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Sac Bee, Wed, 7/18: Lawmakers debate efforts to save Edison:=20 Competing bills range from a straight bailout to purchase of transmission= =20 lines Sac Bee, Wed, 7/18: PG&E sues state over seizure of long-term power contrac= ts=20 Sac Bee, Wed, 7/18: Energy Digest: Advocate attacks utility rescue plan Sac Bee, Wed, 7/18: Hour of decision: Who will pay for costly power of past= ,=20 future? (Editorial) SD Union, Tues, 7/17: Utility sues state seeking millions in seized power= =20 contracts=20 LA Times, Wed, 7/18: PG&E Sues State Over Contracts SF Chron, Wed, 7/18: Consumer prices up as energy costs moderate=20 SF Chron, Wed, 7/18: Contra Costa may upgrade 9 buildings=20 $1.7 million earmarked for conservation=20 SF Chron, Wed, 7/18: Lawmakers devise rival bailout plans for Edison=20 Push to come up with alternative to bankruptcy before recess=20 SF Chron, Wed, 7/18: News briefs on the California power crisis=20 SF Chron, Wed, 7/18: State's largest utility sues state seeking millions in= =20 power contracts seized by governor=20 Mercury News, Wed, 7/18: Surplus state power sold at loss=20 Mercury News, Wed, 7/18: Light bulb moment (Commentary) LA Times, Wed, 7/18: California Trading, Wholesale Power Boost Duke's=20 Earnings 27% ---------------------------------------------------------------------------= --- ---------------------------------------------------- Lawmakers debate efforts to save Edison: Competing bills range from a=20 straight bailout to purchase of transmission lines.=20 By Jim Sanders Bee Capitol Bureau (Published July 18, 2001)=20 Divided legislators began wrestling Tuesday with competing proposals to kee= p=20 one of California's largest private utilities, Southern California Edison,= =20 from going bankrupt.=20 Pressure is rising as Edison continues to struggle with more than $3.5=20 billion in debt and a tentative plan by Gov. Gray Davis to buy the utility'= s=20 transmission lines for $2.76 billion has attracted little support.=20 The question now is whether legislators will accept a modified version of t= he=20 governor's deal, will approve an entirely different rescue plan, or will=20 simply let Edison join Pacific Gas and Electric Co. in bankruptcy court.=20 "We're encouraged that at least there's activity and people are grappling= =20 with the issues," said John Fielder, an Edison senior vice president.=20 The Assembly's energy committee heard testimony on two of the competing=20 proposals Tuesday. The Senate's energy committee will take up the third pla= n=20 today.=20 The issue conceivably could be decided this week, since legislators are=20 scheduled to begin their summer recess Friday.=20 Of the three proposals under consideration, one would authorize state=20 purchase of Edison's transmission lines, one would provide an option to buy= ,=20 and one would simply tally Edison's debts and charge ratepayers to pay them= =20 off.=20 Some legislators favor doing nothing at all and letting a bankruptcy judge= =20 decide Edison's fate.=20 Steve Maviglio, a spokesman for Davis, said the Democratic governor support= s=20 anything that "comes close" to the tentative deal, hammered out in April, t= o=20 buy Edison's transmission lines.=20 Assemblyman Fred Keeley, D-Boulder Creek, and Assembly Speaker Robert=20 Hertzberg, D-Sherman Oaks, have proposed a rescue plan that would buy the= =20 lines at a lower price -- $2.4 billion -- and would modify the governor's= =20 plan substantially.=20 Key elements of the bill would allow the state to buy Edison's hydroelectri= c=20 assets if the transmission-line sale falls through, allow businesses to=20 contract with private suppliers for electricity in 2003, and commit the sta= te=20 to paying only 70 cents of every dollar owed by Edison to power generators.= =20 The deal also would provide California with ownership or conservation=20 easements to more than 20,000 acres of land, and would require Edison to=20 increase its supply of alternative energy -- such as wind or solar. The=20 proposal is not expected to spark new rate hikes, Keeley said.=20 The Senate plan, like the Keeley-Hertzberg proposal, would require large an= d=20 medium businesses to pay down much of Edison's debts.=20 The Senate plan dedicates up to $2.5 billion in large-user rates for debts= =20 involving banks and renewable energy sources known as "qualifying=20 facilities."=20 The plan, written by Sen. Byron Sher, D-Palo Alto, seeks to leave Edison wi= th=20 $1 billion in debt from generators and marketers for the utility to work ou= t=20 on its own.=20 The Senate plan would give the state a five-year option to buy Edison=20 transmission lines for book value -- about $1.2 billion.=20 Rather than provide conservation easements, the plan calls for Edison's=20 environmentally sensitive acreage to be acquired by the state or a trust.= =20 Remaining parts of the proposal are similar to the governor's deal.