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AP Online, July 30, 2001; Monday, 6:00 AM, Eastern Time, Domestic,
????non-Washington, general news item, 365 words, Calif. Sees $4B Less in Power ????Refunds, KAREN GAUDETTE, SAN FRANCISCO THE ELECTRICITY DAILY, July 30, 2001, Monday, Vol. 17, No. 20, 350 words, ????NERC Alters Reliability Bill, Puts FERC In Los Angeles Times, July 30, 2001 Monday, Home Edition, Page 1, 1353 words, ????Sempra Unit Pulls in Profit, and Scrutiny; Energy: The trading arm, which ????has come under increasing criticism, raked in $310 million in the last 18 ????months., DAVAN MAHARAJ, TIMES STAFF WRITER The Associated Press, July 30, 2001, Monday, BC cycle, 7:50 AM Eastern Time ????, Business News, 368 words, Federal energy order leaves California with $4 ????billion less in power refunds, By KAREN GAUDETTE, Associated Press Writer, ????SAN FRANCISCO The Associated Press, July 30, 2001, Monday, BC cycle, 7:49 AM Eastern Time ????, Business News, 261 words, Texas inches toward power deregulation as pilot ????program goes into effect Tuesday, By NATALIE GOTT, Associated Press Writer, ????AUSTIN, Texas The Associated Press State & Local Wire, July 30, 2001, Monday, BC cycle, ????2:39 AM Eastern Time, State and Regional, 471 words, Federal order limits ????potential state refunds by $3 billion, By KAREN GAUDETTE, Associated Press ????Writer, SAN FRANCISCO CBS News Transcripts, CBS Evening News (6:00 PM ET) - CBS, July 29, 2001 ????Sunday, 582 words, California's energy crisis fizzles, SCOTT PELLEY Contra Costa Times, July 29, 2001, Sunday, CC-BIZ-LISTING, 1631 words, ????Contra Costa Times, Walnut Creek, Calif., Business Listing Column Los Angeles Times, July 29, 2001 Sunday, Home Edition, Page 1, 3106 words, ????Energy Landscape Is Forever Altered; Electricity: Deregulation and the ????state's emergence as a buyer have changed how Californians get power., NANCY ????VOGEL, TIMES STAFF WRITER, SACRAMENTO Sacramento Bee, July 29, 2001, Sunday, Pg. A3;, 1205 words, She's the ????governor's right-hand man Tough, loyal, workaholic, Lynn Schenk advises him ????on every major decision., Emily Bazar Bee Capitol Bureau Sacramento Bee, July 29, 2001, Sunday, Pg. L5;, 890 words, Cocky operative ????needles Davis with secret funds, Daniel Weintraub Chicago Tribune, July 29, 2001 Sunday, CHICAGOLAND FINAL EDITION, Magazine; ????Pg. 12; ZONE: C, 4233 words, CUTTING THE CORD; HIGH ELECTRIC BILLS? TAKE ????NOTE: THESE CALIFORNIANS ALMOST HAVE THE UTILITIES OWING THEM MONEY, By ????Karen Brandon. Karen Brandon is a Tribune staff reporter. The Associated Press, July 28, 2001, Saturday, BC cycle, Domestic News, 822 ????words, California lawmaker enjoys utility's largesse; makes no apologies for ????taking contributions, By JENNIFER COLEMAN, Associated Press Writer, ????SACRAMENTO, Calif. SECTION: Domestic, non-Washington, general news item LENGTH: 365 words HEADLINE: ?Calif. Sees $4B Less in Power Refunds BYLINE: KAREN GAUDETTE DATELINE: SAN FRANCISCO BODY: ???California will receive refunds for overpriced electricity, but not as much as it had asked for. ??A closer reading of last week's order from federal energy regulators shows the amount the state will receive could be slashed to just under $4 billion less than half what the state requested. ??Gov. Gray Davis plans to appeal the Federal Energy Regulatory Commission decision Monday, state officials said. Refunds could help prevent the state from raising electric rates to cover its power buying costs, which are now beyond $8 billion. ??''We found a number of disturbing things that lead us to believe FERC may not be so pro-refund as they want Californians to believe,'' said Nancy McFadden, an adviser to Davis. ??For months, Davis and other state officials have asked the commission to rule electricity prices charged since May 2000 to be unjust and unreasonable prices which climbed 10 times higher than past years. ??The state stands to lose a portion of the billions it has spent buying electricity for Pacific Gas and Electric Co. customers and two other financially ailing utilities. Power companies maintain they did not work together to drive up power prices to unreasonable levels. ??The commission's 40-page decision confirms it will only order refunds for power bought since October 2000, rather than May 2000. That means $2 billion less than the state, utilities and others could hope to receive, McFadden said. ??In addition, the commission also said it will not issue refunds for power the state Department of Water Resources bought directly from power companies. FERC only will recognize purchases through the state's now-defunct power market or from the manager of the state's power grid. ??That stripped another $3 billion off the potential refund amount, reducing the refund by a total of $5 billion. State officials had hoped to receive up to $9 billion in refunds. ??A call to FERC for comment was not immediately returned Sunday. ??The commission has ordered an evidentiary hearing, to be completed within 60 days, to determine the size of the refund from providers of wholesale power. ??___ ??On the Net: ??http://www.ferc.gov ??http://www.water.ca.gov LOAD-DATE: July 30, 2001 ??????????????????????????????3 of 77 DOCUMENTS ???????????????????????Copyright 2001 Elsevier Science ????????????????????????????THE ELECTRICITY DAILY ????????????????????????????July 30, 2001, Monday SECTION: Vol. 17, No. 20 LENGTH: 350 words HEADLINE: NERC Alters Reliability Bill, Puts FERC In BODY: ??Apparently spooked by Congress, the North American Electric Reliability Council has modified its proposed reliability legislation to increase the authority of the Federal Energy Regulatory Commission over the proposed new reliability agency. This is in contrast to NERC's earlier legislative proposal, set to be marked up in the Senate, which would make the new North American Electric Reliability Organization virtually autonomous. ??NERC had engineered an industry consensus to move the organization from voluntary to self-regulatory. Sources say that the new proposal is a direct result of growing uneasiness on Capitol Hill with deregulating the industry in the wake of the California crisis, especially in the newly Democratic Senate. ??Section 11(b) of NERC's new draft says FERC "shall have jurisdiction over the Electric Reliability Organization, all affiliated regional reliability entities, all system operators, and all users of the bulk-power system, for purposes of approving and enforcing compliance." NERC is reportedly hoping its language will mitigate an effort by the Senate Energy and Natural Resources Committee to cut NERC out of a self-regulatory role altogether. According to a white paper developed by the new chairman, Sen. Jeff Bingaman(D-N.M.), "legislation should authorize a system for assuring the reliability of the grid that is mandatory, that requires sanctions and penalties for failure to comply with the rules that institutions for that purpose develop, and that is subject to federal oversight." ??Opponents of self-regulation, such as the Pennsylvania-New Jersey-Maryland Interconnection, say NERC/NAERO should not be granted this control, but that FERC should regulate reliability through the regional transmission organizations that are currently being mediated. According to a PJM position paper, "FERC's authority should not be limited or impaired in any way, including its exclusive authority to determine rates, terms, and conditions of transmission services subject to its jurisdiction." [DW] LOAD-DATE: July 27, 2001 ??????????????????????????????4 of 77 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????July 30, 2001 Monday ?Home Edition SECTION: Business; Part 3; Page 1; Financial Desk LENGTH: 1353 words HEADLINE: Sempra Unit Pulls in Profit, and Scrutiny; Energy: The trading arm, which has come under increasing criticism, raked in $ 310 million in the last 18 months. BYLINE: DAVAN MAHARAJ, TIMES STAFF WRITER BODY: ??While the state's two largest