Today's IEP news:

The Associated Press State & Local Wire, May 1, 2001, Tuesday, BC cycle,
????9:49 AM Eastern Time, State and Regional, 840 words, Lawmakers offer bills
????aimed at cutting natural gas prices, By JENNIFER COLEMAN, Associated Press
????Writer, SACRAMENTO (Quotes Smutny)

Los Angeles Times, May 1, 2001 Tuesday, Home Edition, Page 16, 1078 words,
????Davis Turns to Bankruptcy Court for Help in Plan to Buy Power Grid;
????Utility: He seeks support from panel representing creditors of PG&E. The
????firm has rebuffed state's offers., DAN MORAIN, RICHARD SIMON, TIMES STAFF
????WRITERS, SAN FRANCISCO

Los Angeles Times, May 1, 2001 Tuesday, Home Edition, Page 3, 429 words,
????California and the West; THE CALIFORNIA ENERGY CRISIS; ; Power Marketer
????Ordered by FERC to Refund $8 Million; Energy: Williams Energy agrees to 
pay
????but admits no wrongdoing in taking plants offline., NANCY VOGEL, ROBERT J.
????LOPEZ, TIMES STAFF WRITERS

Los Angeles Times, May 1, 2001 Tuesday, Home Edition, Page 3, 699 words,
????California and the West; THE CALIFORNIA ENERGY CRISIS; Power Companies 
Step
????Up Lobbying, JULIE TAMAKI, MIGUEL BUSTILLO, TIMES STAFF WRITERS, 
SACRAMENTO

The New York Times, May 1, 2001, Tuesday, Late Edition - Final, Section A;
????Page 1; Column 5; National Desk, 2130 words, River's Power Aids California
????And Enriches the Northwest, By BLAINE HARDEN, GEORGE, Wash. ?(Great 
article!)
 
The Orange County Register, May 1, 2001, Tuesday, STATE AND REGIONAL NEWS,
????K4842, 378 words, Power supplier to pay state, By Kate Berry

San Jose Mercury News, May 1, 2001, Tuesday, STATE AND REGIONAL NEWS, K4846
????, 814 words, Williams Energy agrees to return $8 million to state, By
????Brandon Bailey

San Jose Mercury News, May 1, 2001, Tuesday, DOMESTIC NEWS, K4844, 1017
????words, Cheney says energy plan could prevent California crisis from
????spreading, By Jim Puzzanghera

The San Francisco Chronicle, MAY 1, 2001, TUESDAY,, FINAL EDITION, NEWS;,
????Pg. A1, 804 words, Feds want surcharge to pay utilities' debts; ???THE 
PLAN:
????Additional rate boost likely, cash would go to power suppliers, Carolyn 
Said

The Tribune (San Luis Obispo, CA), May 1, 2001, Tuesday, STATE AND REGIONAL
????NEWS, K3262, 699 words, Professor converts manure to electricity in effort
????to save money, By Jerry Bunin

The Washington Post, May 01, 2001, Tuesday, Final Edition, FINANCIAL; Pg.
????E03, 495 words, Energy Overcharge Case Settled; Williams to Pay Calif. $8
????Million After Probe Involving AES, Peter Behr, Washington Post Staff 
Writer

The Associated Press State & Local Wire, May 1, 2001, Tuesday, BC cycle,
????9:49 AM Eastern Time, State and Regional, 840 words, Lawmakers offer bills
????aimed at cutting natural gas prices, By JENNIFER COLEMAN, Associated Press
????Writer, SACRAMENTO

The Associated Press State & Local Wire, May 1, 2001, Tuesday, BC cycle,
????9:46 AM Eastern Time, State and Regional, 619 words, Developments in
????California's energy crisis, By The Associated Press




May 1, 2001, Tuesday, BC cycle

?????????????????????????????9:49 AM Eastern Time

SECTION: State and Regional

LENGTH: 840 words

HEADLINE: Lawmakers offer bills aimed at cutting natural gas prices

BYLINE: By JENNIFER COLEMAN, Associated Press Writer

DATELINE: SACRAMENTO

BODY:

??Gov. Gray Davis is relying on stringent conservation measures, increased
electricity supply and quick Legislative authority to proceed with a $12.5
billion revenue bond issue to head off blackouts this summer.

??Davis administration officials briefed lawmakers Monday on the governor's
plan to rescue Southern California Edison by buying the utility's transmission
lines.

??The extra financial details Davis' representatives gave Assembly Republicans
include forecasts of the Department of Water Resources' summer power 
purchases -
the same figures the state will use to find buyers for $12.5 billion in bonds 
to
pay for future power.

??Those forecasts, some Republicans said, count on too many things falling 
into
place, including the assumption that all of the state's financially troubled
alternative energy producers will be online.

??Though energy analysts have predicted skyrocketing energy costs for summer -
up to $1,500 per megawatt hour - the governor's plan calculates an average 
cost
of $195 per megawatt hour over June, July and August.

??That's because DWR cut long-term contracts covering a major part of the
electricity needed during peak times, said Ron Nichols, senior managing 
director
for Navigant Consulting Inc.

??Long-term contracts and conservation will minimize the effect of the 
expected
high spot prices, Nichols said.

??In essence, Davis aides, much of the conservation will be spurred by sticker
shock felt by consumers when they get their higher rates on their June bills.
PG&E customers will see a 34 percent increase, Southern California Edison's 
will
jump 32 and San Diego Gas and Electric rates will jump 44 percent.

??Davis' consultants predict the state can conserve up to 7,234 megawatts
during peak demand - about 16 percent of a 45,000 megawatt load that summer
weather can bring on. One megawatt is roughly enough power for 750 homes.

??Much of that conservation, 2,484 megawatts, will come from three different
conservation programs through the California Independent System Operator, 
keeper
of the state's power grid.

??Davis' "20/20" conservation plan is expected to cut another 2,200 megawatts
of demand. The rest of the cuts come from the sticker shock of higher consumer
rates and by estimating how much less power Californians are using this year
compared to last year.

??"If we're wrong, there are certain reserves built in," said Susan Kennedy,
deputy chief of staff and secretary of cabinet. Either the state borrows more 
or
there will be blackouts, she added, and if the price of power goes higher than
expectations, the state won't be able to afford it.

??By the end of 2002, Davis estimates, DWR will spend $26.9 billion to buy
power for customers of the three financially ailing utilities. Of that, $12.5
billion will be paid for by revenue bonds that will add up to one cent per
kilowatt hour to customer bills for 15 years.

??The Legislature approved the revenue bonds based on a formula that would set
the amount of the issue. Now Davis' representatives say it's urgent that the
Legislature approve a bill with a firm cap so they could begin the bond sale.

??"We need the unambiguous authority to sell bonds. We need it right now. We
cannot afford any delays," Kennedy said.

??A bill putting a $10 billion limit on the bonds stalled in the Assembly last
week after Republicans refused to vote for it until they received more details
about Davis' power buys and long-term contracts.

??Republicans wondered about the ability of the alternative generators to be
online, a sentiment shared by the industry. Currently, about one-third are
off-line now because PG&E and Edison owe them more than $1 billion.

 ??The Public Utilities Commission ordered the utilities to pay those 
generators
every other week starting April 1, but the large debts have the generators
fighting to stay open, said Jan Smutny-Jones, executive director of the
Independent Energy Producers.



??Davis' predictions aren't rosy, but realistic, said Joseph Fichera, a
financial adviser for the governor. "It minimizes the risk of blackouts, but 
you
can never eliminate it."

??Also Monday, an Assembly subcommittee unveiled four bills Monday designed to
increase supplies of natural gas, including streamlining approvals for gas
storage and new pipelines.

??After conducting hearings on the market, the subcommittee is recommending 
the
state streamline the PUC's process to approve underground natural gas storage
facilities and new pipelines, allow lower-grade California natural gas to be
used by industrial users and reform tariffs to see if they discourage
investments in a variety of natural gas-related ventures.

??Meanwhile, the state remained free of power alerts Tuesday morning as
reserves stayed above 7 percent.




??On the Net:

??The bill numbers are: AB78x by Canciamilla; AB73x by Canciamilla and
Dickerson; AB23x, by Assemblyman Dennis Cardoza, D-Atwater, and Assemblywoman
Barbara Matthews, D-Tracy; and AB42x, by Diaz.

