Jeff,
Below are a bunch of articles with quotes from Sen. Dunn & Sen. Peace.  Hope 
it helps, let me know if you need more or if you are looking for something 
else.  
Thanks, A.


Calif Lawmakers Seen Adjourning Without Deal For Edison
By Jason Leopold

07/23/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

OF DOW JONES NEWSWIRES 

LOS ANGELES -(Dow Jones)- The California Legislature is unlikely to pass a 
bill to rescue insolvent utility Southern California Edison before an Aug. 15 
deadline, key lawmakers said Monday.
The state Assembly is expected to adjourn for a monthlong break later Monday 
after it votes on the state's $101 billion budget, which has been fought over 
in both houses for more than a month. The Senate approved the budget early 
Saturday morning 
Once the budget is approved, Assembly members plan to leave for summer 
recess, according to Assembly Speaker Pro Tem Fred Keeley's office, and some 
said they won't return until Aug. 20. 
"I'm fairly sure nothing, other than behind-the-scenes talks will take place 
until after the break," said Sen. Joe Dunn, D-Santa Ana, chairman of the 
Senate committee investigating price gouging by generators. 
Jamie Fisfis, spokesman for the Assembly Republican Minority Caucus, said GOP 
members are leaving for trips and have no intention of returning before Aug. 
20. 
Failure to approve a rescue by Aug. 15 would put the Edison International 
(EIX) utility in a difficult spot. Southern California Edison, in default on 
debt obligations and power bills, is banking on a political solution and has 
said its creditors could drag it into bankruptcy if lawmakers don't pass a 
relief measure by the deadline. 
Gov. Gray Davis, who is also counting on a political solution, may call a 
special session to force action on a rescue plan if lawmakers don't pass 
something before recessing. 
"The governor said he will not hesitate to call a special session if he needs 
to," spokesman Steve Maviglio said. Senate President Pro Tem John Burton, 
D-San Francisco, has disputed the governor's authority to do so. 
Brian Bennett, Edison International's vice president of external affairs, 
remained optimistic that a rescue agreement can be worked out before Aug. 15. 
"There's a group of naysayers out there saying this is not going to get 
done," Bennett said. "The Senate is on the record saying a legislative 
solution is better than bankruptcy. And for the millionth time, this company 
has no intention of filing for bankruptcy." 
Assembly Speaker Bob Hertzberg, D-Van Nuys, and Keeley, D-Boulder Creek, who 
sponsored legislation to rescue Southern California Edison but failed to gain 
the support of a majority of the Assembly, are expected to hold work sessions 
this week to put together a comprehensive piece of legislation that can gain 
the support of the Senate, Gov. Gray Davis and the utility. 
It's unclear who will participate in the work group or whether lawmakers can 
hammer out legislation and pass it before the Aug. 15 deadline set in a 
memorandum of understanding Southern California Edison Ed signed with the 
state in April. 
The MOU calls for the state to buy the utility's transmission lines for $2.76 
billion and enable it to issue debt backed by ratepayers to recoup $3.5 
billion in unrecovered wholesale power costs. 
Each house of the state Legislature is working on its own plan, neither of 
which would implement the MOU in full. 
The Senate bill, which narrowly passed that body Friday, would allow Southern 
California Edison to recover $2.5 billion of its power costs by issuing bonds 
and give the state a five-year option on the utility's transmission lines. 
Edison executives have already said the bill doesn't provide the company with 
sufficient funds to become creditworthy. 
-By Jason Leopold, Dow Jones Newswires; 323-658-3874; 
jason.leopold@dowjones.com

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

California; Metro Desk
Sanctions Against Enron Urged Electricity: A state Senate panel probing 
suspected price gouging says the Houston generator refuses to disclose 
documents.
CARL INGRAM
TIMES STAFF WRITER

07/22/2001
Los Angeles Times
Home Edition
B-1
Copyright 2001 / The Times Mirror Company

SACRAMENTO -- A Senate committee investigating suspected price gouging in the 
California electricity market recommended Saturday that a Texas generator be 
found in contempt and fined for refusing to disclose top-secret business 
records. 
The special committee recommended the actions against Enron Corp. of Houston, 
a major wholesaler of electricity. Swift ratification by the full Senate is 
expected.
The committee, investigating whether generators have manipulated prices to 
drive up profits during the state's energy crisis, urged that Enron be fined 
an initial $1,000 and that the cumulative sum be doubled for each day the 
company continues to defy the panel. 
In its controversial probe, the committee has found eight power sellers in 
contempt for failure to produce subpoenaed documents about their production 
and pricing practices. Recently, six of the companies have sought to have the 
contempt citations cleared by agreeing to hand over the records. 
But Enron and Reliant Energy have refused. Last week, the committee voted a 
second time to hold Reliant in contempt, but has so far suggested fines only 
against Enron. 
If Enron obeys the demand to turn over its trade secrets and other 
confidential information before the full Senate acts, the contempt action 
will be stopped, lawmakers said. 
"We have no hope they will comply," said Sen. Joe Dunn (D-Santa Ana), 
committee chairman. 
Senate President Pro Tem John Burton (D-San Francisco) said upper chamber 
approval of the committee's recommendations would occur quickly, but called 
the progressively severe fines "pocket change" for Enron. 
"Ken Lay spends more than that on his Rolex watches," Burton said of Enron 
Chairman Kenneth Lay. 
An Enron official, Karen Denne, said the committee's recommendations took the 
company by surprise. She said Enron had been working in "good faith" with the 
committee to provide the information, but now was being exclusively targeted 
for punishment. 
"No one else has been singled out by the committee. Why is Enron being 
singled out?" she said. 
Denne said Enron in the last week had agreed to provide all its California 
transaction documents for last year. "That's far more than anyone else has 
turned over," she said. 
She conceded that the records did not detail out-of-state transactions, which 
the committee also had subpoenaed. 
Enron has refused to let the committee inspect its records, contending that 
the Federal Energy Regulatory Commission is the only regulatory entity that 
can legally investigate and control the wholesale electricity market in 
California. 
Enron and other generators also argued that their most closely guarded trade 
secrets would be put at risk of exposure to competitors if they were given to 
the committee, even under confidentiality agreements proposed by the panel. 
Though it is rarely used, the Senate last exercised its contempt power in 
1929 during a price-fixing investigation of the cement industry. Several 
executives were found in contempt for refusing to answer questions and were 
ordered to jail. 
The state Supreme Court, however, voided the contempt citations on grounds 
that the Senate's demands for information were too vague. 
Dunn said the committee considered recommending other punishments, including 
the jailing of top Enron executives and forbidding the firm from doing 
business in California as long as it was in contempt. 
He said the committee, which adopted the report on a unanimous bipartisan 
vote, agreed that payment of fines, known as "coercive penalties," was the 
best choice. 
The Senate ordered the investigation last winter as Gov. Gray Davis declared 
the state to be in an "energy emergency" and a series of rolling blackouts 
was imposed statewide. 
At the time, wholesale generators, most located out of state, were charging 
what some called "rip-off" prices. Davis has asked the federal government to 
order generators to refund almost $9 billion in alleged overcharges, but 
indications are that only about $1 billion may be paid. 
The committee was charged with examining the wholesale market and making 
recommendations for legislation if abuses were found. 
The committee subpoenaed Enron and seven other generators in April, insisting 
that they turn over millions of records relating to bidding strategies, 
prices, energy availability and documents dealing with possible antitrust 
issues, including out-of-state transactions. 
All the companies initially defied the subpoenas. But under the threat of 
contempt, most recently have said they will provide the information under 
confidentiality agreements. 
Enron and Reliant of Houston held out. Enron filed 20 objections to the 
subpoenas and argued that the committee's investigation was out of bounds. 
Reliant has sued the committee in Sacramento Superior Court to stop the 
investigation, charging that the panel violated the company's rights to due 
process and refused to hear its objections to the subpoena.

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

NEWS
THE ENERGY CRUNCH / Power firms' financial records destroyed, state is told
Robert Salladay
Chronicle Sacramento Bureau

07/22/2001
The San Francisco Chronicle
FINAL
A.9
(Copyright 2001)