utilities, Pacific Gas & Electric Co. and Southern California Edison Co., are struggling for survival, the parent of San Diego Gas & Electric Co. is racking up record profit from the state's energy crisis, thanks in part to a subsidiary that buys and sells energy on the wholesale market. ??In the last 18 months, Sempra Energy's trading subsidiary has raked in $310 million in profit. That's $120 million more than the sum Sempra paid for the trading outfit 3 1/2 years ago. And analysts expect profit to climb higher as the trading arm continues to take advantage of volatile energy markets in California and across the United States. ??The trading activities of San Diego-based Sempra are drawing increasing scrutiny from regulators and consumer watchdogs who question why the state is doling out attractive energy contracts to a company that already is flush with cash. Records recently revealed that a Sempra power generator sold all its capacity at attractive prices over an extended period to the California Department of Water Resources, which has been procuring power for the state's largest utilities. ??"Sempra has become like the multimillionaire that refuses to tip," said Michael Shames, executive director of the Utility Consumers' Action Network in San Diego. "There seems to be a fundamental violation of the principle of fairness whereby Sempra's trading arm is hugely profitable at the expense of consumers." ??Sempra insists its trading business is a worldwide operation that deals in not just electricity but oil, gas and other commodities. Only a small portion of the trading unit's profit comes from California and the Western region, said company spokesman Doug Kline. ??State records revealed this month that Sempra Energy Trading--and several other wholesale electricity merchants--charged California some of the highest prices for electricity during the first three months of the year. Sempra officials say they were only procuring power for the state when supplies were critically low, but critics want Sempra to refund the alleged overcharges. ??Separately, Sempra is battling lawsuits that it conspired with several gas and pipeline companies to eliminate competition, drive up natural gas prices and discourage the construction of electricity generating plants in California. ??Sempra's activities have come under scrutiny because critics say its trading subsidiary was influential in driving wholesale electricity prices to levels that helped ignite California's energy crisis. These high prices helped saddle its own SDG&E, PG&E and Edison with billions of dollars in debt. ??PG&E and Edison also have energy-trading businesses, though they are not as lucrative as Sempra's. ??California's 1996 deregulation law created a competitive marketplace where more than 100 energy traders now buy and sell electricity. Energy traders serve as middlemen, buying power from generators and reselling them to utilities and commercial power users. Some middlemen are connected to firms that own power plants, but others are speculators, such as Morgan Stanley Capital Group. ??Traders may buy a block of electricity a day, month or year ahead of time and resell it to another broker, a city or a utility. In California's energy crisis, a single electron might be traded a dozen times before it reaches a ratepayer's home. ??Sempra acquired a trading unit when it bought American International Group Inc. for $190 million in 1997. Sempra Energy Trading earned $13 million in 1998 and $19 million the next year. ??As the energy crisis exploded, Sempra Energy Trading's profit soared to $155 million in 2000. For the first two quarters of this year, the trading unit has accounted for $155 million in profit. ??Critics say Sempra can maximize profit for its trading arm--and various other business units--by knowing the direction of the market. ??For example, if executives in Sempra's trading arm know that its sister subsidiary, Southern California Gas Co., is planning to buy large supplies of gas for storage, they could structure their trades to take advantage of anticipated higher prices, consumer watchdog groups say. ??"What you have is a back-room, cottage industry for information whereby affiliates and generators of the same holding company secretly trade in a market that they have been able to manipulate to exact exorbitant profits at the expense of those customers who don't have access to that information," Shames said. "It's classic insider trading for which people like Michael Milken served time in jail, and yet these holding companies get to build palaces." ??Sempra and its subsidiaries have denied allegations of insider trading and insist that all of the company's activities have been legal. Strict Public Utilities Commission rules prohibit Sempra from sharing information among its business units, said Chairman and Chief Executive Stephen L. Baum. ??Baum, however, acknowledged that it isn't "particularly healthy" for Sempra's trading arm to sell electricity in the California market, where purchases by the state are eventually billed to SDG&E ratepayers. ??"I don't like being embarrassed to announce earnings in some of my business units of Sempra because people are suffering in San Diego in the electricity crisis," Baum said. "That's not a healthy corporate situation." ??Baum has hinted that the parent company might decide to spin off Sempra Energy Trading or other business units to create shareholder value and avoid perceived conflicts of interest. ??For now, the parent company is contesting allegations that Sempra's business units are cashing in on insider knowledge. ??In a recent filing with the state Public Utilities Commission, a group of primarily municipal generators detailed how the Gas Co. may have acted to drive up the price of gas for customers so it could rake in additional profit. ??In mid-2000, the gas utility paid $16.5 million for option contracts that entitled it to buy gas at the end of the year. The contracts gave the Gas Co. an incentive to buy "abnormally high" volumes of gas at the California border during the winter months, said Norman Pedersen, an attorney for the Southern California Generation Coalition. ??High border purchases by the Gas Co. drove up border prices, Pedersen said, allowing the utility to take in $70 million from the deal. ??The Gas Co. has vigorously denied that the $70-million gain was related to California border transactions. ??"Customers were not only protected by, but directly benefited from [our] . . . options programs," the utility's lawyers said in a response filed with the PUC. ??Under a state incentive program that rewards utilities for keeping costs down, the Gas Co. is required to split savings--such as the $70 million--50-50 with ratepayers whenever the company's gas costs fall slightly below market levels. Because the Gas Co. has consistently beaten the market, those savings have multiplied nearly tenfold during the state's power crisis. ??Pedersen's clients, which include the Los Angeles Department of Water and Power, want the PUC to reconsider the incentive program, saying that it "may have contributed to recently disproportionately high border prices" and higher gas costs. ??Last month, the Gas Co. told the PUC it would accept only $30 million of the $106 million it was due under the state incentive program. In return the state must agree to continue the incentive program, according to the Gas Co. proposal. ??Analysts who follow Sempra's stock, which is trading near its 52-week high, said Sempra is being unfairly targeted for being successful. ??Merrill Lynch energy analyst Donato Eassey said Sempra moved more quickly than PG&E and Edison to take advantage of the state's law that deregulated California's energy market and invested the proceeds in trading and other profitable operations. ??"There is nothing illegal about making profits," said Eassey, who recently upgraded Sempra's stock to "buy." "People in California need to pay the damn bill and shut up." LOAD-DATE: July 30, 2001 ??????????????????????????????6 of 77 DOCUMENTS ?????????????????????????????The Associated Press 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. ???????????????????????July 30, 2001, Monday, BC cycle ?????????????????????????????7:50 AM Eastern Time SECTION: Business News LENGTH: 368 words HEADLINE: Federal energy order leaves California with $4 billion less in power refunds BYLINE: By KAREN GAUDETTE, Associated Press Writer DATELINE: SAN FRANCISCO BODY: ??California will receive refunds for overpriced electricity, but not as much as it had asked for. ??A closer reading of last week's order from federal energy regulators shows the amount the state will receive could be slashed to just under $4 billion - less than half what the state requested. ??Gov. Gray Davis plans to appeal the Federal Energy Regulatory Commission decision Monday, state officials said. Refunds could help prevent the state from raising electric rates to cover its power buying costs, which are now beyond $8 billion. ??"We found a number of disturbing things that lead us to believe FERC may not be so pro-refund as they want Californians to believe," said Nancy McFadden, an adviser to Davis. ??For months, Davis and other state officials have asked the commission to rule electricity prices charged since May 2000 to be unjust and unreasonable - prices which climbed 10 times higher than past years. ??The state stands to lose a portion of the billions it has spent buying electricity for Pacific Gas and Electric Co. customers and two other financially ailing utilities. Power companies maintain they did not work together to drive up power prices to unreasonable levels. ??The commission's 40-page decision confirms it will only order refunds for power bought since October 2000, rather than May 2000. That means $2 billion less than the state, utilities and others could hope to receive, McFadden said. ??In addition, the commission also said it will not issue refunds for power the state Department of Water Resources bought directly from power companies. FERC only will recognize purchases through the state's now-defunct power market or from the manager of the state's power grid. ??That stripped another $3 billion off the potential refund amount, reducing the refund by a total of $5 billion. State officials had hoped to receive up to $9 billion in refunds. ??A call to FERC for comment was not immediately returned Sunday. ??The commission has ordered an evidentiary hearing, to be completed within 60 days, to determine the size of the refund from providers of wholesale power. ??On the Net: ??http://www.ferc.gov ??http://www.water.ca.gov LOAD-DATE: July 30, 2001 ??????????????????????????????7 of 77 DOCUMENTS ?????????????????????????????The Associated Press 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. ???????????????????????July 30, 2001, Monday, BC cycle ?????????????????????????????7:49 AM Eastern Time SECTION: Business News LENGTH: 261 words HEADLINE: Texas inches toward power deregulation as pilot program goes into effect Tuesday BYLINE: By NATALIE GOTT, Associated Press Writer DATELINE: AUSTIN, Texas BODY: ??After several delays, the entrance of Texas into the deregulated electricity market is set to begin Tuesday. ??Under a pilot program, officials of the state's electrical grid will begin switching some customers to new power providers at 12:01 a.m. Tuesday. ??The Legislature created the pilot program to give power companies several months to test their systems before full-scale deregulation, which is scheduled to begin Jan. 1 in most of the state. ??Industry officials have promised that deregulation will be smoother in Texas than in California, where it has been blamed for rolling blackouts and skyrocketing utility rates. They say the recent construction of several new power plants in Texas will help the state avoid supply shortfalls that have plagued California. ??The Electric Reliability Council of Texas, which manages the state's grid, gave the go-ahead for the pilot program last week. ??Deregulation allows customers to choose their power provider much like they select a long-distance telephone carrier. Under the Texas pilot program, up to 5 percent of electric customers can switch power companies. ??The pilot program is getting under way nearly two months after its first scheduled start date of June 1. Numerous delays were caused by computer problems. ??While the delays were unfortunate, "we think waiting until all the systems are ready will let us provide good customer service," said Eleanor Scott, spokeswoman for Austin-based Green Mountain Energy. ??On the Net: ??Electric Reliability Council of Texas: http://www.ercot.com LOAD-DATE: July 30, 2001 ??????????????????????????????8 of 77 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. ???????????????????????July 30, 2001, Monday, BC cycle ?????????????????????????????2:39 AM Eastern Time SECTION: State and Regional LENGTH: 471 words HEADLINE: Federal order limits potential state refunds by $3 billion BYLINE: By KAREN GAUDETTE, Associated Press Writer DATELINE: SAN FRANCISCO BODY: ??California will receive refunds for overpriced electricity, but not as much as it had asked for. ??A closer reading of last week's order from federal energy regulators shows the amount the state will receive could be slashed to just under $4 billion - less than half of what the state requested. ??Gov. Gray Davis plans to appeal the Federal Energy Regulatory Commission decision Monday, state officials said Sunday afternoon. Refunds could help prevent the state from raising electric rates to cover its power buying costs, which are now beyond $8 billion. ??"We found a number of disturbing things that lead us to believe FERC may not be so pro-refund as they want Californians to believe," said Nancy McFadden, an adviser to Davis. ??For months, Davis and other state officials have asked the FERC to find electricity prices charged since May 2000 to be unjust and unreasonable - prices which climbed 10 times higher than past years. ??The state stands to lose a portion of the billions it has spent buying electricity for Pacific Gas and Electric Co. customers and two other financially ailing utilities. Power companies maintain they did not work together to drive up power prices to unreasonable levels. ??The FERC's 40-page decision confirms the commission will only order refunds for power bought since October 2000, rather than May 2000. That means $2 billion less than the state, utilities and others could hope to receive, McFadden said. ??In addition, the FERC also said it will not issue refunds for power the state Department of Water Resources bought directly from power companies. FERC only will recognize purchases through the state's now-defunct power market or from the manager of the state's power grid. ??That stripped another $3 billion off the potential refund amount, reducing the refund by a total of $5 billion. ??The DWR bought most of its megawatts directly from power companies after a FERC ruling in December abolished the Power Exchange, the state's key entity that bought and sold power. The Independent System Operator, keeper of the state's grid, then began adding a surcharge on big purchases, McFadden said. ??All told, the most the state could expect to get back would be roughly $3.9 billion, said Barry Goode, a legal secretary to Davis. And despite the overcharges, some of that money has to pay power companies for past power deliveries at a price FERC determines is just and reasonable. ??State officials had hoped to receive up to $9 billion in refunds. ??A call to FERC for comment was not immediately returned Sunday afternoon. ??The FERC has ordered an evidentiary hearing, to be completed within 60 days, to determine the size of the refund from providers of wholesale power. ??