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Sac Bee, Thurs. 6/14: Getting turned on over a turn-off Sac Bee, Thurs. 6/14: New pacts could ease blackouts:Edison crafts five-ye= ar=20 deals to help relieve the fiscal burden on its alternative energy suppliers Sac Bee, Thurs. 6/14: Lockyer to seek grand jury probe of power players Sac Bee, Thurs. 6/14: Energy Digest: PUC: Edison must pay some QF debts SD Union, Wed. 6/13: New price restrictions for electricity said to be=20 coming=20 SD Union, Wed. 6/13: Governor plans to release details on state's power=20 purchases SD Union, Wed. 6/13: Draft of blackout plan offers forecasts instead of=20 warnings SD Union, Wed. 6/13: California governor to release details of state's pow= er=20 purchases=20 SD Union, Wed. 6/13: Report: Energy executives selling stock for millions= =20 (Ken Lay and Jeff Skilling mentioned) SD Union, Wed. 6/13: News briefs on California's power crisis SD Union, Thurs. 6/14: Customers of SDG&E may not get back $300 million Money might be a part of state deal to buy electric grid=20 SD Union, Wed. 6/13: Vallejo City Council votes to switch work hours to sa= ve=20 power SD Union, Thurs. 6/14: Davis announces deal to boost summer power supply= =20 SD Union, Thurs. 6/14: FERC appears set to expand its price curbs SD Union, Thurs. 6/14: State must bare secret energy deals Judge orders release of pacts with suppliers=20 LA Times, Thurs. 6/14: Senate Democrats to use power to illuminate Bush=20 energy plan=20 LA Times, Thurs. 6/14: US invites private funding for grid expansion=20 Bush plan targeting Path 15, a key transmission point in the central valley= ,=20 sets up a showdown with the state LA Times, Thurs. 6/14: Blackouts and businesses: Dying for an exemption? LA Times, Thurs. 6/14: Price for more megawatts is more smog=20 Pollution: relaxed rules for "peaker" plants could push Ventura County over= =20 ozone limits. The effect elsewhere may prove minimal LA Times, Thurs. 6/14: PUC acts to aid alternative energy suppliers Regulators permit utilities to modify contracts with small power providers = to=20 maximize production LA Times, Thurs. 6/14: State still seeks to veil portions of power pacts SF Chron, Thurs. 6/14: Plan would allow private energy companies to own gr= id=20 rights SF Chron, Thurs. 6/14: News briefs on the California power crisis=20 SF Chron, Thurs. 6/14: Refineries may keep chugging in outages PUC looks t= o=20 grant blackout exemption=20 SF Chron, Thurs. 6/14: FERC set to extend power caps=20 Government sources say price controls will be round-the-clock SF Chron, Thurs. 6/14: Judge orders contact disclosures State told to release edited versions of energy agreements tomorrow=20 SF Chron, Wed. 6/13: Energy Report=20 SF Chron, Wed. 6/13: EPA rejects state waiver on fuel additive Refusal could cost 50 cents a gallon at pump, Davis says SF Chron, Wed. 6/13: Governor set to reveal terms of power deals Court must decide confidentiality issue Mercury News, Thurs. 6/14: Price caps elicit fierce debate in congress Mercury News, Thurs. 6/14: PUC commissioner issues draft decision to exemp= t=20 refineries from blackouts OC Register, Wed. 6/13: FERC may expand cap Senators say regulators are set to extend price controls throughout the Wes= t=20 OC Register, Wed. 6/13: Political heat triggers FERC's switch=20 The panel seems more responsive to the voice of public officials OC Register, Wed. 6/13: Davis to air details about power buys He had refused to divulge the contract terms OC Register, Wed. 6/13: Energy notebook Edison makes deal to pay generators of renewable power Getting turned on over a turn-off By Carrie Peyton Bee Staff Writer (Published June 14, 2001)=20 Political action doesn't get much easier than this: Pull a plug. Flip a=20 switch.=20 If you dislike utilities, like the environment or know anyone who does you= =20 might already have received an e-mail call to "Roll Your Own Blackout" for= =20 three hours next week on the day of the summer solstice.=20 Flocks of anonymous e-mails have been swooping across the Internet for week= s=20 promoting the hand-rolled, voluntary blackout aimed at fostering=20 conservation.=20 It is a phenomenon that points out just how deeply energy issues have worme= d=20 into the national consciousness, as well as how much the Internet has becom= e=20 the world's water cooler and its bulletin board.=20 The messages urge people everywhere to turn out their lights and unplug wha= t=20 they can from 7 to 10 p.m. Thursday, creating a dip in energy use that woul= d=20 roll across time zones -- part protest and part party.=20 "Talk to your kids. Watch the stars come out. Cuddle. Pretend the TV's=20 broken. Think what can happen when tens of thousands join this peaceful=20 protest against price-gouging and environmental irresponsibility," exhorts = a=20 Web page devoted to the idea.=20 Marilyn Nyborg of Grass Valley says she's thinking about flipping a circuit= =20 breaker to cut off all power to her house Thursday night, but at the very= =20 least her lights and television will be off.=20 "It's beautiful outside now. It's nice to sit on the porch. As it gets dark= er=20 I don't mind using a flashlight to read and spend some time with my partner= =20 and our new kitties," she said.=20 Nyborg, 62, a high-tech recruiter who calls herself a "quiet activist," sai= d=20 she'll be taking part to demonstrate that people can come together to=20 conserve.=20 "I take great offense at (President) Bush's comment that it's our right as= =20 Americans to waste fuel. I don't think it is. We're also stewards of the=20 planet," she said.=20 David Aragon, a Berkeley engineer who says he coined the phrase "Roll Your= =20 Own Blackout" online for a similar protest, said the idea had its roots in= =20 politics but is nonpartisan.=20 He said he just learned this week that Los Angeles artist Monica Rex was th= e=20 one who expanded his notion, scheduled it for the first day of summer and= =20 sent it out into the world.=20 Rex said she e-mailed a few paragraphs to about 50 friends in mid-April and= =20 posted them on a handful of Web sites to make people aware that they have t= he=20 power over how energy is used.=20 She thought so little of it at the time that she didn't keep a copy.=20 "I didn't know it would get anywhere, actually," she said. But it took off.= =20 By mid-May, multiple copies were landing in e-mail boxes of nearly everyone= =20 with environmental or energy interests. An organic farming public relations= =20 firm publicized it further, saying "millions" of people had been alerted.= =20 Newspapers from Seattle to Denver began writing about the anonymous=20 upswelling. Web pages sprang up dedicated to it.=20 "Everyone I know has seen it. This has swept the globe," said Jeff Softley,= a=20 West Hollywood bartender and longtime environmentalist who has tried for mo= re=20 than a decade to promote the idea of an "Energy Fast" on Earth Day.=20 Softley, who knows a little about stirring up community action, was so stru= ck=20 by how quickly the message moved that he speculated a big environmental gro= up=20 was probably behind it, trying to appear grass-roots.=20 "I just think it caught people's imagination," said Rex. "I am just amazed = at=20 how things move around the Internet." She theorizes that her name was=20 stripped off early in the forwarding process, making it appear anonymous wh= en=20 she had no particular interest in either hiding from the idea or in promoti= ng=20 it.=20 It really doesn't take much to bring a single idea to millions of people,= =20 said David Goff, a University of Southern Mississippi professor who co-edit= ed=20 the book "Understanding the Web."=20 "When you get it in the hands of like-minded people, it doesn't take long f= or=20 that multiplier effect to operate, and it will go very far very fast," he= =20 said.