A state Senate committee is investigating why Morgan Stanley, a financial 
adviser to several power generators, destroyed documents that could show a 
well-planned effort to gouge California consumers. 
After several weeks of asking for the documents, and getting a positive 
response from Morgan Stanley, the Senate committee was told last week that 
the documents were destroyed as a matter of routine "years ago."
"I got a call Wednesday from a Washington, D.C., counsel for Morgan Stanley, 
who said, 'I regret to inform you the documents have been destroyed,' " Sen. 
Joe Dunn, D-Santa Ana (Orange County), chairman of the Senate investigating 
committee, said yesterday. 
The revelation came as the Senate moved against another company under 
scrutiny by Dunn's committee -- Enron Corp., the world's largest energy 
trader. The Senate was meeting yesterday to vote on the 2001-02 state budget 
but approved another step in contempt proceedings against Houston's Enron for 
its refusal to hand over documents to committee investigators. 
The central question is whether power companies colluded to raise prices by 
purposely withholding electricity. At one point this year, the price of power 
was the highest in state history -- more than $5,000 per megawatt -- as 
supplies sank to unusually low levels. 
The Senate inquiry into Morgan Stanley involves activity years before the 
energy crisis. Investigators suspect that power companies and their financial 
advisers knew well before the crisis began that prices could be raised. Any 
records confirming that suspicion would be evidence of extraordinary market 
power. 
At the time deregulation was being implemented during the late 1990s, nearly 
everyone involved was talking about how competition would push down the price 
of electricity. At the same time, however, power companies like North 
Carolina's Duke Energy Corp. were paying inflated prices to purchase power 
plants in California. 
After deregulation, the power companies paid nearly $2 billion total for 
aging plants worth an estimated $1.1 billion. 
"Electricity prices were stable and there was an oversupply (of energy) at 
the time, and these were the oldest units they were buying," Dunn said. "Why 
would they pay two or three times for these plants?" 
Dunn requested that Morgan Stanley (now called Morgan Stanley Dean Witter) 
provide all the supporting documentation regarding the purchase of the 
plants. He said he received commitments from company attorneys that no 
documents had been destroyed. 
A representative with Morgan Stanley declined to comment yesterday. But a 
Morgan Stanley attorney told the Orange County Register, which reported the 
story yesterday, that the company did not destroy any documents after the 
first May 16 request from Dunn's committee. 
"At the end of the project, they decided what they were going to keep and 
what they weren't going to keep, and those decisions were made years before 
the energy crisis and years before this committee existed," attorney Paul 
Patono told the Register. 
Dunn noted it is not illegal to raise prices or exert "market power," as long 
as the energy companies don't collude. But the issue is important to federal 
regulators, who could impose price controls on energy if they believe the 
system is not truly competitive. 
Only a few power firms have refused to hand over documents that the Senate 
committee has requested. Last week, Dunn's committee voted to move forward 
with contempt fines against Enron and Reliant Energy. They also authorized 
the committee to depose executives from the companies. 
Dunn also has recommended fines that would start at $1,000 on the first day 
and double each subsequent day. A $1,000 fine imposed on a Monday would rise 
to $16,000 by Friday, then double to $32,000 on Saturday. A week of delay 
would cost Enron $127,000. 
Senate President Pro Tem John Burton, D-San Francisco, and the Rules 
Committee he controls have the option to raise the fines even higher. They 
plan to take up the matter this week. 
"They can afford it," Burton said yesterday about the proposed fines against 
Enron. "That's like pocket change. Ken Lay (chairman of Enron) spends more 
than that on his Rolex watches." 
Enron representatives could not be reached for comment. Their attorneys have 
previously told Senate investigators that they want a confidentiality 
agreement to protect their bidding practices from being made public.

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

Senate committee told Morgan Stanley destroyed power records

07/22/2001
Associated Press Newswires
Copyright 2001. The Associated Press. All Rights Reserved.

SACRAMENTO (AP) - A state Senate committee wants to know why Morgan Stanley, 
a multibillion dollar financial firm and adviser to several power generators, 
destroyed documents that potentially could show efforts to gouge California 
consumers. 
The company recently also has come under the scrutiny of an Oregon lawmaker 
who is concerned the company's purchase of the rights to move power between 
California and Oregon could result in artificially high prices.
For several weeks, Morgan Stanley had told the committee it would provide the 
documents, but said last week they had been destroyed as a matter of routine 
"years ago," said Sen. Joe Dunn, D-Santa Ana, the committee's chairman. 
Members of the committee are trying to determine whether power companies 
worked together to raise prices by purposefully holding back electricity to 
drive up demand. 
Morgan Stanley's involvement would have been several years ago, when it 
advised out-of-state energy companies to buy California power plants up for 
sale. 
A Morgan Stanley attorney told the Orange County Register that the company 
did not destroy any documents after Dunn's committee requested the documents 
May 16. 
"At the end of the project, they decided what they were going to keep and 
what they weren't going to keep, and those decisions were made years before 
the energy crisis and years before the committee existed," said Paul Patono, 
a company attorney. 
Dunn noted it is not illegal to raise prices as long as a company doesn't 
collude to force prices upward. 
Private utilities became able to sell their plants as part of the 1996 plan 
to deregulate the electricity market. Although the plants were expected to 
sell below their book value, they instead sold for up to three times that 
price, although the state then had an oversupply of electricity and old 
plants. 
While the public was told deregulation would lead to lower electricity 
prices, energy officials and experts testifying before the committee have 
said it's unlikely investors would buy aging power plants if they believed 
that to be true. 
Dunn is curious if there was any kind of plan or advertising that said the 
plants, if bought a certain way, would give of the buyers market power in the 
wholesale electricity market. 
The committee is still moving forward with contempt proceedings against 
Houston-based power marketers Enron Corp. and Reliant Energy for refusing to 
hand over documents to committee investigators. 
New York-based Morgan Stanley, now Morgan Stanley Dean Witter & Co., got into 
the energy trading in 1984 and now is one of the top 20 U.S. power marketers. 
The company also has come under the scope of Rep. Peter DeFazio, D-Ore. 
Morgan Stanley bought the rights to transmit just under a third of the power 
flowing between California and Oregon from the Bonneville Power 
Administration through February 2002. 
DeFazio has written a letter to the BPA, asking that the agency make sure the 
Northwest keeps its "reliable, affordable" energy source. 
"The ability of a financial services company, which has no obligation to 
serve electricity consumers, to lock up all available capacity for a year 
raises serious concerns," DeFazio wrote. 
A company spokeswoman said Morgan Stanley acquired the transmission capacity 
from BPA to meet its power delivery obligations in the Northwest, and had no 
intention of manipulating the market. 
--- 
On the Net: 
http://www.msdw.com

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

USA: UPDATE 1-Calif. govt panel wants Reliant cited for contempt.

07/18/2001
Reuters English News Service
(C) Reuters Limited 2001.

SACRAMENTO, Calif., July 18 (Reuters) - A California legislative panel voted 
on Wednesday to ask the state Senate to cite Reliant Energy Inc. for contempt 
for failing to comply with a subpoena seeking confidential documents. 
The Senate Select Committee to Investigate Market Manipulation voted 6-0 to 
move against Houston-based Reliant, which joins fellow Texas energy giant 
Enron Corp. in facing what could be the first contempt citations imposed by 
California's state senate since 1929.
State Sen. Joe Dunn, the Democratic chair of the panel investigating charges 
of market manipulation and price gouging in California's energy crisis, would 
now begin preparing a full report on Reliant's noncompliance for the full 
Senate. 
The committee's report on Enron could be ready for submission to the full 
Senate Thursday, he said, adding that continued efforts to negotiate an 
agreement had proved fruitless. 
"We have been discussing this with them virtually every single day, and they 
are not in compliance yet," Dunn told Reuters. "Twenty-four hours ago I was 
cautiously optimistic about them, I am now back to pessimistic." 
According to state law, California's senators must use the reports to decide 
whether to slap sanctions on the two companies. They also have the option of 
fining or imprisoning company senior officers. 
Enron, for its part, has filed a lawsuit in Sacramento Superior Court 
challenging the investigative committee's authority to subpoena company 
documents. 
Senate aides said Reliant could follow the lead of another energy company, 
Atlanta-based Mirant Corp. , which has avoided the contempt threat by 
cooperating with legislators' demands to sign confidentiality agreements, 
open a document depository close to Sacramento, and begin placing documents 
there relating to the company's recent business in California. 
The vote against Reliant came despite the company's offer of some 10,000 
documents in an effort to satisfy some of the compliance requirements. 
Larry Drivon, special counsel with the select committee, said Reliant's offer 
represented far fewer documents than some other generators have produced, and 
that "virtually none" of the Reliant documents offered addressed the main 
points of concern as cited in the legislative subpoena. 
"What we've gotten this time is both insignificant and largely irrelevant," 
Drivon said. 
The committee also voted on Wednesday to suspend for 30 days proceedings 
against number of other energy firms, including Duke Energy Corp. , Dynegy 
Inc. , Williams Cos. Inc. , AES Corp. and NRG Energy Inc. , pending a review 
of their compliance efforts to date. 
Enron has argued the committee has no legal jurisdiction over wholesale 
electricity prices, which are regulated by the Federal Energy Regulatory 
Committee (FERC), and that the committee's proceedings violate the company's 
legal rights. 
State officials have accused the energy companies of overcharging California 
power agencies and utilities some $8.9 billion for wholesale electricity over 
the past 14 months, which saw power prices in the state soar tenfold. 
Independent energy merchants have blamed the price spike on the state's 
poorly designed electricity deregulation law and a failure to build enough 
power plants to meet the growing needs of its 34 million residents and its 
industries.