=20 A third proposal, pushed by several lawmakers, seeks to eliminate debt for= =20 Edison and PG&E. It would not involve transmission lines, conservation=20 easements or other such elements.=20 Advocates say Edison's debt stemmed largely from failed state regulatory=20 policies, so the state should simply charge consumers a monthly fee to pay = it=20 off.=20 "This is a straight bailout -- no hidden balls, no extras," said Assemblyma= n=20 Rod Wright, D-Los Angeles.=20 It is not yet known whether that monthly fee could fit within the existing= =20 rate structure. For home=0F'owners, the amount is estimated at $4 in the PG= &E=20 service area and $2 within Edison's boundaries.=20 Consumer groups are wary of the Edison rescue proposals, fearing the state= =20 will ultimately promise too much and get too little.=20 "When a supermarket and dairy farmer both are forced to pay a 10-year bailo= ut=20 tax, the consumer pays more for milk," said Doug Heller of the Foundation f= or=20 Taxpayer and Consumer Rights.=20 The Bee's Jim Sanders can be reached at (916) 326-5538 or jsanders@sacbee.c= om=20 <mailto:jsanders@sacbee.com<.=20 Kevin Yamamura of The Bee Capitol Bureau contributed to this report. PG&E sues state over seizure of long-term power contracts=20 By Dale Kasler Bee Staff Writer (Published July 18, 2001)=20 Reopening an old wound in California's energy crisis, Pacific Gas and=20 Electric Co. has sued the state over a group of low-cost energy contracts= =20 seized almost six months ago by Gov. Gray Davis.=20 The lawsuit, filed Monday in San Francisco Superior Court, stems from the= =20 collapse of the California Power Exchange and the state's entry into the=20 power-buying business in January.=20 PG&E and Southern California Edison had entered into a series of long-term= =20 purchase contracts through the exchange, a now-defunct market for buying an= d=20 selling electricity. But as both utilities collapsed financially and the=20 Power Exchange was clinging to life, the exchange seized the contracts and= =20 was about to auction them off for nonpayment of bills.=20 That's when Davis stepped in. Using his emergency powers, the governor=20 grabbed control of the contracts, saying he didn't want them resold at=20 inflated prices.=20 At the time, the exchange said the contracts were worth about $1 billion,= =20 with PG&E's share set at $348 million.=20 But it's likely their value has fallen along with the spot market price of= =20 electricity. Back when the governor seized them, PG&E's contracts were for= =20 $60 to $130 a megawatt-hour. That was a bargain at the time, and made the= =20 contracts very valuable. Now that spot prices have plunged, those contracts= =20 are no longer such a great deal.=20 PG&E's lawsuit didn't put a value on the contracts. Nevertheless, "the stat= e=20 has benefited from the contracts," said PG&E spokesman Ron Low. "We should = be=20 compensated."=20 The state had planned to pay for the contracts, at a price to be determined= =20 by a state government claims board, said Davis' spokesman Steve Maviglio. B= ut=20 he said the state also expected to be taken to court over the issue.=20 "We always thought we'd be fighting it out in a neutral forum," Maviglio=20 said. "This comes as no surprise."=20 The Bee's Dale Kasler can be reached at (916) 321-1066 or dkasler@sacbee.co= m=20 <mailto:dkasler@sacbee.com<. Energy Digest: Advocate attacks utility rescue plan (Published July 18, 2001)=20 The state's consumer advocate criticized Gov. Gray Davis' proposed rescue= =20 plan for San Diego Gas & Electric on Tuesday, calling it too generous to th= e=20 utility's shareholders.=20 The Public Utilities Commission's Office of Ratepayer Advocates called the= =20 proposed deal with SDG&E and its parent company, Sempra Energy, "clearly=20 excessive."=20 The advocate said the state goes too far in the core element of the rescue= =20 plan -- the $1 billion state purchase of SDG&E's transmission lines. The=20 advocate said the money would be better spent building or buying new=20 generating plants.=20 The plan must be approved by the Legislature and PUC. A similar plan, to bu= y=20 Southern California Edison's transmission lines, has run into numerous=20 roadblocks in the Legislature.=20 --Dale Kasler Hour of decision: Who will pay for costly power of past, future? (Published July 18, 2001)=20 In the next few days, state lawmakers and regulators must make some=20 unsettling choices about how to share the financial burdens of California's= =20 electricity debacle.=20 Looking backward, they will decide how -- or whether -- to erase $3.5 billi= on=20 in debts run up last year by Southern California Edison, when it bought=20 pricey power but couldn't pass the costs on to consumers. Looking ahead, th= ey=20 will choose who, if anybody, will get out of paying for expensive power=20 purchased by the state since the utilities ran out of cash last January.