Time running out on Edison deal
Sacramento Bee, September 14, 2001

Enron agrees to turn over documents to Senate investigators 
San Diego Union Tribune, September 13, 2001



California lawmakers face largest issue, hundreds of bills on final day of session
San Francisco Chronicle, September 14, 2001

Westerners look to windmills as possible saviors of a way of life
San Francisco Chronicle, September 14, 2001

Edison's bailout down to the wire 
Sacramento Bee, September 14, 2001




Time running out on Edison deal
By Jennifer Coleman 
Associated Press Writer

SACRAMENTO (AP) -- State lawmakers prepared to rush through hundreds of measures in the remaining two days of the legislative session, but one massive issue remained unsolved Thursday (AP) -- if and how the state will help Southern California Edison avoid bankruptcy. 
By Thursday afternoon, the Senate had done little to consider the Assembly's revision of a plan the Senate passed in July. Without a Senate vote, the rescue plan will die and leave Edison faced with bankruptcy. 
Without a rescue, "we have every indication from Edison that they'll file for bankruptcy," said Steve Maviglio, the spokesman for Gov. Gray Davis, who negotiated a deal with Edison in April. 
That deal allows the utility to issue revenue bonds, backed by customer bills, to pay most of its $3.9 billion in debts. It also gives the state an option to buy the utility's transmission grid for about $2.4 billion and hold development rights on more than 20,000 acres of Edison land. 
The Legislature must approve the deal by the time it adjourns Friday. Lawmakers are also in a special session devoted to energy issues, which could last longer than the regular session. 
The state's other large utility, Pacific Gas and Electric Co., filed for Chapter 11 bankruptcy in April, after amassing about $8.9 billion due to last year's sky-high electricity costs. Edison says it has accrued $3.9 billion in debts. 
Now, the Senate has an altered version of Davis' deal, but it appears unlikely to pass it. The bill currently allows Edison to sell $2.9 billion in bonds. 
Instead, senators could "gut and amend" an Assembly measure, reverting the deal to something closer to the version they sent the Assembly. 
In that bill, by Sen. Richard Polanco, D-Los Angeles, the utility's bond issue would be capped at $2.5 billion and the state's option to buy the grid would be for the lines' book value. Edison opposed that deal, saying it would not return them to financial solvency. 
Senate President Pro Tem John Burton, a San Francisco Democrat, has been reluctant to pass an Edison deal. Maviglio said the governor's staff was trying to work with Burton's to come up with something. 
"We're ready and willing to meet when he is," Maviglio said. 
The Senate Energy Committee, which could meet Thursday evening, is considering amending an Assembly bill already in their house. That bill would have to be approved by the energy and fiscal committees, then sent to the floor for a vote by the full Senate. 
If that happens, "there's nothing we can do," said Assembly Republican spokeswoman Dana O'Donnell. "It's coming back for concurrence. That means we can't amend it, we can only either vote on it or not vote on it." 
Consumer groups opposed the bill approved by the Assembly last week. 
"We're working pretty hard to prevent them from doing anything," said consumer advocate Doug Heller with the Foundation for Taxpayer and Consumer Rights. That organization has promised to mount a ballot measure to reverse any Edison rescue deal approved by the Legislature. 



Enron agrees to turn over documents to Senate investigators 
By Jennifer Coleman
ASSOCIATED PRESS 
September 13, 2001 
SACRAMENTO - Enron Corp. agreed Thursday to release company documents to a Senate committee investigating possible price manipulation, ending the committee's quest to cite the energy company for contempt for not complying with a subpoena. 
The Senate Rules Committee heard arguments from Enron and the Senate Select Committee to Investigate Price Manipulation of the Wholesale Energy Market over whether the energy company should be found in contempt. 
In June, the select committee subpoenaed Enron files as part of its investigation into record-high prices in the state's wholesale electricity market. Enron sued to quash the subpoena, a motion a judge rejected. 
The judge agreed, however, that Enron was entitled to a protective order for documents revealing sensitive trading and financial information. 
Sen. Joe Dunn, D-Santa Ana, chairman of the select committee, said late Thursday that Enron agreed to the same confidentiality agreement accepted by several other generators. With that agreement, Dunn said, the committee would withdraw a report that recommended Enron be found in contempt. 
He said he expects documents to be transferred immediately. 
Dunn had argued the subpoena also covered nonconfidential documents, and since the energy company also refused to release those papers to the committee, it was in contempt. 
He asked Sen. John Burton, D-San Francisco, chairman of the rules committee, to approve fines against Enron for each day they didn't comply with the subpoena. The daily fines would start at $1,000, doubling each day for 10 days. Then the company would be fined $1 million a day. 
Enron lawyer Michael Kirby said the company had put 49,000 nonconfidential documents in a depository in Sacramento so committee investigators could review them. 
But Dennis Murphy, a lawyer for the select committee, said Enron didn't tell investigators where the depository was located. The committee discovered the address in documents filed by Enron for the court case, he said. 
"We've been trying to get into the depository for a week. They have not allowed our people in there to verify what documents are in there," he said. 
Kirby disputed that, and blamed the committee for delays in turning over the balance of the documents. The two parties haven't met since the judge ordered the protective order, and Kirby said it was the committee that refused to work out the order's details. 
Dunn said the law requires Enron to produce the documents before it was entitled to a protective order. 
Sen. Ross Johnson, R-Irvine, said Dunn's push to have Enron found in contempt "smacks at this point of Enron being punished for exercising their right to go to court." 
A contempt report on Reliant Energy has also been sent to the Senate. A contempt finding against Mirant Corp. was later reversed when the company opened a document depository in Sacramento for the committee's investigators. 
If the full Senate imposes sanctions against Reliant or Enron, it will be the first time since 1929, when the Senate voted to jail reluctant witnesses during a committee investigation of price fixing and price gouging involving cement sales to the state. 



