Please see the following articles:

Sac Bee, Tues, 5/22: Rate hikes bigger worry than blackouts, poll says

Sac Bee, Tues, 5/22: Energy Digest: Half-hour warning for blackouts?

Sac Bee, Tues, 5/21: What's the hang-up?

Sac Bee, Tues, 5/20: Dan Walters: One year later, we know it wasn't just a 
simple game of golf

Sac Bee, Tues, 5/22: Daniel Weintraub: Energy crisis sapping California's 
confidence (Editorial)

SD Union, Tues, 5/22: Panel pulls the plug on county utility plan 

SD Union, Tues, 5/22: Business customers criticize proposed 29% SDG&E rate 
hike 

SD Union, Tues, 5/22: State sends $533.2 million to company, part of April 
bill 

SD Union, Tues, 5/22: 75% say power woes 'very serious' 

SD Union, Tues, 5/22: Governor told to try seizure in power war 

SD Union, Tues, 5/22: Head of PUC unveils evidence of power plant manipulation

LA Times, Tues,  5/22: State to Issue Warnings of Power Outages

LA Times, Tues, 5/22: Businesses May Seek Blackout Exemption


LA Times, Tues, 5/22: Legislators Set to Sue Federal Energy Agency

SF Chron, (AP) Tues, 5/22: California will forecast blackouts and warn the 
public

SF Chron, (AP) Tues, 5/22: Developments in California's energy crisis

SF Chron , Tues, 5/22: How blackout warning plan works

SF Chron , Tues, 5/22: Davis licenses 8th emergency power plant

SF Chron, Tues, 5/22: PAY UP: Rate increases to hit more users than first 
reported, PUC says

SF Chron, Tues, 5/22: Energy crisis not real, state's residents say 
But poll results show most expect more blackouts

SF Chron, Tues, 5/22: Power plant 'ramping' to be probed State senators also 
expected to file suit, 
charging federal regulators with failing to ensure fair rates

SF Chron, Tues, 5/22: Half-hour notice of blackouts planned FAST ALERTS: 
Power grid operator may send voice, e-mail messages

SF Chron, Tues, 5/22: Time-of-use power pricing may be the answer

SF Chron, Tues, 5/22: The mouth that roared 

Mercury News, Tues, 5/22: Blackout alerts, forecasts proposed

OC Register, Tues, 5/22: Blackout season may be heating up

OC Register , Tues, 5/22: Cheney: Forget price caps, OPEC pressure

OC Register, Tues, 5/22: A nuclear rebirth? (Editorial)

Individual.com, Tues, 5/22: Mexico Seen As Medium-Term Solution To California 
Power Shortage

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Rate hikes bigger worry than blackouts, poll says 
By Dan Smith
Bee Deputy Capitol Bureau Chief
(Published May 22, 2001) 
The vast majority of Californians expect to be inconvenienced by power 
blackouts this summer, but two-thirds continue to be far more concerned about 
higher electricity rates they believe are unjustified, according to a Field 
Poll released Monday. 
Meanwhile, 85 percent of the state's residents say they have cut back their 
energy use since the crisis began, and nearly two-thirds believe they can 
conserve an additional 5 percent to 10 percent. 
As they were at the outset of the crisis, poll respondents remain skeptical 
of the power shortage's root cause. Nearly six out of 10 say the crisis is an 
attempt by energy companies to increase rates, rather than the results of a 
real market imbalance. 
"As the seriousness of the issue has gone up, the cynicism has remained 
high," said Mark DiCamillo, director of the San Francisco-based poll. "The 
public still doesn't buy the claim that it's supply and demand. They think 
it's an artificial crisis." 
The poll results, obtained by interviewing a cross-section of 1,015 adults 
between May 11 and Sunday, are part of a special survey the Field Institute 
undertook to measure public opinion about the energy crisis. Subsequent 
releases will survey attitudes about the available policy options and the 
policy-makers who might exercise them. 
Monday's results show Californians are reacting negatively to higher 
electricity rates, even though the most recent increase has yet to appear on 
their monthly bills. 
In a finding nearly identical to Field's January survey, 67 percent are more 
concerned with higher rates than power blackouts. 
And that does not bode well for the elected officials trying to solve the 
problem, DiCamillo said. Pocketbook issues such as rate increases, he said, 
"focus more public opinion on the actors in this drama -- the politicians." 
A majority (52 percent) believes the $5 billion rate increase approved by the 
state Public Utilities Commission last week for customers of Pacific Gas and 
Electric Co. and Southern California Edison was not justified, and an 
identical proportion believes the rate increase will cause a "somewhat" or 
"very serious" problem in their households. 
The proportion of people who believe the increases will cause "very serious" 
problems corresponds to their family income. Among those earning $20,000 or 
less, 27 percent believe the increases will cause very serious problems. Ten 
percent of those earning $80,000 or more believe very serious problems will 
occur. 
In contrast, 27 percent say blackouts have caused a "great deal" or "some" 
inconvenience thus far, although 71 percent believe expected blackouts this 
summer will cause the same degree of inconvenience. More low-income residents 
(45 percent) say they will experience a great deal of inconvenience from 
summer blackouts, compared with just 26 percent of those in the $80,000 and 
above category who feel the same way. 
The poll shows that the 85 percent of respondents who estimated they have 
conserved power have cut back, on average, about 8 percent. Gov. Gray Davis 
has asked all residents and businesses to reduce power use by 
10 percent, although Davis' plan assumes a 7 percent reduction. Eighty-five 
percent also say they can conserve even more, with additional savings, on 
average, amounting to 4 percent. 
Six out of 10 believe the state can avoid blackouts this summer through 
conservation. 
"These numbers are a good guess as to what real conservation is being 
achieved and what is likely to be achieved, and it's not a huge amount," 
DiCamillo said. 

The Bee's Dan Smith can be reached at (916) 321-5249 or smith@sacbee.com. 






Energy Digest: Half-hour warning for blackouts?


(Published May 22, 2001) 
Grid operators are hoping to issue power blackout warnings a half-hour in 
advance, but the new alerts would be educated guesses and blackouts might not 
follow. 
The proposed warning system is expected to be approved Thursday by the board 
of the California Independent System Operator, the Folsom-based organization 
that runs most of the state's high-voltage transmission system. 
Although an unknown number of the alerts will turn out to be false alarms, 
"this would be a huge step forward" for businesses, said Carl Guardino, head 
of the Silicon Valley Manufacturing Group and a member of the ISO board. 
"For employers, a half-hour is the time needed to fire up a major generator, 
to power down an assembly line, to have your employees save what they have on 
their computers," he said. 
By comparison, the last two rounds of rotating blackouts came with two- and 
six-minute warnings, Guardino said. 
The new system could be put in place by June 1, and might also include 
expanded systems for giving e-mail notifications of power alerts or potential 
blackouts, ISO officials said. 
--Carrie Peyton 

Connell plans to borrow 
State Controller Kathleen Connell says Gov. Gray Davis' energy plan doesn't 
add up. 
Connell said at a news conference Monday that the state will spend money on 
electricity at a faster rate than anticipated by Davis, a fellow Democrat. 
As a result, Connell said, she expects to borrow about $4 billion this fall 
to avoid state budget cash shortages in the coming fiscal year. 
"We are virtually in the same kind of fiscal environment that we were in a 
bad budget year," Connell said. 
In recent years, the state has regularly borrowed money through one-year 
revenue anticipation notes to avoid cash-flow problems. The notes are paid 
off within a year when enough tax money flows to the state treasury. 
But Connell didn't have to resort to borrowing this year because of plentiful 
revenue and a healthy reserve. 
Connell said the state's energy purchases have changed the picture, and 
called into question Davis' assumptions. The governor's plan calls for 11 
percent of the power purchases in the first half of this year to be covered 
by lower-cost, long-term contracts. As of last week, only 1 percent of the 
purchases were under contracts, Connell said. 
But Joe Fichera, Davis' financial adviser, said that seven more long-term 
contracts for electricity during peak demand periods this summer will be 
delivered to Connell's office today. 
--John Hill 

Suit to seek price caps
The state Legislature plans to file suit today in federal court in a bid to 
force the Federal Energy Regulatory Commission to impose caps on power 
prices. 
The lawsuit will argue that the commission has failed to ensure that 
Californians are paying just and reasonable rates, as required under the 
Federal Power Act. 
The suit is being filed by Senate President Pro Tem John Burton, D-San 
Francisco, and Assembly Speaker Robert Hertzberg, D-Sherman Oaks. Hertzberg 
said consumer groups and others are also expected to join the suit. 
As evidence, the suit will cite reports earlier this year by the California 
Independent System Operator that the state's electricity market was not 
resulting in just and reasonable rates. The ISO is responsible for running 
the state's transmission grid. 
The suit will cite evidence of how high power rates are causing harm to 
society, Hertzberg said. 
--John Hill 

U.S. attacks special rate
Before the idea goes any further, the federal government Monday asked state 
utility regulators to junk a proposal for a special, high-priced federal 
energy rate. 
In an emergency appeal, federal officials asked the state Public Utilities 
Commission to take a special vote Thursday to drop the idea of even 
researching a pilot program, calling it discriminatory and a waste of time. 
As part of a vote last week that created new electricity rates, the PUC also 
launched a study into charging all federal facilities market-based prices for 
power -- a move widely seen as a dig against federal authorities who have 
refused state pleas to cap wholesale prices. 
But three of the five PUC commissioners said at the time that they disliked 
the idea and would consider other options. 
Given their reluctance, it would be a waste of utilities' scarce resources to 
even begin researching how to assess the special rate, the Department of the 
Navy wrote the PUC on Monday, arguing on behalf of all federal executive 
agencies. 
--Carrie Peyton














What's the hang-up?
Clotheslines save energy and money, but they are considered unsightly by some 
and are banned in many areas
By Mary Lynne Vellinga
Bee Staff Writer 
(Published May 21, 2001)

Rising electricity rates have prompted Stacey Swett to seriously consider 
taking a step she finds somewhat distasteful: hanging a clothesline in her 
back yard. 
"I don't really like the looks of them, but you have to get past that; we 
have a huge issue here with our SMUD bill," Swett said. 
The California Energy Commission touts clotheslines as a nearly cost-free way 
to conserve electricity. Statewide, clothes dryers burn about 1,000 megawatts 
of electricity on a hot summer day, which could be enough to avert a blackout 
on days when state power supplies are tight. An electric dryer costs about 
$130 a year to run. A retractable clothesline will set you back about $14.99. 
People appear to be getting the message. Hardware stores report a sharp rise 
in clothesline sales since the energy crisis hit. People are "going back to 
the old way of doing things," said Dave Haskin, owner of Broadway Hardware in 
Sacramento. 
But the old way of doing things doesn't sit so well in some newer 
neighborhoods. Where Swett lives, in midtown, she can decide for herself 
whether to take the plunge and pin up the bloomers. But in many newer 
neighborhoods -- those governed by homeowners associations -- the practice is 
not allowed. 
Swett works for the management company that runs the homeowners association 
for the gated, Pocket-area subdivision of Riverlake. In Riverlake, it is 
against the rules to hang your laundry where your neighbors can glimpse it. 
The same is true in Gold River, Rancho Murieta, Laguna West and Los Lagos, 
the mansion-studded Granite Bay enclave where Sacramento Kings stars Chris 
Webber and Jason Williams live. 
"People think (clotheslines) are unsightly," said Dan Kocal, owner of the 
Folsom-based Kocal Management Group. His company manages the homeowners 
associations for 70 communities in the Sacramento region. Not one of them 
allows clotheslines unless they are shielded from neighbors' views below the 
fence line or behind a special enclosure. 
When people buy into planned communities such as Gold River, Los Lagos or Sun 
City, they agree to certain rules designed to keep the neighborhood looking 
neat and uniform, Kocal said. 
"You agree that you're only going to park in the garage, that you're not 
going to hang out clothes and that you're not going to paint your house 
purple," Kocal said. 
Clotheslines that can be seen from neighboring yards are banned by virtually 
all the 35,000 California subdivisions and condominium complexes governed by 
homeowners associations, said Richard Monson, president of the Pasadena-based 
California Association of Homeowners Associations. 
"We choose to live in neighborhoods that don't hang these things out," Monson 
said. 
A few weeks ago, Monson was quoted as saying that the sight of hanging 
laundry is "akin to graffiti in your neighborhood." Cartoonist Garry Trudeau 
since has devoted an entire week of his Doonesbury strip to lampooning 
neighborhoods that don't allow clothes to be hung out to dry. 
Now, Monson chooses his words more carefully. "When we talk about areas of 
communities that are less desirable, we often associate those with 
undesirable items that are in proximity to the buildings," he said. He stands 
by his assertion that the sight of clothes flapping in the breeze could knock 
15 percent off property values. 
Brian Rosebrock, a supervisor at the new Home Depot in Elk Grove, doesn't 
understand the stigma. When he was growing up in a rural area outside New 
York City, his mother always dried the family's clothes on the line. 
Rosebrock, 40, still likes the smell of sun-dried clothes. He hangs his 
jeans, socks, sheets and other cotton items in the back yard of his Rosemont 
house. 
"It's just laundry. Everybody is a little uptight here," he said of 
Californians. 
He may have a point. Bruce Hackett, professor emeritus of sociology at the 
University of California, Davis, said Californians harbor more negative 
attitudes toward clotheslines than do people in the Midwest, where line 
drying is more of a tradition. 
About 10 years ago, Hackett did a survey of 45 UC Davis students and 35 
single-family households in Green Bay, Wis. At the time, some students living 
in married housing on the UC Davis campus were upset that they had to walk to 
an isolated, screened area next to the trash bins to hang their laundry. 
"The housing office said clotheslines make the place look like a tenement," 
Hackett said. 
The attitude in Wisconsin was markedly different. 
"On wash day, there were just clotheslines everywhere, which is something you 
don't find here," Hackett said. "One woman told me that when you move into a 
new home it's not really your home until your clothesline is up and your 
clothes are on it." 
In the wake of student complaints, the university eventually changed the 
policy to allow the use of retractable clothes lines in the housing area, 
Hackett said. 
Leaders of several Sacramento-area homeowners associations said they couldn't 
think of any instance in which a homeowner has asked permission to hang a 
clothesline or has gotten in trouble for using one. 
"I don't know of anyone who has a clothesline," said David Brickell, 
president of the Los Lagos Estates Homeowners Association. He said the Los 
Lagos neighborhood is very concerned about the energy crisis and thus "would 
certainly consider" allowing clotheslines. 
To save energy, the subdivision has started turning off its entrance fountain 
at night and is considering buying a smaller fountain pump. 
Monson, head of the statewide association, argued that there are many ways to 
conserve energy without resorting to the public airing of laundry. Wet 
clothes can, for instance, be hung in the garage or the utility room, he 
said. 
"The issue is not clotheslines, the issue is conservation, and hom'eowners 
don't have to hang their clothes out of doors," he said. 
But some energy-conscious citizens think discouraging the use of outdoor 
laundry lines is ridiculous, given the state's energy situation. 
Jennifer Putnam, 41, recently purchased a large umbrella-style apparatus to 
dry clothes in her Jackson back yard. 
"We were standing outside by the (electric) meter at one point, two or three 
months ago. My husband said, 'Look at how fast that thing is going around.' I 
said, 'The only thing on is the dryer.' " 
"During World War II, we had to do certain things," Putnam continued. "Now, 
we're looking at a power crunch, we're looking at saving an economy in 
California. That's critical. That's important. ? I really don't think Granite 
Bay is going to turn into a slum because people put up things to dry their 
clothes on." 
The Bee's Mary Lynne Vellinga can be reached at (916) 321-1094 or 
mlvellinga@sacbee.com. 















