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Thanks, Jean AP Online, June 12, 2001; Tuesday, 3:38 AM, Eastern Time, Domestic, ????non-Washington, general news item, 673 words, Pressure Eases for Calif. ????Governor, ALEXA HAUSSLER, SACRAMENTO, Calif. Copley News Service, June 12, 2001, Tuesday, State and regional, 910 words, ????Public furious at 19 percent rate hike;PUC says its hands are tied, Craig D. ????Rose, SAN DIEGO Los Angeles Times, June 12, 2001 Tuesday, Home Edition, Page 2, 203 words, ????California; ; Williams May Be Required to Refund $11 Million for Power, ????Nancy Rivera Brooks Los Angeles Times, June 12, 2001 Tuesday, Home Edition, Page 1, 581 words, ????Edison Devises Complex Debt Restructuring Plan; Energy: New subsidiary ????created to sell bonds would issue the proceeds as dividends to the parent of ????utility SCE., JERRY HIRSCH, TIMES STAFF WRITER Los Angeles Times, June 12, 2001 Tuesday, Home Edition, Page 1, 828 words, ????Davis Eases Power Plant Pollution Rules; Electricity: Order will allow more ????production from heavily polluting 'peaker' facilities., DAN MORAIN, TIMES ????STAFF WRITER, SACRAMENTO The New York Times, June 12, 2001, Tuesday, Late Edition - Final, Section ????A; Page 24; Column 1; National Desk, 886 words, Bush to Insist on Ethanol ????Use in California, By KATHARINE Q. SEELYE, WASHINGTON, June 11 The San Francisco Chronicle, JUNE 12, 2001, TUESDAY,, FINAL EDITION, NEWS;, ????Pg. A1, 760 words, Air standards lowered for power plants; ???DAVIS ORDER: ????They can run overtime, Robert Salladay, Lynda Gledhill The San Francisco Chronicle, JUNE 12, 2001, TUESDAY,, FINAL EDITION, NEWS;, ????Pg. A1, 898 words, U.S. panel steps up probe of supplier; ???NATURAL GAS: ????Charges of price fixing, Bernadette Tansey, Zachary Coile The Washington Post, June 12, 2001, Tuesday, Final Edition, EDITORIAL; Pg. ????A24, 203 words, Whining in the Dark Chicago Tribune, June 12, 2001 Tuesday, NORTH SPORTS FINAL EDITION, Tempo; ????Pg. 6; ZONE: C; CHANNEL SURFING., 439 words, 'Blackout' sheds some light on ????spike in energy costs, By Steve Johnson, Tribune media critic. The Associated Press State & Local Wire, June 12, 2001, Tuesday, BC cycle, ????6:25 AM Eastern Time, Business News, 675 words, Political pressure eases for ????California Gov. Gray Davis as power prices dip, By ALEXA HAUSSLER, ????Associated Press Writer, SACRAMENTO, Calif. The Associated Press State & Local Wire, June 12, 2001, Tuesday, BC cycle, ????3:12 AM Eastern Time, State and Regional, 510 words, State seeks electric ????rate hike for SDG&E customers, By SETH HETTENA, Associated Press Writer, SAN ????DIEGO Copyright 2001 Associated Press ??????????????????????????????????AP Online ?????????????????June 12, 2001; Tuesday 3:38 AM, Eastern Time SECTION: Domestic, non-Washington, general news item LENGTH: 673 words HEADLINE: ?Pressure Eases for Calif. Governor BYLINE: ALEXA HAUSSLER DATELINE: SACRAMENTO, Calif. BODY: ???Gov. Gray Davis is getting his first glimpse of relief after months defending the state's soaring electricity prices and rolling blackouts. ??A series of events from plummeting wholesale energy and natural gas prices to the unexpected shift in the U.S. Senate has Davis declaring that the state has ''turned a corner'' in its power woes. ??But the governor, whose popularity ratings have taken a dive in recent months, must still weather steaming summer months and homeowner reactions to record-high electricity bills. ??''Some irreparable damage has been done to his image and his popularity,'' said Bruce Cain, director of the Institute of Governmental Studies at the University of California at Berkeley. ??Two recent statewide polls showed that as electricity rates climbed, Davis' approval rating plummeted to its lowest marks since he took office in 1998. ??Davis, who is up for re-election next year, is battling his image as a middle-of-the-road leader and has adopted a confrontational style to deal with the power crisis. ??In May, he hired high-powered crisis control specialists Chris Lehane and Mark Fabiani, trained at the Clinton White House and in the Al Gore presidential campaign. He declared ''war'' on Texas-based energy wholesalers. ??Davis also attacked the Bush administration for opposing price controls on wholesale electricity. ??Soon after, the crisis-weary governor's fortunes shifted. ??Vermont Sen. James Jeffords announced he would defect from the GOP, handing the majority and committee chairmanships to Democrats who favor price caps on wholesale electricity. ??President Bush, criticized for failing to visit California since taking office, traveled to the state and met with Davis. ??When the state Energy Commission announced that Californians had cut power use by 11 percent in May over the previous year, Davis declared a personal victory. He had called for residents and businesses to conserve 10 percent. ??Last week, wholesale electricity prices plunged from more than $500 a megawatt hour to about $50 a megawatt hour their lowest level in a year while natural gas prices also dropped. ??Some experts attributed the price spiral to conservation efforts and mild Western temperatures, which have reduced the need to run air conditioners. ??But the governor's aides argue the declining prices are a direct result of Davis signing long-term contracts with energy providers. ??''We may still have some difficult days ahead of us in the summer but it's pretty clear that the governor's strategy has now borne some fruit,'' said Garry South, chief campaign adviser to Davis. ??Still, the energy crisis has battered Davis, once considered a potential presidential contender in 2004. ??California, heavily reliant on the technology sector, is facing its toughest budget crunch in years. ??Critics argue Davis has called a premature victory in the energy crisis. The state has yet to sell $13.4 billion worth of bonds to repay the state for power buys, and California relies heavily on the spot power market to make up for electricity shortages. ??California Republicans, meanwhile, are fortifying their own campaign strategy. The state party hired veteran consultant Rob Stutzman to counter Davis' hiring of Lehane and Fabiani. ??And Stutzman says Davis has little for which to take credit. ??''The governor is like a little kid that breaks his mother's china and then wants credit for gluing half of it back together,'' Stutzman said. ??Davis' short-term fortunes look promising, however. The state Democrats control both houses of the Legislature and all but one statewide office. ??Davis also holds strong leads over the two Republicans