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Sac Bee, Fri, 7/20: PG&E announces deals with smaller suppliers Sac Bee, Fri, 7/20: Dan Walters: Six months later, utility debts are still= =20 the toughest nut to crack=20 SD Union, Thurs, 7/19: California selling surplus power at fraction of cost= =20 it paid=20 SD Union, Thurs, 7/19: PUC reveals plan to transfer much of watchdog role= =20 SD Union, Thurs, 7/19: Variety of plans to help Edison find friends, foes= =20 SD Union, Thurs, 7/19: Baja is hoping energy squeeze can spark boom=20 SD Union, Thurs, 7/19: GOP pushes energy bill with billions in tax breaks,= =20 emphasis on coal, oil, nuclear power=20 LA Times, Fri, 7/20: Edison May Avert Bankruptcy Filing SF Chron, Fri, 7/20: Summer blackout seers missing the mark -- so far=20 Blackout visions only bad dreams=20 WHAT OUTAGES? State efforts paying off=20 SF Chron, Fri, 7/20: State advisers forced to sell energy stocks=20 CONFLICT: Holdings called unethical=20 SF Chron, Fri, 7/20: Democrats defy Davis with bill on PUC=20 Utilities panel would keep power over rates=20 SF Chron, Fri, 7/20: Developments in California's energy crisis=20 SF Chron, Fri, 7/20: Energy Secretary to speak at forum on California energ= y=20 crisis=20 SF Chron, Fri, 7/20: Energy secretary in S.F. to push Bush program=20 Abraham says supply is the key, not conservation=20 SF Chron, Fri, 7/20: More energy fallout=20 SF Chron, Fri, 7/20: Wilson says Davis ignored warnings about energy=20 Former governor defends himself=20 Mercury News, Fri, 7/20: California buzzing with power - but for how long? Individual.com (AP), Fri, 7/20: Western Utilities Appeal To Protect Their= =20 Customers California=20 Bail-Out by FERC Threatens to Increase Bills for Millions of Customers=20 NY Times, Fri, 7/20: Rate Proposal For Electricity In California=20 LA Times, Fri, 7/20: Edison Bailout Bills Remain Stalled ---------------------------------------------------------------------------= --- -------------------------------------------------------------------------- PG&E announces deals with smaller suppliers (Published July 20, 2001)=20 SAN FRANCISCO -- Two weeks after reaching a long-term agreement with a majo= r=20 electricity supplier, Pacific Gas and Electric Co. on Thursday announced=20 similar pacts with 130 smaller alternative energy companies.=20 The deals, which must be submitted to a federal bankruptcy judge for=20 approval, are expected to provide about 1,600 megawatts at 5.37 cents per= =20 kilowatt hour -- a price set by the Public Utilities Commission for long-te= rm=20 agreements sealed by July 15. The total is about two-thirds of the=20 electricity that the utility usually receives under contracts with=20 alternative energy suppliers.=20 The utility has promised to repay the 131 companies the $740 million it owe= s=20 them when its plan goes into effect.=20 It owes an additional $260 million to other small producers who have not=20 settled. Some of those companies are trying to get out of PG&E contracts.= =20 --Claire Cooper=20 County sues over bond sale Monterey County officials sued the county's investment adviser for selling= =20 them $4.9 million in Pacific Gas and Electric Co. bonds as the utility was= =20 collapsing financially.=20 PG&E defaulted on the bonds, which came due March 26, although it has paid= =20 the county $5,334 in interest, the county said in its lawsuit.=20 The lawsuit, filed in San Francisco Superior Court, says Banc of America=20 Securities sold the bonds to Monterey County on Dec. 11 even though the=20 county "was seeking a conservative, low risk investment."=20 At the time, the securities firm was aware that PG&E "was financially=20 unstable and its securities subject to potential default," the lawsuit says= .=20 BofA Securities said the PG&E bonds were "similar in risk to investment in = a=20 certificate of deposit and less risky than an investment in treasury bonds,= "=20 the suit says.=20 BofA Securities couldn't be reached for comment.=20 --Dale Kasler=20 Dan Walters: Six months later, utility debts are still the toughest nut to= =20 crack=20 (Published July 20, 2001)=20 When Gov. Gray Davis and other state politicians finally became engaged in= =20 the energy crisis last January -- a half-year late -- the state's major=20 investor-owned utilities had already amassed more than $13 billion in debt= =20 from runaway power costs and were out of credit.=20 Davis and the Legislature launched a massive state power purchase program, = a=20 speed-up of new power plants, conservation subsidies and other actions, not= =20 all of which have been successful. But everyone involved knew that the=20 utilities' debts, which had driven them to the brink of bankruptcy, would b= e=20 the most complex and politically difficult aspect of the crisis.=20 Six months later, that's still true.=20 An administration team negotiated for weeks with Pacific Gas and Electric a= nd=20 Southern California Edison on schemes to retire their debts and bring them= =20 back to a creditworthy status. The talks with PG&E went nowhere, and three= =20 months ago, the huge San Francisco-based utility filed for bankruptcy=20 protection. Davis, clearly concerned that Edison would follow, hammered out= a=20 deal with the smaller utility within hours.=20 It was, by any standard, a sweet deal for Edison and its parent company,=20 Edison International -- too sweet for just about everyone in the Legislatur= e=20 -- and immediately, efforts began to change it.=20 Edison lobbyists worked the Legislature, and the utility cranked up a massi= ve=20 advertising and public relations campaign, to no apparent avail. And Davis,= =20 oddly, pulled back from the fray. The Democratic governor concentrated on= =20 another aspect of the crisis with greater political sex appeal: demanding= =20 that power generators, many of whom are PG&E and Edison creditors, be force= d=20 to repay many billions of dollars because, as he put it, they had gouged th= e=20 state. Ultimately, Davis' campaign failed, although his strident advocacy= =20 did, apparently, arrest his decline in public opinion polls. Meanwhile, the= =20 Edison deal languished. With the Legislature now poised to leave Sacramento= =20 on a monthlong summer recess and a self-imposed deadline for enacting the= =20 Edison plan approaching, the Capitol is newly aflutter with efforts.=20 "Complex" doesn't even begin to describe the situation. There are at least= =20 three alternative plans kicking around, none of which can be passed as=20 written. Davis may be willing to accept almost anything that would save him= =20 from the embarrassment of another utility going to bankruptcy court on his= =20 watch, but currently backs a scheme ginned up by Assembly Democratic leader= s.=20 Edison, however, has split with Davis and now favors an alternative offered= =20 by Republicans and some moderate Democrats -- one that consumer advocates= =20 denounced as a corporate bailout. Meanwhile, liberal senators are pushing= =20 another version that Edison likes even less, but its critics among consumer= =20 activists like more.=20 With both lawmakers and outside interest groups so widely scattered over=20 what, if anything, should be done to rescue Edison, a consensus developed= =20 late Thursday to keep the vehicles alive with preliminary floor votes but= =20 continue private negotiations through the monthlong legislative recess.=20 The many-sided stalemate stems from both the rival plans' provisions --=20 farmers, for example, fear environmentalists' gaining authority through the= =20 state over Edison-owned watershed in the Sierra -- and the convoluted=20 dynamics of the Capitol.=20 Legislative leadership is very weak in the era of term limits, especially i= n=20 the Assembly, and lawmakers are leery about voting for any complex utility= =20 measure, particularly one that might raise rates. Some call it "1890 diseas= e"=20 for the number of the 1996 deregulation bill that backfired so badly.