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

Calif Senator: Enron Contempt Charge Seen Dropped Tue

07/16/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LOS ANGELES -(Dow Jones)- A California Senate committee is likely to drop a 
contempt charge against Enron Corp. (ENE) Tuesday because the company is 
close to agreeing to provide information for an investigation into wholesale 
electricity prices, Sen. Joe Dunn, D-Santa Ana, said late Monday. 
"There has been a dramatic change, and I am optimistic that by noon (Tuesday) 
there will be a resolution with Enron," said Dunn, who chairs the Senate 
Select Committee to Investigate Market Manipulation.
The committee voted last week to forward a contempt charge to the full Senate 
because Enron refused to provide certain financial documents and sign the 
committee's version of a confidentiality agreement. If the full Senate voted 
to hold Enron in contempt, it could issue punishments including hefty fines 
and incarceration of executives. - - 17/07/01 00-46G 

The committee also voted last week to drop its contempt charge at any time 
before a full Senate vote if Enron agreed to meet the committee's requests. 
"Enron has chosen to intimate to us that they will comply with our demands. 
They have asked us for the ability to preserve certain objections. There's a 
possibility we may be sued by other market participants, and if so, Enron 
wants to preserve its opportunities to pursue objections at that time," Dunn 
said. 
Enron filed a lawsuit last week to stop the committee's subpoena of financial 
records, and a company attorney said during hearings that Enron was likely to 
contest the contempt charge as well. 
In talks Monday, however, Enron mentioned the possibility of dropping the 
lawsuit, Dunn said, which is not a requirement to the committee's dropping 
the contempt charge. 
No-one at Enron could be reached immediately for comment. 
The documents sought by the price manipulation committee include information 
on bidding and pricing behavior in the state's electricity markets. The 
committee originally was poised to cite seven other electricity generators 
for contempt, but all eventually agreed to provide the requested information. 
-By Jessica Berthold, Dow Jones Newswires; 310-962-2843; 
jessica.berthold@dowjones.com -0- 17/07/01 01-32G

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

News
Contempt vote targets power firm Subpoena Enron Corp. refuses to relinquish 
documents to state Senate panel. Series: energy.0712
JOHN HOWARD
The Orange County Register

07/12/2001
The Orange County Register
1
PageD

SACRAMENTO A Senate committee probing California's troubled energy market 
urged the full Senate to declare Enron Corp. in contempt for shunning a 
legislative subpoena, a move that could put the defiant power company's top 
executives at risk of arrest as early as next week. 
Shortly before the bipartisan vote, the Texas-based energy merchant sued the 
committee in a Sacramento Superior Court four blocks from the Capitol, 
contending lawmakers' demands for documents exceeded their jurisdiction, 
jeopardized confidential business information and trampled the company's 
rights.
The panel -- the Select Committee to Investigate Price Manipulation of the 
Wholesale Energy Market -- voted 6-0 in favor of the contempt finding. The 
decision means a report will be offered to the Senate, which has final 
authority to approve it. That decision could be made by early next week, 
although it could be postponed or withdrawn if the company cooperates, said 
Sen. Joe Dunn, D-Santa Ana. 
If upheld, the Senate then will have broad authority to impose sanctions, 
including daily fines until the documents are produced or even arrests of 
company executives, said Clark Kelso, a law professor at the University of 
the Pacific's McGeorge Law School. A simple majority vote in the 40-member 
Senate is required. 
Enron spokeswoman Karen Denne disputed the authority of the Senate to order 
arrests. "Our key executives do not even live in the state of California. The 
first issue here is jurisdiction. They (California senators) don't have 
jurisdiction outside the state." 
The full Senate is likely to endorse the contempt finding. There is 
bipartisan sentiment for it, and lawmakers often unite when legislative 
authority is challenged. 
In one major case, a company official was held in contempt and briefly jailed 
until he agreed to cooperate with the Legislature during a investigation of a 
concrete company in 1929. 
"What they do in these circumstances can include sending the sergeant at arms 
out to arrest responsible officials and bring them back before the committee. 
Arrest, contingency fines -- they have a wide range of options," said Kelso, 
a legal trouble-shooter for the Davis administration. 
Matthew G. Jacobs, an attorney, former federal prosecutor and a legal 
consultant to the Legislature, agreed. 
"The government code says the Senate can take whatever action they deem 
appropriate," Jacobs said. The Senate could even refer the contempt finding 
to a local prosecutor, who could file misdemeanor criminal charges. 
Denne said the committee's investigation, and its contempt vote, was an 
attempt to "find a political scapegoat." 
Contact Howard at (916) 449-6687 or jhoward@ocregister.com

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

NEWS
CALIFORNIA POWER CRISIS
Senate panel, energy firm fighting tough
Bill Ainsworth
STAFF WRITER

07/12/2001
The San Diego Union-Tribune
1,2,6,7
A-3
(Copyright 2001)

SACRAMENTO -- A Senate panel moved a step toward holding Enron, an energy 
trading firm, in contempt for refusing to turn over documents senators hope 
can shed light on the state's soaring energy prices. 
Enron fired back by filing a lawsuit yesterday asserting that only the 
federal government has the authority to investigate the power market.
The panel, which had previously reached agreements with all the other major 
generators and marketing companies in California, voted 6- 0 to prepare a 
contempt recommendation for the Senate to consider next week. 
The Senate, which last issued a contempt citation in 1929, must approve any 
contempt recommendation. It then has wide-ranging powers to impose fines or 
jail time. 
The chairman of the Senate committee, state Sen. Joe Dunn, D- Laguna Nigel, 
said that if Enron agrees to turn over documents to the committee soon, then 
he will recommend that contempt proceedings be dropped. 
The Senate Select Committee to Investigate Market Manipulation also decided 
yesterday to drop contempt proceedings against Mirant, an Atlanta-based 
marketing company, because it had agreed to turn over documents. 
The dispute also touched on broader issues. 
Enron, the politically connected Houston-based marketing company, has been 
pushing electricity deregulation throughout the world. Company chairman 
Kenneth Lay is a friend and campaign contributor to President Bush. 
Last month the firm helped sponsor a congressional fund-raiser featuring the 
president, where contributors in tuxedos and gowns dined and drank around a 
giant gold "W" that reached to the rafters at the Washington Convention 
Center ballroom. 
Enron has also helped shape Bush's energy plan. It is one of several major 
donors accused of meeting secretly with Vice President Dick Cheney to draft 
the plan. 
Several senators on the panel disputed Enron's claim that only federal 
regulators, and not the state government, could investigate the electricity 
market. 
Further, they blasted the company for saying that California could not have 
access to documents stored outside the state at the firm's Houston 
headquarters. 
State Sen. Steve Peace, D-El Cajon, said the company was so defiant that it 
looked suspicious. 
"Your client doth protest too much," he said to Enron's attorney, Michael 
Kirby. "One can only wonder: What do you have to hide?" 
But Kirby said the company merely wanted to protect confidential information 
and get answers to its objections. That, he said, is why it filed a lawsuit 
contesting the committee's power to seek documents that Enron claimed would 
reveal trade secrets. 
Peace, however, took issue with the lawsuit, calling it a dramatic escalation 
in the dispute over an energy crisis that has cost the state billions. 
"You just declared war on this state's political system," he said.

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

NEWS
Enron files suit over subpoena / Provider challenges move for documents
Lynda Gledhill
Chronicle Sacramento Bureau

07/12/2001
The San Francisco Chronicle
FINAL
A.15
(Copyright 2001)

In another escalation in the war between California and out-of- state energy 
providers, Enron Corp. filed a lawsuit yesterday challenging the 
Legislature's authority to subpoena company documents. 
The suit came as a Senate panel investigating market manipulation voted 6 to 
0 to move forward with a contempt motion against Enron. A report will be 
forwarded to the full Senate early next week if the marketer continues to 
refuse to comply with the subpoena.
"You just went to war with the state of California," Sen. Steve Peace, D-El 
Cajon, told the lawyer representing Enron. ". . . You already initiated a war 
economically; now you're in a political war." 
The Senate committee investigating price manipulation found Enron and Mirant 
Corp. in contempt last month for not turning over subpoenaed documents. The 
finding against Mirant was vacated yesterday because it agreed to turn over 
documents. 
The committee, chaired by Sen. Joe Dunn, D-Santa Ana, requested documents 
from power providers in early April. When the requests were ignored, the 
committee issued subpoenas asking generators for documents covering business 
plans, operations, risk management and investment strategies. 
Peace argued that forcing a judge to decide the scope of the Legislature's 
authority could provoke a constitutional crisis. 
"You are treading into the territory of asking the court to make judgment on 
the rules and the law governing the rights of the Legislature," Peace said. 
"It is a separation of powers issue of the highest order." 
But Michael Kirby, a lawyer hired by Enron, said the Houston company was 
simply looking for due process. 
"A subpoena is a subpoena and once you go that route you must comply with the 
law," he told the committee. "We are entitled to some kind of hearing with a 
neutral arbitrator. It was not our preference to file a lawsuit." 
Kirby and the lawsuit cite several objections to the Senate's subpoena. These 
include the confidentiality of the documents and whether a California body 
can require documents from outside the state. Enron also says that only 
federal regulators have the power to subpoena their records. 
Kirby and members of the committee disagreed over the scope of what a 
legislative subpoena covers versus one used in a criminal matter. 
"I think there is a fundamental misunderstanding about our legislative 
inquiry," Dunn said. "We are not drawing conclusions about guilt or 
innocence. We want to see what fixes must be made in the law." 
Kirby did say Enron has set up a depository in Sacramento and has 30,000 
documents ready to be deposited, pending an agreement can be reached on 
confidentiality issues. 
But that is not good enough for committee members, who believe that Enron has 
continue to evade the committee. 
"We have no indication that Enron ever intends to comply with the subpoena," 
said Sen. Debra Bowen, D-Marina del Ray.

