Today's IEP news....


Have a great 4th of July!



Jean


-- 
Jean Munoz
McNally Temple Associates, Inc.
916-447-8186
916-447-6326 (fx)



AP Online, July 2, 2001; Monday, 11:49 PM, Eastern Time, Domestic,
????non-Washington, general news item, 337 words, California Releases Power
????Contracts, JENNIFER COLEMAN, SACRAMENTO

Contra Costa Times, July 3, 2001, Tuesday, STATE AND REGIONAL NEWS, K5203,
????752 words, Tourists to California just roll with the outages, By Jasmine
????Kripalani

Copley News Service, July 3, 2001, Tuesday, State and regional, 537 words,
????Duke Energy agrees to refund money, Bill Ainsworth, SACRAMENTO, Calif.

Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 12, 158 words,
????Scoring the Pollsters

Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 10, 705 words,
????THE ENERGY CRISIS; ; Generator Bows, Pledges to Cut Electricity Bill by 
$20
????Million; Power: Duke Energy had been accused by the state of price 
gouging.
????Gov. Davis insists that the company still has much to explain., NANCY 
RIVERA
????BROOKS, RICH CONNELL, TIMES STAFF WRITERS

Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 10, 442 words,
????THE ENERGY CRISIS; ; Senate Panel's Resolution Backs Power Plant Seizures;
????Energy: State lawmakers hope to put pressure on producers accused of
????exploiting California. Governor brings another facility online., CARL
????INGRAM, TIMES STAFF WRITER, SACRAMENTO

Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 1, 530 words,
????THE ENERGY CRISIS; ; Power Sales Halted by New Pricing Curbs; 
?Electricity:
????Confused suppliers, unsure what they will be paid, refuse to sell to 
state,
????which asks FERC for a ruling but doesn't get it., NANCY VOGEL, TIMES STAFF
????WRITER, SACRAMENTO

Los Angeles Times, July 3, 2001 Tuesday, Home Edition, Page 1, 1429 words,
????THE ENERGY CRISIS; ; Hidden Costs Revealed in Power Pacts, RICH CONNELL,
????ROBERT J. LOPEZ, JEFFREY L. RABIN, TIMES STAFF WRITERS

The New York Times, July 3, 2001, Tuesday, Late Edition - Final, Section A;
????Page 10; Column 5; National Desk, 804 words, Power Company Rebuts
????Accusations of Gouging, By JAMES STERNGOLD, LOS ANGELES, July 2

San Jose Mercury News, July 3, 2001, Tuesday, STATE AND REGIONAL NEWS,
????K5369, 508 words, Davis paying millions to energy consultants, contracts
????reveal, By Dion Nissenbaum

San Jose Mercury News, July 3, 2001, Tuesday, SJ-ENERGY-PRICE, 834 words,
????California Officials Insist Energy Company Manipulated Prices, Output, By
????Brandon Bailey

The San Francisco Chronicle, JULY 3, 2001, TUESDAY,, FINAL EDITION, NEWS;,
????Pg. A3, 860 words, Uncensored power pacts made public; ???State controller
????says deals will burden general fund for years, Carolyn Said, Christian
????Berthelsen, David Parrish

The Washington Post, July 03, 2001, Tuesday, Final Edition, FINANCIAL; Pg.
????E02, 1111 words, Duke Energy Cuts Calif. Bill

The Associated Press, July 3, 2001, Tuesday, BC cycle, 7:27 AM Eastern Time
????, Business News, 622 words, Duke releases California energy records to
????counter accusations of price gouging, By LESLIE GORNSTEIN, AP Business
????Writer, LOS ANGELES

Business Wire, July 2, 2001, Monday, 590 words, Stage One and Stage Two
????Emergencies Declared as Demand Soars; California ISO Strongly Urges
????Conservation, FOLSOM, Calif., July 2, 2001

Copyright 2001 Associated Press

??????????????????????????????????AP Online

?????????????????July 2, 2001; Monday 11:49 PM, Eastern Time

SECTION: Domestic, non-Washington, general news item

LENGTH: 337 words

HEADLINE: ?California Releases Power Contracts

BYLINE: JENNIFER COLEMAN


DATELINE: SACRAMENTO

BODY:

???State Controller Kathleen Connell released details about four of
California's short-term contracts with power companies Monday, a move the
governor's office said could drive up wholesale energy prices.

??Democratic Gov. Gray Davis for months refused to release details of 
long-term
contracts the state had signed with electricity providers, saying the 
documents
needed to remain secret. He released 38 of the contracts in June, with key
portions blacked out.

??A judge ordered that the long-term contracts be released in their entirety
after several news organizations sued, including The Associated Press.

??But the four short-term contracts Connell released Monday along with the
long-term contracts were not part of the judge's mandate. The contracts reveal
the state's strategy for making day-to-day purchases, said Steve Maviglio,
spokesman for Davis. He said revealing the strategy could lead to higher
wholesale prices.

??''It shows the irresponsibility of the controller and every California who
gets a higher electricity bill can thank Kathleen Connell,'' Maviglio said.

??Connell said the judge heard all the evidence before ordering the complete
contracts released and ''there is no reason that information should raise
prices. Today's prices aren't going to be affected by prices engineered 
several
months ago.''

??But generators can use that information to time their sales and drive up
their prices, said Oscar Hidalgo, spokesman for the Department of Water
Resources.

??''We still feel that those will hinder our leverage in gaining reasonably
priced power on the spot market,'' he said ''It shows our position on the 
daily
spot market and what we're willing to pay,'' he said.

??Some state officials have criticized the long-term deals most of which are 
10
years saying they are too long.

??By signing long-term contracts including 41 deals with 27 power generators
worth about $43 billion the state could get burned if energy prices go down,
said Public Utilities Commissioner Richard Bills.

LOAD-DATE: July 2, 2001

??????????????????????????????3 of 65 DOCUMENTS
??????????????Copyright 2001 Knight Ridder/Tribune News Service
???????????????????????Knight Ridder/Tribune News Service

??????????????????????????????Contra Costa Times

????????????????????????????July 3, 2001, Tuesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K5203

LENGTH: 752 words

HEADLINE: Tourists to California just roll with the outages

BYLINE: By Jasmine Kripalani

BODY:

??SAN FRANCISCO _ Tourists are constantly asking the gift shop manager at Coit
Tower if a blackout could occur while they ride the elevator to the top of the
210-foot fire hose nozzle-shaped landmark.

??"They're serious when they ask it. I always tell 'em, 'We got the last guy
out in only three days,' " said Walt Lo.

??Tour guides, hotel managers and gift shop clerks in the Bay Area have
developed a sense of humor about the California energy crisis. But for many
visitors the perception of blackouts conjures up images of streets without
traffic lights and people trapped in elevators.

??Before leaving their Indiana suburb for vacation, Mike and Lisa Bonahoom
worried about what was ahead, but not enough to stop them from booking a
three-night stay at the room designed by former Grateful Dead frontman Jerry
Garcia in the Hotel Triton.

??"The perception in the Midwest is that (Californians) don't have lights,"
said Mike Bonahoom.

??Lisa, added: "We heard news reports that they shut the lights off every day
(at a set time) in order to save electricity, and people would plan their day
around that. I worried about getting stuck in an elevator for hours, but I
didn't mention any of this to the kids."

??It's a fear California's travel and tourism commission is taking so 
seriously
that it has handed a public relations firm about a half-million dollars to 
plan
an advertising campaign that will convince the rest of the world that it's 
still
safe to travel to the Golden State.

??Communications director Fred Sater blames visitors' fears on the media's use
of the term "rolling blackout."

??" 'Planned outage' or 'power interruption' _ that's the correct phrase," he
said. Sater believes "rolling blackout" inaccurately implies long periods of
darkness across the state.