=20 Then, too, some liberals and consumer activists appear to want all of the= =20 measures to fail, forcing Edison into bankruptcy court. Then, they believe,= =20 the newly created but still inactive state power authority could step in,= =20 using its $5 billion in untapped bonding authority, and pick up assets of t= he=20 utilities on the cheap, thus creating a massive state utility system.=20 Wheels within wheels, and none of them meshing.=20 The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.c= om=20 <mailto:dwalters@sacbee.com<.=20 California selling surplus power at fraction of cost it paid =20 \ objattph=20 By Karen Gaudette ASSOCIATED PRESS July 19, 2001 SAN FRANCISCO =01) Calif= ornia=20 has begun selling power for a fraction of its purchase price as cool weathe= r=20 creates an abundance of electricity, spending that has been criticized by= =20 some watching the state's power crisis closely. Power the state bought at = an=20 average of $138 per megawatt is being sold for as little as $1, energy=20 traders say, though the price is disputed by state officials. The state=20 acknowleges the power sales, but says the surplus represented only a blip i= n=20 an otherwise typical scorching summer and that blackouts still could roll i= f=20 temperatures increase again.=20 However, the surplus power selloff could encourage criticism that the state= =20 bought too much power at too high a price in its haste to fend off rolling= =20 blackouts and power prices 10 times higher than the year before. "If the= =20 price is $138 on average for a month and you have to turn around and sell a= =20 chunk of it for a dollar, you're not going to look real good to a number of= =20 people," said Gary Ackerman, executive director of the Western Power Tradin= g=20 Forum in San Jose. "I just don't think many people in California truly=20 understood what their state did when they stepped into this business." =20 Unlike natural gas, extra electricity cannot be stored away for a later day= .=20 Since Californians haven't been running their air conditioners as often as= =20 expected over the past week, the state hasn't needed the entire 38,000=20 megawatts it had figured it would need. The state Department of Water=20 Resources, in charge of buying power for three financially ailing utilities= ,=20 has spent the past few months arming the state with long-term energy=20 contracts while weaning itself away from buying the highest-priced power on= =20 the last-minute electricity market. Those contracts, along with last month= 's=20 20 percent boost in energy conservation and the temperate weather, mean=20 there's suddenly more power than Californians can use. Energy traders say= =20 the state has tried to sell as much as 6,000 megawatts at one time, Ackerma= n=20 said. That's around 16 percent of the 38,000 megawatts the state estimated= =20 it would use around this time of year, Ackerman said. A megawatt is enough= =20 electricity to power roughly 750 homes. "We know from traders who have=20 bought that it's gone as low as a dollar and last week we know it was as lo= w=20 as $5," Ackerman said. "When a seller shows up with an enormous amount of= =20 power for sale and the market knows it, it has a depressing effect on=20 prices." California Energy Markets, a trade weekly, said the state sold=20 power last Thursday at $25 per megawatt =01) a price that Steve Maviglio, a= =20 spokesman for Gov. Gray Davis, said was "much closer to reality." The stat= e=20 "never sold anything more than 1,000 megawatts on any single day," Maviglio= =20 said. "(Ackerman) has no evidence" of California selling power for $1,=20 Maviglio said. "California Energy Markets is much closer to reality." Osca= r=20 Hidalgo, a DWR spokesman, acknowledged the state has been trying to sell as= =20 much as 20 percent of its daily megawatts, though he would not say at what= =20 price. That could put the state at a disadvantage in the market if=20 competitors knew how much it was paying, Hidalgo said. "This is unusual, b= ut=20 it was anticipated, it is typical in the power buying operation," Hidalgo= =20 said. "It's better than doing nothing with surplus power," Hidalgo said.= =20 "Scheduling energy is a balancing act because you can't store the item." = =20 Hidalgo said the state is sending some of the extra electricity up to the= =20 Bonneville Power Administration to repay it for power it had loaned=20 California earlier this year. "This is not a bad position for us to be in= =20 every once in a while," Hidalgo said. "If someone were to make these=20 long-term contracts go away, we would fall off a cliff and be back where we= =20 were in January."=20 PUC reveals plan to transfer much of watchdog role =20 \ objattph=20 By Craig D. Rose UNION-TRIBUNE STAFF WRITER July 19, 2001 The California= =20 Public Utilities Commission laid out a framework yesterday for transferring= =20 much of its watchdog role in ensuring fair electricity rates to the state= =20 Department of Water Resources. The controversial proposal is in response t= o=20 legislation earlier this year that puts the water department in charge of= =20 state power purchases. Utilities commission action is needed to ensure that= =20 the water department has enough revenue to make the purchases and to clarif= y=20 areas of responsibility, including oversight of power rates. Under the dra= ft=20 agreement made public yesterday, the commission would guarantee that=20 consumers pay enough to cover interest payments on a planned $13.4 billion= =20 bond sale later this year. The guarantee is considered an essential element= =20 for completing the bond sale. The bonds' proceeds are needed to repay some= =20 $8 billion the water department already has spent to purchase electricity a= nd=20 to cover future payments. California began buying electricity through the= =20 water department earlier this year after the state's utilities were unable = to=20 make purchases because of credit problems brought on by the state's failed= =20 deregulation plan. No mention was made in the draft agreement of the=20 possibility of further rate increases to cover electricity purchases. Some= =20 observers have speculated that the current rate structure, even after two= =20 rounds of rate increases, may not cover all costs. On the other hand, the= =20 draft agreement states that the water department itself will determine if t= he=20 prices it pays for electricity meet the legal test of being just and=20 reasonable, a determination heretofore made by the utilities commission. = =20 Under the utilities commission's procedure, the public is invited to commen= t=20 on the draft. An administrative law judge for the commission will consider= =20 the draft before issuing a proposed decision. A full commission vote is=20 expected Aug. 23, a deadline that would have to be met if the bond offering= =20 is to proceed as planned later this year. Harvey Rosenfield, president of= =20 the Foundation for Taxpayer and Consumer Rights, said the utilities=20 commission's draft agreement would allow a "secretive agency of dubious=20 competence controlled by the governor and completely unaccountable to the= =20 public" to unilaterally order rate increases. "It was deregulation which g= ot=20 us into the mess we are in today," Rosenfield said. "Now Wall Street is=20 demanding that the (utilities commission) be forced to surrender its=20 authority and legal responsibility." He urged the commission to reject the= =20 draft proposal. Carl Wood, one of five members of the Public Utilities=20 Commission, said the draft agreement was driven largely by legislation=20 empowering the water department as an electricity purchaser. With a state= =20 department buying power, Wood said, oversight shifts to the governor and th= e=20 Legislature. Commissioner Richard Bilas said he saw the agreement as=20 empowering the water department as "prosecutor, judge and jury" in matters = of=20 electricity purchasing. "The argument is that it's better off this way tha= n=20 the way we were," Bilas said. "And that's true in the short run. But what= =20 about in the long term?"