California lawmakers face largest issue, hundreds of bills on final day of session
State lawmakers faced a mammoth task on the final day of the legislative session as they tackle a rescue plan for Southern California Edison and hundreds of bills to complete by a midnight deadline. 
The terrorist attacks on Tuesday forced lawmakers to skip a full day of proceedings, creating an even busier final day that could possibly drag into Saturday. 
During a marathon session Thursday and early Friday, lawmakers redrew their own district lines, approved twin handgun license bills and a measure allowing in-state college tuition for certain immigrants. 
Lawmakers still have to consider another version of Gov. Gray Davis' plan to rescue Southern California Edison from bankruptcy. The latest plan would let the utility issue $2.5 billion in bonds, leaving the company with $1.4 billion in debt. 
Without a rescue, "we have every indication from Edison that they'll file for bankruptcy," said Steve Maviglio, the spokesman for Davis. 
The cash-strapped utility and Pacific Gas and Electric say they've lost nearly $14 billion since June 2000 to high wholesale prices the state's electricity deregulation law bars them from passing on to consumers. PG&E filed for federal bankruptcy protection April 6. 
Another top priority of the Legislature was redrawing district lines to reflect population changes reported in Census 2000. 
The Assembly and Senate approved district plans for themselves and Congress, sending them to Davis for his approval. 



Westerners look to windmills as possible saviors of a way of life
Wash. (AP) -- Like many ranchers facing pressure from developers, Shirley Hindman worries that one day she might have to break up her Nine Mile Ranch, one of the largest spreads in the Walla Walla Valley. 
"That would make me sick," she says. 
But now she and her father, Billy, have found another way to protect their 14,000 acres of sagebrush-covered hills and canyonland. The answer has come in the wind -- something "we have plenty of," she says. 
And something also in growing demand. 
Soon the ridgelines across Highway 12 from Hindman's corrals will be dotted by windmills. By next year Hindman and several other property owners, including a nearby college, expect to be landlords to the world's largest wind farm. 
Along southeastern Washington and into neighboring Oregon, 450 Danish-built windmills -- sleek white towers 200 feet high with rotors 200 feet across -- will churn out enough power for 75,000 families served by Pacificorp, one of the Northwest's leading electric utilities. 
Nearly 100 of the wind turbines already are producing. Gravel roads and concrete slabs for the others are in place. "It will help us keep Nine Mile. It will help us sustain a way of life," says Hugh Preston, Ms. Hindman's husband. 
More than just an economic hedge for farmers and ranchers, wind farms across the West and upper Midwest are emerging as a growing part of the nation's electricity picture. Major projects are operating or earmarked for completion within a year in Texas, Montana, Minnesota, Kansas and Nevada. 
While windmills still account for only a fraction of 1 percent of the electricity produced in the United States, they no longer are the exotic playthings of a few dreamers. Increasingly, big-time players are showing interest in wind to supplement fossil fuel-powered electricity plants, nuclear reactors and hydroelectric dams. 
"Wind is a technology that's now reliable and proven," says Robert Morrison, vice president for renewable business development at FPL Energy, the Florida-based company building the 300-megawatt Oregon-Washington project. The cost of generating electricity from wind has declined from 38 cents a kilowatt-hour 20 years ago, to 3 to 5 cents a kilowatt hour in today's larger projects, says the industry. That's competitive with natural gas. 
"Suddenly this stuff is economical," says Morrison, whose company has other wind projects under way or being planned in a half-dozen states including Texas, Kansas and Wisconsin. 
Other emerging players include Enron, the giant Houston-based energy conglomerate, and the government's Bonneville Power Administration, which this year sought $1 billion worth of wind energy projects and received more bids than expected. 
"The response blew us away," said George Darr, Bonneville's manager for renewable resources. Some of the projects will begin operating late next year. 
Windmills now account for only about 2,500 megawatts of generating capacity nationwide, but the production is expected almost to double by the end of 2001 to provide enough electricity for 1.3 million households. The industry anticipates that in two decades wind power will grow to 100,000 megawatts and account for 6 percent of the country's electricity. 
In comparison, nuclear power currently provides about 20 percent of U.S. electricity, coal-fired plants 52 percent. 
Wind's sudden popularity has astounded even its biggest boosters. 
"We are in a boom year," says Randall Swisher, executive director of the American Wind Energy Association, the industry's trade group in Washington, D.C. "We are expecting huge growth, especially in the West." 
That is good news for David Bittersdorf, president of NRG Systems Inc., a Vermont company that makes wind-measuring devices. "We've grown 40 percent this year," he says. His company, which had $10 million in sales, expects business to quadruple over the next five years. 
For the Hindman family at Nine Mile Ranch, turbines rising from the scrub mean cash in the bank, while not interfering with their 700 head of cattle. Typically, farmers and ranchers involved in such lease arrangements get about $2,000 a year per turbine. 
"Wind is a very lucrative crop for farmers," says Bill Clemens, president of the chamber of commerce in nearby Walla Walla. The windmills are "a real curiosity" and may even add to the valley's tourist trade, he said. 
Ironically, the region does not provide the most ideal locations for wind power. 
What some call the Saudi Arabia of wind stretches from eastern Montana and the Dakotas, through Nebraska, Kansas and into Texas -- a region with enough wind potential to power the nation, according to the Energy Department. 
James Dehlsen, an early wind energy pioneer, dreams of putting together a massive wind complex of 2,000 turbines stretching over 90 miles of prairie in South Dakota. It would be 10 times as large as the Washington-Oregon project and produce a staggering 3,000 megawatts of electricity. 
"We're at the early stages of the project," said Dehlsen, founder of the Zond Corp., a U.S. wind turbine manufacturer that has since been bought by Enron. But he said he already has a commitments from 150 farmers for use of 176,000 acres. 