who have announced they will challenge him, Secretary of State Bill Jones and Los Angeles businessman William E. Simon Jr. ??Whoever runs against Davis will find an incumbent with more than $26 million raised for next year's election and a team of campaign advisers already using focus groups and polling to gauge public reaction to the power crisis. LOAD-DATE: June 12, 2001 ??????????????????????????????4 of 48 DOCUMENTS ??????????????????????Copyright 2001 Copley News Service ?????????????????????????????Copley News Service ????????????????????????????June 12, 2001, Tuesday SECTION: State and regional LENGTH: 910 words HEADLINE: Public furious at 19 percent rate hike;PUC says its hands are tied BYLINE: Craig D. Rose DATELINE: SAN DIEGO BODY: ??California tends to unanimity when it comes to electricity deregulation: The legislature passed it unanimously in 1996, and people who testified at rate hike hearings yesterday voiced unanimous opposition. ??Speakers at public hearings in San Diego and El Cajon alternately demanded and implored the California Public Utilities Commission to reject an average 19 percent rate hike that the commission says it is obligated by state law to pass along to SDG&E electricity customers. ??Perhaps the loudest applause from an audience that approached 100 at the downtown San Diego hearing yesterday afternoon came in response to calls for the state to exercise its power of eminent domain and seize power plants. ??Guy Mock, a Navy enlisted man who was among those calling for such takeovers, said many in military service are finding rising utility costs a significant burden, pushing some to use food stamps. ??''Remember, people in the military have no choice about being here,'' Mock said. ??Waving computer printouts from research he said he conducted on the Internet, Mock said generators were charging outrageous prices, noting in particular the recent revelation that at one point Duke Energy had charged nearly $3,900 a megawatt-hour for its electricity. Last spring, a megawatt-hour sold for less than $30. ??''Let's take it over,'' Mock suggested as a solution to the power crisis. ??An overflow crowd of about 250 people attended a hearing at the El Cajon Community Center that at times took on the flavor of a church revival. Audience members cheered, clapped and called out comments in support of almost 50 people who spoke at the hearing. ??''There are a couple of hundred here who are very irritated,'' said Chris Medicus of El Cajon. He said he has been conserving energy even before calls to cut back on power use. ??''Who's going to do something for me since I can conserve no more?'' ??Edy Mason, a retired nurse who lives in El Cajon, said she can't afford her rising rent and utility bills on the $732 she receives each month. ??''This is legal rape. I'm tired of being raped. This has to stop,'' Mason said. ??Dan McKenna, chief of the Rural Fire Protection District that serves unincorporated areas of the county, said fire and emergency medical services will be hurt if there is a rate increase. Fire departments are already having to spend large portions of their budgets on energy costs, he said. ??''That's unacceptable, sir,'' he said as members of the audience clapped and called out, ''That's right.'' ??Despite the appeals for tough action, Carl Wood, the only member of the California Public Utilities Commission in attendance at yesterday's hearings, insisted that the commission was obligated to pass along the proposed 19 percent rate hike demanded by the California Department of Water Resources. ??Under legislation passed earlier this year, the department began purchasing power for state utility customers. The same legislation gave the department the right to self-judge the reasonableness of its rate hike requests, a function formerly allocated to the utilities commission. ??That leaves the PUC with a limited role in the rate hike process, Wood acknowledged. ??''We are here to spread the pain,'' said the commissioner, who noted that customers who use 130 percent or less of the baseline amount are shielded from any rate hike by state law. The baseline allowance, which is printed on utility bills, is a subsistence amount of electricity that varies by location and climate. ??But Wood also said later, ''We have to (raise rates) if we want to keep power flowing.'' ??San Diego County Supervisor Dianne Jacob was not persuaded. Jacob said the duty of the commission is to ensure just and reasonable utility rates for Californians. ??''The only way for the commission to fulfill its mission is to disobey the (water department),'' Jacob said. ''I urge the commission to refuse the $915 million rate increase request from the DWR.'' ??Nearly all other speakers agreed, with many blasting the notion that consumers should be forced to pay for the fallout of a deregulation plan they said was designed by major energy corporations for their own benefit. ??''They spent the money, they had the party and now they are asking the little guys to clean up the mess,'' said Frank Jordan. ??Another speaker said the utilities commission would find options to the rate hike if it tapped into public outrage over the electricity crisis. ??''Don't throw more money at the problem,'' said Robert Womack of La Mesa. ''Give us the chance to throw our weight around and we have plenty of weight to throw around.'' ??Holly Duncan of San Diego was as upset over the rate hike process as she was over the increase itself. Duncan noted that the water department which in effect ordered the rate hike was declining to release its power purchase contracts. That left her, she said, in the position of paying for something that was negotiated in secret. ??''Where is our systems of checks and balances?'' Duncan asked. ??The commission is expected to have a proposed rate hike plan ready by June 21, with a final vote on the increase slated for June 28. ??Additional public hearings will be held at 1 p.m. today at the Country Inn Hotel, 35 Via Pico Plaza, San Clemente, and at 7 p.m. today at the California Center for the Arts, Escondido, 340 N. Escondido Blvd. ???pls. don't bite last graf WAGNER-CNS-SD-06-11-01 2244PST LOAD-DATE: June 12, 2001 ??????????????????????????????5 of 48 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ?????????????????????June 12, 2001 Tuesday ?Home Edition SECTION: Business; Part 3; Page 2; Financial Desk LENGTH: 203 words HEADLINE: California; ; Williams May Be Required to Refund $11 Million for Power BYLINE: Nancy Rivera Brooks BODY: ??A major electricity marketer in California, Williams Cos., said Monday that it may be required