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Enron Mail |
Sorry, I did not include these with this morning's distribution.
Individual.com, Mon, 3/26: "Assembly Investigates Gas Prices" Individual.com, Mon, 3/26: "Calif. May See Rise in Power Bills" Individual.com, Mon, 3/26: "BPA to Link New Generation to Northwest Energy Grid" Individual.com, Mon, 3/26: "[B] Enron says sale of utility Portland General is unlikely (Wrap)" --------------------------------------------------------------------- Assembly Investigates Gas Prices By DON THOMPSON Associated Press Writer SACRAMENTO, Calif. (AP) via NewsEdge Corporation - State lawmakers began investigating Friday whether market manipulation helped drive up California's natural gas prices, hearing from a consumer who spoke of the ``terrific shock'' she got from a recent bill. Natural gas costs six times more in California than in other states, said Assemblyman Darrell Steinberg, chairman of the Assembly Energy Oversight Subcommittee. Natural gas that sells for $5.25 elsewhere sells for nearly $30 at the California border, said Steinberg, D-Sacramento. ``We're going to examine every possible reason for the price spike,'' he said. The hearing by Steinberg's subcommittee and the Natural Gas Costs and Availability Subcommittee opened with testimony from utility customers. Gladys Cook of Sacramento told the committee her Pacific Gas and Electric Co. natural gas bill rose from about $47 or $57 a month last year at this time to $344.63 in February and $112 this month. ``It was just a terrific shock, especially after the Christmas holiday and everything,'' said Cook, who lives with her 87-year-old mother, a retired teacher. Cook said they turned down the heat and water heater to try to reduce their bills. Officials from PG&E, Long Beach Energy, San Diego Gas & Electric and Southern California Gas were also expected to testify. Lawsuits filed this week by Long Beach and Los Angeles accuse several utility companies of meeting at a Phoenix hotel in 1996 and deciding to block construction of gas pipelines that could have helped the state avoid its power crisis. The companies deny any collusion. High natural gas prices are just one factor in the state's energy crisis. A tight electricity supply, caused in part by maintenance at California power plants and scarce hydroelectricity in the Pacific Northwest, has contributed to rolling blackouts four times this year, including twice statewide this week. The hearing comes on the heels of a state audit released Thursday that says California's 1996 deregulation law encourages market manipulation by electricity buyers and sellers. And the California Independent System Operator, which oversees most of the state's power grid, told the Federal Energy Regulatory Commission that electricity suppliers have overcharged it and the state Power Exchange at least $6.2 billion since May for power the two bought on behalf of utilities. The excessive charges will continue during high demand this summer unless the commission steps in, the ISO said. The ISO buys emergency electricity to avoid blackouts. The Federal Energy Regulatory Commission, which Gov. Gray Davis and many lawmakers contend isn't doing enough to control California's energy prices, declined to send a representative to the Assembly hearings. However, other regulators were slated to testify. The state Senate plans hearings next month to investigate whether electricity suppliers withheld power to raise prices. ------------------------------------------------------------------------------ ------------------------------------------------------------------------- Calif. May See Rise in Power Bills By JENNIFER COLEMAN Associated Press Writer SACRAMENTO, Calif. (AP) via NewsEdge Corporation - The state's power purchases for two struggling utilities could cost $23 billion by the end of next year, leaving customers paying at least 50 percent more for electricity, The Associated Press has learned. State officials told several key legislators Friday that the state's efforts to help credit-poor Southern California Edison and Pacific Gas and Electric Co. could hit $23 billion by 2003, a legislative source told the AP on condition of anonymity. That's far more than lawmakers and Gov. Gray Davis estimated when they approved legislation authorizing the state's power purchases. At the time, they projected they would need $10 billion in revenue bonds to buy power for the two utilities over a decade. The bonds would be repaid by the utilities' customers over several years. Davis has said repeatedly he is confident the state's power crisis can be resolved without further rate hikes, but the source said cabinet secretary Susan Kennedy, Finance Director Tim Gage and Deputy Chief of Staff John Stevens all warned lawmakers that customers' rates would have to be raised at least 50 percent to cover the new projections. That increase would come on top of a 9 percent to 15 percent increase the Public Utilities Commission approved in January, as well as an additional 10 percent increase already scheduled for next year. Davis spokesman Steve Maviglio confirmed that Kennedy spoke with top Democrats on Friday but declined to elaborate. The source said the calculations were by the administration, not the PUC, which would have to implement any rate increases. Lawmakers weren't told over what time frame such an increase would need to be implemented, the source said. Consumer advocate Harvey Rosenfield of the Foundation for Taxpayer and Consumer Rights promised a rebellion at the ballot box in 2002 if rates continued to rise. ``If this goes through, this is the beginning of the ratepayers' revolt,'' he said. The PUC is expected on Tuesday to address how customer rates will be divided between the state and the utilities. SoCal Edison and PG&E both have pushed for rate increases, and PG&E has said its current rates would be insufficient to cover its bills and the state's. Both say they've lost more than $13 billion since summer due to high wholesale