??Read the bills at www.assembly.ca.gov

LOAD-DATE: May 1, 2001

Copyright 2001 / Los Angeles Times

??????????????????????????????Los Angeles Times

??????????????????????May 1, 2001 Tuesday ?Home Edition

SECTION: Part A; Part 1; Page 16; Metro Desk

LENGTH: 1078 words

HEADLINE: Davis Turns to Bankruptcy Court for Help in Plan to Buy Power Grid;
Utility: He seeks support from panel representing creditors of PG&E. The firm
has rebuffed state's offers.

BYLINE: DAN MORAIN, RICHARD SIMON, TIMES STAFF WRITERS

DATELINE: SAN FRANCISCO

BODY:

??Foiled in his first attempt to buy Pacific Gas & Electric's transmission
grid, Gov. Gray Davis said Monday that he has tried a new tactic: bypassing 
the
company and attempting to build support for the deal in Bankruptcy Court.

??Davis' plan to buy the grid appeared to have ended disastrously last month
when the giant utility filed for bankruptcy protection. But Davis said his
advisors now are trying to sell the idea to a committee of PG&E creditors that
hold a stake in the utility's Chapter 11 proceeding.

??The creditors committee, representing the hundreds of companies owed money 
by
PG&E, does not by itself hold the power to accept or reject the deal, which
Davis sees as a key to his plan to restructure the state's crippled 
electricity
system. But the committee will play an important role in any reorganization 
plan
that is ultimately hammered out in U.S. Bankruptcy Court.

??Given that power, Davis sent advisors to brief the committee last Wednesday.
The advisors told the committee about the deal they struck with Southern
California Edison to buy its share of the statewide transmission grid, and the
similar deal that PG&E rejected.

??"I'm not saying they embraced it entirely," Davis said, after speaking at a
conference of technology entrepreneurs put on by the J.P. Morgan investment
bank. "But they liked parts of it, asked good questions, and I thought it was 
a
good beginning."

??Paul Aronzon, the lead lawyer for the creditors committee, stressed that the
meeting with Davis' advisors would not lead directly to a deal. The governor's
representatives "did not come out and say, 'Would you guys sell us the
transmission grid?' " he said. Rather, Aronzon said, the advisors simply 
brought
the creditors up to speed on what Davis has put on the table.

??Davis has offered more than $7 billion to buy the transmission systems of
Edison, San Diego Gas & Electric and PG&E. So far, only Edison has accepted 
the
deal. The cash infusion would help the utilities restructure their debts, and
ultimately relieve the state of the need to continue buying electricity on 
their
behalf.

??The Davis administration made public Monday its most detailed breakdown yet
on the costs it expects to incur purchasing electricity over the next years.

??However, the extra information failed to satisfy Republican lawmakers, who
are holding up legislation needed to repay the state budget for the billions
already spent on electricity. 

??California will spend $15 billion buying power this year, according to
projections by Davis' advisors.

??But that total will drop to $9 billion next year and $7 billion the next as
long-term electricity contracts, energy conservation efforts and new power
supplies combine to lower the state's costs.

??With money from higher electric rates and a planned $12.5-billion bond, the
state should be able to cover the costs of power and operate at a surplus
starting in November 2002, the administration projected.

??Several Republicans took note of the date: It is the month of the 2002
gubernatorial election, when Davis is expected to seek a second term.

??The figures were based on a dizzying number of assumptions about the state's
energy future. The projections assume, for example, that Californians will
reduce energy consumption by 7%, and that 90% of the state's alternative 
energy
producers will soon generate electricity again. Now only about 65% are online.

??Davis administration officials defended the figures, saying that they were
conservative.

??The reaction to the figures reflects a growing rift between Democrats and
Republicans over how best to solve the state's problems. Efforts have been
lurching unsteadily on several fronts, including the courts, the state
Legislature and Congress, with considerable political head-butting taking 
place
in the last two.

??In Washington today, a key congressional panel is expected to take up
emergency legislation intended to help California, although Davis and other
Democrats have criticized the effort as useless.

??The bill's 19 provisions would, among other things, provide federal aid to
relieve a bottleneck in the state's transmission system, permit governors to
obtain temporary waivers of environmental rules to boost power supplies, and
direct federal disaster officials to help California prepare for blackouts.

??A spokesman for Davis said the Republican-drafted legislation offers "a lot
of things we don't need, and fails to address the one thing we do need," 
namely
firm price controls on wholesale electricity sales.

??Democrats and Republicans have strong, fundamental disagreements about how
best to solve the crisis, with Democrats supporting price controls, if only
temporarily, and many Republicans, including President Bush, opposed to
tampering with the market.

??Several Democrats who attended a White House ceremony Monday to mark Bush's
first 100 days in office spoke briefly to the president about the energy
situation.

??"He was not very sympathetic," said Rep. Bob Filner (D-San Diego), an
advocate of price controls. "They have their minds pretty well made up."

??In one effort to seize the initiative, a divided state Senate Appropriations
Committee approved a bill Monday that would impose a windfall profits tax on
electricity sellers who gouge California consumers. Revenue from the tax would
flow back to Californians in the form of a credit on their state income taxes,
starting next April 15.

??"Our backs are to the wall," said one sponsor of the bill, Sen. Jack Scott
(D-Altadena). "We believe that this is one time when we can stand up to an
avaricious energy generator and say, 'No more.' "

??On a 7-3 vote, Democrats on the committee voted for the bill, SB1X, and
Republicans lined up against it. The measure moved to the Senate floor, where 
it
will require only a simple majority of 21 votes and is expected to pass.

??Davis has said he is open to signing a windfall profits bill, but he has not
publicly lobbied for its passage.

??Also Monday, legislation was introduced in the Assembly to bolster natural
gas supplies in the state. Tight supplies have led to soaring costs for 
natural
gas, the fuel most commonly used to generate electricity in California. 

??*

??Morain reported from San Francisco and Simon from Washington. Times staff
writers Miguel Bustillo, Carl Ingram and Julie Tamaki in Sacramento, Tim
Reiterman in San Francisco and Mitchell Landsberg in Los Angeles contributed 
to
this story.

GRAPHIC: PHOTO: (A3) Gov. Davis, San Francisco Mayor Willie Brown and a
bodyguard after news conference at which Davis urged cities to cut energy use.
Davis is trying new tactic in plan to buy PG&E's power grid. A16 PHOTOGRAPHER:
ROBERT DURELL / Los Angeles Times

LOAD-DATE: May 1, 2001

??????????????????????????????10 of 58 DOCUMENTS

??????????????????????Copyright 2001 / Los Angeles Times

??????????????????????????????Los Angeles Times

??????????????????????May 1, 2001 Tuesday ?Home Edition

SECTION: Part A; Part 1; Page 3; Metro Desk

LENGTH: 429 words

HEADLINE: California and the West;
THE CALIFORNIA ENERGY CRISIS;
;
Power Marketer Ordered by FERC to Refund $8 Million;
Energy: Williams Energy agrees to pay but admits no wrongdoing in taking 
plants
offline.

BYLINE: NANCY VOGEL, ROBERT J. LOPEZ, TIMES STAFF WRITERS

BODY:

??In the first action of its kind during the California energy crisis, federal
regulators have ordered an out-of-state electricity marketer to refund $8
million in connection with allegations that plants were improperly shut down 
to
hike power prices.

??Tulsa-based Williams Energy Marketing & Trading has agreed to pay the refund
under an order issued Monday by the Federal Energy Regulatory Commission.

??The firm, which admitted no wrongdoing in the settlement agreement, was
probed for allegedly forcing utilities to pay higher prices by taking key
generating units in Long Beach and Huntington Beach offline in April and May 
of
last year.

??Paula Hall-Collins, a Williams spokeswoman, said her company settled to end
the matter. She said that the company would have been exonerated had it 
pursued
the case.

??"We decided to go ahead with the settlement in order to put it behind us and
move forward to more productive matters concerning California power issues," 
she
said.

??While federal investigations of alleged overcharges by several firms are
continuing, Monday's order marked the first time a major power merchant has 
been
forced to pay back earnings since California forged into electricity 
deregulation in 1996.

??Critics and the state's independent grid operator have accused power sellers
of unjustly ratcheting up electricity prices in part by taking plants offline.

