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Have a great 4th of July! Jean -- Jean Munoz McNally Temple Associates, Inc. 916-447-8186 916-447-6326 (fx) AP Online, July 2, 2001; Monday, 11:49 PM, Eastern Time, Domestic, ????non-Washington, general news item, 337 words, California Releases Power ????Contracts, JENNIFER COLEMAN, SACRAMENTO Contra Costa Times, July 3, 2001, Tuesday, STATE AND REGIONAL NEWS, K5203, ????752 words, Tourists to California just roll with the outages, By Jasmine ????Kripalani Copley News Service, July 3, 2001, Tuesday, State and regional, 537 words, ????Duke Energy agrees to refund money, Bill Ainsworth, SACRAMENTO, Calif. Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 12, 158 words, ????Scoring the Pollsters Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 10, 705 words, ????THE ENERGY CRISIS; ; Generator Bows, Pledges to Cut Electricity Bill by $20 ????Million; Power: Duke Energy had been accused by the state of price gouging. ????Gov. Davis insists that the company still has much to explain., NANCY RIVERA ????BROOKS, RICH CONNELL, TIMES STAFF WRITERS Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 10, 442 words, ????THE ENERGY CRISIS; ; Senate Panel's Resolution Backs Power Plant Seizures; ????Energy: State lawmakers hope to put pressure on producers accused of ????exploiting California. Governor brings another facility online., CARL ????INGRAM, TIMES STAFF WRITER, SACRAMENTO Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 1, 530 words, ????THE ENERGY CRISIS; ; Power Sales Halted by New Pricing Curbs; ?Electricity: ????Confused suppliers, unsure what they will be paid, refuse to sell to state, ????which asks FERC for a ruling but doesn't get it., NANCY VOGEL, TIMES STAFF ????WRITER, SACRAMENTO Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 1, 1429 words, ????THE ENERGY CRISIS; ; Hidden Costs Revealed in Power Pacts, RICH CONNELL, ????ROBERT J. LOPEZ, JEFFREY L. RABIN, TIMES STAFF WRITERS The New York Times, July 3, 2001, Tuesday, Late Edition - Final, Section A; ????Page 10; Column 5; National Desk, 804 words, Power Company Rebuts ????Accusations of Gouging, By JAMES STERNGOLD, LOS ANGELES, July 2 San Jose Mercury News, July 3, 2001, Tuesday, STATE AND REGIONAL NEWS, ????K5369, 508 words, Davis paying millions to energy consultants, contracts ????reveal, By Dion Nissenbaum San Jose Mercury News, July 3, 2001, Tuesday, SJ-ENERGY-PRICE, 834 words, ????California Officials Insist Energy Company Manipulated Prices, Output, By ????Brandon Bailey The San Francisco Chronicle, JULY 3, 2001, TUESDAY,, FINAL EDITION, NEWS;, ????Pg. A3, 860 words, Uncensored power pacts made public; ???State controller ????says deals will burden general fund for years, Carolyn Said, Christian ????Berthelsen, David Parrish The Washington Post, July 03, 2001, Tuesday, Final Edition, FINANCIAL; Pg. ????E02, 1111 words, Duke Energy Cuts Calif. Bill The Associated Press, July 3, 2001, Tuesday, BC cycle, 7:27 AM Eastern Time ????, Business News, 622 words, Duke releases California energy records to ????counter accusations of price gouging, By LESLIE GORNSTEIN, AP Business ????Writer, LOS ANGELES Business Wire, July 2, 2001, Monday, 590 words, Stage One and Stage Two ????Emergencies Declared as Demand Soars; California ISO Strongly Urges ????Conservation, FOLSOM, Calif., July 2, 2001 Copyright 2001 Associated Press ??????????????????????????????????AP Online ?????????????????July 2, 2001; Monday 11:49 PM, Eastern Time SECTION: Domestic, non-Washington, general news item LENGTH: 337 words HEADLINE: ?California Releases Power Contracts BYLINE: JENNIFER COLEMAN DATELINE: SACRAMENTO BODY: ???State Controller Kathleen Connell released details about four of California's short-term contracts with power companies Monday, a move the governor's office said could drive up wholesale energy prices. ??Democratic Gov. Gray Davis for months refused to release details of long-term contracts the state had signed with electricity providers, saying the documents needed to remain secret. He released 38 of the contracts in June, with key portions blacked out. ??A judge ordered that the long-term contracts be released in their entirety after several news organizations sued, including The Associated Press. ??But the four short-term contracts Connell released Monday along with the long-term contracts were not part of the judge's mandate. The contracts reveal the state's strategy for making day-to-day purchases, said Steve Maviglio, spokesman for Davis. He said revealing the strategy could lead to higher wholesale prices. ??''It shows the irresponsibility of the controller and every California who gets a higher electricity bill can thank Kathleen Connell,'' Maviglio said. ??Connell said the judge heard all the evidence before ordering the complete contracts released and ''there is no reason that information should raise prices. Today's prices aren't going to be affected by prices engineered several months ago.'' ??But generators can use that information to time their sales and drive up their prices, said Oscar Hidalgo, spokesman for the Department of Water Resources. ??''We still feel that those will hinder our leverage in gaining reasonably priced power on the spot market,'' he said ''It shows our position on the daily spot market and what we're willing to pay,'' he said. ??Some state officials have criticized the long-term deals most of which are 10 years saying they are too long. ??By signing long-term contracts including 41 deals with 27 power generators worth about $43 billion the state could get burned if energy prices go down, said Public Utilities Commissioner Richard Bills. LOAD-DATE: July 2, 2001 ??????????????????????????????3 of 65 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ??????????????????????????????Contra Costa Times ????????????????????????????July 3, 2001, Tuesday SECTION: STATE AND REGIONAL NEWS KR-ACC-NO: ?K5203 LENGTH: 752 words HEADLINE: Tourists to California just roll with the outages BYLINE: By Jasmine Kripalani BODY: ??SAN FRANCISCO _ Tourists are constantly asking the gift shop manager at Coit Tower if a blackout could occur while they ride the elevator to the top of the 210-foot fire hose nozzle-shaped landmark. ??"They're serious when they ask it. I always tell 'em, 'We got the last guy out in only three days,' " said Walt Lo. ??Tour guides, hotel managers and gift shop clerks in the Bay Area have developed a sense of humor about the California energy crisis. But for many visitors the perception of blackouts conjures up images of streets without traffic lights and people trapped in elevators. ??Before leaving their Indiana suburb for vacation, Mike and Lisa Bonahoom worried about what was ahead, but not enough to stop them from booking a three-night stay at the room designed by former Grateful Dead frontman Jerry Garcia in the Hotel Triton. ??"The perception in the Midwest is that (Californians) don't have lights," said Mike Bonahoom. ??Lisa, added: "We heard news reports that they shut the lights off every day (at a set time) in order to save electricity, and people would plan their day around that. I worried about getting stuck in an elevator for hours, but I didn't mention any of this to the kids." ??It's a fear California's travel and tourism commission is taking so seriously that it has handed a public relations firm about a half-million dollars to plan an advertising campaign that will convince the rest of the world that it's still safe to travel to the Golden State. ??Communications director Fred Sater blames visitors' fears on the media's use of the term "rolling blackout." ??" 