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

California Officials Press Contempt Findings against Houston-Based Power Firm
Emily Bazar

07/12/2001
KRTBN Knight-Ridder Tribune Business News: The Sacramento Bee - California
Copyright (C) 2001 KRTBN Knight Ridder Tribune Business News; Source: World 
Reporter (TM)

State legislators pressed forward with contempt findings against Enron Corp. 
on Wednesday after the company failed to produce subpoenaed documents and 
filed a lawsuit asking the court to intervene on its behalf. 
Lawmakers on a special Senate committee investigating electricity price 
manipulation warned that the voluminous lawsuit, filed in Sacramento Superior 
Court, could have far-reaching implications for the Legislature's ability to 
conduct investigations and make findings. A few even suggested the legal 
action could trigger "a constitutional crisis" that could end up in the 
California or U.S. supreme court.
"You are treading into the territory of asking a court to make judgment on 
the rules and the law governing the rights of the Legislature," said state 
Sen. Steve Peace, D-El Cajon. "It is a separation of powers issue of the 
highest order." 
Representatives from Enron, a power marketer based in Houston, said they are 
merely concerned that the committee has violated their due process rights. 
Enron and another company, Mirant, were initially found in contempt by the 
committee June 28 for refusing to turn over thousands of pages of documents 
that had been subpoenaed June 11. 
But the committee offered the companies a reprieve. If they complied with the 
subpoenas, signed confidentiality agreements and set up a document depository 
in Sacramento by Tuesday, the contempt findings would be expunged. 
Committee attorney Laurence Drivon reported at the hearing that Mirant had 
complied with the requirements, and had set up a document depository in the 
U.S. Bank building downtown. 
Mirant spokesman Patrick Dorinson said 159,000 pages of documents had been 
turned over in 44 boxes as of Wednesday morning. 
As a result, the panel voted to purge the contempt findings against Mirant, 
but said it would review the company's compliance again in about 30 days. 
Enron, however, did not turn over any documents or sign a confidentiality 
agreement since the last hearing, Drivon said, and negotiations yielded 
little progress. On a 6-0 vote, the panel agreed to move forward with 
contempt proceedings against Enron. 
As early as next week, the committee will forward a report to the Senate, 
which will vote on the contempt findings and levy punishments that could 
range from jail time for company officials to steep fines. 
The panel said Enron could still purge the contempt findings if it complies 
with the subpoena before the report is forwarded. 
But company officials fired back at the committee, accusing members of 
unfairly singling out Enron and treating it differently from other energy 
companies. 
"It is exceedingly difficult to discern whether the committee's actions are 
designed to uncover the facts underlying the price spikes in California's 
wholesale electric power market, or to create a convenient political 
scapegoat to shoulder the blame for California's policy mistakes," one 
official wrote to the committee. 
All along, Enron officials have said they have several objections to the 
committee's process. They believe the panel is violating the Federal Energy 
Regulatory Commission's jurisdiction in its investigation; that it isn't 
entitled to documents that are stored outside California; and that it doesn't 
have the right to the confidential information and trade secrets in the 
documents. 
They also argue that their due process rights have been violated because they 
received no response to their written objections to the subpoena before the 
June 28 contempt vote. 
The committee chairman, Sen. Joe Dunn, D-Santa Ana, overruled most of their 
objections Wednesday. However, Enron officials argued it's unfair for a 
committee member to rule on their objections. 
"It is a foregone conclusion that the objections are going to be overruled," 
Enron lawyer Michael Kirby said at the hearing. 
Officials believe an impartial third party should determine the merits of 
their concerns, which was a primary reason the company filed the lawsuit, 
said Enron spokeswoman Karen Denne. 
In the lawsuit, Enron seeks a court injunction to end contempt proceedings 
until the company's objections "have been duly considered and ruled upon by 
an impartial hearing officer." 
But Dunn said the Legislature's investigations are different from court 
inquiries, and so are its procedures. "The same due process concerns 
applicable to a court proceeding are not equally applicable to an 
investigation by the Legislature," he said. 
He denied the committee had singled out Enron, and said he believes Enron's 
lawsuit is really asking the court to force the Legislature to end its 
investigation. 
The committee is scheduled to consider contempt findings against other power 
companies next week. 
"Enron (has) raised, potentially, a constitutional crisis with this 
litigation," Dunn said. 
Constitutional scholar Clark Kelso said legislators clamoring about a 
constitutional crisis may be exaggerating. But Kelso, a professor at McGeorge 
School of Law in Sacramento, believes the suit should be dismissed because it 
is premature. He said the contempt process is still under way in the Capitol, 
and has yet to be acted upon by the Senate. 
Reacting to Enron's claims that an impartial third party should hear its 
objections, Kelso also disagreed. "A court is not going to hold a Senate 
committee to the same standard of impartiality it would hold a judge to," he 
said.

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

California Senate Committee Pushes Enron Contempt Citation Forward

07/11/2001
Dow Jones Business News
(Copyright (c) 2001, Dow Jones & Company, Inc.)

Dow Jones Newswires 
LOS ANGELES -- A California Senate committee voted Wednesday to forward to 
the full Senate a contempt charge against Enron Corp. because the company 
refuses to provide certain financial documents for an investigation into 
wholesale power prices in the state.
If Enron is deemed to be in contempt by the full Senate, the legislators will 
vote on punishments that could include fines against the company or 
incarceration for company executives. 
"When Enron decides it is so important to keep its information private, I can 
only assume there is much more there to find than I can imagine," said Sen. 
Steve Peace (D., El Cajon), a member of the Senate Select Committee to 
Investigate Market Manipulation. 
Enron (ENE) filed a lawsuit Tuesday to stop the Senate's subpoena of 
financial records, saying the documents were outside of California's 
jurisdiction. 
The Houston company also is likely to legally contest the contempt charge, an 
Enron attorney said during Wednesday's hearings. 
The market manipulation committee will forward its contempt report to the 
full Senate by early next week, at the earliest, said Sen. Joe Dunn (D., 
Santa Ana), chairman of the committee. 
If at any point between now and then Enron decides to comply with the 
committee's requests, the contempt charge will be dropped, Sen. Dunn said. 
The committee also voted not to recommend a contempt charge for Mirant Corp 
(MIR), which agreed to provide financial documents Wednesday morning shortly 
before the hearing. 
The documents sought by Mr. Dunn's committee include information on bidding 
and pricing behavior in the state's electricity markets. The committee 
originally was poised to cite eight electricity generators for contempt, but 
all except Enron have since agreed to provide the requested information. 
Write to Jessica Berthold at jessica.berthold@dowjones.com 
Copyright (c) 2001 Dow Jones & Company, Inc. 
All Rights Reserved

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

California; Metro Desk
Duke Energy Asked to Allow Release of Data Power: Senator says the generator 
is refusing to make public some information crucial to the price-gouging 
probe. Firm says it's complying.
CARL INGRAM
TIMES STAFF WRITER

07/10/2001
Los Angeles Times
Home Edition
B-8
Copyright 2001 / The Times Mirror Company

SACRAMENTO -- The chairman of a Senate committee probing suspected price 
gouging during the California energy crisis charged Monday that Duke Energy 
is refusing to allow him to make public information key to his investigation. 
Sen. Joe Dunn (D-Santa Ana) said Duke has made the price bidding information 
from its Chula Vista plant available to committee members and staffers. But 
under a federal confidentiality rule, the data cannot be made public without 
Duke's consent.
The documents concern the Chula Vista plant, which former employees have 
alleged was ramped up and down to drive up power prices during three days in 
January. However, state records show that the agency overseeing the 
electricity grid ordered those gyrations to keep the power flowing throughout 
the state. 
Dunn said Duke's refusal thwarts the committee's investigation and efforts to 
enact possible remedial legislation because the confidential information 
cannot be shared with others in the Legislature or the public. 
Dunn said Duke cited a rule of the Federal Energy Regulatory Commission that 
gives the company the authority to decide which records it makes public and 
which stay secret. 
"The only one who can release the data is Duke. We agreed to be bound by what 
is provided in the FERC tariff, nothing more or less," he said. 
Former Employees Tell of Maneuvers 
Dunn noted that the committee is considering trying to obtain the information 
elsewhere and "release it over Duke's objections." 
Three former workers at the Duke plant near Chula Vista testified last month 
under oath that the plant, among other things, was ramped up and down in what 
seemed to be an effort to maximize revenue during the Jan. 16-18 emergency. 
But Duke countered immediately that it had merely obeyed orders of the 
California Independent System Operator, which keeps the state's electricity 
grid in balance. Duke later provided Cal-ISO documents backing up its 
explanation. 
Duke executives insisted that the former employees failed to provide a full 
picture of the plant's operation during the three days. 
But Dunn, chairman of the select Senate committee on alleged price gouging, 
said Monday that by refusing to authorize release of all the subpoenaed data, 
Duke was guilty of the same tactics. 
"Duke is trying to draw the impression that it has [provided] the full 
picture. But they are fully aware that we cannot draw any final conclusions 
until all that data has been released. That hasn't occurred," Dunn said. 
To make a determination whether the Chula Vista power was withheld to drive 
up prices, Dunn said, the committee must publicly examine "the bids Duke 
submitted from which the ISO issued orders to the plant." They include the 
expensive hour-ahead and day-ahead markets, he said. 
Duke, a North Carolina-based wholesaler that operates several plants in 
California, noted that it considers the information proprietary and 
off-limits to legislators not on the committee. 
Duke spokesman Tom Williams insisted that the generator is attempting to 
comply with the committee's demands. But he was unable to say whether Duke 
would agree to make the bidding documents public along with other records the 
committee plans to turn over. 
"We are complying now," Williams said. "There is some suggestion that we are 
leaving stuff out when we have not had a chance to testify. . . . I don't 
know what we are ultimately going to do." 
The committee had threatened to cite eight wholesale generators unless they 
provide pricing and bidding documents by Wednesday. Six, including Duke, have 
said they would comply to avoid a contempt citation. Two, Enron and Mirant, 
were cited. 
Dunn said the committee on Wednesday likely will give companies that are 
trying to comply an extra week to do so, but others probably will be formally 
charged with contempt in a report to the full Senate. The upper house is the 
final arbiter of such issues. 
Although there is scant precedent for levying penalties against those cited 
for contempt, Dunn said he favors imposing severe fines. In 1929, the most 
recent case, a cement company executive was sent to jail.