=20 In both cases, the principle guiding the decision ought to be the same: No= =20 one is blameless in getting California into this mess, and no group can=20 escape the pain of getting out of it.=20 Democratic lawmakers in the Assembly are searching in vain for ways to hide= =20 the real costs from voters. Their idea is to have the large users of power= =20 (mostly big businesses) pay off Edison's past debts. In return, businesses= =20 would get some freedom to shop for cheaper power deals in the future.=20 The problem is that there won't be much opportunity to shop in the coming= =20 years. That's because Gov. Gray Davis went out at the very peak of the mark= et=20 and bought up most of the state's future electricity supply before it went = on=20 sale. The strategy of locking most of California's power demand into=20 long-term contracts seemed ill-advised at the time, even more so now.=20 Now that the governor has done all this shopping, the Public Utilities=20 Commission must assure that electric customers will pay for all that=20 electricity -- $43 billion worth of power over the next decade or so. In=20 addition, the PUC must commit customers to repaying the state for the power= =20 it has already purchased this year -- many billions on top of that. The sta= te=20 borrowed from itself to buy all this power, and is banking on a bond sale t= o=20 pay off this debt. Unless a portion of the rate customers pay is dedicated = to=20 repaying those bonds, they can't be sold.=20 This web of regulation, contracts and finance is so complex, so huge, it's= =20 hard to see how the energy leaders in a few days will find a graceful, fair= =20 solution. But for a political compromise to work, all the interests involve= d=20 must take some pain.=20 Southern California Edison must swallow some of its debt. Power generators= =20 and the state must renegotiate some of their long-term contracts so that th= e=20 generators give back some of the bounty they reaped by market manipulation.= =20 And no consumer, big or small, should be allowed to avoid paying the true= =20 costs of the power they use. In this reckoning, there's no easy way out for= =20 anyone -- and especially not for the elected officials who must deliver the= =20 bad news. Utility sues state seeking millions in seized power contracts =20 \ objattph=20 By David Kravets ASSOCIATED PRESS July 17, 2001 SAN FRANCISCO =01)=20 California's largest utility sued the state Tuesday seeking reimbursement o= f=20 millions of dollars in energy contracts the governor seized Jan. 31. San= =20 Francisco-based Pacific Gas & Electric Co. said it "has received no=20 compensation for the damage to its property," according to a suit filed in= =20 San Francisco Superior Court. The suit came as PG&E, which filed for=20 bankruptcy protection in April, struggles to repay $14.4 billion in debt to= =20 thousands of creditors. Invoking constitutionally vested powers, Gov. Gray= =20 Davis seized the energy contracts to keep the California Power Exchange fro= m=20 liquidating them. The now-defunct exchange, which was the state's middleman= =20 for the buying and selling of power, wanted the contracts for itself to=20 recoup hundreds of millions in unpaid power buys that PG&E owed it. The=20 governor's office acknowledged that California owes PG&E for the contracts,= =20 an amount that Davis wants a judge to determine. At the time they were=20 seized, the state estimated their value at $160 million, while the power=20 exchange priced them at $347 million. "We seized the contracts to have=20 reasonable priced power and expected that price to be set in a neutral=20 forum," said Steve Maviglio, the governor's spokesman. It's not easy to=20 determine their value. Using the contracts, the state buys electricity at a= =20 set price, and can avoid the sky-high prices it has to pay for power bought= =20 at the last minute. Therefore, the contracts' value changes with the volati= le=20 price of electricity. "We believe the state has benefited from the value o= f=20 our contracts, and as a result we should be compensated," PG&E spokesman Ro= n=20 Low said. Low declined to place a value on the contracts. The contracts i= n=20 question, which the state is now using to buy electricity because the=20 utility's bad credit rating restricts it from buying its own, promise power= =20 at rates below those being charged today by power generating companies. =20 Because of the shaky financial pictures of PG&E, Southern California Edison= =20 Co. and San Diego Gas & Electric Co., the state in January began buying muc= h=20 of the electricity to supply the ratepayers of those utilities. The power = is=20 sold to ratepayers through the utilities, which reimburse the state through= =20 consumers' bills. But, because of energy pricing rules that prompted the=20 utilities' unstable financial footing, current rates are not enough to repa= y=20 the state. To recoup its losses, the state is expected to sell $8 billion o= r=20 more in bonds to be repaid through increased consumer power rates. Under= =20 California's 1996 deregulation plan, the state's utilities sold many of the= ir=20 power plants and were forced to buy electricity on the market through the= =20 newly created power exchange. As demand mushroomed and supplies became=20 scarce, the utilities began paying substantially more for electricity than= =20 deregulation rules allowed them to collect from consumers. The case is PG&= E=20 v. California, 322921.