'Planned outage' or 'power interruption' _ that's the correct phrase," he said. Sater believes "rolling blackout" inaccurately implies long periods of darkness across the state. ??The San Francisco visitors bureau has taken a less expensive approach. It has posted a letter and Frequently Asked Questions list on its Web site (www.sfvisitor.org) that assures potential visitors that emergency services are still available and that they won't get stuck on an amusement park ride. ??But all the warnings in the world wouldn't have done much good on a recent Thursday at about 1:10 p.m. when the lights in parts of San Francisco flickered, then went out for about an hour. ??Pacific Gas & Electric said 7,000 of its customers were without power and attributed it to a bad cable between Broadway and Vallejo on Mason Street. ??One of those customers included a souvenir shop near Fisherman's Wharf. ??Kathy Joy had to wait several minutes before she could complete a sweatshirt purchase. The cashier rushed to the front of the store with her solar-powered calculator in hand and returned with a total. ??"That'll be $19.90," Sharon Stevenson told Joy and added that she could only accept cash. Joy had the cash. ??Other stores, many of which mistook the outage for a blackout, were forced to shut down their businesses. ??Sean Farber, a sales manager at Studio 39, a video-making business in which a person's body is transposed on a backdrop of the Golden Gate Bridge, took advantage of the power outage to express his political viewpoint by posting a sign that read: "Thanks to PG&E, Enron, and George W Bush We will be closed until 3:00." ??Others saw the outage as an entrepreneurial opportunity. ??"Hey, folks, there's a rolling blackout. You might as well go on a Bay cruise," a tour operator loudly offered. ??Many didn't even notice the hourlong power outage. ??Two visitors from Naples, Fla., who were in town for the recent NASCAR races, noticed the darkened businesses only after a reporter pointed it out. ??"Well, if this means I can't get into the pub, I will be very upset," said Craig Barrero, who was clad in shorts and toting a video recorder. ??Other tourists said the only time the energy crisis has affected them is when they're ready to check out of their hotel room. ??When Robyn and Ben Reeve from Australia walked into their room at the Hilton on Fisherman's Wharf, they found the usual amenities: tightly tucked linens between mattresses and the bathroom towels symmetrically draped over a brass bar. ??The Reeves also found a letter from the general manager informing them that they would have to pay a $2.85 energy tax per night. ??PHOTOS will be available from KRT Direct and KRT Photo Service, 202-383-6099. ??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune ??© 2001, Contra Costa Times (Walnut Creek, Calif.). ??Visit the Contra Costa Times on the Web at http://www.cctimes.com/ JOURNAL-CODE: CC LOAD-DATE: July 3, 2001 ??????????????????????????????4 of 65 DOCUMENTS ??????????????????????Copyright 2001 Copley News Service ?????????????????????????????Copley News Service ????????????????????????????July 3, 2001, Tuesday SECTION: State and regional LENGTH: 537 words HEADLINE: Duke Energy agrees to refund money BYLINE: Bill Ainsworth DATELINE: SACRAMENTO, Calif. BODY: ??As hot summer weather triggered the first Stage 2 power alert yesterday in more than a month, Duke Energy agreed to refund money from an earlier extremely high price to comply with an order from federal regulators. ??While California was able to squeeze by with tight power supplies, southern Nevada was not so lucky and was forced to endure brief rolling blackouts during triple-digit heat. ??California's electricity grid manager, the Independent System Operator, had issued the last previous Stage 2 alert on May 31. ??The hot weather is expected to continue. ''Conservation is going to play a key role in reducing demand,'' said Greg Fishman, spokesman for the ISO. ??California's electricity demand peaked at about 4 p.m. with 41,600 megawatts, with an available supply of 42,402 megawatts. A megawatt can power about 750 homes. ??Meanwhile, Duke Energy announced that it would follow rather than fight an order from the Federal Energy Regulatory Commission to refund money from January when it charged a state record $3,880-per-megawatt hour. Duke was allowed to charge only $273 per megawatt-hour, according to FERC. ??The North Carolina-based company said that it would slash $20 million from California's power bill, including $2.1 million from February. ??Unlike the action for January, the February price cut was not ordered by the Federal Energy Regulatory Commission. ??''It's our way of creating a good working atmosphere to come up with some solutions,'' said Terry Francisco, a company spokesman. ??The money is a mere fraction of the $805 million that the ISO says the company overcharged California residents. ??In all, the ISO says power companies have overcharged California at least $ 8.9 billion. ??Company officials, meanwhile, continued to fight price-gouging charges leveled by former employees of Duke's Chula Vista, Calif., plant. ??They held a news conference explaining in detail the actions it took from Jan. 16 through Jan. 18, a time when it charged the state the record price for power. ??Previously, the company had released a memo from the ISO saying that the Chula Vista plant was operating under the grid manager's instructions when it throttled up and down during that period. ??Jeff Stokes, executive vice president of Duke, would not detail the price the company charged during that time. But in addition to the $3,880 per megawatt hour, he said, Duke charged between 25 percent and 33 percent of that record price. That would make the other prices about $1,000 per megawatt hour. ??Yesterday, a megawatt hour sold for $92 on the spot market, and that's about three times the going price in the spring of 2000. ??Officials from the ISO say the amount of the bids the company offered is needed to determine whether Duke engaged in price gouging. ??A March report by the ISO accused generating companies of driving up prices in two ways: by withholding power and by bidding prices so high the state couldn't afford them. ??Gov. Gray Davis said, in a written statement, that Duke owes Californians an explanation. ??''Duke has a lot of explaining to do for charging Californians the outrageous price of $3,880 a megawatt hour,'' he said. ??WAGNER-CNS-SD-07-02-01 2102PST LOAD-DATE: July 3, 2001 ??????????????????????????????5 of 65 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????July 3, 2001 Tuesday ?Home Edition SECTION: California; Part 2; Page 12; Metro Desk LENGTH: 158 words HEADLINE: Scoring the Pollsters BODY: ??Re "Power Shortage Not Real, Most Californians Say," June 28: Not "most," but a majority of the 1,541 Californians polled. ??President Bush and his administration didn't do well in the poll in the way they handled the electricity situation in California--with a 65% disapproval rating. ?Since the problem started during the Clinton/Gore administration, I wonder how it would have been rated? ??To those polled who agree strongly that Bush would have been more helpful to the state if Californians had voted for him, my response is this: Bush so far has not shown an inclination to sacrifice principles for votes. This is a new way to govern and not easily understood by many. ??I can't help but wonder how the poll results might have been skewed due to efforts by Gov. Gray Davis' taxpayer-funded media gurus, hired at $30,000 per month until last Friday ("Davis Scraps Deal With Consultants," June 30). ??Bob Ball ???o7 Anaheim ???f7 LOAD-DATE: July 3, 2001 ??????????????????????????????6 of 65 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????July 3, 2001 Tuesday ?Home Edition SECTION: California; Part 2; Page 10; Metro Desk LENGTH: 705 words HEADLINE: THE ENERGY CRISIS; ; Generator Bows, Pledges to Cut Electricity Bill by $20 Million; Power: Duke Energy had been accused by the state of price gouging. Gov. Davis insists that the company still has much to explain. BYLINE: NANCY RIVERA BROOKS, RICH CONNELL, TIMES STAFF WRITERS BODY: ??Caving to state and federal pressure, Duke Energy Corp. said Monday that it will reduce by $20 million the amount it claims it is