--- ??On the Net: ??http://www.ferc.gov ??http://www.water.ca.gov LOAD-DATE: July 30, 2001 ??????????????????????????????12 of 77 DOCUMENTS ????????????????Copyright 2001 Burrelle's Information Services ?????????????????????????????CBS News Transcripts ??????????????????SHOW: CBS Evening News (6:00 PM ET) - CBS ?????????????????????????????July 29, 2001 Sunday TYPE: Newscast LENGTH: 582 words HEADLINE: California's energy crisis fizzles ANCHORS: SCOTT PELLEY BODY: ??SCOTT PELLEY, anchor: ??This was supposed to be the summer of California's discontent, dog days without power, because of the state's infamous shortage of electricity. But something completely unexpected is happening. ?The California energy crisis has fizzled. ?The power is back on. How it happened is the subject of our Weekend Journal. ??Unidentified Man: His plan includes 105 recommendations to help the energy crisis, and California heard 38 of them before the power went out. ??PELLEY: Just a few months ago, the rest of the country was laughing about the power woes of California, the nation's largest state and the fifth-largest economy in the world. ??Governor GRAY DAVIS (Democrat, California): There's no question that a lot of people thought we had very little chance to get through the summer without massive blackouts. ?I don't want to jinx ourselves; we still have some hot days ahead. But so far, so good. ??PELLEY: Better than good. ?California had only six days of rolling blackouts this year, and since summer began, no blackouts at all, despite predictions that hot weather would bring disaster. ??So what happened? ??Mr. RICHARD LAUCKHART (Henwood Energy Services): Fear got people to react. ??PELLEY: In January, Richard Lauckhart, a consultant with Henwood Energy Services, was forecasting 300 hours of blackouts this summer, but now... ??Mr. LAUCKHART: We see the crisis is pretty much behind us. ??PELLEY: Henwood found the lights stayed on for three key reasons. ?The drought in the Northwest, which had depleted reservoirs and sapped hydroelectric power in the West, ended. ?New power plants came online faster than anticipated, and Californians started seriously conserving energy. ??(Excerpt from commercial) ??PELLEY: Residents went from cutting their electricity use by just over 5 percent in January to 14 percent during peak hours in June, an energy saving of 2.5 million megawatts. ?But keeping the lights on has proved costly. ??Mr. PETER NAVARRO (Economist): This is an economic crisis. ?It's not an electricity crisis. ?It's not a blackout crisis. ??PELLEY: Economist Peter Navarro has tracked the effects of energy deregulation since it became law. ?He says while California escaped a disastrous summer, it was forced to buy power from out-of-state producers at inflated prices. ?It will be saddled with debt for at least a decade. ??Mr. NAVARRO: What we've had is power costs going up by 10 times. ?The amount of money is staggering; $50 billion, minimum, have been taken from this state through higher energy costs. ??PELLEY: Critics say part of that state debt comes from Governor Gray Davis' decision to enter California into long-term contracts with power producers. Davis says it was necessary to protect California from future price gouging and blackouts. ??Gov. DAVIS: The long-term contracts have shrunk the amount we have to buy every day and given us a sense of reliability. ?I would ask people to think of them in terms of an insurance policy. ??PELLEY: And Governor Davis, sometimes considered a possible presidential candidate, got a huge political hangover. ??Gov. DAVIS: And what are the lessons for other states? ?Don't even consider deregulating unless you have more power than you need. ?We didn't, and it's been a nightmare. ??PELLEY: Now the state of California is fighting to get $8.9 billion in alleged overcharges back from the power producers. ??We'll be back in just a moment. ??(Announcements) LOAD-DATE: July 30, 2001 ??????????????????????????????13 of 77 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune Business News ???????????????????????Copyright 2001 Contra Costa Times ??????????????????????????????Contra Costa Times ????????????????????????????July 29, 2001, Sunday KR-ACC-NO: CC-BIZ-LISTING LENGTH: 1631 words HEADLINE: Contra Costa Times, Walnut Creek, Calif., Business Listing Column BODY: ??THE FOLLOWING INDIVIDUALS or corporations filed fictitious-business-name statements in Alameda and Contra Costa counties. The Times makes every effort to ensure accuracy but cannot be held responsible if there are errors or omissions in this list. The Times gathers information from fictitious business name filings with the counties; not all listings are new businesses. These listings are a public service and do not satisfy requirements that business owners advertise legal notices of their business names. To satisfy this requirement, owners should call the Times classified advertising department. ??Nina Maria Peles, Nina Peles Inc. (a California corporation), Nina Peles, 132 Regent Place. ??Paragon Real Estate and Paragon Mortgage, Timothy Powers, 1451 Danville Blvd. #107. ??Visiting Angels, Living Assistance Services, J&M Homecare Services LLC (a California limited liability company), Frank Miller, 3239 Danville Blvd. #E. ??Thousand Oaks Financial, Ellice Kaminsky, 1225 Solano Ave. ??A&M Landscape Lighting, Michael Worden, 5037 Carbondale Way. ??Beckert Electric, David Beckert, 2105 Silverado Drive. ??Broken Aero Delivery, Tabatha Pimentel, 1008 Mission Drive. ??BT Auto, Marvin Young, 4951 Star Mine Court. ??His Voice Missionary Intercession Ministry, His Voice Missionary Intercession Ministries (a California religious corporation), Dorothy Archuleta, 2943 El Monte Way. ??Jiara's Evening Care, Angela Johnson, P.O. Box 2141, 1901 Mahogany Way #112. ??Perfect Pour, Toreano Norris, 5220 Fairside Way. ??Terilyn Records, Lacey Chaines, 5065 Longhorn Way. ??Vital Solutions, Edwin Jackson, 4525 Shannondale Drive. ??E&G Hauling & Recycling, Eddie Williams, 1908 Calaveras Drive. ??Westcoast Aquaculture, Mary Nicolini, 1540 Taylor Road, P.O. Box 1677. ??Barbary Coast Upholstery Repair, Bill Andrade, 6330 Brentwood Blvd. ??Bella Donna Diamonds, Donna Booher, P.O. Box 1119, 993 Country Glen Lane. ??Circle 'R' Food Mart, Pervaz Raja, 8401 Lone Tree Way. ??Ferguson's Gift Gallery, Briant Ferguson, 1130 Amanda Circle. ??Integrated Business Solutions, IE:, Sandra Davis, 746 Valley Green Drive. ??Ms. Gina's Learn & Play Child Care, Gina Cadrette, 236 Amberleaf Way. ??Oakview Shutters and Blinds, Joseph Quintero, 1236 Comice Parkway, P.O. Box 1915. ??Phlebotomy West, Sheila Clover, 4605 Ford St. ??Racing Xcitement, Gary Brummer, 686 Crossridge Court. ??Proforma Corporate Source, James Heninger, 2022 Montauk Court. ??At Your Door Mobile Dog Grooming, Vivien Pace, 2943 Ponderosa Drive. ??Concord Pet Hospital and Concord Veterinary Hospital, Lawrence Rothe, 3554 Concord Blvd. ??Courtney's Deli, Amelia Fung, 2190-D Meridian Park Blvd. ??Diablo Appraisal and Estate Sales, Hospice of Contra Costa Foundation. (a California corporation), 5350 Clayton Road. ??E B Sources, Frank Engelsbel, 3726 Salsbury Lane. ??Editing Consultants, Shannon Ayres, 1114 Crest Ridge Lane. ??Elite, Troy Ruth, 1151 Crowe Place. ??GameWonder, Sophia Field, 3119 Lonee Court. ??Me & Mom's Dog's, Dena Jones, 4057 Lucas Lane. ??MHC Properties, The Querio Trust, Michael Querio, 1420 Royal Industrial Way. ??Red Velocity, Micha Coen, 1423 Bel Air Drive #A. ??Shooting Sports, James Stone, 4701-B Sunny Place. ??Technology Resource Partners-Beefyboyz.com, Jim Eccles, 2010 Smith Lane. ??The Karma Kanic, Jorge Rico, 2655 Monument Blvd. ??WWW.Beefyboyz.com, James Eccles, 2010 Smith Lane. ??Vintage Silhouettes, Janene Fawcett, 1301 Pomona St. ??Custom Moments, Karen Henrich, 126 Entrada Mesa Road. ??Escrow Experts and Escrow Xperts, Susan Cooper-Tobia, 344 Paraiso Drive. ??KLM Marketing Group, Kirk McKee, 23 Copperfield Lane. ??Penguin Cleaners, Songchi Kim, 413 Railroad Ave. ??Steward Consulting, John Steward, 89 St. Beatrice Court. ??Tucker Investments, Terry McCully, 1077 San Ramon Valley Blvd. ??Visions of Elegance, Joseph Morte, 301 Hartz Ave. ??Winecentives, Michael Svdia, 416 Antelope Ridge. ??Disco