=20 E-mail- and Web-driven protests have triggered fuel boycotts in Great Brita= in=20 and Internet boycotts in France, Goff said, and "we're in the early stages = of=20 this."=20 The whimsical blackout message -- circulated in several versions -- calls o= n=20 people turn off what they can, then "light a candle to the sun god, kiss an= d=20 tell, make love, tell ghost stories, do something instead of watching=20 television, have fun in the dark."=20 Many versions say the voluntary blackout -- "a simple protest and a symboli= c=20 act" -- is being held to protest Bush's disdain for conservation, energy=20 efficiency and alternative fuels.=20 Some variants direct people to books on alternative energy and energy=20 efficiency. Some say the candle should burn for the sun goddess. Some add a= =20 gentle caution, to unplug only what can be "safely" dispensed with.=20 Michael Straus of Point Reyes said he plans to take part by having a=20 candlelight dinner with his parents. Straus, whose "Beyond Organic" PR firm= =20 helped tout the idea, said he put the message out over a public interest an= d=20 academic news wire after it kept landing in his mailbox.=20 The message has zinged from state to state and reportedly reached Europe an= d=20 Asia. It has hit e-mail lists devoted to everything from feminism to=20 used-book sellers. A Texas newspaper credited it to a river protection grou= p=20 called American Rivers, something the flattered but bemused organization=20 denied.=20 Millions of people would have to be involved for their efforts to show up o= n=20 the computers of the California Independent System Operator in Folsom, whic= h=20 constantly monitors electricity use to match demand with supply.=20 If 10 million households turned off a single 100 watt light bulb at once, 1= 00=20 megawatts would drop off the state's electric grid -- probably not noticeab= le=20 amid 30,000 or so megawatts of early evening demand, said Jim Detmers, an I= SO=20 vice president.=20 But 200 to 300 megawatts of reduced demand might be detectable under the=20 right conditions, if sudden changes in wind or temperatures or cloud cover= =20 don't obscure the effect, he said.=20 Computer engineer Aragon said he has no idea how many people will turn off= =20 and tune out June 21.=20 "That's almost like speculating on the spot price of electricity," he said.= =20 "I wouldn't touch it."=20 The Bee's Carrie Peyton can be reached at (916) 321-1086 or=20 cpeyton@sacbee.com. =09=09 =09=09 =09=09 =09=09 =09=09 =09=09New pacts could ease blackouts: Edison crafts five-year deals to help= relieve=20 the fiscal burden on its alternative energy suppliers. =09=09By Jim Sanders Bee Capitol Bureau (Published June 14, 2001)=20 =09=09In a move that could help ease blackouts this summer, Southern Califo= rnia=20 Edison has negotiated five-year deals designed to relieve the financial=20 burden on its alternative energy suppliers.=20 =09=09Gov. Gray Davis hailed the pacts, which state officials helped negoti= ate, as=20 an important step toward stabilizing the energy market and ending litigatio= n=20 over about $1.3 billion owed by Edison.=20 =09=09The move also could help taxpayers, cutting up to $100 million off th= e=20 state's energy tab this year by reducing the amount of power needed from th= e=20 expensive spot market, officials said.=20 =09=09The agreements apply specifically to Edison's suppliers, however, and= do not=20 resolve similar disputes involving Pacific Gas and Electric Co.=20 =09=09The pacts also add a new twist to an ongoing dispute over Davis' bid = to save=20 Edison from bankruptcy by buying its transmission lines for $2.76 billion a= nd=20 providing other financial incentives.=20 =09=09Davis warned at a press conference Wednesday that rates promised in t= he pacts=20 are tied to legislative approval of the rescue plan.=20 =09=09"I believe, given the changed circumstances, that legislators will ta= ke a=20 different look at the (plan)," he said. "I'm not saying it's a certainty, b= ut=20 I'm saying there's now renewed interest."=20 =09=09Senate President John Burton ridiculed the governor's assertion and m= ade it=20 clear he won't be pressured.=20 =09=09"There are an awful lot of questions here, and I think it ill behoove= s the=20 governor, who has not always moved with alacrity, to say that the Legislatu= re=20 is dragging its hands on this issue," Burton said.=20 =09=09Legislators currently are crafting one or more alternatives to the go= vernor's=20 rescue plan, which they say has little support in the Assembly or Senate.= =20 =09=09Southern California Edison, a massive private utility, declined comme= nt=20 Wednesday on the QF -- "qualified facilities" -- agreements or the governor= 's=20 rescue plan.=20 =09=09California taxpayers have spent billions of dollars since January buy= ing=20 power on behalf of Edison and another financially strapped private utility,= =20 PG&E.=20 =09=09One major problem for Edison has been the $1.3 billion debt owed to f= irms=20 that generate alternative energy from wind, geothermal, solar, biomass and= =20 gas-fired cogeneration facilities.=20 =09=09As debts rose each week, some QFs were forced to quit producing elect= ricity,=20 thus exacerbating the energy crisis and forcing California to buy more powe= r=20 on the spot market.=20 =09=09Statewide, most of the alternative energy providers, though still fin= ancially=20 strapped, have resumed production.=20 =09=09The new Edison pacts would add 100 to 300 megawatts of new electricit= y by=20 enticing suppliers to exceed existing contracts.=20 =09=09They would provide a mechanism for repaying Edison's debts to the alt= ernative=20 energy firms. They also promise separate rates for electricity from renewab= le=20 sources and gas-fired facilities.=20 =09=09Key parts of the deal include:=20 =09=09Rates for electricity produced by gas-fired plants would vary based o= n the=20 cost of natural gas at the California-Arizona border.=20 =09=09Edison would pay 5.37 cents per kilowatt-hour, plus a capacity charge= , for=20 energy produced by wind, solar and other renewable energy sources.=20 =09=09The firm would pay an estimated 4 to 9 cents per kilowatt-hour, depen= ding on=20 natural gas costs, for electricity produced by gas-fired plants.=20 =09=09The pacts give Edison and the owners of gas-fired cogeneration facili= ties the=20 ability to renegotiate if market conditions change dramatically.=20 =09=09"The initial reaction from a number of (firms) has been favorable," s= aid=20 Steven Kelly of Independent Energy Producers, an association of wholesalers= .=20 =09=09"We're hopeful this can be implemented in PG&E territory, too," said = Joe=20 Ronan, an official of the Calpine energy firm and chairman of Independent= =20 Energy Producers.=20 =09=09 =09=09The Bee's Jim Sanders can be reached at (916) 326-5538 or jsanders@sa= cbee.com .=20 =09=09Bee Staff Writer Kevin Yamamura contributed to this report.=20 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09Lockyer to seek grand jury probe of power players =09=09By Dan Smith Bee Deputy Capitol Bureau Chief (Published June 14, 2001)=20 =09=09Attorney General Bill Lockyer said Wednesday that he will ask the Sac= ramento=20 County grand jury to look into potential criminal actions by power generato= rs=20 and natural gas companies that have led to skyrocketing wholesale power=20 prices.=20 =09=09Lockyer said he has reached no conclusions about possible criminal ac= ts by "a=20 dozen or so" companies his office is investigating, but is hopeful grand ju= ry=20 testimony will assist in the probe.=20 =09=09"I just want to make sure that we thoroughly investigate every possib= ility,"=20 Lockyer said. "Some people conclude that we don't have evidence. That's not= =20 what I'm saying either. I'm saying we're in the middle of evaluating the=20 evidence."=20 =09=09Lockyer will take the investigation to the grand jury after July 1, w= hen 19=20 jurors convene for the new fiscal year. He would not predict how long the= =20 process would last.