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

Calif Pwr Plant Outages Dn In Jun, Still Top 2000 -Report

07/09/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LOS ANGELES -(Dow Jones)- The average amount of electricity generating 
capacity unavailable to California due to breakdowns or planned maintenance 
at power plants fell by half in June from the three previous months, the 
California Energy Commission said Monday. 
But the 6,758 megawatts of generation that was off line on average last month 
was still more than twice the 2,683 MW off line in June 2000.
Generators, including Duke Energy (DUK), Reliant Energy Inc. (REI) and Dynegy 
Inc. (DYN), said that's because the half-century-old power plants ran at 
maximum capacity during the past year to help cover the state's massive 
electricity shortfall. 
Generators said there's nothing suspicious about the increased amount of 
capacity that went off line this year. In fact, they schedule maintenance a 
year in advance. 
"We ran the heck out of our plants," said Duke spokesman Tom Williams. "These 
plants are about 50 years old. They broke down because we ran them so hard." 
In addition, about 5,000 MW of generation operated by small power producers 
known as qualifying facilities shut down their units this spring, because 
they were owed for power supplied to Edison International (EIX) unit Southern 
Californa Edison and PG&E Corp. (PCG) unit Pacific Gas & Electric. Those 
plants began operating again late last month after striking deals to settle 
their claims. 
State officials, however, believe the generators have purposely kept their 
power plants off line to drive-up wholesale electricity prices. State Sen. 
Joe Dunn, D-Santa Ana, said it appears generators have the ability to 
influence wholesale power prices and have done so by forcing some of their 
units off line. 
"Whether they did it in a concerted fashion is the question we're trying to 
answer," Dunn said. "But it's clear that some of these plants may have shut 
down for unnecessary maintenance." 
The amount of generation off line between March and May averaged 14,026 MW, 
according to the commission's report. Since January, average outages each 
month have run about twice as high as the same month the year before. 
The numbers are based on calculations made by the state's Independent System 
Operator, manager of the electricity grid, which keeps track of the outages. 
-By Jason Leopold, Dow Jones Newswires; 323-658-3874; 
jason.leopold@dowjones.com

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

More Employees To Testify Vs Calif Generators -Senator
By Jason Leopold
Of DOW JONES NEWSWIRES

07/05/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

LOS ANGELES -(Dow Jones)- Current and former power plant employees are 
expected to testify soon against California's major power suppliers, alleging 
the companies manipulated the state's wholesale electricity market in an 
effort to boost power prices, the head of the state Senate committee 
investigating the claims told Dow Jones Newswires. 
The whistleblowers are non-management employees who work for or were once 
employed by Reliant Energy Inc. (REI), Dynegy Inc. (DYN), Mirant Corp. (MIR), 
Williams Cos. (WMB) and Duke Energy (DUK), said state Sen. Joe Dunn, D-Santa 
Ana, chairman of the Senate Select Committee to Investigate Price 
Manipulation.
"We have been dealing with a whole number of whistleblowers to provide their 
view, whether good or bad," Dunn said. "These are whistleblowers from 
virtually all five generators who are either current or former employees." 
California is seeking $9 billion in refunds from suppliers, which it accuses 
of price gouging. The state also hopes to pursue criminal charges against 
power company executives. 
So far, Dunn's committee has only heard testimony from former employees of 
Duke. The testimony against the other generators could come as early as July 
10, Dunn said. Some of the whistleblowers are concerned about losing their 
jobs or being blacklisted once they testify, he said. 
Two former employees of Duke's South Bay power plant are slated to testify 
Thursday before the Senate committee that Duke reduced output at the 
706-megawatt power plant to drive up wholesale power prices. 
Last month, three former Duke power plant employees testified that Duke 
tossed out spare parts and "ramped down" two turbines during power 
emergencies. The men produced control room logs to back up their testimony. 
"The testimony by the new whistleblowers is headed in the same direction as 
the other three (Duke) employees," Dunn said, adding that evidence may 
include some control room logs that show power plants being ramped up and 
down. 
The California Independent System Operator, manager of the state's power 
grid, admitted last week that Duke was acting on its orders when the company 
reduced output at the plant, but said it issued those orders because Duke's 
power prices were too high. 
Generators Deny Manipulation 

Energy companies will have an opportunity to give their side of the story to 
the committee by the end of the month, Dunn said. 
The companies deny allegations they manipulated the market. 
"We have not withheld," said Mirant spokesman Pat Dorinson. "We have not 
manipulated the market. We follow dispatch instructions given to us by the 
ISO." 
Dynegy spokesman Steve Stengel said the company hasn't been told by Dunn's 
office that anyone would be making specific allegations about its operations. 
Repeating an argument used by Duke, Stengel said plant employees weren't 
aware of the big picture. 
"No one at our power plants is in a position to know why the plants ramp up 
and down," Stengel said. "Communication is between the ISO and the Dynegy 
marketing staff. We take dispatch orders from the ISO." 
Dunn said additional employees have come forward since the Duke employees 
first testified and that his staff interviews potential whistleblowers. 
"We see if they have something to add to the investigation," Dunn said. 
Despite the emergence of new witnesses, Dunn wouldn't claim to have found a 
"smoking gun." 
"I tend to shy away from that term," Dunn said. "To be honest, if a (smoking 
gun) exists, I doubt we will ever get our hands on it." 
Dunn's committee started its hearings three months ago. The senator said he 
has concluded that generators have the ability to set the price of wholesale 
electricity and should be stripped of their ability to charge market rates. 
"We still have to hear from the generators," Dunn said. "But it seems very 
clear that the Big Five generators have market power. The question is how do 
they exercise market power and what is the impact on the price? If market 
power has been exercised in a concerted fashion, that's a potential antitrust 
charge. That's illegal." 
The committee will continue its investigation through the summer break, which 
begins July 15, and expects to complete its probe by September, Dunn said. 
-By Jason Leopold, Dow Jones Newswires; 323-658-3874; 
jason.leopold@dowjones.com

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

News
Power producers in contempt Energy Companies withhold documents in probe of 
possible price fixing. Series: energy.0628
KIMBERLY KINDY
The Orange County Register

06/29/2001
The Orange County Register
1
PageH

Sacramento Two power producers were found in contempt Thursday by a Senate 
committee investigating possible price manipulation after company officials 
refused to turn over thousands of subpoenaed documents. Such an action hadn't 
been taken since 1929, when the Legislature was investigating the cement 
industry. 
Enron Corp. and Mirant Energy both failed to reach an agreement by Thursday's 
deadline to turn over internal memos, business strategies, contracts for 
electricity sales, and volumes of other documents that will reveal how 
they've run their businesses under deregulation.
Mirant spokesman Patrick Dorinson said his company hopes to reach an 
agreement with the committee within two weeks and said company officials 
would continue to negotiate in good faith. 
But Enron was defiant. No company official attended the hearing. Instead, San 
Diego attorney Michael Kirby faxed a four-page letter, announcing for the 
first time that the company has no intention of handing over documents. Enron 
challenged the committee's legal authority to investigate the industry and 
said that most of the documents were stored outside California, so the 
committee had no legal right to ask for them. 
Enron officials refused further comment. The response outraged Sen. Steve 
Peace, D-Chula Vista, who said Enron should face harsher punishment than the 
rest and warned other power producers to not follow Enron's lead. 
"These guys make the tobacco guys look like paupers," Peace said. "(The 
tobacco industry was) nowhere near as slick as these guys." 
Sen. Joe Dunn, D-Santa Ana, chairman of the Senate Select Committee to 
Investigate Market Manipulation, said that if the two companies don't comply 
by July 10, the full Senate will likely be asked to hold them in contempt. 
The Senate could order the immediate delivery of the documents in addition to 
fines and other penalties. 
The other five companies that faced a possible contempt citation Thursday 
were given an extension to July 10 because they were starting to turn over 
documents or had agreed to a method of turning them over. 
Those companies include Dynegy Inc., which handed over 18,000 pages Thursday, 
and Reliant Energy, which turned over 1,800, Dunn said. 
Duke Energy and Williams Cos. agreed to turn over the requested documents to 
a central location in Sacramento, provided a confidentiality agreement can be 
reached. AES Corp. was not found in contempt because Williams' compliance 
likely covers the company; Williams pays AES to run the plants and sells the 
energy the plants produce. 
Contact Kindy at (916) 449-6685 or kkindy@ocregister.com

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

California News
TWO COMPANIES FOUND IN CONTEMPT OF LEGISLATURE; ENRON, MIRANT HAVE 12 DAYS TO 
WORK OUT DEAL TO PROVIDE DOCUMENTS
BY DION NISSENBAUM, Mercury News Sacramento Bureau

06/29/2001
San Jose Mercury News
Morning Final
27A
(c) Copyright 2001, San Jose Mercury News. All Rights Reserved.

