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National Public Radio (NPR), Morning Edition (10:00 AM ET) - NPR, May 18, ????2001 Friday, 618 words, California's power plan, ALEX CHADWICK, ELAINE KORRY (Quotes Smutny) AP Online, July 18, 2001; Wednesday, 8:56 AM, Eastern Time, Domestic, ????non-Washington, general news item, 279 words, Pacific Sues Calif. Over ????Contracts, DAVID KRAVETS, SAN FRANCISCO Contra Costa Times, July 18, 2001, Wednesday, STATE AND REGIONAL NEWS, ????K2631, 540 words, Consumers cashing in instead of cooling off, By Katie Oyan Los Angeles Times, July 18, 2001 Wednesday, Home Edition, Page 7, 186 words ????, PG&E Sues State Over Contracts, From Bloomberg News, SAN FRANCISCO Los Angeles Times, July 18, 2001 Wednesday, Home Edition, Page 2, 349 words ????, California; ; Trading, Wholesale Power Boost Duke's Earnings 27%, THOMAS ????S. MULLIGAN, TIMES STAFF WRITER The Orange County Register, July 18, 2001, Wednesday, DOMESTIC NEWS, K1616, ????1230 words, Gov. Davis trying to turn energy crisis to political advantage, ????By John Howard The San Francisco Chronicle, JULY 18, 2001, WEDNESDAY,, FINAL EDITION, ????NEWS;, Pg. A14, 808 words, Lawmakers devise rival bailout plans for Edison; ????Push to come up with alternative to bankruptcy before recess, Lynda Gledhill ????, Sacramento Chicago Tribune, July 18, 2001 Wednesday, NORTH SPORTS FINAL EDITION, ????Editorial; Pg. 20; ZONE: N, 675 words, The (ho-hum) energy crisis National Public Radio (NPR) SHOW: Morning Edition (10:00 AM ET) - NPR May 18, 2001 Friday LENGTH: 618 words HEADLINE: California's power plan ANCHORS: ALEX CHADWICK REPORTERS: ELAINE KORRY BODY: ??ALEX CHADWICK, host: ??California's rushing to get new power plants up and running. ?In January, Governor Gray Davis used emergency powers to speed the permit process. There has been progress, but NPR's Elaine Korry reports probably not enough to avoid more blackouts this summer. ??ELAINE KORRY reporting: ??Since January, California energy regulators have been slashing red tape to speed new power plants online. ?Their tracking 180 separate projects. Bob Thurkelsen, who overseas permitting at the California Energy Commission, says the governor's emergency directive has already paid off. ??Mr. BOB THURKELSEN (California Energy Commission): And that has allowed us to, so far, permit 450 megawatts of new generation in a 21-day period. ??KORRY: In a few cases, even quicker than that. ?Jim Michael is the president of Alliance Power, based in Denver, which sprinted through its permit process in under three weeks. ??Mr. JIM MICHAEL (Alliance Power): Well, we're pouring concrete. We're on schedule, so we're gonna have power plants operating this summer. ??KORRY: Alliance is building two small generators in Southern California. Michael says permitting projects that used to take months were, instead, completed in a day or two, allowing the company to meet critical deadlines. ??Mr. MICHAEL: It was essential. ?Without that streamlining, these projects would have gone away. ?The turbines would have been sold to other projects outside of California and so we would have essentially failed. ??KORRY: Yet there's still a major hitch. ?Despite the speedup in permitting, California will still fall far short of the governor's initial goal. ?He wanted 5,000 new megawatts of electricity, enough to power five million homes, to come online by July 1st. ?In a worst-case scenario, that's how much additional supply the state would need to keep the lights on this summer. ?Yet only half that amount, 2,500 megawatts, will be up and running by July. ?Jan Smutny-Jones heads the industry lobbying group the Independent Energy Producers Association. ?He's not surprised by the shortfall. ??Mr. JAN SMUTNY-JONES (Independent Energy Producers Association): We said at the time that was a very ambitious goal. And we'll see how it plays out. ??KORRY: Smutny-Jones says blackouts are a near certainty this summer. Their severity will depend on a number of unknowns. ?How hot will it get this summer? How much more can Californian's skimp on electricity? ?And how much wattage will the power wholesalers themselves take off line? Power producers have been charged with deliberately shutting down plants to keep prices high. Smutny-Jones has a different explanation for the down time. ??Mr. SMUTNY-JONES: California's electric power system is rapidly aging. We have not built a power plant of an appreciable amount in over a decade. ?And there--while there's power plants being built now, the average age of these power plants is in excess of 36 years old. ?That's the average age, which means that a significant amount