to refund $11 million for electricity sold in the state this year at prices deemed too high by federal regulators. ??Williams of Tulsa, Okla., markets nearly 4,000 megawatts of electricity produced by three Southern California power plants owned by AES Corp. of Arlington, Va. ??Williams has been ordered by the Federal Energy Regulatory Commission to justify prices for $30 million of electricity sold in California during Stage 3 power emergencies from January to April. ??FERC set a price cap for times of extreme electricity shortages during each of those four months and found that prices charged by power plant owners and marketers, including Williams, exceeded the caps by $124.6 million in all. The companies were told to justify those prices or refund them. ??"Williams has filed justification for its prices with the FERC and calculated its refund liability under the methodology used by the FERC to compute refund amounts at approximately $11 million," Williams said in a filing with the Securities and Exchange Commission. Williams said it continues to object to refunds in any amount. LOAD-DATE: June 12, 2001 ??????????????????????????????6 of 48 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ?????????????????????June 12, 2001 Tuesday ?Home Edition SECTION: Business; Part 3; Page 1; Financial Desk LENGTH: 581 words HEADLINE: Edison Devises Complex Debt Restructuring Plan; Energy: New subsidiary created to sell bonds would issue the proceeds as dividends to the parent of utility SCE. BYLINE: JERRY HIRSCH, TIMES STAFF WRITER BODY: ??Edison International plans to raise $1.2 billion in a complex transaction that would tap the borrowing capacity of its only significant profit center--a move critical to the firm's financial health. ??The financing would pay off $618 million in Edison bank debt that comes due June 30. Additionally, the offering would be used to pay off $600 million of floating rate notes due by year's end. ??Mission Energy Holding Co., a company created by Edison International for the sole purpose of issuing these bonds, will offer the notes. The assets of Edison Mission Energy, a subsidiary that owns a network of power plants across the United States and in Asia, Australia and New Zealand, will secure the debt. ??Mission Energy Holding plans to issue the proceeds to Rosemead-based Edison International in the form of dividends, giving the parent company funds to pay off a substantial portion of its debt. ??Despite the backing of such heavy hitters as Wall Street investment bank Goldman Sachs Group, some analysts question whether there is enough investment interest to make the deal work. ??"I am not sure what type of appetite the market will have for this," said Jon Cartwright, a bond analyst with Raymond James & Associates in St. Petersburg, Fla. ??The financing plan comes as the firm is struggling to keep its ailing Southern California Edison electric utility out of Bankruptcy Court. Edison International can pursue the deal because of its byzantine corporate structure, designed to reduce the risk that Edison Mission Energy would be dragged into any potential bankruptcy of either the parent company or corporate sibling SCE. ??The question, Cartwright said, is whether that separation, erected under a financial legal doctrine called "ring fencing," provides enough protection to make lending money palatable to investors. ??"What price are you willing to get for a security that looks like it will have to be tested in Bankruptcy Court?" Cartwright asked. ??Edison International, which declined to comment about the offering, plans to start pitching it on Wall Street this week. ??Even if the offering were completed, Edison International probably would pay a high price for its borrowing. ??Cartwright said a similarly rated bond at another company would pay an interest rate of about 9.67%, but given the risk he would expect investors to demand a higher yield. ??The notes will have a credit rating of BB-minus and come due in 2008, said Standard & Poor's, the bond rating agency. That's slightly higher than the near-default CC rating now carried by Edison International. ??Standard & Poor's said the transaction could raise Edison International's credit rating to a CCC-plus grade--better but still considered a junk rating by the investment community. ??In issuing its rating for the offering Monday, Standard & Poor's said that "the prospects of a bankruptcy filing by or against SCE remain high." ??That reflects the rating agency's assessment that it is increasingly unlikely that the state will complete a rescue plan devised by Edison and Gov. Gray Davis, which calls for the state to purchase SCE's transmission lines for nearly $2.8 billion and issue up to $3.5 billion in ratepayer-secured bonds to pay off debts from purchasing electricity at higher rates than it was allowed to charge customers. ??Edison International shares closed unchanged Monday at $11 on the New York Stock Exchange. The stock has fallen 30% this year. LOAD-DATE: June 12, 2001 ??????????????????????????????7 of 48 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ?????????????????????June 12, 2001 Tuesday ?Home Edition SECTION: California; Part 2; Page 1; Metro Desk LENGTH: 828 words HEADLINE: Davis Eases Power Plant Pollution Rules; Electricity: Order will allow more production from heavily polluting 'peaker' facilities. BYLINE: DAN MORAIN, TIMES STAFF WRITER DATELINE: SACRAMENTO BODY: ??Gov. Gray Davis agreed Monday to lift air emission limits on heavily polluting power plants and allow them to run at capacity this summer as long as the electricity they produce is sold in the state. ??State officials said the plants must be pressed into use to avoid blackouts. ??Davis' executive order lets the generators build the cost of air pollution fines into the price the state pays for electricity produced by natural gas-fired power plants, said Catherine Witherspoon of the California Air Resources Board. ??Municipal utility districts--including the Los Angeles Department of Water and Power--and independent power companies could supply as much as 1,200 megawatts from so-called peaker plants, facilities that generally are permitted to operate for only a few hundred hours a year because they pollute so heavily. That is enough power for more than 1 million homes. ??Other gas-fired power plants that have been shut down because of air pollution restrictions also could be started up as a result of the order. ??In a news conference Monday, state officials said the order will have the effect of lowering air pollution by limiting the use of far dirtier diesel generators, which