Edison's bailout down to the wire 
By Carrie Peyton
Bee Staff Writer
(Published Sept. 14, 2001) 
Today could be judgment day for Southern California Edison. 
The drive to dig the state's second-largest power company out of its financial hole has reached its final, sleep-deprived hours. 
Sometime before the Legislature adjourns late tonight or early Saturday, a $2.5 billion-plus deal could be struck in an effort to keep Edison from following Pacific Gas and Electric Co. into bankruptcy. 
An Edison rescue could lock Southern California businesses into rates higher than residents pay. 
It could indirectly drive up residential rates statewide by freeing big businesses to strike private deals for electricity, leaving small consumers to pay off the state's costly wholesale power contracts. 
And it could still fail to solve Edison's financial problems -- some creditors warn that the utility needs at least $1 billion more to sidestep bankruptcy. 
But some, including Gov. Gray Davis, believe it is the best way out of a 15-month-old energy quandary that began when wholesale prices soared so high that Edison could not pay them while prices it charged consumers were frozen. 
Consumer groups argued that Edison and its parent company were legally obligated by deregulation to dig into past profits to cover the gap. Edison disagreed. 
Since then, Davis has put his prestige on the line with a plan to rescue Edison, which he unveiled three days after PG&E filed for Chapter 11 bankruptcy protection in April. 
"We're not doing this for Edison," the governor said in a press release when an Assembly version of the rescue package passed last week. "We're doing it for ourselves, so we can get people who really understand how to buy power back into the power buying business." 
Many consumer groups and some lawmakers say bankruptcy courts can best unravel Edison's finances. They argue that the best thing the Legislature could do is nothing. 
Some lobbyists give any Edison pact a 50-50 chance of emerging before the weekend. 
Edison officials have said repeatedly that the company's many creditors are likely to petition the courts to force it into bankruptcy if no deal is reached by the Legislature's close. They say that could mean lower-quality electric service in the long run. 
Meanwhile, the terms of any deal have become caught up in the rush toward adjournment, with its hallway conferences, meetings late into the night and constant trades among interest groups and legislative leaders. 
"When you wait until the last few days of the session, this is subject to all sorts of issues that are totally unrelated," said D.J. Smith, a lobbyist for large electricity users. 
By Thursday, one key piece of the debate had come down to whether Edison should get $2.5 billion or $2.9 billion from business customers, and how large a business would have to be before it kicks into the Edison rescue. 
"This may live and die over an apocryphal Rosie's Dry Cleaners," said Mike Florio, an attorney for The Utility Reform Network, a consumer group. "That has kind of become a symbol here over who's going to have to pay for this bailout, (but) I'm not actually sure this is the most important issue." 
Large business groups are lobbying for a big pool of midsize power users to pay off the $2.5 billion or $2.9 billion through extra charges on their electric bills. Senate President Pro Tem John Burton had initially urged that only the largest power users should pay. A compromise figure emerged Thursday but could change again as the measure is amended. 
Also in question is how much other energy legislation might be wrapped into a final deal to win votes or allies. 
At various times, provisions calling for utilities statewide to sell a set amount of renewable power have been included, as sweeteners for the environmentally minded. 
So have provisions that would let businesses sidestep costly long-term state contracts by generating their own electricity or by signing up with other suppliers. 
"The clock is running out," said Chriss Street of Street Asset Management, which is advising a committee of Edison creditors. "The real crunch time for all of these negotiations is going to be in the last hours." 
Street said the Legislature is avoiding the true issue by refusing to authorize a $3.5 billion to $3.9 billion deal that he said is needed to fully pay all creditors. Without the higher amount, he said, Edison creditors might well force a bankruptcy, believing they could get a better deal in court.