Wednesday, April 11, 2001 Energy Cost Study Critical of Public Agencies Too 
 ??? Power: DWP is among three government-run producers cited as driving 
prices up. Spokesmen deny ?
?????any market manipulation. By ROBERT J. LOPEZ, RICH CONNELL, Times Staff 
Writers

Contra Costa Times, April 11, 2001, Wednesday, STATE AND REGIONAL NEWS,
????K4693, 736 words, State gets no promise of help, By Rick Jurgens

Copley News Service, April 11, 2001, Wednesday, State and regional, 471
????words, Price gouging could force new energy rate boost, PUC chief says, Ed
????Mendel, SACRAMENTO

Los Angeles Times, April 11, 2001, Wednesday,, Home Edition, Page 8, 555
????words, POWER CRISIS: FOG STARTS TO THIN; ??MOVEMENT TOWARD SOLUTIONS IS 
NOW
????VISIBLE IN THE ELECTRICITY CRISIS, A BIG ADVANCE FROM THE RECENT IMPASSE.

Los Angeles Times, April 11, 2001, Wednesday,, Home Edition, Page 8, 453
????words, LEADERSHIP IN POWER CRISIS

Monterey County Herald, April 11, 2001, Wednesday, MN-CONSERVE-ENERGY, 612
????words, California Lawmakers Demand More Energy Efficiency from Businesses,
????By Sylvia Moore

The San Francisco Chronicle, APRIL 11, 2001, WEDNESDAY,, FINAL EDITION,
????NEWS;, Pg. A12, 1087 words, NEWS ANALYSIS; ???Different Ways Of Coping for
????PG&E, Edison; ???It may take years to determine if bailout or bankruptcy 
was
????wisest, David Lazarus

The San Francisco Chronicle, APRIL 11, 2001, WEDNESDAY,, FINAL EDITION,
????NEWS;, Pg. A1, 1040 words, State Legislators Take Argument For Electricity
????Rate Cap to Feds, Lynda Gledhill

The Washington Post, April 11, 2001, Wednesday, Final Edition, METRO; Pg.
????B01, 1067 words, Gas Plant's Proposal Alarms Neighbors in Calvert; Owner
????Pushes to Reactivate Facility, Raymond McCaffrey, Washington Post Staff
????Writer

The Associated Press, April 11, 2001, Wednesday, BC cycle, 9:19 AM Eastern
????Time, Business News, 381 words, Report: Government utilities allegedly
????gouged California during power crisis, LOS ANGELES

The Associated Press, April 11, 2001, Wednesday, BC cycle, 3:46 AM Eastern
????Time, Business News, 841 words, States say federal government needs to act
????to stem energy crisis, By H. JOSEF HEBERT, Associated Press Writer, BOISE,
????Idaho

The Associated Press State & Local Wire, April 11, 2001, Wednesday, BC
????cycle, 2:19 AM Eastern Time, State and Regional, 966 words, Cheney urges
????patience for Bush's energy approach, By DAVID AMMONS, AP Political Writer,
????OLYMPIA, Wash.

ABC, April 10, 2001, Pg. 48, 172 words, SPANISH GOVERNMENT PREPARES NEW SET
????OF ELECTRICITY TARIFFS TO AVOID "CALIFORNIA EXPERIENCE" (EL GOBIERNO 
PRAPARA
????UN NUEVO MODELO DE TARIFAS ELECTRICAS PARA EVITAR LA "EXPERIENCIA
????CALIFORNIA")

AP Online, April 10, 2001; Tuesday, Domestic, non-Washington, general news
????item, 704 words, Fed Agency To Discuss Power Demands, H. JOSEF HEBERT,
????BOISE, Idaho

AP Online, April 10, 2001; Tuesday, Domestic, non-Washington, general news
????item, 585 words, Calif. Gov. To Buy Power Lines, LESLIE GORNSTEIN, LOS
????ANGELES

Wednesday, April 11, 2001 

Energy Cost Study Critical of Public Agencies Too 
 Power: DWP is among three government-run producers cited as driving prices 
up. Spokesmen deny any market manipulation. 

By ROBERT J. LOPEZ, RICH CONNELL, Times Staff Writers

????Government-owned utilities, including the Los Angeles Department of Water 
and Power, were influential in driving wholesale electricity prices to levels 
that helped ignite California's exploding energy crisis during the summer and 
fall, according to public and confidential records. 
?????For months, Gov. Gray Davis, legislators and consumer advocates have 
chiefly blamed a few private power companies for throwing the state into 
darkness and economic chaos. 
?????But they are just part of the equation. 
?????A confidential document obtained by The Times names power providers that 
have allegedly manipulated the electricity market. While the document does 
identify out-of-state merchants criticized for gouging, it also discloses for 
the first time the extent to which public entities allegedly have maximized 
profits in the volatile spot market. 
?????The document--which decodes the identities of unnamed suppliers in a 
recent state study--singles out three government-run agencies as consistently 
trying to inflate prices. They are: the DWP, the federally owned Bonneville 
Power Administration in the Pacific Northwest and the trading arm of Canada's 
BC Hydro in British Columbia. 
?????Like a number of privately owned generators, these three producers 
offered power at a range of high prices and, sometimes, in large amounts when 
the state was most desperate. They also helped saddle California's three 
largest utilities with billions of dollars in debt--leading one, Pacific Gas 
& Electric, to seek bankruptcy protection last week. 
?????The study by the California Independent System Operator, or Cal-ISO, 
analyzed thousands of hours of bidding practices for 20 large suppliers in 
the spot, or "real-time," market from May to November. The study accounted 
for factors such as rising production costs, increased demand, periods of 
scarcity and profits that would be earned in a healthy, competitive market. 
?????Money earned above that was called excess profits. 
?????No entity--public or private--earned as much in alleged excess profits 
as British Columbia's Powerex, the state records show. 
?????"They were the most aggressive bidders," said Anjali Sheffrin, author of 
the coded study. 
?????"They had the most amount to bid and the most freedom to bid it in," 
said Sheffrin, who did not discuss any companies by name. 
?????The Canadian agency reaped $176 million in alleged excessive 
profits--several times the amount collected by all but one of the private 
generators. Second on the list was Atlanta-based Southern Co. Energy 
Marketing, now called Mirant, which collected nearly $97 million in alleged 
inflated earnings. 
?????BC Hydro and Mirant--along with the DWP and other producers--say they 
played by the rules established under California's flawed deregulation plan 
and did not exploit the state's troubles. 
?????But BC Hydro officials acknowledge that they did anticipate periods of 
severe power shortages and planned for them by letting their reservoirs rise 
overnight and then opening them to create hydroelectricity, which could be 
produced inexpensively but sold for a premium. 
?????"It was the marketplace that determined what the price of electricity 
would be at any given time," said BC Hydro spokesman Wayne Cousins. "We 
helped keep the lights on in California." 
?????And the rates low for their own customers. During the past year, BC 
Hydro has stashed hundreds of millions dollars in a "rainy day" account to 
ensure that it has among the lowest rates in North America. 
?????Los Angeles' Department of Water and Power, although eighth on the list 
of alleged profiteers, was among those singled out for seeking high prices 
during periods of high demand that helped inflate costs across the entire 
spot market, where emergency purchases are made. 
?????This, according to state documents, was accomplished by offering power 
at incrementally higher prices that would rise substantially with even modest 
increases in demand. The strategy also helped prop up prices, keeping them 
from falling. 
?????The DWP's average hourly bid, or asking price, for electricity 
ultimately bought topped such private sellers as Reliant Energy of Houston 
and Tulsa-based Williams Cos., two major players in the national energy 
market. 
?????In addition, the DWP submitted other bids at far higher prices that 
could pay off handsomely with even small bumps in demand, the report said, 
referring by code to DWP and four other suppliers. "The data shows they 
clearly exercised market power to inflate prices further at higher load 
conditions." 
?????DWP General Manager S. David Freeman called the report's findings 
"outrageous," insisting that the utility never tried to inflate prices. 
?????"These charges go under the heading there is no good deed that goes 
unpunished in this state," Freeman said, noting that DWP power helped avert 
more blackouts across the state. 
?????He did acknowledge, however, that the agency has charged high prices for 
surplus power at the 11th hour but said that was only because it cost more to 
produce. 
?????"We have consistently charged [Cal-ISO] our cost, plus 15%," he said. 
"It's not as though we're up there peddling a bunch of power to jam it down 
their throats." 
?????Freeman said that when his staff reviewed the coded report, they never 
took it personally. "If you're innocent," he said, "you don't look at the 
criminal file." 
?????Yet another public agency criticized for its behavior in California's 
deregulated market was the U.S. government's Bonneville Power Administration, 
a nonprofit agency that sells wholesale electricity produced at 29 federal 
dams in the Columbia-Snake River basin. 
?????Bonneville actually bid slightly lower than the DWP, records show, but 
reaped millions more in alleged excessive profits, apparently because it 
supplied greater amounts of power during the period studied. Bonneville was 
in the top five accused of taking excessive profits. 
?????Bonneville officials say some of its profits are used to pay back 
federal construction loans and fund an internationally recognized salmon 
recovery program. 
?????Stephen Oliver, a Bonneville vice president, said his agency did not act 
improperly and has asked Cal-ISO for detailed information on how it reached 
its conclusions. He said the grid operator often came to Bonneville pleading 
for last-minute electricity and offering to pay high prices. 
?????"From our point of view, we bid what we had when we had it and we 
operated precisely within the terms of their rules," Oliver said. 
?????Those rules--and the bidding practices criticized by Cal-ISO--so 
distorted the market that Aquila Power Corp. of Missouri, which tried to act 
responsibly, has bailed out. 
?????It offered the lowest average hourly price of any supplier 
studied--slightly more than $8 per megawatt-hour, compared to Mirant's $138, 
the highest. 
?????But the spot market, as initially designed, made sure that all suppliers 
offering power received the highest price paid in any hour. 
?????The result: Aquila collected $171 an hour for power it was willing to 
sell at a single-digit price. 
?????"They weren't the culprits," said Cal-ISO's Sheffrin. "Someone else 
drove that up." 
?????Aquila spokesman Al Butkus said the company pulled out of the California 
market because it was too unpredictable. Although the company made money, he 
said, it also could have lost because of possible downward swings. 
?????"We looked at it and we didn't feel very comfortable with what we saw," 
he said. 
?????The market has since been adjusted to prevent high bids from setting the 
price for everyone. But Sheffrin said it hasn't made much difference because 
the overall prices are still excessive. 
?????"We're saying the patient is sick," Sheffrin said of California's 
electricity market. "It needs help [and] may die." 
?????
* * *