??In the case of Williams, the federal energy panel investigated the shutdown
of power plants that were obligated to provide electricity to the state.

??Desperate for power, California's grid operator had to turn to another
provider and pay as much $750 per megawatt-hour--more than 10 times the normal
price. The $8-million refund will go back to the grid operator.

??Williams markets power produced at California plants owned by AES Corp. of
Arlington, Va.

??Federal investigators probed the actions of both Williams and AES, but the
refund order affects only Williams. Initially, FERC had sought a refund of 
about
$10.8 million, but settled for $8 million in the compromise agreement.

??AES spokesman Aaron Thomas said the power plants in question were shut down
because of mechanical problems. He noted that his firm derived no profit from
the replacement power sold by Williams.

??"We literally get paid to convert Williams' gas into Williams' electricity,
which they then sell into the marketplace," Thomas said. "We're not paying any
fines, and we didn't do anything wrong."

??*

??Times staff writers Rich Connell and Richard Simon contributed to this 
story.

LOAD-DATE: May 1, 2001

??????????????????????????????11 of 58 DOCUMENTS

??????????????????????Copyright 2001 / Los Angeles Times

??????????????????????????????Los Angeles Times

??????????????????????May 1, 2001 Tuesday ?Home Edition

SECTION: Part A; Part 1; Page 3; Metro Desk

LENGTH: 699 words

HEADLINE: California and the West;
THE CALIFORNIA ENERGY CRISIS;
Power Companies Step Up Lobbying

BYLINE: JULIE TAMAKI, MIGUEL BUSTILLO, TIMES STAFF WRITERS

DATELINE: SACRAMENTO

BODY:

??As California's electricity crisis exploded this year, so did lobbying by
energy companies.

??Pacific Gas & Electric Co., which has filed for bankruptcy protection, spent
$622,000 lobbying lawmakers and Gov. Gray Davis' administration during the 
first
three months of the year, according to reports filed with the state Monday.

??The reports show that seven energy companies spent more than $1 million on
lobbying as they ramped up their response to the crisis. Houston-based power
producer Reliant Energy, for example, spent nearly $100,000 on lobbying firms
through March 31--almost four times the $25,523 it spent during all of last
year.

??The documents show that lobbyists for the firms were hard at work trying to
influence a horde of energy-related measures, from legislation to set new 
rates
for small power producers to a bill that put California in the electricity 
purchasing business.

??PG&E spokesman Ron Low said his company racked up hundreds of thousands of
dollars in expenses in its unsuccessful effort to reach an agreement with the
state on the purchase of its transmission lines. An unprecedented number of
energy-related bills added to PG&E's need to hire lobbyists, Low said.

??"During the first quarter this year, more than 350 bills were introduced in
the Legislature that deal with the energy industry," Low said. "Almost all 
those
bills affected our customers and required staff analysis, testimony before
legislative committees, and questions to be answered for legislators and their
staff."

??Sempra Energy, the parent firm of San Diego Gas & Electric, spent $192,000
lobbying lawmakers in Sacramento and regulators at the Public Utilities
Commission, roughly half of what it spent all of last year.

??The utility also made campaign contributions to political parties and
Sacramento politicians, giving $250 to Lt. Gov. Cruz Bustamante, $750 each to
Assembly members Keith Richman (R-Northridge) and George Runner Jr.
(R-Lancaster) and $1,000 to Sen. Kevin Murray (D-Culver City), among others.

??A lobbying report for the parent company of Southern California Edison was
not available Monday evening. The reports were required to be filed both
electronically and by mail, postmarked by midnight Monday.

??Electricity merchants and generators also boosted their spending. El Paso
Energy Corp., which owns one of the main natural gas pipelines into 
California,
spent nearly $22,000. It reported lobbying Davis' office and the California 
Energy Commission.

??Lobbyists hired by the company, according to the report, also spent $607 on
dinners held in January and February with five lawmakers and an Assembly staff
member to discuss energy-related issues.

??Assemblyman Roderick Wright, the Los Angeles Democrat who chairs the
Assembly's Utilities and Commerce Committee, dined with a lobbyist 
representing
El Paso on Feb. 21 at the Esquire Grill, a Sacramento restaurant, according to
the report. Assemblyman Joe Canciamilla (D-Pittsburg), who heads a 
subcommittee
exploring natural gas issues, also ate at the Esquire on El Paso's tab that
night.

??The Houston-based power firm Dynegy Inc. spent $32,261 on lobbying through
March 31, compared to $24,000 during all of last year. Another Houston energy
company, electricity marketer Enron Corp., spent $66,994.

??Duke Energy is among the firms paying top dollar for Sacramento lobbyists as
it seeks to build power plants in California to capitalize on the state's 
energy
shortage. The company reported spending more than $62,000 on lobbying through
March 31--more than it spent all of last year.

??"We would be remiss in not ensuring that our voice is heard in Sacramento,"
said Duke Energy spokesman Tom Williams, adding that his firm's proposed Moss
Landing power plant would provide "30% of the new generation [of electricity] 
for the whole state of California in 2002."

??"They're [lobbyists] not speaking for us, he added. "They're helping us know
exactly who to speak with to make sure we're appropriately heard--and frankly,
to ensure that we can get our power plants built."

??*

??Times staff writer Nancy Vogel contributed to this story.

LOAD-DATE: May 1, 2001

??????????????????????????????12 of 58 DOCUMENTS

??????????????????Copyright 2001 The New York Times Company

??????????????????????????????The New York Times

??????????????????May 1, 2001, Tuesday, Late Edition - Final

SECTION: Section A; Page 1; Column 5; National Desk

LENGTH: 2130 words

HEADLINE: River's Power Aids California And Enriches the Northwest

BYLINE: ?By BLAINE HARDEN

DATELINE: GEORGE, Wash.

BODY:

??Doing something nice for California has never been a priority here in the
Columbia River Basin, where high-voltage power lines lope across irrigated
fields of alfalfa, potatoes and wheat.

??Politicians from California, as farmers in this area will explain at great
length, have been scheming for decades to siphon off the basin's cheap
electricity and water.

???Californians, however, have been noticeably less irritating as of late.
Having fouled up electricity deregulation six ways from Sunday, they are
skidding into the summer air-conditioning season desperately short of power. 
In
the last year, much of their salvation has come from the Columbia River, whose
monstrous dams are the largest hydroelectricity machines in North America.

??All along the river, from Portland, Ore., to British Columbia, utility
companies, aluminum makers and farmers have joined to help save California --
but at a staggering price. Charging whatever California's dysfunctional power
market will bear, people in this narrow stretch of the Northwest have created 
a
kind of Kuwait along the Columbia.

??With their record profits, some public utilities are wiring the emptiness of
Eastern Washington with fiber optics, buying diesel generators to make still
more power and paying Wall Street-style wages to electricity traders -- while
making sure that their electricity rates remain among the cheapest in North
America. Just north of the border in British Columbia, a state-owned utility
luxuriated in its California windfall by mailing out rebate checks to 1.6
million customers.

??Their good fortune, though, has come with a measure of ambivalence and may
well be short-lived. A severe drought is already hurting farmers across the
region. If it continues, utilities along the river will have to buy power and
may be punished by the same market forces that gave them a windfall.

??"This is not nice money," said Alice Parker, a retired farmer who heads a
group that promotes irrigation in the Columbia Basin. "It is something that is
offered to us not to use water so Californians can run their 
air-conditioners."

??Nice or not, a whole lot of money flooded into the Columbia Basin.

??North of here in sparsely populated Chelan County, a publicly owned utility
that has two dams on the Columbia made three times as much money last year 
than
it ever had before. With just 35,000 local customers, the utility last year 
had
a $58.2 million profit. It paid its two top power traders $285,000 each, an
astonishing income in a county where per capita income is less than $25,000 a
year. The utility refuses to reveal the traders' names for fear their children
might be kidnapped.

??The chief operating officer of Chelan County Public Utility District
acknowledged that increases in the cost of power were "huge" and "obscene." 
But
the executive, Charles J. Hosken, added, "We would be imprudent if we did not
maximize this market for our customer owners."

??Next door in equally sparse Grant County, a public utility that also owns 
two
dams on the Columbia has made even more money maximizing the market. It had a
record $88.8 million in profits last year -- more than double its best 
previous
year.