Software, Susan Gieseke, 1555 Riverlake Road #D-159. ??Insight Construction; Inside Out Construction; Insight Interior Design and Insight Home Systems, Noel Dagle, 1415 Discovery Bay Blvd. ??USAir Conditioning/Heating Co., Richard Stevenson, 5410 Fairway Court. ??Deals On Wheels Automotive, Shishie Lathi, 7000 Village Parkway #3. ??M&S Roofing, Kathryn Avery, 6542-F Cotton Wood Circle. ??Platinum Productions, Matthew Marks, 4346 Westport Way. ??Political International, Justin O'Donnell, 7172 Regional St. ??City Express Taxi; Airport Yellow Shuttle and Yellow Cab Airport Local, Sarbjit Singh, 1726 Lexington Ave. #5. ??Fortune Building Material Brokerage, Tsui Tung Mui, 11228 San Pablo Ave. ??PLP Productions and Multi Media; Platinum Plak Productions and PLP Beats Music Publishing Co., Preston Pinkney, 10545 San Pablo Ave. #D. ??Silverback Media Group, Traci Donaldson, 5805 Alta Ponta. ??BioTechsources, Yanchu Fang, 2448 Diane Drive. ??E-Nvia.com LLC, E-Nvia.com (a California limited liability company), Jorge Masferrer, 4365 Santa Rita Road. ??Gold Star Painting, Fred William III., 4355 Bermar Ave. ??Hercules Dynamite Baseball, Roni Itagaki, 187 Cardinal Way. ??McCray Services and Crane Practice Management, Lola McCrary, 401 Forest Run. ??Pure Life Fitness and Consulting, Mark Smith, 6 Whitten Lane. ??Seedmusic, Christopher McCooey, 951 East St. #102. ??D&K Administrative Solutions, Karen Miller, 1642 Linden St. ??Fulcrum, Howard Hastings, 4435 First St. #352. ??Green Valley Landscape Maintenance, Samuel Fernandez, 1751 4th St. ??MG Designs, Eduardo Posada, 990 Madrone Way. ??Oriental Rugs Import, Faisal Khan, 1017 Aberdeen Ave. ??Tri Valley Circulars, Mary Meza, 3989 1st St. #C. ??Van Gecko, Santos Rodriguez, 388 Martin Ave. ??White Crane Winery, Gary Ventiling, 4590 Tesla Road. ??A Touch of Nature, Judith Esslinger, 912 Court St. ??Briana's Contract Processing, Brian Lozano, 146 Fig Tree Lane #4C. ??Educonsult, Jeannette Dothee, 110 Escobar St. ??Ferro's Woodworking, Steven Ferro, 454 Holiday Hills Drive. ??Living Health Center, Ellen Potthoff, 6528 Parkdale Plaza. ??Party Zone, Ali Ismalzada, 526 Center Ave. ??Visionary Solutions, Johnathan Kaufman, 2110 Lost Lake Place. ??Home Connections, Jude Pierotti, 1720 Walnut Meadows Drive. ??MechTech Precision, Bryan Morgan, 13 Hiromi Lane. ??Silver River Restaurant, Michael Miu, 3100 Main St. #276. ??Aspen Mortgage, Jon Bloodworth, 502 Miner Road. ??Fastdraw Design & Construction Graphics, Nielsen Architects Inc. (a California corporation), Timerie Gordon, 362 Village Square. ??May Sales, Gregory Fernbacher, 13 Ramona Drive. ??Tri City Home Companion Services, Rosemary Winn, 1439 Hutchinson Court. ??Golden Bailey Co. and Dollar Joes, Myung Kim, 628 Bailey Road. ??R&B Home Gallery, Rhonda Moore, 1200 Alamo Way. ??R.E.O. Networking, Ricardo Ochoa, 1320 Columbia St. ??Residential Housekeeping, Maria Mendoza, 77 West Leland Road. ??Richardson Computer Research, Chris Richardson, 319 Heron Drive. ??The Perfect Gift, Alejandro Fernandez, 2 Marina Blvd. #9A4. ??Clean Impressions Domestic Referral Agency, Traci Behrens, 248 Douglas Lane. ??Flour Power and You Take The Cake, Denise Vickers, 172 Beverly Drive. ??InnerLife Seminars and InnerLife Resources, Melissa Casas, 131 Chilpancingo Parkway #260. ??Rose's Airport & Limo Service, Norbert Sticht, 112 Poshard St. ??D&D Cleaners, Jae Choi, 3059 Hopyard Road #H. ??Dive Up Sports, Richard Palmon, 2341 Foothill Road #4. ??Kenney Partners LLC, Sean Kenney, 4205 Mairmont Drive. ??M&J Marketing, Jody Samuels, 4847 Hopyard Road #4. ??Ohm Electric Co., Robert Ohm, 3164 Paseo Robles. ??Senior Advantage, Frank Guarascio, 4847 Hopyard Road #4176. ??Tri Technology Sales, Tom Triantos, 7899 Medinah Court. ??Bark Stix, Kathleen Gebhart, 145 Eddy St. ??Advanced Financial Solutions-AFS, Walter Coleman, 448 South 24th St. ??Epperly Masonry Restoration, Peter Epperly, P.O. Box 70004, 117 West Richmond Ave. ??Golden Gate Motorsports, Mikial Nijjar, 5200 Huntington Ave. #340. ??Ichiban Center, Roselle Kan, 3288 Pierce St. #C131. ??Majestic Skating Rink & Recreation Center and Majestic Tower, Kimberly Lewis, 4935 San Pablo Dam Road #205. ??Paradise Jeweler, Oh Kwon, 1215 Hilltop Mall Road. ??Pool Medic, Steven Navarro, 869 Lassen St. ??Superior Import, S&J Superior Imports Inc. (a California corporation), Jack Dong, 12900 San Pablo Ave. ??Suzhou, Xiao Zhou, 199 Park Place. ??Pacific Star Massage, Hung Tran, 207 Pacific Ave. ??Carniceria Trujillo, Rafael Truillo, 1474 Broadway Ave. ??L'image Salon & Spa, Amad Dias, 14430 San Pablo Ave. ??EFS Water Treatment Services, Enron Building Services Inc. (a Pennsylvania corporation), Joseph Hrabik, 12647 Alcosta Blvd. #500. ??Mermaid Aquarium, Anne Tran, 46513 Mission Blvd. ??Tina's Transcription Services, Christine Pastran, 265 Reflections Drive #16. ??Ado, Jennifer Schneider, 1241 Dewing Lane. ??Christopherson & Associates, Dean Christopherson, 1111 Civic Drive #380. ??Clinque Venicia, Kathleen Conner, 1406 Mari Lane. ??Georgie's Creek Consulting, Shirley Bergren, 305 Downham Court. ??Golden Bear Building Maintenance, Robert Butler, P.O. Box 3931. ??JK's Interior Accents, Janet Mayfield, 588 Timberleaf Court. ??Jump Start Partners, Dorothea Grigsby, 121 Arlene Drive. ??Modern Technology Institute, Norman Hewlett, 712 Bancroft St. #200. ??Mosaic Blue, Mosaic Blue Inc. (a California corporation), Christopher Nagle, 125 Near Court #504. ??Natalie Rose Gift Baskets, Carol Gilson, 1172 Lindell Drive. ??New Fashion Cleaners, Mi Kyung Son, 581 Ygnacio Valley Road. ??Pack Rat Treasures, Lindsay Wildlife Museum. (a California corporation), Marc Kaplan, 1531 Palos Verdes Mall. ??Tice Valley Optical, Richard Powell, 1988 Tice Valley Blvd. ??----- ??To see more of the Contra Costa Times, or to subscribe to the newspaper, go to http://www.hotcoco.com/ JOURNAL-CODE: CC LOAD-DATE: July 30, 2001 ??????????????????????????????17 of 77 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????July 29, 2001 Sunday ?Home Edition SECTION: Part A; Part 1; Page 1; Metro Desk LENGTH: 3106 words HEADLINE: Energy Landscape Is Forever Altered; Electricity: Deregulation and the state's emergence as a buyer have changed how Californians get power. BYLINE: NANCY VOGEL, TIMES STAFF WRITER DATELINE: SACRAMENTO BODY: ??California's immediate electricity crisis seems to have passed. But like a hurricane that resculpts a tropical island, the crisis has radically altered how 27 million Californians get their electricity and what they pay for it. ??Not all the state's energy problems have disappeared; a siege of very hot weather, for example, could still bring shortages. But the degree of change in the short-term energy picture since the blackout days of early spring is hard to overstate. ??A megawatt-hour that once cost hundreds, sometimes thousands, of dollars now regularly sells for less than $80. ??There hasn't been a forced outage since May 8. ??Predictions that California would suffer 260 hours of blackouts this summer now seem ludicrous. ??The state government, which was spending an average of $65 million a day to buy power in May, now pays an average of less than $30 million a day. Basking in unexpectedly cool summer weather, the government has so much power on hand that on some days it has had to sell surplus electricity at a loss. ??That sudden shift, from crisis to calm, obscures an equally dramatic change in California's long-term approach to how electricity gets bought and sold. ??Just three years ago, the state had embarked on a broad deregulation scheme designed to put most decisions about electricity into the private marketplace. ??Now, the state government itself has become the biggest buyer of power in the West. ??The state's two largest utilities, already stripped by deregulation of much of their ability to generate electricity, are, at least temporarily, also out of the power-buying business. Financially wounded, maybe crippled, their role has been sharply curtailed, perhaps for years. ??Utility