Oil & Gas Journal Online 6/8/2001: Suppliers lobby California lawmakers for direct access for consumers

Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
----- Forwarded by Susan J Mara/NA/Enron on 06/27/2001 11:38 AM -----

"Beiser, Megan" <Megan.Beiser@edelman.com<
06/12/2001 03:56 PM

To: "'arem@electric.com'" <arem@electric.com<, "Allen, Stevan"
<stevan.allen@edelman.com<, arm@phaser.com, Bob_Anderson@apses.com,
"brbarkovich@earthlink.net" <bbarkovich@earthlink.net<, cra@calretailers.com,
dennis.flatt@kp.org, dhunter@s-k-w.com, djsmith@s-k-w.com,
Dominic.DiMare@calchamber.com, drothrock@cmta.net, "Fairchild, Tracy"
<tracy.fairchild@edelman.com<, gdoar@newpower.com, gharrison@calstate.edu,
hgovenar@govadv.com, jackson_gualco@gualcogroup.com, "jerryl@abag.ca.gov"
<jerryl@abag.ca<, .gov@mailman.enron.com, johnlatimer@capitoladvocacy.com,
ken_pietrelli@ocli.com, kgough@calpine.com, kmccrea@sablaw.com,
kmills@cfbf.com, lhastings@cagrocers.com, "Manuel, Erica"
<Erica.Manuel@edelman.com<, mday@gmssr.com, mmoretti@calhealth.org,
nplotkin@tfglobby.com, randy_britt@robinsonsmay.com, richard.seguin@kp.org,
RochmanM@spurr.org, rrichter@calhealth.org, sgovenar@govadv.com,
smccubbi@enron.com, spahnn@hnks.com, sschleimer@calpine.com, theo@ppallc.com,
vincent.stewart@ucop.edu, vjw@ceert.org, "Warner, Jami"
<jami.warner@edelman.com<, wbooth@booth-law.com, wbrown@lhom.com,
wlarson@calstate.edu
cc:
Subject: Oil & Gas Journal Online 6/8/2001: Suppliers lobby California law
makers for direct access for consumers

This is another hit that grew out of the media advisory we sent out at the
end of last week. Also, be on the look out tomorrow for another direct
access story in the Orange County Register. That's when the reporter on the
story has told us it will run.

*********************

< Suppliers lobby California lawmakers for direct access for consumers
< By Kate Thomas
< OGJ Online Staff
< HOUSTON, June 8 -- The California Public Utilities Commission is scheduled
< to set a date formally ending retail choice for California consumers at
< its June 14 meeting, despite behind-the-scene maneuvering to keep choice
< alive for big power consumers.
< Large California electricity users and marketers have mounted a lobbying
< campaign in the legislature to keep direct access alive as an option.
< Sources said it has become a pivotal negotiating point in California Gov.
< Gray Davis's efforts to win Republican support for his proposed bailout of
< Southern California Edison Co.
< Davis ushered in the end of retail choice for electricity consumers when
< he signed a bill Feb. 1 that authorized the state to buy power on behalf
< of Pacific Gas & Electric Co. and Southern California Edison. The retail
< choice provision was added as amendment to the legislation. But it also
< left it up to the California PUC to set a date suspending the right of
< retail customers to select and use an alternative energy supplier.
< Davis appears willing to give suppliers and big businesses what they want
< in exchange for supporting his proposal to keep Southern California
< Edison, Rosemead, Calif., out of bankruptcy protection, sources said. He
< and the utility signed a memorandum of understanding under which the state
< would buy the company's transmission assets in exchange for various
< concessions on the part of Southern California Edison.
< But the deal also required various actions by the PUC and the California
< legislature. It also had deadlines under which certain actions were
< supposed to take place.
< So far little has happened. Earlier this week, the Alliance for Retail
< Energy Markets complained the PUC seemed ready to scuttle chances for
< achieving progress on either front by moving ahead to set a date to end
< competition.
< "There's no point for the PUC to support an order when it might be
< superseded by legislation," said Tracy Fairchild, a spokeswoman for the
< marketing organization whose members include Shell Energy Services, a unit
< of Shell Oil Co.; Enron Energy Services, a unit of Enron Corp.; both of
< Houston; GreenMountain Energy Co., Austin, Tex.; Commonwealth Energy
< Corp., White Rock, BC, and Strategic Energy LLC, an affiliate of Kansas
< City Power & Light Co., Kansas City, Mo.
< Opt out provision
< It isn't clear if PUC Commissioner Carl Wood has the support of other
< commissioners to set the date, Fairchild said. The commission also
< regularly postpones and pulls items off the agenda at the last minute if
< there is no consensus. But with a just-enacted rate increase that relies
< heavily on big business to carry the extra load the commission may not be
< amenable to giving large consumers an opt out provision.
< Suppliers have been lining up support wherever they can find it. Earlier
< this year, Vincent Viola, chairman of the New York Mercantile Exchange,
< weighed in on behalf of California suppliers and large retail customers.
< In a letter to Gray, he argued releasing medium and large commercial and
< industrial buyers from the obligation of using state-supplied power would
< free billions of dollars of state capital from the risks of volatile
< energy markets. "It seems that medium and large businesses have been
< deemed unable to negotiate fair and reliable supply contracts on their own
< behalf," he said.
< He noted if industrials and medium sized businesses were allowed to pick
< up a supplier, the role of the state would be rolled back to cover the
< less than 50% of the market that includes homeowners and small business
< owners.
< Viola also touted the use financial market instruments to protect against
< unexpected energy price moves, rather than locking in prices under
< potentially high-priced fixed contracts.
< While retail electric deregulation is in trouble in many parts of the
< country, big business is managing to keep its options alive. Nevada
< recently all but rescinded its deregulation law that would have given all
< classes of customers the right to choose a supplier and ordered incumbent
< Sierra Pacific Resources, Reno, to halt the sale of its power plants.
< But users of one megawatt or more of electricity were exempted at the last
< minute and can still buy from suppliers other than the regulated utility
< units of Sierra Pacific Resources.
<
<