??The San Francisco visitors bureau has taken a less expensive approach. It 
has
posted a letter and Frequently Asked Questions list on its Web site
(www.sfvisitor.org) that assures potential visitors that emergency services 
are
still available and that they won't get stuck on an amusement park ride.

??But all the warnings in the world wouldn't have done much good on a recent
Thursday at about 1:10 p.m. when the lights in parts of San Francisco 
flickered,
then went out for about an hour.

??Pacific Gas & Electric said 7,000 of its customers were without power and
attributed it to a bad cable between Broadway and Vallejo on Mason Street.

??One of those customers included a souvenir shop near Fisherman's Wharf.

??Kathy Joy had to wait several minutes before she could complete a sweatshirt
purchase. The cashier rushed to the front of the store with her solar-powered
calculator in hand and returned with a total.

??"That'll be $19.90," Sharon Stevenson told Joy and added that she could only
accept cash. Joy had the cash.

??Other stores, many of which mistook the outage for a blackout, were forced 
to
shut down their businesses.

??Sean Farber, a sales manager at Studio 39, a video-making business in which 
a
person's body is transposed on a backdrop of the Golden Gate Bridge, took
advantage of the power outage to express his political viewpoint by posting a
sign that read: "Thanks to PG&E, Enron, and George W Bush We will be closed
until 3:00."

??Others saw the outage as an entrepreneurial opportunity.

??"Hey, folks, there's a rolling blackout. You might as well go on a Bay
cruise," a tour operator loudly offered.

??Many didn't even notice the hourlong power outage.

??Two visitors from Naples, Fla., who were in town for the recent NASCAR 
races,
noticed the darkened businesses only after a reporter pointed it out.

??"Well, if this means I can't get into the pub, I will be very upset," said
Craig Barrero, who was clad in shorts and toting a video recorder.

??Other tourists said the only time the energy crisis has affected them is 
when
they're ready to check out of their hotel room.

??When Robyn and Ben Reeve from Australia walked into their room at the Hilton
on Fisherman's Wharf, they found the usual amenities: tightly tucked linens
between mattresses and the bathroom towels symmetrically draped over a brass
bar.

??The Reeves also found a letter from the general manager informing them that
they would have to pay a $2.85 energy tax per night.

??PHOTOS 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, Contra Costa Times (Walnut Creek, Calif.).

??Visit the Contra Costa Times on the Web at http://www.cctimes.com/
 
JOURNAL-CODE: CC

LOAD-DATE: July 3, 2001

??????????????????????????????4 of 65 DOCUMENTS

??????????????????????Copyright 2001 Copley News Service

?????????????????????????????Copley News Service

????????????????????????????July 3, 2001, Tuesday

SECTION: State and regional

LENGTH: 537 words

HEADLINE: Duke Energy agrees to refund money

BYLINE: Bill Ainsworth

DATELINE: SACRAMENTO, Calif.

BODY:

??As hot summer weather triggered the first Stage 2 power alert yesterday in
more than a month, Duke Energy agreed to refund money from an earlier 
extremely
high price to comply with an order from federal regulators.

??While California was able to squeeze by with tight power supplies, southern
Nevada was not so lucky and was forced to endure brief rolling blackouts 
during
triple-digit heat.

??California's electricity grid manager, the Independent System Operator, had
issued the last previous Stage 2 alert on May 31.

??The hot weather is expected to continue. ''Conservation is going to play a
key role in reducing demand,'' said Greg Fishman, spokesman for the ISO.

??California's electricity demand peaked at about 4 p.m. with 41,600 
megawatts,
with an available supply of 42,402 megawatts. A megawatt can power about 750
homes.

??Meanwhile, Duke Energy announced that it would follow rather than fight an
order from the Federal Energy Regulatory Commission to refund money from 
January
when it charged a state record $3,880-per-megawatt hour. Duke was allowed to
charge only $273 per megawatt-hour, according to FERC.

??The North Carolina-based company said that it would slash $20 million from
California's power bill, including $2.1 million from February.

??Unlike the action for January, the February price cut was not ordered by the
Federal Energy Regulatory Commission.

??''It's our way of creating a good working atmosphere to come up with some
solutions,'' said Terry Francisco, a company spokesman.

??The money is a mere fraction of the $805 million that the ISO says the
company overcharged California residents.

??In all, the ISO says power companies have overcharged California at least $
8.9 billion.

??Company officials, meanwhile, continued to fight price-gouging charges
leveled by former employees of Duke's Chula Vista, Calif., plant.

??They held a news conference explaining in detail the actions it took from
Jan. 16 through Jan. 18, a time when it charged the state the record price for
power.

??Previously, the company had released a memo from the ISO saying that the
Chula Vista plant was operating under the grid manager's instructions when it
throttled up and down during that period.

??Jeff Stokes, executive vice president of Duke, would not detail the price 
the
company charged during that time. But in addition to the $3,880 per megawatt
hour, he said, Duke charged between 25 percent and 33 percent of that record
price. That would make the other prices about $1,000 per megawatt hour.

??Yesterday, a megawatt hour sold for $92 on the spot market, and that's about
three times the going price in the spring of 2000.

??Officials from the ISO say the amount of the bids the company offered is
needed to determine whether Duke engaged in price gouging.

??A March report by the ISO accused generating companies of driving up prices
in two ways: by withholding power and by bidding prices so high the state
couldn't afford them.

??Gov. Gray Davis said, in a written statement, that Duke owes Californians an
explanation.

??''Duke has a lot of explaining to do for charging Californians the 
outrageous
price of $3,880 a megawatt hour,'' he said.



??WAGNER-CNS-SD-07-02-01 2102PST



LOAD-DATE: July 3, 2001

??????????????????????????????5 of 65 DOCUMENTS

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

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

??????????????????????July 3, 2001 Tuesday ?Home Edition

SECTION: California; Part 2; Page 12; Metro Desk

LENGTH: 158 words

HEADLINE: Scoring the Pollsters

BODY:

??Re "Power Shortage Not Real, Most Californians Say," June 28: Not "most," 
but
a majority of the 1,541 Californians polled.

??President Bush and his administration didn't do well in the poll in the way
they handled the electricity situation in California--with a 65% disapproval
rating. ?Since the problem started during the Clinton/Gore administration, I
wonder how it would have been rated?

??To those polled who agree strongly that Bush would have been more helpful to
the state if Californians had voted for him, my response is this: Bush so far
has not shown an inclination to sacrifice principles for votes. This is a new
way to govern and not easily understood by many.

??I can't help but wonder how the poll results might have been skewed due to
efforts by Gov. Gray Davis' taxpayer-funded media gurus, hired at $30,000 per
month until last Friday ("Davis Scraps Deal With Consultants," June 30).

??Bob Ball

???o7 Anaheim

???f7

LOAD-DATE: July 3, 2001

??????????????????????????????6 of 65 DOCUMENTS

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

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

??????????????????????July 3, 2001 Tuesday ?Home Edition

SECTION: California; Part 2; Page 10; Metro Desk

LENGTH: 705 words

HEADLINE: THE ENERGY CRISIS;
;
Generator Bows, Pledges to Cut Electricity Bill by $20 Million;
Power: Duke Energy had been accused by the state of price gouging. Gov. Davis 
insists that the company still has much to explain.

BYLINE: NANCY RIVERA BROOKS, RICH CONNELL, TIMES STAFF WRITERS

BODY:

??Caving to state and federal pressure, Duke Energy Corp. said Monday that it
will reduce by $20 million the amount it claims it is owed for electricity 
sales
in California. 

??The Charlotte, N.C., company is one of the state's largest power plant
operators and, with other generators, has been flayed by politicians and
regulators in recent months for alleged overcharges in the California market 
and
for supposedly manipulating electricity supplies.