??Grant County Public Utility District, which has just 40,000 retail 
customers,
is using its windfall to help build a $70 million fiber optic network for 
local
residents. It has also bought 20 diesel generators to guard against power
shortages and, if possible, exploit the power gold-rush. The utility estimates
that those generators could add $50 million to profits in the coming year.

??Like Chelan, Grant is using its profits as a kind of drought insurance to
insulate its customers from high market prices for electricity, when, as now,
local needs exceed generating capacity in the river. Power rates in Grant and
Chelan Counties are about one-fifth as much as in New York City.

??Grant County's utility has rejected, for the time being, the idea of giving 
a
share of its profits to its customers.

??"How would it look if Grant County gives away rebates while so many people
are paying more for electricity?" asked Lon Topaz, director of resource
management for the utility. "It would be lousy politics."

An Upside-Down Economy

??The second-worst drought on record in the Columbia River Basin has combined
with California's deregulation mess to further distort the energy market.
Drought has not only helped increase the price at which electricity can be 
sold
on the spot market -- 10 to 20 times as much as last year's price -- it has
strengthened a compelling bottom-line rationale for conservation. Every 
megawatt
not purchased and used in the Northwest (often at locked-in, long-term prices
that are a fraction of the current market rate) can be sent south to 
California.
For many utilities, conservation spells local savings and a long-distance
bonanza.

??As a result, a regional economy built on half a century of cheap hydropower
has been stood on its head. Irrigation farmers here are being paid up to $440 
an
acre not to farm.

??Similarly, aluminum companies are collecting about $1.7 billion this year by
not making aluminum. Companies like Alcoa have earned profits that delight 
Wall
Street, while keeping about 10,000 workers on their payroll, by reselling
hydropower that they bought in the mid-1990's under a cheap long-term 
contract.

??Even residential customers are being offered a chance to make a few dollars
from the power crunch. Avista Utilities has announced that it will pay its
customers in Washington and Idaho 5 cents for every kilowatt they do not use, 
if
their consumption falls more than 5 percent below last year's level.

??For utilities in the Northwest, by far the largest profits from California's
electricity crisis have been secured in British Columbia. A number of private
American utilities have also benefited from California's troubles.

??BC Hydro, a utility owned by British Columbia with dams on the Columbia and
Peace Rivers, is the first corporation in the history of the province to 
exceed
$1 billion in profits, as measured in Canadian currency ($712 million in 
United
States currency).

??To celebrate, the provincial government ordered BC Hydro to do something it
had never done before. The utility mailed each of its customers a check for
$130. BC Hydro also guaranteed them no increases in electricity rates, which
have not gone up for seven years.

??"We are just happy to be lucky that we have reservoirs and dams that were
built by people of great foresight," said Brian R. D. Smith, chairman of BC
Hydro.

??When reminded that a March study by the California Independent System
Operator, which runs that state's power grid, accused BC Hydro of market
manipulation and profit gouging, Mr. Smith was less happy.

??"All they do is scream and shout and they won't pay you the money they owe
you," he said, arguing that his company has gone out of its way to help
California in its hour of need. Gouging has nothing to do with it, he said,
adding that it was California's "awful mess" in deregulating power markets 
that
fueled BC Hydro's record profits.

A Good Deal for Farmers

??In the beginning, that is to say when federal money began transforming the
Columbia from the world's premier salmon highway into a chain of adjustable
lakes, no one paid much attention to electricity. The river possessed a third 
of
America's hydroelectric potential, but there were not enough people in the
Northwest to use more than a fraction of it, and long-distance high-voltage
transmission lines did not exist.

??The main intention, when New Deal dollars began raining on the Northwest in
the 1930's, was to create family farms. Grand Coulee Dam, the biggest dam in
North America and by far the largest hydroelectric plant, was primarily 
designed
as a water-delivery device for farmers.

??Since then, as 6,000 miles of tunnels and concrete canals were built to
shuttle water around in sagebrush country, each 960-acre farm in the Columbia
Basin Federal Irrigation Project was blessed with at least $2.1 million in
federal infrastructure subsidies, according to the Bureau of Reclamation, 
which
built it.

??In addition, farmers are guaranteed access to cheap water from the Columbia
and the right to buy all the electricity they needed to pump that water out of
the river -- at $1.50 a megawatt. A megawatt of electricity currently sells 
for
$375 to $400 on the spot market. As Paul Pitzer, a Columbia Basin historian, 
has
written, farmers here have always felt that "no price is too high to pay for
their water so long as someone else is paying the bill."

??This year, though, the price finally became unbearably high for the
Bonneville Power Administration, a nonprofit agency that markets electricity
from 29 federal dams on river. ?The agency calculated that if it could 
persuade
farmers in the project not to irrigate 90,000 acres of land, water left in the
Columbia would produce electricity worth as much as $129 million (if it had to
be purchased at current market prices).

??In a buyout that is without precedent in the Pacific Northwest, Bonneville 
is
paying 800 farmers a total of $30 million. The farmers receive $330 for each
acre they do not farm. On top of that, Grant County's public utility is paying
many of the same farmers about $100 an acre not to farm their land.

??On April 13, about 20 irrigators gathered for lunch at the Martha Inn Cafe
here in George to discuss the buyout. Since farm prices are low this year, 
they
agreed that it was a good deal.

??Still, the farmers, who do not like to be reminded of the federal subsidies
that keep their irrigation system afloat, said they worried about the 
precedent
they set when they traded water for cash.

??"This has to be a temporary deal," said Tom Flynt, 52, who normally farms 
900
acres but has taken 150 acres out of production because of the buyout. "If
anybody thought this would affect their water rights, there would be no 
takers."

??Several farmers said they did not like the idea of their water supporting 
the
lifestyles of urban people, especially Californians, who, those who were
interviewed said, do not appreciate the food that the farmers put on their
table.

??"We feel that Americans are making decisions with their mouths full," said
Tricia C. Lubach, a marketing consultant whose husband is an irrigation 
farmer.
"Not too long ago they didn't worry about where the power comes from. Someday
they may think about where the food comes from."

A 'Wonderful Energy Fit'

??A couple of hundred miles northwest of George, in a penthouse conference 
room
that overlooks Vancouver harbor, Mr. Smith, the chairman of British Columbia's
most profitable company, explained in mid-April what a pain it was selling
electricity to Californians.

??"People say to me what are you doing selling power to those ungrateful
Californians," he said. It does not help, he added, that the state is behind 
on
its bills by about $300 million.

??Still, neither BC Hydro nor the provincial government can afford to lose
California's money. The utility has become a cash cow for the provincial 
budget,
which in the last decade has received more than $3.7 billion from BC Hydro.

??"We have a wonderful energy fit," Mr. Smith said, referring to BC Hydro's
power-trading relationship with California, if not to Californians themselves.
"We have oversupply in the summer when they have got high demand, and we have
got undersupply in the winter when they have got stuff to give to us."

??BC Hydro has acknowledged that it massages its hydropower system to sell
power when it is most needed -- and most expensive -- in California. The 
utility
closes the faucets on its dams at night during the summer, storing water while
meeting local electricity needs with cheap off-peak power brought from across
the West. In the morning, when prices peak, it opens the faucets and zaps
electricity off to California.

??"We spill water during the day," Mr. Smith said. "Why? Is it because we can
make more money? No. It's because that is when everybody wants electricity, 
for
God's sake."

??Questions about profit gouging on the part of dam-dependent utilities in the
Northwest may soon be moot. Drought has reduced the Columbia River runoff so 
far
this year to about half of what is considered normal.

??The shortfall dovetails with higher costs for natural-gas-fired power plants
and a growing gap on the West Coast between demand for electricity and 
capacity
to generate it.

??"Absent being successful in getting loads down, we could be looking at
quadrupling of the power rates," said Paul Norman, head of power operations at
Bonneville.

??Unless conservation increases or the drought eases, Mr. Norman warned that 
by
late summer, the Northwest's era of cheap power could come to a sudden and
painfully expensive end.