=20 PG&E Sues State Over Contracts From Bloomberg News July 18 2001 SAN FRANCISCO -- PG&E Corp.'s Pacific Gas & Electric Co. utility sued=20 California on Tuesday, saying it wants to be paid for the wholesale=20 electricity contracts the state seized in January. Gov. Gray Davis took away Pacific Gas' 12-month forward contracts to ensure= a=20 sufficient and continuous supply of electricity for the state. At the time,= =20 California estimated the contracts were worth $150 million. Pacific Gas claims the contracts had "significant value" because they allow= ed=20 the utility to receive power for less than current market rates. "Although= =20 PG&E has demanded just compensation from the [state], PG&E has received no= =20 compensation for the damage to its property," the utility said in court=20 papers filed Monday in San Francisco Superior Court. The company, which filed for Chapter 11 protection in April, is seeking=20 damages and attorney fees. The state claimed in January that the contracts= =20 would have delivered enough electricity to power 100,000 to 500,000 homes f= or=20 6 cents to 13 cents per kilowatt-hour. Officials in the governor's office did not immediately return calls seeking= =20 comment.=20 Copyright 2001, Los Angeles Times <http://www.latimes.com<;=20 Consumer prices up as energy costs moderate=20 LEIGH STROPE, Associated Press Writer Wednesday, July 18, 2001=20 ,2001 Associated Press=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/07/18/= finan cial0837EDT0023.DTL< (07-18) 05:37 PDT WASHINGTON (AP) --=20 Consumer inflation edged up last month as electricity prices continued to= =20 surge, while the cost of gasoline and other energy products retreated.=20 The Labor Department reported Wednesday that the Consumer Price Index, the= =20 government's most closely watched inflation measure, climbed by a seasonall= y=20 adjusted 0.2 percent in June. The index was up 3.8 percent for the year.=20 The new reading on consumer prices matched analysts' expectations.=20 The "core" rate of inflation, which excludes volatile energy and food price= s,=20 rose 0.3 percent in June compared with just 0.1 percent in May.=20 ,2001 Associated Press=20 Contra Costa may upgrade 9 buildings=20 $1.7 million earmarked for conservation=20 Jason B. Johnson, Chronicle Staff Writer <mailto:jbjohnson@sfchronicle.com< Wednesday, July 18, 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= 7/18/ MNC199898.DTL< Contra Costa will spend as much as $1.7 million to conserve energy at the= =20 county's nine worst "energy hog" buildings under a proposal approved=20 yesterday by the Board of Supervisors.=20 The measure is part of a larger effort the board in March agreed to underta= ke=20 to reduce the county's energy use by up to 10 percent.=20 A private company will install upgraded heating, ventilation and air=20 conditioning control systems at the nine buildings, resulting in savings of= =20 just under $200,000 a year.=20 "What we've done is pick our energy hogs," said Bart Gilbert, the county's= =20 general services director. "To start the process of making our buildings mo= re=20 energy efficient."=20 County officials had no difficulty in identifying the hogs, which tended to= =20 be large buildings that serve a variety of uses and are open as much as 24-= =20 hours a day, seven days a week, said Gilbert.=20 Eight of the buildings are in Martinez, the county seat, and one is in=20 Antioch. They include the Bray Courts building in downtown Martinez,=20 sheriff's offices and morgue, and the Employment and Human Services buildin= g=20 in Antioch.=20 One energy waster is the 120,000-square-foot Summit Center, an office=20 building on Arnold Drive in Martinez that the county acquired last year.=20 The building's cooling system activates at a particular setting -- 76=20 degrees. So it shuts down completely when the temperature reaches below tha= t=20 setting and won't turn on until it reaches about 79 degrees.=20 But new digital technology controls allow the system to gradually reduce or= =20 increase power without having to shut down, which saves energy.=20 "When you turn the system on everything doesn't kick in, everything doesn't= =20 come on full speed," said Gilbert. "That's a tremendous savings."=20 The county will contract with Syserco Inc. of Fremont to install the new=20 control systems from July through June 30, 2002.