SACRAMENTO -- California lawmakers found two companies in contempt on 
Thursday for refusing to turn over thousands of pages of documents as part of 
an investigation into possible electricity price gouging, the first time 
since the Great Depression that a committee has resorted to such a drastic 
measure. 
After weeks of fruitless negotiations, a special state Senate committee 
unanimously found Enron and Mirant -- two of the state's largest private 
power providers -- in contempt of the Legislature.
''These companies have shown contempt for the people of California, and it 
adds to the strong suspicion that they have a lot to hide,'' said Sen. Wes 
Chesbro, D-Santa Rosa. 
Five other energy companies avoided a similar fate with a series of 11th-hour 
faxes, phone calls and deliveries to the Capitol meant to signal their 
willingness to cooperate. 
But lawmakers offered sharp criticism of Enron and Mirant. ''Am I prepared to 
throw someone in jail for non-compliance? Hell, yes,'' said Sen. Bill Morrow, 
the top Republican on the committee. 
The companies have 12 days to work out an agreement with the committee or 
face punishment. Because the action is taken so rarely, there is little 
guidance for lawmakers on how to proceed. 
Any punishment must be approved by the full Senate, which has wide latitude 
to order the arrest of company officials, impose financial penalties or take 
some other action. 
An attorney for Mirant sought to avert the vote with a last-minute agreement, 
rejected by the committee, to turn over some documents. Enron's response was 
a four-page letter in which it questioned the committee's right to examine 
its business practices. 
The last time the state Senate took such an action came in 1929 when 
lawmakers ordered the arrest and brief imprisonment of a cement company 
executive who refused to speak to them about alleged price fixing. 
More recently, a state Assembly committee investigating former Insurance 
Commissioner Charles Quackenbush ordered the arrest last summer of a witness 
who failed to appear at a hearing. The witness came to the Capitol several 
hours later. 
The Senate committee has been trying for months to gain access to 
internaldocuments. 
All seven companies fought the requests and asked the committee to adopt 
broad restrictions on what material it would make public. But the committee 
refused. 
In light of the stalemate, the committee vowed to hold the companies in 
contempt. 
Five companies -- Duke Energy, Dynegy, Reliant, Williams and AES -- managed 
to ward off a contempt vote by turning over, or agreeing to turn over, 
documents under the less-stringent secrecy protections offered by the 
committee in May. 
As the hearing got under way, Reliant turned over 1,800 pages of what it 
called non-confidential documents. A few hours later, Dynegy delivered seven 
boxes filled with more than 18,000 documents. 
Sen. Joe Dunn, D-Garden Grove, called the last-minute flurry of activity 
''unfortunate and disturbing'' and said his committee will spend the next two 
weeks looking over the documents to see if they satisfy the panel's demands. 
Should the companies balk on their last-minute agreements, Dunn said, the 
committee will take a second look at finding them in contempt. {CHART} CHART: 
MERCURY NEWS 
[Chart not taken in database]

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


California News
FIRMS FACE CONTEMPT RULING FOR WITHHOLDING DOCUMENTS
BY DION NISSENBAUM, Mercury News Sacramento Bureau

06/28/2001
San Jose Mercury News
Morning Final
19A
(c) Copyright 2001, San Jose Mercury News. All Rights Reserved.

SACRAMENTO -- A special legislative committee looking into alleged 
electricity price gouging is poised to take the almost unprecedented step of 
declaring power companies in contempt for failing to turn over thousands of 
pages of documents. 
State Sen. Joe Dunn is expected to grill the major power companies at a 
hearing today for refusing to turn over records the Garden Grove Democrat and 
his committee want to examine.
''We have reached the end of our patience,'' Dunn said Wednesday. 
If the committee declares the companies in contempt, Senate aides said, it 
would be the first time in 72 years that the Legislature has taken such a 
step. 
Just what might happen to the companies remains unclear. State law gives 
lawmakers broad, but vague, power to impose financial penalties on the 
companies, arrest witnesses or take stronger action. 
The full Democrat-controlled state Senate would have to decide what 
punishment, if any, to impose. 
Dunn and his committee have taken a lead in the Capitol in exploring 
allegations that power companies, including Duke Energy, Reliant, Mirant, 
Williams and Dynegy, used unethical or illegal tactics to drive up the price 
of power and rake in billions in profits. 
For nearly three months, the committee has been working with company lawyers 
to gain access to thousands of pages of documents. After weeks of stalemate, 
the committee issued a 15-page subpoena earlier this month to the companies. 
But the companies have balked. 
Tom Williams, a Duke spokesman, said his company was unwilling to turn over 
information until the committee agreed to some restrictions. 
''We have not gotten adequate confidentiality agreements from Sen. Dunn's 
committee and that's a big stumbling block,'' he said. 
Dunn said he is willing to protect company trade secrets but will not agree 
to broad confidentiality rules. 
According to Senate aides, the last time the Senate found someone in contempt 
was in 1929, when lawmakers ordered the arrest of a witness in a price fixing 
investigation. The state Assembly made similar threats last year during an 
investigation of former Insurance Commissioner Charles Quackenbush. Exactly 
one year ago, the Assembly committee ordered the arrest of a witness who 
failed to appear. The witness appeared several hours later.

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

NEWS
Two power firms held in contempt by state Senate panel / Enron, Mirant cited 
over subpoenaed documents
Lynda Gledhill
Chronicle Sacramento Bureau

06/29/2001
The San Francisco Chronicle
FINAL
A.6
(Copyright 2001)

A state Senate committee held Enron and Mirant corporations in contempt 
yesterday for not turning over subpoenaed documents as six other energy 
companies made frantic, last-minute deals to comply with the lawmakers' 
orders. 
The contempt finding is the first of its kind since 1929 when a Senate panel 
investigating price fixing in cement prices briefly jailed a Portland 
businessman for refusing to comply with a subpoena.
"Jailing is an option and we preserve all options at this point," said state 
Sen. Joe Dunn, D-Santa Ana, the chairman of the committee investigating 
charges of price manipulation in the wholesale electricity market. 
Although Dunn's committee voted 5 to 0 to find the companies in contempt, the 
panel will decide July 10 whether to ask the full Senate to issue sanctions 
against Enron and Mirant. 
Dunn's committee requested documents from power providers in early April. 
When the requests were ignored, the committee issued subpoenas on June 11 
asking generators for documents covering business plans, operations, risk 
management, and investment strategies. 
Based on their pledges yesterday to cooperate with the committee, six energy 
providers escaped contempt citations and were given until July 10 to comply 
with the orders. All of the companies cited concerns about confidentiality of 
the documents. 
As committee members met, generators' lawyers stepped into hallways and made 
hurried calls from cell phones to their corporate headquarters, and one 
company delivered a truckload of documents to the Capitol. 
"While we have received certain documents today, we have no idea what has 
been given to us," Dunn said. "That it has taken until today to get these 
responses is unfortunate and disturbing." 
Enron drew most of the wrath from the committee after sending only a letter 
questioning the committee's jurisdiction. The company also criticized an 
investigation by Attorney General Bill Lockyer, which company officials 
called "fatally and irreparably compromised" by what it said was blatant 
bias. 
Lockyer has said in published articles that the heads of some of the power 
generating companies, like Enron, should go to jail. 
Lawmakers took Enron to task for not bothering to send a representative to 
the hearing. 
"There is clearly a stark contrast in the conduct in the marketplace between 
Enron and other companies," said Sen. Steve Peace, D-El Cajon. "The irony of 
the Enron letter is that they were the architect of the whole (deregulation) 
concept." 
An Enron spokeswoman reached after the hearing declined to comment. 
An attorney for Duke told lawmakers his company would agree to place all 
requested documents in a Sacramento depository for the committee to review. 
He also agreed that except for a few minor changes the company would agree to 
a proposed confidentiality agreement. 
Under the plan, information such as trade secrets and other proprietary 
information would be kept confidential and companies would receive a 10-day 
notice if the committee planned to make public any confidential materials. 
The company would then have that time to ask for a court order preventing any 
release. 
A lawyer for Williams Energy agreed to the same conditions as Duke, and an 
attorney for Mirant pursued a similar strategy but stopped short of pledging 
that all documents would be made available. 
A Mirant spokesman said later that the company has compiled thousands of 
pages of documents and will continue to work with the committee. 
"We want some assurance from committee that the documents will not end up in 
some public forum where they could be misused," said Patrick Dorinson. 
If Mirant or Enron comply with the subpoena before the July 10 hearing, the 
contempt citation will be rescinded, Dunn said. 
As the committee met, it received boxes from Dynegy containing 18,000 pages, 
plus 1,800 documents from Reliant. Two other companies, AES and NRG Energy 
Inc., were given an extension because the requests for their documents were 
made later. 
The committee will review the documents before July 10 to see if those 
companies have complied, Dunn said. 
The last time the Legislature found someone in contempt was 72 years ago when 
H.T. Battelle of the Pacific Portland Cement Co. was thrown in jail for 
ignoring a Senate subpoena. 
Dunn said it is not clear what the Senate would do in this case. 
The Democratic lawmaker's committee made national headlines last week when 
three former employees of a Duke power plant testified that they were told to 
ramp power production up and down in an apparent attempt to manipulate 
electricity prices. Duke countered that it was merely following the orders of 
the state's power grid operators.

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

USA: Calif. Senate panel cites generators for contempt.

06/28/2001
Reuters English News Service
(C) Reuters Limited 2001.

SACRAMENTO, Calif., June 28 (Reuters) - A California state Senate committee 
voted to cite Mirant Corp . and Enron Corp for contempt on Thursday after the 
energy generators failed to supply confidential documents as required by 
subpoena. 
The committee, which is seeking evidence of power price manipulation in 
California's chaotic energy market, voted unanimously for the contempt 
citations after Mirant and Enron did not produce the required papers.
"The step we took today is historic," said state Sen. Joe Dunn, Democratic 
chair of the Senate Select Committee to Investigate Market Manipulation. "We 
haven't done this in 72 years." 
Dunn said his committee would draw up a contempt report which would be 
forwarded to the Senate by July 10. 
The full Senate, in turn, will be charged with determining what sanctions to 
impose - which could range from renewed orders for documents to fines to jail 
time for individuals determined to have obstructed compliance with the 
subpoenas. 
The committee postponed action on possible contempt citations for other 
energy companies, including Reliant , Dynegy , Williams Cos , Duke Energy , 
AES Corp and NRG Energy , giving them until July 10 to follow through on 
promises to provide the required documentation. 
Dunn said the citations against Mirant and Enron - which would be the first 
imposed by California's state Senate since 1929 - would be vacated if the 
companies comply with the subpoenas by the July 10 deadline. 
The companies have objected to providing the confidential materials, which 
they argue includes proprietary information on bidding and pricing for 
California energy purchases that, if disclosed, could damage their 
competitive ability. 
Enron, in particular, has rejected the committee's authority, saying it keeps 
its documentation in Texas and is therefore outside California jurisdiction.