??http://www.nytimes.com
 
GRAPHIC: Photo: Electricity generated by Rock Island Dam in Chelan County,
Wash., helped the county's public utility earn a record $58.2 million in 
profits
last year. (Larry Davis for The New York Times)(pg. A20)

Graph: "The Public Utilities"
NET OPERATING PROFITS

Graph tracks operating profits since 1995 for the following:

Grant County
Wnapum and Priest Rapids Dams

Chelan County
Rocky Reach and Rock Island Dams

BC Hydro
All major hydroelectric dams in British Colombia

(Source: The public utilities)(pg. A20)

Chart/Map: "One River's Bonanza"
Some public utilities that own dams along the Columbia River, which has one
third of the hydroelectric potential in North America, are selling power to
California and making record profits.

Map of the United States and Canada follows the path of the Columbia River. 
(pg.
A20)

LOAD-DATE: May 1, 2001

??????????????????????????????13 of 58 DOCUMENTS

??????????????Copyright 2001 Knight Ridder/Tribune News Service
???????????????????????Knight Ridder/Tribune News Service

??????????????????????????The Orange County Register

?????????????????????????????May 1, 2001, Tuesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K4842

LENGTH: 378 words

HEADLINE: Power supplier to pay state

BYLINE: By Kate Berry

BODY:

??SANTA ANA, Calif. _ An energy company accused of withholding power to drive
up prices in California's electricity market agreed to pay $8 million in a
settlement approved Monday by federal energy regulators.

??The settlement is the first by a company accused of charging excessive
electricity prices in the state.

??The Federal Energy Regulatory Commission accepted the settlement in which
Williams Cos., of Tulsa, Okla., will refund the state's grid operator $8 
million
for power sold at more than 10 times what it otherwise would have cost.

??The purchases were made in a 10-day period last April and May. Regulators
said Williams deliberately kept generating units in Long Beach and Huntington
Beach offline to raise prices. The California Independent System Operator, 
which
manages the state's electric grid, designated those units to supply power 
during
periods of peak demand at contracted prices.

??The FERC order stated that "Williams had a financial incentive to prolong
outages," at the two plants, which are owned by AES Corp.

??Williams would have been paid $63 a megawatt hour if the two power plants 
had
been online, the FERC order stated. Instead, the company was paid $750 a
megawatt hour for electricity from other AES generating units during that
period.

??AES had said that the units were taken offline for repairs. AES, which sells
all power generated at its three plants in Southern California to Williams 
under
a contract, did not share in the profits from the power sales.

??Officials at Williams have repeatedly denied that the units were 
deliberately
shut down. As part of the settlement, the company did not admit wrongdoing.

??Federal officials had required Williams and AES to justify more than $40
million charged to the ISO. The companies faced paying a maximum of $10.8
million in refunds.

??In a separate matter, Williams is one of several power providers accused by
federal regulators of overcharging the ISO $124 million for power in January 
and
February. The power providers are still disputing those charges.

??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

??(c) 2001, The Orange County Register (Santa Ana, Calif.).

??Visit the Register on the World Wide Web at http://www.ocregister.com/
 
JOURNAL-CODE: OC

LOAD-DATE: May 1, 2001

??????????????????????????????14 of 58 DOCUMENTS

??????????????Copyright 2001 Knight Ridder/Tribune News Service
???????????????????????Knight Ridder/Tribune News Service

????????????????????????????San Jose Mercury News

?????????????????????????????May 1, 2001, Tuesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K4846

LENGTH: 814 words

HEADLINE: Williams Energy agrees to return $8 million to state

BYLINE: By Brandon Bailey

BODY:

??SAN JOSE, Calif. _ For the first time in California's current energy crisis,
a power supplier accused of gouging the state's wholesale electricity market 
has
agreed to return a slice of its profits.

??Under a consent agreement with the Federal Energy Regulatory Commission,
Oklahoma-based Williams Energy has agreed to refund $8 million that the 
company
earned by selling replacement power at top dollar after two generating plants 
in
Southern California went offline for several days last spring.

??But Williams admitted no wrongdoing and FERC specifically stated that it was
not finding any violation of its rules. The $8 million will be returned to the
California Independent System Operator, which bought the power from Williams
last April and May.

??The agreement was promptly criticized by state officials who contend that
Williams and other power suppliers have made billions in excess profits by
selling in California's troubled wholesale market.

??"An $8 million refund is nothing in the context of the excessive rates that
these marketers, like Williams, have been receiving," charged Carl Wood, a
member of the California Public Utilities Commission.

??"The broader issue is like somebody walking out of a bank having robbed them
of $1,000 and the cops stop them at the door and tell them: 'You're going to
have to hand back $10,'" Wood complained. "FERC is acting as the collector for
the cartel."

??California authorities had urged the federal commission to impose $33 
million
in penalties, or three times the $11 million in revenue that federal 
authorities
initially estimated Williams had made from the two plant shut-downs. Federal
officials weren't available for comment Monday and it wasn't clear how the $8
million refund was determined.

??"Our purpose in settling was so we could move on and focus on the energy
issues that are facing California, and not extend this through a lengthy 
hearing
process," said Paula Hall-Collins, a Williams spokeswoman, who declined to
discuss specifics of the case. "We're confident that if we had a full hearing 
of
the facts, we would have been exonerated entirely."

??She said the $8 million would simply be applied against the $252 million 
that
Williams is owed for other energy purchases by the ISO and the state's
now-defunct Power Exchange.

??The refund marks the first time that any power supplier has agreed to return
profits made in California since federal officials began investigating charges
that the state's wholesale electricity market has been rife with manipulation
and abuse. In three other cases that don't involve plant outages, FERC has
ordered suppliers to justify their prices or refund up to $125 million in
profits. Those cases are still pending.

??In a separate proceeding, state authorities are urging FERC to reject
Williams' application for permission to continue selling electricity in
California at unregulated wholesale rates. Hall-Collins said she doesn't 
expect
the consent agreement to affect that application.

??The agreement stems from an investigation launched last year, following
temporary shutdowns at the Huntington Beach and Alamitos power plants owned 
and
operated by Virginia-based AES Inc. Williams has an exclusive agreement with 
AES
to sell all of the output from AES's California plants. In turn, Williams also
had a special contract with the Independent System Operator to make certain
units of those plants available when the ISO needed them to ease localized
energy shortages.

??The episode occurred shortly before wholesale power prices began to 
skyrocket
statewide last summer. When one unit went off-line for repairs in late April 
and
another unit was shut down in early May, the ISO was forced to buy replacement
power from two other AES units in the area. But because those units weren't
subject to the same contract, a FERC statement said the ISO was forced to pay
Williams a spot market price of nearly $750 per megawatt hour _ much higher 
than
the contract rate of roughly $63.

??Both units were taken off-line for emergency maintenance and repairs,
according to the consent agreement. But the document also says that a Williams
employee offered AES a financial incentive to extend the outage at one of the
units.

??Williams never actually paid any incentive to AES, according to the FERC
document, which says Williams has taken steps to prevent any similar offers in
the future.

??AES isn't required to make any restitution under the consent agreement. An
AES spokesman said his firm has no reason to manipulate plant outages because 
it
has contracted to sell all of its power to Williams at a pre-determined rate.

??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

??(c) 2001, San Jose Mercury News (San Jose, Calif.).

??Visit Mercury Center, the World Wide Web site of the Mercury News, at
http://www.sjmercury.com/
 
JOURNAL-CODE: SJ

LOAD-DATE: May 1, 2001

??????????????????????????????15 of 58 DOCUMENTS

??????????????Copyright 2001 Knight Ridder/Tribune News Service
???????????????????????Knight Ridder/Tribune News Service

????????????????????????????San Jose Mercury News

?????????????????????????????May 1, 2001, Tuesday

SECTION: DOMESTIC NEWS

KR-ACC-NO: ?K4844

LENGTH: 1017 words

HEADLINE: Cheney says energy plan could prevent California crisis from 
spreading

BYLINE: By Jim Puzzanghera

BODY:

??WASHINGTON _ The energy woes of California and the nation cannot be solved
with price controls or conservation, but only by increasing the country's 
supply
of oil and natural gas and using more coal and nuclear power, Vice President
Dick Cheney said Monday.

??Cheney was laying the groundwork for the announcement later this month of a
major energy proposal. The vice president argued that without adopting the 
Bush
administration plan, California's energy crisis may spread to the rest of the
country.

??"A few years ago, many people had never heard the term 'rolling blackout.'
Now everybody in California knows the term all too well. And the rest of 
America
is starting to wonder when these rolling blackouts might roll over them," 
Cheney
said in a Toronto speech to the Associated Press.