??Duke also on Monday formally released internal documents of its own, as well
as from the California Independent System Operator, showing that the agency 
was
responsible for huge swings in production at a San Diego-area power plant that
sparked accusations of price gouging.

??In sworn testimony June 22 before a state Senate investigating panel, three
former workers at Duke's Chula Vista plant offered internal operating logs for
three days in January, saying they showed that the company throttled 
generators
up and down "like a yo-yo" to boost prices during power emergencies.

??The company denied the allegations, saying that the workers were not in a
position to know that Cal-ISO, which operates most of the statewide power 
grid,
was controlling the changes.

??Duke has been "shocked and appalled by the accusations that have been 
leveled
against our company," said Jeff Stokes, its executive vice president for 
Western
gas and power. The letter from Cal-ISO acknowledging that it ordered the
production gyrations in the course of maintaining grid reliability was 
reported
Saturday by The Times.

??Duke said the $20-million refund for January and February will come from a
"credit premium" that it had placed on electricity sales because it feared it
would never be paid by Southern California Edison and Pacific Gas & Electric, 
the utility companies then lurching toward bankruptcy. PG&E has since filed 
for
bankruptcy-law protection, and Edison remains financially shaky.

??The Federal Energy Regulatory Commission in June said Duke was entitled to 
no
more than $273 per megawatt-hour of electricity in January and ordered the
company to pay back everything it reaped above that price for the
month--including an infamous charge of $3,880 per megawatt-hour, which a
spokesman for Gov. Gray Davis called "obscene."

??Davis said Monday that Duke still has much to explain.

??"There's no doubt in my mind that there's been an effort by many of the 
power
producers to 'game' the system," Davis said, after dedicating Calpine Corp.'s
540-megawatt Sutter Energy Center in Yuba City, the second of four major power
plants to begin operation this summer.

??So far, Duke executives said, the company has been paid less than 2 cents on
the dollar for the power it provided the state in January and February. The
federal commission is holding a settlement conference to seek agreement on
possible refunds owed California by power generators and marketers.

??A Cal-ISO spokesman declined to comment on the Duke revelations, citing a 
gag
order imposed by the administrative law judge overseeing the settlement
conference.

??Although Cal-ISO late Friday acknowledged that the ramping at the Chula 
Vista
plant was in response to its orders, representatives of the grid agency, the
governor's office and the special state Senate committee probing alleged power
gouging warned Monday that Duke's activities at the plant are still being
scrutinized.

??The ramping activity ordered by Cal-ISO is only part of the picture, they
say. Further investigation of pricing is underway.

??State officials suggest, for example, that the grid operator may have ramped
down generation at times to avoid paying unreasonably high prices. Duke Energy
has refused to release details of the prices it charged for power on the days 
at
the heart of the ex-employees' allegations, and did so again Monday in a
conference call with reporters.

??Under questioning Monday, Duke executive Stokes did indicate that the prices
charged for the power associated with the January logs were in the range of $
1,000 to $1,500 per megawatt-hour, enough electricity to serve about 750
California homes for an hour.

??*

??Times staff writer Eric Bailey in Yuba City contributed to this story.

LOAD-DATE: July 3, 2001

??????????????????????????????7 of 65 DOCUMENTS

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

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

??????????????????????July 3, 2001 Tuesday ?Home Edition

SECTION: California; Part 2; Page 10; Metro Desk

LENGTH: 442 words

HEADLINE: THE ENERGY CRISIS;
;
Senate Panel's Resolution Backs Power Plant Seizures;
Energy: State lawmakers hope to put pressure on producers accused of 
exploiting
California. Governor brings another facility online.

BYLINE: CARL INGRAM, TIMES STAFF WRITER

DATELINE: SACRAMENTO

BODY:

??Hoping to pressure out-of-state electricity sellers accused of exploiting
California during the long energy emergency, a legislative committee on Monday
urged Gov. Gray Davis to begin seizing power plants.

??The Senate Rules Committee approved a nonbinding resolution that tells the
governor the Senate would support seizures if Davis takes such a step.

??All three Democrats on the committee, including Senate leader John Burton of
San Francisco, author of the measure, voted to send it to the full Senate, 
where
approval is expected. It does not require passage by the Assembly.

??The committee's two Republican members abstained from the vote. They also 
did
not argue against the resolution.

??Burton, who has been eager to commandeer a power plant or two, said Davis 
did
not ask for the resolution. But gubernatorial spokesman Steve Maviglio said 
the
governor is grateful for any support he can get.

??Davis, at a ceremony near Yuba City where he marked the opening of a new
540-megawatt power plant, made no mention of the resolution but lashed out at
some of his favorite targets--those same out-of-state generators.

??"We have been a cash cow for Houston, Texas, and Charlotte, North Carolina,
and Oklahoma," Davis said. "That is going to stop."

??In his State of the State speech in January, Davis warned that he would
invoke his emergency powers of eminent domain to seize power plants, if it 
meant
keeping electricity flowing in California. 

??Taking over power plants, Burton argued, would "stabilize" the sky-high
wholesale prices that Californians have been paying for almost a year. The
measure notes that some prices have soared as high as $3,900 a megawatt-hour, 
50
times higher than just two years ago.

??The measure calls the wholesale electricity market in California "grossly
dysfunctional" and characterized by the "abuse of market power and the
withholding of electricity supply."

??The resolution provides no documentation, however, of the charges. A special
Senate committee is looking into whether generators are manipulating the 
market
to drive up profits.

??None of the out-of-state wholesalers that might be affected by the 
governor's
action returned calls seeking a response.

??The new gas-fired plant that was activated on Monday will produce enough
electricity for 500,000 homes. It was the second major plant start-up in a 
week.

??Standing in front of the giant turbines and cooling stacks of the Calpine 
Corp. plant, Davis said the state will be bringing more energy online during
this two-week period than it had in the preceding 13 years.

??*

??Times staff writer Eric Bailey contributed to this story.

LOAD-DATE: July 3, 2001

??????????????????????????????8 of 65 DOCUMENTS

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

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

??????????????????????July 3, 2001 Tuesday ?Home Edition

SECTION: California; Part 2; Page 1; Metro Desk

LENGTH: 530 words

HEADLINE: THE ENERGY CRISIS;
;
Power Sales Halted by New Pricing Curbs;
Electricity: Confused suppliers, unsure what they will be paid, refuse to sell
to state, which asks FERC for a ruling but doesn't get it.

BYLINE: NANCY VOGEL, TIMES STAFF WRITER

DATELINE: SACRAMENTO

BODY:

??Confusion over new federal price restrictions prompted several electricity 
sellers to back away from sales to California on Monday afternoon, pushing the
state closer to blackouts, energy officials said.

??The state lost sales that would have provided enough electricity to supply
more than 1 million homes, said Ray Hart, deputy director of the California 
Department of Water Resources, which has been buying much of the state's
electricity since January.

??At least five companies producing or marketing power "are telling us that
since they don't know what they're going to get paid, they're not going to 
take
the risk, and so they're not going to sell the energy," Hart said.

??The electricity sales fell through after power consumption soared in summer
heat and grid operators were forced to declare a Stage 1 emergency, meaning
reserves had dipped below 7%. It was the first such emergency since May 31.

??Under a June 19 order by the Federal Energy Regulatory Commission intended 
to
bring down wholesale electricity markets across the West, a power emergency in
California triggers the setting of a new price limit that applies to power 
plant
owners from Washington to Arizona.

??The new price is supposed to be based upon whatever it costs to run the most
inefficient, expensive power plant selling electricity to California grid
operators during the first full hour of a Stage 1 emergency.

??But much uncertainty remains about exactly how and when the new price is
supposed to be established under the commission's order, and that apparently
drove away sellers, Hart said.