rates paid by millions of customers have been raised, and the state's utility watchdog, which used to control rates, is poised to yield much of its authority to an unlikely agency: the Department of Water Resources, whose principal job until January was running reservoirs and canals. ??And consumers seem almost certain to be saddled with billions of dollars in debt and contracts to buy power that practically guarantee high electricity rates for years to come. ??The two sets of changes, the short-term and the long, are interconnected. Both stem from the state's dramatic entry into the market seven months ago. ??On Jan. 17, blackouts darkened much of the state. Power plant owners refused to sell electricity to Pacific Gas & Electric and Southern California Edison, the state's two biggest utilities, which had been nearly drained of cash by eight months of soaring wholesale power prices while being prevented by the state from raising rates for consumers. ??Four private energy companies were warning that they would take the two utilities into Bankruptcy Court the next day if the state did not begin to pick up the bill for electricity. ??Faced with the options of rationing power, shocking California's economy with a tripling of electricity rates or opening the state's checkbook, a grim-faced Gov. Gray Davis signed an emergency decree to allow the Department of Water Resources to use its budget to buy electricity that would then be sold to consumers. ??That act, later broadened and formalized by the Legislature, opened the door for taxpayer money--$8 billion and counting--to be used to buy electricity. ??"It's our obligation to provide power to the homes and businesses that drive California," Davis said at the time. "I'm disappointed the utilities can't do it. We have no choice but to step in, and we will do it." ??The involvement of the state in buying power changed the political calculations involved in setting electricity rates. For months, the private utilities had complained that California's rates, which were frozen as part of the state's deregulation law, were lower than the cost of buying power. But raising rates to help the utilities was politically unpalatable; the Public Utilities Commission in January gave them just a fraction of what they sought by raising rates for PG&E and Edison residential customers by 9%. ??After the state began buying power, though, it was California's treasury that was at risk. Pressure built quickly for more rate hikes. In March, the PUC approved the largest increase in its history, boosting the rates of some customers by more than 40%. ??Those increases showed up in bills last month. The higher costs and conservation efforts have reduced demand. Cooler-than-expected weather lowered demand even more. Californians used 12% less electricity last month than in June 2000, after adjusting for weather and economic growth, according to the California Energy Commission. ??Seven months after the state began buying power, January's sense of urgency has dissipated. Buyer's remorse is setting in. Grumbling grows louder about how deeply the state has inserted itself into the electricity business. ??It was a "huge mistake" to let the Department of Water Resources become the buyer of most of the electricity used by California, said Bill Booth, an attorney for the California Large Energy Consumers Assn., a group of heavy industry manufacturers that pushed hard for deregulation in the early 1990s. ??"I would hope that the state as an entity chooses to get out of that role sooner rather than later," Booth said. "The state has shown zero capability of doing that well," he said, voicing a criticism also made by Republican lawmakers. ??Davis and his advisors argue that they had little choice but to jump in and buy power on behalf of the utilities. And they insist that their intervention has stabilized the market. ??Long-Term Contracts Called 'Insurance' ??After the state government began buying electricity, officials moved quickly to get the state out of the exorbitant spot market by locking up $43-billion worth of long-term power contracts, some lasting more than a decade. Lawmakers and consumer advocates are growing increasingly critical of those contracts, some of which are now more expensive than the falling prices in the spot market. ??But Davis administration officials insist that spot market prices are falling only because the state is now buying 40% of its power under contract, rather than bidding up prices by seeking all of its electricity in the market. ??"Insurance is insurance, and it costs a little bit, but it's a damned good thing to have," said S. David Freeman, the governor's top energy advisor and the former general manager of the Los Angeles Department of Water and Power. ??"The people in this ballgame that will criticize long-term contracts will criticize anything with stability in it because God forbid that it may turn out to cost a tiny bit more than what the spot market is in the future," Freeman added. "That kind of thinking leads you to be in the spot market." ??The shift out of the spot market is not the only factor that has stabilized the situation, however, and some accuse the governor of taking undue credit. ??The change is "clearly explained by the fundamentals of supply, which has increased, and demand, which has decreased because people are conserving," said Gary Ackerman, executive director of the Western Power Trading Forum, a group of electricity sellers. ??The price of natural gas, the fuel used to run most of California's power plants, has fallen by half since early January. There is widespread disagreement about why--mirroring the argument over why gas prices spiked in the first place. ??When prices rose, electricity companies accused gas pipeline companies of gouging. The gas firms said power generators bid up the price knowing they could recoup the cost by selling expensive megawatts. ??Another factor in lowering wholesale electricity prices is that the state's overall power supplies are more abundant because many power plants that were shut down this spring are running again. ??At times last winter, more than 10,000 megawatts of capacity were offline. Recent plant shutdowns have totaled closer to 4,000 megawatts. Three new power plants have opened this summer, adding 1,415 megawatts to the state's capacity. ??Statewide demand for electricity has been peaking at a little more than 30,000 megawatts in recent days. ??Again, the reasons for the additional supply are disputed. Generating companies say their plants were shut down earlier this year for repairs and maintenance. ??State officials and consumer advocates have alleged that some of the plants were taken offline to manipulate prices. Today, with less power being bought on the spot market, there are fewer incentives for such manipulation. ??A federal wholesale electricity price cap that took effect in June also has also dampened prices, experts say. ??The Federal Energy Regulatory Commission imposed the cap, now at $92 per megawatt-hour, after resisting the pleas of California politicians for nearly a year. ??"They just did a complete 180," said Severin Borenstein, director of the University of California Energy Institute in Berkeley, "and if they had done it earlier, we would have saved a lot of money." ??The agency that manages most of the state's transmission grid has found that bids by power sellers dropped after June 21, when the price limit took effect. But assessing how much of the change resulted from the cap and how much from other factors "is difficult," said Anjali Sheffrin, director of market analysis at the California Independent System Operator. ??The changes in the market--and the debate between the administration and its critics--involve who pays for risk. ??Little Incentive for Firms to Trim Costs ??Before deregulation in 1998, California's electricity industry was designed above all to avoid the risk of shortages. Utilities built a cushion of supply, and regulators guaranteed