owed for electricity sales in California. ??The Charlotte, N.C., company is one of the state's largest power plant operators and, with other generators, has been flayed by politicians and regulators in recent months for alleged overcharges in the California market and for supposedly manipulating electricity supplies. ??Duke also on Monday formally released internal documents of its own, as well as from the California Independent System Operator, showing that the agency was responsible for huge swings in production at a San Diego-area power plant that sparked accusations of price gouging. ??In sworn testimony June 22 before a state Senate investigating panel, three former workers at Duke's Chula Vista plant offered internal operating logs for three days in January, saying they showed that the company throttled generators up and down "like a yo-yo" to boost prices during power emergencies. ??The company denied the allegations, saying that the workers were not in a position to know that Cal-ISO, which operates most of the statewide power grid, was controlling the changes. ??Duke has been "shocked and appalled by the accusations that have been leveled against our company," said Jeff Stokes, its executive vice president for Western gas and power. The letter from Cal-ISO acknowledging that it ordered the production gyrations in the course of maintaining grid reliability was reported Saturday by The Times. ??Duke said the $20-million refund for January and February will come from a "credit premium" that it had placed on electricity sales because it feared it would never be paid by Southern California Edison and Pacific Gas & Electric, the utility companies then lurching toward bankruptcy. PG&E has since filed for bankruptcy-law protection, and Edison remains financially shaky. ??The Federal Energy Regulatory Commission in June said Duke was entitled to no more than $273 per megawatt-hour of electricity in January and ordered the company to pay back everything it reaped above that price for the month--including an infamous charge of $3,880 per megawatt-hour, which a spokesman for Gov. Gray Davis called "obscene." ??Davis said Monday that Duke still has much to explain. ??"There's no doubt in my mind that there's been an effort by many of the power producers to 'game' the system," Davis said, after dedicating Calpine Corp.'s 540-megawatt Sutter Energy Center in Yuba City, the second of four major power plants to begin operation this summer. ??So far, Duke executives said, the company has been paid less than 2 cents on the dollar for the power it provided the state in January and February. The federal commission is holding a settlement conference to seek agreement on possible refunds owed California by power generators and marketers. ??A Cal-ISO spokesman declined to comment on the Duke revelations, citing a gag order imposed by the administrative law judge overseeing the settlement conference. ??Although Cal-ISO late Friday acknowledged that the ramping at the Chula Vista plant was in response to its orders, representatives of the grid agency, the governor's office and the special state Senate committee probing alleged power gouging warned Monday that Duke's activities at the plant are still being scrutinized. ??The ramping activity ordered by Cal-ISO is only part of the picture, they say. Further investigation of pricing is underway. ??State officials suggest, for example, that the grid operator may have ramped down generation at times to avoid paying unreasonably high prices. Duke Energy has refused to release details of the prices it charged for power on the days at the heart of the ex-employees' allegations, and did so again Monday in a conference call with reporters. ??Under questioning Monday, Duke executive Stokes did indicate that the prices charged for the power associated with the January logs were in the range of $ 1,000 to $1,500 per megawatt-hour, enough electricity to serve about 750 California homes for an hour. ??* ??Times staff writer Eric Bailey in Yuba City contributed to this story. LOAD-DATE: July 3, 2001 ??????????????????????????????7 of 65 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????July 3, 2001 Tuesday ?Home Edition SECTION: California; Part 2; Page 10; Metro Desk LENGTH: 442 words HEADLINE: THE ENERGY CRISIS; ; Senate Panel's Resolution Backs Power Plant Seizures; Energy: State lawmakers hope to put pressure on producers accused of exploiting California. Governor brings another facility online. BYLINE: CARL INGRAM, TIMES STAFF WRITER DATELINE: SACRAMENTO BODY: ??Hoping to pressure out-of-state electricity sellers accused of exploiting California during the long energy emergency, a legislative committee on Monday urged Gov. Gray Davis to begin seizing power plants. ??The Senate Rules Committee approved a nonbinding resolution that tells the governor the Senate would support seizures if Davis takes such a step. ??All three Democrats on the committee, including Senate leader John Burton of San Francisco, author of the measure, voted to send it to the full Senate, where approval is expected. It does not require passage by the Assembly. ??The committee's two Republican members abstained from the vote. They also did not argue against the resolution. ??Burton, who has been eager to commandeer a power plant or two, said Davis did not ask for the resolution. But gubernatorial spokesman Steve Maviglio said the governor is grateful for any support he can get. ??Davis, at a ceremony near Yuba City where he marked the opening of a new 540-megawatt power plant, made no mention of the resolution but lashed out at some of his favorite targets--those same out-of-state generators. ??"We have been a cash cow for Houston, Texas, and Charlotte, North Carolina, and Oklahoma," Davis said. "That is going to stop." ??In his State of the State speech in January, Davis warned that he would invoke his emergency powers of eminent domain to seize power plants, if it meant keeping electricity flowing in California. ??Taking over power plants, Burton argued, would "stabilize" the sky-high wholesale prices that Californians have been paying for almost a year. The measure notes that some prices have soared as high as $3,900 a megawatt-hour, 50 times higher than just two years ago. ??The measure calls the wholesale electricity market in California "grossly dysfunctional" and characterized by the "abuse of market power and the withholding of electricity supply." ??The resolution provides no documentation, however, of the charges. A special Senate committee is looking into whether generators are manipulating the market to drive up profits. ??None of the out-of-state wholesalers that might be affected by the governor's action returned calls seeking a response. ??The new gas-fired plant that was activated on Monday will produce enough electricity for 500,000 homes. It was the second major plant start-up in a week. ??Standing in front of the giant turbines and cooling stacks of the Calpine Corp. plant, Davis said the state will be bringing more energy online during this two-week period than it had in the preceding 13 years. ??