??"Without a clear, coherent energy strategy for the nation, all Americans
could one day go through what Californians are experiencing now, or worse,"
warned Cheney who heads the administration's high-level energy task force.

??Cheney's speech was notable more for its tone than its substance. Much of 
the
detail he offered is similar to what Energy Secretary Spencer Abraham laid out
last month. He reiterated the need for more than 1,300 new power plants and
38,000 miles of additional natural gas pipeline. And Cheney repeated an
administration claim that the area to be opened for drilling in Alaska's
environmentally sensitive Arctic National Wildlife Refuge would be smaller 
than
Washington's Dulles airport.

??But Cheney, who ran a Texas firm that provided services to the energy
industry, used blunt language to dismiss the idea that conservation could be a
major solution to the problem.

??"The aim here is efficiency, not austerity," Cheney said, rejecting the
notion that Americans should be told to "do more with less."

??"Conservation may be a sign of personal virtue, but it is not a sufficient
basis for a sound, comprehensive energy policy," he said.

??Large-scale conservation is one of California Gov. Gray Davis' efforts for
getting through this summer without extensive blackouts. Earlier this month,
Davis approved an $850 million energy conservation plan that offers incentives
to try to shave at least 2,000 megawatts a day off the state's electricity
usage.

??Davis on Monday blasted Bush and Cheney for belittling conservation 
programs.

??"It's clear that the Bush administration has an energy bias. Both the
president and the vice president come from an oil and gas producing state. 
That
is their bias," Davis said, referring to Bush's Texas oil roots and Cheney's
tenure as the head of Texas-based Halliburton Co. "And I do believe we should
build more plants and produce more energy, but at the same time, we must 
become
more energy efficient."

??Davis and other California officials have also pushed the administration to
limit the price of electricity throughout the West this summer. Although 
federal
regulators approved measures last week designed to rein in the cost of
electricity in California, the plan fell far short of hard price caps.

??Cheney on Monday restated the White House's opposition to price caps, saying
they were among a number of the "usual quick fixes" that have failed to solve
the problem over the years.

??"Price controls, tapping strategic reserves, creating new federal agencies _
if these were any solution we'd have resolved the problems a long time ago,"
Cheney said.

??The Vice President rejected the idea that alternative sources of energy 
could
replace our dependence on fossil fuels such as oil, gas and coal, at least 
for a
long time.

??"The reality is that fossil fuels supply virtually a hundred percent of our
transportation needs and an overwhelming share of our electricity 
requirements,"
he said. "For years down the road, this will continue to be true."

??The solution, he said, was to find more oil and natural gas by increasing
drilling in the United States, making more use of coal by finding new ways to
burn it more cleanly, and a renewed emphasis on nuclear power.

??"Fortunately for the environment, one-fifth of our electricity is nuclear
generated," he said. "If we're serious about environmental protection, then we
must seriously question the wisdom of backing away from what is, as a matter 
of
record, a safe, clean and very plentiful energy source."

??Carl Pope, executive director of the Sierra Club, said the White House is
trying to convince people that their plan to ramp up energy production, even 
at
the expense of environmental concerns, is the only way to solve the energy
problems.

??"From the beginning, the administration has wanted to tell the American
people that they didn't have any choice, that the only way they could 
transport
themselves to work, heat their houses, toast their toast was to ruin the
environment," he said.

??The environmental leader saw a sign of desperation, however, in Cheney's
speech. "They've been out pushing this agenda for a hundred days and the
American people are rejecting it," Pope said.

??Several recent polls have shown Bush scoring low on his handling of
environmental and energy issues. A Wall Street Journal/NBC News poll released
last week, showed 61 percent of respondents rated Bush's performance on energy
as "only fair" or "poor."

??U.S. Rep. Anna Eshoo, D-Calif., said the administration was going backward
with its proposals. She joined with more than 30 of her colleagues from
California and Washington to write to Abraham Monday and criticize the 
handling
of the energy crisis.

??"We can do much better than this," Eshoo said of the crystallizing White
House plan. "I don't think we need to sacrifice our environment in order to 
move
ahead."

??(staff writer Michael Bazeley contributed to this report.)

??ARCHIVE GRAPHIC on PressLink-NewsCom:

??20010428 ENERGY FORECAST, 1 col x 5 in, shows projected increase in 
gasoline,
heating oil and natural gas prices between now and 2010, according to a new
analysis of government data.

??(c) 2001, San Jose Mercury News (San Jose, Calif.).

??Visit Mercury Center, the World Wide Web site of the Mercury News, at
http://www.sjmercury.com/
 
JOURNAL-CODE: SJ

LOAD-DATE: May 1, 2001

??????????????????????????????16 of 58 DOCUMENTS

?????????????????Copyright 2001 The Chronicle Publishing Co.

?????????????????????????The San Francisco Chronicle

?????????????????????MAY 1, 2001, TUESDAY, FINAL EDITION

SECTION: NEWS; Pg. A1

LENGTH: 804 words

HEADLINE: Feds want surcharge to pay utilities' debts;

THE PLAN: Additional rate boost likely, cash would go to power suppliers

SOURCE: Chronicle Staff Writer

BYLINE: Carolyn Said

BODY:
Federal energy regulators have proposed a surcharge on wholesale electricity 
sales in California to compensate generating companies, angering state 
officials
who say the idea amounts to gouging consumers.

???The Federal Energy Regulatory Commission suggested collecting the money to
reimburse electricity suppliers who have debts from Pacific Gas and Electric 
Co., Southern California Edison and San Diego Gas & Electric Co. Power 
companies
accrued some $6 billion in unpaid bills from California's struggling utilities
in late 2000 and early this year, until the state stepped in to take over the
purchasing of power.

???"Under the pretense of helping California, (FERC) is proposing to steal
additional money from California ratepayers to pad the pockets of the greedy
energy companies," Gov. Gray Davis said in a statement. "FERC does not care 
one
wit about the ratepayer. Their plan is a total capitulation to the energy
companies."

???Sen. Dianne Feinstein, D-Calif., who has been an outspoken critic of FERC's
policies in California, said the surcharge would "ensure that power generators
get paid fully for their price gouging. That is outrageous and will further
alienate Californians."

???The surcharge presumably would be levied on the California Department of
Water Resources, which, as the state's purchasing agent, has already spent 
more
than $5 billion on power since January. The DWR's costs, in turn, are likely 
to
be borne by California's consumers and taxpayers.

???FERC would require the California Independent System Operator, which runs
the state's power grid, to collect the surcharge. But state regulators could
challenge the surcharge.

???"We have 30 days to comment to FERC and are considering our options," said
Sean Gallagher, state counsel at the California Public Utilities Commission.

???"If (FERC's) concern is public policy and maintaining just and reasonable
prices for consumers, I don't quite understand why they would get into the
middle of a legal wrangle about past bills' getting paid," said Severin
Borenstein, director of the University of California Energy Institute in
Berkeley. "It is true the firms would like to get paid. I'm not sure what FERC
has to do with helping them collect their money."

???A 'GOUGING TAX'

???Consumer advocates characterized the surcharge as a "gouging tax" that
underscores the Bush administration's close ties to energy firms, many of 
which
are based in President Bush's home state of Texas.

???"This is evidence that FERC and the administration are more interested in
protecting the energy industry than the consumers or taxpayers of California,"
said Doug Heller, a consumer advocate with the Los Angeles-based Foundation 
for
Taxpayer and Consumer Rights. "It's back-billing us to pay prices that were
unjust and unreasonable per the FERC's own analysis."

???FERC's Curt Hebert, a Mississippi Republican whom President Bush appointed
chairman of the commission, was behind the surcharge proposal, which he told 
the
Wall Street Journal was a way "to stabilize the market." Hebert did not return
calls for comment.

???The surcharge was proposed in FERC's 39-page "mitigation" plan to alleviate
wholesale electricity prices in California during power emergencies; the plan
was released last week. FERC said it would accept public comment on the 
proposal
for 30 days, after which it would decide whether to implement it.

???COMPLICATED ISSUES

???Even the power industry, the presumptive beneficiary of the surcharge, did
not express whole-hearted support for it.