=20 =09=09He said many of the 80 lawyers in his office assigned to the energy c= risis=20 are looking at possible civil violations relating to market manipulation an= d=20 other allegations against power players.=20 =09=09Possible criminal violations involve the state's racketeering, unfair= =20 business practices, fraud and antitrust statutes, Lockyer said.=20 =09=09Power companies have consistently denied allegations that they have v= iolated=20 any civil or criminal statutes.=20 =09=09Besides Lockyer's probe, several legislative committees are investiga= ting=20 power interests' actions in California's energy crisis.=20 =09=09 =09=09The Bee's Dan Smith can be reached at (916) 321-5249 or smith@sacbee.= com.=20 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09Energy Digest: PUC: Edison must pay some QF debts=20 =09=09 (Published June 14, 2001)=20 =09=09Southern California Edison should pay at least 15 percent of its back= debts=20 to any alternative power producer, called a "qualifying facility," that nee= ds=20 the money to get back into operation this summer, utility regulators agreed= =20 Wednesday.=20 =09=09The 5-0 decision by the state Public Utilities Commission also endors= ed=20 agreements reached Tuesday between Edison and some key qualifying facilitie= s=20 that call for incentive payments for increased production and a price of $5= 4=20 a megawatt-hour for five years for some producers.=20 =09=09Ensuring that every power plant is up and running at maximum levels t= his=20 summer will be critical to keeping prices low and blackouts rare,=20 commissioners said. However, several added that they supported the revised= =20 contracts reluctantly because of long-term costs.=20 =09=09"California consumers have overpaid billions of dollars to QFs" alrea= dy, said=20 Commissioner Carl Wood. He warned that as more new plants are built, "we ma= y=20 not need this power, and yet we will be obligated to purchase it at prices= =20 that are vastly higher than other power that will be available."=20 =09=09--Carrie Peyton=20 =09=09New members rock FERC =09=09WASHINGTON -- The arrival of two new members is showing signs of shak= ing up=20 the Federal Energy Regulatory Commission, a once-obscure agency that may be= =20 the best hope for controlling wholesale electricity prices in power-starved= =20 California.=20 =09=09Patrick Wood III, former chairman of the Texas Public Utility Commiss= ion, and=20 Nora Mead Brownell, a former member of the Pennsylvania Public Utility=20 Commission, will participate in their first meeting Monday when the panel= =20 meets in an unusual session on California rates.=20 =09=09Among those most heartened to see the new members was William Massey,= a=20 Democrat and frequent dissenter on the five-member panel who strongly favor= s=20 price controls to head off what he has described as a looming economic=20 catastrophe for the state this summer.=20 =09=09"I never thought I would be so thrilled to see two Republicans coming= over=20 the horizon," Massey said.=20 =09=09Massey's enthusiasm is shared by many California Democrats who believ= e Wood=20 and Brownell will tilt the balance toward stronger action in their crusade= =20 for lower wholesale rates.=20 =09=09--David Whitney=20 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09 =09=09New price restrictions for electricity said to be coming=20 =09=09 =09=09 =09=09 =09=09 =09=09By H. Josef Hebert ASSOCIATED PRESS=20 =09=09June 13, 2001=20 =09=09WASHINGTON =01) Under growing political pressure, federal regulators = are=20 preparing new but still limited price restrictions for electricity in=20 California and other Western states, according to government officials.=20 =09=09Congressional and private industry sources said the Federal Energy Re= gulatory=20 Commission is almost certain, at a meeting next week, to expand a price=20 mitigation directive to cover all transactions in California and expand it = to=20 other states, including the Pacific Northwest.=20 =09=09The limited price caps, announced in April, now apply only to Califor= nia and=20 only to periods when a supply emergency is in effect because power reserves= =20 have fallen below 7.5 percent. California Gov. Gray Davis has called them= =20 inadequate and full of loopholes for power generators to skirt controls.=20 =09=09Sen. Dianne Feinstein, D-Calif., told a Senate hearing "it now appear= s" that=20 the April order will be broadened. She said it was "another step forward" b= ut=20 far short of the cost-based price caps she and other congressional Democrat= s=20 have sought.=20 =09=09Several other sources, speaking on condition of anonymity, also said = they=20 expected the FERC to broaden the April order.=20 =09=09The commission chairman, Curtis Hebert, said price mitigation issues = will be=20 discussed at its Monday meeting.=20 =09=09The five-member commission of three Republicans and two Democrats has= come=20 under attack from Democrats in Congress and from Davis. They contend the=20 agency has been far too timid in curtailing price gouging in the wholesale= =20 Western power markets.=20 =09=09The commission regulates wholesale electricity markets and interstate= natural=20 gas pipelines. Under a 1934 law, it is required to ensure prices are just a= nd=20 reasonable.=20 =09=09Hebert, a Republican named as chairman by President Bush in January, = defended=20 the agency at an energy forum Wednesday.=20 =09=09"Our price mitigation plan is working," said Hebert, citing recent de= clines=20 in electricity and natural gas prices in California and elsewhere in the=20 West. Acknowledging the criticism, he said of the FERC: "We're not the most= =20 popular people in town right now."=20 =09=09This week, electricity prices on the spot market in California fell t= o below=20 $100 a megawatt-hour for the first time this year. Natural gas prices also= =20 eased. Earlier year price have frequently surpassed $300 a megawatt hour, t= en=20 times what they were in pre-crisis 1999.=20 =09=09A megawatt is enough electricity to serve about 600 homes.=20 =09=09California officials have said it is too early to tell how the FERC's= April=20 order has affected prices.=20 =09=09The reason for the price drops is unclear, Feinstein said. She noted = that=20 California's attorney general this week announced plans for a grand jury to= =20 consider criminal charges against some power generators and marketers.=20 =09=09Also Wednesday, several economists told a Senate hearing that tempora= ry price=20 controls, if structured properly, should not impede electricity investments= =20 and supplies as Republican lawmakers and the administration repeatedly have= =20 argued.=20 =09=09"It is incorrect that regulation necessarily interferes with supplies= ,"=20 Cornell economist Alfred Kahn, a prominent deregulation advocate, told the= =20 Senate Governmental Affairs Committee.=20 =09=09It was the Senate's first hearing on California's energy crisis since= =20 Democrats recently took power.=20 =09=09Kahn said that if price caps were temporary, exempted new power plant= s, and=20 provided sufficient profits, "there will be no shortage of people intereste= d=20 and willing to build new power plants."=20 =09=09"The greatest danger is continued chaos," said Paul Joskow, an econom= ist at=20 the Massachusetts Institute of Technology. He, too, urged some price contro= ls=20 based on costs of production.=20 =09=09Sen. Fred Thompson, R-Tenn., said the economists were painting " a ro= sy=20 picture." He read letters from several Wall Street analysts who insisted th= at=20 price controls would be a "recipe for disaster" and make investors reluctan= t=20 to enter the California power market.=20 =09=09Senate Democrats have promised to move forward with legislation to re= quire=20 the FERC to act unless the commission takes additional steps to address=20 allegations of price gouging in California.