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Enron Mail |
In general I have a good understanding of how government works. This I do
not understand at all. Unless it has to do with the CDWR setting rates now? Otherwise, how can the governor enter into a rate settlement? Do other parties get a chance to comment on it? Did this just totally moot our lovely trip to San Diego? This is all very wierd. Harry Kingerski 06/19/01 08:45 AM To: Leslie Lawner/NA/Enron@Enron cc: Subject: SEMPRA ENERGY DEAL ANNOUNCED.... FINALLY! ok, so what does this mean for our case - I guess we have to wait and see the details ----- Forwarded by Harry Kingerski/NA/Enron on 06/19/2001 08:44 AM ----- Jeff Dasovich Sent by: Jeff Dasovich 06/18/2001 05:18 PM To: Alan Comnes/PDX/ECT@ECT, Angela Schwarz/HOU/EES@EES, Beverly Aden/HOU/EES@EES, Bill Votaw/HOU/EES@EES, Brenda Barreda/HOU/EES@EES, Carol Moffett/HOU/EES@EES, Cathy Corbin/HOU/EES@EES, Chris H Foster/HOU/ECT@ECT, Christina Liscano/HOU/EES@EES, Craig H Sutter/HOU/EES@EES, Dan Leff/HOU/EES@EES, Debora Whitehead/HOU/EES@EES, Dennis Benevides/HOU/EES@EES, Don Black/HOU/EES@EES, Dorothy Youngblood/HOU/ECT@ECT, Douglas Huth/HOU/EES@EES, Edward Sacks/Corp/Enron@ENRON, Eric Melvin/HOU/EES@EES, Erika Dupre/HOU/EES@EES, Evan Hughes/HOU/EES@EES, Fran Deltoro/HOU/EES@EES, Gayle W Muench/HOU/EES@EES, Ginger Dernehl/NA/Enron@ENRON, Gordon Savage/HOU/EES@EES, Harold G Buchanan/HOU/EES@EES, Harry Kingerski/NA/Enron@ENRON, Iris Waser/HOU/EES@EES, James D Steffes/NA/Enron@ENRON, James W Lewis/HOU/EES@EES, James Wright/Western Region/The Bentley Company@Exchange, Jeff Messina/HOU/EES@EES, Jeremy Blachman/HOU/EES@EES, Jess Hewitt/HOU/EES@EES, Joe Hartsoe/Corp/Enron@ENRON, Karen Denne/Corp/Enron@ENRON, Kathy Bass/HOU/EES@EES, Kathy Dodgen/HOU/EES@EES, Ken Gustafson/HOU/EES@EES, Kevin Hughes/HOU/EES@EES, Leasa Lopez/HOU/EES@EES, Leticia Botello/HOU/EES@EES, Mark S Muller/HOU/EES@EES, Marsha Suggs/HOU/EES@EES, Marty Sunde/HOU/EES@EES, Meredith M Eggleston/HOU/EES@EES, Michael Etringer/HOU/ECT@ECT, Michael Mann/HOU/EES@EES, Michelle D Cisneros/HOU/ECT@ECT, mpalmer@enron.com, Neil Bresnan/HOU/EES@EES, Neil Hong/HOU/EES@EES, Paul Kaufman/PDX/ECT@ECT, Paula Warren/HOU/EES@EES, Richard L Zdunkewicz/HOU/EES@EES, Richard Leibert/HOU/EES@EES, Richard Shapiro/NA/Enron@ENRON, Rita Hennessy/NA/Enron@ENRON, Roger Yang/SFO/EES@EES, Rosalinda Tijerina/HOU/EES@EES, Sandra McCubbin/NA/Enron@ENRON, Sarah Novosel/Corp/Enron@ENRON, Scott Gahn/HOU/EES@EES, Scott Stoness/HOU/EES@EES, Sharon Dick/HOU/EES@EES, skean@enron.com, Tanya Leslie/HOU/EES@EES, Tasha Lair/HOU/EES@EES, Ted Murphy/HOU/ECT@ECT, Terri Greenlee/NA/Enron@ENRON, Tim Belden/HOU/ECT@ECT, Tony Spruiell/HOU/EES@EES, Vicki Sharp/HOU/EES@EES, Vladimir Gorny/HOU/ECT@ECT, Wanda Curry/HOU/EES@EES, William S Bradford/HOU/ECT@ECT, Kathryn Corbally/Corp/Enron@ENRON, Jubran Whalan/HOU/EES@EES, triley@enron.com, Richard B Sanders/HOU/ECT@ECT, Robert C Williams/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Greg Wolfe/HOU/ECT@ECT, James Wright/Western Region/The Bentley Company@Exchange, Dirk vanUlden/Western Region/The Bentley Company@Exchange, Steve Walker/SFO/EES@EES, Jennifer Rudolph/HOU/EES@EES, Martin Wenzel/SFO/HOU/EES@EES, Douglas Condon/SFO/EES@EES, wgang@enron.com, Scott Govenar <sgovenar@govadv.com<, Hedy Govenar <hgovenar@govadv.com< @ ENRON, jklauber@llgm.com, Mike D Smith/HOU/EES@EES, John Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Janel Guerrero/Corp/Enron@Enron, Eric Letke/DUB/EES@EES, Richard B Sanders/HOU/ECT@ECT, gfergus@brobeck.com, Michael Tribolet/ENRON@enronXgate, Robert Frank/NA/Enron@Enron, Richard B Sanders/HOU/ECT@ECT, gfergus@brobeck.com, Susan J Mara/NA/Enron@ENRON, Chris Holmes/HOU/EES@EES, David Leboe/Enron@EnronXGate cc: Subject: SEMPRA ENERGY DEAL ANNOUNCED.... FINALLY! ----- Forwarded by