??Shortly after the state issued the Stage 1 alert at 1:30 p.m., putting the
old price limit of $90 per megawatt-hour in question, companies that had
committed to provide the state electricity hour by hour Monday afternoon 
backed
out, Hart said. The companies include TransAlta Energy Marketing of Oregon,
Constellation Power of Baltimore and Sempra Energy Trading, a unit of the San
Diego-based energy conglomerate.

??Forced to dip even deeper into the state's power reserves and declare a 
Stage
2 emergency, water agency officials called the federal energy commission's
hotline for clarification about what the new price should be and when it 
should
take effect. They got no answer.

??Hart said commission officials reached at home promised to try to clarify
their order today. One outstanding question is what obligations power 
suppliers
have to deliver electricity to California in an emergency.

??Both buyers and sellers in the market agree that the new price, when it is
set, will probably be lower than $90 per megawatt-hour because the price of
natural gas, the main fuel in California power plants, has dropped lately.

??Temperatures soared several degrees higher Monday than grid operators had
anticipated. But they said they expected to avoid rolling blackouts in part
because the Bonneville Power Administration in Portland, Ore., had agreed to
provide several hundred megawatts of Pacific Northwest hydropower each hour in
exchange for a return of electricity from California later this summer.

??"Bonneville is giving us emergency power to get us through," Hart said.

LOAD-DATE: July 3, 2001

??????????????????????????????9 of 65 DOCUMENTS

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

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

??????????????????????July 3, 2001 Tuesday ?Home Edition

SECTION: California; Part 2; Page 1; Metro Desk

LENGTH: 1429 words

HEADLINE: THE ENERGY CRISIS;
;
Hidden Costs Revealed in Power Pacts

BYLINE: RICH CONNELL, ROBERT J. LOPEZ, JEFFREY L. RABIN, TIMES STAFF WRITERS

BODY:

??California consumers on Monday were given their first detailed glimpse of 
the
unpredictable and potentially higher costs they'll face in the future under
power-buying deals signed by Gov. Gray Davis' administration.

??State Controller Kathleen Connell released previously secret elements of the
state's long-term electricity contracts, along with a new warning that the 
price
tag could exceed the administration's previous estimate of $43 billion.

??Technical vagaries in the pacts, Connell said, could leave state power bills
open to wild fluctuations over the next decade. Even after weeks of analyzing
the 41 agreements, she said, her office is still unable to say "what the 
[cost ]
ceiling could be."

??Among other things, the controller said, most costs under the contracts are
now running between $70 and $200 per megawatt-hour, and she predicted that 
costs
over the next decade will be far higher than the $69 per hour suggested by
Davis' aides.

??More certain are the amounts the state is paying more than two dozen private
consultants who have been drawn into the electricity crisis and whose 
contracts
also were released Monday by the controller.

??Some of those consultants--working on behalf of Davis or the state agency
that has been purchasing power since January--are making tens of thousands of
dollars each month.

??Connell's release of the uncensored electricity contracts came one day after
the California attorney general said Davis would not appeal a judicial order
declaring them public records in their entirety. The court action in San Diego
was filed by The Times and other news organizations.

??Three weeks ago, after another ruling favorable to the media, the
administration released the contracts, which will govern the cost of wholesale
electricity for years to come. But key technical provisions were redacted from
those documents.

??Davis planned to release the contracts later this week, but the controller
upstaged him Monday, offering her own spin on the deals and prompting the
governor's office to shoot back.

??His aides insisted Connell's warning of possibly higher costs was based on
incomplete information. Her price figures, they said, were skewed toward
purchases made earlier in the year, when electricity and natural gas prices 
were
significantly higher.

??"Unfortunately, the controller doesn't let the facts get in the way of a 
good
story," said Davis spokesman Steve Maviglio, adding that the controller has 
been
at odds with Davis since he endorsed her rival, Antonio Villaraigosa, in the 
Los
Angeles mayor's race. "This is just a drive-by shooting where she does not 
have
the full set of information."

??Millions in Hidden Costs

??Still, the contracts released Monday show for the first time the millions of
dollars in hidden costs that are being shouldered by taxpayers.

??At least one of the energy suppliers, Houston-based Dynegy Inc., negotiated
terms that allow it to pass along to the state high-cost delivery charges for
natural gas, experts said.

??Robert Michaels, an energy consultant and professor of economics at Cal 
State
Fullerton, said the Dynegy contract permits the firm to use the state's most
costly benchmark of natural gas prices.

??Dynegy "has its choice of the highest [cost delivery] point," said Michaels,
who once advised the company. Like Connell and others, Michaels said that even
with the complete picture of the contracts, it is difficult to determine how
much added cost ratepayers may face as the deals extend into the next decade.

??Also, in just the first three months of the Dynegy contract, the state 
picked
up about $10 million in pollution, start-up and other operational costs for 
the
firm.

??Likewise, a contract with San Diego-based Sempra Energy Resources, parent
company of San Diego Gas & Electric, allows the company to choose where it
delivers electricity into the state grid, Michaels said after an initial 
review
of the agreement.

??"It seems to offer a lot of flexibility for the supplier," said Michaels, 
who
also has been a consultant for power suppliers. "It's not obvious what the 
state
got out of this [deal]."

??The new details on fuel and emission costs underscored some critics' fears.
"As you look at the devil in the details, it gets worse," said UC Irvine
economist Peter Navarro.

??He noted, for example, that Dynegy has been one of the power merchants
labeled by Davis as "pirates."

??But examining the company's complete contract Monday, Navarro said, it 
seemed
as if the state was saying, "You pirate, take California's dowry."

??Navarro and other critics note that power prices have fallen dramatically in
recent weeks, well below those the state is paying under the long-term
contracts.

??A Times analysis of payments made so far under the contracts shows the
average cost per megawatt-hour has been $173. Recent spot prices for peak 
power
have been as low as $50 a megawatt-hour, according to surveys by Platts Energy
Trader, an industry newsletter. By Monday, when an energy emergency was
declared, the price had risen to about $92 a megawatt-hour.

??Administration officials, including Davis' chief contract negotiator, S.
David Freeman, have said the state had little negotiating leverage when many 
of
the deals were struck early this year.

??"Early on, we were having a very difficult time gaining any advantage," said
Oscar Hidalgo, spokesman for the state Department of Water Resources, which
oversees power purchases. Still, Hidalgo and others in the administration
contend the power deals will stabilize prices in the long term, and have tamed
high spot prices this year.

??"Now, we have gained the upper hand," Hidalgo said.

??A Big Payday for Consultants

??Meanwhile, payments to outside consultants hired to assist the governor and
the state Department of Water Resources in dealing with California's energy
crisis reached nearly $2.8 million by late last month, according to the 
figures
released Monday.

??But those payments represent only a fraction of the total contracts the 
state
has signed with a broad array of consultants to assist with the purchase of
power and acquisition of transmission lines, to provide legal and technical
advice, and to mount advertising campaigns and polish Davis' image.

??The agreements include a $1.5-million multiyear contract with the 
Washington,
D.C., law firm of Grammer, Kissel, Robbins, Skancke & Edwards, which 
specializes
in energy and environmental law.

??Attorney Elisa J. Grammer and other members of the firm will represent the
state in proceedings before the Federal Energy Regulatory Commission and 
related
court proceedings through the end of May 2004.

??Another contract calls for the state to pay $1.1 million to two New York
consulting firms--the Blackstone Group and Saber Partners--at the rate of $
275,000 a month. The contract includes the services of Joseph Fichera, one of
Davis' chief advisors on the energy crisis.

??Blackstone/Saber could be paid an additional $14.58 million if the
Legislature approves deals to buy electric transmission systems from the 
state's
three private utilities--the financially rocky Southern California Edison,
Pacific Gas & Electric, which has filed for bankruptcy, and San Diego Gas &
Electric. Critics say the contract, in effect, provides a huge financial
incentive for the consultants to boost the price the state will have to pay 
for
the transmission system, which would result in higher fees for them.

