I certainly agree on the tip of the iceberg point.  They do need to be
watched and watched carefully.  An isolated incident is one thing, a
pattern of losses is quite another.
         My experience with Campbell has been limited to watching him
operate in committee, and I have not been impressed.  I would be happy to
be surprised in the future.   MIKE



At 07:09 PM 7/24/2001 -0500, you wrote:

>Interesting points.  However, I don't ever recall you agreeing with every
>Commission decision on disallowances.  And I know you wouldn't establish
>differing standards for IOUs and state water agencies.
>
>I just hope that this isn't the tip of the iceberg.
>
>You really think that Campbell is a dim bulb?  A Republican, yes, but I
>haven't heard anyone else describe him as a dim bulb.
>
>Best,
>Jeff
>
>
>
>
>                     Mike
> Florio
>                     <mflorio@turn        To:     Jeff.Dasovich@enron.com
>
>                     .org>                cc:
>
>                                          Subject:     Re: Figures show
> state lost big on
>                     07/24/2001           extra
> power
>                     05:40
> PM
>
>
>
>
>
>
>
>
>Shame on you, Jeff!  I expect this sort of thing from inexperienced
>reporters and dim bulbs like Campbell.  But you KNOW that this sort of
>thing is no big deal.  And when did the PUC ever disallow these kinds of
>losses for the utilities?  I don't think my memory has gotten that bad.
>MIKE
>
>
>
>At 03:20 PM 7/24/2001 -0500, you wrote:
> >FYI.  Many similar stories in the major papers today.
> >
> >Best,
> >
> >
> >Jeff
> >
> >
> >Figures show state lost big on extra power
> >
> >
> >Posted at 9:53 p.m. PDT Monday, July 23, 2001
> >
> >
> >BY JOHN WOOLFOLK
> >
> >
> >Mercury News
> >
> >
> >State figures show California may have lost about $14 million this month
> >selling surplus electricity for less than it cost.
> >
> >
> >The Mercury News disclosed last week that some power was being sold at a
> >loss. But the new figures provide the first indication of just how much
> >excess power the state bought in its desperate effort to avoid blackouts
>--
> >and how cheaply some of that power was sold when it turned out not to be
> >needed.
> >
> >
> >A Republican lawmaker said Monday the loss also shows Democratic Gov. Gray
> >Davis' energy policies are needlessly costing consumers.
> >
> >
> >``This whole thing is a mess,'' said Assemblyman John Campbell, R-Irvine,
> >who requested details of the state's surplus power sales. ``The government
> >needs to get out of the power business before it costs Californians even
> >more money.''
> >
> >
> >A state spokesman didn't dispute the $14 million figure outright but said
> >it is an approximation based on average prices and that the actual loss
> >probably is less.
> >
> >
> >``It's a number I'm sure he likes very much, but it's definitely an
> >estimated number, and it could be far lower,'' said Oscar Hidalgo,
> >spokesman for the state Department of Water Resources.
> >
> >
> >Campbell responded that the loss also could be higher.
> >
> >
> >The state has spent $415 million on power so far this month.
> >
> >
> >State officials last week confirmed that cool weather and consumer
> >conservation have left California holding more power than it needs. The
> >revelation was a stunning turnaround for a state that months ago was
>paying
> >top dollar for power, expecting shortages this summer.
> >
> >
> >Price that was paid
> >
> >
> >The state bought 3.5 million megawatt-hours of electricity for July at an
> >average price of $118 per megawatt-hour, according to a response Friday by
> >the Department of Water Resources to Campbell's inquiry. The state has
>sold
> >178,000 surplus megawatt-hours in July at an average price of $37, the
> >department said.
> >
> >
> >Based on those average prices, the state paid $21 million for the surplus
> >power, which it sold for $6.5 million -- $14.5 million less than it cost.
> >
> >
> >A more precise calculation of the state's loss is difficult because
> >purchased power is acquired at different times and prices and pooled as a
> >``portfolio.''
> >
> >
> >Purchases included long-term contracts that averaged $138 per
>megawatt-hour
> >as well as cheaper spot-market buys.
> >
> >
> >State officials last week said they were selling surplus at $15 to $30 a
> >megawatt-hour, while some traders cited unconfirmed sales as low as $1.
> >
> >
> >Hidalgo noted that the surplus sales represent just 5 percent of
> >California's July purchases, which totaled $415 million. The $6.5 million
> >from sales will help lower the state's power bill, he said, adding that
> >utilities routinely sell some extra electricity.
> >
> >
> >``Despite the fact that we're in somewhat of a surplus, any power-buying
> >operation in the world is going to have to plan for these types of
> >situations,'' Hidalgo said. ``It's not unique, and in fact it's normal
> >operating procedure for any utility.''
> >
> >
> >Other Western utilities, including Portland General Electric in Oregon,
> >have said they, too, are selling some surplus power at a loss and describe
> >it as a cost of doing business.
> >
> >
> >The suppliers buying the state's surplus electricity on the cheap include
> >the big out-of-state energy companies that the governor has called
> >price-gouging ``snakes.'' Among them are Duke Energy, Dynegy Power and
> >Marketing, El Paso Power Services, Mirant, Reliant Energy and Williams
> >Energy.
> >
> >
> >`Best bid' taken
> >
> >
> >Hidalgo said the state took the best offers it could find.
> >
> >
> >``It's only reasonable to get the best bid you can,'' he said.
> >
> >
> >Campbell said the $14 million loss is troubling because ratepayers or
> >taxpayers will have to cover the cost, whereas a private utility could be
> >forced to eat the expense if regulators determined it was unreasonable.
> >
> >
> >State officials say what's more important is that the overall cost of
>power
> >is dropping, from an average daily tab of $64 million in May to $25
>million
> >this month, in part because the state has so much power.
> >
> >
> >Contact John Woolfolk at jwoolfolk@sjmercury.com <
> >mailto:jwoolfolk@sjmercury.com> or (408) 278-3410.