=20 Variety of plans to help Edison find friends, foes =20 \ objattph=20 Agreement in Legislature doesn't seem likely soon By Ed Mendel UNION-TRIBU= NE=20 STAFF WRITER July 19, 2001 SACRAMENTO -- Plans to aid Southern California= =20 Edison met mixed fates in legislative committees yesterday amid opposition= =20 from business, consumers and Edison itself, which said one of the plans wou= ld=20 not restore its ability to borrow money. The Senate energy committee=20 rejected a plan that is tough on Edison, but the committee plans to conside= r=20 it again today. In the Assembly, a committee approved two plans. One has t= he=20 support of Democratic leaders, is viewed more favorably by Gov. Gray Davis= =20 and has not drawn opposition from Edison. The other, crafted by the committ= ee=20 chairman, Rod Wright, D-Los Angeles, and Republicans, is supported by=20 businesses and Edison. Senate President Pro Tempore John Burton, D-San=20 Francisco, told an Edison official during a committee hearing that financia= l=20 experts have told him repeatedly that bankruptcy is the logical course for= =20 Edison. "They keep saying they don't understand why a business in your=20 situation does not avail themselves of that," Burton said. The Senate lead= er=20 told the Edison official not to expect the usual legislative compromises th= at=20 would give the utility most of what it is seeking in a rescue plan. "I wan= t=20 to disabuse you of the fact that somehow you are going to get some great bi= g=20 deal at the end of the rainbow," Burton said. "Because you are not going=20 to." The Senate and Assembly Democratic leadership plans require businesse= s=20 to pay off most or all of Edison's debt, while also preventing businesses= =20 from shopping around for cheaper power. Business groups oppose the plans=20 because of those provisions. Davis is pushing for a legislative plan that= =20 would keep Edison from joining Pacific Gas and Electric in bankruptcy. He= =20 wants an Edison rescue plan that could become a model for getting PG&E out = of=20 bankruptcy. Once their financial health is restored, the utilities could= =20 resume buying power for their customers, allowing the state to get out of t= he=20 power-buying business it entered in January, when the utilities were crippl= ed=20 by a failed deregulation plan and no longer able to borrow money. But the= =20 lengthy and sometimes emotional debates in legislative committees yesterday= =20 made it clear that reaching an agreement on an Edison rescue plan in the ne= xt=20 few days will not be easy. A plan that Davis negotiated with Edison in ear= ly=20 April found little support in the Legislature and is not being considered.= =20 Opponents said the plan was too generous to Edison. But the alternative=20 rescue plans prepared in the Legislature also are called too generous to=20 Edison by a consumer group, the Foundation for Consumer and Taxpayer Rights= ,=20 which is threatening to put an initiative on the ballot to repeal any Ediso= n=20 "bailout." Edison, on the other hand, fears that it will be saddled with t= oo=20 much debt and placed under a regulatory system that does not assure lenders= =20 that the utility will be able to pay costs for operating and buying equipme= nt=20 and power. "We don't believe this bill in its present form would restore u= s=20 to creditworthiness," Bob Foster, an Edison vice president, told a committe= e=20 hearing the Senate plan. The plan by Wright and Republicans was supported = by=20 business groups and Edison but opposed by consumers. All ratepayers would p= ay=20 off the Edison debt and businesses would be allowed to shop for cheaper pow= er=20 as state long-term contracts expire. "What will come out of the mix is har= d=20 to tell," said Steve Maviglio, Davis' press secretary. "Everyone is working= =20 feverishly to get something passed in the next few days."=20 Baja is hoping energy squeeze can spark boom =20 \ objattph=20 New electricity, gas plants seen spurring a fresh wave of growth By Diane= =20 Lindquist UNION-TRIBUNE STAFF WRITER July 19, 2001 Energy shortages in= =20 California and Mexico are firing hopes for a new wave of industrial=20 development in Baja California, where a maquiladora slowdown has cut=20 thousands of jobs. The power squeeze has triggered a rush to build=20 electricity and natural gas projects in Baja California. Once those plants= =20 are up and running, energy experts and Tijuana boosters say, the state will= =20 be able to make an unusual pitch to global manufacturers: Come to Baja=20 California, where power is plentiful, reliable and relatively cheap. "It's= a=20 new frontier for Baja California," said Institute of the Americas president= =20 Paul Boeker, a frontier that "opens up investment opportunities that aren't= =20 possible at the moment." To seize the possibilities, Tijuana's Economic=20 Development Corp. is pushing the Baja California government to fund a study= =20 to identify the United States' biggest electricity and natural gas users. = =20 "When we saw the price of energy going up so high in California, we thought= =20 we might be able to use this as a marketing tool," said David Mayagoitia, a= =20 director of the development group. The hope is that an influx of big-energ= y=20 users, such as high-tech firms that operate clean rooms, will offset seriou= s=20 problems in the region's sputtering maquiladora industry. Since October,= =20 Baja California has lost 11,700 maquiladora jobs, 4 percent of the sector's= =20 total. In Tijuana alone, 7,600 positions have disappeared. "I've never see= n=20 so many large and small and medium companies narrow their operations in suc= h=20 a short amount of time," said Deloitte & Touche accountant Mauricio Munroy.= =20 Maquiladora insiders like Munroy blame the U.S. economic downturn, rising= =20 costs, a strong peso and a new Mexican regulatory regime for reining in the= =20 operations. Mayagoitia calls it a crisis. "Our labor costs are going up.= =20 We're not as competitive as other places in the world. We have to look for= =20 other angles." Over the past three decades, the arrival of foreign-owned= =20 maquiladoras has pushed Baja California's population to 2.5 million and=20 transformed the state into one of the world's manufacturing hot spots. The= =20 region now ranks as a top producer of televisions and other consumer=20 electronic products, and many other goods. There are 1,287 factories in th= e=20 state, employing 278,900 workers. New operators continue to come. Since=20 October, when employment began dropping, 33 companies have established=20 factories in the state. Other companies, including Korean electronics giant= =20 Samsung, the state's largest operator, are expanding. But in the past nine= =20 months, the sector's growth has dropped below its routine double-digit rate= . =20 Some companies, such as Sanyo and Day Runner, have shut factories. Others a= re=20 threatening to. And so many have trimmed operations that Munroy said, "I=20 don't think we can feel comfortable the industry's going to recover." But= =20 now, California's energy crisis and cross-border power demands could alter= =20 that picture. A natural gas pipeline and three power plants in the works wi= ll=20 boost the state's electricity output by 2,200 megawatts. As much as 1,500= =20 megawatts could flow to California consumers. Additional plants are=20 anticipated. Mexican Energy Secretary Ernesto Martens has said there's no= =20 limit to the number that could be built in Baja California. And California= =20 and Mexican officials are considering recruiting energy companies to start= =20 projects in Baja