Dan Walters: One year later, we know it wasn't just a simple game of golf


(Published May 20, 2001)

California will mark -- but certainly not celebrate -- an anniversary this 
week. It was exactly one year ago that a late spring heat wave swept over San 
Diego, and as air conditioners began drawing heavy amounts of power, San 
Diego Gas & Electric Co. began charging its customers high, market-oriented 
rates for juice. 
It was the beginning of the California energy crisis, or at least of public 
and political awareness that something was wrong. And a year later, every 
aspect of the crisis continues to grow worse. We are paying 10 times as much 
for power as we were two years ago. We have amassed more than $20 billion in 
private and public debt that will grow even with sharp increases in consumer 
power rates. And we face potentially life-threatening summer blackouts. 
Certainly the roots of the crisis extend much further than one year. They go 
back to decisions in the 1970s to stop major power plant construction and 
rely on conservation and alternative generating sources. And they include a 
momentous decision in the mid-1990s to adopt a "deregulation" plan that was 
an unworkable hybrid of open markets and price controls that left us at the 
mercy of out-of-state generators. Of more currency is what was and wasn't 
done in the last 12 months to fan that spark into a uncontrolled, and perhaps 
uncontrollable, firestorm. 
Gov. Gray Davis once said that he was approaching energy just as he plays 
golf, "one hole at a time." Unfortunately for Davis, and for the state, it 
was not a golf game, but one of three-dimensional, and perhaps 
four-dimensional, chess. To manage the crisis effectively, the Democratic 
governor needed the ability, either personally or through trusted aides, to 
pull together its disparate elements into a cohesive whole. 
The golfing approach was evident from the beginning, as Davis dealt with only 
the most immediate aspects of the situation as they evolved, rather than 
embracing it wholly and actively. Private and public energy experts warned 
that what was happening in San Diego was a harbinger of a larger crisis and 
proposed that the 1996 "deregulation" be suspended, that rates be raised 
slightly and that private utilities be given broad authority to enter into 
long-term supply contracts to stabilize the market. But Davis and his 
handpicked state Public Utilities Commission president, Loretta Lynch, 
stalled for time. 
Less than a month after the crisis first surfaced, the PUC voted 3-2 to 
authorize long-term supply contracts at about 5 cents a kilowatt-hour -- 
slightly higher than wholesale prices had been, but ridiculously cheap by 
contemporary standards. Publicly owned utilities saw the looming price 
escalation and quickly locked up long-term supplies, but Lynch denounced the 
commission action as "a wrong turn" that could lead to higher consumer bills, 
and within days it was scuttled in legislation signed by Davis. 
Rather than face the issue comprehensively and proactively, Davis, Lynch and 
the Legislature opted for an expedient fix in San Diego, rolling back retail 
rates without addressing either supply or cost issues. Within weeks, private 
utilities were beginning to take on billions of dollars in debt as wholesale 
costs skyrocketed. 
Last summer's failure to act was compounded by other errors of judgment. It's 
clear now, for example, that it was a mistake for the state to continue 
buying power at sky-high rates when the utilities had exhausted their credit. 
Having a new deep pocket encouraged the generators to charge whatever the 
market would bear. 
A year after he could have nipped the crisis in the bud, but didn't, Davis is 
busily rewriting history and blaming others, principally Republicans, for the 
dilemma. But the governor cannot, or should not, escape the responsibility 
for approaching this very complex situation like a game of golf, or like some 
routine political dispute, and thus failing to apply the aggressive and 
sophisticated managerial touch that this crisis demanded from the onset. 
As Gen. George McClellan discovered at the Battle of Antietam during the 
Civil War, the unwillingness to take risk often leads to greater carnage. 
The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.com
.







Daniel Weintraub: Energy crisis sapping California's confidence


(Published May 22, 2001) 

California's energy crisis is becoming a crisis of confidence. As electricity 
rates rise and blackouts mount, residents are losing faith in their 
government's ability to deal with the one issue underlying this crisis and 
almost everything else that happens in the state -- population growth. 
Energy and growth, in fact, are intertwined in the minds of everyday 
Californians to an extent not yet reflected in the debate inside the Capitol, 
according to the results of a new poll from the Public Policy Institute of 
California. 
More than three-quarters of those surveyed statewide said they believe 
population growth contributed to the electricity shortage. And even if the 
energy crisis fades, people expect other problems associated with growth to 
worsen. 
The crisis, in other words, has only heightened a sense that many people 
already had, a feeling that California's famous quality of life is threatened 
by rapid growth and our failure to provide the public works and services 
needed to make growth tolerable. 
For the first time since the mid-1990s, more people say the state is headed 
in the wrong direction (48 percent) than in the right direction (44 percent). 
And 56 percent said they expect bad economic times in the year ahead. That's 
a quick decline from January, when a majority said they thought the state was 
on the right track and 62 percent expected good economic times ahead. 
"There is some deep-seated anxiety about the way government works, the way we 
plan for the future, the way we make law, the way big decisions are made by 
the governor and the Legislature," said Mark Baldassare, a Public Policy 
Institute researcher who conducted the poll. "People didn't have a great deal 
of confidence in local and state government to begin with, and now they have 
even less." 
Asked to cite the most important problem facing the state, 43 percent named 
energy. But fully one-quarter of those surveyed said growth or related 
problems -- the environment, housing, and transportation -- were on the top 
of their list. Just 6 percent named schools as the top problem, a big drop 
from a year ago, and the same number cited the economy. Other perennial 
favorites -- crime, health care, taxes -- barely registered on the scale. 
By a wide margin, Californians view growth as inevitable, but that doesn't 
mean they have to like it. More than 8 in 10 said the state's anticipated 
climb from 34 million people to 45 million by 2020 will make California a 
less desirable place to live. 
Six in 10 said traffic congestion is already a big problem in their 
community, and 23 percent said it was somewhat of a problem. Nearly 
three-quarters said the availability of housing was a problem. Sixty-four 
percent said air pollution was a problem, and 61 percent complained about the 
lack of opportunity for well-paying jobs. 
The poll's respondents were conflicted about how best to deal with these 
problems. A large majority favored local control rather than letting the 
state taking a more active role in guiding growth and development. Yet an 
astounding 89 percent said local governments in a region should work together 
rather than each city and county deciding growth issues on its own. 
But in a reflection of their lack of confidence in government, 63 percent 
said local citizens should make growth decisions by voting on ballot 
initiatives, while 35 percent said it would be better for local officials to 
make those calls after thorough planning reviews and public hearings. A 
little more than half -- 51 percent -- said they would vote today for an 
initiative to slow the pace of development in their community even if it 
meant having less economic growth. 
What does all this mean for the political world? It's been clear for months 
that the energy crisis was sapping Gov. Gray Davis' popularity in the state, 
and this poll confirms that trend. Six in 10 say they disapprove of the way 
Davis has handled the energy crisis, and his overall approval rating has 
slipped to 46 percent, from 63 percent in January. 
Conventional wisdom has been that if Davis could somehow find his way through 
the energy crisis, he still could cruise to re-election. But that may no 
longer be the case. Sixty-seven percent of residents say the crisis has made 
them less confident in the state government's ability to plan for the future. 
Gone is the optimism Californians once had that growth would produce a more 
vibrant economy and make life better for us all. 
Californians have a vaguely uneasy feeling that things are slipping out of 
control, that no one really has a grip on where this state is going and how 
we are going to get there. The energy crisis is only the most vivid example 
of our failure to cope with change. People are worried. Davis should be, too. 

The Bee's Daniel Weintraub can be reached at (916) 321-1914 or at 
dweintraub@sacbee.com.







Panel pulls the plug on county utility plan 



Backers blame SDG&E for bill's demise in Assembly committee
By Bill Ainsworth 
UNION-TRIBUNE STAFF WRITER 
May 22, 2001 
SACRAMENTO -- An Assembly committee yesterday thwarted a bipartisan effort to 
ease the way for San Diego County to form a municipal utility district that 
backers say would bring residents cheaper and more reliable power. 
Proponents of the plan said San Diego Gas & Electric and its parent company, 
Sempra, engineered a political power play that ensured defeat of the 
proposal. The utility was the main opponent. 
"Their lobbyists just got on this thing and killed it," said Bill Horn, 
chairman of the San Diego County Board of Supervisors, who attended 
yesterday's hearing before the Assembly Utilities and Commerce Committee. 
"They did a tremendous disservice to residents of San Diego County." 

But a lobbyist for Sempra told the committee that forming a municipal utility 
wouldn't solve the energy crisis because it would do nothing to increase the 
supply of electricity. 
"We're not in the middle of a utility crisis," said lobbyist Cindy Howell. 
"It's a generation crisis." 
The bill, which would have applied only to San Diego County, had strong 
bipartisan support from local officials, including state Sens. Steve Peace, 
D-El Cajon, and Dede Alpert, D-Coronado, who took the unusual step of 
personally testifying before an Assembly committee. 

But the proposal earned just three of the 10 votes needed to clear the 
committee. All of the votes came from Republicans. 
The bill's author, Assemblyman Mark Wyland, R-Escondido, blasted the 
stockholder-owned utility company for opposing the bill. 
"They simply don't want a threat to their ability to make as much money as 
they can on the backs of San Diego ratepayers," he said. 
Proponents say forming a public utility would allow residents to tap cheaper 
sources of power, especially future hydroelectric power planned by the San 
Diego County Water Authority. 
They argue that controlling some power plants could reduce the county's 
dependence on expensive electricity now purchased by SDG&E on the wholesale 
market. That, in turn, could lead to lower utility bills. 
During the current energy crisis, communities with publicly owned power, 
including Los Angeles and Sacramento, have paid much lower energy bills than 
communities served by investor-owned utilities. 
But current state law makes it difficult to create a local municipal utility 
because it requires a majority of voters to endorse the plan in an election 
in which at least two-thirds of registered voters turn out. 
As a practical matter, that means approval likely would occur only during a 
presidential election when voter interest is high. 
Peace said the current law was written for a reason: to protect privately 
owned utilities. 
"The law was written on purpose by this Legislature to make it almost 
impossible to form a municipal utility district," he said. 
Wyland's legislation, Assembly Bill 206, would have changed the law to allow 
majority-vote approval in the new district, without regard to how many voters 
turn out. 
A proposal to create a municipal utility would have to go through months of 
local hearings before it could be placed on the ballot. Wyland said he didn't 
expect the new agency to replace SDG&E but merely to give residents more 
options over the long term. 
Initially, Sempra opposed the bill because it would have given the new public 
agency the power of eminent domain to take over transmission lines and other 
facilities owned by SDG&E. 
At the hearing yesterday, Wyland offered to strip eminent domain power from 
the new agency. 
But Howell, the Sempra representative, still opposed the plan and argued that 
there is no reason to change the voting requirement in the current law. 
Forming a utility district, she said, is a significant step that should 
require high voter turnout. 
The bill also drew opposition from unionized employees of Sempra. 
Committee chairman Rod Wright, D-Los Angeles, voted against the bill, saying 
it was vague and that San Diego legislators should get a better idea of what 
they want to do. 
He left open the possibility that he would support a proposal to allow the 
county to buy power but not to form its own utility. 
Wright, widely considered an ally of the privately owned utilities, received 
$16,500 last year in contributions from Sempra, according to the Secretary of 
State's Web site. 
Other members of the committee objected to the proposed structure of the new 
utility, which would be governed by a nine-member board of two supervisors, 
two San Diego City Council members, three council members from county cities 
and two public members. 
The proposal seemed to turn the political parties' positions on public power 
upside down. 
The measure failed to win any votes from Democrats, who enthusiastically 
endorsed a new state power authority that allows California to finance, buy 
and seize power plants. 
But the plan was supported by three Republicans, including Assemblymen Jay La 
Suer of La Mesa, David Kelley of Idyllwild and Bill Leonard of Rancho 
Cucamonga. Republicans opposed the state power authority, with some calling 
it socialism. 
Wyland said he may try to resurrect the proposal later in the year. 







Business customers criticize proposed 29% SDG&E rate hike 



By Craig D. Rose 
UNION-TRIBUNE STAFF WRITER 
May 22, 2001 
SDG&E's commercial customers are attacking the prospect of paying an average 
of 29 percent more to cover the state's soaring cost of buying electricity. 
At a California Public Utilities Commission hearing in San Diego yesterday, 
some business customers also noted the irony that only in February did they 
win the same rate freeze as residential customers. 
"We need rates we can depend on," said John Roberts, who owns an irrigation 
products business in San Marcos. 
SDG&E customers were the first to bear the brunt of deregulation, and the 
utility's residential ratepayers were the first to win a reprieve when the 
state capped rates at 6.5 cents per kilowatt-hour. 
The SDG&E cap is expected to end for all customers in the coming weeks as the 
commission moves to increase SDG&E's rates to levels now paid by customers of 
PG&E and Edison, which are about 3 cents per kilowatt-hour higher. 
Yesterday's hearing, however, was for commercial rates. 
Roberts said his San Marcos-based irrigation products company has withstood a 
tripling of power costs over the past year, while having to cut the cost of 
its products because of competition, he said. 
Roberts added that socking businesses with high costs in order to spare 
residential electricity customers from expected rate hikes could be 
counterproductive. 
"If businesses leave the state, they'll be without jobs, and a $30 savings on 
their power bills won't mean much," Roberts said. 
The hearing at the County Administration Building was attended by about 30 
people. An additional hearing is scheduled at 7 p.m. today in the Community 
Rooms at the Oceanside Civic Center, 330 N. Coast Highway. 
Larger crowds are expected for hearings on residential rate increases. Dates 
for those hearings have not been set. 