of the fleet is older than that. ?They break down. ??KORRY: The industry, itself, is partly to blame for the aging fleet. The Energy Commission did license small generators during the 1990s. And if bigger ones weren't built, it's largely because the energy producers, themselves, balked at building them. ?Chris Seiple, with RDI Consulting, says construction slowed everywhere; that is, until last year. ?Since 2000, he says, 90,000 new megawatts of energy have come online nationwide. ?That's more capacity in two years than was built during all of the 1990s. ?And now comes the Bush national energy policy, urging even greater production. ?According to Seiple, we could wind up with too much of a good thing. ??Mr. CHRIS SEIPLE (RDI Consulting): So we really expect that in--What?--50 markets we will go from a situation of having shortages to having too much supply. ??KORRY: In yesterday's speech, President Bush repeated the administration's claim that the nation will need at least 1,300 additional power plants over the next two decades. ?Seiple says an over supply would drive down prices, hurting the power wholesalers, but lower energy costs would suit most ratepayers just fine. Elaine Korry, NPR News, San Francisco. ??CHADWICK: It's 19 minutes past the hour. LOAD-DATE: July 17, 2001 AP Online ????????????????July 18, 2001; Wednesday 8:56 AM, Eastern Time SECTION: Domestic, non-Washington, general news item LENGTH: 279 words HEADLINE: ?Pacific Sues Calif. Over Contracts BYLINE: DAVID KRAVETS DATELINE: SAN FRANCISCO BODY: ???California's largest utility has sued the state seeking reimbursement of millions of dollars in energy contracts seized by the governor. ??San Francisco-based Pacific Gas & Electric Co. ''has received no compensation for the damage to its property,'' the company said in a lawsuit filed Tuesday in San Francisco Superior Court. ??PG&E filed for bankruptcy protection in April and is struggling to repay $14.4 billion to thousands of creditors. ??Gov. Gray Davis seized the energy contracts on Jan. 31 to keep the California Power Exchange from liquidating them. The now-defunct exchange, which had been the state's middleman for buying and selling power, wanted the contracts to recoup hundreds of millions of dollars that PG&E owed it. ??The governor's office acknowledged that California owes PG&E for the contracts, an amount that Davis wants a judge to determine. At the time they were seized, the state estimated their value at $160 million, while the power exchange priced them at $347 million. ??''We seized the contracts to have reasonable priced power and expected that price to be set in a neutral forum,'' said Steve Maviglio, the governor's spokesman. ??Under the contracts, the state buys electricity at a set price rather than paying higher prices for power bought at the last minute. Therefore, the contracts' value changes with the volatile price of electricity. ??''We believe the state has benefited from the value of our contracts, and as a result we should be compensated,'' PG&E spokesman Ron Low said. ??Low declined to place a value on the contracts. ?????(PROFILE ?????(CO:Pacific Gas and Electric; TS:PCG; IG:ELC;) ?????) LOAD-DATE: July 18, 2001 ??????????????????????????????5 of 57 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ??????????????????????????????Contra Costa Times ???????????????????????????July 18, 2001, Wednesday SECTION: STATE AND REGIONAL NEWS KR-ACC-NO: ?K2631 LENGTH: 540 words HEADLINE: Consumers cashing in instead of cooling off BYLINE: By Katie Oyan BODY: ??WALNUT CREEK, Calif. _ Whether it's the call of duty or the cash incentive, the first wave of power bills reflecting a state rebate program show a large number of Californians are lining up to ease the grid. ??Savings from Pacific Gas & Electric's 20/20 rebate program total $7.6 million so far, a spokesman said. ??The program, an initiative by Gov. Gray Davis to promote conservation, shaves 20 percent off customers' bills for using 20 percent less energy this summer than last summer. ??PG&E has processed one-third of its July power bills, and the results show that 29 percent of customers sliced enough electricity use last month to earn the reward. ??Out of about 1.3 million bills processed, 394,000 customers qualified for the credits. ??Thousands more still stand to gain as the company sifts through remaining bills. PG&E serves 4.7 million customers in Northern California, from Baker to the Oregon border. ??"Twenty-nine percent are meeting the qualifications, which is good," said PG&E spokesman Jon Tremayne. "That's a significant chunk." ??The results also are significant compared to previous expectations. Davis