California. Meanwhile, numerous companies -- El Paso and= =20 Phillips, Sempra, Chevron and Chiyoda among them -- have expressed interest= =20 in building liquid natural gas facilities near Rosarito and Ensenada. The= =20 operations would convert into vapor form liquified natural gas imported fro= m=20 other regions for use in Mexico and the United States. Such projects could= =20 give Baja California billions of dollars in investment, thousands of=20 construction and operating jobs, and a reputation as an energy-abundant pla= ce=20 to do business. "Large energy consumers could come down here, set up=20 operations and get a big break on their utilities," Mayagoitia said. =20 Previously, such operators have shunned Baja California. "They've always= =20 said electricity down here is not constant. There are too many fluctuations= =20 on the line," Mayagoitia said. While a bigger supply would overcome that= =20 obstacle, other challenges must be met before the region can use energy as = a=20 marketing tool. At a San Diego Dialogue forum on energy last week, Boeker= =20 listed the key elements needed to attract the next wave of industrial=20 development to Baja California. As he sees it, they need at least one liqui= d=20 natural gas import facility, to allow power generators to export to=20 California and sell directly to companies in Baja California, and to upgrad= e=20 the cross-border gas and electricity transmission infrastructure. Mexico= =20 also needs to make sure its business laws and regulations, which in the pas= t=20 have restricted the energy sector, allow corporations to get the supplies a= nd=20 prices they need to be competitive, Mayagoitia said. "We think if the=20 numbers make sense, and they have confidence that Mexico can deliver what= =20 they need, then we'll have the market niche." GOP pushes energy bill with billions in tax breaks, emphasis on coal, oil,= =20 nuclear power =20 \ objattph=20 By H. Josef Hebert ASSOCIATED PRESS July 19, 2001 WASHINGTON =01) House= =20 Republican leaders hope to pass a broad energy package in the coming weeks= =20 that offers billions of dollars in tax breaks and favors for the coal, oil= =20 and nuclear industries as well as conservation incentives. Much of the=20 legislation, which emerged in bits and pieces this week from four House=20 committees, mirrors =01) and in some cases goes beyond =01) the energy blue= print=20 outlined by President Bush two months ago. House GOP leaders have promised= =20 to enact energy legislation before Congress leaves for its summer recess in= =20 August. The energy package includes drilling in an Arctic wildlife refuge,= a=20 top priority of the White House; incentives for technology to allow continu= ed=20 use of coal for power production; and tax breaks for high-mileage hybrid=20 gas-electric automobiles. But in some cases, the House committees have=20 cleared measures not even sought by the administration. Within one of the= =20 energy bills is a provision giving some of the largest, most profitable oil= =20 companies a waiver on having to pay the government royalties on oil and gas= =20 taken from new lease areas in the Gulf of Mexico. During the presidential= =20 campaign, Bush opposed such a royalty waiver, which critics claim amounts t= o=20 a $7.3 billion windfall to the oil companies. The House tax-writing=20 committee, meanwhile, produced $33.5 billion worth of energy-related tax=20 breaks =01) a much broader sweep of tax incentives than Bush has sought =01= ) even=20 though some Democrats wondered whether there will be money available. Abou= t=20 half the tax breaks would go to oil, gas and coal industries and an=20 additional $9 billion was earmarked to promote conservation and energy=20 efficiency Rep. Bill Thomas, R-Calif., chairman of the Ways and Means=20 Committee, said the aim was to produced "a balanced package of tax measures= "=20 that helps conservation and development of energy supplies. But the breath= =20 of the tax incentives went far beyond those proposed by the White House=20 energy task force headed by Vice President Dick Cheney. In addition to tax= =20 breaks for clean coal initiatives, refineries, pipelines and nuclear power= =20 plants, the committee also approved tax credits on a wide range of=20 conservation programs, from helping to sell hybrid-fueled cars to making it= =20 cheaper to insulate homes, buy residential solar panels, reduce energy use = in=20 commercial buildings and develop and sell more efficient appliances. Still= ,=20 "overall the (legislative) package is disappointing," said David Nemtzow,= =20 president of the Alliance to Save Energy, a private energy conservation=20 advocacy group. While Nemtzow praised the tax writers for some of their=20 provisions, he said big-ticket energy saving items =01) such as a major inc= rease=20 in automobile fuel economy and tougher appliance standards =01) were largel= y=20 rejected in other energy legislation advanced to the House floor this week.= =20 The disagreements over energy efficiency, a fight Democrats pledged to=20 continue when the legislation is considered by the full House, was apparent= =20 during the Energy and Commerce Committee's crafting of its energy bill. A= =20 proposal to boost the federal corporate average fuel economy standard, or= =20 CAFE, from the current 27.5 mpg to 37.5 mpg was soundly defeated, 43-11.=20 Another fuel economy increase and an attempt to force the Bush administrati= on=20 to accept a more stringent federal air conditioner standard also fell by=20 similar margins. Rep. Billy Tauzin, R-La., the committee chairman, dismiss= ed=20 the criticism. He called the legislation that emerged from committee by a= =20 50-5 vote a "landmark conservation bill" that for the first time in years h= as=20 Congress taking steps to increase motor vehicle fuel economy. The bill=20 requires that CAFE standards for light trucks be adjusted to reduce gasolin= e=20 consumption by new sport utility vehicles and minivans by 5 billion gallons= =20 over six years. Critics called that far too little, noting that the gasolin= e=20 savings over six years would amount to about what all cars and trucks consu= me=20 in two weeks. The Bush administration's biggest victory came in the=20 Resources Committee, where Democrats failed 19-29 to strip the legislation = of=20 a provision that would allow oil drilling in the Arctic National Wildlife= =20 Refuge in northeastern Alaska. Opponents vowed to kill the provision on th= e=20 House floor, where Democrats will be joined by many moderate Republicans in= =20 opposing it. Senate Democrats also have said no Arctic refuge drilling=20 measure would pass. Nevertheless, Rep. James Hansen, R-Utah, sponsor of th= e=20 legislation, said he was optimistic. "It's a selling job," he said, noting= =20 that with the various energy bills before the full House, "we're now down t= o=20 serious business."