Jeff Dasovich/NA/Enron on 06/18/2001 05:18 PM ----- "McMorrow, Thomas" <TMcMorrow@manatt.com< 06/18/2001 04:58 PM To: "'Andy Brown (E-mail)'" <ABB@eslawfirm.com<, "'B Brown Andy (E-mail)'" <andybrwn@earthlink.net<, "'Baker Carolyn (E-mail)'" <cabaker@duke-energy.com<, "'Bob Escalante (E-mail)'" <rescalante@riobravo-gm.com<, "'Bob Weisenmiller (E-mail)'" <rbw@mrwassoc.com<, "'Curtis Kebler (E-mail)'" <curtis_l_kebler@reliantenergy.com<, "'Dean. Nistetter (E-mail)'" <Dean.Nistetter@dynegy.com<, "'Douglas Kerner (E-mail)'" <DKK@eslawfirm.com<, "'Greg Blue (E-mail)'" <gtbl@dynegy.com<, "'Jan Smutny-Jones (E-mail)'" <smutny@iepa.com<, "'Jeff Dasovich (E-mail)'" <Jeff.Dasovich@enron.com<, "'Joe Ronan (E-mail)'" <joer@calpine.com<, "'John Larrea (E-mail)'" <john.g.larrea@williams.com<, "'Julee Malinowski-Ball (E-mail)'" <jmball@ns.net<, "'Kassandra Gough (E-mail)'" <kgough@calpine.com<, "'kent Palmerton (E-mail)'" <kent.palmerton@williams.com<, "'Lynn Lednicky (E-mail)'" <lale@dynegy.com<, "'Marie Moretti (E-mail 2)'" <mmoretti@mccabeandcompany.net<, "'Marty Wilson (E-mail)'" <mwilson@pstrategies.com<, "'McNally Ray (E-mail)'" <rmcnally@mcnallytemple.com<, "''Nam Nguyen' (E-mail)'" <nam.nguyen@powersrc.com<, "'Norton Kelli (E-mail)'" <knorton@mcnallytemple.com<, "'Paula Hall-Collins (E-mail)'" <paula.hall-collins@williams.com<, "'Pigott Jack (E-mail)'" <jackp@calpine.com<, "'Richard Hyde (E-mail)'" <rwhyde@duke-energy.com<, "'Roger Pelote (E-mail)'" <roger.pelote@williams.com<, "'Stephanie-Newell (E-mail)'" <stephanie-newell@reliantenergy.com<, "'Sue Mara (E-mail)'" <smara@enron.com<, "'Tom Ross (E-mail)'" <tross@mcnallytemple.com<, "'Tom Williams (E-mail)'" <tcwillia@duke-energy.com<, "'Alex Sugaoka (E-mail)'" <alex.sugaoka@uaecorp.com<, "'Bill Carlson (E-mail)'" <william_carlson@wastemanagement.com<, "'Bill Woods (E-mail)'" <billw@calpine.com<, "'Bob Ellery (E-mail)'" <bellery@spi-ind.com<, "'Bob Gates (E-mail)'" <bob.gates@enron.com<, "'Cody Carter (E-mail)'" <cody.carter@williams.com<, "'Curt Hatton (E-mail)'" <Curt.Hatton@gen.pge.com<, "'David Parquet'" <david.parquet@enron.com<, "'Dean Gosselin (E-mail)'" <dean_gosselin@fpl.com<, "'Doug Fernley (E-mail)'" <fernley.doug@epenergy.com<, "'Duane Nelsen (E-mail)'" <dnelsen@gwfpower.com<, "'Ed Tomeo (E-mail)'" <ed.tomeo@uaecorp.com<, "'Eileen Koch (E-mail)'" <eileenk@calpine.com<, "'Eric Eisenman (E-mail)'" <eric.eisenman@gen.pge.com<, "'Frank DeRosa (E-mail)'" <frank.derosa@gen.pge.com<, "'Frazier Blaylock (E-mail)'" <frazier_blaylock@ogden-energy.com<, "'Hap Boyd (E-mail)'" <Hap_Boyd@enron.com<, "'Hawks Jack (E-mail)'" <jack.hawks@gen.pge.com<, "'Jim Willey (E-mail)'" <elliottsa@earthlink.net<, "'Joe Greco (E-mail)'" <jgreco@caithnessenergy.com<, "'Jonathan Weisgall (E-mail)'" <jweisgall@aol.com<, "'Kate Castillo (E-mail)'" <CCastillo@riobravo-gm.com<, "'Kelly Lloyd (E-mail)'" <kellyl@enxco.com<, "'Ken Hoffman (E-mail)'" <khoffman@caithnessenergy.com<, "'Kent Fickett (E-mail)'" <kfickett@usgen.com<, "'Lynn Lednicky (E-mail)'" <lynn.a.lednicky@dynegy.com<, "'Marty McFadden (E-mail)'" <marty_mcfadden@ogden-energy.com<, "'Paula Soos'" <paula_soos@ogden-energy.com<, "'Randy Hickok (E-mail)'" <rjhickok@duke-energy.com<, "'Rick S. Koebbe (E-mail)'" <rskoebbe@powerworksinc.com<, "'Rob Lamkin (E-mail)'" <rllamkin@seiworldwide.com<, "'Ross Ain (E-mail)'" <ain@worldnet.att.net<, "'Steve Iliff'" <siliff@riobravo-gm.com<, "'Steve Ponder (E-mail)'" <steve_ponder@fpl.com<, "'Tony Wetzel (E-mail)'" <twetzel@thermoecotek.com<, "'William Hall (E-mail)'" <wfhall2@duke-energy.com<, "'trusso@mcnallytemple.com'" <trusso@mcnallytemple.com<, "'sadlersa@earthlink.net'" <sadlersa@earthlink.net<, "'mstultz@epsa.org'" <mstultz@epsa.org<, "'rtemple@mcnallytemple.com'" <rtemple@mcnallytemple.com<, "'tracy.fairchild@edelman.com'" <tracy.fairchild@edelman.com<, "'megan.beiser@edelman.com'" <megan.beiser@edelman.com<, "'deborah.fiorito@dynegy.com'" <deborah.fiorito@dynegy.com<, "'lchurch@epsa.org'" <lchurch@epsa.org<, "'Katie