administration officials estimated that 10 percent to 20 percent of customers would earn the rebate. ??Of those who qualified, 355,000 were residential customers and 39,000 fell under commercial, industrial or agriculture categories. ??The savings were divided roughly in half. Residents saved $3.7 million; businesses, factories, farms and ranches saved $3.9 million. ??The average residential customer who qualified for the discount sheared $ 10.50 off energy costs. Commercial, industrial and agricultural customers _ whose bills can reach $200,000 a month _ saved an average of $100. ??"In general, these are all very positive results," Tremayne said. "It shows that Californians as a whole, individually and collectively, do our part." ??Davis ordered investor-owned utilities _ PG&E, Southern California Edison and San Diego Gas & Electric Co. _ to take part in rebate programs in March. ??The campaign was designed to stave off rolling blackouts and spare the state from having to import loads of expensive electricity on behalf of its financially distressed utilities. ??The programs benefit California's biggest energy guzzlers the most. Those who used very little electricity to begin with have little room to cut back. ??Merle Luck, a senior citizen who lives in a one-bedroom apartment in Concord, said the 20/20 reward is likely out of her grasp. ??"My bill isn't that high, so I don't come up to the baseline," she said. ??If Luck uses any less electricity than she already does, she'll roast. ??"I'm more careful and I think twice, but my big thing is the air conditioner," she said. "I'm not keeping it quite as cool as I would like, but I have lots of windows and lots of sun, and it can get very warm." ??Even with her conservation efforts, Luck's $28 power bill wasn't as steep as she expected. ??"It's a little more than last year at this time, but I think we've had more heat," she said. ??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: July 18, 2001 ??????????????????????????????8 of 57 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ????????????????????July 18, 2001 Wednesday ?Home Edition SECTION: Business; Part 3; Page 7; Financial Desk LENGTH: 186 words HEADLINE: PG&E Sues State Over Contracts BYLINE: From Bloomberg News DATELINE: SAN FRANCISCO BODY: ??PG&E Corp.'s Pacific Gas & Electric Co. utility sued California on Tuesday, saying it wants to be paid for the wholesale electricity contracts the state seized in January. ??Gov. Gray Davis took away Pacific Gas' 12-month forward contracts to ensure a sufficient and continuous supply of electricity for the state. ?At the time, California estimated the contracts were worth $150 million. ??Pacific Gas claims the contracts had "significant value" because they allowed the utility to receive power for less than current market rates. ??"Although PG&E has demanded just compensation from the [state], PG&E has received no compensation for the damage to its property," the utility said in court papers filed Monday in San Francisco Superior Court. ??The company, which filed for Chapter 11 protection in April, is seeking damages and attorney fees. The state claimed in January that the contracts would have delivered enough electricity to power 100,000 to 500,000 homes for 6 cents to 13 cents per kilowatt-hour. ??Officials in the governor's office did not immediately return calls seeking comment. LOAD-DATE: July 18, 2001 ??????????????????????????????9 of 57 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ????????????????????July 18, 2001 Wednesday ?Home Edition SECTION: Business; Part 3; Page 2; Financial Desk LENGTH: 349 words HEADLINE: California; ; Trading, Wholesale Power Boost Duke's Earnings 27% BYLINE: THOMAS S. MULLIGAN, TIMES STAFF WRITER BODY: ??Pushed by the explosive growth of its trading and wholesale-power businesses, Duke Energy Corp. on Tuesday reported a 27% increase in second-quarter profit, narrowly topping Wall Street estimates. ??Duke's net income was $419 million, or 53 cents per share, in the quarter ended June 30, up from $329 million, or 44 cents, in the year-ago quarter. The consensus estimate of industry analysts was 52 cents per share. ??Revenue for the quarter leaped 43% to $15.6 billion. ??Shares rose 38 cents to close at $42.03 on the New York Stock Exchange. ??Charlotte, N.C.