??Davis also drew criticism in late May when he hired two former White House
strategists--Mark Fabiani and Chris Lehane--at $15,000 a month each. Both also
did consulting work for Edison to help the utility win approval of a financial
rescue package that Davis is pushing. Critics charged the two had a conflict 
of
interest representing both the governor and the utility.

??The governor announced late Friday that Fabiani no longer works for him and
that Lehane would work for less money. Davis' statement said that Lehane would
be paid $9,900 a month, roughly the same pay as the governor's last
communications director, and he would not work for Edison while consulting for
Davis.

??Also released was the state's contract with the governor's energy
conservation czar, Freeman. The former head of the Los Angeles Department of
Water and Power is being paid $120,000 for six months' work from April 15
through Oct. 15.

??*

??Times staff writers Nancy Rivera Brooks, Virginia Ellis, Davan Maharaj, Doug
Smith, Nancy Vogel and Daryl Kelley contributed to this story.

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

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

?????????????????July 3, 2001, Tuesday, Late Edition - Final

SECTION: Section A; Page 10; Column 5; National Desk

LENGTH: 804 words

HEADLINE: Power Company Rebuts Accusations of Gouging

BYLINE: ?By JAMES STERNGOLD

DATELINE: LOS ANGELES, July 2

BODY:

??Duke Energy, one of California's larger electricity generators, and state
officials today rebutted charges by three former Duke employees that the 
company
had manipulated output to drive up prices, saying the shifts had been ordered 
by
a state-controlled agency. And the agency, the California Independent System
Operator, agreed.

??Stephanie McCorkle, a spokeswoman for the semi-independent agency, which is
empowered to manage the state's power grid, said it largely controlled how 
much
power was being produced by the Duke Energy plant. She added that the agency 
had
not offered this information at the time the former employees testified in the
State Senate because it had not been asked.

???In the Senate hearings on June 22, the three former plant workers said the
company had ramped output up and down, manipulated maintenance schedules and
even thrown away some spare parts at a plant in suburban San Diego County in 
an
apparent effort to drive prices higher in January when supplies were tight.

??The hearing was another theater in the war of words between the state and 
the
electricity generators, as each has accused the other of causing the energy
crisis.

??The state, particularly Gov. Gray Davis, has accused the generators of
gouging the state on the wholesale power market. Gov. Davis recently demanded
about $9 billion in refunds from the generators, including Duke, while the
companies have asserted that the state fell victim to market shortages created
by its own policies.

??Some top state officials had called the testimony by the three former Duke 
Energy employees -- two plant mechanics and a control room technician -- the
first "smoking gun," proving market manipulation.

??"In my opinion, there was price manipulation," Glenn Johnson, a certified
power plant mechanic, said of Duke's actions at the San Diego plant. Duke 
supplies about 5 percent of California's electricity from four plants in
California.

??But today Duke Energy sought to demonstrate that the state itself had caused
the fluctuations at its plants and that the people who testified were simply
unaware of the company's overall commitments to the market.

??The company offered a highly detailed presentation, saying that the rise and
fall in output had been ordered by the agency.

??Jeff Stokes, an executive vice president of Duke Energy, which has its
headquarters in Charlotte, N.C., offered copies of handwritten logs from the
plant and other documents to show that the workers saw only a partial picture 
of
the operation of the plants and so were unaware that at various times the 
agency
had deliberately set aside some of the output capacity as a reserve.

??Mr. Stokes explained that at times the plants are actually put at the
disposal of the agency, which increases or decreases output to maintain 
balance
in the overall electrical grid. At other times, the agency keeps some 
operating
capacity off-line as a reserve, so it can meet sudden increases in demand, he
explained.

??Mr. Stokes said the bottom line was that during those critical days in
January covered by the testimony in the State Senate, the plant, which has 
four
operating units, was effectively at the state's disposal.

??"The full available output was offered at all times," Mr. Stokes said.

??Ms. McCorkle, the spokeswoman for the agency, said of the presentation, "I
thought it was a very accurate description." She added that at times the 
agency
had not bought all the output from the plant because Duke was asking too much
for the power, not because it was being withheld from the market.

??Still, some remained skeptical. Governor Davis, who switched on a brand new
power plant in Sutter County today, said through his spokesman that he was not
convinced. Earlier, Mr. Davis had invited the three former plant workers to
breakfast and had offered a tribute to their integrity.

??"There are still a lot more questions out there," said Steve Maviglio, the
governor's spokesman.

??Mr. Maviglio said that even if Duke had refuted the charges the most
important issue outstanding was how much the power generators should refund to
the state for overcharges.

??There have been numerous investigations by federal and state agencies of the
wholesale prices charged this year, and several have found what they have
described as convincing evidence of overcharging. But no definitive orders 
have
been handed down and a host of investigations are continuing.

??Indeed, for an industry that was supposedly deregulated several years ago,
the utilities and power generators are now subject to the most intensive
regulatory scrutiny perhaps in their history.

??In fact, California triggered price limits in 11 Western states today by
issuing a power alert. It was the first time the limits went into effect since
they were imposed by federal regulators two weeks ago.


??http://www.nytimes.com
 
GRAPHIC: Photo: Gov. Gray Davis of California presided yesterday as a power
plant went on line in Sutter County. (Associated Press)

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??????????????????????????????13 of 65 DOCUMENTS

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

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

????????????????????????????July 3, 2001, Tuesday

SECTION: STATE AND REGIONAL NEWS

KR-ACC-NO: ?K5369

LENGTH: 508 words

HEADLINE: Davis paying millions to energy consultants, contracts reveal

BYLINE: By Dion Nissenbaum

BODY:

??SACRAMENTO _ Gov. Gray Davis has agreed to pay more than $17 million to a
small group of financial experts and political consultants _ some of them 
dubbed
by critics as "a den of thieves" _ to help him steer his way clear of the 
energy
crisis.

??New contracts released Monday show that the price tag for energy consultants
has nearly doubled in recent months as the Democratic governor sharpened his
attacks on power companies.

??Among them are a former head of the Bonneville Power Administration who is
being paid $300 an hour, a Southern California financial adviser who gets $400
an hour and a security firm paid $45,000 to protect the office where state
workers buy energy.

??Because some of the state's biggest advisers have links to other major
players in the energy crisis, the deals have been criticized by some state
leaders and consumer groups.

??Included in the group are former executives with Southern California Edison,
which is trying to win legislative support for a financial bailout, and two 
New
York investment firms. Saber Partners and the Blackstone Group, which are 
being
paid $275,000 a month, could receive an extra $14 million if they can get
legislators to back the Edison bailout.

??State Controller Kathleen Connell, who released the contracts along with the
long-term energy contracts Davis signed with power companies, called the
arrangement "disturbing" and "unethical."

??Steve Maviglio, the governor's spokesman, derided Connell as "a termed-out
elected official who finished last in the Los Angeles mayoral primary with no
political future and this is the only way she can have relevance."

??"The governor makes no apologies for hiring the best talent he can to
negotiate the best deal for California," he added.

??Davis has been forced to scrap one high-profile contract. Last week, Davis
cut ties with Mark Fabiani, a veteran Democratic Washington political 
consultant
who was continuing to work for Edison while advising the governor.

??At the same time, Davis scaled back his deal with Fabiani's partner, Chris
Lehane, who will be paid $9,000 a month instead of $30,000 a month as 
originally
planned.

??Both men are still due $30,000 for work in June.

??Doug Heller, a consumer advocate for the Foundation for Taxpayer and 
Consumer
Rights, said Davis has created a "den of thieves" by hiring consultants who 
have
little loyalty to California.