=20 Edison May Avert Bankruptcy Filing Energy: Thanks to a rate increase and natural gas price drop, the utility's= =20 improved cash flow may cover its electricity costs. By JERRY HIRSCH Times Staff Writer July 20 2001 For the first time in months, Southern California Edison is collecting more= =20 money than it is spending on electricity, a shift that could enable the=20 utility to avoid bankruptcy without a state intervention as dramatic as the= =20 proposed $2.8-billion purchase of the company's transmission lines. The turnabout has come during the last several weeks as natural gas prices-= -a=20 major component in the cost of electricity--have plummeted and as Edison ha= s=20 collected more money from customers through a record increase in rates=20 approved by state regulators. The utility this month expects to collect more than it will spend on=20 electricity--the first time that has happened since the state's power crunc= h=20 started in May 2000. If the trend holds, Edison would be able to cover=20 several hundred million dollars in losses that piled up after Feb. 1 from i= ts=20 purchases of electricity, said executives at the Rosemead-based company. Edison's relief comes against a backdrop in which the California power cris= is=20 appears to be easing, as consumers conserve energy, new power plants come= =20 online and wholesale prices moderate from the high levels of last winter. The executives said that barring an unusually severe heat wave, which would= =20 prompt customers to crank up energy-guzzling air conditioners, or another= =20 spike in natural gas prices, Edison by early next year also could make=20 payments on a proposed bond offering to pay down its $3.5 billion in debt= =20 from energy purchases before Feb. 1. Creditors of the utility and consultants working with the governor's office= =20 agree that such a scenario could mean that Edison would be able to stay out= =20 of U.S. Bankruptcy Court without the state buying the company's transmissio= n=20 lines, which is a key element in Gov. Gray Davis' now-stalled proposal to= =20 rescue the utility. Jim Scilacci, the utility's chief financial officer, has hinted at improvin= g=20 company finances during conference calls with creditors holding $931 millio= n=20 in defaulted bonds and notes in recent weeks. Investors have responded=20 positively, boosting the company's depressed stock price about 45% in the= =20 last six weeks to a Thursday close of $14.70 on the New York Stock Exchange= . Although Edison's cash flow may be enough to cover its electricity costs, i= ts=20 huge debts keep it far from solvency. Moreover, the company still faces two= =20 wild cards in its fight to avoid bankruptcy: California's own claims on tha= t=20 cash and the utility's uncertain prospects of gaining state approval to use= =20 the money to repay its debts. The Department of Water Resources is buying electricity for 27 million=20 Californians served by Edison and the state's two other regulated utilities= .=20 The agency could disclose as soon as today how big a slice it will take fro= m=20 Edison's rate collections to repay a proposed $13.4-billion bond offering t= o=20 cover the state's purchases. The water agency began buying electricity from private generators in Januar= y,=20 after Edison and Pacific Gas & Electric Co., the Northern California utilit= y,=20 became mired in debt. PG&E went on to file for bankruptcy protection in Apr= il. "What this means for Edison all depends on how much money it can keep," sai= d=20 Paul Patterson, an analyst with investment bank ABN Amro in New York. The water department's requirements could eat up much of the margin that ha= s=20 provided Edison with its small cushion this month. However, Joseph Fichera,= =20 chief executive of Saber Partners, which is advising the governor, said the= =20 latest numbers indicate that there is enough money in current rates to=20 implement the governor's plan to pay for the utility's debt as well as the= =20 state's current and future power purchases. Even if the water department allocation still left room for Edison to pay o= ff=20 its debts, such a course of action would require approval by the state=20 Legislature and the Public Utilities Commission. Although energy trends=20 appear to allow the utility to regain its financial footing, analysts=20 cautioned that the utility still could find itself in Bankruptcy Court if t= he=20 state doesn't provide a method for Edison to pay its debts. "While we might be able to cover our costs going forward, it is equally=20 important that we have a way to pay off that $3.5-billion debt," said Brian= =20 Bennett, an Edison vice president. "But without knowing what [the water=20 department's] revenue needs are, we won't know what is left over in rates t= o=20 cover our costs." Bennett blamed the utility's so-called under-collection--debts that piled u= p=20 as frozen consumer rates could not cover soaring wholesale electricity=20 costs--on what he called "flawed regulatory policies." Based on recent energy prices, Bennett said, "We are just only beginning to= =20 repay the under-collection." The recently enacted rate increases, which kicked in last month, have pushe= d=20 what Edison can charge customers for the electricity component of their bil= ls=20 from about 7 cents a kilowatt-hour to 10.27 cents. At the same time, declining natural gas prices have sliced in half what the= =20 utility must pay to a group of small and alternative-energy companies that= =20 generate about 27% of its electricity needs. Edison, for example, paid this= =20 group 18.6 cents a kilowatt-hour in February. That dropped to 13.6 cents by= =20 May and now stands at about 7.5 cents. Each penny decline in the cost of=20 electricity from this group of generators represents more than $200 million= =20 in savings for Edison on an annual basis. Bennett cautioned that if the water department requires additional funds or= =20 if Edison's energy costs were to turn upward again, "then rates once again= =20 may not be adequate to cover our generation costs. It is therefore imperati= ve=20 that this uncertainty in the rate structure be cured now so we establish=20 predictable, stable rates for our customers." Three plans to aid Edison to varying degrees are working their way through= =20 the Legislature, though late Thursday it appeared none would be approved=20 before lawmakers adjourn for a summer recess. Several legislators have said= =20 they are content to let Edison join PG&E in bankruptcy. Any plan that would allow Edison to use a portion of the rates it is=20 collecting to pay off a bond offering would meet the objection of some=20 consumer groups, which label the concept a corporate bailout. "Just as the utilities gambled on deregulation and were winners at first,= =20 Edison now has to be responsible for its losses," said Harvey Rosenfield,= =20 president of the Foundation for Taxpayer and Consumer Rights in Santa Monic= a.=20 He said Bankruptcy Court is the most appropriate place for Edison to resolv= e=20 its financial problems. Several creditors of the utility, however, said that as long as Edison can= =20 tread water or even work down its debts, there is little incentive to put t= he=20 company into bankruptcy, which would only add another legal layer and more= =20 expenses to an exceptionally complicated situation. Creditors could move against the company if they believed its finances were= =20 declining and thus shrinking the amount of cash and assets that could be=20 distributed in a bankruptcy proceeding. They also could put Edison into=20 involuntary bankruptcy if some creditors exacted payment from the company= =20 ahead of others that are owed money.=20 Copyright 2001, Los Angeles Times <http://www.latimes.com<;=20 Summer blackout seers missing the mark -- so far=20 Blackout visions only bad dreams=20 WHAT OUTAGES? State efforts paying off=20 Joe Garofoli, Chronicle Staff Writer <mailto:jgarofoli@sfchronicle.com< Friday, July 20, 2001=20 ,2001 San Francisco Chronicle </chronicle/info/copyright<=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2001/07/20/MN215347.DTL= < Months ago, the experts said there might be a blackout today.=20 If not today, then probably this week.=20 Well, most likely this month.=20 If not, then for sure sometime this summer, so Californians had better unpl= ug=20 the toaster and pray for rain because there are going to be 260 hours of=20 blackouts this summer. Or more.=20 It's starting to feel like the day after Y2K around here.=20 An unexpected thing happened on the way to California's summer of darkness = -=20 - nothing. Zero blackouts this summer, thanks to Gray-friendly skies and=20 Californians conserving power in record amounts.=20 Now the state is so flush with power that it's selling back the surplus at = a=20 loss. Even Disneyland has cranked up its flashy Electrical Parade again.