-based Duke, like other out-of-state independent power producers, is under fire from Gov. Gray Davis for allegedly overcharging for electricity from its California generating plants. ??Duke does not break out its California results, but its profits from soaring spot-market prices in California during the quarter probably amounted to no more than a penny or two per share, according to analyst Jeff Gildersleeves of Argus Research in New York. ??California accounts for about 10% of Duke's U.S. wholesale-power business, and about 90% of its California power is sold through long-term contracts rather than on the spot market, the company has said. ??Those long-term contracts are a source of worry for investors, Gildersleeves said. Neither Duke nor the state has disclosed whether the contract prices can be adjusted downward if spot-market prices fall, he said. If the prices are not firm, it could represent a risk to future profits, he added, especially if spot prices continue to fall. ??Duke's North American Wholesale Energy business unit posted second-quarter operating earnings of $251 million, up 128% from $110 million a year earlier. ??Analyst Timothy M. Winter of A.G. Edwards in St. Louis said the overall quarter was "very good," considering that Duke's earnings from its regulated- utility business in North and South Carolina actually were flat because of mild weather, a slowing economy and increased costs associated with some nuclear generating facilities being out of operation. GRAPHIC: PHOTO: Duke, which owns a plant in Morro Bay, beat analyst estimates. PHOTOGRAPHER: CAROLYN COLE / Los Angeles Times LOAD-DATE: July 18, 2001 ??????????????????????????????10 of 57 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ??????????????????????????The Orange County Register ???????????????????????????July 18, 2001, Wednesday SECTION: DOMESTIC NEWS KR-ACC-NO: ?K1616 LENGTH: 1230 words HEADLINE: Gov. Davis trying to turn energy crisis to political advantage BYLINE: By John Howard BODY: ??SACRAMENTO, Calif. _ An enduring image of the spring-summer of 2001: Calif. Gov. Gray Davis perched in front of a power plant, speaking over the turbines' din about California's energy crisis. ??The Democratic governor doesn't address the knot of sweaty local reporters busily taking notes. He gazes past them to the television cameras, which capture his image and send it across the nation. He may be speaking in Yuba City or Sacramento or Bakersfield, but he's talking to Washington, D.C., New York and Chicago. ??For Davis is trying to turn California's energy crisis to his political advantage. Despite some setbacks - such as a federal regulatory judge's finding last week that California is eligible for much less in energy refunds than Davis wants _ he has a growing national presence, where just weeks ago he had almost none. ??Davis remains the Democrats' point man on energy and the environment. Those are two issues Democrats hope to use to win back the White House. ??"He's the leading governor among Democrats, and certainly the dominant governor in a Democratic field for president," said Republican consultant Tony Quinn. "But he has to get credit for getting the energy crisis solved. There has to be sufficient supply next year, no blackouts next summer and the prices have to stabilize." ??Davis has started to dance on the national stage, where presidential hopefuls audition. And if he wins re-election next year _ not a certainty _ that stage will be his new home. ??Thus, Davis, the career politician, has come to the defining moment of his political career. ??"If he turns this around and gets re-elected handily, he's a contender," said Larry Sabato, a political scientist at the University of Virginia. ??Sabato cautioned: "But he's in trouble in his own state. He didn't anticipate the crisis, but he's been in office for two years, so it's difficult for him to say, 'None of this happened on my watch.' That's a tough argument to make." ??Davis, of course, has been busy making precisely that argument every chance he gets. The rest of his message: California, given short shrift by federal regulators, has been bilked of billions of dollars by profit-hungry energy companies. ??That message has been honed by Mark Fabiani and Chris Lehane, two political consultants who are largely responsible for Davis' emerging national presence. Davis hired them under a state-paid $30,000 contract that prompted outrage from Republicans and at least one lawsuit. Fabiani recently left the state payroll. ??Both White House veterans, Fabiani and Lehane are known as the "Masters of Disaster" for their handling of Clinton-Gore scandals, including Whitewater and Asian fund-raising. ??In just seven weeks, the two strategists started turning Davis' political fortunes around. ??"In March and April, I used to see these emails from Republicans doing high fives and saying he (Davis) was toast. I don't see that now," said Mark Bogetich, a Republican researcher. ??Davis also is using campaign