Powell relative working for Davis' re-election
The Contra Costa Times
October 12, 2001
<http://www.contracostatimes.com/news/california/stories/powell_20011012.htm>
 
Gov. Davis' campaign is fined $50,000
SF Gate News
October 12, 2001
<http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/10/12/MN139259.DTL>
 
 
Alternative SDG&E debt plan to get hearings
The San Diego Union Tribune
October 12, 2001
<http://www.uniontrib.com/news/uniontrib/fri/business/news_1b12power.html>
 
 
Edison pact could point way for PG&E 
The Sacramento Bee
October 12, 2001
<http://www.capitolalert.com/news/capalert05_20011012.html>
 
 
Groups file plan for SDG&E debt
The San Diego Union Tribune
October 11, 2001
<http://www.uniontrib.com/news/business/20011011-9999_1b11briefs.html>
 
 
 
 
 
 
Powell relative working for Davis' re-election
 
SACRAMENTO -- A close relative of U.S. Secretary of State Colin Powell is working for Democratic Gov. Gray Davis' re-election campaign. 

Andre W. Lewis, whose father's first cousin is Powell and who considers the prominent leader his uncle, has been hired as deputy political director of the Davis re-election committee. 

Davis campaign adviser Garry South said the governor did not know of Lewis' connection to Powell until after he was hired. "That's not why we hired him," South said. 

"I just thought he was a high-class, high-quality guy and that he would be a real addition to the staff," South said. 

Raised in Southern California, Lewis, 37, has worked in politics at the national, state and local levels. According to the campaign committee, Lewis has served as chief of staff for U.S. Rep. Juanita Millender-McDonald, D-Carson, since 2000. 

He also has worked for the California Democratic Party and served two stints in the U.S. State Department as a presidential appointee in the Clinton administration. 

At the State Department, he worked as a senior official on European and Central Asian security issues and was a special envoy to the hostage negotiations during the Kosovo war, the committee said. 

Lewis, who is working at Davis' Los Angeles campaign headquarters, declined to comment, and the campaign referred questions to South. 

Lewis will help with political operations and outreach to the state's African-American community, public safety and veterans groups, according to a press release issued by the campaign. 

Lewis, a Democrat, occasionally talks in the office about Powell and the U.S. response to the Sept. 11 terrorist attacks, South said. 

"He doesn't wear it on his sleeve, but he's obviously proud of him," South said. 

Davis is seeking a second term in office. In November 2002, he will face the winner of a March Republican primary.

 
Gov. Davis' campaign is fined $50,000

The Fair Political Practices Commission fined Gov. Gray Davis' campaign committee $50,000 yesterday for campaign reporting violations during his 1998 gubernatorial election. 

The commission found that Davis' campaign failed to properly report nearly $161,000 in contributions. 

It also said Davis' committee did not properly itemize about $101,000 in donations. While the money was listed in voluntary electronic filings, it was not properly reported on paper copies, the FPPC said. 

Campaign officials also did not itemize more than $9 million paid to consultants to buy television campaign spots. The campaign also failed to show proof that it told major contributors that they had to file separate donation disclosures. 

A spokesman for Davis' committee, Gabriel Sanchez, said the campaign did not intentional violate campaign laws. 

"We make every effort to follow the letter of the law but in any campaign this large there are glitches," Sanchez said. "While it is regrettable, this is a small amount of infractions given the amount of money spent in the 1998 campaign." 

 
 
 
Alternative SDG&E debt plan to get hearings
 
Approval of the governor's plan for paying the $747 million debt SDG&E says it is owed by its customers appeared less certain yesterday, as the president of the state utilities commission said she planned to hold public hearings for an alternative proposal. 

Loretta Lynch, president of the California Public Utilities Commission, said in a local radio interview that regulators will hold hearings in San Diego regarding a plan from consumer groups that purports to save customers about $185 million more than the governor's proposal. 

The groups said the earlier plan negotiated between the governor and the utility would be costly for consumers and a windfall for San Diego Gas & Electric. 

At stake is how much SDG&E contributes and how much customers pay toward the debt, which accumulated in a so-called balancing account when SDG&E paid more for electricity than it was able to collect from customers during the power crisis. 

Despite the plan for hearings, Lynch told KPBS-FM radio that the commission would make a final decision about how to resolve the controversial $747 million debt by November. 