=20 Still, the doomsayers aren't backpedaling, merely clarifying their fevered= =20 springtime predictions. Like Michael Zenker, of Cambridge Research=20 Associates.=20 "I think (the reporter) was asking me to speculate," Zenker said of his=20 comment in May that there could be hundreds of hours of darkness this summe= r.=20 Officially, he said, his organization predicted 20 to 40 hours of blackouts= .=20 And it doesn't plan to adjust that figure. "We've decided not to do any liv= e=20 forecasting," Zenker said.=20 Who knew what the summer would bring? Not California's power officials. The= =20 state's Department of Water Resources was in such a blackout-fearing frenzy= =20 earlier this year that it purchased too much power. So, over the past few= =20 days,=20 the state has been forced to sell power it bought for as much $133 per=20 megawatt for between $15 and $30, department spokesman Oscar Hidalgo said= =20 yesterday.=20 "If you would have told us last winter that there would be a week in July= =20 that there would be a surplus of power, a lot of people would have had smil= es=20 on their faces," Hidalgo said.=20 That isn't the only fallout from the summer of surprising light. A group of= =20 California business and development leaders worries that the rest of the=20 country is asking the same misinformed question as your Aunt Minnie in=20 Cleveland: "How do all you people in California work by candlelight all the= =20 time?"=20 That kind of ignorance cost a Hewlett-Packard manufacturing plant in=20 Roseville some business two months ago. A longtime Midwestern customer was = so=20 afraid that his company's order wouldn't be filled on time because of=20 blackouts that he sent his business to an HP plant in California's energy= =20 nemesis: Texas.=20 "If that company thought that way, then how many others back East are=20 thinking that way?" said Ken Larson, a spokesman for Hewlett-Packard. He is= =20 helping a $150,000, six-month promotional campaign called the Power of=20 California, which will send economic and business leaders across the countr= y=20 to counter the misrepresentation that blackouts are a part of daily life in= =20 the Golden State. The campaign is being funded mostly with private money.= =20 Looking back, there was no shortage of blackout Henny Pennys last spring.= =20 The North American Electrical Reliability Council predicted 260 hours of=20 darkness. The Bay Area Economic Council said there would be a blackout ever= y=20 business day this summer.=20 Neither organization regrets yelling "Blackout!" in a crowded state.=20 "At the time (March), there was good reason to expect that things would be= =20 that bad," said Sean Randolph, president of the Bay Area Economic Forum, a= =20 group of public and private leaders.=20 "Without that elevation of public consciousness, we wouldn't have gotten th= e=20 demand change (conservation) that we expected."=20 Others resorted to two favorite scapegoats: the weather and the media.=20 "The headlines on blackouts were around last summer," said Ellen Vancko, a= =20 spokeswoman for the North American Electrical Reliability Council in New=20 Jersey. "You should check out your own paper."=20 Besides, Vancko said, nobody could have predicted that temperatures would= =20 remain at or below average in California's major cities.=20 Actually, temperatures were 1.3 degrees above normal at San Francisco=20 International Airport in June and 3 degrees above normal in most Central=20 Valley cities. And yet, no blackouts.=20 Nearly every forecaster cautions that summer is only half over and the=20 hottest part of the season lies ahead.=20 "Conservation is still important," said Stephanie McCorkle, a spokeswoman f= or=20 the California Independent System Operator, which runs the state's power=20 grid. She offered a prediction on when Californians could relax about the= =20 threat of blackouts.=20 "At the first frost," she said. "November, maybe?"=20 E-mail Joe Garofoli at jgarofoli@sfchronicle.com=20 <mailto:jgarofoli@sfchronicle.com<.=20 ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 1=20 State advisers forced to sell energy stocks=20 CONFLICT: Holdings called unethical=20 Mark Martin, Chronicle Staff Writer <mailto:mmartin@sfchronicle.com< Friday, July 20, 2001=20 ,2001 San Francisco Chronicle </chronicle/info/copyright<=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2001/07/20/MN75216.DTL< Sacramento -- One consultant hired by the state to negotiate long-term=20 electricity contracts owned stock in a company that signed billion-dollar= =20 deals with California.=20 Another fresh hire bought more than $10,000 in stock in Enron Corp. -- the= =20 Houston power trader frequently vilified by Gov. Gray Davis and lawmakers -= -=20 as he helped the state develop electricity buying strategy.=20 A top Davis lawyer told the two consultants and seven others on Wednesday= =20 morning to sell off stock in companies like Enron and Calpine Corp. within= =20 four hours or lose their jobs.=20 Having a financial interest in electric companies while working for the sta= te=20 on power issues was not ethical, said Barry Goode, Davis' legal affairs=20 secretary, in a memo.=20 All nine complied with the directive, said Davis spokesman Steve Maviglio= =20 said, but controversy intensified yesterday over whether some of the state'= s=20 hired guns managing the energy crisis have conflicts of interest.=20 The stock investments have come to light in the past week as 35 consultants= =20 hired by the state to buy and schedule power and to negotiate energy=20 contracts have submitted documents detailing their personal finances.=20 Most of the consultants who owned stock list their jobs as schedulers --=20 those who schedule electricity deliveries after power has been purchased.= =20 But others more directly involved with power trading also owned stock in=20 energy companies, documents show.=20 Richard Ferreira earns $200 an hour to help negotiate and manage the state'= s=20 long-term contracts with power companies. He started his job Jan. 31.=20 According to Ferreira's financial statement, he owned between $2,000 and=20 $10,000 worth of stock in Calpine Corp. -- the company based in San Jose th= at=20 announced on Feb. 28 it had signed two long-term contracts with the state= =20 worth $8.3 billion.=20 Ferreira could not be reached for comment, and spokesmen for the Department= =20 of Water Resources, which hired the consultants, said he did not know if=20 Ferreira worked on the Calpine contracts.=20 Another consultant, Richard Nichols, bought between $10,000 and $100,000=20 worth of stock in Enron in April -- more than three months after his compan= y=20 signed on with the state to help "in the procurement of power supplies,"=20 according to his job description. The stock buy came at a time when the=20 Federal Energy Regulatory Commission was taking a hard line against wholesa= le=20 electricity price caps for California.=20 Nichols' company, Navigant Consulting, Inc., could make as much as $800,000= =20 for its work for the state this year. Nichols could not be reached for=20 comment.=20 Citing invoices from Controller Kathleen Connell's office, Secretary of Sta= te=20 Bill Jones, an announced GOP candidate for governor, argued that there are = at=20 least seven other Navigant employees who are billing the state for work on= =20 energy issues. None of them have disclosed their financial interests.=20 Jones said he takes issue with the Davis administration's decisions on who= =20 should file financial statements and who should be exempt.=20 FINANCES NOT DISCLOSED Several consultants, including two Wall Street firms that made $275,000 a= =20 month to negotiate the state's attempts to bail out troubled public=20 utilities, have not disclosed their finances because Davis officials have= =20 concluded they do not fit the definition of a consultant.