funds to finance $150,000 a week worth of radio ads to get his message to voters. The campaign follows Republican-backed television ads targeting the governor. ??True, the Masters of Disaster have been lucky in polishing Davis' image _ there have been miscues by Bush, good weather and a dearth of blackouts. But Fabiani and Lehane made their own luck, too. ??They went on the offensive, in the manner of an election campaign: ??They set up daily, campaign-style events, complete with "visuals" for television and daily news nuggets for print media. ??They created the governor's "Daily Energy Agenda" and "News From Gray Davis," spin fixtures they faxed and emailed around the state. ??They began holding regular press conference calls with Davis administration officials, daily and through the weekend, getting the administration's spin to the public. ??They ratcheted up Davis' rhetoric demonizing power generators as price-gougers and pirates, focused on Bush and his regulators as the power behind California's crisis, and depicted the state as the helpless victim of powerful forces. ??"They turned his numbers around, temporarily," said Sacramento-based Republican consultant Mike Donovan. "But he's clearly not out of the woods yet." ??Bush's recent visit to California to attend an "energy summit" gave the governor more ammunition. Davis, coached by Fabiani and Lehane, scored when Bush, as expected, turned down the governor's request to meet with the public to discuss the electricity crisis. The confrontation made front pages across the country. In Lehane's view, it showed a responsible governor bashed by an uncaring president. ??"In that sense, it was a major defining moment for both men," Lehane said. ??Nationally, Democrats have seized on environment and energy as two related issues that will help give them back control of the House in 2002. They see Davis as the key, and it is no secret in Washington that the White House views Davis as a political threat. ??National media interest in Davis is growing and California television reporters who cover the governor say their networks seek increasing coverage of the governor. ??Since the spring, he has started to show up with greater regularity on national television news shows, has become the national Democrats' point man to attack the Bush administration's electricity policies, has been on CNN's "Larry King Live" and "Inside Politics," and has done numerous talk shows. He's visited the network morning programs. He's even been a mystery guest on "The Tonight Show With Jay Leno" _ an appearance engineered in part by Lehane. He's testified before a U.S. Senate newly dominated by friendly Democrats and made front pages across the country. ??Looking to score points with national Democrats, Davis details his differences with Bush on critical environmental issues. Those include Bush's rejection of California's request for an exemption from a federal fuel-additive requirement, the Bush administration's call for increased oil drilling in Alaska and the president's dismantling of wilderness protections ordered by former President Clinton. ??"He's more highly visible on the national level now, but if he stumbles, that will be more visible, too," said political analyst Sherry Bebitch Jeffe of Claremont Graduate University. ??Democratic pollster Paul Maslin agrees. ??"All this is moot until (California) voters render a judgment next November (2002). Whatever is going on nationally is far secondary to him doing his job and whatever the verdict of the voters is," Maslin said. ??Meanwhile, Bush might be helping Davis build a national profile. A recent New York Times-CBS News survey showed Bush's personal appeal has dropped to its lowest point since April 2000. Most people are disenchanted with a number of Bush's policies, including energy and the environment, which Davis is targeting. ??"Ironically, he and Bush are basically joined at the hip on this energy issue," Jeffe said. "He (Davis) is being blamed for it in California, and Bush is being blamed for it nationally. So one could make the case that the political fortunes of Gray Davis and George Bush are inextricably intertwined." ??ARCHIVE PHOTOS on NewsCom (from KRT Photo Service, 202-383-6099): ??Gray Davis ??