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

News
Senate may turn up heat on power producers Legislature Subpoenas may be used 
to obtain internal documents from big electricity companies. Series: 
energy.0628
KIMBERLY KINDY
The Orange County Register

06/28/2001
The Orange County Register
1
Cal

SACRAMENTO The Senate might exercise its contempt powers for the first time 
in more than 70 years if electricity producers fail today to obey a subpoena 
ordering them to turn over documents that would provide an inside look at 
their business practices, lawmakers said Wednesday. 
The power producers are flying in representatives to appear before a Senate 
committee today, but they are not expected to turn over any of the documents, 
which were first requested in April.
They are seeking a protective order that would ban the committee from 
disclosing the information to the public or to other government agencies, 
said Gary Ackerman, executive director of the Western Power Trading Forum, 
which represents many of the major power producers. 
"They want to have some control over these confidential documents, and they 
have this right," Ackerman said. "The Senate has subpoena powers, but they 
also have obligations." 
State Sen. Joe Dunn, D-Santa Ana -- who chairs the Senate committee that 
issued the subpoenas -- said he hopes the power producers will comply, but if 
they don't he'll be forced to take more aggressive actions. 
There are two possibilities, including the reissuance of subpoenas, this time 
naming company officials instead of a faceless corporation. The full Senate 
would have the power then to throw the named person in jail, as it did in 
1929 when the Legislature was investigating the cement industry for possible 
collusion and price- fixing. In that case, the state Supreme Court stood 
behind the Senate's authority. 
The focus of Dunn's committee is similar to the 1929 investigation. He is 
looking into accusations of collusion and price fixing, this time among some 
of the nation's largest electricity producers. 
Dunn said the other possible action is to ask the full Senate to hold the 
companies in contempt, and order that they turn over the documents or face 
possible court action. Failure to comply with a legislative subpoena is a 
misdemeanor. The Senate also could probably ask the court to intervene in the 
dispute, said Matthew Jacobs, an attorney who's studied the Legislature's 
powers in this area. 
"It is my sincere hope that we can avoid the ultimate penalty for 
noncompliance, which is to jail the individual to comply," Dunn said. "There 
is no legal basis for refusing to comply with the legislative subpoena based 
on an assertion of confidentiality." 
Senate Leader John Burton, D-San Francisco, said the Senate will likely 
support whatever action the committee asks it to take. 
"The Senate would probably support what they would want to do," Burton said. 
"If they make the case, then we will probably take the action that they 
believe is appropriate." 
Jacobs, who served as special counsel to the Assembly during the hearings 
that led to the resignation of former Insurance Commissioner Chuck 
Quakenbush, said the Legislature's subpoena power is the greatest when a 
specific person is named. 
"The (Senate) sergeant-at- arms goes out and places the person under arrest 
and takes him down to the county jail," said Jacobs. "If they comply with the 
subpoena, they can get out of jail. You can't throw a corporation in jail." 
In the 1929 case, the sergeant-at-arms arrested H.T. Battelle, secretary of 
the Pacific Portland Cement Co. The company protested, saying the Senate 
didn't have such authority, but the Supreme Court sided with the Senate. 
Battelle was forced to comply, according to a copy of the published decision. 
Dunn said since Battelle's case is the only trailblazing that's been done on 
the Senate's contempt and subpoena power, it will rely on the advice of the 
Legislative Counsel's Office as to its options should the generators fail to 
turn over documents. 
Power producers are angry with Dunn and his committee's aggressive approach 
to unearthing information. During a committee hearing last week -- which 
showcased three former power-plant workers who have accused the producers of 
wrongdoing -- the power merchants' group labeled the committee's work a 
"witch hunt." 
Contact Kindy at (916) 449-6685 or kkindy@ocregister.com.

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

News
Testimonies point to power manipulation Electricity Davis calls account of 
ex-Duke Energy workers a potential `smoking gun.' Series: energy.0623
KIMBERLY KINDY
The Orange County Register

06/23/2001
The Orange County Register
1
Cover

SACRAMENTO Three former workers at a Duke Energy plant moved from obscurity 
into the national spotlight Friday as they became the first eyewitnesses to 
provide sworn testimony accusing a generator of unethical -- and perhaps 
illegal -- conduct in California's energy crisis. 
Gov. Gray Davis called the men "heroes," and before the first witness even 
completed his testimony, he invited them and their families to have breakfast 
with him Monday.
"If these allegations are true, it might be the smoking gun we thought 
existed all along." 
With 10 television crews and twice as many radio and print reporters 
recording one of the most dramatic Capitol hearings in recent history, the 
men spent six hours before a special Senate committee that is investigating 
whether price-fixing and collusion among generators either fueled or created 
the crisis. 
The accounts of mechanics Ed Edwards and Glenn Johnson and control- room 
operator Jimmy Olkjer included accusations of equipment tampering at a Chula 
Vista plant in order to withhold production and drive up electricity prices. 
The testimony drew an immediate response. A consortium of power generators 
labeled the hearing a "witch hunt" in a letter that reached committee 
chairman Sen. Joe Dunn, D-Santa Ana, even before the last witness had 
finished testifying. Dunn diverted briefly from the questioning to read the 
letter aloud and then dismissed the charge as "nonsense." 
Duke spokesman Tom Wil liams said the former employees' testimony should be 
questioned because when Duke assembled its own team this spring, they were 
not hired. "It's absolutely absurd," Williams said of the allegations. 
But Lt. Gov. Cruz Bustamente said he believes the accounts of the three men 
are solid. He believes that Duke perhaps didn't hire them because they were 
at the top of their pay scale, each of them working more than two decades in 
the business. 
"I think they provide clear evidence of tampering at the facility," said 
Bustamente. "They have distinguished careers and service records and they are 
coming forward as good Californians." 
The testimony of the three men recounted much of the same information they 
provided to The Orange County Register and CBS News on Thursday, but expanded 
it and added a few revelations. 
Dunn believes the most important testimony focused on a series of 
control-room logs for three days in mid-January that show how frequently Duke 
ordered the "ramping up" and "ramping down" of their generators. 
Johnson called it "yo-yoing" and said the charts on the generators that track 
production levels started looking like "cardiac monitors" after Duke took 
over the plant. 
The significance of the constant ramping up and down is two-fold: It could be 
used as partial evidence to prove allegations that Duke manipulated its 
production levels to drive up prices. And it backs up testimony from the 
former employees that this behavior led to the erosion of good equipment, 
causing further breakdowns and outages that would affect supply. 
Duke officials said most of this ramping up and down was on orders of the 
California Independent Systems Operator, which operates the state's power 
grid, but they could not quantify what percentage of the decisions were their 
own. 
"This amount of ramping up and down is unusual," said Dunn. "There were 
decisions made in three-, four-, five- minute intervals. I don't think that 
kind of micromanagement comes from ISO." 
The three men -- whom Duke had inherited from former plant operator San Diego 
Gas & Electric -- said they were shut out of decision- making that led to the 
powering down of generators. But after a while, they said, they were able to 
pick up on the longtime Duke employees' jargon and began to make their own 
interpretations for the company's motives behind powering down. 
"They would say they were `down for economics.' That was thrown around a 
lot," said Johnson, who added that he came to believe it was done 
deliberately to "reduce load to boast prices." 
Again, Duke officials deny these allegations, saying they never powered down 
generators to "game" the market. 
Sen. Steve Peace, D-El Cajon, said the testimony convinced him that Duke 
Energy is in violation of its lease with the San Diego Unified Port 
Authority, which owns the plant. 
The lease, which Peace read from during the hearing, requires that Duke use 
"prudent utility practices" in its management of the plant - - something that 
both Edwards and Johnson said was violated as routine maintenance was 
abandoned and generators fell into disrepair. 
If found in violation of the lease -- which the port authority is 
investigating -- Duke presumably could lose control of the plant. 
Williams said Duke has improved, rather than downgraded, the service record 
of the plant. 
On Thursday, the employees said in interviews with the Register that they 
were ordered to fill Dumpsters with valuable new parts that were sold as 
scrap metal. The parts were later needed to perform repairs, and since they 
were not on hand, generators were not able to operate at full capacity. 
Olkjer, the control-room operator, said he also noticed a correlation between 
Duke's decision to ramp down its generators and a precipitous rise in energy 
prices. He believes that the Duke was able to influence prices by withholding 
power. 
"None of these allegations are true," said Williams. "Many of the parts were 
obsolete, so we did clear them out ... we did nothing unethical." 
Dunn said the next committee hearing, in mid-July, will provide power 
generators with an opportunity to respond to allegations that they have 
price-gouged Californians. He said that so far, three months after asking for 
and then serving subpoenas for documents, the committee has received nothing 
from the generators. 
"They have also refused to agree to a non-destruct order for documents. We 
want them to promise to not destroy documents, which could provide critical 
evidence, and they will not do it," Dunn said adding that the contempt 
charges are a possibility. 
Dunn said if the committee finds evidence of criminal wrongdoing, it will 
hand it over to Attorney General Bill Lockyer. If it finds evidence of 
misconduct that shows the market is being wrongly manipulated, it will use 
that information to push for system reforms and refunds for overcharges. 
After the hearing, the men said they were amazed and frightened by the media 
circus and by attention they received. 
"I'm shocked," said Johnson, who Friday was also awarded a Medal of Valor by 
the California National Guard after a three-year delay because of 
administrative glitches. "I feel like my life is never going to be the same." 
Contact Kindy at kkindy@ocregister.com or 916-449-6685