industry could use if power supplies are threatened. ??"If we don't get every last megawatt we can [from natural gas-fired plants]," said Witherspoon of the air board, "we will see people turning to diesel more frequently." ??Added Kellan Fluckiger, a top energy advisor to Davis: "If you don't run these, you're either going to have outages or you're going to run something dirtier." ??Fluckiger said the order expands "the number of hours these things can run and the amount of energy they can produce." ??New natural gas-fired power plants emit about half a pound per megawatt-hour of operation of ozone-producing pollutants. The plants affected by the order emit between two and five pounds of oxides of nitrogen per megawatt-hour. ??If the plants are pressed into operation for 200,000 megawatt-hours this summer, there will be between 400,000 and 1 million additional pounds of oxides of nitrogen emitted into the air. ??The state probably will end up paying the fees associated with the extra pollution through higher electricity prices. The fees amount to $7.50 per pound of oxides of nitrogen--or $7.5 million if the plants operate for 200,000 hours--and $1.10 per pound of carbon monoxide emissions. The money would be used to reduce air pollution from other sources. ??"Under this order, dirty power plants can run as long as they want and pollute as much as they want so long as they pay into a fund," said Gail Ruderman Feuer, senior attorney with the Natural Resources Defense Council. "Our concern is that there's no guarantee that the fund will result in emission reductions any time soon." ??A Ventura County air pollution control official said that running one peaking power plant operated by Reliant Energy for one hour is the equivalent of adding 20,000 new cars to Ventura County highways for an hour. Reliant Energy could not be reached for comment Monday night. ??"To the extent that they run when not needed for an emergency, it's going to put more air pollution into Ventura County skies and it's going to make our air dirtier," said Dick Baldwin, air pollution control officer for Ventura County. ??Los Angeles DWP Director David Wiggs hailed the order, saying it was needed so the city can sell the state as much as 1,000 megawatts of power this summer. ??"This was the issue we had to have solved or we could not offer any of our excess capacity to the state," Wiggs said. ??He added, however, that the city and state have not yet agreed on a price for the power. Wiggs said the city is "negotiating to get our cost as low as we can legally charge" so that customers of the city utility district are not subsidizing consumers in the rest of the state. Municipal utility districts elsewhere in the state also are expected to benefit from the order. ??Though the order was aimed at spurring municipal utilities to sell power to the state, it also applies to independent power producers such as Reliant Energy of Houston and Duke of North Carolina--both of which have called on Davis to ease air pollution restrictions on their old natural gas-fired facilities. ??"This puts more money in the Texans' pockets and more air pollution in Ventura County residents' lungs," said Baldwin of Ventura County. ??Doug Allard, a Santa Barbara County air pollution control officer, also said it seems as if the governor is giving private power generators much of what they had sought. ??"We have serious concerns about the order," said Feuer of the Natural Resources Defense Council. "It's taking the discretion away from local air districts to regulate power plants in their region." ??* ??Times staff writer Nancy Vogel contributed to this story. ??RELATED STORY ??Utility: Edison plans to raise $1 billion in debt restructuring. C1 LOAD-DATE: June 12, 2001 ??????????????????????????????8 of 48 DOCUMENTS ??????????????????Copyright 2001 The New York Times Company ??????????????????????????????The New York Times ?????????????????June 12, 2001, Tuesday, Late Edition - Final SECTION: Section A; Page 24; Column 1; National Desk LENGTH: 886 words HEADLINE: Bush to Insist on Ethanol Use in California BYLINE: ?By KATHARINE Q. SEELYE DATELINE: WASHINGTON, June 11 BODY: ??The Bush administration has decided to force California to use ethanol as an antipollution fuel additive, a move that the critics say could result in an increase of at least 5 cents a gallon at the pump this summer in that state. ??California had asked the federal government to be exempted from a Clean Air Act requirement to use fuel additives like ethanol to cleanse its gasoline, arguing that cheaper technologies were available. ???Administration officials said today that the government would issue a decision on Tuesday denying the request. ??Last Friday, in a speech in Iowa, Mr. Bush hinted at the decision, saying he supported the use of ethanol "not only to reduce dependency on foreign sources of energy but secondly as a way to clean the air." ??Several Democratic senators from farm states, including Tom Daschle of South Dakota, the new majority leader, and Tom Harkin of Iowa, the new chairman of the Agriculture Committee, saw a favorable decision as a huge boon to their states' economies and had urged Mr. Bush to deny California the waiver. ??It was Mr. Daschle -- and former Senator Bob Dole of Kansas -- who began the push for ethanol a decade ago by inserting in the Clean Air Act an amendment that required 2 percent of cleaner-burning gasoline to contain oxygenates like ethanol. ??The act required that it be sold in cities with the worst smog: Los Angeles, New York, Baltimore, Chicago, Hartford, Houston, Milwaukee, Philadelphia, Sacramento and San Diego. ??Some California fuel has oxygenates throughout the year, but in most Northeastern states the additives are used only in the winter months to reduce emissions of carbon monoxide. ??The decision opens up the biggest market in the country to corn producers and, in particular, could benefit the Archer Daniels Midland agribusiness, a major Republican contributor, because it is one of the few ethanol producers able to transport ethanol to the West and East Coasts. ??But environmentalists say there are now less expensive, less complex ways to reduce such pollution than adding ethanol. ??And they contend that Mr. Bush's decision is intended to solidify his support in the farm states that he won in the last election and help him make an important overture to Iowa, which he lost. ??Several Northeast states were waiting to see whether California received its waiver before applying for their own, but a spokesman for a consortium of those states said today that they