Kaplan'" <kaplan@iepa.com<, "'tcwillia@duke-energy.com'" <tcwillia@duke-energy.com<, "'rwhyde@duke-energy.com'" <rwhyde@duke-energy.com<, "'Suzy.L.Rodriguez@dynegy.com'" <Suzy.L.Rodriguez@dynegy.com<, "'ppitts@wiredworld1.com'" <ppitts@wiredworld1.com<, "'mnobili@cal-lobby.com'" <mnobili@cal-lobby.com<, "'sscsus@aol.com'" <sscsus@aol.com<, "'kvellandi@pstrategies.com'" <kvellandi@pstrategies.com<, "'Jean Munoz'" <jmunoz@mcnallytemple.com< cc: Energy Practice Group <EnergyPracticeGroup@manatt.com< Subject: SEMPRA ENERGY DEAL ANNOUNCED.... FINALLY! OFFICE OF THE GOVERNOR PR01:295 FOR IMMEDIATE RELEASE 06/18/2001 GOVERNOR DAVIS ANNOUNCES AGREEMENT WITH SDG&E, SEMPRA ENERGY $400-$12,000 Per Customer Balloon Payment Eliminated, No Additional Rate Increases Required to Pay Off Undercollection SACRAMENTO Governor Gray Davis today announced an agreement with San Diego Gas & Electric and the utility's parent company, Sempra Energy, that will erase a $747 million balloon payment facing the utility's three million customers. "The balloon is burst," Governor Davis said. "Under this agreement, the undercollection is eliminated, without any increase in rates. This is a massive benefit to the San Diegans, the first Californians to bear the brunt of our state's energy crisis last summer." The Memorandum of Understanding (MOU), signed by the Department of Water Resources for Gov. Davis with Sempra Energy and SDG&E executives while a group of San Diego ratepayers, and State Senators Steve Peace (D-El Cajon) and Dede Alpert (D-Coronado) looked on, includes a number of provisions to eliminate the undercollection that could have cost each customer approximately $750 (as much as $400 for each residential customer, $1,400 for each small-commercial customer and $12,000 for each medium-sized commercial customer). In addition, it would settle several regulatory cases before the California Public Utilities Commission (PUC), gives the State the opportunity to purchase 15,780 acres of environmentally-sensitive lands owned by the company along the Colorado River, and provides below-market power to the State through December 2010 from the San Onofre nuclear power plant. The regulatory provisions are subject to PUC approval. It also calls for the purchase of SDG&E's transmission lines for approximately $1 billion, or 2.3 times book value. However, the deal is not contingent on that purchase of SDG&E's transmission network, which includes 170 electric lines exceeding 69 kilovolts in capacity and spans approximately 1,800 circuit miles from southern Orange County to the Mexican border. The system also includes about 135 electric substations and transmission interties with Southern California Edison's system at the San Onofre Nuclear Generating Station. "Throughout these long and complex negotiations, Governor Davis and we have had the mutual objective of reducing the financial impact of California's crisis on SDG&E's customers and helping the State gain more control over its energy destiny," said Stephen L. Baum, chairman, president and chief executive officer of Sempra Energy. "Today's agreement represents a winning proposition for our customers, the State and our company: it reduces the future financial burden on our customers, protects the State's economic future, and creates a clear path for future growth and profitability for our company. Going forward, we are committed to working with Governor Davis and the State to implement his recovery plan." The MOU signed today is the second with California's investor-owned utilities. An agreement with Southern California Edison is pending approval before the State Legislature. Unlike the Edison