that they could pass on the cost to their customers. ??Critics said that such regulation left the utilities with little incentive to trim costs, meaning that ratepayers paid higher bills. ??Deregulation was supposed to shift the risk of owning power generation to private companies and those who bought their stock. Proponents said consumers would benefit as private firms risked their own money to build power plants and competed with one another to sell electricity. ??But in practice, competition in California brought price spikes and supply shortages. ??"The reason why economists have preached that competition is better than regulation," said Ken Rose, executive director of the National Regulatory Research Institute at Ohio State University in Columbus, "is that the investor putting his own dollars on the line will be more careful with those dollars. The downside of that is if there's any ability of the suppliers to control prices, then they'll exploit that advantage, which is what you'd expect them to do. ??"You can't make risk go away," he said. ??Now Californians face a different risk: that a new, largely untested 96-person, $2-million-per-month bureaucracy designed to buy power could run amok. ??There's no easy way to disband the power-buying operation until the utilities get back on their feet financially. That could take years. In April, PG&E filed for bankruptcy to fend off creditors. Edison's finances have started to improve somewhat, but the company is still seeking help from the Legislature, where no rescue plan seems to be gaining momentum. ??In the meantime, the Department of Water Resources has little oversight as it goes about its newly assigned job of buying electricity. ??The Public Utilities Commission for 80 years has dictated the rates utilities could charge. But under new rules proposed earlier this month, the PUC will essentially become a rubber stamp, adjusting rates for customers of PG&E, Edison and San Diego Gas & Electric Co. to match whatever amount of money the Department of Water Resources says is needed. ??Even PUC officials say such a drastic loss of control is necessary to allow the state to sell $13.4 billion in bonds. Those bonds are designed to repay the state's taxpayers for past power costs. They will be backed by the money that customers pay PG&E, Edison and SDG&E each month. ??That is just one of the ways in which the drastic actions taken to prevent an energy meltdown have hemmed in policymakers trying to envision the future shape of the state's electricity industry. ??"There is certainly a lot less room for designing the future than many people would like," said state Sen. Debra Bowen (D-Marina del Rey). ??For example, competition--the dream of deregulators--appears dead for at least several years. ??That's because of the need to pay for the long-term contracts and reimburse the state's general fund for the billions already spent. ??The owners of steel mills, cement plants and grocery stores blanch at the cost of the contracts. They are chafing to break from the utilities and cut their own deals for electricity with private companies such as Enron Corp. Such one-on-one deals were banned by the Legislature when it put the state into the power-buying business. ??"Ultimately, we think our own companies buying power for themselves is the best solution," said Jack Stewart, president of the California Manufacturers and Technology Assn. ??But that move would again shift the risks inherent in the electricity business. Allowing big firms to walk away from the utilities would mean that someone else--renters, homeowners and small business owners--would have to bear the cost of maintaining a cushion of extra supply for the state. Many lawmakers are reluctant to allow that. ??"Any kind of meaningful competition in California has been postponed until 2004, 2005, at which time some of the long-term contracts start ending," said Michael Shames, executive director of the Utility Consumers' Action Network in San Diego. ??Ultimately, Davis said in an interview, "the long-term solution to this problem depends on having more power than we need." ??Generators base their prices "on how much power they know you do or do not have," Davis said. To protect consumers from being gouged, he said, the state's goal should be to always have at least 15% more power than it needs. ??Private companies will never take on the risk of building the last few power plants necessary to ensure a surplus, said Davis, so the state must. ??To that end, Davis backed a law that takes effect next month creating a Public Power Authority. The agency will be able to sell $5 billion in revenue bonds to build, buy and own power plants and to finance energy efficiency and conservation programs. ??Ironically, the governor said, this new agency, as the "builder of last resort," could clear the way for the competition that the state's deregulation plan so miserably failed to achieve. ??"We've never really had a chance to test deregulation in an ideal world, because we've never had more power than we need," the governor said. "My overriding goal is to keep the lights on and provide Californians with the power they need. . . . A byproduct of our efforts will be to put the state in a position where deregulation works." ??In the hybrid system Davis envisages, the state government will act like a giant public power agency and control nearly as much electricity as private companies. That role for California government would have been inconceivable just two years ago, said Ohio State University's Rose, who tracks the way each state regulates the electricity industry. ??"I don't know of any other state headed toward that," he said. "But no other state has had the crisis of California." ??* ??MORE INSIDE ??PG&E Bankruptcy: Legal and other fees in the case could amount to $470 million, one expert says. C1 GRAPHIC: PHOTO: It rained on Pacific Gas & Electric's corporate headquarters in San Francisco the day in April that the firm filed for bankruptcy protection because of mounting debts in California's energy crisis. PHOTOGRAPHER: ROBERT DURELL / Los Angeles Times PHOTO: State Sen. Debra Bowen (D-Marina del Rey) is upbeat with Gov. Gray Davis in January as they announce the results of an energy auction on the Internet to keep electricity rates stable. PHOTOGRAPHER: ROBERT DURELL / Los Angeles Times LOAD-DATE: July 29, 2001 ??????????????????????????????19 of 77 DOCUMENTS ??????????????????Copyright 2001 McClatchy Newspapers, Inc. ????????????????????????????????Sacramento Bee ??????????????????July 29, 2001, Sunday METRO FINAL EDITION SECTION: MAIN NEWS; Pg. A3; CAPITOL & CALIFORNIA LENGTH: 1205 words HEADLINE: She's the governor's right-hand man Tough, loyal, workaholic, Lynn Schenk advises him on every major decision. BYLINE: Emily Bazar Bee Capitol Bureau BODY: ??Despite her high-profile role as Gov. Gray Davis' top adviser, Lynn Schenk keeps a decidedly low profile. ??She shuns public attention and refuses to speak to reporters. But Schenk can often be seen whispering counsel into the governor's ear. ??The attorney and former congresswoman has become a powerful force in the Democratic governor's administration, winning the trust of a leader who trusts precious few. ??On every major policy decision, whether it involves health care or law enforcement, Davis elicits his chief of staff's opinion. When high-stakes phone calls need to be made, he entrusts her with the task. During last-minute negotiations, Davis sends Schenk to represent him at the table. ??"There are no limits on what he expects her to do and what he asks her to do," said Garry South, Davis' chief political adviser. "She is his eyes and ears and the funnel for him of things he needs to know, danger signs he needs to be aware of, problem areas that appear to be building somewhere." ??Described as demanding, meticulous, hard-working and fiercely loyal, Schenk mirrors many of Davis' traits. Both are considered moderate Democrats. Both are notoriously hard to work