=20 County officials believe that the plan will reduce demand by 700,000 kilowa= tt=20 hours and pay for itself in about five years by reducing energy costs.=20 The county has applied for a low-interest loan from the state's Energy=20 Department that would cover about half the plan's costs. It is one of sever= al=20 Bay Area communities seeking such loans during the energy crisis.=20 In the past two months, state officials have received $50 million worth of= =20 new loan applications from city and county governments.=20 Before the energy crisis, the department would average between $5 and 10=20 million in loan applications, said Virginia Lew, project manager for the=20 department's Energy Partnership Program.=20 San Francisco is set to receive $5 million in loans for replacing inefficie= nt=20 lighting at San Francisco General Hospital and city traffic signals.=20 Solano County will receive $1.1 million for lighting and efficiency project= s=20 similar to those in Contra Costa, while Santa Rosa was given $1.5 million f= or=20 water and wastewater treatment facility upgrades.=20 Oakland officials are awaiting approval of the city's application for about= =20 $400,000 for a combination of lighting and ventilation efficiency projects.= =20 e-mail Jason B. Johnson at jbjohnson@sfchronicle.com=20 <mailto:jbjohnson@sfchronicle.com<.=20 ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 17=20 Lawmakers devise rival bailout plans for Edison=20 Push to come up with alternative to bankruptcy before recess=20 Lynda Gledhill, Chronicle Sacramento Bureau <mailto:lgledhill@sfchronicle.c= om< Wednesday, July 18, 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= 7/18/ MN76320.DTL< Sacramento -- Lawmakers are struggling this week to agree on a plan to keep= =20 Southern California Edison from declaring bankruptcy as they rush to comple= te=20 business before Friday's scheduled summer recess.=20 After months of talking about a solution and dismissing one agreed to by=20 Edison and Gov. Gray Davis, lawmakers now have several competing proposals = to=20 consider.=20 A plan introduced last week by Assembly Speaker Robert Hertzberg, D-Sherman= =20 Oaks (Los Angeles County), was debated for several hours yesterday, along= =20 with a GOP-backed alternative by Assemblyman Roderick Wright, D-Los Angeles= .=20 The two plans, which are scheduled for votes today in the Assembly Energy= =20 Costs and Availability Committee, take sharply different approaches:=20 -- Hertzberg's plan would pay $2.4 billion for Edison's transmission lines = to=20 help cover the utility's estimated $3.5 billion debt. The utility would be= =20 allowed to pay off its remaining debt by issuing bonds.=20 The utility would repay the bonds using ratepayer money. For the first two= =20 years, all customers would pay for the debt, but after that the largest use= rs=20 would pay off the rest.=20 -- Wright calls his plan a "straight bailout." It would allow the utility t= o=20 issue bonds to cover all of its debt and impose a $2 a month rate increase= =20 for all users until the debt is paid.=20 The Senate also introduced its own plan. A bill by Sen. Byron Sher, D-Palo= =20 Alto, would give the state a five-year option to buy the transmission lines= =20 and would have the state back only $2.5 billion of the utility's debt.=20 Since Davis announced a deal with Edison earlier this year, lawmakers,=20 business groups and consumer advocates have all expressed reservations with= =20 one aspect or another of it. Opposition has usually focused on the state=20 purchase of Edison's transmission lines.=20 The flurry of activity this week is an effort by lawmakers to take some kin= d=20 of vote before they adjourn. The Edison agreement has an Aug. 15 deadline f= or=20 approval by the Legislature.=20 Brian Bennett, a spokesman for Edison, said creditors view that date as=20 extremely important.=20 "We're as close to bankruptcy as our creditors want us to be," he said. "Is= =20 it a drop dead date? I don't know, but it is clearly an important date."=20 Consumer groups have denounced Wright's plan, and at least one calls=20 Hertzberg's proposal just another bailout and said it would cost California= ns=20 $6.7 billion over the next 10 years.=20 "We cannot be seduced by big businesses paying a bailout tax," said Doug=20 Heller, a consumer advocate with the Foundation for Taxpayer and Consumer= =20 Rights. "At the end of the day, we know businesses will pass these costs on= =20 to the consumer."=20 Included in the 76-page Hertzberg bill are provisions that would allow larg= e=20 companies to buy their power directly from a provider instead of going=20 through the utility after 2003.=20 But a coalition of large business groups also said they are strongly oppose= d=20 to the plan because it does not allow for immediate direct access.