agreement, however, the MOU with Sempra Energy does not need legislative approval (except for the acquisition of transmission lines). "This is an example of the good that can come when parties are responsible and remain at the bargaining table," Governor Davis said. "This is a balanced business transaction that benefits ratepayers and provides a stable environment for the State's third largest utility." Governor Davis said the MOU will not result in any additional electric-base-rate increases for SDG&E customers to recover the $750 million undercollection. Without the MOU, future balloon payments to recover this sum could have been as much as $750 per customer. The regulatory balancing account for SDG&E's undercollected power costs had grown to approximately $750 million since September 2000, when the State imposed a retail rate cap of 6.5 cents per kilowatt-hour, retroactive to May 2000. California state law AB 265, signed by Governor Davis last year, provided for SDG&E's recovery of all its prudently incurred power costs, but delegated responsibility to the PUC for determining the method and timeline for recovery. The agreement includes a complex package of elements to eliminate the balloon payment, such as the settlement of the reasonableness-review case SDG&E had with the PUC. To settle that case, the utility has agreed to forego collecting $100 million of the balancing account. In addition, the agreement notes that: SDG&E agrees to give back 90 percent of the profits on two long-term power contracts earned since the energy crisis flared last June. That means SDG&E will forego collecting another $219 million in the balancing account. (The California Department of Water Resources will purchase those contracts as of June 1.); SDG&E and its sister utility, SoCalGas, will invest at least $3 billion over six years into capital improvements. In addition, if the State decides not buy the transmission lines (and SDG&E builds the Valley Rainbow line) the utility, backed by Sempra Energy, will put another $500 million into transmission line improvements, subject to PUC approval). Excluding the transmission system improvements, this is an increase of $600 million more than the utilities invested in capital improvements in the previous five years; and SDG&E will drop all legal claims against the State. "We know that many of our customers are extremely concerned about the potential of large balloon payments looming in the future to address our past undercollections," said Edwin A. Guiles, group president of Sempra Energy's regulated business units and chairman of SDG&E. "We are pleased that today's agreement provides the framework to resolve major regulatory issues to the benefit of our customers. Many challenges remain, but, this agreement demonstrates that, by working together, we can surmount these challenges in a way that benefits all the key stakeholders in California's energy future." The MOU also calls for the Department of Water Resources (DWR) to continue to buy power for SDG&E through the agency until certain conditions are met. DWR has been purchasing power for SDG&E customers since early February. SDG&E is a regulated utility operating in San Diego and southern Orange counties. Sempra Energy (NYSE: SRE), based in San Diego, is a Fortune 500 energy services holding company with annualized 2001 revenues of about $13 billion. Through its eight principal subsidiaries - Southern California Gas Company, San Diego Gas & Electric, Sempra Energy Solutions, Sempra Energy Trading, Sempra Energy International, Sempra Energy Resources, Sempra Communications and Sempra Energy Financial - the Sempra Energy companies' 12,000 employees serve more than nine million customers in the United States, Europe, Canada, Mexico, South America and Asia.
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