The governor and SDG&E announced their plan in June, saying it required the utility to contribute $319 million toward the debt and eliminated the balancing account without lengthy litigation or raising rates. 

Consumer groups, led by the San Diego-based Utility Consumers' Action Network, say the governor's plan does not go far enough, particularly because SDG&E earned an estimated $400 million in profits from the sale of electricity during the power crisis. 

Under the governor's plan, those profits are awarded to the company's shareholders, though SDG&E would use $219 million from the profits as part of its $319 million contribution toward the debt. 

Under the consumer groups' plan, SDG&E would be allowed to keep some of the profits, but it would contribute $72 million more than it would under the governor's plan. The alternative plan also would require the utility to make other monetary concessions. 

In a formal decision earlier this year, the California utilities commission said SDG&E's profits do belong to customers. SDG&E has sued to overturn the decision in court, but it has put the litigation on hold pending the utilities commission's resolution of the plan to pay the debt. 

Michael Shames, executive director of UCAN, said yesterday that he was encouraged by Lynch's call for hearings on the consumer plan. 

"There is $400 million at stake here," Shames said. 

SDG&E said yesterday that it had not received formal notification about the hearings, nor had it yet seen the alternative plan for paying the debt. 

A spokesman for the utility, however, repeated earlier comments that the company saw the alternative plan as an attempt to derail the PUC's process of considering the governor's plan. 

Lynch also said yesterday that the utilities commission would continue to challenge the more than $40 billion in long-term electricity contracts signed by the state during the crisis. 

Lynch said the agreements bind the state to overpriced power and are in violation of federal law requiring electricity rates to be "just and reasonable." 

The utilities commission president said the contracts may be even more expensive than earlier thought because at least some of the power they bind California to purchase is not needed. The extra costs would damage businesses and family budgets, she said. 

"If you have to pay three to four times more for energy, you don't have the money to grow your business or meet other needs of your family," Lynch said. 

She also defended action by the commission last week that effectively delayed the sale of $12.5 billion in state bonds needed to pay power costs. Lynch said the commission supported a legislative proposal for floating the bonds, which would separate them from the long-term power contracts.

 
 
 
Edison pact could point way for PG&E 
 
The multibillion-dollar settlement between Southern California Edison and California regulators could ultimately ripple well beyond homes and businesses in the south state. 

It might form rough outlines for a deal that could pull Pacific Gas and Electric Co. out of bankruptcy without removing its assets from state regulation. 

The pact between Edison and the California Public Utilities Commission also might presage a nimbler PUC, one likelier to strike closed-door deals without its typical months of testimony, briefs and hearings. 

Along with its statewide impacts, which may not fully unfold for years, the settlement with the state's second-largest utility also raises uncertainties for its customers, who will pay billions to retire its debts. 

One week after a federal judge approved the $6.35 billion pact to restore Edison to financial health after wholesale power costs spiraled out of control, it is becoming increasingly clear that much of the cost will be born by south state consumers. 

From the start, the Edison rescue plan was a stealth settlement. 

It was negotiated in secret, approved in a closed meeting and so murky that days afterward, even some PUC analysts were still debating just how much money was involved. 

"It's definitely ambiguously worded," said Steve Linsey, a supervisor in the PUC's semi-independent Office of Ratepayer Advocates. On his first review of the deal, he thought about $1.7 billion would be paid by customers through future electric rates. But that figure will be at least $3.3 billion and probably higher, according to Edison and those who negotiated the deal for the PUC. 

"There seems to be a lot of off-the-books interpretation in a direction that is unfavorable to ratepayers," Linsey said. 

The PUC settlement emerged after the Senate and Assembly deadlocked over how much money should flow to Edison and what other benefits should be included for the company and some of its customers. 

In addition, the PUC gave Edison permission to use small and large customers' rates to collect much of the money to pay off back debts, bypassing legislative bargaining to shield residential consumers. 

And the PUC settlement took a much broader view of Edison's finances, sweeping in old debts and cash on hand, and then basically authorized a blueprint to pay off $6.35 billion in debts. 

About three-fourths of that amount -- $4.9 billion -- appears to come from the utility's customers. 

Edison's investors will pick up $1.5 billion -- $1.2 billion through eliminating shareholder dividends for three years, and $300 million as a company contribution. 