=20 "Ultimately, we think our companies buying power for themselves is the best= =20 solution," said Jack Stewart, president of the California Manufacturers and= =20 Technology Association. "If businesses think there's a light at the end of= =20 the tunnel where they see lower rates coming, they might tough it out and= =20 stay."=20 Wright argues that the beauty of his proposal is that it could easily apply= =20 to the Pacific Gas and Electric Co. service area if the company wanted to u= se=20 it as a way out of bankruptcy court. He estimates that PG&E customers would= =20 pay about $4 a month to help the company pay off its debt.=20 "This is a straight bailout," Wright said. "This is not a hidden bill. Ther= e=20 are extras."=20 Wright said he believes his constituents would rather pay an extra $2 than = be=20 unemployed because their business left the state due to high energy costs.= =20 Business groups said the idea makes sense.=20 "What good would it do to have your electricity bill reduced by $10 or $15= =20 but not have a job?" said Bill Hauck, president of the California Business= =20 Roundtable.=20 Whatever plan is eventually authorized would be used to convince the PG&E= =20 bankruptcy judge to follow a similar model for that company, giving the sta= te=20 those transmission lines as well.=20 The purchase of the transmission lines has been at the center of Davis' pla= n.=20 He argues that the purchase will give the state the ability to upgrade the= =20 system, allowing a better flow of power between Northern and Southern=20 California and a decreased chance of blackouts.=20 But opponents argue that the state is getting one-third of a complicated=20 system that will cost billions to upgrade and operate.=20 "It's like buying a car with three wheels -- it is not going to get out of= =20 the lot," consumer advocate Heller said.=20 E-mail Lynda Gledhill at lgledhill@sfchronicle.com=20 <mailto:lgledhill@sfchronicle.com<.=20 ,2001 San Francisco Chronicle </chronicle/info/copyright< Page A - 14=20 News briefs on the California power crisis=20 Wednesday, July 18, 2001=20 ,2001 Associated Press=20 URL:=20 <http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/07/18/= state 0913EDT0146.DTL< (07-18) 06:13 PDT (AP) -- diuriegr1 ?By The Associated Press?SAN DIEGO (AP)= -- County supervisors want to eliminate a $100 fee for ?installing solar p= ower systems to spur interest in the alternative energy ?source. ?Superviso= r Ron Roberts proposed waiving the fee at the board's Tuesday ?meeting. A n= ew ordinance may be ready for the supervisors' approval in two ?months. ?Th= e fee is charged to homeowners who live in the unincorporated areas of the = ?county. Solar power systems for hot water heaters can cost about $4,000 an= d ?home units can cost about $26,000. ?The county has been issuing more per= mits for solar units this year and ?expects to issue 250 permits by Decembe= r. Two years ago, the county issued ?only 12. ?TEMECULA, Calif. (AP) -- An = Indian burial ground sits in the way of a ?proposed power-line route and tr= ibal members have asked U.S. Sen. Barbara ?Boxer to help preserve the site.= ?Boxer, D-Calif., last week introduced an amendment to the Interior ?Appro= priations bill that would place more than 700 acres of land owned by the ?P= echanga tribe in a federal trust. If approved, the legislation would allow = ?the tribe to bypass the procedure review by the Bureau of Indian Affairs. = ?San Diego Gas & Electric wants to run a 500,000-volt power line through th= e ?area. The $271 million route would run through southwestern Riverside Co= unty ?and link the utility's grid with one operated by Southern California = Edison. ?SDG&E officials said the proposed federal legislation wouldn't der= ail the ?company's project. ?"I don't think it jeopardizes the project," sa= id SDG&E spokeswoman Jacqueline ?Howells. "There are variations of our line= that don't require that land, and ?there are alternatives further west." ?= The state's Public Utilities Commission must still approve the project. ?Th= e tribe recently purchased the site, which has one of the state's oldest ?o= ak trees. It is also home to several village sites and areas used for ?crem= ation. Tribal chairman Mark Macarro said the amendment wasn't ?specifically= meant to block the power line project but rather to preserve the ?land fro= m development. ?,2001 Associated Press ???????State's largest utility sues = state seeking millions in power contracts seized ?by governor ?DAVID KRAVET= S, Associated Press Writer?Wednesday, July 18, 2001 ?,2001 Associated Press= ?URL: ?<http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/200= 1/07/18/natio?nal0848EDT0542.DTL<?(07-18) 05:48 PDT SAN FRANCISCO (AP) -- ?= California's largest utility has sued the state seeking reimbursement of ?m= illions of dollars in energy contracts seized by the governor. ?San Francis= co-based Pacific Gas & Electric Co. "has received no compensation ?for the = damage to its property," the company said in a lawsuit filed Tuesday ?in Sa= n Francisco Superior Court. ?PG&E filed for bankruptcy protection in April = and is struggling to repay ?