would not apply and without it would expect to see an increase in gasoline prices. ??Gov. Gray Davis of California, who has already clashed with the White House over its energy policy and its refusal to place price caps on electricity, said the decision could cost Californians, who already pay the highest gas prices in the nation, an additional 6 cents per gallon, or about $450 million a year for the estimated 580 million gallons of ethanol that will be needed annually. ??Janet Hathaway, a lawyer for the Natural Resources Defense Council, with a specialty in fuels and vehicles, said the decision "means that the whole country has to use ethanol in every gallon of reformulated gas, which means suddenly a lot of demand has to chase a limited supply, which always means prices go up." ??Ms. Hathaway added, "It's not necessary to use ethanol to achieve the same environmental results." ??There are basically two widely available additives, or oxygenates, that help cleanse gasoline -- ethanol and M.T.B.E. (methyl tertiary butyl ether). But M.T.B.E. has been found to contaminate drinking water and is being phased out in 11 states, including California and much of the Northeast. ??The administration's expected decision would force those states instead to use ethanol, an alcohol made by the fermentation of sugars from corn, which last year constituted two-thirds of 1 percent of the gasoline produced in this country. ??California argued two years ago to the Environmental Protection Agency that it wanted a waiver from such a mandate because refiners had other ways to blend gasoline that were cheaper and cleaner. ??The agency under the Clinton administration decided to grant the waiver, concluding that it would reduce emissions, but President Bill Clinton never completed action on the matter. ??David Uchic, a spokesman for the National Corn Growers Association, said he doubted California's claim of cheaper, cleaner blends. ??"If you want to tell us you can refine a gas that meets the Clean Air standards and is cheaper than ethanol-added enhanced gas, go ahead," Mr. Uchic said. "Let's see the numbers." ??In addition, he said the Bush decision was a flat-out victory for his industry, which hopes to triple ethanol production over the next decade. ??"This will spur new investment in ethanol plants and in expanding existing facilities, and we just see production going up, up, up," Mr. Uchic said. ??Jason Grumet, executive director of the Northeast States for Coordinated Air Use Management, a consortium of state agencies, said the administration's decision was ill-conceived and potentially harmful. ?"We will be paying more money for higher-polluting gasoline," Mr. Grumet said. "This is a decision that will profoundly benefit a couple of multinational agribusinesses at the expense of the environment, drivers and the small farmer." ??http://www.nytimes.com LOAD-DATE: June 12, 2001 ??????????????????????????????10 of 48 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ????????????????????JUNE 12, 2001, TUESDAY, FINAL EDITION SECTION: NEWS; Pg. A1 LENGTH: 760 words HEADLINE: Air standards lowered for power plants; DAVIS ORDER: They can run overtime SOURCE: Chronicle Sacramento Bureau BYLINE: Robert Salladay, Lynda Gledhill BODY: Gov. Gray Davis eased California's air pollution standards for power plants yesterday with an executive order that will allow some to run overtime this summer and squeeze out extra electricity. ???Energy advisers said the governor's order actually would cause less pollution in the coming months because it allows natural-gas powered plants to run longer and reduce the need to run dirtier diesel-powered generators often used as backups. ???"If you don't run these, you're either going to have outages, or you're going to run something dirtier," said Davis adviser Kellan Fluckiger. ???Under the current state of emergency, the governor has sweeping powers to make changes in the law. ???The Davis administration roughly estimated that about 1,200 megawatts in extra power could be produced and sold to California, enough to supply an estimated 1.2 million homes. The Los Angeles Department of Water and Power, which has been selling its extra electricity to the state, said it might be able to supply 1,000 megawatts alone. ???Under the current law, power plants in California are allowed to emit specific amounts of major pollutants -- nitrogen oxides and carbon monoxide -- and then must shut down when they reach a federal and state quota. ???The executive order allows power plants in California to bypass those environmental standards as long as they sell the extra power to the state or another California-based utility. The order lasts until Davis rescinds it. ???EXEMPTION TRADE-OFFS ???In exchange for the exemptions, the power generators must pay penalties for the extra pollution they cause. The fines would probably range around $37.50 for every megawatt produced during these peak periods, according to Catherine Witherspoon with the California Air Resources Board. ???Although prices are falling, a megawatt hour has sold on the daily market for more than $500 -- at one point soaring to as much as $1,900. ???Money from the fines would be put into local pollution-control accounts and used to reduce emissions elsewhere, Witherspoon said. She said the governor's order was the best way to get more power and still maintain environmental standards. ???Witherspoon said the federal Environmental Protection Agency, which needs to approve the new standards set by Davis, had been "very cooperative." ???"Bringing the maximum amount of power out of natural gas capacity is really going to help," Witherspoon said. "If we don't get every last megawatt we can, we will see people turning to diesel more frequently." ???The South Coast Air Quality District, which is the largest and most polluted area of the state, already has been allowing power plants to produce more power in exchange for higher fines, said Ralph Cavanagh of Natural Resources Defense Council. ???"The key is whether the mitigation fund being set up will actually be used to offset pollution," he said. The "jury is still out" on how successful the program has been, Cavanagh said. ???Cavanagh agreed that using natural gas plants was much better than diesel, something the Davis administration is considering. "Clearly we want to suppress the operation of diesel," he said. "To the extent that it reduces diesel, that is a benefit." ???The state's municipal utilities have for months been asking Davis for yesterday's exemption so they can run their natural-gas-powered plants longer, and presumably make some money off the increase in sales. Power prices are at their highest in history. ???Davis has previously threatened the public utilities takeover because of the high prices being charged the state, which has spent about $8.3 billion to purchase power since January. The utilities have said they are only passing along the high cost of the natural gas used to produce the electricity. ???"This was the issue we had to have solved or we could not offer any of our excess capacity to the state," said David Wiggs, general manager of the L.A. Department of Water and Power. ???The price of the extra power is "being negotiated now with the governor's people at the direction of Mayor (Richard) Riordan to get the cost as low as possible," Wiggs said. "We have not reached an agreement." ??