=20 Jones has suggested that the state's long-term deals with several companies= =20 to deliver electricity might be invalid if negotiators had a financial stak= e=20 in those companies.=20 Maviglio said Davis officials were investigating whether there had been any= =20 direct conflicts. The state attorney general's office and the state's Fair= =20 Political Practices Commission also are reviewing Jones' allegations.=20 Maviglio and a spokesman for the state's Department of Water and Power coul= d=20 not say yesterday whether new employees were asked before they were hired= =20 whether they had any financial stake in the energy market.=20 STOCKS SOLD VOLUNTARILY But some consultants acknowledged a potential conflict and got rid of stock= s=20 before this week. In his filing, Mark Skowdronski reports owning more than= =20 $10,000 worth of Reliant Energy stocks when he began his job in March of=20 negotiating long-term contracts for the state. When he was given the task o= f=20 negotiating with Reliant, he said he sold his stock on March 20.=20 Jones has stopped short of accusing anyone of criminal activity. And a lett= er=20 from Attorney General Bill Lockyer to Jones notes that the consultants woul= d=20 have to own more than 3 percent of a company they dealt with to be prosecut= ed=20 criminally.=20 Maviglio said the accusations come from a man who is launching his run for= =20 Davis' job next year.=20 "This is all politics," said Steve Maviglio, Davis' press secretary. "We're= =20 following the law."=20 He said that when the state was forced to enter the business of buying powe= r=20 earlier this year, officials had to quickly hire people who knew the energy= =20 business, including some who still had investments in power companies.=20 "If you want a plumber, you hire a guy who has plumbing experience," Mavigl= io=20 said.=20 E-mail Mark Martin at markmartin@sfchronicle.com=20 <mailto:markmartin@sfchronicle.com<.=20 ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 1=20 Democrats defy Davis with bill on PUC=20 Utilities panel would keep power over rates=20 Lynda Gledhill, Chronicle Sacramento Bureau <mailto:lgledhill@sfchronicle.c= om< Friday, July 20, 2001=20 ,2001 San Francisco Chronicle </chronicle/info/copyright<=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2001/0= 7/20/ MN222719.DTL< Sacramento -- Lawmakers moved with lightning speed yesterday to undo a plan= =20 that would force California regulators to raise electricity rates whenever= =20 state power buyers deem it necessary.=20 A hastily introduced bill pits Democratic lawmakers against the=20 administration of Gov. Gray Davis, which is counting on the state Public=20 Utilities Commission to approve rate increases to pay for electricity witho= ut=20 questioning whether the state got a good price.=20 Historically, utilities bought their electricity and asked the PUC to appro= ve=20 rate hikes. The PUC decided whether the requests were justified.=20 But with the utilities now deeply in debt and the state buying electricity,= =20 the old system has broken down. This week, the PUC issued a draft agreement= =20 that would guarantee the state would get as much money as it needs to pay f= or=20 the electricity it is buying.=20 Consumer advocates said the proposed agreement would force the PUC to cede= =20 its responsibility to protect customers from unreasonable rate increases.= =20 Senate leader John Burton, D-San Francisco, called the agreement=20 "overreaching" by the governor's Department of Water Resources, which is=20 buying the state's power.=20 Under Burton's bill, consumers would still have to repay $13.4 billion in= =20 bonds that the state plans to float to cover its purchases. But the bill=20 would allow the PUC to scrutinize the state's expenses beyond those covered= =20 by the bond -- costs mounting to billions of dollars over the next 15 to 20= =20 years.=20 The bill passed out of two committees with bipartisan support yesterday and= =20 now faces a vote by the full Senate. Both business and consumer groups=20 expressed their support for the measure.=20 "This is better for ratepayers," said Lenny Goldberg of the Utility Reform= =20 Network. "It makes the bond issue secure and gives a chance to look into al= l=20 of the contracts."=20 PUC Commissioner Richard Bilas said some change is needed to restore=20 commission oversight.=20 "The only check and balance on the Department of Water Resources as it is= =20 would be the governor," Bilas said. "I think it takes a different branch of= =20 government to do that oversight."=20 But Bruce Van Dusen, a lawyer hired by the Department of Water Resources,= =20 said Burton's bill could delay the bond sale and jeopardize the general fun= d.=20 The concern is that while Burton's bill guarantees that the bond issue woul= d=20 be repaid, it does not spell out how all the long-term electricity contract= s=20 that the state has signed will be covered. The contracts stipulate that the= =20 generators will be paid through electricity rates.=20 Chronicle staff writer Bernadette Tansey contributed to this report. / E-ma= il=20 Lynda Gledhill at lgledhill@sfchronicle.com=20 <mailto:lgledhill@sfchronicle.com<.=20 ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 19=20 Developments in California's energy crisis=20 The Associated Press Friday, July 20, 2001=20 ,2001 Associated Press=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/07/20/= state 1023EDT0173.DTL< (07-20) 07:23 PDT (AP) --=20 Developments in California's energy crisis:=20 FRIDAY: * No power alerts Friday as electricity reserves stay above 7 percent.=20 THURSDAY: * Legislators continue struggling with competing versions of a plan crafted= =20 by Gov. Gray Davis to rescue Southern California Edison from bankruptcy.=20 Davis' plan, announced in April, offers Edison $2.76 billion for its=20 transmission system and lets the utility issue revenue bonds to repay the= =20 rest of their debts. Edison is estimated to have amassed $3.5 billion in=20 debts from record-high wholesale electricity prices to customers. A competi= ng=20 bill by Speaker Robert Hertzberg, D-Van Nuys, and Assemblyman Fred Keeley,= =20 D-Boulder Creek, would trims at least $300 million from the governor's offe= r,=20 and also would allow Edison to issue the bonds, which would be repaid by=20 Edison ratepayers over a decade.=20 * Pacific Gas and Electric Co. decides to extend contracts to buy electrici= ty=20 from 131 small power plants for the next five years, the utility announced= =20 Thursday in U.S. Bankruptcy Court. As part of the deal, the utility also wi= ll=20 pay those power plants $740 million for unpaid electricity deliveries they= =20 had made to PG&E before it filed for federal bankruptcy protection on April= =20 6. The power plants throughout the state, which largely harness energy from= =20 the sun, wind, biomass and natural gas to produce electricity in=20 environmentally friendly ways, agreed to supply PG&E with nearly 3,000=20 megawatts of power for 5.37 cents per kilowatt hour on average.=20 * Assemblyman John Campbell sends a letter to the director of the Departmen= t=20 of Water Resources, demanding to know how much surplus power the state is= =20 selling and at what price. Since January, the state has bought electricity= =20 for the customers of three financially ailing utilities. Cooler July=20 temperatures than expected have led to a sudden surplus of power, which=20 energy traders say is being sold for more than $100 less than it was bought= .=20 State officials say the extra power shows the state planned ahead well, and= =20 that if the weather heats up, it will be prepared.=20 * In sharp contrast to a poll released in May, Californians now say that=20 although the state needs power, nuclear energy is not a safe enough source.