=20 =09=09"If we ignore these problems, we put our economy at risk," said Sen. = Joseph=20 Lieberman, D-Conn.=20 =09=09?? =09=09 =09=09On the Net:=20 =09=09FERC: www.ferc.gov/=20 =09=09Senate committee witness list: www.senate.gov/(tilde)gov=01) affairs/061301witness=01)list.htm=20 =09=09 Governor plans to release details on state's power purchases=20 By Don Thompson ASSOCIATED PRESS=20 June 13, 2001=20 SACRAMENTO =01) California signed long-term electricity contracts at prices= =20 higher than those now available on the daily spot market, Gov. Gray Davis= =20 acknowledged Wednesday as a judge ordered him to release the pacts' details= .=20 But Davis said the long-term contracts between the state and power generato= rs=20 helped break the price spiral that had driven electricity prices to record= =20 heights.=20 Critics said other factors played a larger role in what they warned is a=20 temporary price drop, and said Davis foolishly locked in long-term rates at= =20 the market's peak.=20 "The price, the spot market on electricity is coming down because we've=20 locked in long-term contracts," Davis said. "This is Economics 101. ... We= =20 were paying a lot more in January and February than we are now on the spot= =20 market because we have dramatically shrunk the spot market, providing=20 reliable power for California at affordable rates."=20 By next month, the state will have to buy less than half the power it needs= =20 on the daily market, making the generators compete for a smaller share of t= he=20 market and forcing prices down, he said.=20 Davis said that will stabilize a wildly fluctuating market for the long ter= m,=20 although the cost may exceed market costs in years to come.=20 The contracts, along with new plants, more conservation, criminal and=20 regulatory investigations into price gouging and possible price caps have= =20 combined to cut costs, Davis said.=20 Saying "there will be a day of accounting" for price gougers, Davis also sa= id=20 a "pincer effort from Sacramento and Washington" forced energy producers to= =20 lower prices.=20 Davis appeared Wednesday as a San Diego superior court judge ordered the=20 state to release the contract details by noon Friday.=20 Several news organizations and Republican Assemblyman Tony Strickland,=20 R-Thousand Oaks, sued Davis, saying the contracts used state money and shou= ld=20 be open to the public.=20 For months, Davis had refused to do so, saying that would hurt the state's= =20 negotiating position. Earlier this week, however, he asked San Diego Superi= or=20 Court Judge Linda B. Quinn to lift the confidentiality clauses in the 38=20 contracts, because the secrecy was no longer that important.=20 The contracts, worth almost $43 billion, could keep long-term rates=20 relatively high for years if the recent decline in prices remains in place.= =20 Contract records obtained by the Los Angeles Times showed the state is=20 committed to buying power at prices up to $154 a megawatt-hour during peak= =20 demand periods and more than $95 for power at times when demand is low.=20 By comparison, the state recently bought peak power for less than $100 an= =20 hour and less than $20 an hour at night when demand is less.=20 Wholesale prices have dropped recently, but they could rise this summer whe= n=20 temperatures and air conditioning use climb.=20 Energy analysts agreed with Davis that a convergence of factors led to lowe= r=20 prices, not just the long-term contracts.=20 Severin Borenstein, director of the University of California Energy=20 Institute, called the prices in the state's contracts "disturbingly high"= =20 compared to those available a few years ago, but the state didn't have much= =20 choice.=20 In essence, Borenstein said, the contracts mean California now pays its hig= h=20 power bill "on an installment plan" in which generators agree to string out= =20 their profits over years instead of recouping them now.=20 But Peter Navarro, an economist at the University of California, Irvine, sa= id=20 the Davis administration negotiated "from a position of severe weakness. Th= ey=20 (generators) had us over a barrel and they stuck it to us."=20 Davis, Navarro said, "adopted a long-term strategy to fight a short-term=20 crisis."=20 The administration will look particularly foolish if the Federal Energy=20 Regulatory Commission acts next week to rein in higher power prices after= =20 months of refusing to intervene, Navarro said.=20 "This is a huge mistake that's been made by the state and what's being show= n=20 here is the depth of it," said Assemblyman David Cogdill, R-Modesto, who=20 supported Strickland's suit.=20 "In effect, we locked in an energy crisis for the next 10 years," said Harv= ey=20 Rosenfield of the Foundation for Taxpayer and Consumer Rights. He called fo= r=20 Attorney General Bill Lockyer to toss out any contracts he determines=20 overcharge the state.=20 Davis energy adviser S. David Freeman, former head of the Los Angeles=20 Department of Water and Power, said the contracts altered the marketplace a= nd=20 freed the state from its nearly total reliance on the volatile spot market.= =20 "The war ain't over," Freeman said, "but we have landed on enemy territory= =20 and we are rolling them back."=20 Draft of blackout plan offers forecasts instead of warnings=20 By Jennifer Coleman ASSOCIATED PRESS=20 June 13, 2001=20 SACRAMENTO =01) In May, Gov. Gray Davis announced a plan to give California= ns=20 detailed warnings of rolling blackouts to help businesses and residents pla= n=20 for outages.=20 But a draft of the plan, obtained by The Associated Press, has changed the= =20 proposed one-hour "blackout warning" to a "probability forecast," which one= =20 utility official called a "vague warning that's wrong more often than it's= =20 right."=20 The one-hour notice is expected to be wrong two-thirds of the time, because= =20 the Independent System Operator will continue to look for power to keep the= =20 lights on, said several people who participated in meetings to plan the=20 blackout notifications.=20 Under Davis' plan, the ISO, manager of the state's power grid, will also=20 issue a 48-hour rolling blackout forecast and the 24-hour location=20 notification.=20 Peter Navarro, an economist with University of California, Irvine who works= =20 on energy issues, called the one-hour blackout notice "a very blunt=20 instrument."=20 "It's going to be like the typical California forecast =01) sunny, hot and = dry=20 with a chance of rolling blackouts," Navarro said. "How do you prepare for= =20 that?"=20 The Governor's Office of Emergency Services coordinated the plan to impleme= nt=20 Davis' order by consulting private and municipal utilities, the ISO and the= =20 Public Utilities Commission. The plan will be presented to Davis by Friday.= =20 Even after the issuing the 60-minute blackout notice, the state will keep= =20 looking for last-minute power, said ISO spokeswoman Stephanie McCorkle. "Th= e=20 public knows the ISO doesn't have a crystal ball, but it can provide=20 information to help them make critical decisions."=20 A utility official, who participated in the calls and who spoke on the=20 condition of anonymity, said the one-hour blackout probability forecast=20 "doesn't come anywhere close to what's been promised to the public.=20 "Instead of a real one-hour notice of an outage that people can rely on and= =20 make plans for, they're just going to get another vague warning that's goin= g=20 to be wrong far more often than it's right," the executive said.=20 The utilities will make the biggest differences in handling blackouts, said= =20 Steve Conroy, a spokesman for Southern California Edison, which participate= d=20 in one of the conference calls.=20 "There is more advance notice from the utilities to our customers," Conroy= =20 said.=20 Edison and San Diego Gas and Electric Co. have joined Pacific Gas and=20 Electric Co. in assigning customers a "block number" so they will know what= =20 neighborhood are next to be hit by a blackout.