I've got Bilas's "winter of discontent."  What a buffoon.  It takes more guts 
than a train robber to, on one hand, propose a spineless, ineffective 
approach to dealing with what are now recognized as serious flaws in the 
current regulatory structure, and in the same breath, go to the court of 
public opinion and whine about a gas market spinning madly out of control.  
Apparently, he's also setting the table for possible intervention in the 
market by state lawmakers or regulators if we get any more "out of whack."

Are you going over to see Bilas today with Mike Day, et al.?  Are we to 
assume by Bilas's wishy-washy statements to the media that the Comprehensive 
Settlement is still on the table?  Thoughts, please.


Natural Gas Intelligence, Wednesday, December 6, 2000
CA Officials See Potential Gas Supply Problems
Some state officials already are dubbing the upcoming heating season as 
California's "winter of discontent" as continued high wholesale natural gas 
prices are driving up consumer bills and state regulators look at options for 
unbundling Southern California Gas Co.'s transmission and storage system. 
According to other state energy officials he talks with, Richard Bilas, 
commissioner at the California Public Utilities Commission, said, "We could 
have some real problems." Bilas, the former energy commissioner and 
immediate-past president of the CPUC, has proposed a modest unbundling of 
SoCalGas' system, given the current energy price volatility, in a proposed 
settlement decision now being reviewed. Action on the proposed decision could 
come Dec. 21, but observers predict alternate orders will be offered by some 
of Bilas's colleagues on the five-member CPUC, and that could push into next 
year final action. 
If gas prices continue at their precedent-setting levels, California likely 
will be intervening at the Federal Energy Regulatory Commission as it already 
has been doing regarding last summer's electricity price spikes, Bilas said. 
"There are a lot of things the state can do, but whether they are done is a 
matter of philosophical and political judgment," he said. "If gas prices get 
totally out whack in the view of a number of state decision-makers, there is 
likely to be intervention on behalf of the state into gas pricing. And I 
don't know if any of that serves the public well in the long run, but this is 
a short-run political problem." 
As for his proposed decision on settlement for the unbundling of the 
SoCalGas's system, Bilas is unsure at this point if it will stimulate a more 
robust core aggregation market --- now almost a decade old --- with added 
volumes and marketers. He said he needs to hear from participants in the 
market in response to the proposed decision, which basically adopts the more 
modest compromise of three different settlements filed with the CPUC. 
"I'll know better where this proposed decision is going in another two weeks 
after I have talked with the other commissioners and some of the parties," 
said Bilas, noting that the pending gas settlements should be the last major 
changes in California's gas market for awhile, unless the state legislature 
decides to get involved as it has on several occasions in the past three 
years. 
"Everything to do with gas matters statewide is on the table and I am not 
going to make any predictions," Bilas said during a telephone interview in 
which he expressed concerns about both natural gas and electricity issues in 
California in the coming year. He said the supply-demand imbalance for the 
state's electricity market needs long-term solutions, but he thinks 
short-term political answers will win out. 
Bilas said the recent state energy commission conclusion that California's 
electricity needs can be met with the existing plants underway or proposed 
could pan out, but only if an unlikely combination of three factors converge: 
all the plants now on the drawing board actually get built, no major electric 
or gas transmission bottlenecks occur, and energy prices stabilize. 
"Even if all of the proposed plants came on line in two years rather than 
three, I think we still would have problems," he said. "Let's face it, demand 
for electricity in the Pacific Northwest and California is growing like 
crazy. So, until there is something done on the demand side, so we get some 
demand responsiveness, just attacking the supply side I don't think is going 
to do it."