State sends $533.2 million to company, part of April bill 



By Ed Mendel 
UNION-TRIBUNE STAFF WRITER 
May 22, 2001 
SACRAMENTO -- One of the biggest single checks ever issued by the state of 
California, $533.2 million, went to an Atlanta-based firm Friday for power 
purchased for California utility customers during a single month, April. 
Mirant, formerly Southern Energy, says more than half of the power came from 
three plants in the San Francisco Bay Area that it purchased from Pacific Gas 
and Electric for $801 million under a failed deregulation plan. 
State Treasurer Kathleen Connell, who displayed a blown-up copy of the check 
at a news conference yesterday, said she thinks the state has failed to 
obtain enough cheap long-term power contracts and will have to borrow more 
than the $13.4 billion planned. 
Connell, an elected official who issues state checks, said the power bills 
she had paid by last Thursday, totaling $5.1 billion, provide no basis for 
assuming that the price of electricity "is dropping and that it will continue 
to drop through the summer." 
But a consultant for Gov. Gray Davis said the state, which has more long-term 
contracts than Connell has seen, is on track to control power costs with the 
aid of conservation and that it plans to meet its goals without additional 
borrowing. 
"I think the public should have confidence that this is not a rosy scenario," 
said Joseph Fichera of Saber Partners, a Davis consultant. "It's the expected 
scenario." 
The state plans to issue a bond of up to $13.4 billion in late August that 
will repay the general-fund taxpayer money used for power purchases, about $7 
billion so far. The bond will be paid off over 15 years by utility customers. 
Davis has declined to reveal details of state spending for power, arguing 
that the information would be used by power suppliers to submit higher bids. 
A group of newspapers and Republican legislators have filed lawsuits to force 
disclosure. 
Connell said she has received 25 contracts from 17 power suppliers. She 
declined to release details of the contracts, saying they are complicated and 
have varying prices. 
Connell said the check for $533,181,235 issued to Mirant Friday is one of the 
largest she has written since taking office in 1995. 
"This purchase was made entirely at spot-market prices," Connell said, "even 
though the Department of Water Resources (the state agency that purchases 
power) has an executed long-term contract with this company." 
Mirant said in a statement that, at the request of the state, its marketing 
arm gave the state a "helping hand" by buying power from suppliers not 
willing to sell to the state and then reselling the power to the state. 
"We've done the state a tremendous service in purchasing power on its 
behalf," said Randy Harrison, Mirant's Western chief executive officer, "and 
it's wrong for the transactions to be misinterpreted and skewed in a negative 
light." 
Mirant said its subsidiaries generated 1.377 million megawatt-hours in April, 
while its marketing arm purchased enough additional electricity to boost the 
total sold to the state during the month to 2.077 million megawatt-hours. 
The firm said the power was sold for an average of $256.87 per megawatt-hour. 
That's below the $346 average that the state expects to pay on the expensive 
spot market during the second quarter of this year, from April through June. 
But it's well above the average price of $69 per megawatt-hour said to have 
been obtained in the first round of long-term contracts negotiated by the 
state. 
Mirant purchased three power plants from PG&E capable of producing 3,000 
megawatts during a controversial part of deregulation. The state Public 
Utilities Commission ordered utilities to sell off at least half of their 
fossil-fuel power plants without requiring the purchasers to provide low-cost 
power to California. 
The utilities sold nearly two dozen major power plants capable of producing 
more than 20,000 megawatts. The largest group of plants, 4,700 megawatts, 
went to AES Corp. of Virginia. Three Texas firms purchased plants producing 
7,000 megawatts. 
The power supply situation in California remained sound enough yesterday to 
ward off blackouts, although temperatures are on the rise throughout the 
state. More heat means more air conditioning, and a greater strain on the 
system. 
But starting next month, the state's electricity grid managers plan to 
provide businesses and consumers with better forecasts of potential rolling 
blackouts. 
The California Independent System Operator will post on its Web site "power 
warnings" when there is at least a 50 percent chance that rolling blackouts 
might be required during the next 24 hours. The ISO will issue a "power 
watch" when less-critical shortages are anticipated in advance of high demand 
days. 
The agency also plans to give a 30-minute warning before it orders utilities 
to cut power to customers, posting information about probable interruptions 
on its Web site. Its Web site address is http://www.caiso.com 
"There have been a number of requests from businesses and consumers alike 
that would like more advance notice and to be able to plan better. That's 
what we are trying to do," ISO spokeswoman Lorie O'Donley said. 
O'Donley said many details about how notifications will occur still have to 
be worked out, including whether e-mails or pagers might be used. 
In other developments in the electricity crisis: 
?About 1.5 million compact fluorescent light bulbs will be distributed to 
375,000 households as part of the "Power Walk" program that began during the 
weekend. Members of the California Conservation Corps are going door-to-door 
in parts of some cities to distribute the bulbs as part of a $20 million 
conservation program. 
?Republican legislative leaders sent Davis a letter criticizing the governor 
for using taxpayer funds to hire two aides to former Vice President Al Gore 
as communication consultants for $30,000 a month. The Republicans said Mark 
Fabiani and Chris Lehane operate "a partisan, cut-throat political 
communications firm." 
?The state Auditor General said in a report on energy deregulation that the 
state is not meeting some of its goals for conservation and for building new 
power plants. The auditor also said the PUC does not have a process for 
quickly approving new transmission lines. The state has been importing about 
20 percent of its power. 
Staff writer Karen Kucher contributed to this report. 







75% say power woes 'very serious' 



By John Marelius 
UNION-TRIBUNE STAFF WRITER 
May 22, 2001 
The overwhelming majority of Californians now regard the state's electricity 
crisis as a serious problem, but say they have not yet been greatly 
inconvenienced by it, a new Field Poll has found. 
The nonpartisan statewide survey found that while people believe the 
electricity problem is real, they believe it stems more from an attempt by 
energy companies to drive rates up than from an actual shortage. 
They are also far more worried about soaring electricity bills than the 
threat of blackouts. 
And Californians offered contradictory views as to whether electricity 
conservation can head off blackouts this summer. They believe all electricity 
consumers -- residents, businesses and government -- can reduce their usage 
enough to avert blackouts. But they also say they already have cut back their 
own usage about as much as they can. 
In January, the Field Poll surveyed public attitudes about the growing 
electricity crisis. At the time, 58 percent characterized the situation as 
"very serious." Now, the percentage of the population that considers the 
situation "very serious" has grown to 75 percent. 
Californians also hold a rather cynical view of the crisis. Thirty-six 
percent say they believe it is the consequence of an electricity shortage, 
but 59 percent say it was caused by energy companies seeking to increase 
profits. 
The Field Poll is based on telephone interviews with 1,015 California adults 
conducted between May 11 and Sunday. According to statistical theory, the 
poll would be accurate 95 percent of the time within a margin of error of 3.2 
percentage points. 
So far, the ill effects of the electricity crisis are ones Californians seem 
to be willing to live with. But they worry that will not be the case much 
longer. 
Eleven percent said they had been inconvenienced "a great deal" by blackouts. 
But looking toward the summer, 34 percent said they expected blackouts to be 
a major inconvenience. 
Likewise, 19 percent said the electricity rate increases averaging 10 percent 
that have taken effect have been a very serious problem for them. If rates 
were to go up another 10 percent, 36 percent would regard that as a serious 
problem. 
Opinion is divided over the merits of recent rate increases approved by the 
state Public Utilities Commission. Forty-one percent called them justified 
and 52 percent called them unjustified. 
"It's not overwhelmingly panned, which I suppose is about as well as could be 
expected on an issue like this," said Mark DiCamillo, associate director of 
the Field Poll. "It's almost like a tax increase. The public doesn't want it; 
it's just whether they think it's justified or not." 
Looking ahead, 28 percent say blackouts are the greatest threat posed by the 
electricity crisis. But more than twice as many, 67 percent, say they are 
more concerned about escalating electricity bills. 
By a significant ratio, 61 percent to 34 percent, Californians believe 
additional conservation measures by all electricity users can eliminate the 
need for summer blackouts. 
But when it comes to their own electricity consumption, they say they already 
have cut back significantly and can't do much more. 
Californians say they have reduced their household electricity usage by an 
average of 8 percent. They said they could cut back by another 4 percent in 
their homes without causing serious problems. 
"If the state is looking and the governor is looking for redoubled efforts, 
it's going to be painful because the public thinks we can do a little bit 
more, but not a lot," said DiCamillo.






Governor told to try seizure in power war 



By Philip J. LaVelle 
UNION-TRIBUNE STAFF WRITER 
May 19, 2001 
A major San Diego business group urged Gov. Gray Davis yesterday to take 
emergency steps in the energy crisis, including seizing power plants -- an 
action the governor said may be in the cards. 
Davis met over lunch for nearly two hours with members of the San Diego 
Building Owners and Managers Association, overseers of about 250 commercial 
properties here. 
The meeting, at the University Club at Symphony Towers downtown, was closed 
to the media. 

In remarks to reporters later, Davis repeated his hard line against 
out-of-state energy producers, relating a threat made to a dozen power 
executives in a private meeting May 9. 

"I told the generators face to face, as close as I am to you .?.?. 
'Gentlemen, you are going to lose your plants, and I'm going to sign a 
windfall-profits tax, unless you help us get through this summer without 
blackouts and without staggering prices.'?" 
Davis also said he told them: "You know you've been ripping us off, acting in 
a predatory manner. If you do it this summer, you leave me no choice but to 
take your plants and sign a windfall-profits tax. So the ball is in your 
court, gentlemen." 
Building association executive Craig Benedetto said the group had "a frank 
exchange" with Davis. "We want to do our fair share (on conservation), but 
we're also concerned about the supply side," he said. The group "strongly 
urged him to use his emergency powers to do whatever is necessary, including 
seizing plants." 
Association President Cybele Thompson said Davis asked for a string of 
conservation measures. Yet some cannot be implemented without state 
intervention, she said. For example, Davis urged that air-conditioning 
thermostats be set at 78 degrees, but "a lot of our leases don't permit it," 
she said. 
While in San Diego, Davis received an honorary doctor of science degree from 
Scripps Research Institute. 






Head of PUC unveils evidence of power plant manipulation 



ASSOCIATED PRESS 
May 19, 2001 
LOS ANGELES ) The head of the California Public Utilities Commission provided 
a state Senate committee with evidence showing three power generators reduced 
electricity production and then benefited from the resulting high prices. 
While testifying before the committee Friday, PUC President Loretta Lynch 
displayed charts that tracked electricity prices and power generation at 
three plants on a single day last November. 
According to the graphs, after the plants reduced production during the 
middle of the day, the state was forced to declare two separate power 
emergencies which indicate electricity reserves had fallen seriously low. 
After the shortfall in supply helped cause a spike in prices, the companies 
operating the three plants suddenly increased their electricity production to 
almost full capacity, allowing them to capitalize on the much higher rates. 
"We certainly see a pattern," Lynch told the committee, which is 
investigating alleged manipulation of the state's wholesale power market by 
energy suppliers. "Many generators are playing on their experience and 
playing, to an extent, California." 
Maintenance records reviewed by investigators show that there were no valid 
reasons for the plants to cut back production, Lynch said. 
She would not identify the power plants involved, however, Lynch did say that 
they are owned by at least two companies. 
Sen. Joseph Dunn, who heads the special committee investigating alleged 
market manipulation, said Lynch's testimony, on its face, is "very damning." 
He said his committee has uncovered additional preliminary evidence showing 
that several power companies have allegedly engaged in similar behavior. 
During a break in Friday's hearing, a spokeswoman for a trade group of major 
power suppliers told the Los Angeles Times that there have been no 
coordinated efforts to shrink supplies to increase profits. 
"There has been no collusion," said Jean Muoz of the Independent Energy 
Producers Association. 
The PUC and state Atty. Gen. Bill Lockyer are jointly investigating the 
exorbitant wholesale power prices that have cost California billions and 
brought major utilities to financial ruin. 







State to Issue Warnings of Power Outages 
Electricity: Cal-ISO says it will try to give residents and businesses 
24-hour notice of probable blackouts. 