?????Top 10 in Profits 
?????The California Independent System Operator says that a total of $505 
million in extra profits was reaped by power suppliers from May to November 
2000 in California's volatile spot market. The alleged excess profits were 
generated by high bids and high-volume sales during periods of peak demand. 
* * *
?????British Columbia Power Exchange: $176.2 million 
?????Southern Co. Energy Marketing (renamed Mirant): $96.8 million 
?????Reliant Energy Services $35.5 million 
?????Dynergy Electric Clearing House $32.1 million 
?????Bonneville Power Administration $30.0 million 
?????Enron Energy Services $27.9 million 
?????Duke Energy Trading $18.4 million 
?????Los Angeles Dept. of Water and Power $17.8 million 
?????Sempra Energy Trading $14.9 million 
?????Pacific Corp. $13.6 million 
?????Source: Public and confidential government records 
Copyright 2001 Los Angeles Times 


?Copyright 2001 Knight Ridder/Tribune News Service
???????????????????????Knight Ridder/Tribune News Service

??????????????????????????????Contra Costa Times

??????????????????????????April 11, 2001, Wednesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K4693

LENGTH: 736 words

HEADLINE: State gets no promise of help

BYLINE: By Rick Jurgens

BODY:

??BOISE, Idaho _ A delegation of California legislators traveled here Tuesday
to plead with federal regulators to cap soaring wholesale electricity and
natural gas prices but left within a few hours without any promises of relief.

??Assembly Speaker Robert Hertzberg, D-Van Nuys, the delegation leader, urged
the Federal Energy Regulatory Commission not to turn its back on the Golden
State. "California is poised on the edge of an economic precipice that 
threatens
not only our economy but the economy of the entire country," he said.

??But Commission Chairman Curt Hebert chided California for not doing enough 
to
solve its own problems. Still, he professed his willingness to help. "It is in
everyone's interest to keep the lights on at all costs," he said.

??But Hebert, a protege of Senate Majority Leader Trent Lott, R-Miss., is a
vocal opponent of price caps and didn't offer the California delegation the
promise it was looking for. That didn't surprise Assemblyman Fred Keely, 
D-Santa
Cruz, a member of the delegation. Such a move would be "a dramatic and
unprecedented departure" from past actions of the commission, Keely said as he
left the meeting.

??California led the nation in electricity industry restructuring with a 1996
law that turned over control of the state's lifeline of electrons to a market
dominated by a handful of private generating companies.

??But so far, the market hasn't delivered on the promise of cheaper power. In
California, power procurement costs jumped to $32 billion in 2000, from $7.4
billion in 1999, and could go as high as $65 billion to $70 billion this year,
Keely said.

??Now the state can't put its deregulation genie back in the bottle without
FERC's help. And although two of the three commissioners at Tuesday's meeting
said they were willing to consider price caps, the measure faces an uphill
battle in the five-member commission, which will soon have two new Republican
members appointed by President Bush.

??In the meantime, don't look for relief this summer from the region's
hydroelectric dams, the regulators were told. "Probably the greatest energy
crisis the West has experienced ever" looms after a dry winter emptied
reservoirs behind the dams, U.S. Sen. Larry Craig, R-Idaho, told the 
commission.

??Jim Kempton, a representative of the Northwest Power Planning Council, said
there is a "near-record drought in the Columbia River Basin."

??But the region's electricity crunch isn't purely an act of nature, according
to the regulators from 11 Western states who were at the meeting. Complaining
that electricity industry restructuring hasn't created a well-functioning
wholesale market in the Western states, several blamed the control over output
and prices exercised by a handful of generators and traders." "Market power
continues to plague restructuring," said Constance White, a Utah regulator.

??But the call for price caps opened a fault line among the regulators and
politicians at the meeting, where opponents of caps had the home-court
advantage. "Price caps do not provide incentives for conservation and do not
provide incentives for investment" in new power plants, said Idaho Gov. Dirk
Kempthorne, a Republican. That position was backed by a letter from nine 
Western
governors hailing the commission for its "resistance to the considerable
pressure to impose 'penny wise and pound foolish' rate controls."

??The California delegation countered with its own gubernatorial letter, from
Gray Davis, calling for "real and effective price restraints in what is
obviously a dysfunctional electricity market in California and throughout the
West." Davis noted that Oregon and Washington governors support his position.

??That call found a receptive ear in William Massey, a FERC member who 
supports
caps. "Our passion for markets must be tempered with common sense," he said.

??Some at the meeting took the opportunity to offer California some advice on
how to deal with its problems. Marsha Smith, an Idaho regulator, urged
Californians to prepare to bite the bullet. "The only answer for the summer is
demand reduction," she said. "If the price goes (beyond the limit you're 
willing
to pay), don't buy it. I would rather have rolling blackouts."

??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

??(c) 2001, Contra Costa Times (Walnut Creek, Calif.).

??Visit the Contra Costa Times on the Web at http://www.cctimes.com/
 
JOURNAL-CODE: CC

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??????????????????????????????8 of 100 DOCUMENTS

??????????????????????Copyright 2001 Copley News Service

?????????????????????????????Copley News Service

??????????????????????????April 11, 2001, Wednesday

SECTION: State and regional

LENGTH: 471 words

HEADLINE: Price gouging could force new energy rate boost, PUC chief says

BYLINE: Ed Mendel

DATELINE: SACRAMENTO

BODY:

??The state's top electricity regulator told a congressional hearing yesterday
that California may have to raise rates again if federal regulators do not 
stop
price gouging by generators.

??The president of the Public Utilities Commission, Loretta Lynch, told the
congressional panel that ''California is literally being plundered, with the
full knowledge and consent of the Federal Energy Regulatory Commission.''

??When the PUC adopted the biggest rate increase in California history last
month for Pacific Gas and Electric and Southern California Edison, Lynch said
she believed that no more rate increases would be needed.