electricity costs that California's 1996 deregulation law prevents them from collecting from their customers. PG&E's and Edison's credit was cut off by electricity wholesalers in January, and the state has been spending $40 million to $50 million a day since then to keep the lights on for their customers _ about $4.2 billion in taxpayer money so far. State Controller Kathleen Connell warned this week that the state's power-buying is gutting California's budget surplus and putting the state at financial risk. Wall Street has also been wary. The Standard & Poor's credit-rating agency put the state on a credit watch ``with negative implications'' when the power purchases began. California has faced an energy crunch for months, fueled by high natural gas prices, soaring wholesale electricity costs and a tight power supply due in part to California plant maintenance and scarce hydroelectric power in the Pacific Northwest. The Assembly on Friday opened hearings into the skyrocketing natural gas costs that will include an investigation into whether market manipulation helped drive up prices. Pacific Gas and Electric Co. customer Gladys Cook of Sacramento told the committee her natural gas bill rose from about $50 a month last year at this time to $344 in February and $112 this month. ``It was just a terrific shock, especially after the Christmas holiday and everything,'' she said. Natural gas that sells for $5.25 elsewhere sells for nearly $30 at the California border, said Assemblyman Darrell Steinberg, chairman of the Assembly Energy Oversight Subcommittee. The cities of Los Angeles and Long Beach filed lawsuits this week accusing several gas companies of conspiring to drive up prices by limiting supply. The lawsuits say the companies decided in a Phoenix hotel room in 1996 to block construction of gas pipelines that could have helped the state avoid its power crisis. Rick Morrow, vice president of customer service for Southern California Gas Co., denied executives at the meeting were conspiring to drive up gas prices. ``There was no mystery to the meeting,'' he said. ``What is being alleged is absolutely false.'' ------------------------------------------------------------------------------ --------------------------------------------------------------------- BPA to Link New Generation to Northwest Energy Grid PORTLAND, Ore., March 23 /PRNewswire/ via NewsEdge Corporation - The Bonneville Power Administration signed agreements with Goldendale Energy Inc. this week to connect the power from a proposed 248-megawatt gas-fired combustion turbine to the Northwest energy grid. "BPA is eager to act quickly to bring a new power resource online at a time when the Northwest and the entire West Coast are suffering from an extreme shortage of energy," said BPA's Acting Administrator Steve Wright. "This project can help meet the Northwest's energy needs as well as help contribute to bringing down high energy costs." The Goldendale Energy Project is to be built in Goldendale, Wash. The developers expect to have the new combustion turbine plant running by July 2002. The merchant plant will sell its output into the wholesale market. Some power may serve the nearby Goldendale Aluminum Smelter. In the agreement signed between BPA and Goldendale Energy Inc., the energy company will pay BPA $1.6 million to construct, operate and maintain a 230-kilovolt terminal at BPA's Harvalum Substation. Klickitat County Public Utility District will build a new 9.2 mile transmission line from the generation project to the substation. The terminal will make it possible for the new power to be integrated into the Federal Columbia River Transmission System. BPA has agreed to have the terminal operational by Jan. 15, 2002. SOURCE Bonneville Power Administration CONTACT: Mike Hansen of Bonneville Power Administration, 503-230-4328 Web site: http://www.bpa.gov ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ------------- [B] Enron says sale of utility Portland General is unlikely (Wrap) New York, March 23 (BridgeNews) - Enron Corp. said its proposed sale of Oregon utility Portland General Electric Co. will probably be dropped because a California law prevents buyer Sierra Pacific Resources from selling power plants to fund the purchase. The company's President and Chief Executive Officer Jeff Skilling said during a phone conference Friday that there is only a 5% chance that it will be able to sell PGE. He added that Enron is not in a rush to sell the Oregon utility since it is a profitable business. Nevada electric utility Sierra Pacific agreed to buy PGE for $3.1 billion in cash and assumed debt in November 1999, and the transaction was expected to close in the second half of 2000. Enron decided to sell PGE since a regulated utility no longer fit with its strategy to buy and sell energy on wholesale markets. But a new California law that prevents power generators from selling power plants has stalled the deal. Sierra Pacific, which has some operations in California, intended to sell some of its plants to AES Corp. finance the acquisition. The Nevada Legislature also is considering a moratorium on power plant sales, according to Sierra Pacific spokeswoman Faye Anderson. She said Sierra Pacific is still confident the deal will close by the end of the second quarter. Enron also said it will begin trading a liquefied natural gas contract on its Enron Energy Services Web site this summer. The LNG business in North America has been booming in the last year, and Skilling said he expects it will continue to improve as U.S. natural gas supplies are squeezed. Skilling said Enron still expects to earn between $1.75 and $1.78 per share this year. He also said the company's fundamentals are sound, and he doesn't understand why the stock has fallen to the $50s from a high of $90.75 in August. "It's a bad market, but Enron is in good shape," Skilling said. On Friday, shares of Enron rose nearly 8% to close at $59.40. End [slug: ENRON-PORTLAND-GENL]
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