* ??Times staff writer Eric Bailey contributed to this story. LOAD-DATE: July 3, 2001 ??????????????????????????????8 of 65 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????July 3, 2001 Tuesday ?Home Edition SECTION: California; Part 2; Page 1; Metro Desk LENGTH: 530 words HEADLINE: THE ENERGY CRISIS; ; Power Sales Halted by New Pricing Curbs; Electricity: Confused suppliers, unsure what they will be paid, refuse to sell to state, which asks FERC for a ruling but doesn't get it. BYLINE: NANCY VOGEL, TIMES STAFF WRITER DATELINE: SACRAMENTO BODY: ??Confusion over new federal price restrictions prompted several electricity sellers to back away from sales to California on Monday afternoon, pushing the state closer to blackouts, energy officials said. ??The state lost sales that would have provided enough electricity to supply more than 1 million homes, said Ray Hart, deputy director of the California Department of Water Resources, which has been buying much of the state's electricity since January. ??At least five companies producing or marketing power "are telling us that since they don't know what they're going to get paid, they're not going to take the risk, and so they're not going to sell the energy," Hart said. ??The electricity sales fell through after power consumption soared in summer heat and grid operators were forced to declare a Stage 1 emergency, meaning reserves had dipped below 7%. It was the first such emergency since May 31. ??Under a June 19 order by the Federal Energy Regulatory Commission intended to bring down wholesale electricity markets across the West, a power emergency in California triggers the setting of a new price limit that applies to power plant owners from Washington to Arizona. ??The new price is supposed to be based upon whatever it costs to run the most inefficient, expensive power plant selling electricity to California grid operators during the first full hour of a Stage 1 emergency. ??But much uncertainty remains about exactly how and when the new price is supposed to be established under the commission's order, and that apparently drove away sellers, Hart said. ??Shortly after the state issued the Stage 1 alert at 1:30 p.m., putting the old price limit of $90 per megawatt-hour in question, companies that had committed to provide the state electricity hour by hour Monday afternoon backed out, Hart said. The companies include TransAlta Energy Marketing of Oregon, Constellation Power of Baltimore and Sempra Energy Trading, a unit of the San Diego-based energy conglomerate. ??Forced to dip even deeper into the state's power reserves and declare a Stage 2 emergency, water agency officials called the federal energy commission's hotline for clarification about what the new price should be and when it should take effect. They got no answer. ??Hart said commission officials reached at home promised to try to clarify their order today. One outstanding question is what obligations power suppliers have to deliver electricity to California in an emergency. ??Both buyers and sellers in the market agree that the new price, when it is set, will probably be lower than $90 per megawatt-hour because the price of natural gas, the main fuel in California power plants, has dropped lately. ??Temperatures soared several degrees higher Monday than grid operators had anticipated. But they said they expected to avoid rolling blackouts in part because the Bonneville Power Administration in Portland, Ore., had agreed to provide several hundred megawatts of Pacific Northwest hydropower each hour in exchange for a return of electricity from California later this summer. ??"Bonneville is giving us emergency power to get us through," Hart said. LOAD-DATE: July 3, 2001 ??????????????????????????????9 of 65 DOCUMENTS ??????????????????????Copyright 2001 / Los Angeles Times ??????????????????????????????Los Angeles Times ??????????????????????July 3, 2001 Tuesday ?Home Edition SECTION: California; Part 2; Page 1; Metro Desk LENGTH: 1429 words HEADLINE: THE ENERGY CRISIS; ; Hidden Costs Revealed in Power Pacts BYLINE: RICH CONNELL, ROBERT J. LOPEZ, JEFFREY L. RABIN, TIMES STAFF WRITERS BODY: ??California consumers on Monday were given their first detailed glimpse of the unpredictable and potentially higher costs they'll face in the future under power-buying deals signed by Gov. Gray Davis' administration. ??State Controller Kathleen Connell released previously secret elements of the state's long-term electricity contracts, along with a new warning that the price tag could exceed the administration's previous estimate of $43 billion. ??Technical vagaries in the pacts, Connell said, could leave state power bills open to wild fluctuations over the next decade. Even after weeks of analyzing the 41 agreements, she said, her office is still unable to say "what the [cost ] ceiling could be." ??Among other things, the controller said, most costs under the contracts are now running between $70 and $200 per megawatt-hour, and she predicted that costs over the next decade will be far higher than the $69 per hour suggested by Davis' aides. ??More certain are the amounts the state is paying more than two dozen private consultants who have been drawn into the electricity crisis and whose contracts also were released Monday by the controller. ??Some of those consultants--working on behalf of Davis or the state agency that has been purchasing power since January--are making tens of thousands of dollars each month. ??Connell's release of the uncensored electricity contracts came one day after the California attorney general said Davis would not appeal a judicial order declaring them public records in their entirety. The court action in San Diego was filed by The Times and other news organizations. ??Three weeks ago, after another ruling favorable to the media, the administration released the contracts, which will govern the cost of wholesale electricity for years to come. But key technical provisions were redacted from those documents. ??Davis planned to release the contracts later this week, but the controller upstaged him Monday, offering her own spin on the deals and prompting the governor's office to shoot back. ??His aides insisted Connell's warning of possibly higher costs was based on incomplete information. Her price figures, they said, were skewed toward purchases made earlier in the year, when electricity and natural gas prices were significantly higher. ??"Unfortunately, the controller doesn't let the facts get in the way of a good story," said Davis spokesman Steve Maviglio, adding that the controller has been at odds with Davis since he endorsed her rival, Antonio Villaraigosa, in the Los Angeles mayor's race. "This is just a drive-by shooting where she does not have the full set of information." ??Millions in Hidden Costs ??Still, the contracts released Monday show for the first time the millions of dollars in hidden costs that are being shouldered by taxpayers. ??At least one of the energy suppliers, Houston-based Dynegy Inc., negotiated terms that allow it to pass along to the state high-cost delivery charges for natural gas, experts said. ??Robert Michaels, an energy consultant and professor of economics at Cal State Fullerton, said the Dynegy contract permits the firm to use the state's most costly benchmark of natural gas prices. ??Dynegy "has its choice of the highest [cost delivery] point," said Michaels, who once advised the company. Like Connell and others, Michaels said that even with the complete picture of the contracts, it is difficult to determine how much added cost ratepayers may face as the deals extend into the next decade. ??Also, in just the first three months of the Dynegy contract, the state picked up about $10 million in pollution, start-up and other operational costs for the firm. ??Likewise, a contract with San Diego-based Sempra Energy Resources, parent company of San Diego Gas & Electric, allows the company to choose where it delivers electricity into the state grid, Michaels said after an initial review of the agreement. ??"It seems to offer a lot of flexibility for the supplier," said Michaels, who also has been a consultant for power suppliers. "It's not obvious what the state got out of this [deal]." ??The new details on fuel and emission costs underscored some critics' fears. "As you look at the devil in the details, it gets worse," said UC Irvine economist Peter Navarro. ??He noted, for example, that Dynegy has been one of the power merchants labeled by Davis as "pirates." ??But examining the company's complete contract Monday, Navarro said, it seemed as if the state was saying, "You pirate, take California's dowry." ??Navarro and other critics note that power prices have fallen dramatically in recent weeks, well below those the state is paying under the long-term