By MIGUEL BUSTILLO and NANCY VOGEL, Times Staff Writers 

?????Californians will hear an expanded forecast on their morning commutes 
this summer, courtesy of the energy crisis: "The 405 Freeway is jammed, 
there's a slim chance of showers, and oh, by the way, there's a 50% 
likelihood of blackouts."
?????By the end of this month, the California Independent System Operator, 
the agency that manages the state's power grid, expects to issue 24-hour 
forecasts generally detailing when and where blackouts can be expected.
?????It is also piecing together a high-tech system to give businesses, 
government officials and the public at least a half-hour notice of a probable 
blackout in their area.
?????Just how those notices will be issued remains somewhat up in the air, 
but Cal-ISO is talking with private companies capable of notifying more than 
10,000 customers a minute via fax and phone, and millions a minute via 
wireless communications such as pagers.
?????Cal-ISO assembled the plan after complaints from businesses, 
particularly those in the Silicon Valley, that last-minute blackouts were 
costing California millions. The plan also responds to growing political 
pressure for the public to be kept informed of the barrage of outages that is 
expected to darken the state this summer because of insufficient supplies of 
electricity.
?????If Californians' electricity use pattern is similar to last year's, 
Cal-ISO has projected, the state could suffer 34 days of blackouts, making 
increased notification crucial.
?????With a shortage of hydroelectric power imports from the drought-stricken 
Pacific Northwest, and no new power plants coming online until July, the 
agency calculates that there will be a supply-demand gap in June of 3,700 
megawatts--enough power to supply 2.8 million homes. A national utility 
industry group painted a more dire scenario last week when it predicted that 
California will experience up to 260 hours of blackouts this summer.
?????"The weather report and traffic report are good analogies; people know 
they are not 100% accurate, but if [a blackout] really means a lot to them, 
they will check in," said Mike Florio of the Utility Reform Network, who 
serves on the Cal-ISO board.
?????Details remain sketchy, and the programs may be altered when the board 
meets Thursday. But a Web page called "Today's Outlook" on the agency's 
Internet site, www.caiso.com, will be created to illustrate, hour by hour, 
how much electricity is available during a 24-hour period and whether there 
is a predicted surplus or shortfall.
?????Media outreach will be expanded to provide news bulletins on electricity 
conditions a day in advance. They will not only include demand projections 
and the effects of weather, but they also will define the level of emergency 
that is expected.
?????A "power watch" will be sounded during stage 1 and stage 2 shortages, 
and a more serious "power warning" if there is a 50-50 chance of a stage 3, 
which often results in blackouts. (Stage 1 emergencies occur when power 
reserves drop below 7%, stage 2 5% and stage 3 1.5%.)
?????Most important, Cal-ISO is pledging to provide 30-minute notice of 
probable blackouts to people in the areas served by Pacific Gas & Electric, 
Southern California Edison and San Diego Gas & Electric, among others. In 
addition to giving the warnings on the Internet and through the mass media, 
Cal-ISO will sound alarms to select e-mail addresses and pager numbers on 
"blast lists," or massive computer databases that it will assemble.
?????"The technology is there. This is a war California is in, and we should 
be deploying high-tech solutions," said Carl Guardino of the Silicon Valley 
Manufacturing Group, the Cal-ISO board member who had been pushing hardest 
for better notification. "Every time California goes black, the economy sees 
red."
?????Guardino said that businesses and public agencies are now receiving just 
two- to six-minute warnings before blackouts, not nearly enough to react.
?????"A two-minute warning may be sufficient in a football game, but it is 
insufficient to protect California businesses and the public," he said. 
?????Though businesses and government agencies are expected to make the most 
of the warnings, Florio said residents also will benefit. 
?????"It will be more of a challenge to get the information to individual 
homeowners, but if someone works at home, and sets it up to get an e-mail 
notice, they can take advantage," he said. 
?????In other energy news Monday, the woman in charge of paying California's 
power bills warned that a $13.4-billion bond issue to cover electricity 
purchases will be insufficient and that the state will have to borrow $4 
billion more before it runs out of cash in February.
?????Calling a news conference in the capital, state Controller Kathleen 
Connell questioned the key assumptions underpinning Gov. Gray Davis' 
financial plan for overcoming the energy crisis. The plan assumes the $13.4 
billion in bond sales will repay state coffers for electricity purchases and 
cover future power buys for the next two years.
?????Connell's opinion is notable because, as the state's chief check writer, 
the independently elected Democrat is privy to information about the prices 
the state is paying for electricity bought on the spot market and through 
long-term contracts--data that Davis has largely kept secret.
?????Davis' advisors and Department of Finance officials dispute Connell's 
warnings.







Businesses May Seek Blackout Exemption 
Energy: PUC will accept new applications, which would be granted only to 
minimize danger to public health and safety. 

By NANCY RIVERA BROOKS, Times Staff Writer 


?????The San Francisco Giants want one, and so presumably do most other 
California businesses: an exemption from the rolling blackouts that experts 
say are all but certain this summer.
?????But whether operating on a baseball diamond or in more mundane venues 
far from the bright lights of pro sports, few businesses will be granted such 
waivers--and then only to minimize threats to public health and safety--under 
a process detailed Monday by the California Public Utilities Commission.
?????"It would be nice in a perfect world if we could exempt everyone who 
asks from rolling blackouts. Unfortunately, we can't do that," Commissioner 
Carl A. Wood said in announcing the procedure for applying for blackout 
exemptions.
?????The PUC already exempts a fairly lengthy list of those whose services 
are needed to protect public health and safety, including fire and police 
stations and acute-care hospitals.
?????Energy experts are predicting blackouts this year ranging from a total 
of 20 hours at the most optimistic to 200 hours or more, based on such 
factors as historic patterns of electricity usage, forecasts for hot weather 
and expectations of diminished hydroelectric imports from out of state.
?????Any new business exemptions, which would start no sooner than August, 
would be granted only to minimize danger to public health and safety. 
?????That means a business would not be granted an exemption from outages 
just because it fears revenue loss, Wood said at a Los Angeles news 
conference.
?????Residential customers will be unable to apply for the exemptions. 
Nevertheless, many already enjoy blackout protection by quirk of location--if 
they share a circuit with an exempt customer--or if they are customers of the 
Los Angeles Department of Water and Power and municipal utilities such as 
those in Glendale and Burbank that do not rely on the statewide power grid 
for electricity.
?????The PUC can approve only a limited number of blackout exemptions, Wood 
said, because to maintain system reliability, a pool of customers 
representing at least 40% of total system load must be available for rolling 
power outages. 
?????Statewide, about 50% of system load is exempt from blackouts in the 
territories served by the three big investor-owned utilities: Edison 
International's Southern California Edison, PG&E Corp.'s Pacific Gas & 
Electric and Sempra Energy's San Diego Gas & Electric.
?????"This is not an exercise in determining who is most affected 
economically by rolling blackouts. Everyone is affected economically by 
rolling blackouts," Wood said.
?????The PUC has set up a Web site, www.rotating-outages.com, and toll-free 
number, (888) 741-1106, for businesses seeking information and applications. 
The deadline to apply is 5 p.m. June 1.
?????Completed applications will be reviewed by an engineering consulting 
firm, Exponent Inc. of Menlo Park, Calif., which will develop a priority list 
based on risk to public health and safety.
?????Only businesses that have applied would be considered for exemptions, 
Wood said, explaining that the commission will not excuse entire industries.
?????The PUC is expected to vote on the exemptions by Aug. 2.
?????Wood said several companies already have applied, including the 
operators of Pacific Bell Park in San Francisco, home of the Giants major 
league baseball team.






Legislators Set to Sue Federal Energy Agency 
Power: Lawmakers try a new idea: a lawsuit arguing that blackouts pose danger 
to people, law enforcement and even water supply 

By DAN MORAIN, Times Staff Writer 

?????SACRAMENTO--Legislative Democrats today will sue federal energy 
regulators, charging that their inaction threatens elderly people in nursing 
homes, children in day care centers, law enforcement and its ability to fight 
crime, and the state's drinking water supplies.
?????Rather than focus on record wholesale energy costs, the lawsuit takes a 
new tack, homing in on the threat to health and safety posed by California's 
energy crisis and the blackouts likely this summer.
?????A draft of the suit seeks to force the Federal Energy Regulatory 
Commission to set "just and reasonable" wholesale power rates as a way of 
ending the crisis before blackouts occur. The action is being filed by 
veteran trial attorney Joe Cotchett on behalf of Senate President Pro Tem 
John Burton (D-San Francisco), Assembly Speaker Bob Hertzberg (D-Sherman 
Oaks), and the city of Oakland. 
?????"A crisis of unprecedented dimensions is already taking shape in 
California," the draft says. "The public health, safety and welfare of the 
state's 34 million residents is in jeopardy due to the tragic consequences of 
rolling blackouts and punitive prices."

?????Suit Says Blackouts Pose Threats
?????Until now, most California officials, including Gov. Gray Davis, have 
been urging that the regulatory commission cap wholesale power prices as a 
way of limiting costs to the state, which has spent more than $6 billion 
buying electricity since January.
?????In the lawsuit, Cotchett will be arguing that while higher bills will 
stretch the budgets of people on fixed incomes, frail elderly people "are 
left to wonder if their oxygen tanks, drip IVs, dialysis machines and 
electricity-powered therapeutic beds will respond when they are needed."
?????"Rolling blackouts represent more than just an annoyance for the men, 
women and children with disabilities," the suit says. "They represent an 
imminent threat to life, health and independence."
?????Cotchett said the suit will be filed in the U.S. 9th Circuit Court of 
Appeals in San Francisco, bypassing the federal trial court. Cotchett said 
the circuit court has direct jurisdiction over FERC.
?????Joining Cotchett will be Clark Kelso, a professor at McGeorge Law School 
in Sacramento who briefly was insurance commissioner last year after Chuck 
Quackenbush resigned. Kelso said he initially was skeptical that lawmakers 
had legal standing to sue. But after Cotchett spoke with him, Kelso said he 
became convinced the suit had merit.
?????"Let's face it," said Kelso, a Republican, "this is the single most 
important issue that the state faces for the next six months."

?????Watching the Water Supply
?????The suit cites warnings from governmental agencies about the 
implications of blackouts, including one the state Department of Health 
Services issued earlier this month to public water agencies statewide. The 
warning contains a sample notice that local water authorities should give to 
consumers.
?????"If the water looks cloudy or dirty," the warning says, "you should not 
drink it." The warning suggests that if people are concerned about water 
quality, they can boil it or add "eight drops of household bleach to one 
gallon of water, and let it sit for 30 minutes."
?????Most water agencies have back-up generators. But the suit says that "if 
an agency's water treatment facilities are hit by a power outage, a two-hour 
blackout can result in two-day interruptions in providing safe drinking water 
because of time needed to bring equipment back online and flush potentially 
contaminated water from the system."





California will forecast blackouts and warn the public 
JENNIFER COLEMAN, Associated Press Writer
Tuesday, May 22, 2001 
,2001 Associated Press 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/22/state1
651EDT7299.DTL&type=news 
(05-22) 00:05 PDT (AP) -- 
Eds.: PMs.
SACRAMENTO, Calif. (AP) -- The operator of California's electricity grid is 
offering a partial answer to a major consumer complaint, planning to give the 
public a half-hour's warning before shutting off the lights. 
Beginning May 30, the Independent System Operator also plans to issue 
warnings similar to weather advisories 24 hours before expected blackouts. 
Up to now, the agency has refused to give more than a few minutes' warning, 
saying it did not want to alarm people when there was still a chance that a 
last-minute purchase of power could stave off blackouts. The utilities have 
also resisted giving warnings, saying they did not want to tip off burglars 
and other criminals. 
"Definitely, it's a good idea," said Shirley Starr, a racetrack employee in 
the Los Angeles suburb of Rosemead. "If I know it's going to happen, I won't 
defrost the refrigerator or something." 
Like some business customers and consumer groups, she wondered if 30 minutes 
warning would be enough. 
"A lot of people, if they are at work, a half hour isn't going to do any 
good," Starr said. 
"I think it should be more than 30 minutes," said George Aguilar, an animal 
control officer in El Monte. "It should be at least eight hours." 
Californians have been warned that rolling blackouts could be a regular 
feature this summer. The state's power system, crippled by a botched effort 
at deregulation, has been unable to produce or buy enough electricity to 
power air conditioners on hot days. 
The rolling blackouts move from neighborhood to neighborhood in a sequence 
that is determined by the utilities and is difficult or impossible for the 
public to predict. The outages last 60 to 90 minutes and then skip to another 
neighborhood. 
Because of the lack of notice, the six days of rolling blackouts to hit the 
state so far this year have led to pileups at intersections suddenly left 
without stoplights, trapped people in elevators, and caused business losses 
by bringing production lines to a halt. People with home medical equipment 
like oxygen fret they that they will be cut off without warning. 
The new plan by the ISO borrows from the language of weather forecasters: It 
will issue a "power watch" or "power warning" that will give notice the grid 
could be headed toward blackouts. 
The ISO will issue 30-minute warning to the media and others before any 
blackouts actually begin. However, the ISO will not say what neighborhoods 
will be hit. 
"It's better than no notice," said John Handley of California Independent 
Grocers. 
He said stores could use the warning to rush customers through checkout and 
even move items to cold storage if necessary. 
"Once the power goes out, we can't ring anyone up," Handley said. 
Many small factories have production lines that cannot be interrupted without 
risk to an entire lot of whatever they produce, said Brad Ward, president and 
chief executive of the Small Manufacturers Association of California. 
For example, a manufacturer might be using acid to etch something on a piece 
of metal. If power is shut off suddenly, the acid might not be removed in 
time and the piece would be ruined. 
"This is really, really good news," Ward said. 
The ISO said it also is looking into high-tech ways it can get word of an 
impending blackout quickly to homeowners and businesses through mass e-mails, 
faxes, automated phone calls and pager messages. 
On the Net: 
California Independent System Operator: www.caiso.com 
,2001 Associated Press ? 




Developments in California's energy crisis 
The Associated Press
Tuesday, May 22, 2001 
,2001 Associated Press 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/22/state0
347EDT7321.DTL&type=news 
(05-22) 00:47 PDT (AP) -- 
Developments in California's energy crisis: 
MONDAY:
* No power alerts as reserves stay above 7 percent. 
* State power grid operators say they'll soon be giving residents and 
businesses 30 minutes notice before they order rolling blackouts. The 
Independent System Operator will also be issuing a daily energy forecast with 
projected supply and demand, and the likelihood of blackouts. Several 
lawmakers say they'll introduce plans that would give Californians even more 
notice of blackouts -- from one day to one month. 
* The state auditor releases a report on the state's energy crisis, saying 
previous estimates that the state could avoid blackouts this summer are 
overly optimistic. The Bureau of State Audits also criticized the California 
Public Utilities Commission, saying the commission hasn't responded to the 
crisis by expediting transmission line project. 
* Gov. Gray Davis is in Chicago, speaking with city officials there about 
blackout procedures. 
* Davis' energy advisers say that the state is meeting its energy goals, 
despite doubts raised by Controller Kathleen Connell and other critics. 
Connell questioned whether the state can buy enough electricity cheap enough 
to avoid borrowing more than the $13.4 billion approved by state lawmakers. 
But Davis adviser Joe Fichera says the state has signed more long-term power 
contracts that will help keep prices low. 
* Davis' office announces that an eighth "peaker" power plant has been 
licensed. The 135-megawatt plant in Gilroy is expected to be online by the 
end of September. The California Energy Commission says that more than 10,000 
megawatts of new electricity since April 1999. 
* The California Energy Commission also announces increased rebates for 
renewable energy systems -- such as solar panels, fuel cells or small wind 
generation. Rebates of up to 50 percent on the system are available for 
residential, commercial, industrial or agricultural users. 
* Republican legislative leaders criticize Davis for spending tax money on a 
political communications firm that previously advised Vice President Al Gore. 
Davis is hiring Gore's former press secretary and deputy campaign manager for 
six months at $30,000 a month to coordinate the governor's communications on 
energy issues. Senate GOP Leader Jim Brulte and Assembly Republican Leader 
Dave Cox say Davis should pay them with campaign funds, not taxpayers' money. 
* Shares of Edison International closed at $11.23, down 51 cents. PG&E Corp. 
dropped 48 cents to close at $11.16. 
WHAT'S NEXT:
* Davis' representatives continue negotiating with Sempra, the parent company 
of San Diego Gas and Electric Co., to buy the utility's transmission lines. 
* Davis is scheduled to sign a bill Tuesday that would expedite power plant 
siting. 
* Republican Assemblyman Mike Briggs plans to introduce a bill that would 
allow people to know a month ahead if they will be affected by rolling 
blackouts. 
THE PROBLEM:
High demand, high wholesale energy costs, transmission glitches and a tight 
supply worsened by scarce hydroelectric power in the Northwest and 
maintenance at aging California power plants are all factors in California's 
electricity crisis. 
Edison and PG&E say they've lost nearly $14 billion since June to high 
wholesale prices the state's electricity deregulation law bars them from 
passing on to consumers. PG&E, saying it hasn't received the help it needs 
from regulators or state lawmakers, filed for federal bankruptcy protection 
April 6. 
Electricity and natural gas suppliers, scared off by the two companies' poor 
credit ratings, are refusing to sell to them, leading the state in January to 
start buying power for the utilities' nearly 9 million residential and 
business customers. The state is also buying power for a third investor-owned 
utility, San Diego Gas & Electric, which is in better financial shape than 
much larger Edison and PG&E but also struggling with high wholesale power 
costs. 
The Public Utilities Commission has approved average rate increases of 36 
percent for residential customers and 38 percent for commercial customers, 
and hikes of up to 49 percent for industrial customers and 15 or 20 percent 
for agricultural customers to help finance the state's multibillion-dollar 
power buys. 
,2001 Associated Press ? 




