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Enron Mail |
I certainly agree on the tip of the iceberg point. They do need to be
watched and watched carefully. An isolated incident is one thing, a pattern of losses is quite another. My experience with Campbell has been limited to watching him operate in committee, and I have not been impressed. I would be happy to be surprised in the future. MIKE At 07:09 PM 7/24/2001 -0500, you wrote: <Interesting points. However, I don't ever recall you agreeing with every <Commission decision on disallowances. And I know you wouldn't establish <differing standards for IOUs and state water agencies. < <I just hope that this isn't the tip of the iceberg. < <You really think that Campbell is a dim bulb? A Republican, yes, but I <haven't heard anyone else describe him as a dim bulb. < <Best, <Jeff < < < < < Mike < Florio < <mflorio@turn To: Jeff.Dasovich@enron.com < < .org< cc: < < Subject: Re: Figures show < state lost big on < 07/24/2001 extra < power < 05:40 < PM < < < < < < < < <Shame on you, Jeff! I expect this sort of thing from inexperienced <reporters and dim bulbs like Campbell. But you KNOW that this sort of <thing is no big deal. And when did the PUC ever disallow these kinds of <losses for the utilities? I don't think my memory has gotten that bad. <MIKE < < < <At 03:20 PM 7/24/2001 -0500, you wrote: < <FYI. Many similar stories in the major papers today. < < < <Best, < < < < < <Jeff < < < < < <Figures show state lost big on extra power < < < < < <Posted at 9:53 p.m. PDT Monday, July 23, 2001 < < < < < <BY JOHN WOOLFOLK < < < < < <Mercury News < < < < < <State figures show California may have lost about $14 million this month < <selling surplus electricity for less than it cost. < < < < < <The Mercury News disclosed last week that some power was being sold at a < <loss. But the new figures provide the first indication of just how much < <excess power the state bought in its desperate effort to avoid blackouts <-- < <and how cheaply some of that power was sold when it turned out not to be < <needed. < < < < < <A Republican lawmaker said Monday the loss also shows Democratic Gov. Gray < <Davis' energy policies are needlessly costing consumers. < < < < < <``This whole thing is a mess,'' said Assemblyman John Campbell, R-Irvine, < <who requested details of the state's surplus power sales. ``The government < <needs to get out of the power business before it costs Californians even < <more money.'' < < < < < <A state spokesman didn't dispute the $14 million figure outright but said < <it is an approximation based on average prices and that the actual loss < <probably is less. < < < < < <``It's a number I'm sure he likes very much, but it's definitely an < <estimated number, and it could be far lower,'' said Oscar Hidalgo, < <spokesman for the state Department of Water Resources. < < < < < <Campbell responded that the loss also could be higher. < < < < < <The state has spent $415 million on power so far this month. < < < < < <State officials last week confirmed that cool weather and consumer < <conservation have left California holding more power than it needs. The < <revelation was a stunning turnaround for a state that months ago was <paying < <top dollar for power, expecting shortages this summer. < < < < < <Price that was paid < < < < < <The state bought 3.5 million megawatt-hours of electricity for July at an < <average price of $118 per megawatt-hour, according to a response Friday by < <the Department of Water Resources to Campbell's inquiry. The state has <sold < <178,000 surplus megawatt-hours in July at an average price of $37, the < <department said. < < < < < <Based on those average prices, the state paid $21 million for the surplus < <power, which it sold for $6.5 million -- $14.5 million less than it cost. < < < < < <A more precise calculation of the state's loss is difficult because < <purchased power is acquired at different times and prices and pooled as a < <``portfolio.'' < < < < < <Purchases included long-term contracts that averaged $138 per <megawatt-hour < <as well as cheaper spot-market buys. < < < < < <State officials last week said they were selling surplus at $15 to $30 a < <megawatt-hour, while some traders cited unconfirmed sales as low as $1. < < < < < <Hidalgo noted that the surplus sales represent just 5 percent of < <California's July purchases, which totaled $415 million. The $6.5 million < <from sales will help lower the state's power bill, he said, adding that < <utilities routinely sell some extra electricity. < < < < < <``Despite the fact that we're in somewhat of a surplus, any power-buying < <operation in the world is going to have to plan for these types of < <situations,'' Hidalgo said. ``It's not unique, and in fact it's normal < <operating procedure for any utility.'' < < < < < <Other Western utilities, including Portland General Electric in Oregon, < <have said they, too, are selling some surplus power at a loss and describe < <it as a cost of doing business. < < < < < <The suppliers buying the state's surplus electricity on the cheap include < <the big out-of-state energy companies that the governor has called < <price-gouging ``snakes.'' Among them are Duke Energy, Dynegy Power and < <Marketing, El Paso Power Services, Mirant, Reliant Energy and Williams < <Energy. < < < < < <`Best bid' taken < < < < < <Hidalgo said the state took the best offers it could find. < < < < < <``It's only reasonable to get the best bid you can,'' he said. < < < < < <Campbell said the $14 million loss is troubling because ratepayers or < <taxpayers will have to cover the cost, whereas a private utility could be < <forced to eat the expense if regulators determined it was unreasonable. < < < < < <State officials say what's more important is that the overall cost of <power < <is dropping, from an average daily tab of $64 million in May to $25 <million < <this month, in part because the state has so much power. < < < < < <Contact John Woolfolk at jwoolfolk@sjmercury.com < < <mailto:jwoolfolk@sjmercury.com< or (408) 278-3410.
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