??But Lynch had a different view yesterday as she testified at a hearing on 
the
California electricity crisis chaired by Rep. Dan Burton, R-Ind., which
continues today in San Jose and tomorrow in San Diego.

??Lynch told Burton that the two rate increases adopted by the PUC since
January totaled 4 cents per kilowatt hour, enough to be a 60 percent increase 
if
they were enacted in Burton's congressional district in Indiana.

??''It may not be enough,'' Lynch said, ''if the current price-gouging
practices persist and remain unabated by federal regulators.''

??The PUC raised the PG&E and Edison residential rate 9 percent in January. A
second increase last month raised the electricity tab more than 40 percent and
the total monthly bill, including transmission and distribution fees, 26
percent.

??The PUC has not acted on a request by San Diego Gas & Electric, which is in 
a
different financial situation, for a rate increase of 2.3 cents per kilowatt
hour.

??Lynch said a flawed deregulation plan pushed by former Republican Gov. Pete
Wilson ''caused the utilities to sell off much of their generation to entities
who now hold us hostage daily to extortionate price demands for electricity.''

??The Republican congressmen on the panel reopened the debate about whether
Lynch, an appointee of Democratic Gov. Gray Davis, and the PUC prevented
utilities from obtaining cheap long-term power contracts last fall.

??Lynch said the PUC quickly approved long-term contracts last Aug. 3, two
weeks after a request from the utilities. She said the utilities obtained a
number of long-term contracts but declined to give details, referring the 
panel
to the utilities.

??The San Diego-based consumer group Utility Consumers' Action Network is
suggesting dramatically different solutions to the state's power crisis.

??UCAN will release a report today calling for a ''buyers' cartel'' made up of
the states of California, Oregon and Washington that would buy power together,
insisting on reasonable prices from power generators.

??UCAN also calls for the forced sale to the state of any in-state power
generator that refuses to sell at reasonable rates.



??WAGNER-CNS-SD-04-10-01 2119PST



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?????????????????????????????12 of 100 DOCUMENTS

??????????????????????Copyright 2001 / Los Angeles Times

??????????????????????????????Los Angeles Times

???????????????????April 11, 2001, Wednesday, Home Edition

SECTION: Metro; Part B; Page 8; Editorial Writers Desk

LENGTH: 555 words

HEADLINE: POWER CRISIS: FOG STARTS TO THIN;

MOVEMENT TOWARD SOLUTIONS IS NOW VISIBLE IN THE ELECTRICITY CRISIS, A BIG
ADVANCE FROM THE RECENT IMPASSE.

BODY:


??California's effort to resolve its energy crisis now is headed down two
radically different tracks, one through the U.S. Bankruptcy Court and the 
other
via the state regulatory and political process. Since each route leads into
unknown territory, no one knows how this is going to come out, but the
divergence itself has potential benefits. State political leaders and other
Californians will be able to weigh each approach as Pacific Gas & Electric's 
case progresses through federal court and Southern California Edison's winds
through the Legislature and the state Public Utilities Commission.

??In the wake of PG&E's bankruptcy filing Friday, Gov. Gray Davis announced
that accelerated negotiations with Southern California Edison had produced an
agreement to help the firm out of debt with a state purchase of Edison's
electricity transmission grid for $ 2.76 billion.

??There are also potential benefits in Edison's decision to deal with the 
state
rather than go into bankruptcy. Some are spelled out in a 36-page memorandum 
of
understanding reached with Davis. A major provision is that Edison must sell 
all
of its power generation to the state for the next 10 years at cost, a figure 
to
be determined by the PUC. This amounts to about 40% of the power that Edison
supplies to its service area, which covers Southern California except for the
San Diego region and the cities of Los Angeles, Pasadena, Glendale and 
Anaheim.

??One troubling question is whether it still makes sense for the state to buy
Edison's share of the state power transmission grid in the absence of a 
similar
deal with PG&E. Davis insists that even with a portion of the grid, the state
will be able to expand it and make it more reliable, and therefore he is
continuing negotiations with San Diego Gas & Electric for its portion. This is
an issue the Legislature needs to explore, along with whether any additional
rate hikes are necessary--Davis says they are not--and how much Edison's 
parent
firm should be required to contribute to the deal. What Davis agreed to may be
good for Edison, but is it too good?

??The Edison agreement won support from the investment firm Goldman Sachs,
which suggested it serve as a pattern for a quick restructuring of
PG&E--something the Bankruptcy Court would probably have the power to do. PG&E
has summarily rejected additional talks with the state, but Bankruptcy Judge
Dennis Montali should examine the Edison deal carefully for elements that 
might
be of value in the PG&E case.

??The damage done over many months--to the utilities' financial health, to the
state's coffers and credibility, to consumer confidence--cannot be repaired
overnight. It will take months for electricity rate hikes to start denting the
utilities' debts, for the state's financial drain to be added up and for the
prospects of repayment to be clear. It is also possible that the crisis has 
not
hit bottom yet, and that a vicious brew of summer heat, unregulated price 
spikes
and electricity shortages will deal the state a knockout blow. Even so, 
forward
motion toward solutions is now visible. It is an improvement over the opaque
muddle that existed even a week ago.


??*

??For more information: The Edison agreement is on the Internet at
www.governor.ca.gov. Click on "Issues," then "Energy" and "All latest 
actions."

LOAD-DATE: April 11, 2001

?????????????????????????????13 of 100 DOCUMENTS

??????????????????????Copyright 2001 / Los Angeles Times

??????????????????????????????Los Angeles Times

???????????????????April 11, 2001, Wednesday, Home Edition

SECTION: Metro; Part B; Page 8; Letters Desk

LENGTH: 453 words

HEADLINE: LEADERSHIP IN POWER CRISIS

BODY:


??* Michael J. Aguirre's "Use Eminent Domain as a Power Tool" (Commentary,
April 9), on the lack of leadership shown in the current power crisis by Gov. 
Gray Davis and the Legislature, reflects the feelings of the silent majority 
in
California. We need to have our government literally take back the power
supplies for Californians.

??Why do we call these modern robber barons (PG&E and Edison) public 
utilities,
when in reality they are private money-grabbing companies? The concept of a
public utility and the associated tax breaks that go with it was designed to
protect the public good.

??We need a governor and Legislature like Teddy Roosevelt, who become irate,
stand up and slug it out with the robber utilities. It is time for the
government to use the power of eminent domain. If our politicians lack the 
guts,
we need to exercise our right of political recalls to protect the public
interest and guarantee the new political slogan "power for the people."

??ROBERT BEALL

??Long Beach


??*

??I wonder where these "intermediary" companies that are charging PG&E,
Southern California Edison and San Diego Gas & Electric such outrageous prices
are in the governor's negotiations. Someone obviously has made a tidy profit
from the deregulation in 1996. Who is protecting them? Surely we all have our
hindsight opinions and see the pitfalls of the decisions that were made in the
past decade. Population growth, no new power plants, deregulation . . . hmm.

??I am confident that there are enough politicians and clever business school
geniuses who can get us back on track. But let's look at the whole picture and
involve all parties in planning. Before our state government is in the throes 
of
"electrical bankruptcy," I would invite the 1996 legislators and the
intermediary power brokers (yes, that pun is intentional). There's enough room
at the governor's table.

??MARY CRICHTON LEAVER

??Orange


??*

??Re Paul Conrad's depiction of the power problem, "How many companies does it
take to unscrew a light bulb?" (Commentary, April 9): When will he ever get 
the
facts straight? It is not the utilities that are at fault, but the 
uncontrolled
power providers that caused PG&E, Edison and SDG&E to be on the verge of
bankruptcy.

??RON BRANT

??Los Angeles


??*

??If Gov. Davis wants to create a significant reduction in California's energy
consumption, he should implement a 35-hour workweek for all state government
employees and urge all California employers to do the same. If every office
building in the state powered up at 8 a.m. or 8:30 a.m. instead of 7:30 a.m.,
the savings would be tremendous. American workers put in the longest working
hours in the industrialized world.

??JOSEPH FUCHS

??Altadena

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?????????????????????????????14 of 100 DOCUMENTS

??????????????Copyright 2001 Knight Ridder/Tribune Business News
?????????????????????Copyright 2001 Monterey County Herald

????????????????????????????Monterey County Herald

??????????????????????????April 11, 2001, Wednesday

KR-ACC-NO: MN-CONSERVE-ENERGY

LENGTH: 612 words

HEADLINE: California Lawmakers Demand More Energy Efficiency from Businesses

BYLINE: By Sylvia Moore

BODY:


??California is the nation's most energy-efficient state, but state lawmakers
want businesses to conserve even more.