$14.4 billion to thousands of creditors. ?Gov. = Gray Davis seized the energy contracts on Jan. 31 to keep the California ?P= ower Exchange from liquidating them. The now-defunct exchange, which had ?b= een the state's middleman for buying and selling power, wanted the contract= s ?to recoup hundreds of millions of dollars that PG&E owed it. ?The govern= or's office acknowledged that California owes PG&E for the ?contracts, an a= mount that Davis wants a judge to determine. At the time they ?were seized,= the state estimated their value at $160 million, while the power ?exchange= priced them at $347 million. ?"We seized the contracts to have reasonable = priced power and expected that ?price to be set in a neutral forum," said S= teve Maviglio, the governor's ?spokesman. ?Under the contracts, the state b= uys electricity at a set price rather than ?paying higher prices for power = bought at the last minute. Therefore, the ?contracts' value changes with th= e volatile price of electricity. ?"We believe the state has benefited from = the value of our contracts, and as a ?result we should be compensated," PG&= E spokesman Ron Low said. ?Low declined to place a value on the contracts. = ?,2001 Associated Press ?????Surplus state power sold at loss ?Posted at 11= :50 p.m. PDT Tuesday, July 17, 2001 ?BY JOHN WOOLFOLK ??Mercury News ???Sta= te officials who bought power contracts averaging $138 per megawatt-hour ?f= or this month are selling some of the power back for as little as $1 per ?m= egawatt-hour, traders say. ?After scrambling this spring for every megawatt= it could buy to stave off ?summer blackouts, cool weather and decreased de= mand have left the state ?holding more power than it needs and selling the = surplus for whatever it can ?get. ?State officials won't say how much they = are selling the power for, but ?acknowledged unloading surplus electricity.= ?``We're seeing certain times of the day where we may not need power that = we ?previously thought we needed, and we're selling it on the open market,'= ' said ?Oscar Hidalgo, spokesman for the state Department of Water Resource= s. ``We're ?probably moving a little more power than we anticipated, but I = don't think ?anybody anticipated a July like we're experiencing.'' ?Utiliti= es routinely sell surplus contract power when demand is lower than ?expecte= d. But the state's recent sell-off could fuel criticism that ?California bo= ught too much power at too high a price, fearing rolling ?blackouts and soa= ring prices this summer. ?``There's a painful lesson to be learned when you= overbuy when supplies are ?tight,'' said Gary Ackerman, executive director= of the Western Power Trading ?Forum. ``Anybody can lose money in this busi= ness, and the state of California ?is getting a taste of that.'' ?The state= in the past week has sold anywhere from 10 to 20 percent of its ?available= power, Hidalgo said. On Tuesday, the state had up to 40,000 ?megawatts ava= ilable, while demand hovered around 32,000 megawatts, according ?to the pow= er grid operator. ?Must be sold ?Because electricity cannot be stored, powe= r purchased in contracts for a ?later date would be wasted if not used or s= old. ?``It's better than losing it altogether,'' Hidalgo said. ``The way th= e ?electricity business is set up, you either use it or move it. You can't = put ?it in a bottle and put it on a shelf.'' ?State officials would not say= how much they've made in sales to offset ?purchase costs, citing concerns = about jeopardizing their bargaining position. ?According to California Ener= gy Markets, a trade weekly, the state was ?unloading power last Thursday at= $25 per megawatt-hour. Ackerman said the ?state has been selling power for= as little as $1 to $5 per megawatt-hour. ?Power was selling on the spot ma= rket for $20 to $40 per megawatt-hour ?Tuesday. ?The state, which assumed t= he role of power buyer for California's biggest ?utilities in January, expe= cted to sell surplus power from time to time, ?although not quite this much= , Hidalgo said. Even with demand down, the state ?still is buying more powe= r than it sells, he said. ?With temperatures throughout the West unseasonab= ly low in recent weeks, other ?utilities also are selling their surplus pow= er at a loss. ?``That's an accepted operating risk we always assume,'' said= Scott Simms, ?spokesman for Portland General Electric, adding that recent = federal price ?caps are lower than what the Oregon utility paid. ``Sometime= s you gain, ?sometimes you lose. Hopefully, if you planned well, you end up= winning.'' ?Whether the state planned well or overbought is hard to say. T= he contracts ?could prove invaluable if another heat wave threatens blackou= ts. Ackerman ?likened power contracts to insurance -- a prudent move to gua= rd against ?shortages and price spikes, even if it turns out you don't need= it. ?At the very least, the current situation underscores the importance o= f ?weather in the volatile electricity market. Traders pore over forecasts = and ?even buy weather insurance, Ackerman said. ?Demand and prices have bee= n so low that some energy companies are shutting ?down the small power plan= ts called ``peakers.'' ?Hidalgo said the state has no regrets. ?