----------------------------------------------- ??Tell us what you think-- What are your suggestions for saving energy? Send your best tips to Energy Desk, San Francisco Chronicle, 901 Mission St., San Francisco, CA 94103; or put your ideas in an energy-efficient e-mail to energysaver@sfchronicle.com.E-mail the reporters at rsalladay@sfchronicle.com and lgledhill@sfchronicle.com. LOAD-DATE: June 12, 2001 ??????????????????????????????11 of 48 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ????????????????????JUNE 12, 2001, TUESDAY, FINAL EDITION SECTION: NEWS; Pg. A1 LENGTH: 898 words HEADLINE: U.S. panel steps up probe of supplier; NATURAL GAS: Charges of price fixing SOURCE: Chronicle Staff Writers BYLINE: Bernadette Tansey, Zachary Coile BODY: Federal regulators widened their investigation yesterday of a Texas natural gas firm accused of inflating statewide energy prices, reversing an earlier order that had partially exonerated the company. ???The Federal Energy Regulatory Commission's 4-to-0 ruling in the investigation of El Paso Corp., backed by Pat Wood, the Bush administration's new appointee, was greeted by California's chief energy regulator as a turning point in the commission's attitude toward state complaints of price gouging. ???The commission's action "signals a whole new chapter of vigilant enforcement," said Loretta Lynch, president of the state Public Utilities Commission. ???The federal commission reopened the question of whether El Paso rigged the bid for a huge block of capacity on its gas pipeline in favor of its own marketing affiliate, thus stifling competition that could have prevented natural gas prices from soaring to the levels they reached last winter. ???In the past year, gas from the Southwest has sold at the California border at prices as much as 10 times the nationwide average, driving up the price of consumers' heating bills and of electricity produced at power plants that run on natural gas. ???In March, before Wood was appointed, the commission cleared El Paso of complaints by California officials that the firm had engineered the takeover by its marketing arm of more than one-third of the space on its pipeline into California. That pipeline supplies half of the state's gas. ???In the same ruling, however, the commission ordered a trial-like hearing on the separate question of whether El Paso exercised near-monopoly market power to boost its profits. ???The PUC, Pacific Gas and Electric Co. and Southern California Edison say El Paso's pipeline affiliate and its marketing subsidiary combined to prevent competing shippers from importing natural gas, jacking up prices. ???The hearing, which has already stretched from an original schedule of four days to more than five weeks, will now be expanded for evidence on accusations that l Paso broke federal regulations against preferential treatment for affiliates. ???COMPANY NOT WORRIED ???El Paso spokeswoman Norma Dunn said the probe would reinforce the commission's original decision that El Paso was innocent of rigging the pipeline bid. ???"We're confident they'll use the same information to reach the same conclusion," Dunn said. ???Harvey Morris, the PUC's lead attorney in the case, said the order could lead to harsher penalties against El Paso if an administrative law judge found wrongdoing. ???Lynch said last week that El Paso should be forced to pay back California for what the state considers its excess costs during the 15-month contract between the company and its marketing arm, El Paso Merchant Energy. The state has never estimated that figure, but consultants for Edison say the alleged market manipulation cost California an extra $3.7 billion. ???The PUC first asked the federal commission to void the contract in April 2000. By the time the commission ordered a hearing, the contract was close to its expiration date -- this past May 31. ???Wood, who was sworn in to the commission last week, said in a concurring opinion yesterday that such cases should be investigated promptly. ???"In the framework of active energy markets, it is critical that the commission act expeditiously on complaints," Wood wrote. ???RAISING THE BAR ???Wood's remark "seems to raise the bar for FERC" in its role as a market watchdog, Lynch said. ???There has been much speculation about how Wood's presence will affect the federal commission, which has been at odds with California officials over virtually every area of energy policy. ???Wood, a 38-year-old lawyer, was nominated to the Texas Public Utilities Commission by then-Gov. George W. Bush in 1995. At the time, Bush said that Wood "shares my conservative philosophy" and would bring a free-market approach to regulation. ???Bush administration officials have hinted that Wood will replace Curt Hebert as chairman of the federal commission, though White House spokesman Ari Fleischer dampened the speculation last week, saying Hebert was not in danger of losing his job. ???On his recent trip to the state, Bush said he had assigned Wood to investigate the high cost of natural gas delivered to California. ???Wood has spoken to Gov. Gray Davis twice on the phone about the energy crisis. The two plan to meet in Washington on June 20, said Steve Maviglio, a spokesman for Davis. ???"The governor was enthusiastic about Pat Wood after his conversations with him," Maviglio said. "He feels the commissioner understands the issues out here, and he promises to provide some relief in one form or another." ???Davis declined to comment on yesterday's decision until he had time to read it. ???The PUC's Morris said that it was no coincidence that gas prices in California had dropped dramatically since El Paso Merchant Energy's contract expired May 31, and 30 competing shippers started to share the pipeline capacity. ???"It's no longer the 800-pound gorilla