The clearest-cut customer contribution flows into a $3.3 billion pot to be filled by future electric bills, probably through the end of 2003. But that's not their only contribution. 

Another $1.6 billion would come from Edison's cash on hand, which includes money already collected from rates and loans that will eventually be repaid by customers. 

"In the end, you're right, the vast sum of money here comes from ratepayers," said Brian Bennett, Edison vice president of external affairs. 

But if Edison had won its suit, Bennett said, it would have been entitled to the full $6.35 billion, without its shareholders taking any hit at all. 

No one can know who would have won the Edison suit. Both sides say they had compelling legal arguments. So why did the PUC, after maintaining publicly for months that it would prevail, chose to settle? 

Partly, the commission was getting gloomy forecasts from the law firm it had hired, said PUC commissioner Richard Bilas. But he and others said there was another, looming fear. 

The PG&E bankruptcy reorganization plan, filed Sept. 20, called for shifting utility assets, including the company's hydroelectric plants, nuclear plant, and gas storage and pipeline network, to a firm free from state regulation. 

"People's calculus was shaken up by what PG&E did," said Mike Florio, an attorney for The Utility Reform Network, a consumer group. "It was just in the ether that 'oh God, there's something really ugly out there. We don't think they can get away with it, but we're not entirely sure.'" 

The reorganization plan would leave a new PG&E company free to set its own rates for power that its plants produce. 

That prospect horrifies regulators and lawmakers who have watched unregulated generators set market prices so high they crippled PG&E and Edison. 

They plan to fight PG&E's efforts, and one of their key tools could be showing the judge that the PUC has been able to salvage Edison while keeping it regulated. 

"They could say, 'judge, you don't have to do this bad deal that PG&E wants. We can work it out,'" said Randy Chinn, an adviser to state Sen. Debra Bowen, D-Marina del Rey. 

For its part, PG&E maintains that the PUC should have helped it out last fall with something similar to the Edison deal. But now, the utility said, it prefers its bankruptcy reorganization plan. 

PUC chief counsel Gary Cohen predicts that if the utility's efforts are rejected by the bankruptcy judge, PG&E will have to begin consultations with regulators for some sort of solution. 

"I think it would be smarter to be talking now," he said. 

A PG&E rescue wouldn't follow the Edison settlement exactly because PG&E's debts and costs are higher, Cohen said, but the PUC's goal would be the same goal it held for Edison: a healthy, regulated utility. 

Consumer groups have blasted the settlement for funneling money to Edison after the utility was allowed to essentially pad its bills during the late 1990s to position itself for deregulation. A PUC majority took a similar stance for more than a year -- until the Edison settlement. 

"We finally got to the point where we said look, we've seen the alternatives, and the alternatives are something like what PG&E is trying to do, or having the state take over the business of buying power," Cohen said. 

Most people at the commission, he said, concluded that a regulated utility looks much more appealing than unregulated power plants or the state Department of Water Resources, which has been buying power for cash-strapped utilities since January. 

Cohen, who orchestrated the Edison settlement negotiations, said they had to be kept quiet for fear that a leak could trigger a bankruptcy filing. Bilas said if it had leaked, so many people would have tried to stop the deal that it likely would have been torpedoed. 

At a closed session before approving it, he said, every commissioner worried aloud that they were sidestepping their own frequent calls for due process, full information and proper hearings. 

It is far too early to say whether more closed door deals will follow. Bilas, Florio and others predict the current PUC has little taste for them. But the five-member commission continues to evolve each time a term expires and the governor appoints a new commissioner. 

"It scares the hell out of me what a really pro-utility commission would do with this," said Florio, the consumer advocate. "This could be the beginning of something really ugly." 

In addition, if utilities see federal suits as way to slice through time-consuming PUC procedures, a flurry of suits could follow, said Linsey of the Ratepayer Advocates' Office.

 
 
 
Groups file plan for SDG&E debt
 
Consumer groups and others filed an alternative plan with the California Public Utilities Commission yesterday for dealing with the $747 million debt SDG&E says it is owed by its customers. The groups say their proposal will save ratepayers at least $185 million compared with an earlier proposal submitted to the PUC by the utility and state officials. Separately, the commission ordered San Diego Gas & Electric to apply all of an expected $124 million in savings from an earlier corporate merger to customers during 2003. SDG&E had asked to retain half the savings for shareholders.