© 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: July 18, 2001 ??????????????????????????????11 of 57 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ???????????????????JULY 18, 2001, WEDNESDAY, FINAL EDITION SECTION: NEWS; Pg. A14 LENGTH: 808 words HEADLINE: Lawmakers devise rival bailout plans for Edison; Push to come up with alternative to bankruptcy before recess SOURCE: Chronicle Sacramento Bureau BYLINE: Lynda Gledhill DATELINE: Sacramento BODY: Lawmakers are struggling this week to agree on a plan to keep Southern California Edison from declaring bankruptcy as they rush to complete business before Friday's scheduled summer recess. ???After months of talking about a solution and dismissing one agreed to by Edison and Gov. Gray Davis, lawmakers now have several competing proposals to consider. ???A plan introduced last week by Assembly Speaker Robert Hertzberg, D-Sherman Oaks (Los Angeles County), was debated for several hours yesterday, along with a GOP-backed alternative by Assemblyman Roderick Wright, D-Los Angeles. ???The two plans, which are scheduled for votes today in the Assembly Energy Costs and Availability Committee, take sharply different approaches: ???-- Hertzberg's plan would pay $2.4 billion for Edison's transmission lines to help cover the utility's estimated $3.5 billion debt. The utility would be allowed to pay off its remaining debt by issuing bonds. ???The utility would repay the bonds using ratepayer money. For the first two years, all customers would pay for the debt, but after that the largest users would pay off the rest. ???-- Wright calls his plan a "straight bailout." It would allow the utility to issue bonds to cover all of its debt and impose a $2 a month rate increase for all users until the debt is paid. ???The Senate also introduced its own plan. A bill by Sen. Byron Sher, D-Palo Alto, would give the state a five-year option to buy the transmission lines and would have the state back only $2.5 billion of the utility's debt. ???Since Davis announced a deal with Edison earlier this year, lawmakers, business groups and consumer advocates have all expressed reservations with one aspect or another of it. Opposition has usually focused on the state purchase of Edison's transmission lines. ???The flurry of activity this week is an effort by lawmakers to take some kind of vote before they adjourn. The Edison agreement has an Aug. 15 deadline for approval by the Legislature. ???Brian Bennett, a spokesman for Edison, said creditors view that date as extremely important. ???"We're as close to bankruptcy as our creditors want us to be," he said. "Is it a drop dead date? I don't know, but it is clearly an important date." ???Consumer groups have denounced Wright's plan, and at least one calls Hertzberg's proposal just another bailout and said it would cost Californians $ 6.7 billion over the next 10 years. ???"We cannot be seduced by big businesses paying a bailout tax," said Doug Heller, a consumer advocate with the Foundation for Taxpayer and Consumer Rights. "At the end of the day, we know businesses will pass these costs on to the consumer." ???Included in the 76-page Hertzberg bill are provisions that would allow large companies to buy their power directly from a provider instead of going through the utility after 2003. ???But a coalition of large business groups also said they are strongly opposed to the plan because it does not allow for immediate direct access. ???"Ultimately, we think our companies buying power for themselves is the best solution," said Jack Stewart, president of the California Manufacturers and Technology Association. "If businesses think there's a light at the end of the tunnel where they see lower rates coming, they might tough it out and stay." ???Wright argues that the beauty of his proposal is that it could easily apply to the Pacific Gas and Electric Co. service area if the company wanted to use it as a way out of bankruptcy court. He estimates that PG&E customers would pay about $4 a month to help the company pay off its debt. ???"This is a straight bailout," Wright said. "This is not a hidden bill. There are extras." ???Wright said he believes his constituents would rather pay an extra $2 than be unemployed because their business left the state due to high energy costs. ???Business groups said the idea makes sense. ???"What good would it do to have your electricity bill reduced by $10 or $15 but not have a job?" said Bill Hauck, president of the California Business Roundtable. ???Whatever plan is eventually authorized would be used to convince the PG&E bankruptcy judge to follow a similar model for that company, giving the state those transmission lines as well. ???The purchase of the transmission lines has been at the center of Davis' plan. He argues that the purchase will give the state the ability to upgrade the system, allowing a better flow of power between Northern and Southern California and a decreased chance of blackouts. ???But opponents argue that the state is getting one-third of a complicated system that will cost