." ???The FERC proposal also implies that electricity generators have reduced production in California, an allegation the power companies themselves deny. FERC asked for comments on whether the surcharge "would help to increase production by creating a greater assurance that generators will be paid."E-mail Carolyn Said at csaid@sfchronicle.com. LOAD-DATE: May 1, 2001 ??????????????????????????????17 of 58 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ??????????????????????The Tribune (San Luis Obispo, CA) ?????????????????????????????May 1, 2001, Tuesday SECTION: STATE AND REGIONAL NEWS KR-ACC-NO: ?K3262 LENGTH: 699 words HEADLINE: Professor converts manure to electricity in effort to save money BYLINE: By Jerry Bunin BODY: ??SAN LUIS OBISPO, Calif. _ After growing up on a Kansas farm, Douglas Williams had just started his post-graduate research in agricultural engineering when the first national energy crisis hit in 1973. ??He saw how dependent agriculture was on fossils fuels and knew its future economic health depended on making greater use of renewal energy sources, such as the sun, wind and methane. ??Now a Cal Poly professor, and with California in another energy crisis, Williams is managing a project that converts cow manure into electricity. His methane project could save the university $15,000 annually in electricity costs while simultaneously reducing pollution and decreasing odors. ??Williams, who has taught in the agricultural engineering and bioresources department for 18 years, hopes to have the project running full time by June. He said the entire project's costs could be recouped in 12 years or less, depending on how fast energy costs increase. ??The system should produce 20 kilowatts per hour or .02 megawatts of energy, enough to meet about two-thirds of the energy needs for the agriculture department, he said. The $200,000 project is being funded mostly by grants with some matching money from business and government. ??The manure from about 200 milk cows at Cal Poly's dairy will fuel the project. "Cows, in proportion to their weight, generate a lot of organic matter," said Williams, who grew up on a 480-acre farm that raised crops and livestock. ??The manure is flushed off the concrete dairy floor into a 4 million-gallon lagoon. A reinforced polypropylene sheet covers about 90 percent of the lagoon, trapping the methane that is naturally produced as manure decomposes. The gas is sent to turn a turbine, which produces electricity. ??Water and solid waste left over by the process are used for irrigation and fertilizer on Cal Poly crop lands, he added. ??Burning methane to generate electricity produces about one-tenth of the nitrous oxide that is created by an internal combustion engine, he said. The project also should reduce water pollution by insuring the proper distribution of wastewater, Williams added. ??The process isn't new, Williams said. He started working on the project in 1998 and has worked in this field for 25 years. "Even before this energy crisis, there was a lot of interest in it." Farmers see it as a means to improve relations with their residential neighbors, said Williams, a Los Osos resident. ??Agricultural projects in Tulare and Kings counties have been rejected after neighbors lobbied against odors they anticipated from farms, he said. ??Williams reported getting phone calls from farmers interested in the technology. He has written papers on the topic and will present one later this year in Belgium. And he has consulted with pig farmers in Thailand and the Philippines about methane power. ??Using methane to create electricity holds promise for California, where cows produce nearly 60 billion pounds of manure annually, Williams said, noting that Gov. Gray Davis recently signed legislation that authorized spending $10 million on methane energy pilot projects at dairies. ??Nirupam Pal, who teaches civil and environmental engineering, is a co-researcher on the project, Williams said. Pal is taking odor measurements at the dairy, which is about a mile from the center of the campus. ??Williams, who teaches classes on wastewater as well as agriculture and energy, uses the methane project in several classes and involved students in the project's design. Chris Dalikas, majoring in agricultural systems management, installed the project's gas piping. ??"There's lot of good practical experience in this for students," said Williams, who got his bachelor's from Kansas State and his doctorate in 1973 from UC Davis. ??"Some of my students have done senior projects on this," he said. "That's the Cal Poly way. Anytime you do research, you've got to have students involved." ??PHOTO will be available from KRT Direct and KRT Photo Service, 202-383-6099. ??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune ??© 2001, The Tribune, San Luis Obispo, Calif. ??Visit The Tribune Online at http://www.Sanluisobispo.com/ JOURNAL-CODE: SO LOAD-DATE: May 1, 2001 ??????????????????????????????18 of 58 DOCUMENTS ??????????????????????Copyright 2001 The Washington Post ?????????????????????????????The Washington Post ?????????????????????May 01, 2001, Tuesday, Final Edition SECTION: FINANCIAL; Pg. E03 LENGTH: 495 words HEADLINE: Energy Overcharge Case Settled; Williams to Pay Calif. $8 Million After Probe Involving AES BYLINE: Peter Behr, Washington Post Staff Writer BODY: ???Williams Co. of Tulsa, a major supplier of electricity to California, yesterday agreed to refund $ 8 million to the state to settle an investigation into alleged overcharging brought by the Federal Energy Regulatory Commission. ???The announced settlement with FERC also covers AES Corp., a global power-plant operator headquartered in Arlington. Neither company admitted engaging in wrongdoing in agreeing to the settlement, FERC said. ???Although FERC has directed more than a dozen California electricity suppliers to refund $ 124.5 million or justify their wholesale power bids to the state, the Williams-AES case is the only enforcement action FERC has brought so far involving California's extraordinary wholesale power costs. ???Stu Ryan, AES's group manager for California, said the company had not shared in Williams's profit in the two instances. "The plants were legitimately not available" for service," he said. "We are not paying a penny of this [the FERC settlement], and I think that speaks volumes." ???A Williams spokeswoman said the company preferred to work "more productively" on California's energy issues than battling with FERC. ???"We are confident the facts would have exonerated us." ???California's Public Utility Commission had urged that companies face triple damages if found in violation of federal regulations, but FERC said the heavier sanctions were not warranted. ???One of FERC's three commissioners, while concurring in the settlement, said the agency had not been tough enough. ???"Economic withholding" is hard if not impossible to remedy after the fact, said commissioner William L. Massey, "thus remedies for market misconduct must be comparably severe enough to act as a deterrent. . . . This settlement is not as strong as I would have preferred." ???The FERC investigation involved two AES-owned plants in California at Alamitos and Huntington Beach. AES had contracted to take natural gas from Williams, use it to generate electricity and sell the power at an agreed-upon price back to Williams. ???Williams in turn, had a contract to provide the state's power grid with output from the two AES units on short notice to maintain sufficient voltage in transmission networks or meet other reliability needs. Williams received a fee for this service and was also entitled to be reimbursed for plant operating costs at an hourly rate of about $ 63 per megawatt. ???On different occasions in April and May, the state was notified that the plants were not in service and the state's grid manager, the Independent System Operator, had to buy power from other AES units not cove
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