=20 "The newest element that's required is to make geographic information=20 available to the public. It was already available to public safety offices,= "=20 said John Nelson, spokesman for PG&E.=20 Blackout forecasts, Conroy said, are "very much like a weather forecast" an= d=20 subject to change. McCorkle said forecasts will also encourage power=20 conservation and further lessen the chance of blackouts.=20 Eric Lamoureux, an emergency services spokesman, said the plan isn't intend= ed=20 to predict a blackout but give a sense of when they're likely.=20 Utility customers don't need a guarantee, just a warning that blackouts cou= ld=20 occur, said Michael Shames, executive director of Utility Consumers' Action= =20 Network.=20 "The objective here is to allow customers to prepare for the eventuality of= =20 blackouts," he said. "The people will not rebel if the lights stay on. What= =20 we do need is more than 30 minutes notice."=20 Jennifer Ng, the owner of Moonlight Cleaners in Elk Grove, said she'd welco= me=20 two days' notice for blackout. It took her more than a week to catch up on= =20 work that a couple hours of blackouts halted at the dry cleaners, she said.= =20 "It affects businesses more than people think," Ng said. "If I had more=20 warning, I would be able to stay late the night before or bring in more=20 people."=20 To really give a true blackout warning, Shames said, the ISO must "draw the= =20 line" and stop shopping for electricity to keep the lights on.=20 Plus, Shames added, repeated false alarms could lose their effectiveness.= =20 "That's why they shouldn't be issued cavalierly."=20 Shames and Navarro have called for a price ceiling for last-minute power bu= ys=20 and a willingness to suffer blackouts in prices don't come down. The=20 Legislature is now considering a bill to allow state power buyers to stop= =20 shopping for power.=20 California governor to release details of state's power purchases=20 By Alexa Haussler ASSOCIATED PRESS=20 June 13, 2001=20 SACRAMENTO =01) Gov. Gray Davis is close to releasing details of 38 long-te= rm=20 contracts between the state and power generators, a move that would end a= =20 lengthy battle over whether the agreements should remain confidential.=20 Davis for months had refused to release information on the contracts, but h= is=20 aides said Tuesday the disclosure was expected this week.=20 The Los Angeles Times reported Wednesday that confidential government recor= ds=20 show state officials agreed to contracts at prices higher than those now=20 being paid in the daily spot market.=20 The contracts, which total nearly $43 billion, could burden consumers with= =20 relatively high utility rates if the recent trend toward lower electricity= =20 and natural gas prices continues.=20 Records obtained by the Times show the state is committed to buying power a= t=20 prices up to $154 a megawatt-hour during peak demand periods and more than= =20 $95 for power at times when demand is low. In comparison, the state recentl= y=20 purchased peak power for less than $100 an hour and less than $20 an hour a= t=20 night when demand dropped.=20 The recent purchases reflect a drop in wholesale prices, which could rise= =20 again this summer when temperatures climb and air conditioning use surges.= =20 "The theme here is the governor embarked on a long-term strategy for a=20 short-term crisis," Peter Navarro, an economist at University of California= =20 Irvine, told the Times. "They pretty much got this exactly wrong."=20 State officials defended the long-term contracts, crediting the agreements= =20 with altering the marketplace. The contracts also have freed the state from= =20 its nearly total reliance on the volatile spot market.=20 "This was all a well thought-through plan of action," said Davis energy=20 adviser S. David Freeman, former head of the Los Angeles Department of Wate= r=20 and Power. "The war ain't over. But we have landed on enemy territory and w= e=20 are rolling them back."=20 Republican lawmakers and several news organizations, including The Associat= ed=20 Press, sued Davis in March, saying his refusal to release the contracts'=20 details violated the California Public Records Act.=20 Still, Davis refused, saying that revealing the details would put the state= =20 at a competitive disadvantage in other contract talks.=20 Oklahoma-based Williams Energy, one of the generators with a state contract= ,=20 opposes the release of the contract details.=20 "Information contained in those is proprietary information that allows us t= o=20 be competitive and to bid competitively," said spokeswoman Paula=20 Hall-Collins.=20 Raymond Hart, Department of Water Resources deputy director, wrote power=20 generators Monday saying the department would ask a judge Wednesday to thro= w=20 out a confidentiality provision in the contracts.=20 Meanwhile, the Times also reported Wednesday that executives and board=20 directors from power companies gained millions of dollars through stock sal= es=20 last year.=20 State officials accuse them of profiteering from the energy crisis, but som= e=20 executives netted upwards of $123 million in option transactions in 2000,= =20 according to a filing with the Securities and Exchange Commission. Stock=20 prices for energy companies enjoyed robust growth last year.=20 Report: Energy executives selling stock for millions=20 ASSOCIATED PRESS=20 June 13, 2001=20 LOS ANGELES =01) Executives and board directors from power companies that s= tate=20 officials accuse of profiteering from the energy crisis have gained million= s=20 of dollars through stock sales, according to a newspaper report.=20 The Los Angeles Times reported Wednesday that these executives exercised=20 options and sold stock for double, triple and even 10 times the level of=20 prior years. The newspaper based its findings on trading data supplied by= =20 First Call/Thomson Financial and federal regulatory findings.=20 Kenneth L. Lay, chairman of Enron, netted $123 million in option transactio= ns=20 in 2000, according to a filing with the Securities and Exchange Commission.= =20 The amount was triple his 1999 level and nearly 10 times what he made in=20 1998.=20 Lay also has made stock sales since November that have been worth nearly $2= 3=20 million.=20 Lay and other power company executives have shown a knack for timing their= =20 stock sales near the top of the market. Many of the companies' shares have= =20 fallen since the bulk of the stock sales, the Times reported.=20 Critics claim corporate profits for the power companies have been driven up= =20 by the energy crisis in California and the West. The crisis created a bull= =20 market for publicly traded power companies, making the shares held by the= =20 executives particularly lucrative.=20 State officials were outraged, but not surprised by the transactions.=20 "It is part of a pattern of smart trading by these guys," said state Sen.= =20 Debra Bowen, D-Marina del Rey, who chairs the Senate Energy, Utilities and= =20 Communications Committee. "The mentality is to get everything that you can= =20 and then ride out the bust.=20 "I think they are figuring that by this time next year the party will be ov= er=20 and they will be left sitting in a room with plastic cups half-filled with= =20 stale beer," Bowen added.=20 The stock sales seemed logical to Loretta Lynch, president of the Californi= a=20 Public Utilities Commission.=20 "It stands to reason that if the companies are making exorbitant profits,= =20 then the individuals who run the companies are also making exorbitant=20 profits," she said.=20 The power executives who sold stock dealt shares of the following companies= :=20 Virginia-based AES Corp.; Duke Energy Corp. of North Carolina, the=20 Houston-based energy firms of Enron Corp. and El Paso Corp. and San=20 Jose-based Calpine Corp.