contracts. ??A Times analysis of payments made so far under the contracts shows the average cost per megawatt-hour has been $173. Recent spot prices for peak power have been as low as $50 a megawatt-hour, according to surveys by Platts Energy Trader, an industry newsletter. By Monday, when an energy emergency was declared, the price had risen to about $92 a megawatt-hour. ??Administration officials, including Davis' chief contract negotiator, S. David Freeman, have said the state had little negotiating leverage when many of the deals were struck early this year. ??"Early on, we were having a very difficult time gaining any advantage," said Oscar Hidalgo, spokesman for the state Department of Water Resources, which oversees power purchases. Still, Hidalgo and others in the administration contend the power deals will stabilize prices in the long term, and have tamed high spot prices this year. ??"Now, we have gained the upper hand," Hidalgo said. ??A Big Payday for Consultants ??Meanwhile, payments to outside consultants hired to assist the governor and the state Department of Water Resources in dealing with California's energy crisis reached nearly $2.8 million by late last month, according to the figures released Monday. ??But those payments represent only a fraction of the total contracts the state has signed with a broad array of consultants to assist with the purchase of power and acquisition of transmission lines, to provide legal and technical advice, and to mount advertising campaigns and polish Davis' image. ??The agreements include a $1.5-million multiyear contract with the Washington, D.C., law firm of Grammer, Kissel, Robbins, Skancke & Edwards, which specializes in energy and environmental law. ??Attorney Elisa J. Grammer and other members of the firm will represent the state in proceedings before the Federal Energy Regulatory Commission and related court proceedings through the end of May 2004. ??Another contract calls for the state to pay $1.1 million to two New York consulting firms--the Blackstone Group and Saber Partners--at the rate of $ 275,000 a month. The contract includes the services of Joseph Fichera, one of Davis' chief advisors on the energy crisis. ??Blackstone/Saber could be paid an additional $14.58 million if the Legislature approves deals to buy electric transmission systems from the state's three private utilities--the financially rocky Southern California Edison, Pacific Gas & Electric, which has filed for bankruptcy, and San Diego Gas & Electric. Critics say the contract, in effect, provides a huge financial incentive for the consultants to boost the price the state will have to pay for the transmission system, which would result in higher fees for them. ??Davis also drew criticism in late May when he hired two former White House strategists--Mark Fabiani and Chris Lehane--at $15,000 a month each. Both also did consulting work for Edison to help the utility win approval of a financial rescue package that Davis is pushing. Critics charged the two had a conflict of interest representing both the governor and the utility. ??The governor announced late Friday that Fabiani no longer works for him and that Lehane would work for less money. Davis' statement said that Lehane would be paid $9,900 a month, roughly the same pay as the governor's last communications director, and he would not work for Edison while consulting for Davis. ??Also released was the state's contract with the governor's energy conservation czar, Freeman. The former head of the Los Angeles Department of Water and Power is being paid $120,000 for six months' work from April 15 through Oct. 15. ??* ??Times staff writers Nancy Rivera Brooks, Virginia Ellis, Davan Maharaj, Doug Smith, Nancy Vogel and Daryl Kelley contributed to this story. LOAD-DATE: July 3, 2001 ??????????????????????????????11 of 65 DOCUMENTS ??????????????????Copyright 2001 The New York Times Company ??????????????????????????????The New York Times ?????????????????July 3, 2001, Tuesday, Late Edition - Final SECTION: Section A; Page 10; Column 5; National Desk LENGTH: 804 words HEADLINE: Power Company Rebuts Accusations of Gouging BYLINE: ?By JAMES STERNGOLD DATELINE: LOS ANGELES, July 2 BODY: ??Duke Energy, one of California's larger electricity generators, and state officials today rebutted charges by three former Duke employees that the company had manipulated output to drive up prices, saying the shifts had been ordered by a state-controlled agency. And the agency, the California Independent System Operator, agreed. ??Stephanie McCorkle, a spokeswoman for the semi-independent agency, which is empowered to manage the state's power grid, said it largely controlled how much power was being produced by the Duke Energy plant. She added that the agency had not offered this information at the time the former employees testified in the State Senate because it had not been asked. ???In the Senate hearings on June 22, the three former plant workers said the company had ramped output up and down, manipulated maintenance schedules and even thrown away some spare parts at a plant in suburban San Diego County in an apparent effort to drive prices higher in January when supplies were tight. ??The hearing was another theater in the war of words between the state and the electricity generators, as each has accused the other of causing the energy crisis. ??The state, particularly Gov. Gray Davis, has accused the generators of gouging the state on the wholesale power market. Gov. Davis recently demanded about $9 billion in refunds from the generators, including Duke, while the companies have asserted that the state fell victim to market shortages created by its own policies. ??Some top state officials had called the testimony by the three former Duke Energy employees -- two plant mechanics and a control room technician -- the first "smoking gun," proving market manipulation. ??"In my opinion, there was price manipulation," Glenn Johnson, a certified power plant mechanic, said of Duke's actions at the San Diego plant. Duke supplies about 5 percent of California's electricity from four plants in California. ??But today Duke Energy sought to demonstrate that the state itself had caused the fluctuations at its plants and that the people who testified were simply unaware of the company's overall commitments to the market. ??The company offered a highly detailed presentation, saying that the rise and fall in output had been ordered by the agency. ??Jeff Stokes, an executive vice president of Duke Energy, which has its headquarters in Charlotte, N.C., offered copies of handwritten logs from the plant and other documents to show that the workers saw only a partial picture of the operation of the plants and so were unaware that at various times the agency had deliberately set aside some of the output capacity as a reserve. ??Mr. Stokes explained that at times the plants are actually put at the disposal of the agency, which increases or decreases output to maintain balance in the overall electrical grid. At other times, the agency keeps some operating capacity off-line as a reserve, so it can meet sudden increases in demand, he explained. ??Mr. Stokes said the bottom line was that during those critical days in January covered by the testimony in the State Senate, the plant, which has four operating units, was effectively at the state's disposal. ??"The full available output was offered at all times," Mr. Stokes said. ??Ms. McCorkle, the spokeswoman for the agency, said of the presentation, "I thought it was a very accurate description." She added that at times the agency had not bought all the output from the plant because Duke was asking too much for the power, not because it was being withheld from the market. ??Still, some remained skeptical. Governor Davis, who switched on a brand new power plant in Sutter County today, said through his spokesman that he was not convinced. Earlier, Mr. Davis had invited the three former plant workers