= =20 The poll, released Thursday by the Public Policy Institute of California,= =20 showed that 55 percent of residents believe nuclear power is too dangerous,= =20 even if building more nuclear power plants would help alleviate the country= 's=20 energy problems. In a Field Institute poll of 1,015 adults released in May,= =20 59 percent of Californians favored nuclear power and 36 percent were oppose= d.=20 * PG&E Corp. shares rise 30 cents to close at $15.40. Shares of Edison=20 International rise 25 cents to close at $14.70. Sempra shares rise 65 cents= =20 to close at $27.12.=20 * No power alerts Thursday as electricity reserves stay above 7 percent.=20 * The Senate and Assembly are expected to vote on competing versions of dea= ls=20 to rescue Southern California Edison from bankruptcy. Legislators are tryin= g=20 to clear their agendas before leaving for a monthlong summer break.=20 WHAT'S NEXT: * The Department of Water Resources, the state agency that since January ha= s=20 been buying electricity for the customers of three financially ailing=20 utilities, is set to release on Friday numbers that will indicate whether= =20 state power regulators will need to order an electric rate increase so the= =20 state can recoup its power buying and administrative costs.=20 THE PROBLEM: High demand, high wholesale energy costs, transmission glitches and a tight= =20 supply worsened by scarce hydroelectric power in the Northwest and=20 maintenance at aging California power plants are all factors in California'= s=20 electricity crisis.=20 Southern California Edison and Pacific Gas and Electric say they've lost=20 nearly $14 billion since June 2000 to high wholesale prices the state's=20 electricity deregulation law bars them from passing on to consumers. PG&E,= =20 saying it hasn't received the help it needs from regulators or state=20 lawmakers, filed for federal bankruptcy protection April 6. Electricity and= =20 natural gas suppliers, scared off by the companies' poor credit ratings, ar= e=20 refusing to sell to them, leading the state in January to start buying powe= r=20 for the utilities' nearly 9 million residential and business customers. The= =20 state is also buying power for a third investor-owned utility, San Diego Ga= s=20 & Electric, which is in better financial shape than much larger Edison and= =20 PG&E but is also struggling with high wholesale power costs.=20 The Public Utilities Commission has approved average rate increases of 37= =20 percent for the heaviest residential customers and 38 percent for commercia= l=20 customers, and hikes of up to 49 percent for industrial customers and 15=20 percent or 20 percent for agricultural customers to help finance the state'= s=20 multibillion-dollar power buys.=20 Energy Secretary to speak at forum on California energy crisis=20 KAREN GAUDETTE, Associated Press Writer Friday, July 20, 2001=20 ,2001 Associated Press=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/07/20/= state 0328EDT0124.DTL< (07-20) 00:28 PDT SAN FRANCISCO (AP) --=20 U.S. Energy Secretary Spencer Abraham spent only a few minutes addressing= =20 California's power woes as he spoke to an audience of business leaders and= =20 city representatives who have seen blackouts roll through their factories a= nd=20 technology firms.=20 California's power woes will not be solved with conservation and increased= =20 reliance on renewable energy alone, Abraham told the crowd of local busines= s=20 leaders in echoing statements from other Bush administration officials.=20 "If you don't have enough energy supply you face the threat of blackouts,"= =20 Abraham said. He devoted the rest of his speech promoting key aspects of th= e=20 Bush administrations energy plan.=20 The nation needs to expand and improve its electricity transmission system = to=20 make sure power can get where it needs to go, unimpaired by political and= =20 geographical borders, Abraham said.=20 "It's not just enough to just have an adequate supply. It has to be=20 reliable," Abraham told the crowd.=20 Abraham urged the technology industry to focus on developing methods to mov= e=20 power more efficiently, and added that charging more for power at certain= =20 times of day would trigger more conservation than the government urging the= =20 public to cut back usage.=20 He praised the efforts of Washington State-based Puget Sound Energy to bill= =20 its ratepayers more if they used electricity during times of highest demand= =20 -- when electricity is most expensive -- to encourage them to conserve or= =20 shift their factory production or laundry to cheaper hours of the day.=20 Rather than relying solely on distant power plants for electricity, Abraham= =20 hopes homes and businesses will soon run their appliances on power they mig= ht=20 produce in their own backyards and parking lots.=20 Abraham arrived in San Francisco after telling a crowd of Hispanic communit= y=20 advocates in Milwaukee that the Bush administration saw partnerships with= =20 neighboring countries, including Mexico, as essential to developing untappe= d=20 energy sources.=20 Abraham's speeches around the country coincide with a House Republican effo= rt=20 to approve broad-ranging energy legislation before the end of the month whe= n=20 Congress leaves for its summer recess.=20 The GOP's energy package would offer billions of dollars in tax breaks and= =20 favors for the coal, oil and nuclear industries as well as conservation=20 incentives. That plan is similar and in some cases exceeds the energy=20 blueprint outlined by President Bush two months ago.=20 The package of legislation includes drilling in an Arctic wildlife refuge;= =20 incentives for technology to allow continued use of coal for power=20 production; and tax breaks for high-mileage hybrid gas-electric automobiles= .=20 It exceeds the Bush plan in a provision that gives some of the largest, mos= t=20 profitable oil companies a waiver on having to pay the government royalties= =20 on oil and gas taken from new lease areas in the Gulf of Mexico. Bush oppos= ed=20 the royalty waiver, which critics claim amounts to a $7.3 million windfall = to=20 the oil companies.=20 Vice President Dick Cheney is also visiting cities around the country=20 promoting the Bush energy plan, fearing it is losing steam as gas prices an= d=20 other energy costs continue to slide.=20 Both the Bush plan and the House's energy package have been criticized by= =20 environmental groups as being too soft on expanding energy efficiency and= =20 conservation programs and too easy on extending tax breaks to energy=20 companies.=20 Some of the criticisms stem from Cheney's refusal to identify all the=20 industry leaders who met with the energy task forced chaired by the vice=20 president which developed the Bush energy policy.=20 ,2001 Associated Press=20 Energy secretary in S.F. to push Bush program=20 Abraham says supply is the key, not conservation=20 David R. Baker, Chronicle Staff Writer <mailto:dbaker@sfchronicle.com< Friday, July 20, 2001=20 ,2001 San Francisco Chronicle </chronicle/info/copyright<=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2001/0= 7/20/ MN238054.DTL< In San Francisco to stump for President Bush's energy plans, Energy Secreta= ry=20 Spencer Abraham yesterday praised California's conservation efforts but=20 insisted that frugality alone would not solve the power crisis.=20 Abraham, speaking to a group of Bay Area business leaders, warned against t= he=20 perception that the crisis is lessening even though rolling blackouts haven= 't=20 materialized this summer as expected.=20 "There's a pervasive myth," he told people at the Bay Area Council's annual= =20 dinner at the San Francisco Hilton on O'Farrell Street. "It's the idea that= =20 we have no real energy crisis, or if we do, it can be overcome with=20 conservation."=20 He insisted that California and the rest of the country still need to=20 increase power production, decrease dependence on foreign oil and fix an=20 inadequate electricity transmission system -- key
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