=20 Jeffrey K. Skilling, CEO of Enron, filed regulatory documents in May=20 announcing his intention to sell 140,000 shares of Enron stock for $7.98=20 million. Skilling in 2000 netted more than $62 million in similar=20 transactions.=20 Harvey Padewer, president of Duke Energy's Energy Services division, sold= =20 Duke stock for $12.26 million in February, netting $2.99 million.=20 State and federal agencies are investigating several large energy companies= =20 to determine if they conspired to boost prices either by limiting the=20 construction of power plants or by manipulating the supply of natural gas= =20 needed to run power plants.=20 No one is claiming the stock trades were illegal, but critics have linked t= he=20 transactions to the profits gained in California.=20 "The generators have no shame," said Steve Maviglio, a spokesman for Gov.= =20 Gray Davis. "It speaks to how there has been a massive transfer of wealth= =20 from California and the West to Texas and the Southeast."=20 Lay and Enron officials declined to comment on stock trading by executives= =20 and a spokesman for AES also declined to comment on the matter.=20 A spokesman for Duke Energy said many of the sellers at Duke continue to ho= ld=20 large amounts of the company's stock and sold the their stock to capitalize= =20 on a healthy market.=20 "Many of these people have a lot of stock, and this 7/16is 3/8 an opportuni= ty=20 to diversify their personal portfolios at an opportune time when Duke's sto= ck=20 is up," said Terry Francisco, a spokesman for Duke Energy.=20 News briefs on California's power crisis=20 ASSOCIATED PRESS=20 June 13, 2001=20 HUNTINGTON BEACH =01) An energy company says a restriction prohibiting it f= rom=20 selling power generated at its California plants out-of-state violates=20 interstate commerce laws.=20 AES Corp. filed a petition Monday with the California Energy Commission=20 claiming the restriction should be withdrawn because it hinders the company= 's=20 efforts to negotiate a contract with the state Department of Water Resource= s,=20 which brokers power deals for the state.=20 AES spokesman Aaron Thomas said Tuesday that the two sides are close to an= =20 agreement and filing the petition was a backup if negotiations fail.=20 The Arlington, Va.-based company recently won approval from the state's=20 Energy Commission to restart two idle generators in Huntington Beach, but= =20 were told it could only sell the 450 megawatts produced at the Orange Count= y=20 plant to California utilities.=20 The 40-year-old units, which will reopen in August, will generate 10 percen= t=20 of the 5,000 megawatts needed by the state to avoid rolling blackouts this= =20 summer.=20 Customers of SDG&E may not get back $300 million=20 Money might be part of state deal to buy electric grid By Jeff McDonald=20 UNION-TRIBUNE STAFF WRITER=20 June 14, 2001=20 Talks to allow state ownership of the poles and wires that push electricity= =20 across San Diego County have dragged on in numbing detail for months.=20 But with the deal between Gov. Gray Davis and Sempra Energy "extremely=20 close," local politicians and a consumer advocate fear its price will inclu= de=20 hundreds of millions of dollars that had been headed for ratepayers' pocket= s.=20 San Diego city and county officials took the unusual step yesterday of=20 criticizing regulators and the parent company of SDG&E for excluding them= =20 from secret negotiations.=20 State must bare secret energy deals=20 FERC appears set to expand its price curbs=20 Davis announces deal to boost summer power supply=20 Continuing coverage: California's Power Crisis=20 ?=20 Mayor Dick Murphy, meanwhile, dispatched a letter to the president of the= =20 California Public Utilities Commission pleading to be invited to the table.= =20 "I need your assurance that the city will be permitted to actively=20 participate in the formation of any proposed settlement," the San Diego may= or=20 wrote. "The ratepayers of San Diego city and county deserve no less."=20 At stake: more than $300 million paid to SDG&E by its 1.2 million customers= =20 over recent months.=20 Utility company executives claim the cash should go to shareholders, while= =20 local elected officials, consumer advocates and even state regulators say t= he=20 money belongs to customers.=20 The disputed windfall accumulated over several months, as SDG&E used=20 long-term contracts to buy power at one price then sell the electricity to= =20 consumers at a much higher rate.=20 Customers were billed the larger of the two costs, a practice SDG&E parent= =20 Sempra Energy said was appropriate even though SDG&E has insisted for month= s=20 that under deregulation it merely distributes power.=20 "Shareholders deserve to make money on contracts that they took the risk=20 for," said company spokesman Ed Van Herik, who was unable to specify how mu= ch=20 electricity is bought and sold under the agreements.=20 SDG&E may still be benefiting from the long-term deals it reached with=20 Louisville Gas and Electricand Pacificorp.=20 The agreements ran between 1997 and the end of this year, according to San= =20 Diego City Attorney Casey Gwinn. Because of the litigation, he was allowed = to=20 review the contracts but is not permitted to disclose their value.=20 "There is a fundamental fairness principle that is at issue here," Gwinn=20 said.=20 Earlier this year, state regulators ruled that the value of the contracts= =20 should help pay down a so-called balancing account -- some $750 million SDG= &E=20 says it spent on power but hasn't been allowed to collect from customers.= =20 Utility company lawyers appealed that ruling and the case remains locked in= =20 litigation.=20 But in an apparent policy reversal, the PUC last week joined Sempra in aski= ng=20 the appeals court to delay considering the claim while the governor's offic= e=20 deals for the network of SDG&E power poles and transmission lines. Gwinn's= =20 office was served notice of that filing Tuesday.=20 The value of the long-term contracts has become a critical issue in those= =20 executive-level discussions, which San Diego area politicians say is unfair= .=20 "It's a slap in the face," county Supervisor Dianne Jacob said. "They charg= ed=20 us more and now they're making a big profit."=20 Michael Shames of the Utility Consumers' Action Network said a closed-door= =20 deal between Davis and Sempra could undermine the PUC ruling that the SDG&E= =20 contracts are ratepayer assets.=20 "The PUC will never hear it, the city of San Diego and UCAN will never get = a=20 chance to argue it" in court, he said.=20 Davis spokesman Steve Maviglio said the governor is carefully weighing the= =20 plight of San Diego consumers as he pushes ahead with negotiations to buy t= he=20 SDG&E electric grid.=20 "We're extremely close to an agreement with the utility, and first and=20 foremost in the governor's mind are the interests of San Diego ratepayers,"= =20 he said. "The deal is going to be a balanced business transaction."=20 Acquiring the poles and wires that move power across the state is a key pie= ce=20 of the governor's plan to resolve the electricity crisis in California. Dav= is=20 struck a deal with Southern California Edison, but Pacific Gas and Electric= =20 declared bankruptcy in April, so those assets are in dispute.=20 Even though transmission lines make money for the three investor-owned=20 utilities, critics worry that buying the electric grid may not be wise=20 because the system is old and in need of more than $1 billion in upgrades.= =20 PUC attorney Gary Cohen said he sympathizes with the San Diego County elect= ed=20 officials who first brought the complaint over the SDG&E contracts to his= =20 office. But ending the power struggle in California is more important.=20 "If there's a deal, those contracts are just one part of it," Cohen said. "= I=20 understand their frustration. The contracts are up on appeal and they won.