How blackout warning plan works 
The Associated Press
Tuesday, May 22, 2001 
,2001 Associated Press 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/22/state0
347EDT7320.DTL&type=news 
(05-22) 00:47 PDT (AP) -- 
Details of plan by California Independent System Operator to warn of 
impending blackouts: 
* When demand is high, ISO will issue forecasts 24 hours in advance giving 
projections of peak demand, supply and weather outlook. Notice will be given 
to the media, emergency-services agencies and the utililities. 
* A "Power Watch" will be issued when it is likely the grid will reach Stage 
One, when the system is within 7 percent of running out of power, or Stage 
Two, when the system is within 5 percent of running out of power. 
* A "Power Warning will be issued when there is at least a 50 percent chance 
of a Stage One alert -- when demand is within 11/2 percent of the available 
supply. 
* 30 minutes before ordering the utility companies to trigger rolling 
blackouts, the ISO will put out a "notice of probable load interruption." 
Notice goes to media and utilities, and is posted on the agency's Web site, 
www.caiso.com. If power is found, or if the warning prompts enough 
conservation, blackouts can still be avoided. 
* Plan takes effect May 30. 
How utilities tell customers which areas will be blacked out: 
* Pacific Gas & Electric bills presently show customers which outage "block" 
they are in. Blocks are blacked out in a specific order that customers can 
find on company's Web site. PG&E typically gives the block numbers in 
announcing a rolling blackout. 
* Southern California Edison plans to start a similar system of informing 
customers their "outage group number" by June 3. 
* PG&E has pager, e-mail and automated telephone notification systems for big 
power users and residential customers on life-support equipment. 
,2001 Associated Press ? 




GILROY 
Davis licenses 8th emergency power plant 

Tuesday, May 22, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
NL188945.DTL&type=news 
Gov. Gray Davis announced yesterday the licensing of the eighth power plant 
-- a 135-megawatt site designed to meet summer demand -- under a 21-day 
emergency review he ordered three months ago. 
Calpine Corp. plans to build the plant -- consisting of three 45-megawatt 
gas-fired turbines -- next to the firm's existing cogeneration power plant in 
Gilroy. The plant should be producing electricity no later than Sept. 30. 
Calpine has guaranteed the annual sale of 2,000 hours of generation from the 
"peaker" project under contract to the California Department of Water 
Resources. 
To swiftly beef up the state's power production during the peak summer 
demand, Davis signed the February order directing the California Energy 
Commission to expedite review of the peaker plants -- small, temporary, 
simple- cycle generators that can be quickly put into operation. The eight 
plants licensed so far will add a total of 636 megawatts to the grid this 
summer. 




PAY UP: Rate increases to hit more users than first reported, PUC says 
David Lazarus, Chronicle Staff Writer
Tuesday, May 22, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N27807.DTL&type=news 

State regulators admitted yesterday that almost two-thirds of Northern 
California power customers will be hit with higher electricity rates, 
contradicting an earlier claim that half of all consumers would be untouched 
by rising bills. 
Meanwhile, officials and utility executives said bills could go even higher 
if lawmakers try to reduce the number of households suffering rate hikes. A 
preliminary vote on the matter by the state Senate Energy Committee is 
scheduled for today. 
In adopting the biggest rate increase in California history, the Public 
Utilities Commission told consumers that half of all residential ratepayers 
would be unaffected by higher bills. 
This is roughly the case for customers of Southern California Edison, but 
Pacific Gas and Electric Co. said yesterday that at least 65 percent of its 
residential customers will experience higher bills as of June 1. 
"I never had a great deal of confidence that 50 percent of people would be 
exempt from rate increases," said PUC member Carl Wood. "I was surprised by 
the 50 percent number." 
Nevertheless, Wood was one of three Democratic appointees on the five- member 
commission who voted in favor of the rate plan, which included a tiered 
system under which the heaviest power users would face the steepest increases 
in monthly bills. 
Residential customers who can stay within 130 percent of so-called baseline 
usage would experience no rate increases. 
"We've been sold a false bill of goods," said Medea Benjamin, head of the San 
Francisco consumer advocacy group Global Exchange. "The PUC made a huge point 
of saying that half of all people would be unaffected. They can't promise one 
thing and then do something else." 
RUSH JOB
Regulators admit they were in a hurry to get a rate system adopted in time 
for PG&E and Edison to begin collecting the higher fees in their June bills. 
For this reason, they went ahead with last week's vote even though it was 
apparent that less than half of all residential ratepayers would be able to 
stay within 130 percent of baseline, as outlined by the tiered system. 
"If we wanted to do it perfectly, we would never have gotten it done," Wood 
said. "We can't get the baseline adjusted before the end of the summer, even 
at an accelerated pace." 
Because electricity rates have been linked to baseline usage, this once- 
esoteric calculation has taken center stage in California's energy mess. 
BASELINE USAGE
The baseline usage figure -- included on PG&E bills -- was devised nearly 20 
years ago to define the amount of fuel "necessary to supply a significant 
portion of the reasonable energy needs of the average residential customer," 
according to the Public Utilities Code. 
It includes several variables, such as climate, time of year and type of 
fuel. 
However, the last time regulators tabulated baseline numbers was in 1994, 
meaning that the figures on most people's bills no longer reflect actual 
power consumption. 
"This was pre-computers, pre-Internet and pre- a lot of other things that are 
now in the house," said Richard Bilas, a Republican PUC member who opposed 
last week's rate hike. 
The average baseline for most households is about 250 kilowatt hours per 
month, according to the 1994 numbers. To be exempt from rate hikes, a 
household thus would need to use no more than 325 kilowatt hours. 
However, regulators and utilities now say that actual power usage for the 
typical home is at least 500 kilowatt hours per month -- well above most 
people's baseline amounts. 
"It's not possible to stay within 130 percent of that," Bilas said. "I know I 
can't do it." 
NEW BASELINE CRITERION
With regulators set to begin re-examining baseline numbers Thursday, the 
Senate Energy Committee is seeking ways to make the tabulation more equitable 
by adding a new criterion to the figure: household size. 
Now, a family of five with computers, electronic games and almost round-the- 
clock power consumption would have the same baseline as the bachelor living 
next door who is rarely home. 
That disparity would be addressed by a bill to be submitted today by Sen. 
Jackie Speier, D-Hillsborough, who wants household size to be a factor in 
determining baseline, with the baseline limit rising in proportion to the 
number of people in the residence. 
"Baseline is a totally unfair measure of the number of people in a 
household," she said. "Families are severely impacted." 
Robert Herrell, Speier's staff director, said state authorities would rely on 
"self-certification" for each household to accurately report its number of 
occupants -- essentially, the honor system. 
"The last thing you want to do is create baseline police," he said. 
"Hopefully, people wouldn't game the system." 
But Akbar Jazayeri, director of revenue and tariffs for Southern California 
Edison, said that even if regulators succeed in adjusting baseline figures to 
better reflect household size and usage levels, this only would increase the 
number of ratepayers who can stay within 130 percent of revised limits. 
"That means more people would be exempt from rate increases," Jazayeri 
observed. "There would be less revenue from ratepayers, so you would have to 
get other people to make up for it." 
In other words, another rate increase. 
"We'll need another rate increase if we mess around with baseline," warned 
the PUC's Bilas. 

E-mail David Lazarus at dlazarus@sfchronicle.com. 
Who uses how much
Most PG&E residential customers do not stay within 130 percent of baseline 
power usage, which means they will be subject to a rate increase.
-- Customers as a  percentage of baseline use
   Up to 130%       35%
   Up to 200%       23%
   Up to 300%       22%
   More than 300%   20%
Source: PG&E
Chronicle Graphic






Energy crisis not real, state's residents say 
But poll results show most expect more blackouts 
Carla Marinucci, Chronicle Political Writer
Tuesday, May 22, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N175993.DTL&type=news 

The overwhelming majority of Californians say the state's power crisis is 
"very serious" and blame the big energy companies for creating and 
manipulating shortages, results of a new Field Poll show. 
"In the public's view . . . this is a manufactured crisis -- not a real 
crisis," Mark DiCamillo, director of the statewide Field Poll, said 
yesterday. "That cynicism permeates a lot of things. . . . The public is not 
sold on the explanations as to why we're in the crisis we're in." 
The poll results, released yesterday after a year of energy woes, underscore 
Californians' increasing concerns about the energy crisis and their growing 
list of personal conservation efforts to deal with it. The poll of 1, 015 
California adults was conducted May 11 to Sunday. 
CONSUMPTION, CONSERVATION
In what may be the first such tally of statewide conservation efforts, 
California residents said they reduced their power consumption by an average 
of 8 percent -- an effort motivated by the energy crisis. 
The new poll results also dramatized that Californians are "very attentive" 
to news reports and information about the energy crisis as a way of bracing 
themselves for the effects of increased rates and power outages. 
But so far, it is not the politicians who are the object of their wrath -- it 
is big energy, DiCamillo said. 
"They're the bad guys," he said. "But (in the public's view) no one has been 
able to stop them. No one is winning this." 
The findings of the latest Field poll: 
-- Three quarters of the Californians polled deemed the energy crisis "very 
serious," and 20 percent said "somewhat serious" -- compared with just 5 
percent who said they didn't see it as a problem. That is similar to a 
California Public Policy Institute survey released Monday that showed 82 
percent of those polled believe the energy crunch is a "big problem." 
-- Despite the widespread media coverage of the effects of blackouts, many 
Californians said they were not personally inconvenienced, the poll results 
showed. Just 11 percent reported being inconvenienced "a great deal" by 
blackouts, and another 16 percent say they have been affected "some" by the 
problems, compared with 16 percent who said they'd had "a little" 
inconvenience, and 11 percent who said "none." Almost half said they had not 
experienced a blackout at all. 
-- One-third said they expected to be inconvenienced "a great deal" by 
blackouts during this coming summer, the poll showed. 
-- Only 1 in 5 residents say rate increases have so far created serious 
problems for them -- and nearly half say they haven't been affected at all, 
the poll showed. But most Californians say they are fully aware new rate 
increases have been passed by the Public Utilities Commission, and "you can 
see the pain level goes up fairly dramatically," said DiCamillo. "They're 
bracing themselves for the worst." 
WHAT LIES AHEAD
DiCamillo said the poll results confirm how deeply Californians fear what may 
lie ahead in the energy arena. 
"Up to this point, (rate increases and blackouts haven't) really touched a 
strong nerve, but they really feel it's coming," he said. "They don't know 
how it will affect them. . . . They're looking at the politicians as if 
they're impotent in the face of these changes." 
The Field Poll has a margin of error of plus or minus 3.2 percentage points. 
Tell us what you think -- What are your suggestions for saving energy? Send 
your best tips to Energy Desk, San Francisco Chronicle, 901 Mission St., San 
Francisco, CA 94103; or put your ideas in an energy-efficient e-mail to 
energysaver@sfchronicle.com. 