to breakfast and had offered a tribute to their integrity. ??"There are still a lot more questions out there," said Steve Maviglio, the governor's spokesman. ??Mr. Maviglio said that even if Duke had refuted the charges the most important issue outstanding was how much the power generators should refund to the state for overcharges. ??There have been numerous investigations by federal and state agencies of the wholesale prices charged this year, and several have found what they have described as convincing evidence of overcharging. But no definitive orders have been handed down and a host of investigations are continuing. ??Indeed, for an industry that was supposedly deregulated several years ago, the utilities and power generators are now subject to the most intensive regulatory scrutiny perhaps in their history. ??In fact, California triggered price limits in 11 Western states today by issuing a power alert. It was the first time the limits went into effect since they were imposed by federal regulators two weeks ago. ??http://www.nytimes.com GRAPHIC: Photo: Gov. Gray Davis of California presided yesterday as a power plant went on line in Sutter County. (Associated Press) LOAD-DATE: July 3, 2001 ??????????????????????????????13 of 65 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune News Service ???????????????????????Knight Ridder/Tribune News Service ????????????????????????????San Jose Mercury News ????????????????????????????July 3, 2001, Tuesday SECTION: STATE AND REGIONAL NEWS KR-ACC-NO: ?K5369 LENGTH: 508 words HEADLINE: Davis paying millions to energy consultants, contracts reveal BYLINE: By Dion Nissenbaum BODY: ??SACRAMENTO _ Gov. Gray Davis has agreed to pay more than $17 million to a small group of financial experts and political consultants _ some of them dubbed by critics as "a den of thieves" _ to help him steer his way clear of the energy crisis. ??New contracts released Monday show that the price tag for energy consultants has nearly doubled in recent months as the Democratic governor sharpened his attacks on power companies. ??Among them are a former head of the Bonneville Power Administration who is being paid $300 an hour, a Southern California financial adviser who gets $400 an hour and a security firm paid $45,000 to protect the office where state workers buy energy. ??Because some of the state's biggest advisers have links to other major players in the energy crisis, the deals have been criticized by some state leaders and consumer groups. ??Included in the group are former executives with Southern California Edison, which is trying to win legislative support for a financial bailout, and two New York investment firms. Saber Partners and the Blackstone Group, which are being paid $275,000 a month, could receive an extra $14 million if they can get legislators to back the Edison bailout. ??State Controller Kathleen Connell, who released the contracts along with the long-term energy contracts Davis signed with power companies, called the arrangement "disturbing" and "unethical." ??Steve Maviglio, the governor's spokesman, derided Connell as "a termed-out elected official who finished last in the Los Angeles mayoral primary with no political future and this is the only way she can have relevance." ??"The governor makes no apologies for hiring the best talent he can to negotiate the best deal for California," he added. ??Davis has been forced to scrap one high-profile contract. Last week, Davis cut ties with Mark Fabiani, a veteran Democratic Washington political consultant who was continuing to work for Edison while advising the governor. ??At the same time, Davis scaled back his deal with Fabiani's partner, Chris Lehane, who will be paid $9,000 a month instead of $30,000 a month as originally planned. ??Both men are still due $30,000 for work in June. ??Doug Heller, a consumer advocate for the Foundation for Taxpayer and Consumer Rights, said Davis has created a "den of thieves" by hiring consultants who have little loyalty to California. ??"The governor's goal should be to ensure protection for ratepayers," he said. ??Along with Fabiani and Lehane, Davis has agreed to pay up to $6.2 million to the Electric Power Group, a firm headed by former Edison senior vice president Vikram Budhraja. Budhraja is being paid $275 an hour. ??Davis also hired Edison vice president Larry Hamlin as his interim "construction czar" and is paying him $165 an hour. ??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune ??© 2001, San Jose Mercury News (San Jose, Calif.). ??Visit Mercury Center, the World Wide Web site of the Mercury News, at http://www.sjmercury.com/ JOURNAL-CODE: SJ LOAD-DATE: July 3, 2001 ??????????????????????????????14 of 65 DOCUMENTS ??????????????Copyright 2001 Knight Ridder/Tribune Business News ??????????????????????Copyright 2001 San Jose Mercury News ????????????????????????????San Jose Mercury News ????????????????????????????July 3, 2001, Tuesday KR-ACC-NO: SJ-ENERGY-PRICE LENGTH: 834 words HEADLINE: California Officials Insist Energy Company Manipulated Prices, Output BYLINE: By Brandon Bailey BODY: ??Even as executives at Duke Energy were claiming vindication Monday, state officials insisted that newly released dispatch logs for the company's Chula Vista power plant don't necessarily absolve the firm of charges that it manipulated electricity prices. ??Duke released documents Monday that contradict the testimony of three former workers who accused the company of scaling back the plant's output in order to drive up prices. The records show Duke was following orders from the state's grid operator when the company ramped its generators up and down last January. ??But without corresponding information about Duke's prices, which the company has declined to make public, state officials say there is no way to know if North Carolina-based Duke was gouging or not. ??Grid officials said they might order a plant to reduce output if the price is excessive, but they might later instruct the same plant to increase production -- even when the price is high -- if customers need the power. ??A top Duke executive said Monday that the company charged roughly $ 1,200 per megawatt hour of power produced at the plant during the three days under scrutiny -- well above a so-called soft price cap of $ 150 that was then in effect. But the official, Duke executive vice president Jeff Stokes, declined to discuss prices in detail. ??The controversy underscores the complexity of California's dysfunctional energy market. While the evidence against Duke is unclear, experts say the system is vulnerable to economic schemes that are far more sophisticated than simply shutting down a generator to create an artificial shortage of electricity. ??"The full analysis is a lot more complicated," said Severin Borenstein, an economist and director of the University of California Energy Institute who has studied prices in the California market. ??Economists for the state's Independent System Operator, which runs the power grid, have said their studies show power suppliers earned excessive revenue primarily by refusing to sell at lower rates -- as opposed to shutting down plants. The studies concluded that suppliers used sophisticated bidding techniques to keep prices high. ??Power industry spokesmen have denounced the ISO studies as flawed and biased. Suppliers have also denied shutting down plants or reducing output to drive up prices. ??But when the three former Duke workers appeared before a state Senate committee last month, many critics viewed their testimony as hard evidence of long-suspected price-gouging. Among other things, the workers produced operator logs that showed the output of two Chula Vista generating units was scaled up and down during three days in January when the state was short of power. ??Though key legislators on the panel said they would reserve judgment, Lt. Gov. Cruz Bustamante called the testimony a "smoking gun." Gov. Gray Davis hailed