??"The governor's goal should be to ensure protection for ratepayers," he 
said.

??Along with Fabiani and Lehane, Davis has agreed to pay up to $6.2 million to
the Electric Power Group, a firm headed by former Edison senior vice president
Vikram Budhraja. Budhraja is being paid $275 an hour.

??Davis also hired Edison vice president Larry Hamlin as his interim
"construction czar" and is paying him $165 an hour.

??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: July 3, 2001

??????????????????????????????14 of 65 DOCUMENTS

??????????????Copyright 2001 Knight Ridder/Tribune Business News
??????????????????????Copyright 2001 San Jose Mercury News

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

????????????????????????????July 3, 2001, Tuesday

KR-ACC-NO: SJ-ENERGY-PRICE

LENGTH: 834 words

HEADLINE: California Officials Insist Energy Company Manipulated Prices, 
Output

BYLINE: By Brandon Bailey

BODY:


??Even as executives at Duke Energy were claiming vindication Monday, state
officials insisted that newly released dispatch logs for the company's Chula
Vista power plant don't necessarily absolve the firm of charges that it
manipulated electricity prices.

??Duke released documents Monday that contradict the testimony of three former
workers who accused the company of scaling back the plant's output in order to
drive up prices. The records show Duke was following orders from the state's
grid operator when the company ramped its generators up and down last January.

??But without corresponding information about Duke's prices, which the company
has declined to make public, state officials say there is no way to know if
North Carolina-based Duke was gouging or not.

??Grid officials said they might order a plant to reduce output if the price 
is
excessive, but they might later instruct the same plant to increase production
-- even when the price is high -- if customers need the power.

??A top Duke executive said Monday that the company charged roughly $ 1,200 
per
megawatt hour of power produced at the plant during the three days under
scrutiny -- well above a so-called soft price cap of $ 150 that was then in
effect. But the official, Duke executive vice president Jeff Stokes, declined 
to
discuss prices in detail.

??The controversy underscores the complexity of California's dysfunctional
energy market. While the evidence against Duke is unclear, experts say the
system is vulnerable to economic schemes that are far more sophisticated than
simply shutting down a generator to create an artificial shortage of
electricity. 

??"The full analysis is a lot more complicated," said Severin Borenstein, an
economist and director of the University of California Energy Institute who 
has
studied prices in the California market.

??Economists for the state's Independent System Operator, which runs the power
grid, have said their studies show power suppliers earned excessive revenue
primarily by refusing to sell at lower rates -- as opposed to shutting down
plants. The studies concluded that suppliers used sophisticated bidding
techniques to keep prices high.

??Power industry spokesmen have denounced the ISO studies as flawed and 
biased.
Suppliers have also denied shutting down plants or reducing output to drive up
prices.

??But when the three former Duke workers appeared before a state Senate
committee last month, many critics viewed their testimony as hard evidence of
long-suspected price-gouging. Among other things, the workers produced 
operator
logs that showed the output of two Chula Vista generating units was scaled up
and down during three days in January when the state was short of power.

??Though key legislators on the panel said they would reserve judgment, Lt.
Gov. Cruz Bustamante called the testimony a "smoking gun." Gov. Gray Davis 
hailed the men as "heroes" and invited them for breakfast.

??At the request of state officials, however, the ISO examined its logs for 
the
three days and issued a memo late last week that said the Chula Vista plant
operators were responding to ISO instructions.

??"The records released today are clear proof that the units were made fully
available and followed the direction of the ISO," Stokes said. During a news
conference, he explained that the ISO used the two units to help balance
supplies with fluctuating demand -- by keeping the units in reserve and 
issuing
frequent instructions to adjust their output throughout the day.

??ISO officials confirmed that they will call on plants to balance out supply
and demand. But they have also said the dispatch logs don't provide a complete
picture.

??"Price can be a factor" in accepting bids for electricity, said ISO 
spokesman
Gregg Fishman. "We're not going to use megawatts any longer than we absolutely
have to, if that power is at astronomical prices."

??Fishman declined to discuss specifics involving Duke. Under federal rules,
the ISO treats information about power plant production and energy prices as
confidential. It released its dispatch logs with Duke's permission, but was 
not
permitted to release price information.

??"It's only half the story," complained Steve Maviglio, the governor's
spokesman. He added that Duke "still has a lot of explaining to do."

??Duke doesn't want to release price information because that would give
competitors an insight into company strategies, said Stokes, who added that
prices would be disclosed "at the appropriate time and setting."

??Stokes also complained that Duke wasn't given a chance to defend itself
before the Senate investigating panel. Committee chairman Joe Dunn, D-Garden
Grove, said he is waiting for Duke to turn over price information and other 
data
before company representatives are scheduled to testify.

??Until then, Dunn added, "we still can't draw a final judgment."


??-----

??To see more of the San Jose Mercury News, or to subscribe to the newspaper,
go to http://www.sjmercury.com
 


JOURNAL-CODE: SJ

LOAD-DATE: July 3, 2001

??????????????????????????????15 of 65 DOCUMENTS

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

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

?????????????????????JULY 3, 2001, TUESDAY, FINAL EDITION

SECTION: NEWS; Pg. A3

LENGTH: 860 words

HEADLINE: Uncensored power pacts made public;

State controller says deals will burden general fund for years

SOURCE: Chronicle Staff Writers

BYLINE: Carolyn Said, Christian Berthelsen, David Parrish

BODY:
State Controller Kathleen Connell yesterday released uncensored versions of
California's energy contracts, including short-term contracts that Gov. Gray
Davis had hoped to keep under wraps for three months.

???Connell said the contracts for $43 billion worth of power were negotiated 
at
the worst possible times, for higher prices and longer periods than are
necessary. But Davis' office countered that Connell was grandstanding and that
her release of short-term contracts would hurt the state in its negotiations
with power generators.

???Connell said the contracts showed California paying more than the $69 a
megawatt hour Davis had stated. Ranging from $44 to $249 per megawatt hour, 
most
are between $100 and $200 a megawatt hour, she said, adding that variables
prevented calculating an exact average.

???But Steve Maviglio, Davis' spokesman, said Connell had selectively mixed in
some higher-priced short-term contracts "to misrepresent facts about the price
we negotiated."

???Although a fellow Democrat, Connell has long had a contentious relationship
with Davis. In an interview yesterday, she said the deals Davis made could 
mean
the general fund would be in debt for years to come. She added that it 
appeared
the administration would run out of money to buy electricity by December.

???Davis is "indebting future generations of Californians to ease the 
potential
pain a portion of people might feel over the summer of 2001," she said.

???A judge ordered the contracts to be released two weeks ago, but Davis'
office blacked out many vital elements, such as where power would be generated
and transmitted. The judge last week ordered Davis to release that redacted
material, which the governor's office said he had planned to do this Thursday 
--
omitting the short-term contracts. Instead, Connell released the material
yesterday.

???Among other new revelations:

???-- Consultants. The state signed agreements for more than $15 million to
consultants for help in negotiating the contracts, legal advice and other
services, some for months or years into the future. To date, the state has 
paid
out nearly $2.8 million on those contracts, including $30,000 to S. David
Freeman, the former head of the Los Angeles Department of Water and Power, 
whom
Gov. Gray Davis retained as an energy adviser in April.

???The largest of the 27 consulting agreements was for up to $6.2 million with
Electric Power Group LLC of Pasadena for help in negotiating the long-term
contracts with the power providers. The firm is headed by several former
executives with Southern California Edison.

???"There are a number of consulting contracts that appear questionable,"
Connell said. Citing one example, Connell said she had refused to pay the
contract of Mark Fabiani and Chris Lehane, two political image consultants
retained by Davis, because the firm was also representing Southern California
Edison.