??Saving electricity is the point of an executive order issued by Gov. Gray
Davis in February that requires California businesses to substantially reduce
outdoor lighting during non-business hours.

??To make sure that all businesses in Monterey County get the message,
representatives from the California Technology, Trade and Commerce Agency 
(TTCA)
joined with local law enforcement and the Kmart Corp. on Tuesday at a news
conference inside the Seaside Kmart.

??The governor's order went into effect Mar. 15, as a reaction to the state's
current energy crisis and will continue to be law for the foreseeable future.

??The conference was part of an outreach effort that will include handing out
informational pamphlets to businessowners.

??"This is a voluntary outreach educational effort," said TTCA Secretary Lon
Hatayama. "We would like for businesses to conserve on their own." Hatayama
praised Kmart Corp. as one of the businesses leading the way to energy
conservation -- thanks to a $ 2 million grant from the state.

??The state is asking businesses to reduce energy consumption from outdoor
lighting by 50 percent or more, but not so much that it endangers the safety 
of
the public, employees and property. Businesses are also required to shut off
lighting primarily used for decorative or marketing functions when closed. As 
a
last resort, businesses that fail to work with law enforcement and voluntarily
comply with the law may face a $ 1,000 fine.

??"We don't expect (police) officers to be counting light bulbs," said
Hatayama. "We do not want to jeopardize safety -- only ensure that the 
reduction
is reasonable."

??Hatayama said the goal is for California businesses to reduce overall energy
consumption by 3,700 megawatts during peak periods, and by 10 percent over the
summer.

??Both Seaside Community Liaison Officer Barry Pasquarosa and Monterey County
Sheriff Lt. Mike Derbyshire said local businesses have reacted positively to 
the
call to conserve.

??"The voluntary compliance has been remarkable," said Derbyshire.

??Hatayama added that the tremendous reduction his agency has seen among
Monterey County businesses, including those once brightly-lit auto malls, has
not reduced sales.

??Kmart Corp.'s divisional energy manager, Adel Suleiman, thanked Davis and 
the
California Energy Commission for granting the company $ 2 million to reduce
energy emissions in 85 of its California stores. As a result, Suleiman said,
Kmart is currently retrofitting existing outdoor light fixtures at these 
stores
with energy-efficient bulbs. So far, the company has been able to reduce 
indoor
lighting at its stores by 40 percent and outdoor lighting by more than 50
percent.

??"We are committed to (saving) 8.2 megawatts by summer and 12 megawatts by 
the
end of the year," Suleiman said, adding that the savings are equal to the 
energy
needed to power 10,000 homes.

??Suleiman also pointed out the number of energy efficient products Kmart
offers to customers, including compact florescent bulbs, weatherstripping and
ceiling fans. The items cost a bit more, he said, but they are well worth the
savings consumers will eventually see in their electric bills.

??"These innovative programs by the state and the Department of Energy
Conservation have made Kmart proud to be in California," said Suleiman. "We
realize the challenge that California faces, and Kmart is doing its part to
conserve."


??-----

??To see more of the Monterey County Herald, or to subscribe to the newspaper,
go to http://www.montereyherald.com.



JOURNAL-CODE: MN

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?????????????????Copyright 2001 The Chronicle Publishing Co.

?????????????????????????The San Francisco Chronicle

???????????????????APRIL 11, 2001, WEDNESDAY, FINAL EDITION

SECTION: NEWS; Pg. A12

LENGTH: 1087 words

HEADLINE: NEWS ANALYSIS;

Different Ways Of Coping for PG&E, Edison;

It may take years to determine if bailout or bankruptcy was wisest

SOURCE: Chronicle Staff Writer

BYLINE: David Lazarus

BODY:
This much at least is sure: Either Pacific Gas and Electric Co. or Southern
California Edison is very, very clever.

???PG&E, which filed for bankruptcy protection last Friday, believes the best
way for it to return to financial health is by throwing itself on the mercy of
the court

???and plodding through months or

???years of contentious litigation.

???Edison, meanwhile, agreed Monday to a sweeping bailout accord with Gov. 
Gray
Davis that, if given final approval, would instantly restore the utility to
creditworthiness but force it to sell off valuable assets and commit to
bargain-basement power contracts.

???"One has a deal and the other doesn't, so today it looks like Edison made
the right choice," said Michael Worms, an energy-industry analyst at Gerard
Klauer Mattison in New York.

???"But we won't really know for sure until PG&E's bankruptcy thing plays 
out,"
he said. "It could be that they did this correctly."

???If nothing else, both PG&E and Edison are convinced that they have chosen
wisely.

???"A negotiated, practical, comprehensive resolution is far preferable to
bankruptcy," said John Bryson, chairman of Edison International, parent of the
Southern California utility.

???That's fine for Edison, "given its set of facts," PG&E said in a brief
statement. "Given our set of facts, we continue to believe that a Chapter 11
reorganization is the most feasible means to reach a solution."

???Analysts said two factors played pivotal roles in each company's decision:
money and culture.

???While both utilities hope to recover past costs for wholesale power, PG&E
says it is owed $9 billion, while Edison's debt is only about half that.

???"PG&E concluded that because they're owed so much more money than Edison,
they had a better chance in Bankruptcy Court," said Brian Youngberg, an 
analyst
at brokerage Edward Jones in St. Louis.

???Culturally, analysts said, PG&E prides itself on nearly 100 years of
providing electricity and gas to Northern Californians. Therefore, selling off
its transmission lines would have been a blow to the company's core identity.

???Edison, for its part, is seen as a less enthusiastic player in the utility
business, and its parent company had few qualms about shedding assets.

???Aside from its utility, Edison International owns power plants and, through
its Edison Capital subsidiary, is involved in various investment projects.

???As California's two largest utilities pursue opposite paths to
profitability, consumers have been left scratching their heads over how this
will affect both the state's energy crisis and future electricity bills.

???A summer of power shortages remains virtually a sure thing. Higher
electricity rates are almost certain as well.

???"At the end of the day, California consumers have gotten a raw deal," said
Dan Jacobson, a spokesman for the California Public Interest Research Group in
Sacramento.

???Edison customers already know a rate hike is in the works; they will pay a
special charge on their bills to help cover the state's bailout agreement.

???PG&E customers must wait to see whether the bankruptcy judge will seek to
pass along the utility's multibillion-dollar debt to ratepayers -- a decision
that could take years to reach.

???Yet whether through bankruptcy or bailout, Jacobson said PG&E and Edison
face no choice but to raise rates as the state continues to pay sky-high
wholesale prices for electricity.

???Assembly Speaker Robert Hertzberg estimated yesterday that California will
spend about $65 billion this year buying power, compared with just $5 billion
last year.

???To cover this huge increase, "the whole state is going to see higher 
rates,"
Jacobson warned.

???Which leads to the question of the hour: As power costs soar, is the
governor buying a pig in a poke with his quest to purchase the transmission
lines of all three California utilities?

???Public ownership of the power grid would do little if anything to reduce
electricity costs. If anything, it would place taxpayers or ratepayers -- or
both -- on the hook for billions of dollars in repairs and upgrades to the
system.

???Yet Davis is depicting public ownership of the power lines as a necessary
step toward solving California's myriad energy problems.

???While the Edison deal awaits final approval from state regulators and the
Legislature, Davis already has entered into talks with Sempra Energy on
acquiring the power lines of its San Diego utility.

???"We've stabilized one of the utilities and are negotiating with another
one," said Steve Maviglio, a spokesman for the governor. "This puts us in a
strong position to buy the rest."

???In Edison's case, the lines will be leased back to the utility for a 
nominal
fee.

???Maviglio said the state will file a petition with Bankruptcy Judge Dennis
Montali informing him of California's interest in purchasing PG&E's 
transmission
network, should Montali begin selling the utility's assets to pay off 
creditors.

???"Since it's one of their largest assets, we think it's a likely candidate,"
Maviglio said.

???But even if Davis succeeds in acquiring the thousands of miles of power
lines of all three utilities, what then?

