great Herbert quote on the issue of refunds...

FERC GOP Commissioner To Skip San Diego Hearings Tue
By Jason Leopold
Of DOW JONES NEWSWIRES

11/13/2000
Dow Jones Energy Service
(Copyright (c) 2000, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Explaining that the California electricity crisis has 
become "a political nightmare," the U.S. Federal Energy Regulatory 
Commission's lone Republican Party commissioner has decided not to attend 
hearings in San Diego on Tuesday. 
"I don't expect you will see anything happen tomorrow," the commissioner, 
Curt Hebert, said.
"California would rather fight this out for the next five to ten years rather 
than take steps now to solve the problem," said Hebert. 
Hebert, who is in San Diego this week attending a conference of energy 
regulators, said that he had requested the hearings be held on a different 
day due to a conflict in his schedule. 
But another reason Hebert won't attend Tuesday's hearings, he said, is 
because California Gov. Gray Davis, a Democrat, skipped FERC hearings in 
Washington last week. 
The governor sent a videotaped message to be played at the hearings, and in 
it he severely criticized FERC's proposed solutions to California's problems 
as totally inadequate. Davis explained to the FERC that he couldn't go to 
Washington Thursday because Mexico's president-elect, Vicente Fox, was 
visiting California. 
Hebert said that California lawmakers aren't focusing on solving the state's 
electricity crisis, but rather are simply using it for political gain. 
"What's going to kill California's electricity market in the end is all the 
politicizing," he said. 
Hebert expects to see more companies withdraw projects for building new power 
plants in the state, as Enron Corp (ENE) and Calpine Corp (CPN) did two weeks 
ago. As a result, Hebert expects blackouts in the state next summer, as well 
as continued high prices in the wholesale power market. 
Although he formally concurred with FERC's proposed order on ways to repairs 
the state's power market, he said that it should go further in ending price 
caps in California's power market. Unless California addresses the issue of 
price caps, "the state will never attract new supply." 
He also disagreed with views expressed by the two state senators that 
attended FERC's hearings in Washington on Thursday. Those state senators, 
Steve Peace and Debra Bowen - both Democrats, said that if the FERC didn't 
order merchant power companies and power marketers in the state to refund 
some of their summer profits to utilities, then California's voters would 
vote essentially to nationalize the state's power plants. 
"FERC isn't going to cave into any threats. California needs to do two 
things. They need to solve the problem and be intellectually honest that the 
electricity market structure isn't working," he said. 
Hebert said that two members of the California Public Utilities Commission 
told him that they - like the FERC - thus far haven't found any evidence of 
market power abuse by merchant plant owners or power marketers. As a result, 
those state commissioners don't expect to be able to order refunds, according 
to Hebert. 
"In my view as an attorney, I've seen no evidence of criminal activity. 
Chasing after refunds is a waste of time and money," Hebert said. 
"Lawmakers here need to be concerned about consumers. We've had three 
hearings already - are customers any better off? I don't think so," he added. 
-By Jason Leopold, Dow Jones Newswires; 
323-658-3874; jason.leopold@dowjones.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.