the men as "heroes" and invited them for breakfast. ??At the request of state officials, however, the ISO examined its logs for the three days and issued a memo late last week that said the Chula Vista plant operators were responding to ISO instructions. ??"The records released today are clear proof that the units were made fully available and followed the direction of the ISO," Stokes said. During a news conference, he explained that the ISO used the two units to help balance supplies with fluctuating demand -- by keeping the units in reserve and issuing frequent instructions to adjust their output throughout the day. ??ISO officials confirmed that they will call on plants to balance out supply and demand. But they have also said the dispatch logs don't provide a complete picture. ??"Price can be a factor" in accepting bids for electricity, said ISO spokesman Gregg Fishman. "We're not going to use megawatts any longer than we absolutely have to, if that power is at astronomical prices." ??Fishman declined to discuss specifics involving Duke. Under federal rules, the ISO treats information about power plant production and energy prices as confidential. It released its dispatch logs with Duke's permission, but was not permitted to release price information. ??"It's only half the story," complained Steve Maviglio, the governor's spokesman. He added that Duke "still has a lot of explaining to do." ??Duke doesn't want to release price information because that would give competitors an insight into company strategies, said Stokes, who added that prices would be disclosed "at the appropriate time and setting." ??Stokes also complained that Duke wasn't given a chance to defend itself before the Senate investigating panel. Committee chairman Joe Dunn, D-Garden Grove, said he is waiting for Duke to turn over price information and other data before company representatives are scheduled to testify. ??Until then, Dunn added, "we still can't draw a final judgment." ??----- ??To see more of the San Jose Mercury News, or to subscribe to the newspaper, go to http://www.sjmercury.com JOURNAL-CODE: SJ LOAD-DATE: July 3, 2001 ??????????????????????????????15 of 65 DOCUMENTS ?????????????????Copyright 2001 The Chronicle Publishing Co. ?????????????????????????The San Francisco Chronicle ?????????????????????JULY 3, 2001, TUESDAY, FINAL EDITION SECTION: NEWS; Pg. A3 LENGTH: 860 words HEADLINE: Uncensored power pacts made public; State controller says deals will burden general fund for years SOURCE: Chronicle Staff Writers BYLINE: Carolyn Said, Christian Berthelsen, David Parrish BODY: State Controller Kathleen Connell yesterday released uncensored versions of California's energy contracts, including short-term contracts that Gov. Gray Davis had hoped to keep under wraps for three months. ???Connell said the contracts for $43 billion worth of power were negotiated at the worst possible times, for higher prices and longer periods than are necessary. But Davis' office countered that Connell was grandstanding and that her release of short-term contracts would hurt the state in its negotiations with power generators. ???Connell said the contracts showed California paying more than the $69 a megawatt hour Davis had stated. Ranging from $44 to $249 per megawatt hour, most are between $100 and $200 a megawatt hour, she said, adding that variables prevented calculating an exact average. ???But Steve Maviglio, Davis' spokesman, said Connell had selectively mixed in some higher-priced short-term contracts "to misrepresent facts about the price we negotiated." ???Although a fellow Democrat, Connell has long had a contentious relationship with Davis. In an interview yesterday, she said the deals Davis made could mean the general fund would be in debt for years to come. She added that it appeared the administration would run out of money to buy electricity by December. ???Davis is "indebting future generations of Californians to ease the potential pain a portion of people might feel over the summer of 2001," she said. ???A judge ordered the contracts to be released two weeks ago, but Davis' office blacked out many vital elements, such as where power would be generated and transmitted. The judge last week ordered Davis to release that redacted material, which the governor's office said he had planned to do this Thursday -- omitting the short-term contracts. Instead, Connell released the material yesterday. ???Among other new revelations: ???-- Consultants. The state signed agreements for more than $15 million to consultants for help in negotiating the contracts, legal advice and other services, some for months or years into the future. To date, the state has paid out nearly $2.8 million on those contracts, including $30,000 to S. David Freeman, the former head of the Los Angeles Department of Water and Power, whom Gov. Gray Davis retained as an energy adviser in April. ???The largest of the 27 consulting agreements was for up to $6.2 million with Electric Power Group LLC of Pasadena for help in negotiating the long-term contracts with the power providers. The firm is headed by several former executives with Southern California Edison. ???"There are a number of consulting contracts that appear questionable," Connell said. Citing one example, Connell said she had refused to pay the contract of Mark Fabiani and Chris Lehane, two political image consultants retained by Davis, because the firm was also representing Southern California Edison. ???Maviglio said: "The governor makes no apologies for hiring the best talent to fight the arsenal of generators. They have several floors of skyscrapers in Houston armed with the best talent money can buy." ???-- LADWP. Los Angeles' municipal utility, the Los Angeles Department of Water and Power, sold the state $57.8 million worth of power in March and April. LADWP charged the state between $213.50 to $174.60 per megawatt-hour of electricity, a price that included a 15 percent premium. ???LADWP was not profiteering, said Eric Pharp, director of public affairs for the municipal utility. "I don't think most people would think that is excessive," Pharp said. "Fifteen percent is what people felt was a reasonable return." The 15 percent markup was decided on last December by Freeman, then LADWP's director, and approved by the LADWP board. ???"What if LADWP found itself short of power, would it expect to get that power from the state at a reasonable cost?" asked Severin Borenstein, head of the University of California Energy Institute. "If they expect backstop help from the state if they ever get in trouble, now's the time to step forward on that basis." ???-- Price. Bill Marcus, principal economist with JBS Energy, a Sacramento consulting firm that represents consumer and environmental groups in utility issues, said the new material showed the state had paid huge amounts for short-term power, more than twice as much as recent federal price caps. ???He also questioned whether California had acted in a panic to buy too much power. "The system is not going to have enough flexibility built into it, come three to four years from now if we keep signing contracts," he said. "I'd like them to stop and take a breath, see if there are ways to change the worst contracts, rather than running hell-bent for election as fast as they can, trying to sign these things." ???Maviglio said the contracts represented a "balanced portfolio" of purchases; provided California with a reliable price for electricity; and had helped drive down spot market prices. "Instead of being vulnerable to the whims of the market, we know exactly how much we'll be paying," he said.E-mail Carolyn Said at csaid@sfchronicle.com. GRAPHIC: PHOTO, State Controller Kathleen Connell said the contracts showed more than $69 per megawatt hour was paid. LOAD-DATE: July 3, 2001 ??????????????????????????????16 of 65 DOCUMENTS ??????????????????????Copyright 2001 The Washington Post ?????????????????????????????The Washington