= =20 But in fairness, everybody needs to wait and see what the whole resolution= =20 will be."=20 Discussions include not only talk of a price for SDG&E transmission lines -= -=20 likely around $1 billion, according to Shames -- but also whether the utili= ty=20 adequately hedged its power purchases against rising costs and the=20 reasonableness of other buying practices.=20 "There's a bunch of issues on the table," Cohen said. "It's difficult and= =20 conceivably impossible to settle cases where you have a whole bunch of=20 parties if everybody is insisting they're part of the negotiations."=20 State Sen. Dede Alpert, whose September legislation established the=20 "balancing account" now in dispute, said she doesn't care who receives publ= ic=20 accolades for steering the value of the SDG&E contracts to ratepayers.=20 "I certainly expect this needs to be something that benefits the people of= =20 San Diego," the Coronado Democrat said. "But whether the credit goes to the= =20 city of San Diego, the PUC or the governor I don't think matters."=20 ?=20 Vallejo City Council votes to switch work hours to save power=20 ASSOCIATED PRESS=20 June 13, 2001=20 VALLEJO =01) In an effort to save an estimated $11,000 in electricity costs= ,=20 City Council members unanimously voted to switch city hall workers to a=20 four-day workweek.=20 The 7-0 vote came Tuesday as a result of the city's increased energy bills.= =20 Since the Association of Bay Area Governments suspended its electricity=20 purchasing program, which allowed participants to buy power cheaper than=20 other cities, Vallejo has seen an increase from 9.5 cents a kilowatt hour t= o=20 20 cents per kilowatt hour.=20 The switch to 10-hour days begins July 9 and will continue through Nov. 9.= =20 City Hall will be open 7:30 a.m. to 7 p.m. Monday through Thursday. The=20 current hours are 8:30 a.m. to 5:15 p.m. Monday through Friday.=20 Police and fire departments will be unaffected by the change.=20 City officials also recently negotiated with O'Hara Energy Corp. to install= =20 special meters to monitor and control energy use at City Hall. That program= =20 is expected to save $50,000.=20 Davis announces deal to boost summer power supply=20 By Ed Mendel=20 UNION-TRIBUNE STAFF WRITER=20 June 14, 2001=20 SACRAMENTO -- Gov. Gray Davis, claiming momentum toward solving the=20 electricity crisis, announced an agreement yesterday to keep unpaid small= =20 generators on line this summer.=20 Davis said a pincers movement from Washington, D.C., and Sacramento is=20 telling energy price-gougers that "the days of figuratively raping and=20 pillaging California are over and there will be an accounting."=20 Attorney General Bill Lockyer announced that a criminal grand jury will beg= in=20 meeting in Sacramento early next month to investigate whether the state's= =20 electricity and natural gas markets were manipulated and whether illegal=20 profits were made.=20 Davis also said he was optimistic about getting legislative approval of som= e=20 variation of his long-stalled plan to keep Southern California Edison out o= f=20 bankruptcy.=20 "I'm not saying it's a certainty," Davis said. "But I am saying there is no= w=20 a renewed interest in ratifying something like the memorandum of=20 understanding that we have worked out with Edison."=20 Davis said the Legislature can change the proposal, but the amendments must= =20 be acceptable to him and to Edison. The Senate is planning to begin hearing= s=20 on the Edison plan in a few weeks.=20 The governor said pressure on electricity suppliers is coming from=20 investigations, long-term contracts that have lowered spot market prices an= d=20 increased energy conservation by Californians.=20 Davis said pressure in Washington is coming from congressional hearings and= =20 the possibility that the Federal Energy Regulatory Commission will order=20 regional price limits or refunds for overcharges in California.=20 The governor also said three new power plants could begin operating in the= =20 next 30 days, an apparent reference to Calpine's 500-megawatt plant near Yu= ba=20 City and its 559-megawatt plant at Pittsburg and a 320-megawatt Mission=20 Energy-Texaco plant in Kern County.=20 The small non-utility generators that operate as "qualifying facilities"=20 under a federal program are capable of providing about a quarter of the pow= er=20 needed by the state.=20 In March, blackouts during two days were said to have resulted, in part, fr= om=20 small generators who were not operating because they had not been paid. Dav= is=20 announced an agreement yesterday between Edison and its QF contractors.=20 The Davis administration thinks the agreement could produce an additional 1= 00=20 to 300 megawatts of power (a megawatt is enough for 750 to 1,000 homes) thi= s=20 summer because some generators had previously contracted to sell less power= =20 than they are capable of producing.=20 Richard Katz, a former assemblyman from Van Nuys asked by Davis to negotiat= e=20 the agreement, said the QF contractors will receive an average of about 11= =20 cents per kilowatt-hour during the five-year contracts.=20 Katz said generators who use renewable energy sources -- such as solar, win= d,=20 geothermal, and biomass -- will be paid an average of about 7.37 cents per= =20 kilowatt-hour.=20 He said that co-generators, who use natural gas and sell the excess heat to= =20 businesses, will receive an average of 15 cents to 16 cents per=20 kilowatt-hour.=20 The generators will receive 10 percent of the money they are owed when the= =20 contracts are signed, and the full debt eventually will be paid with=20 interest.=20 Katz said the new rates for the small contractors are tied to legislative= =20 approval of the Edison rescue plan. But Senate President Pro Tempore John= =20 Burton, D-San Francisco, disagreed, saying action by the Public Utilities= =20 Commission yesterday implemented the agreement between Edison and the small= =20 contractors.=20 ?=20 FERC appears set to expand its price curbs=20 By Joe Cantlupe=20 COPLEY NEWS SERVICE=20 June 14, 2001=20 WASHINGTON -- Facing mounting political pressure, the Federal Energy=20 Regulatory Commission seems poised next week to greatly expand existing=20 energy price restrictions that now kick in only during emergencies.=20 Hints of the move surfaced yesterday as a Senate committee started=20 investigating FERC's response to the California power crisis.=20 The current order limits prices only when the state's power reserves dip=20 below 7.5 percent, the level at which a Stage 1 alert is called.=20 Critics, including Gov. Gray Davis, say that order is full of loopholes=20 because any price can be charged when no emergency has been declared, which= =20 is most of the time.=20 Sen. Dianne Feinstein, D-Calif., told the Governmental Affairs Committee=20 yesterday that "it now appears that on Monday, FERC may extend this order t= o=20 the entire Western energy market and may ensure that the order stays in pla= ce=20 at all times."=20 "This sounds good on the face of it, and it may well be," added Feinstein.= =20 "However, this situation is ripe for manipulation, as I believe they have= =20 been doing," she said of power generators in the state.=20 She said that FERC is essentially considering a "flexible price cap" that,= =20 like the existing order, sets the price on the cost of producing electricit= y=20 at the most-costly, least-efficient power plant.=20 FERC officials declined to discuss the agency's possible action next week, = or=20 Feinstein's remarks.=20 FERC's previous "price mitigation" order went into effect May 29 and some= =20 federal regulators say it caused wholesale electricity prices to plummet in= =20 California. Megawatts that once cost an average of more than $300 -- and=20 sometimes several thousand dollars -- recently dropped to below $100 during= =20 peak usage. A megawatt powers about 750 homes.