E-mail Carla Marinucci at cmarinucci@sfchronicle.com 
Field Poll
 Californians' reactions to energy crisis
   More than half of Californians surveyed this month by the Field Poll say 
the energy crisis is more a product of the energy companies' efforts to drive 
up rates than a real shortage. Despite that view, 85 percent say they're 
trying to conserve energy. 
-- Which is closer to your view - that the current electricity shortage is 
real or is an attempt by energy companies to increase rates?
               Attempt to increase rates   Real shortage  No opinion
May survey             59%                     36%           5%
January survey         57%                     36%           7%
May survey results by household income:
  Less than $20,000    54%                     37%           9%
 $20,000 to $40,000    62%                     34%           4%
 $40,000 to $60,000    59%                     36%           5%
 $60,000 to $80,000    57%                     37%           6%
  More than $80,000    55%                     42%           3%
-- Degree to which residents say they have cut back on electricity usage 
since 
the start of energy crisis: Percentage of residents who . . .
Have not been able to conserve   15%
Have cut back electricity use (median percentage cutback 8%): 
    5%            17%
   10%            25%
   15%            14%
   20%            13%
   More than 20%  11%
.
Can't estimate % of savings 5%
The results are based on a telephone survey conducted May 11 to 20 by the 
Field Institute. The survey of 1,015 California adults was completed in 
English and Spanish using random digit dialing methods. This poll has a 
margin 
of error of plus or minus 3.2 percentage points.
Chronicle Graphic





Power plant 'ramping' to be probed 
State senators also expected to file suit, charging federal regulators with 
failing to ensure fair rates Christian Berthelsen, Chronicle Staff Writer
Tuesday, May 22, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N151793.DTL&type=news 
State legislators said yesterday that they will investigate charges power 
companies manipulated electricity prices by repeatedly ramping the output of 
their plants up and down and creating artificial shortages. 
Sen. Joe Dunn, D-Santa Ana (Orange County), who heads a special committee 
reviewing energy prices, called the "ramping" allegations, first disclosed in 
The Chronicle on Sunday, "outrageous acts of manipulation." 
Dunn said that even if the practices did not violate current law, legislation 
could be drafted to make such acts illegal in the future. 
"We're looking at it, yes, from the point of view of civil or criminal 
statutes that may exist but also whether legislation should be introduced to 
render it a violation for future such acts." 
Dunn's committee already has been investigating charges that power generators 
"gamed" the wholesale energy market to boost their profits. 
The Chronicle reported Sunday that power companies used a complex tactic to 
alter the output of their plants, sometimes several times within an hour. 
Sources who work in the plants said the ploy enabled the companies to drive 
up the prices they receive for electricity. The firms avoided detection by 
still meeting the terms of their contracts, which required them to supply a 
certain amount of power each hour. The sources said the tactic greatly 
contributed to deteriorating physical conditions at the plants, leading to 
the record level of outages now plaguing California plants. 
The senate committee, which convened in March after The Chronicle reported 
that power companies had overstated the growth in demand for electricity in 
California, has obtained confidential bidding and generation data for power- 
generating companies. Dunn said the data will be analyzed to determine which 
plants employed the ramping tactic. He added that the issue would be examined 
in a public hearing in the coming weeks. 
Meanwhile, pressure continued to mount on generating companies that drove 
electricity supplies through the roof during the past year. 
Sources said the California Public Utilities Commission, which is 
investigating allegedly unnecessary plant shutdowns, has narrowed its focus. 
It is targeting several plants that had no apparent defects yet went offline 
during periods when prices were rising because of limited electricity 
supplies. 
Commissioner Jeff Brown said the names of these plants are under court seal. 
However, Dow Jones reported yesterday that one of them was a San Diego-area 
plant co-owned by Dynegy Inc. of Houston and NRG Inc. of Minneapolis. Another 
was a Pittsburg plant owned by Mirant Corp. of Atlanta. The companies denied 
the allegations. 
On another front, Sen. John Burton, D-San Francisco, and Assembly Speaker 
Robert Hertzberg, D-Sherman Oaks (Los Angeles County), were expected to file 
a lawsuit this morning against the Federal Energy Regulatory Committee for 
failing to carry out its stated duty of ensuring "just and reasonable" 
electricity rates. 
"Their central failing is that they don't follow the law," Burton said in an 
interview. "Either they're letting their friends within the industry or their 
ideology get in the way of their public responsibility." 
The California attorney general's office also is pressing forward with an 
investigation into the practices of wholesale power companies. 

E-mail Christian Berthelsen at cberthelsen@sfchronicle.com. 
Offline firms
   Reliant Energy had more outages during a 39-day period examined by The 
Chronicle than any other power provider. Outage numbers were calculated by 
multiplying the number of a company's generators that were either fully or 
partially offline by the number of days they were out.
   Firm     Megawatts
   Reliant    319
   Southern   310
   AES        278
   Duke       261
   PG&E       249





Half-hour notice of blackouts planned 
FAST ALERTS: Power grid operator may send voice, e-mail messages 
Lynda Gledhill, Chronicle Sacramento Bureau
Tuesday, May 22, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N121634.DTL&type=news 

Sacramento -- Californians will receive 30 minutes' warning that blackouts 
may be imposed -- enough time, it is hoped, to get out of the elevator or 
through a dangerous intersection, the state's power grid managers said 
yesterday. 
The California Independent System Operator also will provide a daily power 
forecast 24 hours in advance so residents and businesses can plan for 
blackouts the same way people prepare for severe storms. 
"We want a system that is proactive," said Carl Guardino, an ISO board member 
and president of the Silicon Valley Manufacturing Group. "When the last few 
rolling blackouts hit there was as little as two minutes' warning. Two 
minutes may be fine in a football game, but it's not fine for California's 
economy or safety." 
ISO officials also said they are examining high-tech ways of quickly 
spreading the word about impending blackouts to homeowners and businesses 
through mass e-mails, faxes, automated phone calls and pager messages. 
The plan, detailed in a report issued yesterday, still falls far short of 
other proposals being pushed in the Legislature. Lawmakers have suggested 
scheduling blackout days months in advance and having California join with 
other Western states to form a "buyer's cartel" that would refuse to pay for 
power when prices become too high. 
"It's not the report I was expecting, but 30 minutes of notice is certainly 
better than two," said Sen. Debra Bowen, D-Marina del Ray. "No matter how you 
slice it, this summer is going to be miserable. The question is whether we 
want to have planned misery or unplanned misery." 
A spokesman for the California Manufacturers and Technology Association, 
which commissioned a recent report that found unplanned blackouts could cost 
the state economy $21.8 billion, said the ISO policy changes will be a 
tremendous help to many businesses. 
"In this electrically unreliable world, any notification manufacturers can 
get is good," said Gino DeCaro, a spokesman for the association. "While 30 
minutes won't be enough for some, for most manufacturers it will be 
sufficient. " The ISO will wait for guidance from the governor and lawmakers 
regarding more complicated issues such as the creation of scheduled 
blackouts, said Michael Florio, an ISO board member and official at The 
Utility Reform Network. 
"There are bigger public policy ramifications," Florio said. 
The ideas will be discussed in greater detail at an ISO board meeting 
Thursday. Stephanie McCorkle, an ISO spokeswoman, said the changes are just 
updates of policies already in place. 
WARNING OF 'PROBABLE' BLACKOUTS
The 30-minute advance-notification system, scheduled to go into effect early 
next month, would warn of "probable" blackouts, including the amount of load 
that will have to be curtailed in each service area. 
Until now, the agency has refused to give more than a few minutes' warning, 
saying it did not want to alarm people when there was still a chance that a 
last-minute purchase of power could stave off blackouts. The utilities also 
have resisted giving warnings, saying they did not want to tip off burglars 
and other criminals. 
The ISO also has been working to upgrade its Web site to provide the most 
current information about how much electricity is being used and how much is 
available. It will also establish a system this summer through which that 
information can be sent in an hourly e-mail. 
This information may make it easier for larger users of electricity to plan 
their operations, said ISO spokeswoman Lorie O'Donley. 
Also planned by the ISO is a "Power Watch/Power Warning" system that would 
provide a 24-hour notice of high-demand days. 
Under the two-tiered system, a "Power Watch" would be declared whenever a 
Stage One or Stage Two alert is likely, while a "Power Warning" would be 
issued whenever there is at least a 50 percent chance of a Stage Three alert. 
With one report suggesting California may see as many as 700 hours of rolling 
blackouts this summer, lawmakers are hard at work trying to find ways to make 
the outages easier for power customers to cope with. 
The idea of a buyer's cartel, the subject of a Capitol hearing today, would 
have California -- in partnership with other states -- set a firm ceiling on 
what it will pay power producers for electricity this summer -- and not one 
dime more. 
The idea, which has attracted the support of some key lawmakers and the 
cautious interest of Gov. Gray Davis, could potentially curtail the 
exorbitantly high prices the state has been paying for electricity. 
The trade-off would be the likelihood of more frequent blackouts than if the 
state continues to pay any price electricity sellers demand. 
The maximum the state would pay would be set by a formula, based on such 
things as the cost of natural gas. A reasonable profit for power producers 
would be built in, supporters said. 
DESIGNATING BLACKOUT DAYS
Meanwhile, Assemblyman Mike Briggs, R-Fresno, will introduce a bill today 
that would require the state's utilities and Public Utilities Commission to 
designate days for potential blackouts to each block. 
For example, a customer located in Block 3 of Pacific Gas and Electric Co. 's 
service area could be told in advance that power will be turned off June 5 if 
blackouts are needed that day. 
"Right now, every day is a potential blackout day," Briggs said. "This way 
people would know when their potential days are." 
On alert 
-- When demand is high, the ISO will forecast peak demand, power supply and 
weather 24 hours in advance. 
-- A "power watch" will be issued when it is likely the grid will reach Stage 
1 (system is within 7% of running out of power) or Stage 2 (system is within 
5% of running out of power). 
-- A "power warning" will be issued when there is at least a 50% chance of a 
Stage 3 alert (demand is within 1.5% of supply). 
Who calls a blackout? 
Engineers in Folsom at the Independent System Operator keep watch on the 
state's power consumption. When they determine that energy reserves have 
dipped below 1.5 percent of available capacity, the ISO can order utilities 
to start cutting juice. Officials said this week they would give 30 minutes' 
notice before blackouts begin. The ISO tells the utilities exactly how much 
power to cut. 
Q: Who decides who gets blacked out and for how long? 
A: That's up to the utilities. PG&E has divided its 4.5 million customers 
into 14 blocks; each block is darkened for one to two hours at a time. The 
blocks are defined by PG&E's network of circuits rather than by geography. 
Thus, neighborhoods in San Francisco, Oakland and Pleasant Hill can be 
blacked out simultaneously. 
Q: How many users are blacked out at once? 
A: Each of PG&E's 14 
blocks represents about 550 megawatts of electricity. (A megawatt is enough 
electricity to power 1,000 homes.) If PG&E is told to cut more than 550 
megawatts, it can shut down two or more blocks at a time. PG&E also can black 
out smaller portions within each block if the ISO's requirements are for less 
than 550 megawatts. 
Q: How is power shut off? 
A: This is a straightforward matter of shutting off circuits in a power 
substation by computer or sending a crew to flip the switches by hand. 
Q: How many days of blackouts have we had this year and how many customers 
have been affected? 
A: A total of 3,035,000 customers have been blacked out in the six days of 
rolling blackouts since Jan. 1, 2001. 
Q: Which block of customers will be blacked out next? 
A: Some or all customers in Block 1. 
Q: How do I know what block I'm in? 
A: Look for the words "Rotating Outage Block" followed by a number on your 
bill. If it says Block 50, you share an electrical circuit with a hospital, 
police station or other "essential service" that is normally exempt from 
service cuts. 
Q: What should I do when the lights go out? 
A: Power experts advise: 
-- Turn off all lights and appliances to prevent damage-causing power surges 
when service is restored. Leave one light on to indicate when the electricity 
is back. 
-- Use caution when driving because traffic signals may be out. Treat all 
intersections as a four-way stop. 
-- To protect food, open refrigerator and freezer doors only when absolutely 
necessary. 
-- Keep a flashlight and radio with fresh batteries available. If you light 
candles, observe the usual safety precautions. 
-- If the lights go out, check with neighbors to determine if only your home 
is affected. It may be a downed power line or some other problem, in which 
case you should alert PG&E or your city electrical bureau. 
-- When the power returns, turn on one appliance at a time to prevent power 
surges. 
-- Don't plug a generator into the wall; when the lights return, it can send 
a high-voltage current through the system that can electrocute power workers. 
-- Tell children who are home alone to remain calm, to turn off the TV and 
computers, and not to use candles. 
Sources: PG&E, Chronicle staff 
Chronicle Graphic 
E-mail Lynda Gledhill at lgledhill@sfchronicle.com. 




Time-of-use power pricing may be the answer 
Jane Bryant Quinn
Tuesday, May 22, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/B
U225334.DTL&type=news 
Most of the rest of the country will soon be catching California's energy 
disease. I don't mean blackouts and brownouts. I mean higher electricity 
prices, which are all but inevitable. 
Retail prices are regulated in most parts of the country. But when utilities 
pay more for wholesale power, they have to pass it on. How much prices rise 
will depend partly on whether we learn, again, to conserve. 
Consumers bought into conservation after the energy shocks of the 1970s and 
early '80s. We not only turned down thermostats and insulated the attic, we 
embraced government intervention and technological change. 
Federal energy standards brought forth more efficient refrigerators and air 
conditioners. New building codes made homes and offices less expensive to 
heat, 
cool and light. Rebate programs helped people buy better lightbulbs and 
appliances. Electricity use grew more slowly than the economy did. 
But in the late '90s, with prosperity in full swing, demand began catching up 
with supply. Consumers stopped worrying about their energy bills. High-tech 
businesses gobbled megawatts for lunch. 
Utilities and states -- California among them -- closed or scaled back their 
conservation programs. We're all free-market maniacs now. The markets were 
supposed to create efficiency, unaided. 
But they haven't. So while we work out the problems and wait for new plants 
to come online, we need to spread the available power around. 
Energy conservation needs a big push. The Bush administration has blinders on 
when it cuts conservation spending and downplays the need. 
But a market-based question has also entered the conservation debate. Would 
we save power if it were priced in a different way? 
Most consumers don't realize that the wholesale price of power changes at 
various times of day. Prices spike when demand is high, say on summer 
afternoons, and fall at night when most offices have closed. 
But most of us pay a constant price per hour, whether we use expensive hours 
or cheap ones. So we have no incentive to conserve power during hours of high 
demand. 
Market-based pricing is intended to get you to think twice before using power 
during those expensive peaks. There are three main approaches to this today: 
CHANGING THE FIXED PRICE. Many utilities today charge more in the hot summer 
months than in the winter months. Georgia Power goes further -- raising your 
summer price as you use energy more. In the winter, your rate for extra 
kilowatt-hours declines. 
VOLUNTARY TIME-OF-USE PROGRAMS. You pay the most for power during weekday 
hours and the least on weekends and overnight. Oregon will introduce a 
statewide time-of-use program in October. Niagara Mohawk in Syracuse, N.Y., 
has 4,000 consumers on time-of-use. 
Ahmad Faruqui of the industry's Electric Power Research Institute estimates 
that a well-designed time-of-use program could cut residential peak demand by 
about 2.5 percent. In California, that could reduce energy costs by 12 
percent over the summer. 
So far, however, these programs haven't persuaded many people to run their 
washing machines at night. Saving $20 or $30 isn't worth the hassle, says 
Mike O'Sheasy, Georgia Power's manager of product design. 
REAL-TIME PRICING. Here, the utility varies your price per kilowatt-hour 
during the day, as its own prices change. Using a "smart meter" and "smart 
thermostat," you could program your water heater or air conditioner to turn 
off automatically during times when power costs the most. Many businesses 
already pay on real-time. 
How consumers like real-time pricing remains to be seen. Georgia Power tried 
it 12 years ago and dropped it. 
But Gulf Power in Pensacola, Fla., rolled out newer technology last year and 
thinks it has a hit. About 1,500 customers are already online with 400 more 
on the waiting list, even though the smart meters cost them $4.53 a month. 
"People like the control over their power bill," says Gulf's Margaret Neyman, 
general manager of marketing. She says customers are saving 15 percent, 
which more than covers their participation cost. 
Puget Sound Energy in Bellevue, Wash., has enrolled more than 420,000 
customers in a smart-meter program. They've been getting reports, showing 
when they use power the most and what it costs to deliver. 
This month, the utility started tying its smart meters to time-of-use 
pricing. Customers pay less during night-time hours, all day Sundays and 
holidays. 
Consumer and environmental groups generally haven't supported market-based 
pricing for homes. They blame high prices, in part, on market manipulation 
and don't want the power sellers to profit from it. 
They have a case. But blackouts and brownouts amount to a sales pitch for 
suspending clean-air rules and reopening old, polluting plants. Greenies need 
to support any power-saving plan that works. 