???"I'm glad they brought it up," said Gary Ackerman, executive director of 
the
Western Power Trading Forum, which represents all major buyers and sellers of
wholesale electricity in California. "But it skirts the issue of what's state
regulated and what's federally regulated. I'm not sure how federal regulators
can pass a charge on wholesale costs which then ends up on consumers, without
the state saying it's OK."

???Some of the proposal's wording is unclear. It discusses, for example,
whether the surcharge money "should cover all past-due amounts or only future
unpaid bills starting from the date the plan is begun."

???The reference to "future unpaid bills" is puzzling since, with the state of
California picking up the tab, electricity suppliers no longer are 
accumulating
unpaid bills from the utilities.

???"That could become a self-fulfilling prophecy; we don't want to go there,"
Ackerman said about the idea of "future unpaid bills."

???The FERC proposal also implies that electricity generators have reduced
production in California, an allegation the power companies themselves deny.
FERC asked for comments on whether the surcharge "would help to increase
production by creating a greater assurance that generators will be 
paid."E-mail
Carolyn Said at csaid@sfchronicle.com.

LOAD-DATE: May 1, 2001

??????????????????????????????17 of 58 DOCUMENTS

??????????????Copyright 2001 Knight Ridder/Tribune News Service
???????????????????????Knight Ridder/Tribune News Service

??????????????????????The Tribune (San Luis Obispo, CA)

?????????????????????????????May 1, 2001, Tuesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K3262

LENGTH: 699 words

HEADLINE: Professor converts manure to electricity in effort to save money

BYLINE: By Jerry Bunin

BODY:

??SAN LUIS OBISPO, Calif. _ After growing up on a Kansas farm, Douglas 
Williams
had just started his post-graduate research in agricultural engineering when 
the
first national energy crisis hit in 1973.

??He saw how dependent agriculture was on fossils fuels and knew its future
economic health depended on making greater use of renewal energy sources, such
as the sun, wind and methane.

??Now a Cal Poly professor, and with California in another energy crisis,
Williams is managing a project that converts cow manure into electricity. His
methane project could save the university $15,000 annually in electricity 
costs
while simultaneously reducing pollution and decreasing odors.

??Williams, who has taught in the agricultural engineering and bioresources
department for 18 years, hopes to have the project running full time by June. 
He
said the entire project's costs could be recouped in 12 years or less, 
depending
on how fast energy costs increase.

??The system should produce 20 kilowatts per hour or .02 megawatts of energy,
enough to meet about two-thirds of the energy needs for the agriculture
department, he said. The $200,000 project is being funded mostly by grants 
with
some matching money from business and government.

??The manure from about 200 milk cows at Cal Poly's dairy will fuel the
project. "Cows, in proportion to their weight, generate a lot of organic
matter," said Williams, who grew up on a 480-acre farm that raised crops and
livestock.

??The manure is flushed off the concrete dairy floor into a 4 million-gallon
lagoon. A reinforced polypropylene sheet covers about 90 percent of the 
lagoon,
trapping the methane that is naturally produced as manure decomposes. The gas 
is
sent to turn a turbine, which produces electricity.

??Water and solid waste left over by the process are used for irrigation and
fertilizer on Cal Poly crop lands, he added.

??Burning methane to generate electricity produces about one-tenth of the
nitrous oxide that is created by an internal combustion engine, he said. The
project also should reduce water pollution by insuring the proper distribution
of wastewater, Williams added.

??The process isn't new, Williams said. He started working on the project in
1998 and has worked in this field for 25 years. "Even before this energy 
crisis,
there was a lot of interest in it." Farmers see it as a means to improve
relations with their residential neighbors, said Williams, a Los Osos 
resident.

??Agricultural projects in Tulare and Kings counties have been rejected after
neighbors lobbied against odors they anticipated from farms, he said.

??Williams reported getting phone calls from farmers interested in the
technology. He has written papers on the topic and will present one later this
year in Belgium. And he has consulted with pig farmers in Thailand and the
Philippines about methane power.

??Using methane to create electricity holds promise for California, where cows
produce nearly 60 billion pounds of manure annually, Williams said, noting 
that
Gov. Gray Davis recently signed legislation that authorized spending $10 
million
on methane energy pilot projects at dairies.

??Nirupam Pal, who teaches civil and environmental engineering, is a
co-researcher on the project, Williams said. Pal is taking odor measurements 
at
the dairy, which is about a mile from the center of the campus.

??Williams, who teaches classes on wastewater as well as agriculture and
energy, uses the methane project in several classes and involved students in 
the
project's design. Chris Dalikas, majoring in agricultural systems management,
installed the project's gas piping.

??"There's lot of good practical experience in this for students," said
Williams, who got his bachelor's from Kansas State and his doctorate in 1973
from UC Davis.

??"Some of my students have done senior projects on this," he said. "That's 
the
Cal Poly way. Anytime you do research, you've got to have students involved."

??PHOTO will be available from KRT Direct and KRT Photo Service, 202-383-6099.

??KRT CALIFORNIA is a premium service of Knight Ridder/Tribune

??(c) 2001, The Tribune, San Luis Obispo, Calif.

??Visit The Tribune Online at http://www.Sanluisobispo.com/
 
JOURNAL-CODE: SO

LOAD-DATE: May 1, 2001

??????????????????????????????18 of 58 DOCUMENTS

??????????????????????Copyright 2001 The Washington Post

?????????????????????????????The Washington Post

?????????????????????May 01, 2001, Tuesday, Final Edition

SECTION: FINANCIAL; Pg. E03

LENGTH: 495 words

HEADLINE: Energy Overcharge Case Settled; Williams to Pay Calif. $8 Million
After Probe Involving AES 

BYLINE: Peter Behr, Washington Post Staff Writer

BODY:




???Williams Co. of Tulsa, a major supplier of electricity to California, 
yesterday agreed to refund $ 8 million to the state to settle an investigation
into alleged overcharging brought by the Federal Energy Regulatory Commission.

???The announced settlement with FERC also covers AES Corp., a global
power-plant operator headquartered in Arlington. Neither company admitted
engaging in wrongdoing in agreeing to the settlement, FERC said.

???Although FERC has directed more than a dozen California electricity 
suppliers to refund $ 124.5 million or justify their wholesale power bids to 
the
state, the Williams-AES case is the only enforcement action FERC has brought 
so
far involving California's extraordinary wholesale power costs.

???Stu Ryan, AES's group manager for California, said the company had not
shared in Williams's profit in the two instances. "The plants were 
legitimately
not available" for service," he said. "We are not paying a penny of this [the
FERC settlement], and I think that speaks volumes."

???A Williams spokeswoman said the company preferred to work "more
productively" on California's energy issues than battling with FERC.

???"We are confident the facts would have exonerated us."

???California's Public Utility Commission had urged that companies face triple
damages if found in violation of federal regulations, but FERC said the 
heavier
sanctions were not warranted.

???One of FERC's three commissioners, while concurring in the settlement, said
the agency had not been tough enough.

???"Economic withholding" is hard if not impossible to remedy after the fact,
said commissioner William L. Massey, "thus remedies for market misconduct must
be comparably severe enough to act as a deterrent. . . . This settlement is 
not
as strong as I would have preferred."

???The FERC investigation involved two AES-owned plants in California at
Alamitos and Huntington Beach. AES had contracted to take natural gas from
Williams, use it to generate electricity and sell the power at an agreed-upon
price back to Williams.

???Williams in turn, had a contract to provide the state's power grid with
output from the two AES units on short notice to maintain sufficient voltage 
in
transmission networks or meet other reliability needs. Williams received a fee
for this service and was also entitled to be reimbursed for plant operating
costs at an hourly rate of about $ 63 per megawatt.

???On different occasions in April and May, the state was notified that the
plants were not in service and the state's grid manager, the Independent 
System
Operator, had to buy power from other AES units not covered by the supply
contract. For that power, Williams charged about $ 750 per megawatt hour, FERC
said -- making a profit of $ 10.85 million.

???The issue was whether the plants were legitimately out of service, the
commission said.

???Although FERC raised questions about that issue, its settlement yesterday
offered no conclusions.



