Sue Mara
Enron Corp.
Tel: (415) 782-7802
Fax:(415) 782-7854
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	"Beiser, Megan" <Megan.Beiser@edelman.com>
	02/14/2001 04:06 PM
		 
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		 cc: 
		 Subject: Governor Davis Announces Bill Package to Increase Renewable Energ 
y, Distributed Generation and Co-generation


> The Governor held his press conference today at the co-generation plant at
> the University of California Medical Center in Sacramento.
> 
> All local TV, print and radio news media outlets sent representatives.
> 
> Although the focus of the news conference was supposed to be introduction
> of a legislative package promoting renewable energy, distributed
> generation and co-generation, it quickly turned to how the Governor will
> deal with the possible bankruptcy of the utilities.  The Governor said
> that it has "become increasingly obvious" to him that the best solution to
> the utilities' financial problems is the "acquisition of transmission
> lines."  He noted that the transmission lines are the utilities "most
> significant asset" and would be something the public would be able to get
> value from "in perpetuity."  He said the arrangement will likely be a
> "lease" of the utilities' lines, with the companies continuing to maintain
> them, "to capture [the utilities'] expertise."  Details of this plan will
> be announced on Friday, the Governor said.  The time and place for this
> announcement have yet to be released.
> 
> The Governor later said he felt the utilities' parent/holding companies
> should "be part of the solution" so there would be "shared pain" in
> reaching a solution.
> 
> The Governor said he suspected that acquisition of the transmission lines
> will involve the sale of revenue bonds, but he "didn't have enough wisdom"
> when asked about it to give a firm answer.  He said he believed he would
> have that wisdom on Friday. 
> 
> The Governor also commented on his plan to police and/or fine business
> establishments that keep their lights on after business hours.  He said he
> would announce a finalized plan on or around Mar. 15, a specific program
> to reduce by 50-70% the amount of energy used by retailers after-hours.
> 
> The Governor did outline the legislative package designed to promote
> renewable energy, distributed generation and co-generation through
> incentives, rebates and tax credits.  
> 
> The package contains:
> 1.) "Rebate Increase Bill": "Emerging Renewable Resources Account of the
> Renewable Resource Trust Fund" = $50 million to increase rebates for
> renewable distributed generation systems smaller than 10 kilowatts (this
> money will come from the General Fund)
> 
> 2.) Tax Credit Bill: SB 17X (Brulte): A 50% tax credit for the purchase
> and installation of renewable distributed generation systems larger than
> 10 kilowatts and up to 200 kilowatts for large facilities such as
> apartment complexes and businesses. 
> 
> 3.) Renewable Energy Loan Guarantee Program: AB 53X (Reyes): $50 million
> for a commercial loan guarantee program for renewable power systems,
> distributed generation and co-generation facilities. 
> 
> 4.)Retrofitting of Distributed Generation Facilities: This proposal will
> provide $20 million to achieve 40 MW of reduced peak load through
> retrofitting of natural gas distributed generation units at municipal
> water districts to improve environmental performance.  This involves
> retrofitting diesel and dirty natural gas generators with clean natural
> gas technology. 
> 
> 5.)Legislation to Exempt Microgeneration and Renewable Facilities Less
> than 1 MW from Standby Charges: Elimination of the standby charges paid by
> distributed generation end-use customers to the Investor Owned Utilities.
> This includes small co-generation facilities and only applies to units
> that generate less than one megawatt. 
> 
> ***********************************
> 
> Please find the text of the Governor's press release for this news
> conference below:
> 
> FOR IMMEDIATE RELEASE
> 02/14/2001 2:00 pm 
> 
> GOVERNOR DAVIS ANNOUNCES BILL PACKAGE TO INCREASE RENEWABLE ENERGY,
> DISTRIBUTED GENERATION AND CO-GENERATION 
> 
> SACRAMENTO 
> 
> Governor Gray Davis today announced a legislative package to provide
> incentives to power up more renewable energy, distributed generation and
> co-generation to help meet California's energy challenge.
> 
> "By investing in renewable energy sources, clean distributed generation
> and co-generation, we can increase our energy supply without taking power
> away from the grid," Governor Davis said. "My generation plan contains the
> most ambitious renewable energy program in the nation."
> 
> Distributed generation and co-generation are powerful tools for meeting
> California's power needs. These types of facilities reduce demand on the
> state power grid. They also provide energy independence from the
> Independent Systems Operator and the volatile spot market; advanced
> technology that creates jobs as well as power; and reliable energy sources
> that respect the environment.
> 
> Governor Davis' legislative package for distributed generation,
> co-generation and renewable energy includes:
> 
> 
> 1.   $50 million to increase rebates for renewable distributed generation
> systems smaller than ten kilowatts. 
> 2.   A 50% tax credit for the purchase and installation of renewable
> distributed generation systems larger than 10 kilowatts and up to 200
> kilowatts for large facilities such as apartment complexes and businesses.
> This will be carried in SB 17x by Senator Jim Brulte (R-Cucamonga). 
> 3.   $50 million for a commercial loan guarantee program for renewable
> power systems, distributed generation and co-generation facilities. This
> will be carried in AB 53x by Assemblymember Sarah Reyes (D-Fresno). 
> 4.   $20 million for retrofit of distributed generation owned by
> municipal water districts to improve environmental performance. This
> involves retrofitting diesel and dirty natural gas generators with clean
> natural gas technology. 
> 5.   Elimination of the standby charges paid by distributed generation
> end-use customers to the Investor Owned Utilities. This includes small
> co-generation facilities and only applies to units that generate less than
> one megawatt. 
> 
> 
> The Davis Administration will work closely with legislators to pass
> legislation to implement these proposals.
> 
> Co-generation is the simultaneous generation of electricity and heat or
> steam, usually on an industrial site. Typically, the electricity is sold
> to the grid and the heat or steam is used onsite in the industrial process
> 
> Distributed generation is a term used for a decentralized approach to
> generating electricity. Generally, the electricity is generated on the
> site where it is being used. It can include renewables (such as solar or
> wind power), fuel cells, and micro-generators.
> 
> Governor Davis made his announcement at the UC Davis Medical Center
> Co-Generation Plant in Sacramento. The plant supplies not only all of the
> electricity for the but all of the heating and cooling, for the UC Davis
> Medical Center. It produces 26 MW of power. Since the Medical Center needs
> less than half of that, the excess power is sold back to the ISO, which
> pays the Center's utility bills.
> 
> "The UC Davis Medical Center Co-Generation Plant is a self-sufficient
> facility," Governor Davis added. "It is an efficient facility. It is a
> clean facility. And it is the kind of facility that we need a lot more of
> to meet our peak energy demands."
> 
> Governor Davis' energy plan relies on three elements: stabilization,
> conservation and generation. The Governor is working with legislative
> leadership on a stabilization plan for the State's Investor Owned
> Utilities. Over the last several weeks, Governor Davis unveiled an
> aggressive plan for energy conservation that will help reduce demand and
> keep costs down and a plan to dramatically increase the supply of produced
> and sold in California. 
> 
> 
> ###
> 
>