???"There is a notion that the state will control a government-owned power 
grid
and somehow we will all be better off," said Harry Snyder, senior advocate at
Consumers Union in San Francisco.

???However, he said the power lines may end up being little more than "a hard
asset that makes it look like we weren't just giving cash away for nothing."

???Actually, there may be some upside to ownership of the transmission lines.
For one thing, this could give California more clout in its dealings with 
power
generators.

???The state theoretically could argue that if generators want their juice
shipped to ratepayers' homes, they must charge more reasonable prices.

???On the other hand, generators could just as easily say that if California 
wants electricity for its newly purchased lines, and thus raise money in
transmission fees, it should mind how it deals with its new business partners.

???Meanwhile, as the owner of power lines, California would have an easier 
time
getting its voice heard by the Federal Energy Regulatory Commission, with
oversees transmission systems nationwide.

???To date, California's entreaties to FERC for regional caps on wholesale
power prices have fallen on deaf ears. Owning power lines would not 
necessarily
make FERC more attentive to the state's interests, but it would raise
California's profile. E-mail David Lazarus at dlazarus@sfchronicle.com.

LOAD-DATE: April 11, 2001

?????????????????????????????16 of 100 DOCUMENTS

?????????????????Copyright 2001 The Chronicle Publishing Co.

?????????????????????????The San Francisco Chronicle

???????????????????APRIL 11, 2001, WEDNESDAY, FINAL EDITION

SECTION: NEWS; Pg. A1

LENGTH: 1040 words

HEADLINE: State Legislators Take Argument For Electricity Rate Cap to Feds

SOURCE: Chronicle Staff Writer

BYLINE: Lynda Gledhill

BODY:
Taking off before dawn, a delegation of California lawmakers yesterday winged
its way to a stark airport hotel here and pleaded for federal regulators to
intervene in the state's dysfunctional energy market.

???The lawmakers had arranged just the day before to attend a meeting of the
Federal Energy Regulatory Commission, signaling just how desperate they are to
gain an upper hand in California's energy crisis.

???FERC, as the body is known, has become a four-letter word among many
California politicians. The panel's steadfast refusal to embrace wholesale 
price
controls on electricity has left everyone from the governor to the state's
congressional delegation fuming -- although one commissioner appeared 
yesterday
to soften her opposition to the idea.

???After just four hours of sleep before the last-minute trip, Assembly 
Speaker
Robert Hertzberg, D-Sherman Oaks, was in no mood to be confrontational.

???He figured that since FERC-bashing had gained little, the state might be
better off showing what it had done to try to solve its own problem.

???"We didn't want to go and be Khrushchev banging his shoe on the table," he
said. "We are telling FERC we're in this together. We have a role, and you 
have
a role."

???So Hertzberg opened his five-minute remarks by acknowledging that 
California
had created some of its own problems. But he pleaded with the three
commissioners to pay attention to what was happening in the Golden State.

???'ECONOMIC PRECIPICE'

???"California is poised on the edge of an economic precipice that threatens
not only our economy, but the economy of the entire country," Hertzberg said,
adding that the state anticipated paying $65 billion for electricity this 
year,
almost 10 times its power bill in 1999.

???Two of the three board members seemed to hear the request. Commissioner
William Massey has long been an advocate for increased FERC intervention. And
Linda Breathitt, the third sitting commissioner, appeared to further soften 
her
reluctance to impose price controls yesterday.

???"I have increasing concerns about what the summer holds," she said. "We 
must
find a way to calm the troubled market if a competitive market is ever going 
to
become a reality."

???But FERC Chairman Curt Hebert is the man standing squarely in the way of
California's requests. As the head of the board, he has complete control over
its agenda.

???California and other states believe price controls are essential for 
getting
through the summer, while Montana, Arizona and other states believe caps would
suppress supply and make the situation worse.

???Hebert believes in free markets, and as an appointee of President Bush,
concurs with Bush's belief that price caps would do nothing to help and would
perhaps make the situation even worse.

???THE NAYS HAVE IT

???"We've continued to have an open mind," Herbert said in a deep Texan drawl,
even as he shook his head. "If you look at the landscape here, there are a
number of commissioners and states that seem to be averse to any type of price
cap -- it seems to outweigh those that want a price cap."

???At times, he accused California of dragging its feet and not doing enough 
to
deserve special attention from FERC. But the two other commissioners were 
quick
to defend the state.

???California's Assembly members went to the six-hour meeting with a proposal:
"cost-base" price caps for 18 months on natural gas and electricity prices. 
The
idea would be for the price to be capped at cost to generate the power, plus a
reasonable rate of return.

???Fred Keeley, D-Boulder Creek, the Assembly's point man on the energy 
crisis,
said, "We're pleading with FERC.

???"I don't think we're splitting hairs," Keeley said. "The cost-base price 
cap
allows generators to make a profit while bringing stability to the market."

???But most representatives from other states passionately disagreed.

???"A FERC policy could have glorious intentions and disastrous consequences,"
said Nevada Public Utilities Commissioner Richard McIntire. "FERC must resist
pressure to institute price caps."

???But Keeley said if the federal government did not take action, the state
would have to do what it could to control the wholesale prices.

???While there has been talk in Sacramento of taking over power plants, Keeley
said the more logical step would be to take over power contracts. The state
could step in and take over the power before it is sold to the marketer, thus
preventing huge artificial mark-ups, Keeley said.

???Assemblyman Anthony Pescetti, R-Rancho Cordova, said, however, "I have
concerns about seizing anything."

???Meanwhile in Sacramento, three GOP members of Congress grilled
representatives of FERC, the Public Utilities Commission and the Independent
System Operator about their roles in the state's energy mess.

???Yesterday's politically tinged hearing was the first of three meetings the
House Government Reform Committee will hold around the state this week. Hebert
will appear at a hearing in San Jose today.

???Much of the committee's questioning fell on PUC President Loretta Lynch, 
who
was appointed to the post by Gov. Gray Davis.

???The GOP lawmakers accused Lynch of worsening the crisis by dragging her 
feet
on giving utilities the power to enter long-term contracts and thus avert more
costly spot-market buying.

???She replied that the PUC had granted the utilities' request to enter into
long-term contracts within two weeks.

???Lynch blamed FERC's lifting wholesale price caps for the astronomic rise in
electricity prices.

??----------------------------------------------------------------------------

???What's Next

???-- The House Government Reform Committee plans energy hearings today in San
Jose and tomorrow in San Diego.

???-- Edison and PG&E are expected to file their 2000 earnings reports April
17.

???-- The state Senate starts hearings April 18 in its inquiry into 
allegations
that electricity suppliers illegally withheld power to drive up California's 
wholesale prices. Wholesalers deny such accusations.

???-- Also April 18, the Assembly plans to resume hearings in its inquiry into
California's highest-in-the-nation natural gas prices.

??Chronicle staff writer Greg Lucas contributed to this story. / E-mail Lynda
Gledhill at lgledhill@sfchronicle.com.

LOAD-DATE: April 11, 2001

?????????????????????????????18 of 100 DOCUMENTS

??????????????????????Copyright 2001 The Washington Post

?????????????????????????????The Washington Post

???????????????????April 11, 2001, Wednesday, Final Edition

SECTION: METRO; Pg. B01

LENGTH: 1067 words

HEADLINE: Gas Plant's Proposal Alarms Neighbors in Calvert; Owner Pushes to
Reactivate Facility

BYLINE: Raymond McCaffrey, Washington Post Staff Writer

BODY:


???The predicament they're facing has become ordinary in the outer reaches of
the Washington area: a major construction project planned for the 
neighborhood.

???Their concerns are anything but.

???Terrorist attacks. Nuclear meltdowns. Environmental disaster.

???That's what residents in southern Calvert County fear could happen if a
Tulsa-based company is allowed to go ahead with a $ 120 million project to
reactivate and refurbish a liquefied natural gas storage and importation
facility at Cove Point.

???At a recent public meeting hosted by the Federal Energy Regulatory
Commission, which will decide the fate of the Williams Co. proposal, neighbors
worried aloud about the potential for a disaster -- accidental or intentional 
--
either at the facility or involving one of the large tankers that would 
deliver
imported fuel via the Chesapeake Bay.

???But their biggest fear is the effect that such a disaster would have on
another facility that stands just a few miles away -- the Calvert Cliffs 
Nuclear
Power Plant.