Caption: Ex-power plant worker Ed Edwards, right, testifies before a state 
Senate panel Friday 
Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

Metro Desk
THE ENERGY CRISIS Power Debate Heats Up as Davis Reveals Contracts
RICH CONNELL NANCY RIVERA BROOKS; DAN MORAIN
TIMES STAFF WRITERS

06/16/2001
Los Angeles Times
Home Edition
A-1
Copyright 2001 / The Times Mirror Company

SACRAMENTO -- After months of resisting disclosure, Gov. Gray Davis on Friday 
released 38 long-term power contracts that aides said show the administration 
is deftly managing the energy crisis, but that critics warn contain clauses 
and costs that may burden consumers with unpredictably high prices for years. 
Provisions in some of the contracts protect generators from new state taxes, 
shield them from potential action by federal regulators and give them a break 
on environmental costs. At the same time, the documents are so heavily 
censored in crucial areas that it is impossible to fully assess their impact 
on the state and its residents.
State officials insist that the complex agreements, extending as much as 20 
years and costing an estimated $43 billion, already have slowed the 
hemorrhaging of state spending on power and sheltered consumers from wild 
electricity price swings in the future. 
"These provide a major building block for lifting this energy crisis," Davis' 
top energy advisor, S. David Freeman, said as a 600-page stack of agreements 
was made public in response to a court order. "That was our longer-term 
strategy. We implemented it, and it's worked." 
The governor, questioned after a public appearance at Mather Air Force Base, 
echoed his advisor's optimism, but added: "I'm under no illusions. I think 
the summer is going to be hot and the peak prices will spike up." 
For months, Davis has publicly vilified the generators with whom his 
administration has now become contractually bound. Asked whether his nemeses 
negotiated in good faith, the governor said: "I do not think the generators 
have our best interests at heart. . . . They're laughing all the way to the 
bank. My job is to fight back." 
Davis has a heavy political investment in the pacts, which the state began 
negotiating in January as blackouts hit, power prices soared and the state's 
large utilities slipped toward insolvency. 
Crediting the contracts, Davis aides noted the state was paying an average of 
$332 a megawatt hour for power in January, but only $179 this month. The 
contracts call for an average price of about $85 per megawatt hour over the 
next five years and about $69 over the next 10 years. 
Critics have noted that the state's current average costs under the contracts 
exceed those now available on the daily market. But Davis contends the 
current reduced prices are largely a result of his contracting strategy. 
Partly because of the secrecy Davis imposed on the deals, they have become a 
focal point of suspicion over his handling of the crisis. News 
organizations--including The Times--and Republican officeholders sued to get 
them. Consumer groups, meanwhile, complained about being hit with historic 
utility rate increases for deals no one could examine. 
The controversy seemed to intensify Friday, despite efforts by the governor's 
team to portray the agreements as a major tactical victory against 
out-of-state power marketers who exploited the state's flawed deregulation 
scheme. 
GOP Leader Attacks 'Sweetheart Deals' 
Assembly Republican Leader Dave Cox of Fair Oaks, whose staff pored over the 
documents, attacked the governor for brokering "sweetheart deals for the 
generators." 
Even a key Democrat, state Sen. Joe Dunn (D-Garden Grove), expressed serious 
concerns about a number of provisions in the deals that seem to offer special 
relief to generators. 
Some lawmakers and consumer groups pointed to provisions that would allow 
generators to shift the cost of new taxes to the state and possibly exempt 
the firms from a windfall profits tax. 
"It ups the ante as far as the ultimate burden that the contracts will place 
on the shoulders of California ratepayers and taxpayers," said Dunn, who is 
heading a special committee investigating alleged manipulation of the state's 
energy market. 
The senator said he also is concerned about provisions such as one negotiated 
with GWF Energy, which prevents the state from pressing any future claims 
with federal regulators regarding the company's profits. 
"It is very disconcerting that we would willingly give up the right to 
challenge any of these [prices]," Dunn said. 
Consumer advocate Harvey Rosenfield called some of the contract terms 
outrageous. Rosenfield, who heads the Foundation for Taxpayer and Consumer 
Rights in Santa Monica, said it was "bad enough" that the long-term contracts 
resulted in "high rates for Californians for a decade." He said Friday's 
disclosures pointed to other "giveaway" perks. 
Freeman, who formerly headed Los Angeles' Department of Water and Power, 
insisted that generators won no special windfall profit protections. The only 
tax increases generators can pass along to the state, he said, are those 
directly tied to production of the power in the contracts, such as new taxes 
on natural gas. 
"I'm not going to say some lawyer won't argue" that the generators will not 
claim they are exempt from a windfall profits tax. "But the contract is very 
clear and the law is very clear." 
Some of the pacts lock in specific prices, such as $58 a megawatt hour for 
around-the-clock power from Baltimore-based Constellation Energy Group. The 
Davis administration said those guard against price spikes in future years. 
Other contracts, officials said, balance the portfolio. They include deals 
such as those with Dynegy Inc., which tie prices to the cost of fuel in 
future years. 
A number of energy insiders found reason to praise the contracts. 
"The point of signing long-term contracts is not to get a great deal, it's to 
reduce risk" from the volatility of spot markets, said Severin Borenstein, 
director of the Energy Institute at UC Berkeley. 
Edison Cites Hedge Against Price Spike 
The long-term power contracts will be an important factor in limiting the 
state's exposure to future price spikes, said Bob Foster, senior vice 
president of public affairs for Rosemead-based Edison International, the 
corporate parent of Southern California Edison. 
"This was California's problem to begin with," Foster said. "You don't want 
to be buying a lot of power traded on the spot market. What we really need is 
a portfolio of contracts that range from one to seven years and that take out 
the volatility from a large percentage of the market." 
Davis advisors stressed that most of the contracted power also is linked to 
development of new California generating plants, a key part of the governor's 
drive to free the state from reliance on out-of-state power trading 
companies. 
About 60% to 70% of all the power that will be purchased in future years 
under the contracts will be from new plants. The agreements, Freeman said, 
helped developers obtain bank financing for their proposed plants. 
By nurturing new plants, the state is signaling energy companies that "this 
gravy train of high [prices] is not going to last forever," said Vikram 
Budhraja, California's lead consultant in the bargaining. 
But as analysts pored over the details, some challenged the governor's basic 
premise that the long-term deals were largely responsible for recent falling 
prices. They attribute the softening market to a host of other factors, 
including cooler weather, falling natural gas prices and more plants 
completing spring maintenance. 
In fact, some scholars say that the current prices simply prove that the 
state committed to paying the power companies too much for too long. 
"The governor's spin doctors claim that not entering into the contracts would 
have been gambling," said UC Irvine economist Peter Navarro. He said that in 
the years ahead, odds are are heavily against the contracts being a bargain. 
"That makes those contracts a long shot," he said, "which is gambling in the 
worst sense of the word." 
Analyst Sees Too Much Uncertainty in Contracts 
Reviewing contracts Friday, energy economist Robert Michaels of Cal State 
Fullerton said he was also troubled by the financial risks the state appears 
to be assuming in some contracts for power plant pollution control expenses. 
In some cases, he said, the state could be charged for costly emission 
control upgrades. 
"There's such uncertainty about what future state policy is going to be in 
terms of cost of permits, retrofit requirements and new technology," said 
Michaels, who reviewed the contracts at The Times' request. "I am not 
familiar with any power contracts where I've seen that. It strikes me as 
unusual." 
Assemblyman Tony Strickland (R-Thousand Oaks), who independently sued Davis 
to reveal the power contracts, said the public would not have been able to 
weigh such trade-offs if the governor had continued the secrecy. 
Davis relented Tuesday, a day before a San Diego Superior Court judge was to 
hear the public records challenge. 
Some complained the administration is still withholding key information. 
Attorneys for the news organizations who sued the administration will return 
to court later this month to argue for release of the redacted material. 
The released contracts blacked out the indexes used to set natural gas 
prices, the amount of natural gas needed to fire specific generators and 
which pipelines are being used to ship the gas. That's important because gas 
shipped into Southern California is more costly than gas shipped into 
Northern California. 
Additionally, the state is withholding information on whether the state or 
the generators should pay when there are breakdowns or congestion on the 
transmission system, resulting in a failure to deliver power. 
Documents' Release Doesn't Stop Dispute 
Experts said transmission-related provisions can be crucial to such contracts 
final costs. 
In arguing for continuing confidentiality, Davis maintained that the 
disclosure of detailed contract information would undercut the state's 
negotiators by tipping off competing generators. On Friday, however, some 
critics attributed to the move to politics. 
"If they were great contracts, they would have been released months ago," 
said Navarro of UC Irvine. 
But Davis' defenders, including Assemblyman Roderick Wright (D-Los Angeles), 
chairman of the Utilities and Commerce Committee, said the contracts 
accomplished exactly what they were intended to do: stabilize the price and 
supply of electricity. 
"If all of a sudden you dump all these contracts, and all this power went 
back into the spot market, guess what? We'd be in the same damn position we 
were in last year." 
* 
Times staff writers Robert J. Lopez, Miguel Bustillo, Julie Tamaki, Virginia 
Ellis in Sacramento and Jerry Hirsch and Doug Smith in Los Angeles 
contributed to this story.

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