=20 But some observers say that many factors are responsible for the sudden pri= ce=20 drop, including cooler weather, conservation and state long-term electricit= y=20 contracts.=20 At a meeting of the California Public Utilities Commission in San Francisco= =20 yesterday, Chairwoman Loretta Lynch said she is "very encouraged" that FERC= =20 is reconsidering its earlier decision, but said the result would be=20 "absolutely inadequate" because FERC would cap prices at a relatively high= =20 rate, according to The Associated Press.=20 Yesterday's Washington hearing by the Governmental Affairs Committee was th= e=20 Democratic-controlled Senate's first foray into California's emotionally=20 charged power crisis and seemed a harbinger of intensified partisan wrangli= ng=20 to come.=20 Feinstein and Sen. Barbara Boxer, D-Calif., used the hearing to make pleas= =20 for immediate action on price caps and to complain about FERC.=20 "Today, we see no semblance of really meaningful regulation," Feinstein sai= d.=20 Committee Chairman Joseph Lieberman agreed.=20 "The fact of the matter is that the California market is not even=20 functional," said Lieberman, D-Conn. "I think it's fair to say if the feder= al=20 government doesn't step in and provide temporary price relief, the natural= =20 trend toward deregulation will come to a halt."=20 California officials have sought price caps to rein in what they term=20 outrageous electricity costs charged by out-of-state companies.=20 But the Bush administration has vehemently opposed caps, saying they would= =20 discourage investment in new power plants.=20 In recent weeks, however, some key congressional Republicans have softened= =20 their position, saying they would not oppose limited controls.=20 FERC itself -- heavily criticized by Davis and others as a do-nothing agenc= y=20 -- appears to be showing a new face, with two new members appointed by Bush= =20 promising more aggressive monitoring of the power industry.=20 Feinstein and Rep. Henry Waxman, D-Los Angeles, have sponsored bills that= =20 would enact tougher price caps. The legislation is expected to be debated= =20 later this month.=20 Sen. Fred Thompson, R-Tenn., the ranking Republican on the committee, oppos= ed=20 Boxer and Feinstein's calls for price caps and said that California officia= ls=20 were partly to blame for the state's problems for acting "too late."=20 ?=20 State must bare secret energy deals=20 Judge orders release of pacts with suppliers By Karen Kucher and Craig D. Rose=20 UNION-TRIBUNE STAFF WRITERS=20 June 14, 2001=20 The state's secret energy deals won't be secret much longer.=20 Even as some details about California's long-term power contracts began to= =20 emerge, a Superior Court judge yesterday ordered the almost-full release of= =20 the state's agreements with power suppliers by noon tomorrow to attorneys= =20 representing news organizations and a dozen state lawmakers.=20 Judge Linda B. Quinn also set a hearing for June 27 to decide whether to=20 order the state to release information about its costly spot-market=20 electricity purchases, something the state only wants to do six months afte= r=20 the transactions are completed.=20 The news organizations and legislators filed suit under the Public Records= =20 Act, seeking the contracts that bind the state to more than $40 billion in= =20 power purchases over the next decade.=20 Revelations that California has contracted to pay as much as $154 per=20 megawatt-hour to Constellation Energy Group Inc. quickly brought complaints= =20 that the state had overpaid for electricity. The price of the commodity is= =20 now plunging.=20 The Los Angeles Times? and at least one other newspaper, which obtained som= e=20 of the long-term state contracts, reported that power costs ranged to as lo= w=20 as $58, and down to about $22 when the state supplies fuel to generating=20 plants.=20 By comparison, spot prices yesterday for power were from $55 to $65 per=20 megawatt-hour, far below levels earlier this year when prices averaged more= =20 than $250 for several months and reached a high of nearly $3,900.=20 Until last June, prices rarely exceeded $50 per megawatt-hour. Deregulation= =20 advocates said prices would decline as the market was opened up.=20 Gov. Gray Davis' strategy in dealing with budget-busting costs over the pas= t=20 year has been to sign long-term deals to avoid buying in daily markets.=20 Yesterday, he said comparing contracted electricity costs to spot prices is= =20 unfair.=20 "The price of spot market electricity is coming down because we have locked= =20 in long-term contracts," Davis said. "We knew this going in. The purpose of= =20 getting long-term contracts is to wean ourselves away from a spot market."= =20 The governor referred to the often-cited criticism that California's soarin= g=20 power prices were caused partly by an excessive dependence on buying power = in=20 daily markets, as opposed to under longer contracts.=20 Severin Borenstein, an expert in electrical deregulation from the Universit= y=20 of California Energy Institute, agreed that comparing current spot prices= =20 with contract prices was unfair.=20 Speaking at a news conference yesterday hosted by the governor's press=20 secretary, Borenstein said the deals should be analyzed in the context of= =20 conditions that existed as they were negotiated.=20 Spot prices during the first three months of this year, for example, averag= ed=20 about $285 per megawatt hour.=20 But a prominent critic of deregulation said that neither buying strategy=20 presented an acceptable option for consumers.=20 "They gouge you with spot prices or they gouge with term contracts," said= =20 Harvey Rosenfield, president of the Foundation for Taxpayer and Consumer=20 Rights in Santa Monica, which is expected to lead a ballot initiative next= =20 year over deregulation.=20 "We have to get out of this deregulation disaster."=20 Parts censored For months, Davis refused to make public details about the contracts, sayin= g=20 that revealing information about the deals would put the state at a=20 disadvantage in contract negotiations.=20 The state became a major electricity buyer after the near-bankrupt utility= =20 companies were unable to make purchases on their own.=20 This week, however, Davis agreed to release the contracts, with certain=20 portions censored. The governor's change of heart came as the newspaper=20 reports emerged and critics alleged that the state was overpaying.=20 A spokesman for Enron Corp. said yesterday that the state had many=20 opportunities to secure power at lower prices than it appears to have paid= =20 under the contracts. Enron, however, declined to sell any power to the stat= e=20 under contract.=20 Outside of court yesterday, Deputy Attorney General Tim Muscat said that th= e=20 state has secured enough contracts in the past month to feel comfortable=20 releasing long-term contract details.=20 The state has signed 61 contracts or agreements in principle that cover muc= h=20 of the state's unmet electricity needs, he said.=20 "We have finally reached critical mass and now we think we can disclose the= =20 contracts and still protect the public's interest in getting the best deal= =20 and going forward with negotiating agreements," Muscat said.=20 But he added that the state wants to keep private some technical contract= =20 information that could harm the state's contract partners.=20 Media opposed "You are going to be looking at a contract that has 98 to 99 percent of the= =20 content in it," Muscat told reporters gathered outside Quinn's San Diego=20 courtroom. "The only thing that could be removed are some technical issues.= "=20 Alonzo Wickers, an attorney representing the coalition of media=20 organizations, said he will oppose allowing the state to omit portions of t= he=20 contracts and will seek full information abou
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