The mouth that roared 
Rob Morse
Monday, May 21, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/21/M
N77405.DTL&type=news 
Last week I was watching the TV news and saw a frightening sight. An angry 
Gray Davis was declaring war on Texas. 
"We are literally in a war with energy companies who are price-gouging us," 
the governor said, shaking with something that looked an awful lot like 
emotion. "Many of those companies are in Texas." 
In typical Davis style, the governor is a little late in declaring war on 
Texas. If he had been president in 1942, he would have spoken of that day of 
infamy in 1941. 
It also was a typical Davis half-measure. He didn't declare war on all of 
Texas, just the Texans who poll badly in California. 
Those would be George W. Bush and his friends and contributors who cut off 
our power, robbed us, and then used us as an example of why the nation needs 
holes punched in Alaska and hundreds of Homer Simpsons put in charge of 
nuclear fuel rods. 
Davis isn't the type to boldly declare unlimited war on all of Texas, 
certainly not "Austin City Limits," chili and the Texans we love, like Willie 
Nelson, Tommy Lee Jones, Charlotte Mailliard Shultz and Willie Brown. 
But Davis had a Texas stereotype in mind as he spoke of the hardscrabble 
hombres in Houston high-rises who are smart and mean and are holding us up 
long-distance. Yep, it's as if Texas is saying to California, "Your money or 
your lifestyle." 
Davis said he would retaliate each month by naming a Texas corporation "pig 
of the month." 
Yeah, that'll hurt those guys at Reliant Energy and Enron. 
Having Gray Davis on your side in a dustup with a bunch of Texans is like 
having the head of the high school av crew on your side in a rumble with the 
Crips. 
Right now the gashouse gangsters in Houston are having a jeweler make 14- 
karat gold pigs they can wear proudly in their lapels while they eat steak 
and laugh at Californians deprived of their sushi because of the loss of 
refrigeration. Texas kids will have bumper stickers on their fuel- 
inefficient scooters saying, "My dad is a proud pig of the month in 
California." 
We have to do better than this pig of the month stuff. Slogans won't do when 
you're fighting guys who are cutting off the electricity to read them by. 
Texans have a better slogan, "Don't mess with Texas," and they're a tight 
bunch who won't take kindly to Davis messing with any of their citizens, no 
matter how rich. 
How is Davis going to match "Don't mess with Texas"? Sorry, but "Californians 
are people, too" won't cut it. 
Long before Davis declared half-war on Texas, a couple of readers suggested 
that California retaliate by cutting off the supplies of our products to 
Texas, 
specifically wine. 
This, of course, is indication of Californians' isolation from mesquite 
reality. There may be six guys in Texas who ever order wine with their 
T-bones, 
and they're all in Austin. The menus say, "One: red. Two: white. Three rose. 
Please order by number." And they all might as well be from upstate New York. 
If California were the world's only producer of beer and tequila, then we 
might have a chance of beating Texas by cutting off the essentials of life. 
There's only one way to defeat Texas short of an outright shooting war 
pitting our kids armed by junk-gun manufacturers against their citizens with 
concealed-carry permits. We have to declare an embargo on the one thing that 
Texans really need from California -- entertainment. 
Texans are shutting down our televisions and movie theaters, so we'll cut 
them off from movies and TV shows made in California. Hey, they're all made 
here. Until we get affordable power, it's no sitcoms and no J-Lo for them. 
They won't even get Westerns, since those are shot in parts of California 
blighted enough to look like Texas used to look. Nowadays much of Texas looks 
like Beverly Hills, hold the hills. 
We'll also embargo that branch of entertainment known as California itself. 
At the border crossing into California on I-70, a heavily armed guard will 
peer into each car and truck looking for pointy boots and ask, "Are you 
carrying any fruit, vegetables or Texans?" 
Should any Texans turn up, they'll be sent packing toward El Paso, never to 
taste seared ahi, never to see the weirdos on the Sunset Strip, and never to 
feel the natural air-conditioning they can never shut off in San Francisco. 
They'll have to go to Florida if they want to see a guy in a mouse head. 
There's a governor there who won't call them pigs. 
Rob Morse's column appears Mondays, Wednesdays, Fridays and Sundays. His 
e-mail address is rmorse@sfchronicle.com. 








Blackout alerts, forecasts proposed 
Posted at 10:03 p.m. PDT Monday, May 21, 2001 
BY JOHN WOOLFOLK 

Mercury News 


Under pressure to give more notice before pulling the plug, California's 
power grid managers Monday proposed issuing alerts a half-hour before 
blackouts and forecasting the likelihood of outages a day in advance. 
The Independent System Operator's proposal heartened business leaders who say 
unexpected rolling blackouts have cost them millions of dollars. 
But the proposal disappointed consumer advocates and some lawmakers who hoped 
grid officials would consider their suggestion to schedule rolling blackouts 
days or weeks in advance. 
Grid officials compared their proposal to the weather forecasts that alert 
Midwesterners to tornadoes, and cautioned that the predictions are subject to 
change. 
``It's akin to a severe storm watch and a severe storm warning,'' said Gregg 
Fishman, spokesman for the ISO, which will consider the proposal Thursday. 
``We try to give as much hard information as soon as we can. But there are 
days where those things are going to change very quickly.'' 
Business leaders said a half-hour warning, even if it's a false alarm, would 
be better than the two to six minutes they got during the last round of 
rolling blackouts in April. 
``We're happy with what the ISO is trying to do,'' said Gino DiCaro, 
spokesman for the California Manufacturers and Technology Association. ``It's 
making a bad situation a little better.'' 
But critics said the proposal changes little and, with frequent blackouts 
expected this summer, urged the state to instead schedule them in advance. 
``It's actually quite distressing and disappointing,'' said Michael Shames, 
executive director of the Utility Consumers Action Network, which proposed 
scheduling blackouts. ``If the public is looking for better information on 
blackouts, they'll have to look elsewhere.'' 
State Sen. Debra Bowen, D-Redondo Beach, whose energy committee is 
considering notification issues today, agreed. 
``It's not the report I was expecting, but 30 minutes of notice is certainly 
better than two,'' Bowen said. 
The idea of scheduling blackouts is gaining ground among state lawmakers, who 
say it would let people know when to expect outages and also force down 
runaway power prices by dampening demand. 
The grid operator didn't propose scheduled blackouts because lawmakers 
haven't yet agreed on the concept. 
``It's in the talking stage,'' Fishman said. ``There's nothing firm.'' 
Rolling blackouts, in which utilities cut power from one block of customers 
for an hour or so and then move to the next block, protect the system from 
total failure when demand threatens to overwhelm supplies. Systemwide failure 
could take days to fix. 
Bad summer forecast 
Californians have had six days of rolling blackouts this year and will likely 
see many more this summer, as power-guzzling air conditioners drive demand as 
much as 3,700 megawatts over available supplies. A megawatt can power about 
1,000 homes. 
The ISO highlights the potential for blackouts through progressive emergency 
stages. Stage 3, the highest level, indicates rolling blackouts are possible. 
Grid managers alert utilities and public safety officials to conditions by 
e-mail, pager, telephone, radio and Internet postings, and notify the public 
through news broadcasts. 
To date, two-thirds of consumers say they're more concerned about power 
prices than rolling blackouts, according to a Field Poll released today. But 
more than seven in 10 expect to be inconvenienced by the outages expected 
this summer, the poll found. 
``People in general are much more willing to tolerate blackouts if they know 
they're going to happen,'' said Guy Phillips, energy aide to Assembly Speaker 
Pro Tem Fred Keeley, D-Santa Cruz. 
The nature of the electric system makes advance notice of blackouts 
difficult, grid officials said. California is so short of power that weather 
changes and power plant shutdowns can dramatically affect the outlook. 
On Monday, the state avoided blackouts amid soaring temperatures because of 
power imported from other states and cooler weather in Southern California, 
said ISO spokeswoman Lorie O'Donley. That could change as Southern California 
heats up today and Wednesday, but blackouts aren't expected, barring a sudden 
plant failure or drop in imports, she said. 
National Weather Service forecasters expect a high of 90 degrees in San Jose 
today, with a low in the upper 50s tonight. 
Under Monday's ISO proposal, grid managers would commit to issuing a 
30-minute notice of ``probable interruptions,'' identifying the affected 
utilities and how much power they must cut. It still would be up to the 
utilities to determine which areas would be affected. 
The ISO also would issue 24-hour grid advisories. If the ISO expects a Stage 
1 or 2 emergency the next day, grid managers will issue a ``Power Watch.'' If 
there is a 50 percent or greater chance of a Stage 3 emergency the next day, 
the ISO will declare a ``Power Warning.'' 
In addition, the ISO would bolster the ``system conditions'' report on its 
Web page by adding available supply figures. The report now lists only actual 
and forecast demand. Customers also would be able to sign up for hourly 
e-mail updates. 
ISO officials also are looking into contracts with notification services 
offering to alert customers to grid conditions by request through phones, 
faxes, e-mails or pagers. 
``We spent the last four months designing this with businesses for 
businesses,'' said ISO board member Carl Guardino, who also heads the Silicon 
Valley Manufacturing Group. 
The blackouts that hit the Bay Area on June 14 cost Silicon Valley businesses 
$100 million, Guardino said, adding that he expects the ISO to approve the 
proposals by month's end. 
`Chance to do something' 
``Every time the lights go out, companies see red,'' Guardino said. ``Half an 
hour actually gives you a chance to do something. You can deploy police 
officers to intersections. You can power down assembly lines.'' 
Others say that's not enough. 
``I want 30 days' warning,'' said Assemblyman Mike Briggs, R-Fresno, who 
plans to introduce a bill today that would schedule each utility outage block 
for a day when blackouts are possible. 
That would help farmers, who must have power on specific days for water 
delivery and crop processing, Briggs said. 
State Sen. Dede Alpert, D-San Diego, has a bill scheduled for discussion 
today calling for the state to set a ceiling on what it will pay for power 
and to schedule outages the next day if there aren't enough sellers at that 
price. 
Guardino said the ISO isn't ruling out scheduled blackouts, but is concerned 
that such an approach could result in unnecessary outages. 
Assembly Speaker Robert Hertzberg, D-Van Nuys, believes the ISO proposal is a 
good idea in any case. 
``Doing everything we can to let people know what's likely to happen is 
important,'' said Paul Hefner, a Hertzberg aide, ``whether or not we can go 
forward with some sort of scheduled blackout.''













Blackout season may be heating up 
Firms may seek PUC lights-out exemptions as more power comes on-line. 
May 21, 2001 
By KATE BERRY
The Orange County Register 
A sizzling summer-like heat wave could threaten California with rolling 
blackouts early this week, energy officials said. 
The blackouts could hit even as regulators debate the pros and cons of 
pre-scheduling blackouts. 
In addition, the state Public Utilities Commission will accept applications 
this week from businesses claiming they must be exempt from having their 
lights go out. 
Temperatures of over 100 degrees in the Central Valley and 90 degrees in the 
Bay area are expected today. Southern California will bear the brunt of the 
heat Tuesday, so energy demand could be diffused throughout the state. 
"We do expect this upcoming heat wave to be brutal,'' said Stephanie 
McCorkle, a spokeswoman for the California Independent System Operator, which 
manages the state's electric grid. "But we can't say for sure we'll be able 
to avoid blackouts.'' 
The good news is that the grid operator expects more than 3,000 megawatts of 
power to be online this week, compared with two weeks ago, when California 
endured modest blackouts for two straight days. Still, about 10,000 megawatts 
of electricity, or one-quarter of the state's capacity, will be out of 
service, McCorkle said. 
The ISO plans to release a report today on how scheduled blackouts might 
work. The report is a response to a bill sponsored by state Sen. Dede Alpert, 
D-Coronado, that would allow the grid operator to refuse to buy power that is 
considered too expensive and instead call for rolling blackouts. 
The PUC, which has been besieged by consumer complaints, might begin hearings 
into inequities in the "baseline'' allocation on residential utility bills. 
Consumers are complaining that baseline, which guarantees a subsistence level 
of electricity based on various climate regions throughout the state, is not 
consistent with energy usage. 