???"What happens if the plant goes sky-high and a lot of us go with it?"
resident Mary Robinson asked federal officials at the meeting.

???In a letter to federal regulators, resident Norman Overfield urged them to
consider the ramifications of a terrorist act. "It would seem that it would 
only
require a source of ignition to transform an accidental discharge into a large
firestorm," Overfield wrote. "Consider the possible consequences of a 
deliberate
attack on a ship at the terminal similar to the attack on the USS Cole in 
Aden,"
he continued, referring to the suicide bombing of a U.S. destroyer in Yemen in
1999.

???The concerns of the residents are similar to those expressed by residents 
in
Montgomery and Frederick counties who live near sites where companies have
proposed new or expanded facilities to meet the nation's growing energy needs 
--
which have been highlighted by the California electricity crisis.

???Demand for energy is behind the proposal by Williams, which asked the
federal commission to approve its plan by September so it can begin importing
liquefied natural gas in April 2002 to an offshore pier near the Cove Point
installation plant. The gas would then be piped in vapor form for 87 miles, 
from
Calvert through Prince George's, Charles, Fairfax and Loudoun counties.
Utilities would buy the gas and resell it to businesses and individuals.
Utilities could also use the gas to generate electricity.

???"It gives you a new source of supply to meet the growing demand for gas and
also for electricity," said Joe Fields, a Williams official who is involved 
with
the Cove Point project.

???The Cove Point plant was built in 1974, and its former owners, the Columbia
and Consolidated Natural Gas companies, operated a liquefied natural gas
terminal and related pipeline facilities. In 1979, a gas explosion at the 
plant
killed one employee and injured another.

???The importation operation ended in December 1980 because of falling 
domestic
natural gas prices and a dispute with exporters from Algeria, the main source 
of
the product, according to Williams officials. The onshore facilities reopened 
in
1994 to provide a natural gas storage service.

???Williams bought the plant in June and wants permission to reactivate the
offshore facility and build a fifth storage tank with a capacity of 2.5 
billion
cubic feet. The four existing storage tanks are twice as large.

???The pier, which is about 1 1/4 miles offshore and connected to the plant by
an underwater tunnel, will be refurbished to handle tankers that typically are
about 1,000 feet long and 150 feet wide, according to a county official.

???Vouching for the plant's safety, Fields maintained that many of the
residents' fears were "concerns you heard when the facility opened" in the
1970s.

???"Safety is Williams' and Cove Point's primary concern," he said.

???The Energy Regulatory Commission and the Department of Transportation "have
safety guidelines," Fields said. "We build to either meet or exceed those
guidelines."

???The company has received the endorsement of the Calvert County Board of
Commissioners, which is eyeing the up to $ 2 million in annual tax revenue 
that
the refurbished plant would generate. Commissioners are desperately looking 
for
money to build schools and pay for other services in Calvert, where the
population has jumped 45 percent over the last decade. Critics say that's the
very reason federal regulators need to give the plan a hard look.

???Those voicing concerns are not just neighbors of the plant. The list of
official interveners in the federal review includes the Maryland Department of
Natural Resources, which wants time to assess the plan. While the department
does not oppose the project, it is against a request by Williams that the
federal commission expedite the review, said Richard McLean, a department
manager of nuclear programs.

???McLean has maintained that an expedited review would not allow enough time
to assess concerns such as the effect of the tankers on the Chesapeake Bay or
potential risks the renewed operation might pose to nearby Calvert Cliffs, 
which
won relicensing from the U.S. Nuclear Regulatory Commission last year.

???A three-decade-old environmental assessment is not valid today, McLean 
said,
referring to the last time such issues were fully examined for the gas plant.

???Not only has Calvert's population nearly doubled since then, but operations
have expanded at the Patuxent River Naval Air Station in nearby St. Mary's
County, he said. Commercial and recreational boat traffic on the Chesapeake 
Bay
have increased, too, McLean said.

???"There's no question in my mind that we want to revisit our prior risk
assessment," he added. "The risk assessment is risk for the communities, risk
for the Patuxent River Naval Air Station, which has a whole lot more people 
than
before . . . and there is some concern that this could potentially compromise
commercial freight traffic on the bay."

???Federal regulators have said that the commission has not decided whether to
expedite the review. Regardless, they said, an extensive risk-assessment study
would be conducted and available for public review.

???Yet some expressed concern that the growing need for fuel will force the
government to speed up the review.

???"You can't compromise a process because somebody says we need this," McLean
said.

LOAD-DATE: April 11, 2001

?????????????????????????????19 of 100 DOCUMENTS

?????????????????????????????The Associated Press

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

?????????????????????April 11, 2001, Wednesday, BC cycle

?????????????????????????????9:19 AM Eastern Time

SECTION: Business News

LENGTH: 381 words

HEADLINE: Report: Government utilities allegedly gouged California during 
power
crisis

DATELINE: LOS ANGELES

BODY:

??Private power wholesalers have been blamed for driving up California's 
electricity prices but even government-owned utilities allegedly manipulated 
the
market, maximizing profits and inflaming the energy crisis, according to a
confidential document obtained by the Los Angeles Times.

??The document shows that the power providers, including the Los Angeles
Department of Water and Power, influenced the spiraling costs of wholesale
electricity between May and November 2000.

??The DWP was eighth on the list of alleged price gougers for seeking high
prices during periods of high demand, which helped inflate costs across the
entire spot market, the document said.

??The document decodes the identities of unnamed power providers in a recent
study by the California Independent System Operator. CISO examined thousands 
of
hours of bidding practices for 20 large electricity providers.

??DWP General Manager S. David Freeman called the findings "outrageous."

??"We have consistently charged (CISO) our cost plus 15 percent," Freeman 
said.
"It's not as though we're up there peddling a bunch of power to jam it down
their throats."

??In addition to the DWP, the document singles out two other government-run
agencies that it said consistently inflated prices: the federally owned
Bonneville Power Administration in the Pacific Northwest, and the trading arm 
of
Canada's BC Hydro in British Columbia.

??BC Hydro reaped the most in what the state's power-grid operator deemed
"excess profits." The Canadian agency took in $176 million, several times the
amount of allegedly excessive earnings collected by all but one private
generator. Second on the list was Atlanta-based Mirant which collected nearly 
$
97 million.

??The companies cited said they broke no state rules and abided by 
California's
1996 deregulation law, the Times reported Wednesday.

??BC Hydro officials acknowledged, however, that they anticipated periods of
severe power shortages and let their reservoirs fill with water overnight, 
then
opened them to produce cheap hydroelectric power to sell at a premium.

??"It was the marketplace that determined what the price of electricity would
be at any given time," BC Hydro spokesman Wayne Cousins told the Times. "We
helped keep the lights on in California."

LOAD-DATE: April 11, 2001

?????????????????????????????20 of 100 DOCUMENTS

?????????????????????????????The Associated Press

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

?????????????????????April 11, 2001, Wednesday, BC cycle

?????????????????????????????3:46 AM Eastern Time

SECTION: Business News

LENGTH: 841 words

HEADLINE: States say federal government needs to act to stem energy crisis

BYLINE: By H. JOSEF HEBERT, Associated Press Writer

DATELINE: BOISE, Idaho

BODY:

??A six-hour brainstorming session between federal and state energy regulators
ended with a clear message: Western states want more help from Washington to
corral the region's deepening power crisis.

??The three members of the Federal Energy Regulatory Commission flew to Idaho
for what Chairman Curtis Hebert called "frank discussions" with officials from
11 Western states about the astronomical electricity prices that have spread
from California to almost every corner of the region.

??And the Washington regulators got an earful.

??"Montana is taking a hell of a hit because of this market," declared Gary
Feland, whose job it is to approve requests by the state's utilities to pass
wholesale price increases on to their retail customers.

??"Politically we're getting beat up," added Feland.

??In many states, retail electricity sales are still regulated, but wholesale
markets are not. The state officials warned that many of the electricity rate
increases, stemming from wholesale price run-ups, have yet to reach consumers,
but will in the coming months as states have no choice but to approve them.

??Much of the discussion focused on whether FERC, which regulates the 
wholesale
power market, should temporarily impose price controls to ease the impact of
what one of the commissioners, William Massey, called "a looming disaster" 
this
summer if nothing more is done.