Post ????????????????????July 03, 2001, Tuesday, Final Edition SECTION: FINANCIAL; Pg. E02 LENGTH: 1111 words HEADLINE: Duke Energy Cuts Calif. Bill BODY: ???Duke Energy, which supplies about 5 percent of California's electricity, agreed to reduce by $ 20 million the amount owed to it by the state for power it supplied in January and February. Last month, the Federal Energy Regulatory Commission rejected Duke's explanation for high prices it charged for power and ordered the company to pay refunds. Charlotte-based Duke had to reduce its January bill by $ 17.8 million and its February bill by $ 2.1 million. ???Ford was urged by the attorneys general in 23 U.S. states to protect the environment by replacing mercury switches used to light hoods and trunks in millions of cars. The attorneys general wrote a letter calling on the automaker to replace the switches in cars that are being recalled to have their Bridgestone/Firestone tires replaced. The letter said the mercury in the switches poses a health threat to humans and the ecosystem because it enters the air when a car is scrapped and incinerated. Mercury can cause brain, lung and kidney disease in humans. ??Best Buy has agreed to pay $ 5.4 million to resolve an overtime-pay dispute involving about 70,000 current and former employees, the Labor Department said. Workers were not paid for hours worked on their days off, during meal breaks, after they punched out and while they waited for managers to unlock doors, the department said. Best Buy also did not keep an accurate record of hours worked by employees, a department official said. Back wages will be paid to workers who were employed at all Best Buy stores from February 1998 to February 2000. ??Napster has suspended its online music-swapping service because it is unable to stop the unauthorized exchange of songs. Napster discovered its users continue to trade bootlegged songs, despite technological safeguards put in place to comply with a federal court order mandating it halt the practice. The company suspended its service late Sunday and said yesterday that it was not clear when users would be able to resume trading songs online. ??Staples agreed to settle a lawsuit with shareholders who said a plan to buy back $ 122 million worth of shares in its Internet unit from insiders was a waste of corporate assets. Staples public shareholders will get more details about how the company set the proposed buyout value at about $ 7 per share. Venture capitalists, executives and directors paid $ 3.25 for the Staples.com stock in 1999. ??Citigroup's $ 1.95 billion acquisition of European American Bank from ABN Amro Holding, a purchase that will expand Citigroup's presence in New York City and Long Island, has been approved by federal regulators. Several consumer groups opposed the merger on claims Citigroup has engaged in abusive mortgage lending practices. In response, federal regulators said they will closely monitor Citigroup's lending business. ??Intel started shipping the fastest version to date of its Pentium 4 microprocessor. The new chip runs at 1.8 gigahertz, slightly faster than the 1.7-GHz Pentium 4 released in April. The company also released a 1.6-GHz Pentium 4 yesterday. ???Netpliance agreed to pay a $ 100,000 fine to the Federal Trade Commission for deceptive advertising and billing practices of its discontinued I-opener, a stripped-down computer that sold for $ 199. The FTC said Netpliance failed to disclose extra costs associated with the computer, such as monthly Internet service fees. Netpliance did not admit to any wrongdoing. ??T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 3.58 percent, from 3.375 percent last week. Rates on six-month bills rose to 3.5 percent from 3.34 percent. The actual return to investors is 3.663 percent for three-month bills, with a $ 10,000 bill selling for $ 9,909.50, and 3.612 percent for a six-month bill selling for $ 9,823.10. Separately, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.60 percent last week from 3.46 percent the previous week. ??NextWave Telecom said it has entered an all-cash deal with Lucent Technologies to begin construction of local wireless networks in Detroit and Madison, Wis. NextWave, which filed for bankruptcy in 1998, said it has "ample funds" to launch the project. NextWave reiterated that it plans to emerge from bankruptcy. ???Sara Lee Corp. agreed to buy Earthgrains for $ 2.8 billion in cash and debt to become the country's second-largest maker of bread. ??Barnes & Noble.com, following the lead of rival Amazon.com, is offering free shipping on orders of more than one item. ??DuPont sharply curtailed its earnings forecast for the second quarter, blaming a global economic slowdown and a strong dollar. The company now estimates earnings per share, before one-time items, to be 35 to 45 cents, down from 90 cents per share in the same quarter last year. Wall Street was expecting earnings of 53 cents a share. ??Minnesota Mining & Manufacturing said it expects lower second-quarter earnings because of continued weakness in the U.S. economy, an increased slowdown in Europe and Asia, and negative currency effects. It predicted a profit of $ 1.10 to $ 1.14 per share, excluding one-time items but including negative currency effects. ?In the second quarter of last year, 3M earned $ 1.18 per share. ??The International Monetary Fund postponed a decision on disbursing a $ 1.5 billion loan to Turkey because the Ankara government has failed to implement some of its pledges to overhaul the nation's banking system and state-owned telephone monopoly. The decision to delay a vote by the IMF's board is the latest snag in a $ 19 billion bailout of Turkey that was arranged in February after the Turkish lira collapsed. ???Global semiconductor sales fell more than 20 percent in May from a year earlier, continuing a decline that began in November, a trade group said. The Semiconductor Industry Association said sales were $ 12.71 billion, which was a 7.3 percent decline from the April level. ??Carlyle Group, a D.C.-based investment firm whose advisers include former president George Bush, plans to keep as a dividend almost half of an $ 850 million loan for its Arlington-based United Defense Industries, according to people familiar with the matter. The $ 400 million payout will enable Carlyle to generate a return for clients without cutting the stake in a company that gets 85 percent of its sales from contracts with the U.S. government. ??Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers. LOAD-DATE: July 03, 2001 ??????????????????????????????17 of 65 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 3, 2001, Tuesday, BC cycle ?????????????????????????????7:27 AM Eastern Time SECTION: Business News LENGTH: 622 words HEADLINE: Duke releases California energy records to counter accusations of price gouging BYLINE: By LESLIE GORNSTEIN, AP Business Writer DATELINE: LOS ANGELES BODY: ??Duke Energy has released operating logs to counter accusations by former workers that it reduced output to boost prices during California's energy crisis. ??Ex-employees told state investigators two of four turbines at Duke's southern California plant were shut down for three days in January during Stage 3 power alerts, which can lead to rolling blackouts. ??The records show that during most of that time, units One and Two at the South Bay plant in Chula Vista were either supplying all their power to the California market or providing what are called ancillary services. ??That's when a plant is paid not to produce, but to stand by in case of emergency, or if the state's grid is already at capacity. ??California's Independent System Operator, which manages most of the state's power grid, has acknowledged that it, not Duke, was controlling the turbines at the time. ??"Duke was responding to their requests," Jeff Stokes, executive vice president of Duke's western gas and pow
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