Cheney: Forget price caps, OPEC pressure 
Vice president calls for more refineries and review of fuel-content rules. 
May 21, 2001 
By BRIGITTE GREENBERG
The Associated Press 
WASHINGTON -- Capping electricity prices or pressuring OPEC to cut oil prices 
will not solve U.S. energy problems, Vice President Dick Cheney said Sunday 
in defending a Bush administration energy plan that stresses production over 
conservation. 
While Democrats want immediate relief for California's power crisis, there 
were few encouraging words from Cheney, who led a task force that developed 
the Bush plan. 
"They got into trouble in California over a period of years, and it's going 
to take two or three years to get out of it," Cheney told CBS' "Face the 
Nation." "There are going to be blackouts this summer." 
For the short term, the administration has approved Gov. Gray Davis' requests 
to expedite permits for new power plants and has ordered federal offices in 
the state to reduce energy consumption this summer by 10 percent. 
Sen. Barbara Boxer, D-Calif., said she was appalled that President George W. 
Bush is not considering price caps or investigating companies that she said 
are charging exorbitant prices for electricity. She noted that both Cheney 
and Bush are former oil company executives. 
"It's really rather stunning because those of us who are living through this 
have suggested many things," Boxer told CBS. "So the vice president sits very 
coolly, and I admire his cool, but he really sounds like an oil man, not a 
vice president charged with helping the people." 
If dairy farmers sought as much profit as oil companies - in some cases 1,600 
percent - a gallon of milk would cost $190, she said. 
Cheney said the answer to long-term price stability lies in building more oil 
refineries in the United States and in reviewing a system whereby different 
states require different blends of fuel - some mixed with the corn additive 
ethanol, for example - to meet clean-air standards. 
Capping prices would not increase the supply of energy or reduce demand, 
Cheney said. 
"We get politicians who want to go out and blame somebody and allege there is 
some kind of conspiracy, whether it's the oil companies or whoever it might 
be, instead of dealing with the real issues," Cheney told NBC's "Meet the 
Press." 
He criticized Davis for what he called a "harebrained scheme" to use the 
state's budget surplus to buy power. 
Senate Majority Leader Trent Lott, R-Miss., said Congress should look into at 
least temporarily suspending the federal gas tax, which is 18.4 cents per 
gallon. 
Cheney, however, said that would pose problems for the nation's highway trust 
fund, which relies on that tax to build and maintain the country's 
transportation infrastructure. 
Describing himself as a "pretty good environmentalist," Cheney also responded 
to criticism from some environmental groups that he did not meet with them 
before issuing the energy plan because he is beholden to energy producers who 
gave millions of dollars to the Bush campaign. 
"I couldn't begin to sit down with all of those various groups. I didn't have 
time," he said.




















A nuclear rebirth?
Despite obstacles, it should be in the mix to help ease the electricity 
crisis. 
May 20, 2001
By John Seiler
The Orange County Register
With the lights and air conditioners set to go out in summer blackouts, 
everyone is scrambling for more energy production. That's why nuclear power 
is back - cleaner, safer and more efficient. 
President Bush set the tone in his 163-page energy plan released Thursday, 
calling nuclear power "a major component of our national energy policy." The 
president wants to make it easier to license new plants and give $1.5 billion 
in tax credits for purchasing nuclear plants to make it easier for industry 
consolidation. And he wants to continue studying the construction of a 
nuclear- waste site in Yucca Mountain, Nevada, a project that is crucial to 
California. 
But California faces hurdles. The state bans new nuclear construction until 
the national nuclear-waste site is built and anyone who builds here has to 
deal with legitimate concerns about earthquake safety and adequate water for 
cooling. This state also is a major center for environmentalists who oppose 
nuclear power.
Nevertheless, advances in technology, years of experience and other factors 
should make nuclear energy a serious candidate for responding to 
California's, and the nation's, energy needs. It's a good time to think 
through the history and the potential of this powerful energy producer.
Nuclear accidents
The heyday of the American nuclear power program was the 1950s through 1979, 
when the Three Mile Island meltdown in Pennsylvania led to an end to new 
plans for nuclear power. "The Three Mile Island accident destroyed the 
reactor, but the core itself remained confined. Radioactive gases were 
vented, but there is no accepted evidence that this harmed the public," 
writes John McCarthy, a Stanford professor of computer sciences with an 
extensive Web site on nuclear power: 
www-formal.stanford.edu/jmc/progress/nuclear-faq.html.
The last American nuclear plant opened in 1996 at Watts Barr in Tennessee, 23 
years after its construction was given the OK. No new plant construction has 
been approved in America since 1977. 
In 1986, the Chernobyl nuclear plant in the Soviet Union (now Ukraine) 
exploded from high-pressure steam (not a nuclear explosion), spewing out 
radiation and casting further doubts on the future of the American nuclear 
program, although no American nuclear reactor ever had anything close to the 
shoddy socialist design of the Chernobyl plant.
"At the end of 1998 there were 9,012 civilian power reactor years of 
experience throughout the world, and Chernobyl is the only nuclear power 
plant accident harming the public," McCarthy notes on his site. Put another 
way, excluding Chernobyl, nuclear power plants have never harmed the public. 
Irrational fears
Contributing to the anti-nuclear atmosphere were such films as 1979's "The 
China Syndrome," starring Jane Fonda and 1983's "Silkwood," starring Meryl 
Streep. And let's not forget one of the funnier skits on "Saturday Night 
Live" in 1979, in which Dan Aykroyd played President Jimmy Carter, who 
becomes irradiated touring "Two Mile Island" after an accident and grows into 
The Amazing Colossal President. 
In California, sentiment was set by then-Gov. Jerry Brown, whose chief of 
staff was Gray Davis, now California's governor. "Well, it's not completely 
clear to me what a reasonably scientific position is on nuclear power - 
except to say that where there are other potentially less destructive 
alternatives, it doesn't make much sense to rush to increase dependency on 
nuclear power plants. In California there are alternatives such as 
conservation, cogeneration combined cycle, geothermal and solar energy. In 
the aggregate they make it possible to slow down the growing use of nuclear 
power," Brown told biographer Orville Schell in Brown, published in 1978.
Foreign countries don't share America's phobia about nuclear power, which 
provides 78 percent of France's electricity, compared to 20 percent in the 
United States and 16 percent in California. America has 103 operating 
reactors out of 435 worldwide.
Surfin' San Onofre
"You'd catch 'em surfin' at ... San Onofre," harmonized the Beach Boys in 
"Surfin' USA." And the surfers still ride the waves right in front of the 
nuclear power plant, which has been operated in complete safety since 1968. 
The first nuclear reactor built was decommissioned in 1992 and is being 
dismantled. The two remaining, newer reactors - the large cones visible as 
you drive by on the I-5 freeway - are licensed to operate by the federal 
Nuclear Regulatory Commission until 2022, spokesman Ray Golden told me, and 
could be running until 2042 if an extension is granted.
Put another way, if the state had just three more nuclear sites the size of 
the one in San Onofre, there would be no blackouts this summer. The state is 
expected to be short 5,000 megawatts. San Onofre's two reactors together 
produce 2,240 megawatts of power. (1,000 megawatts serves about 1 million 
homes.)
California's only other nuclear plant is the Diablo Canyon facility, which 
opened in 1985 and provides 2,190 megawatts of power. 
Last Wednesday I toured the San Onofre plant. Bechtel workers were fixing one 
turbine, on which an electrical circuit breaker had shorted out in February 
and caused a fire. The turbine should be fixed by sometime in June, in time 
for the summer energy crunch.
It should be noted that the turbine is not the reactor. The turbine rotates 
and creates electricity the same as at any other kind of plant, so the fire 
didn't come close to causing problems for the reactor.
The nuclear fuel the reactor uses costs about $30 million a year, Golden 
said. That works out to a cost of "less than 3 cents a kilowatt hour," he 
said, but couldn't be more specific because of company policy. That compares 
to a cost of 3 cents to 4 cents a kilowatt hour for natural gas.
Regulatory hoops
Despite the safety and need for nuclear power, there are a number of hurdles 
to building new plants, especially in California:
lWaste disposal. Currently, all American nuclear plants store their nuclear 
wastes on site, such as the large concrete bunkers I saw at San Onofre. The 
waste has to be stored for 10,000 years. They're awaiting the potential 
development of the Yucca Mountain, Nevada, waste site, on which $7 billion 
already has been spent for studies by the U.S. Department of Energy. The site 
already was the location of 100 nuclear bomb tests. 
The site will be ready "at the earliest in 10 years," Barbara Byron, nuclear 
waste policy adviser for the California Energy Commission, told me.
In the meantime, California law stipulates that "no nuclear fission thermal 
powerplant ... shall be permitted land use in the state" until the U.S. 
government develops a "means for the disposal of high-level nuclear waste."
Another problem is that President Carter shut down America's only nuclear 
waste processing plant in the late 1970s, which would have recycled most of 
the waste, immensely relieving the problem. In March, Sen. Pete Domenici of 
New Mexico introduced S. 472, the Nuclear Energy Electricity Supply Assurance 
Act of 2001, which would develop a new waste reprocessing facility.
lEarthquakes. The state's unstable geology adds to the risk and cost of 
building plants here. 
lWater. The state's lack of water makes it difficult to site new plants. 
Byron said nuclear plants use "two and a half times as much water as other 
plants." 
lIn a deregulated market, companies are less likely to pay the $2 billion to 
$5 billion a new nuclear plant is estimated to cost, Byron said. How does 
that compare? The Electric Power Supply Association told me that it's 
difficult to estimate the cost of building and running a new plant, whether 
it uses nuclear, natural gas or some other power. However, the costs of some 
recent natural gas plants have ranged from $600,000 to $800,000 per megawatt 
of installed power, or as much as $800 million for 1,000 megawatts of power. 
And given that new natural-gas plants range from 50 to 1,500 megawatts, 
there's more flexibility in designing and financing projects.
New technologies
But the technology keeps moving forward. One thing that should keep costs 
down is standardized nuclear-plant designs, an idea that has kept prices 
reasonable in France. In the past, each nuclear plant in America was 
basically designed as a unique unit.
Since 1997, the Nuclear Regulatory Commission, which regulates all nuclear 
plants in America, has approved three new advanced designs: The Advanced 
Boiling Water Reactor design by GE Nuclear Energy, which generates 1,300 
megawatts; the System 80+ design by Westinghouse (formerly ABB-Combustion 
Engineering), which generates 1,300 megawatts and is similar to that used at 
San Onofre; and the AP600 design by Westinghouse, which generates 600 
megawatts.
"Nine other reactor designs have been submitted for NRC review, however only 
two - the AP1000 and the Pebble Bed Module Reactor - are being actively 
pursued at this time," the NRC reports on its Web site. 
www.nrc.gov/OPA/gmo/tip/fsadvancedrx.html
The AP1000 is a more powerful version of the AP600. But the Pebble Bed design 
is new and is called "politically correct" by those working on it, Andrew 
Kadak told me; he's a professor at the Massachusetts Institute of Technology 
in the nuclear engineering department. He said the new technology is 
"high-efficiency, helium-cooled." It runs at lower temperatures than 
traditional nuclear plants and "uses a different type of fuel. It produces 
less energy per cubic meter. Essentially there's no chance for melting 
because of the lower power density they generate. You could put them near 
population centers because of their safety."Each plant would generate about 
100 MW, or about one tenth of current plants. Construction planned for a 
plant in South Africa will run $100 million. Even if the cost were double in 
America, he said, "it's still very competitive for natural gas." The South 
African plant will produce power at a cost about 1.6 cents to 2 cents per 
kilowatt-hour, "about half what natural gas cost two years ago" when natural 
gas prices were stable; the price comparison is even better today, since 
natural gas prices have more than doubled.
Kadak said the concerns over emitting gasses into the environment, the high 
cost of other fuels and a changing political climate make nukes feasible 
again.
Kadak said that the Pebble Bed design can be up and running within four years 
once a site is approved.
When will we go nuclear again?
"For the first time in a long time it looks like it might be starting up 
again," Fred Smith told me about nuclear power construction; he's head of the 
Competitive Enterprise Institute, a Washington think-tank that advances new 
thinking on economic matters. "Sooner or later we will have a waste 
facility," he said of the Yucca Mountain site. "The nuclear option is far 
more viable than most people thought. The anti-nuclear campaign has passed 
its peak. But it will take time. I think within the decade we'll have a new 
nuclear plant. That wasn't true two years ago."
Moreover, natural gas - which will power most of the new plants coming online 
in California - will continue to be scarce. "We haven't drilled for it," 
Smith said. "It's hard to transmit. We'll have to build more pipelines. It's 
not easy to ship from abroad."
By contrast, nuclear power's fuel prices are almost constant. 
What's short-circuiting the construction of nuclear power? The same thing 
that has caused the electricity and other energy crises: politics. Even 
though nuclear plants would alleviate concerns (real or imagined) about 
global warming by reducing dependency on fossil fuels and coal, 
environmentalists remain opposed, including the Sierra Club and the Green 
Party.
The Sierra Club Web site includes several resolutions opposing nuclear power. 
The 2000 Green Party platform called for "the early retirement of nuclear 
power reactors as soon as possible (in no more than 5 years)."
Legislation
In the California Legislature, Assemblyman Bill Leonard of San Bernardino 
introduced Assembly Bill 1492, which would have allowed the construction of 
nuclear plants in California even without a national waste-disposal facility. 
But it was amended only to allow a single nuclear plant owned by the state - 
not a good idea. It then was made a two-year bill, meaning it won't be 
considered until next January.
Sen. Tom McClintock of Simi Valley has sponsored Senate Joint Resolution 13, 
a non-binding resolution that reads, "the Legislature ( hereby determines 
that nuclear energy is a necessary source of electricity generation, with no 
detrimental impact on its citizens and environment; and be it further 
resolved that the Legislature of the State of California urges the United 
States Secretary of Energy to expedite the review of the scientific data 
regarding Yucca Mountain's suitability as a permanent federal repository for 
high-level radioactive materials and make his recommendation to the president 
this year."
"This is the first step in the debate," McClintock told me. 
The second step will begin this summer when state and federal legislators 
hear from citizens calling them in the dark during blackouts. That will 
concentrate minds on the necessity of bringing back to America an electricity 
source that is safe, cheap and almost unlimited. John Seiler is an Orange 
County Register editorial writer. 






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This story appeared on http://www.individual.com May 22, 2001
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Mexico Seen As Medium-Term Solution To California Power Shortage



MEXICO CITY, May 21, 2001 (El Economista/Infolatina via COMTEX)  via NewsEdge 
Corporation  - Increased
access to electric power generated in northwestern Mexico is the main
medium-term solution to the U.S. state of California's continuing power 
shortage
currently envisioned by state authorities, according to a report in Mexican
financial daily El Economista. Michael Flores, California Gov. Gray Davis'
representative for relations with Mexico, said boosting electricity imports 
from
the Mexican state of Baja California was regarded as a priority north of the
border. For geographical reasons, Baja California is not connected to the rest
of Mexico's national power grid, and, so, its excess supply cannot be diverted
to areas of Mexico that are plagued by power shortages. Baja California's and
California's transmission systems are linked, and Mexican state-owned power
utility the Federal Electricity Commission (CFE) has been exporting an average
50 megawatts per day to California since January. Flores said there currently
were plans to build new generation plants and expand existing ones in Baja
California specifically for the purpose of exporting electricity to 
California.