Pretty good LA Times editorial.  "Tracy" is with ARM's new PR Firm -- their 
job will be to let people know that retail competition is essential
----- Forwarded by Susan J Mara/NA/Enron on 11/21/2000 07:54 AM -----

	"Counihan, Rick" <rick.counihan@greenmountain.com>
	11/20/2000 05:39 PM
		 
		 To: "'ARM List Serve'" <Arm@phaser.com>
		 cc: 
		 Subject: FW: There's No Going Back

ARMers,

This is the type of editorial where they should be listing a robust retail
market.  I do not have Tracy's e-mail.  Please forward for me.

Rick

-----Original Message-----
From: Rachel McMahon [mailto:rachel@cleanpower.org] 
Sent: Monday, November 20, 2000 12:47 PM
To: Shannon Eddy; Tracy Cordes; Julia Levin; Jane Hotchkiss-Gordy; Alan
Nogee; Bonnie Holmes-Gen; Dan Kirshner; David Olsen; Deborah Dodds;
Donald Aitken; Ed Maddox; Eric Miller; Fran Prisco; Hap Boyd; Heather
Robbins; Jack Pigott; jcameron@solutionsatwork.com; Jennifer Minnehan;
Jim Caldwell; Joe Costello; Joe Ronan; John Shahabian; John White;
Jonathan Weisgall; Julie Blunden; Kari Smith; Ralph Cavanagh; Rich
Ferguson; Rick Counihan; Sara Myers; Sara Stern; Sarah Rose; Sheryl
Carter; Steve Hamilton; Steve Ponder; Tom "Smitty" Smith; Trond
Aschehoug; Les Nelson; Rhonda Mills
Subject: There's No Going Back 


Monday, November 20, 2000
Los Angeles Times Editorials

There's No Going Back
California is again suffering from electricity shortages, but a return to
the regulated monopolies of the old days isn't the answer.

     California's electricity market is a mess. First a hot summer in the
south brought shortages and skyrocketing prices. Now the state is threatened
with another wave of rolling blackouts stemming from elevated heating
demands caused by a cold snap and from power plants being out of service.
Californians may even be asked to turn off their Christmas lights to
conserve energy.
     Deregulation of the industry in 1996 is being blamed for California's
energy crunch, to a large extent justifiably. The rules under which the
"deregulated" market has been operating, combined with woefully insufficient
power generation capacity, have allowed some power providers to make a
killing at the expense of consumers. Because electricity was plentiful in
1996, the state froze all new power plant construction in the belief there
was enough capacity to meet future needs. Going back to privately owned or
state-run monopolies, however, is not the answer. Rather, the rules have to
be changed to give the utilities more freedom in buying and selling
electricity and to encourage power generators to build new plants in the
state. For their part, consumers should conserve more electrical power.
     The Federal Energy Regulatory Commission, which controls the wholesale
electricity market and drives deregulation nationwide, has drawn up rules
aimed at bringing relief to consumers as soon as the changes are adopted. In
the long run, however, it is up to the state to streamline and speed up
procedures for approving new power plants. It takes years just to comply
with rigid environmental laws and get all the paperwork done.
     The reason California led the way in electricity deregulation is that
the old monopoly utilities were inefficient and their rates were among the
highest in the country. Re-creating that system, aside from the cost, would
return the state to the sluggish monopolies. It would do nothing to solve
the underlying problem of insufficient power supply. New capacity would
still have to be built to accommodate the booming economy.
     The cornerstone of the federal proposal is the elimination of state
rules that have forced utilities such as San Diego Gas & Electric Co., the
guinea pig in the deregulation experiment, and Southern California Edison to
buy or sell most of their load on the highly volatile spot markets. That
prevents them from entering into long-term contracts that would make supply
more reliable and prices more stable. Power suppliers, aided by spikes in
demand, used the state restrictions skillfully to drive up prices. Los
Angeles was spared the high cost and power shortages because its city-run
utility, the Department of Water and Power, is not subject to the illogical
state market restrictions.
     Other federal proposals would overhaul the state's power transmission
and exchange agencies to make them independent of the power generators and
utilities and require them to report noncompetitive market behavior. The
federal government could then require sellers to refund their ill-gotten
gains.
     Gov. Gray Davis was right in telling the federal energy commission last
week that the market rules have been manipulated in California to generate
"obscene profits" for power suppliers. But he was wrong in suggesting that
the state should regain control of the industry. The market behaved
according to the flawed rules the California Legislature wrote for it. The
federal proposal would go a long way toward fixing the problem. Sacramento,
meanwhile, should encourage energy conservation programs and the development
of alternative and renewable power sources.