LOAD-DATE: May 01, 2001

??????????????????????????????20 of 58 DOCUMENTS

???????????????????The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

????????????????????????May 1, 2001, Tuesday, BC cycle

?????????????????????????????9:49 AM Eastern Time

SECTION: State and Regional

LENGTH: 840 words

HEADLINE: Lawmakers offer bills aimed at cutting natural gas prices

BYLINE: By JENNIFER COLEMAN, Associated Press Writer

DATELINE: SACRAMENTO

BODY:

??Gov. Gray Davis is relying on stringent conservation measures, increased
electricity supply and quick Legislative authority to proceed with a $12.5
billion revenue bond issue to head off blackouts this summer.

??Davis administration officials briefed lawmakers Monday on the governor's
plan to rescue Southern California Edison by buying the utility's transmission
lines.

??The extra financial details Davis' representatives gave Assembly Republicans
include forecasts of the Department of Water Resources' summer power 
purchases -
the same figures the state will use to find buyers for $12.5 billion in bonds 
to
pay for future power.

??Those forecasts, some Republicans said, count on too many things falling 
into
place, including the assumption that all of the state's financially troubled
alternative energy producers will be online.

??Though energy analysts have predicted skyrocketing energy costs for summer -
up to $1,500 per megawatt hour - the governor's plan calculates an average 
cost
of $195 per megawatt hour over June, July and August.

??That's because DWR cut long-term contracts covering a major part of the
electricity needed during peak times, said Ron Nichols, senior managing 
director
for Navigant Consulting Inc.

??Long-term contracts and conservation will minimize the effect of the 
expected
high spot prices, Nichols said.

??In essence, Davis aides, much of the conservation will be spurred by sticker
shock felt by consumers when they get their higher rates on their June bills.
PG&E customers will see a 34 percent increase, Southern California Edison's 
will
jump 32 and San Diego Gas and Electric rates will jump 44 percent.

??Davis' consultants predict the state can conserve up to 7,234 megawatts
during peak demand - about 16 percent of a 45,000 megawatt load that summer
weather can bring on. One megawatt is roughly enough power for 750 homes.

??Much of that conservation, 2,484 megawatts, will come from three different
conservation programs through the California Independent System Operator, 
keeper
of the state's power grid.

??Davis' "20/20" conservation plan is expected to cut another 2,200 megawatts
of demand. The rest of the cuts come from the sticker shock of higher consumer
rates and by estimating how much less power Californians are using this year
compared to last year.

??"If we're wrong, there are certain reserves built in," said Susan Kennedy,
deputy chief of staff and secretary of cabinet. Either the state borrows more 
or
there will be blackouts, she added, and if the price of power goes higher than
expectations, the state won't be able to afford it.

??By the end of 2002, Davis estimates, DWR will spend $26.9 billion to buy
power for customers of the three financially ailing utilities. Of that, $12.5
billion will be paid for by revenue bonds that will add up to one cent per
kilowatt hour to customer bills for 15 years.

??The Legislature approved the revenue bonds based on a formula that would set
the amount of the issue. Now Davis' representatives say it's urgent that the
Legislature approve a bill with a firm cap so they could begin the bond sale.

??"We need the unambiguous authority to sell bonds. We need it right now. We
cannot afford any delays," Kennedy said.

??A bill putting a $10 billion limit on the bonds stalled in the Assembly last
week after Republicans refused to vote for it until they received more details
about Davis' power buys and long-term contracts.

??Republicans wondered about the ability of the alternative generators to be
online, a sentiment shared by the industry. Currently, about one-third are
off-line now because PG&E and Edison owe them more than $1 billion.

??The Public Utilities Commission ordered the utilities to pay those 
generators
every other week starting April 1, but the large debts have the generators
fighting to stay open, said Jan Smutny-Jones, executive director of the
Independent Energy Producers. 

??Davis' predictions aren't rosy, but realistic, said Joseph Fichera, a
financial adviser for the governor. "It minimizes the risk of blackouts, but 
you
can never eliminate it."

??Also Monday, an Assembly subcommittee unveiled four bills Monday designed to
increase supplies of natural gas, including streamlining approvals for gas
storage and new pipelines.

??After conducting hearings on the market, the subcommittee is recommending 
the
state streamline the PUC's process to approve underground natural gas storage
facilities and new pipelines, allow lower-grade California natural gas to be
used by industrial users and reform tariffs to see if they discourage
investments in a variety of natural gas-related ventures.

??Meanwhile, the state remained free of power alerts Tuesday morning as
reserves stayed above 7 percent.




??On the Net:

??The bill numbers are: AB78x by Canciamilla; AB73x by Canciamilla and
Dickerson; AB23x, by Assemblyman Dennis Cardoza, D-Atwater, and Assemblywoman
Barbara Matthews, D-Tracy; and AB42x, by Diaz.

??Read the bills at www.assembly.ca.gov

LOAD-DATE: May 1, 2001

??????????????????????????????21 of 58 DOCUMENTS

???????????????????The Associated Press State & Local Wire

The materials in the AP file were compiled by The Associated Press. ?These
materials may not be republished without the express written consent of The
Associated Press.

????????????????????????May 1, 2001, Tuesday, BC cycle

?????????????????????????????9:46 AM Eastern Time

SECTION: State and Regional

LENGTH: 619 words

HEADLINE: Developments in California's energy crisis

BYLINE: By The Associated Press

BODY:

??Developments in California's energy crisis:

??TUESDAY:


??- An Assembly electricity oversight committee releases report on its
investigation of alleged natural gas price and supply manipulation.

??- The state remains free of power alerts as electricity reserves stay above 
7
percent.

??MONDAY:


??- Gov. Gray Davis' staff briefs Assembly Republicans on the plan to purchase
Southern California Edison's transmission lines. The governor estimates that
during peak hours this summer, Californians can conserve more than 7,000
megawatts. That's enough power for more than 5 million homes. Davis' advisers
say the Legislature needs to quickly approve a bill that would let the state
issue bonds to buy power for customers of Pacific Gas and Electric, San Diego
Gas and Electric and Edison. The bonds would also repay the general fund for 
the
more than $5 billion the state has already spent on power.

??- PG&E's transmission lines could still be bought by the state despite the
utility seeking bankruptcy protection when an earlier deal with state
negotiators fell through, Davis says. Davis tells reporters that a creditors
committee of businesses owed money by PG&E asked the state for a briefing on
talks to buy San Diego Gas and Electric Co.'s transmission lines. Davis says 
he
believes there is still some possibility of buying PG&E's lines.

??- Williams Energy agrees to pay $8 million to settle charges by federal
regulators that the company withheld power to drive up prices.

??"We decided to settle to put this behind us and to put our full attention
toward more productive matters in relation to California versus going through 
a
costly and long hearing process," said Williams spokeswoman Paula 
Hall-Collins.
She said Williams "is confident that a full hearing of the facts would have
exonerated us entirely."

??- Members of the Assembly Subcommittee on Natural Gas Costs and Availability
unveil legislation to cut natural gas prices.

??- The state Assembly approves a bill that lets a private energy company
purchase a shuttered PG&E power plant. The North American Power Group plans to
reopen the Kern Power Plant that PG&E shut down in 1985. Once renovated, it 
will
provide enough electricity about 180,000 homes. The bill moves to the Senate.

??- The state remains free of power alerts as electricity reserves stay above 
7
percent.



??WHAT'S NEXT:


??- Davis' representatives continue negotiating with Sempra, the parent 
company
of San Diego Gas and Electric Co., to buy the utility's transmission lines.

??THE PROBLEM:

??High demand, high wholesale energy costs, transmission glitches and a tight
supply worsened by scarce hydroelectric power in the Northwest and maintenance
at aging California power plants are all factors in California's electricity 
crisis.

??Edison and PG&E say they've lost nearly $14 billion since June to high
wholesale prices the state's electricity deregulation law bars them from 
passing
on to consumers. PG&E, saying it hasn't received the help it needs from
regulators or state lawmakers, filed for federal bankruptcy protection April 
6.

??Electricity and natural gas suppliers, scared off by the two companies' poor
credit ratings, are refusing to sell to them, leading the state in January to
start buying power for the utilities' nearly 9 million residential and 
business
customers. The state is also buying power for a third investor-owned utility,
San Diego Gas & Electric, which is in better financial shape than much larger
Edison and PG&E but also struggling with high wholesale power costs.

??The Public Utilities Commission has raised rates as much as 46 percent to
help finance the state's multibillion-dollar power buys.

LOAD-DATE: May 1, 2001