on the El Paso system," Morris said. ???El Paso spokeswoman Dunn said prices had dropped because of a wide range of factors, including mild weather, increased hydroelectric power production and a lower demand for gas.E-mail Bernadette Tansey at btansey@sfchronicle.com. and Zachary Coile at zcoile@sfchronicle.com. LOAD-DATE: June 12, 2001 ??????????????????????????????13 of 48 DOCUMENTS ??????????????????????Copyright 2001 The Washington Post ?????????????????????????????The Washington Post ????????????????????June 12, 2001, Tuesday, Final Edition SECTION: EDITORIAL; Pg. A24 LENGTH: 203 words HEADLINE: Whining in the Dark BODY: ???California Gov. Gray Davis [op-ed, May 16] asserted that California's energy crisis is a result of the federal government's failure to "carry out [its] statutory obligation to ensure energy prices are 'just and reasonable.' " ???Nonsense. ???For 12 years, by Gov. Davis's own admission, California has not built a major power plant within its borders. Instead, it has exported pollution to the other states (where does that lovely "green" electricity come from?) and patted itself on the back for its environmental "consciousness." ???Now Gov. Davis says, "The federal government must do its part to temporarily control runaway energy prices." Again, nonsense. The "runaway energy prices" California pays are a direct result of a conscious decision to export pollution to its neighboring states for 12 years. ???And, it should be pointed out, demanding that the federal government institute "temporary" price controls is the equivalent of demanding that the rest of the states pay for accepting California's pollution. ???Until California brings its own generators on line -- and the refining-pipeline capacity to fuel them -- let it whine in the dark. It won't freeze. ??MICHAEL HANKAMER ??Manassas LOAD-DATE: June 12, 2001 ??????????????????????????????14 of 48 DOCUMENTS ????????????????????Copyright 2001 Chicago Tribune Company ???????????????????????????????Chicago Tribune ??????????????June 12, 2001 Tuesday, NORTH SPORTS FINAL EDITION SECTION: Tempo; Pg. 6; ZONE: C; CHANNEL SURFING. LENGTH: 439 words HEADLINE: 'Blackout' sheds some light on spike in energy costs BYLINE: By Steve Johnson, Tribune media critic. BODY: ??You are reading this, I presume, with the lights on. Don't get too comfortable with that idea. ??The very timely "Frontline" episode titled "Blackout" (9 p.m., WTTW-Ch. 11) examines the new circumstances that led to California's energy crisis, in particular, but also the natural-gas price spike that made last winter so long and costly in Illinois. ??The episode, reported with The New York Times, suggests very strongly that what happened in the Golden State was not simply another case of isolated left-coast kookiness, like est, but rather a case of left-coast kookiness likely to spread to the rest of the country, like salad bars. ??It is, in other words, a cautionary tale, and then some. The take from correspondent Lowell Bergman -- yes, the fellow from "The Insider" who used to be a top "60 Minutes" producer -- blames free-market theory mixed with the basic business principle of trying to make as much money as you can. Electricity deregulation and other legal developments paved the way for a new class of businesspeople, ones who trade power like any other commodity. Regulatory agencies, meanwhile, have either had their teeth taken away or have lost the will to use them. ??The effect was especially profound in California because a deregulation bill that satisfied neither free marketers nor public-interest groups had forced power companies to get rid of their generating plants. They were at the mercy of the markets, the markets found a way to charge more, and that -- again, in Bergman's take -- is why the cost of electricity jumped by more than a multiple of 10. ??At the heart of this debate is the question of whether the nation can afford to treat power like soybeans. The California evidence suggests not, but Bergman's interviews, including one with Vice President Richard Cheney, suggest this administration will continue to follow the free-market path that, coincidentally, helps some of its biggest campaign donors. ??Two side notes: ??- It is fascinating to see Bergman, who used to be a resolutely behind-the- scenes guy, take so readily to appearing on camera. He makes sure to include some of his best moments as a questioner, even when they're not necessarily key to the story. Mike Wallace, his old partner, would be proud, but it's a different style than "Frontline" viewers are used to, where the correspondent stays out of the way. ??- This "Frontline" received heavy advance publicity before it aired last Tuesday on most PBS stations nationwide. WTTW says the episode was a late addition to the "Frontline" schedule and the station was already locked into pledge programming at that time. LOAD-DATE: June 12, 2001 ??????????????????????????????15 of 48 DOCUMENTS ???????????????????The Associated Press State & Local Wire The materials in the AP file were compiled by The Associated Press. ?These materials may not be republished without the express written consent of The Associated Press. ???????????????????????June 12, 2001, Tuesday, BC cycle ?????????????????????????????6:25 AM Eastern Time SECTION: Business News LENGTH: 675 words HEADLINE: Political pressure eases for California Gov. Gray Davis as power prices dip BYLINE: By ALEXA HAUSSLER, Associated Press Writer DATELINE: SACRAMENTO, Calif. BODY: ??Gov. Gray Davis is getting his first glimpse of relief after months defending the state's soaring electricity prices and rolling blackouts. ??A series of events - from plummeting wholesale energy and natural gas prices to the unexpected shift in the U.S. Senate - has Davis declaring that the state has "turned a corner" in its power woes. ??But the governor, whose popularity ratings have taken a dive in recent months, must still weather steaming summer months and homeowner reactions to record-high electricity bills. ??"Some irreparable damage has been done to his image and his popularity," said Bruce Cain, director of the Institute of Governmental Studies at the University of California at Berkeley. ??Two recent statewide polls showed that as electricity rates climbed, Davis' approval rating plummeted to its lowest marks since he took office in 1998. ??Davis, who is up for re-election next year, is battling his image as a middle-of-the-road leader and has adopted a confrontational style to deal with the power crisis. ??In May, he hired high-powered crisis control specialists Chris Lehane and Mark Fabiani, trained