??Afterward, Hebert tallied up the results: Five states opposed such controls,
three wanted them desperately and three others were not sure. Previously, the
latter three had lined up in the "no" column.

??Hebert has made clear his opposition to renewed price regulation - even
temporarily to address an emergency - because he argues that a free market is
the only way to get people to build more power plants and transmission lines 
and
create the "price signal" to foster conservation.

??His position drew support from Vice President Dick Cheney in a telephone
interview with the Associated Press in Olympia, Wash.

??"The problem with price caps is that they don't solve the problem," said
Cheney. "Just look at California, where they had caps applied at the retail
level that, coupled with the requirement to buy power on the spot market, has
driven PG&E into bankruptcy."

??Pacific Gas & Electric, California's largest utility, said last week it had
debts of $9 billion and filed for Chapter 11 bankruptcy protection.

??Like the state officials, FERC is deeply split on the issue of price
controls.

??"It is wrong to put the entire Western economy in harm's way solely to
protect a price signal arising from a dysfunctional market," Massey said. "Our
passion for the market must be tempered with commonsense."

??A contingent from California submitted a proposal calling for cost-based
price caps for 18 months on wholesale electricity and natural gas sales across
the West. Only FERC can impose such caps.

??"We have done our part. We cannot do it alone," Bob Herzberg, speaker of
California's Assembly, told the three FERC commissioners. The Californians
listed the state's response to its power problems so far: Actions to boost
conservation, increase retails electricity rates and speed up power plant
construction. Still, they bemoaned that California this year was expected to
spend $65 billion on electricity, nearly 10 times its power bill in 1999.

??Hebert insisted that the FERC "is doing everything it can" to ensure just 
and
reasonable prices and cited the commission's action to seek $124 million in
refunds on California power sales. He also said the commission plans soon to
approve a new system of tracking market abuses.

??Officials from Washington state and Oregon joined California in the plea for
temporary price regulation. The Northwest has been hit by a severe drought,
making less hydro-generated electricity available and forcing greater reliance
on the high-priced spot market. On Monday the Bonneville Power Authority said 
it
may have to nearly triple what it charges for its power if demand doesn't drop
sharply and reduce the need of spot market purchases.

??But in a surprising development, Wyoming, Utah and New Mexico said they no
longer were sure that price controls would be such a bad thing. And even those
opposed to price caps, like Montana's Feland, criticized FERC for not being 
more
aggressive in challenging prices - many of them now 10 times what they were a
year ago - as unreasonable.

??"In the real world, in the world of the West, the ideal market doesn't
exist," Marilyn Showalter, a Washington state utility regulator said. She
disputed the contention that price caps would discourage investment, arguing
that the uncertainties brought to soaring prices already were doing that.

??"The lack of action (from FERC) is threatening to undermine the commission's
own credibility" and eroding political confidence in electricity deregulation 
and competition, she said.


??Associated Press Writer David Ammons in Olympia, Wash., contributed to this
report.



LOAD-DATE: April 11, 2001

?????????????????????????????21 of 100 DOCUMENTS

???????????????????The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

?????????????????????April 11, 2001, Wednesday, BC cycle

?????????????????????????????2:19 AM Eastern Time

SECTION: State and Regional

LENGTH: 966 words

HEADLINE: Cheney urges patience for Bush's energy approach

BYLINE: By DAVID AMMONS, AP Political Writer

DATELINE: OLYMPIA, Wash.

BODY:

??Vice President Dick Cheney is urging fellow westerners to give the Bush
administration more time before judging its record on energy and the
environment.

??Cheney, in a telephone interview with The Associated Press from the White
House, said the administration is barely under way, but over time it will 
become
clear that President Bush has a balanced and smart view on the environment and
will help the nation weather the short-term energy crunch.

??Cheney was responding to criticism from western Democrats, including
Washington Gov. Gary Locke and Rep. Jay Inslee, D-Wash., who gave the two most
recent Democratic responses to Bush's weekly radio addresses.

??Locke accused Bush of pushing policies that will harm the environment,
specifically mentioning the recent decision to roll back regulations limiting
the amount of arsenic in drinking water. Inslee said the administration offers
only "excuses and inaction" on the West's deepening energy woes.

??Cheney, who heads Bush's energy task force, defended the
administration's strong opposition to energy price caps, which all three West
Coast Democratic governors have advocated.

??"The problem with price caps is that they don't solve the problem - just 
look
at California where they had caps applied at the retail level that, coupled 
with
the requirement to buy power on the spot market, has driven PG&E (Pacific Gas 
&
Electric) into bankruptcy," he said Tuesday.

??California's energy deregulation has price caps for customers, but not
wholesalers.

??"To say the solution is price caps shows that they haven't spent much time
studying the problem," Cheney said. "Caps provide some short-term political
relief to the politicians, but (are) no long-term answer."

??Conservation, permit streamlining and more power production are what the 
West
needs, he said.

??Much of the region faces a drought, with snowpack only half the normal 
level,
he noted.

??"We will have to find ways to do everything we can to conserve, to only use
the power we absolutely have to have," he said.

??Beyond that, "The main thing is to try to build our long-term generating
capacity if we can get beyond the next year or two."

??Locke stood by his earlier criticism of the White House.

??"We hear a great deal of talk about drilling and digging and burning, but 
not
a great deal of talk about renewable sources of energy," said Dana Middleton,
the governor's communications director.

??Temporary price caps are essential, she said.

??"People need relief right this minute," she said. "Temporary limits can
stabilize the market and allow all the western states to put their plans into
effect, to let everyone get their houses in order, especially California.

??"We're just asking for a little assistance so we can catch our breath and 
our
companies can start to build more generating capacity."

??Middleton said the administration's new budget cuts conservation programs,
"So what is Mr. Cheney talking about?"

??Locke took part in groundbreaking for a 248-megawatt power plant about 30
miles south of the Capitol on Tuesday.

??Cheney denied Inslee's contention that the White House has refused to meet 
on
the energy problem. "That is fundamentally not true," he said.

??Inslee later shot back that two dozen members of Congress have been
repeatedly denied a joint meeting with Cheney to press their support for price
caps.

??"This is a hornet's nest that needs to be stirred," Inslee said in an
interview. "What I am trying to get this administration to understand is that
this is the beginning of the energy crisis, not the end. They see it as some
sort of 45-day problem and it's over.

??"They hope some sort of weather fairy will take care of it. They feel they
can draw a wall around California and let it sink into the Pacific Ocean. The
administration does not understand the depth of this crisis, nor do they
understand the potential of it spreading to the entire nation. Alan Greenspan 
is
saying that the energy shocks are affecting consumer confidence."

??Cheney said environmental groups are jumping to an ill-founded conclusion
that Bush will be an enemy.

??"I think we will be perceived as having a balanced approach over time," he
said. "These tend to be emotional issues and people get buzzed up in short
order."

??Environmental groups should take a deep breath, he said.

??"I don't want to discourage people's expression of what they believe, but we
are in the early stages of the administration and the president and I both 
love
the land. We are both westerners and care a lot about the environment and I
would hope people would give us the time to prove ourselves, to show our
commitment to pass the Earth along in better shape than we got it."

??Criticism "just goes with the territory," he said.

??He said the White House hasn't decided whether the Bonneville Power
Administration can take as much as $500 million in credits from the U.S.
Treasury this year.

??The so-called "fish credits" are for costs unrelated to BPA's generation of
hydroelectric power, including salmon restoration, irrigation and recreation.

??The credits could be used to offset this year's BPA payment to the
government. BPA owes between $750 million and $800 million as repayment of
federal investments in the massive system that serves the West.

??"That was suggested to us, but we haven't made a decision," the vice
president said.

??Cheney said the stalemate over China's holding of the crew of the U.S. Navy
reconnaissance plane, home-based in Washington state, is taking a lot of his
time, but that he's also spending plenty of time working on energy, the 
budget,
tax relief and other issues.

??He said his health is fine, and that he appreciates people asking.

??"I can't go to the grocery store without people coming up and asking how I
am."