``What we w= ere doing was making sure we had an available supply with these ?contracts,= '' Hidalgo said. ``We were facing scarcity in the market early on. ?There w= asn't enough supply to fulfill the need. What the contracts have done ?is o= bligated the producers to give us power.'' ?Blackout threat fades ?The stat= e's daily power costs have fallen from more than $100 million in May ?to le= ss than $26 million in July, Hidalgo said, and there hasn't been a ?blackou= t in two months. While some of the surplus power is sold on the ?market, it= is also being traded to Northwestern hydropower utilities to cover ?past d= ebts, he said. ?``This is not a bad position for us to be in,'' Hidalgo sai= d, adding that the ?situation could always take a turn for the worse. ``We = can't lose sight of ?the fact that we're still in an emergency situation. I= f this was routine, ?this crisis would be over. We're not out of the woods.= '' ???Contact John Woolfolk at jwoolfolk@sjmercury.com ?<mailto:jwoolfolk@s= jmercury.com< or (408) 278-3410. ????????Light bulb moment ?Published Wedne= sday, July 18, 2001, in the San Jose Mercury News ?NOW it all makes sense. = Dick Cheney hasn't been pushing to drill for more oil ?and gas because of h= is pals in the energy business. It's because of his ?electric bill. ?The ve= ep mansion, it turns out, consumes electricity the way a 1965 ?Oldsmobile b= urned gas. The bill for this year -- $186,000 -- shouldn't have ?to come ou= t of Cheney's budget, the White House says. It should be paid by ?the Navy,= which owns the property. ?No way, we say -- unless the house lights have s= ome national defense value. ?Perhaps blinding the pilots of incoming fighte= r jets? ?The Bush team says California should just face up to market prices= . So why ?not Cheney? ?But there is an alternative, as we've discovered out= here. Conservation. It ?works. Really. ?Cheney's got a 33-room house. Do t= hey all have to be lit up all the time? ?????Business; Financial Desk ?Cali= fornia Trading, Wholesale Power Boost Duke's Earnings 27%?THOMAS S. MULLIGA= N??07/18/2001 ?Los Angeles Times ?Home Edition ?Page C-2 ?Copyright 2001 / = The Times Mirror Company ?Pushed by the explosive growth of its trading and= wholesale-power businesses, ?Duke Energy Corp. on Tuesday reported a 27% i= ncrease in second-quarter ?profit, narrowly topping Wall Street estimates. = ?Duke's net income was $419 million, or 53 cents per share, in the quarter = ?ended June 30, up from $329 million, or 44 cents, in the year-ago quarter.= ?The consensus estimate of industry analysts was 52 cents per share. ?Reve= nue for the quarter leaped 43% to $15.6 billion. ?Shares rose 38 cents to c= lose at $42.03 on the New York Stock Exchange. ?Charlotte, N.C.-based Duke,= like other out-of-state independent power ?producers, is under fire from G= ov. Gray Davis for allegedly overcharging for ?electricity from its Califor= nia generating plants. ?Duke does not break out its California results, but= its profits from soaring ?spot-market prices in California during the quar= ter probably amounted to no ?more than a penny or two per share, according = to analyst Jeff Gildersleeves ?of Argus Research in New York. ?California a= ccounts for about 10% of Duke's U.S. wholesale-power business, ?and about 9= 0% of its California power is sold through long-term contracts ?rather than= on the spot market, the company has said. ?Those long-term contracts are a= source of worry for investors, Gildersleeves ?said. Neither Duke nor the s= tate has disclosed whether the contract prices ?can be adjusted downward if= spot-market prices fall, he said. If the prices ?are not firm, it could re= present a risk to future profits, he added, ?especially if spot prices cont= inue to fall. ?Duke's North American Wholesale Energy business unit posted = second-quarter ?operating earnings of $251 million, up 128% from $110 milli= on a year earlier. ?Analyst Timothy M. Winter of A.G. Edwards in St. Louis = said the overall ?quarter was "very good," considering that Duke's earnings= from its ?regulated-utility business in North and South Carolina actually = were flat ?because of mild weather, a slowing economy and increased costs a= ssociated ?with some nuclear generating facilities being out of operation. = ???PHOTO: Duke, which owns a plant in Morro Bay, beat analyst estimates.; ;= ?PHOTOGRAPHER: CAROLYN COLE / Los Angeles Times ?
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