???Maviglio said: "The governor makes no apologies for hiring the best talent
to fight the arsenal of generators. They have several floors of skyscrapers in
Houston armed with the best talent money can buy."

???-- LADWP. Los Angeles' municipal utility, the Los Angeles Department of
Water and Power, sold the state $57.8 million worth of power in March and 
April.
LADWP charged the state between $213.50 to $174.60 per megawatt-hour of
electricity, a price that included a 15 percent premium.

???LADWP was not profiteering, said Eric Pharp, director of public affairs for
the municipal utility. "I don't think most people would think that is
excessive," Pharp said. "Fifteen percent is what people felt was a reasonable
return." The 15 percent markup was decided on last December by Freeman, then
LADWP's director, and approved by the LADWP board.

???"What if LADWP found itself short of power, would it expect to get that
power from the state at a reasonable cost?" asked Severin Borenstein, head of
the University of California Energy Institute. "If they expect backstop help
from the state if they ever get in trouble, now's the time to step forward on
that basis."

???-- Price. Bill Marcus, principal economist with JBS Energy, a Sacramento
consulting firm that represents consumer and environmental groups in utility
issues, said the new material showed the state had paid huge amounts for
short-term power, more than twice as much as recent federal price caps.

???He also questioned whether California had acted in a panic to buy too much
power. "The system is not going to have enough flexibility built into it, come
three to four years from now if we keep signing contracts," he said. "I'd like
them to stop and take a breath, see if there are ways to change the worst
contracts, rather than running hell-bent for election as fast as they can,
trying to sign these things."

???Maviglio said the contracts represented a "balanced portfolio" of 
purchases;
provided California with a reliable price for electricity; and had helped 
drive
down spot market prices. "Instead of being vulnerable to the whims of the
market, we know exactly how much we'll be paying," he said.E-mail Carolyn Said
at csaid@sfchronicle.com.

GRAPHIC: PHOTO, State Controller Kathleen Connell said the contracts showed 
more
than $69 per megawatt hour was paid.

LOAD-DATE: July 3, 2001

??????????????????????????????16 of 65 DOCUMENTS

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

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

????????????????????July 03, 2001, Tuesday, Final Edition

SECTION: FINANCIAL; Pg. E02

LENGTH: 1111 words

HEADLINE: Duke Energy Cuts Calif. Bill

BODY:




???Duke Energy, which supplies about 5 percent of California's electricity, 
agreed to reduce by $ 20 million the amount owed to it by the state for power 
it
supplied in January and February. Last month, the Federal Energy Regulatory
Commission rejected Duke's explanation for high prices it charged for power 
and
ordered the company to pay refunds. Charlotte-based Duke had to reduce its
January bill by $ 17.8 million and its February bill by $ 2.1 million.



???Ford was urged by the attorneys general in 23 U.S. states to protect the
environment by replacing mercury switches used to light hoods and trunks in
millions of cars. The attorneys general wrote a letter calling on the 
automaker
to replace the switches in cars that are being recalled to have their
Bridgestone/Firestone tires replaced. The letter said the mercury in the
switches poses a health threat to humans and the ecosystem because it enters 
the
air when a car is scrapped and incinerated. Mercury can cause brain, lung and
kidney disease in humans.







??Best Buy has agreed to pay $ 5.4 million to resolve an overtime-pay dispute
involving about 70,000 current and former employees, the Labor Department 
said.
Workers were not paid for hours worked on their days off, during meal breaks,
after they punched out and while they waited for managers to unlock doors, the
department said. Best Buy also did not keep an accurate record of hours worked
by employees, a department official said. Back wages will be paid to workers 
who
were employed at all Best Buy stores from February 1998 to February 2000.

??Napster has suspended its online music-swapping service because it is unable
to stop the unauthorized exchange of songs. Napster discovered its users
continue to trade bootlegged songs, despite technological safeguards put in
place to comply with a federal court order mandating it halt the practice. The
company suspended its service late Sunday and said yesterday that it was not
clear when users would be able to resume trading songs online.

??Staples agreed to settle a lawsuit with shareholders who said a plan to buy
back $ 122 million worth of shares in its Internet unit from insiders was a
waste of corporate assets. Staples public shareholders will get more details
about how the company set the proposed buyout value at about $ 7 per share.
Venture capitalists, executives and directors paid $ 3.25 for the Staples.com
stock in 1999.

??Citigroup's $ 1.95 billion acquisition of European American Bank from ABN
Amro Holding, a purchase that will expand Citigroup's presence in New York 
City
and Long Island, has been approved by federal regulators. Several consumer
groups opposed the merger on claims Citigroup has engaged in abusive mortgage
lending practices. In response, federal regulators said they will closely
monitor Citigroup's lending business.

??Intel started shipping the fastest version to date of its Pentium 4
microprocessor. The new chip runs at 1.8 gigahertz, slightly faster than the
1.7-GHz Pentium 4 released in April. The company also released a 1.6-GHz 
Pentium
4 yesterday.

???Netpliance agreed to pay a $ 100,000 fine to the Federal Trade Commission
for deceptive advertising and billing practices of its discontinued I-opener, 
a
stripped-down computer that sold for $ 199. The FTC said Netpliance failed to
disclose extra costs associated with the computer, such as monthly Internet
service fees. Netpliance did not admit to any wrongdoing.

??T-bill rates rose. The discount rate on three-month Treasury bills auctioned
yesterday rose to 3.58 percent, from 3.375 percent last week. Rates on 
six-month
bills rose to 3.5 percent from 3.34 percent. The actual return to investors is
3.663 percent for three-month bills, with a $ 10,000 bill selling for $
9,909.50, and 3.612 percent for a six-month bill selling for $ 9,823.10.
Separately, the Federal Reserve said the average yield for one-year constant
maturity Treasury bills, a popular index for making changes in adjustable-rate
mortgages, rose to 3.60 percent last week from 3.46 percent the previous week.

??NextWave Telecom said it has entered an all-cash deal with Lucent
Technologies to begin construction of local wireless networks in Detroit and
Madison, Wis. NextWave, which filed for bankruptcy in 1998, said it has "ample
funds" to launch the project. NextWave reiterated that it plans to emerge from
bankruptcy.

???Sara Lee Corp. agreed to buy Earthgrains for $ 2.8 billion in cash and debt
to become the country's second-largest maker of bread.



??Barnes & Noble.com, following the lead of rival Amazon.com, is offering free
shipping on orders of more than one item.



??DuPont sharply curtailed its earnings forecast for the second quarter,
blaming a global economic slowdown and a strong dollar. The company now
estimates earnings per share, before one-time items, to be 35 to 45 cents, 
down
from 90 cents per share in the same quarter last year. Wall Street was 
expecting
earnings of 53 cents a share.

??Minnesota Mining & Manufacturing said it expects lower second-quarter
earnings because of continued weakness in the U.S. economy, an increased
slowdown in Europe and Asia, and negative currency effects. It predicted a
profit of $ 1.10 to $ 1.14 per share, excluding one-time items but including
negative currency effects. ?In the second quarter of last year, 3M earned $ 
1.18
per share.



??The International Monetary Fund postponed a decision on disbursing a $ 1.5
billion loan to Turkey because the Ankara government has failed to implement
some of its pledges to overhaul the nation's banking system and state-owned
telephone monopoly. The decision to delay a vote by the IMF's board is the
latest snag in a $ 19 billion bailout of Turkey that was arranged in February
after the Turkish lira collapsed.

???Global semiconductor sales fell more than 20 percent in May from a year
earlier, continuing a decline that began in November, a trade group said. The
Semiconductor Industry Association said sales were $ 12.71 billion, which was 
a
7.3 percent decline from the April level.