LOAD-DATE: April 11, 2001

?????????????????????????????25 of 100 DOCUMENTS

??????????????????Copyright 2001 Financial Times Information

?????????????????????????????All rights reserved

???????????????????????????????Global News Wire

????????????????????????Abstracted from ABC in Spanish

?????????????????????????????????????ABC

????????????????????????????????April 10, 2001

SECTION: Pg. 48

LENGTH: 172 words

HEADLINE: SPANISH GOVERNMENT PREPARES NEW SET OF ELECTRICITY TARIFFS TO AVOID 
"
CALIFORNIA EXPERIENCE" (EL GOBIERNO PRAPARA UN NUEVO MODELO DE TARIFAS
ELECTRICAS PARA EVITAR LA "EXPERIENCIA CALIFORNIA")

BODY:


??The Spanish economy ministry is preparing a decree law to regulate
electricity sector tariffs in light of the deregulation of the sector. The new
tariff model has been devised to prevent a repeat of the current situation in
California, where the electricity sector is in crisis. ?From 1 January 2003 
all
consumers in Spain will be eligible to choose their own electricity supplier.
The new tariffs will be set according to three criteria, namely the recovery 
of
costs to provide network access, the efficient allocation of costs amongst
different suppliers and the adoption of maximum and standard tariffs 
throughout
Spain. The measures hope to ensure that distribution and transport companies 
can
guarantee electricity supplies.

??In California a number of electricity distributors now face bankruptcy,
having been forced to freeze tariffs whilst electricity prices soared. One of
the means by which the Spanish government intends to prevent the situation 
from
occurring in Spain is to invest in diversified energy sources.

JOURNAL-CODE: WABC

LOAD-DATE: April 10, 2001


???????????????????????Copyright 2001 Associated Press

??????????????????????????????????AP Online

???????????????????????????April 10, 2001; Tuesday

SECTION: Domestic, non-Washington, general news item

LENGTH: 704 words

HEADLINE: ?Fed Agency To Discuss Power Demands

BYLINE: H. JOSEF HEBERT


DATELINE: BOISE, Idaho

BODY:

???A federal energy agency, under fire for not being more aggressive in 
dealing
with the Western electricity shortages and high prices, was meeting Tuesday 
with
officials from 11 Western states to discuss ways to contain the problem this
summer.

??The unusual meeting called by the Federal Energy Regulatory Commission comes
as a California utility decided to sell its transmission lines to avoid
bankruptcy and officials in the Northwest predicted a tripling of electricity 
rates unless power demand is cut sharply in the coming months.

??The FERC, which regulates wholesale electricity sales, asked state utility
regulators from the 11 states in the Western power grid to discuss ways that 
the
federal agency might help in easing the power crunch as the heavy summer 
demand
periods are about to begin.

??But the three commissioners are likely to get some sharp comments from some
of the participants over the agency's refusal to consider price caps on
wholesale power transactions and why it hasn't been more aggressive in 
demanding
refunds on sales this winter.

??FERC Chairman Curtis Hebert, a strong free market advocate, has argued that
price controls will hinder investment in new power plants and send the wrong
''price signal'' to both investors and consumers who need to conserve energy.

??''Price caps are unworkable, unreliable and not a solution,'' contends
Hebert, a Republican whose approach generally reflects the views of President
Bush.

??West Coast officials and politicians, led by California Democratic Gov. Gray
Davis, have chastised the FERC for not imposing temporary price caps and not
taking more forceful actions against power generators who have charges prices
far above what many consider reasonable even in a tight energy market.

??However, that is a decidedly minority position.

??Eight of the 11 governors who sent representatives to the meeting have said
caps would hinder expansion of energy supplies. The governors of Washington 
and
Oregon have joined Davis in arguing that the Western power market is broken 
and
temporary price controls are needed to corral the cost of wholesale power.

??Wholesale power prices of from $250 to $300 a megawatt-hour continue to be
common not only in California but also in the Northwest where power purchasers
have increasingly had to turn to the spot market because a severe drought has
curtailed supplies from hydroelectric dams.

??On Monday, the Bonneville Power Administration, which for decades has given
the Northwest some of the lowest electricity prices in the country, announced 
it
will have to increase wholesale rates by 250 percent unless electricity demand
is reduced sharply within two months. With current demand, Bonneville will 
have
to rely extensively on high-priced spot markets, said BPA Administrator Steven
Wright.

??In California, the state's second biggest utility, Southern California 
Edison, announced it plans to sell its transmission lines to the state for 
$2.76
billion to raise cash and avert bankruptcy.

??SoCal and Pacific Gas & Electric, which last week sought protection from
creditors by filing bankruptcy, owe more than $13 billion for power purchases
since last summer. Because no one has been willing to sell more power to the 
two
utilities, the state has spent $45 million to $50 million a day since January 
to
buy power at rates many times what they were before the power crunch began.

??Commissioner Linda Breathitt said she wants to hear what advice the state
regulators might have and ''hear their views on how FERC can assist them'' in
addressing power shortages and likely soaring prices this summer.

??Breathitt has sided with Hebert on the price cap issue. Another 
commissioner,
William Massey, has argued strongly for price caps, but has been overruled.

??To fill two vacancies on the FERC, President Bush recently named two new
commissioners, both state utility regulators, who like Hebert are strong
supporters of electricity deregulation. The two nominees, Pat Wood of Texas 
and
Nora Brownell of Pennsylvania, have not yet been confirmed by the Senate.




LOAD-DATE: April 10, 2001

?????????????????????????????45 of 100 DOCUMENTS

???????????????????????Copyright 2001 Associated Press

??????????????????????????????????AP Online

???????????????????????????April 10, 2001; Tuesday

SECTION: Domestic, non-Washington, general news item

LENGTH: 585 words

HEADLINE: ?Calif. Gov. To Buy Power Lines

BYLINE: LESLIE GORNSTEIN


DATELINE: LOS ANGELES

BODY:

???Southern California Edison's customers will get a break from surging
electricity rates thanks to the cash-starved utility's agreement to a $2.76
billion deal allowing the state to buy its transmission lines.

??Gov. Gray Davis announced the deal Monday, in which the state's
second-largest utility also agreed to a 10-year deal to provide low-cost power
to customers.

??The deal is a key part of the governor's plan to keep SoCal Edison solvent.
It would give the utility money to reorganize its debts and pay power
generators, many of which have not been paid since November.

??''We will be well-served by having financially healthy utilities with 
skilled
and experienced employees,'' said Edison International chief executive John
Bryson.

??The deal still requires approval by state legislators and regulators.

??''This agreement proves good things can happen when the parties are
responsible, resolute and stay at the table,'' Davis said Monday. ''If you 
walk
away from the table, nothing can get done.''

??Pacific Gas and Electric Co., the state's largest utility, filed for federal
bankruptcy protection on Friday without notifying Davis of its plans.

??On Monday, PG&E asked U.S. Bankruptcy Judge Dennis Montali to issue a
temporary restraining order against the state Public Utilities Commission a
request that PUC General Counsel Gary Cohen called a ''declaration of war''
against the commission and its authority to regulate the utility.

??The PUC says the utility owes the state more than $8 billion for electricity
that the Department of Water Resources bought on behalf of the utility's
customers since January. PG&G maintain the commission has miscalculated.

??Davis said there was still room for a deal with PG&E if the company wanted 
to
come back to the bargaining table. But PG&E said it would continue to pursue a
resolution to its problems through the bankruptcy court.

??''We are pleased that Southern California Edison, given its set of facts, 
and
the state have been able to reach an agreement,'' PG&E spokesman Ron Low said.
''Given our set of facts, we continue to believe that a Chapter 11
reorganization is the most feasible means to reach a solution.''

??Judge Montali is to hold another PG&E bankruptcy hearing Tuesday to continue
determining which creditors will be paid, and in what order.

??Critics of the Edison deal attacked it Monday as expensive and impractical.
Republican Assemblyman Dave Cox said the power lines could require billions of
state dollars to upgrade.

??''My guess is the governor will have a difficult time finding a single
Republican who is interested or who believes that purchase of the grid was a
good business transaction,'' he said. ''It's hard to see any benefit.''

??The memorandum of understanding signed Monday gives the utility the right to
back out of the deal if the PUC does not implement certain changes within 60
days.

??Edison wants a half cent per kilowatt hour dedicated to repaying the utility
$2 million it says it lost by buying power at high wholesale rates and selling
it at frozen retail rates.

??PUC Chairwoman Loretta Lynch said she would expedite consideration of the
proposed deal.


?