for and have a tendency to micromanage. ??Davis' political relationship with Schenk has evolved over 20 years, since they served together in former Gov. Jerry Brown's administration. Davis was Brown's chief of staff, the position he has awarded Schenk, and Schenk was first deputy secretary, then secretary of the Business, Transportation and Housing Agency. ??Though the two took divergent paths - she entered the business world and served one term in Congress while he began his incremental ascent to the governorship - they remained friends and political allies. ??After he was elected governor in 1998, Davis asked Schenk to assume the toughest job in his administration. With her appointment to the $131,400-a-year post, Schenk, 56, became the highest-ranking woman in the history of the state's gubernatorial administrations. ??Their similarities have led numerous colleagues and friends to call Schenk Davis' "alter ego," a designation with which the governor would probably agree. ??"I don't think there's anyone in my administration whose philosophical perspective is closer to mine than hers," Davis said of Schenk recently. ??As one of the few people Davis trusts, Schenk has moved beyond the duties of a traditional chief of staff. ??Howard Dickstein, a prominent tribal attorney, described Schenk as focused and tireless during the 1999 talks to negotiate compacts that regulate gambling on Indian lands. She sometimes scheduled meetings at midnight. ??Schenk also was heavily involved in talks last year over a bill by state Sen. Kevin Murray, D-Culver City, that would have required police officers to record the race and ethnicity of the people they stop in an effort to collect data on racial profiling. ??Though he wasn't completely satisfied with the watered-down bill, Murray said Schenk was responsive to his concerns and, above all, loyal to the governor. ??"You know when you're talking to her, you're not getting her opinion," he said. "You're getting the governor's opinion." ??Behind the scenes, however, Schenk's influence on policy is palpable, particularly when she feels strongly about an issue. ??According to Grantland Johnson, secretary of the Health and Human Services Agency, Schenk was the driving force behind the governor's "Aging with Dignity" initiative, which aimed to expand in-home and community-based care for the elderly. ??"She's very passionate," he said. "When she latches onto an issue, she's like a pit bull." ??The child of Hungarian immigrants, Schenk - who speaks fluent Hungarian - came from relatively humble beginnings. Her father, who survived a Nazi concentration camp, was a tailor, and her mother a manicurist. Schenk paid for her studies at the University of California, Los Angeles, by working as a telephone operator. ??A University of San Diego law school graduate, Schenk was soon working for San Diego Gas & Electric Co. as an attorney in the early 1970s. The investor-owned utility currently is embroiled in the state's energy crisis, which has dominated the administration's attention, and therefore her attention, for the entire year. ??Schenk became a player in San Diego's tight-knit business and political circles, and also emerged as an outspoken advocate for women's rights. She served as a director of a bank that catered to women, and also joined a group of women in the early 1970s that helped break the "men only" lunchtime rule at a respected San Diego restaurant. ??After her stint in the Brown administration, she was elected a San Diego port commissioner and in 1992 to the U.S. House of Representatives. She was defeated two years later by Republican Brian Bilbray. ??She ran an unsuccessful campaign for state attorney general in 1998 and served as an attorney for the international law firm Baker & McKenzie in San Diego. ??When she became the governor's chief of staff, Schenk established herself as a sharp thinker and a demanding workaholic. ??She has managed to stay focused despite personal upheaval, including her father's death last year and her husband's recent struggle with cancer. ??Her work ethic is renowned. "One night in 1993 or 1994, she was reading the federal budget with a cold can of soup," said her former congressional chief of staff, Laurie Black. ??Schenk isn't only tough on herself; she's tough on her employees. ??Known as an extraordinarily tough boss, Schenk has a low tolerance for error - a trait she shares with the governor - and burns through assistants quickly. ??A former Schenk staffer said Schenk isn't mean-spirited, but expects employees to anticipate her needs and live up to her expectations. ??"She was a perfectionist herself and she demanded perfection from everybody," the staffer said. "It was very hard for people to adjust to that." ??Many of her colleagues and friends expect Schenk to remain chief of staff at least through next year's gubernatorial election. ??After that, it's anyone's guess. Schenk, in characteristic style, refused to be interviewed by The Bee for this story. Davis' spokesman, Steve Maviglio, declined to authorize interviews with other members of the administration. ??"She really has a lot of the behavior of a good attorney," said former Senate President Pro Tem James Mills. "She isn't going to divulge anything that isn't advantageous to divulge." ??* * * ??Lynn Schenk ??Position: Chief of staff to Gov. Gray Davis. ??Born: Jan. 5, 1945, in New York City. ??Personal: Lives in La Jolla. Married to law professor Hugh Friedman. ??Education: Bachelor's degree from University of California, Los Angeles; law degree from University of San Diego; studied at the London School of Economics. ??Experience: Attorney; Democratic candidate for state attorney general in 1998; member of Congress, 1993-95; San Diego port commissioner 1990-92; secretary of the California Business, Transportation and Housing Agency, 1980-83; White House fellow 1976-77; deputy state attorney general 1971-72. ??Sources: Governor's office, Bee research ??* * * ??The Bee's Emily Bazar can be reached at (916) 326-5540 or ebazar@sacbee.com . GRAPHIC: Associated Press photograph / Charles Rex Arbogast Lynn Schenk, Gov. Gray Davis' top adviser, can be seen in the foreground, arms raised, applauding a speech by her boss last year at the Democratic National Convention in Los Angeles. The two moderate Democrats have been political allies since they served 20 years ago in Gov. Jerry Brown's administration, when Davis held the position that Schenk now holds in the Davis administration. LOAD-DATE: July 30, 2001 ??????????????????????????????20 of 77 DOCUMENTS ??????????????????Copyright 2001 McClatchy Newspapers, Inc. ????????????????????????????????Sacramento Bee ??????????????????July 29, 2001, Sunday METRO FINAL EDITION SECTION: FORUM; Pg. L5; OTHER VIEWS LENGTH: 890 words HEADLINE: Cocky operative needles Davis with secret funds BYLINE: Daniel Weintraub BODY: ??Scott Reed is one cocky guy. ??From his perch in Washington, D.C., throwing bombs into California's political landscape, Reed is trying to rattle Gov. Gray Davis. He thinks he's succeeding. ??Reed is the man behind the television commercials that have been running for the past month, challenging the governor's take on the energy crisis and trying to get voters to blame Davis for the problem. ??"They're working," Reed says of his creations. "They wouldn't be squealing like stuck pigs if they weren't." ??But it's not just the message in the ads that has Davis and his people upset. It's that Reed has found a way to air them while keeping secret the identity of the people putting up millions of dollars to buy the television time. ??Reed, a former executive director of the Republican National Committee and campaign manager for Sen. Robert Dole's 1996 presidential campaign, is head of something called the American Taxpayer Alliance - the official sponsor of the anti-Davis ads. The alliance is a tax-exempt organization that was formed years ago but was dormant until just befo
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