??Carlyle Group, a D.C.-based investment firm whose advisers include former
president George Bush, plans to keep as a dividend almost half of an $ 850
million loan for its Arlington-based United Defense Industries, according to
people familiar with the matter. The $ 400 million payout will enable Carlyle 
to
generate a return for clients without cutting the stake in a company that gets
85 percent of its sales from contracts with the U.S. government.

??Compiled from reports by the Associated Press, Bloomberg News, Dow Jones 
News
Service and Washington Post staff writers.

LOAD-DATE: July 03, 2001

??????????????????????????????17 of 65 DOCUMENTS

?????????????????????????????The Associated Press

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.

???????????????????????July 3, 2001, Tuesday, BC cycle

?????????????????????????????7:27 AM Eastern Time

SECTION: Business News

LENGTH: 622 words

HEADLINE: Duke releases California energy records to counter accusations of
price gouging

BYLINE: By LESLIE GORNSTEIN, AP Business Writer

DATELINE: LOS ANGELES

BODY:

??Duke Energy has released operating logs to counter accusations by former
workers that it reduced output to boost prices during California's energy
crisis.

??Ex-employees told state investigators two of four turbines at Duke's 
southern
California plant were shut down for three days in January during Stage 3 power
alerts, which can lead to rolling blackouts.

??The records show that during most of that time, units One and Two at the
South Bay plant in Chula Vista were either supplying all their power to the
California market or providing what are called ancillary services.

??That's when a plant is paid not to produce, but to stand by in case of
emergency, or if the state's grid is already at capacity.

??California's Independent System Operator, which manages most of the state's
power grid, has acknowledged that it, not Duke, was controlling the turbines 
at
the time.

??"Duke was responding to their requests," Jeff Stokes, executive vice
president of Duke's western gas and power operations, said Monday.

??Stokes added that Duke's prices during those three days were somewhere 
around
25 percent of the $3,880 figure noted by the Federal Energy Regulatory
Commission when it singled out Duke for criticism in a June 19 order extending
price controls in California.

??State officials were not impressed with Duke's operating logs.

??Sen. Joe Dunn, chairman of the Senate Committee to Investigate Price
Manipulation, said Duke was releasing selected documents that presented 
"nowhere
near the complete picture."

??Dunn asked the ISO to analyze whether the Duke logs and its own logs 
indicate
any patterns that suggest price manipulation.

??Duke, based in Charlotte, N.C., also on Monday slashed $20 million from
California's power bill, becoming the first wholesaler to cut its charges for
electricity sold to the state during January and February.

??FERC has accused Duke of overcharging the state millions of dollars by
selling electricity at rates as high as $3,880 per megawatt-hour when it was
only entitled to charge $273 per megawatt-hour.

??Duke contested the gouging accusations but said it would abide by the
commission's order.

??"It's our way to say, let's get beyond that," Duke spokesman Terry Francisco
said. "Let's try to come up with a long-term solution."

??The ISO had no comment on Duke's $20 million move.

??Meanwhile, California's electric grid operator issued an energy alert Monday
for the first time since FERC imposed the cost ceilings, triggering price caps
in 11 Western states.

??Unexpectedly high temperatures brought higher energy use that required the
ISO to declare a Stage 2 alert for about three hours, meaning electricity 
reserves fell below 5 percent. The ISO maintained a Stage 1 alert into the
evening, meaning reserves were below 7 percent.

??California wasn't the only state wallowing in power woes Monday. 
Triple-digit
temperatures triggered rolling blackouts across southern Nevada for the first
time in the state's history.

??By the afternoon, Nevada Power's 1.2 million customers had cranked up air
conditioners enough to demand a record 3,924 megawatts of power, forcing the
utility to cut about 100 megawatts, or enough electricity for roughly 75,000
homes.

??"About 10,000 customers were affected for about an hour," said Paul Heagen,
spokesman for Nevada Power Co. "Today was a wake-up call."

??Nevada Power asked its major power users, including the neon-lit resorts on
the Las Vegas Strip, for voluntary reductions at about 3 p.m.

??Casinos switch to backup generators and took conservation measures that went
mostly unnoticed by guests.

??The utility also imposed rolling blackouts until it could purchase power on
the open market, Heagen said.

LOAD-DATE: July 3, 2001

??????????????????????????????26 of 65 DOCUMENTS

??????????????????????Copyright 2001 Business Wire, Inc.

????????????????????????????????Business Wire

?????????????????????????????July 2, 2001, Monday

DISTRIBUTION: News Editors/Energy Writers

LENGTH: 590 words

HEADLINE: Stage One and Stage Two Emergencies Declared as Demand Soars;
California ISO Strongly Urges Conservation

DATELINE: FOLSOM, Calif., July 2, 2001

BODY:


??The California Independent System Operator (California ISO) issued a Stage
One Emergency at 1:35 p.m. today, July 2, 2001, and a stage two emergency at
2:40 p.m. as operating reserves dipped below five percent. The state's 
appetite
for power is 2,000 megawatts over forecasts due to temperatures that are 5 to 
6
degrees hotter than meteorologists predicted. Because the heat wave is 
regional
in nature, levels of imported power have decreased as other states, especially
those in the southwest, also cope with high demand for power. In addition, 
1,500
megawatts of imported power was also reduced when a two-unit power plant that
serves Southern California tripped offline over the weekend.

??The expected peak demand on the transmission system is expected to reach
about 40,000 megawatts around 4:00 p.m. today. Consumers can help reduce the
strain on the power grid by conserving electricity today, especially during 
the
peak afternoon hours. The California ISO requests that customers voluntarily
reduce their use of electricity to prevent more severe curtailment measures.

??Powerful Habits at Home:

???????-- ?Set your thermostat at 78-80 degrees when home, 85 or off
????????????when away.
????????-- ?Avoid using appliances during the peak usage period 8:00
????????????a.m. to 8:00 p.m.
????????-- ?Turn off your pool pump and avoid outdoor watering during
????????????peak periods.

??Powerful Habits at Work:

???????-- ?Turn off computer monitor when you are away from your desk
????????-- ?Turn off half the overhead lighting.
????????-- ?Set the thermostat at 78-80

??Today's Stage One and Two declarations, expected to be in effect until 6:00
p.m., enables the California ISO to access emergency resources to help 
maintain
operating reserves. A Stage Two is declared when reserves drop below five
percent. At this level, large commercial customers that have signed up to
voluntarily curtail power during high demand days will be asked to do so. If 
an
operating reserve shortfall of less than one-and-a-half percent is 
unavoidable,
Stage Three is initiated. Involuntary curtailments of service to customers
including "rotating blackouts" are possible during this emergency declaration.
The California ISO's Electrical Emergency Plan (EEP) is part of the state's
enhanced reliability standards enacted by landmark legislation Assembly Bill
1890 that led to the restructuring of California's electricity industry.

??The California ISO is charged with managing the flow of electricity along 
the
long-distance, high-voltage power lines that make up the bulk of California's 
transmission system. The not-for-profit public-benefit corporation assumed the
responsibility in March 1998, when California opened its energy markets to
competition and the state's investor-owned utilities turned their private
transmission power lines over to the California ISO to manage. The mission of
the California ISO is to safeguard the reliable delivery of electricity, 
facilitate markets and ensure equal access to a 25,526 circuit mile "electron
highway."

??Conservation tips and continuous system condition updates are available on
the web at www.caiso.com and the California Flex Your Power website is at
www.flexyourpower.ca.gov

??Other helpful contacts:

????????Pacific Gas and Electric ??????????415/973-5930
?????????Southern California Edison ????????626/302-2255
?????????San Diego Gas and Electric ????????877/866-2066

??CONTACT: California ISO, Folsom
Stephanie McCorkle, 888/516-NEWS

??URL: http://www.businesswire.com
 
LOAD-DATE: July 3, 2001