billions to upgrade and operate. ???"It's like buying a car with three wheels -- it is not going to get out of the lot," consumer advocate Heller said.E-mail Lynda Gledhill at lgledhill@sfchronicle.com. LOAD-DATE: July 18, 2001 ??????????????????????????????13 of 57 DOCUMENTS ????????????????????Copyright 2001 Chicago Tribune Company ???????????????????????????????Chicago Tribune ?????????????July 18, 2001 Wednesday, NORTH SPORTS FINAL EDITION SECTION: Editorial; Pg. 20; ZONE: N LENGTH: 675 words HEADLINE: The (ho-hum) energy crisis BODY: ??Republicans usually have faith that markets will correct themselves. When it comes to energy, though, the Bush administration seems to have lost the faith. ??At least, that's the more charitable way to interpret the White House's approach toward an energy policy. The less charitable way is to assume the Bush team jumped on temporary market aberrations to sell legislation in the midst of an overblown, manufactured, energy crisis. ??Charitable or uncharitable, the fact is President Bush sent a small army of lawmakers and Cabinet officials to fan across the country this week to sell his energy policy, but they're selling amid a spate of bad news. Bad news for the administration, but not for consumers. ??Remember those predictions by Energy Secretary Spencer Abraham and others that gasoline prices would top $3 a gallon this summer? Higher prices lured more gas to the market and eased supply problems. Prices are resting comfortably at less than half that predicted price. ??The nation struggled when natural gas prices doubled last winter. But high prices reduced demand and lured more production, and by the end of winter prices were easing. ??And, finally, the predictions of a long, dark summer in California have not come true. That's not necessarily because markets corrected themselves. California and federal regulators intervened with price caps and a massive state government effort to take control of the electricity market. But the true price of such intervention may be severe--the state has committed to long-term electricity contracts and massive government borrowing that will be a drain on the state's economy for years. ??Energy deregulation in the 1970s and 1980s drove prices down, but lower prices discouraged investment in energy production. That failure to expand production has caught up to us. But now we're seeing the market respond again: Higher energy prices are spurring more production, which has already begun to ease prices. ??In the meantime, the Bush administration seems to have gotten the message that the public takes environmental protection quite seriously, even while there's talk of an energy crisis. The administration was forced to greatly scale down its plans for oil and gas drilling in the Gulf of Mexico. Its ill-advised plans to drill in the Arctic National Wildlife Refuge are all but dead. The U.S. House--driven by moderate Republicans who hold the balance of power--has voted to ban new drilling in the Great Lakes and is moving to promote conservation and energy efficiency. ??The Bush team invited a public relations disaster from the beginning, when Vice President Dick Cheney's energy task force held closed-door meetings in which energy producers were on the inside and environmentalists on the outside. The president's own warnings of "a dark future" and geopolitical blackmail spurred by severe energy shortages sound a little shrill now. ??But the administration has an opportunity to lick its wounds and make something out of the beating it has taken. There are a lot of sensible ideas in the Bush energy policy, though public awareness of many of them got crowded out by visions of oil wells popping up next to the Alaska caribou and Florida beachcombers. ??U.S. economic expansion will demand more energy sources. The administration's goal of streamlined government review to get power plants up and running makes sense. So does the effort to improve the reliability of interstate power lines so electricity can get to where it's needed. The hodge-podge of federal, state and local rules on gasoline formulas restrict supply and hike prices; proposals to move toward a federal standard make sense. ??The Bush administration--starting with Dick Cheney's 'bah, humbug' attitude toward conservation--has mishandled its political strategy on energy. But it can recover without a wholesale recasting of its priorities: Respect the environment, promote efficiency and conservation, and remove the unnecessary government roadblocks that stall new energy sources from getting to the market. LOAD-DATE: July 18, 2001
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