at the Clinton White House and in the Al Gore presidential campaign. He declared "war" on Texas-based energy wholesalers. ??Davis also attacked the Bush administration for opposing price controls on wholesale electricity. ??Soon after, the crisis-weary governor's fortunes shifted. ??Vermont Sen. James Jeffords announced he would defect from the GOP, handing the majority and committee chairmanships to Democrats who favor price caps on wholesale electricity. ??President Bush, criticized for failing to visit California since taking office, traveled to the state and met with Davis. ??When the state Energy Commission announced that Californians had cut power use by 11 percent in May over the previous year, Davis declared a personal victory. He had called for residents and businesses to conserve 10 percent. ??Last week, wholesale electricity prices plunged from more than $500 a megawatt hour to about $50 a megawatt hour - their lowest level in a year - while natural gas prices also dropped. ??Some experts attributed the price spiral to conservation efforts and mild Western temperatures, which have reduced the need to run air conditioners. ??But the governor's aides argue the declining prices are a direct result of Davis signing long-term contracts with energy providers. ??"We may still have some difficult days ahead of us in the summer but it's pretty clear that the governor's strategy has now borne some fruit," said Garry South, chief campaign adviser to Davis. ??Still, the energy crisis has battered Davis, once considered a potential presidential contender in 2004. ??California, heavily reliant on the technology sector, is facing its toughest budget crunch in years. ??Critics argue Davis has called a premature victory in the energy crisis. The state has yet to sell $13.4 billion worth of bonds to repay the state for power buys, and California relies heavily on the spot power market to make up for electricity shortages. ??California Republicans, meanwhile, are fortifying their own campaign strategy. The state party hired veteran consultant Rob Stutzman to counter Davis' hiring of Lehane and Fabiani. ??And Stutzman says Davis has little for which to take credit. ??"The governor is like a little kid that breaks his mother's china and then wants credit for gluing half of it back together," Stutzman said. ??Davis' short-term fortunes look promising, however. The state Democrats control both houses of the Legislature and all but one statewide office. ??Davis also holds strong leads over the two Republicans who have announced they will challenge him, Secretary of State Bill Jones and Los Angeles businessman William E. Simon Jr. ??Whoever runs against Davis will find an incumbent with more than $26 million raised for next year's election and a team of campaign advisers already using focus groups and polling to gauge public reaction to the power crisis. GRAPHIC: AP Photo SC101 LOAD-DATE: June 12, 2001 ??????????????????????????????16 of 48 DOCUMENTS ???????????????????The Associated Press State & Local Wire The materials in the AP file were compiled by The Associated Press. ?These materials may not be republished without the express written consent of The Associated Press. ???????????????????????June 12, 2001, Tuesday, BC cycle ?????????????????????????????3:12 AM Eastern Time SECTION: State and Regional LENGTH: 510 words HEADLINE: State seeks electric rate hike for SDG&E customers BYLINE: By SETH HETTENA, Associated Press Writer DATELINE: SAN DIEGO BODY: ??While resident after resident rose in outrage over the state's ongoing energy crisis, Gail Hoover stood in the hallway outside the public hearing, begging for money. ??Through tears, the 52-year-old single disabled mother from El Cajon said this is what California's energy crisis has driven her to. On top of her folding table sits family photos and a gift bag that reads, "A donation would be greatly appreciated." ??Hoover said electricity is essential to her well-being. She needs power to keep her medicine cool and to work her electric hospital bed. And because her disability check isn't enough to pay all the expenses, Hoover said she has no choice but to ask strangers for help pay her $300 San Diego Gas & Electric bill. ??"We don't have money for anything but food," she said Monday. "My children are so ashamed we have to do this." ??San Diegans were the first in the state to pay out of control power prices and they will soon experience another first - an electric rate hike imposed by the state. ??The California Department of Water Resources, which recently took over electricity buying for the state's cash-strapped utilities, is raising San Diego Gas & Electric rates 19 percent to collect $915 million the agency says it needs to make those purchases. The rate hike was the subject of a public hearing Monday, where residents like Hoover had the opportunity to tell state regulators how they felt about such increases. ??Customers of SDG&E were the first to be exposed to unrestricted power prices under the state's 1996 deregulation law, which is widely blamed for the current energy crisis. After local residents saw their power bills double and triple last summer, the California Legislature stepped in last fall and froze bundled rates at about 15 cents a kilowatt hour. ??The DWR will raise rates on average by 2.77 cents per kilowatt-hour to 17.87 cents a kilowatt-hour, according to the Public Utilities Commission. A kilowatt-hour is enough to light 10 100-watt lamps for one hour. ??SDG&E, which serves 1.2 million customers in San Diego and Orange counties, has a separate request to raise rates an additional 16 percent or 2.3 cents per kilowatt-hour, pending before the PUC. The utility says the increase would raise $800 million to cover losses it incurred paying skyrocketing prices of electricity before the DWR began buying power in January. ??Typically, requests for rate increases, such as SDG&E's, goes through the PUC, which reviews such proposals and sets "reasonable" rates. But the law signed in January that gave the DWR the power to buy electricity also gave the agency the power to solely judge the merits of its own rate increase proposals. The department has determined that the SDG&E is reasonable, spokesman Oscar Hidalgo said Monday. ??How the rate hike will be distributed has not yet been determined, Hidalgo said. Under California law, residential customers will not see any rate increase for using up to 130 percent of their baseline amounts. Low-income households also are exempt. GRAPHIC: AP Photos LOAD-DATE: June 12, 2001
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