Consumer Groups, Calif PUC Question Pwr Contract Validity 
 
LOS ANGELES (Dow Jones)--Two California consumer groups have asked California Attorney General Bill Lockyer to investigate whether some state electricity contracts should be nullified because of a possible conflict of interest held by one of the state's negotiations, according to a press release Monday. 

The Utility Reform Network and Consumers Union asked Lockyer to examine whether income earned from energy companies by consultant Vikram Budhraja presented a conflict of interest, because he may have been involved in contract negotiations with those companies

We believe there is ample evidence for the Attorney General to investigate whether some of the state's electricity contracts were made in violation of California's conflict of interest laws," said Bill Ahern, senior policy analyst with Consumers Union West Coast Regional Office. "If the Attorney General finds that a contract was made in violation of the law, it must be set aside as void." 
Three weeks after Budhraja's January hire date, Williams Companies (WMB, news, msgs) won a $3.4 billion contract to provide power to the state over 10 1/2 years. Budhraja disclosed in mid-August that his company, the Electric Power Group, was paid more than $10,000 by Williams during the previous 12 months. Budhraja was hired by the California Department of Water Resources to negotiate power contracts, but hasn't said which generators he dealt with in the weeks before the Williams contract was signed. 

"It is reasonable to assume that Budhraja may have been involved in the negotiations that led to the Williams contract," Ahern said. "It is also likely that there are more detailed records and evidence in existence, which only a subpoena or search warrant may uncover." 

The groups also are concerned that Budhraja may have held a conflict of interest due to his potential involvement in negotiating a $3.9 billion contract with Allegheny Energy Inc. (AYE, news, msgs) while he owned stocks in energy companies, according to the release. 

The Attorney General's office recently said it doesn't plan to investigate conflicts of interest involving energy contract negotiations. No one at the office could be reached for comment Monday. 

The California Public Utilities Commission is also petitioning federal regulators to throw out some of the state's $43 billion in long-term energy contracts, the San Francisco Chronicle reported Monday. 

The CPUC has argued in filings with the Federal Energy Regulatory Commission over the past three months that energy companies took advantage of the state's energy crisis to negotiate high-priced contracts, according to the report. The average price of power under the contracts is $69 a megawatt-hour, more than double peak electricity prices last week. 

CPUC lawyers have filed challenges before the FERC on deals negotiated with Scottish Power (SPI, news, msgs) unit PacifiCorp, Alliance Colton LLC, Sempra Energy (SRE, news, msgs) and Calpine Corp. (CPN, news, msgs), according to the report. 

Budhraja disclosed in August that he owned as much as $10,000 in Scottish Power stock while a $1 billion long-term contract with subsidiary PacifiCorp was being hammered out. The state signed the 10-year contract July 6. Budraha sold his stock July 30. State officials say Budhraja had nothing to do with the deal, according to the report. 

 

-----Original Message-----
From: Dorothy Rothrock [mailto:drothrock@cmta.net]
Sent: Monday, October 01, 2001 7:07 PM
To: Dasovich, Jeff
Subject: [Fwd: Letter to Loretta Lynch on rate agreement]




-------- Original Message --------
Subject: Letter to Loretta Lynch on rate agreement
Date: Mon, 1 Oct 2001 14:31:15 -0700
From: lkaye@ka-pow.com
To:
jstewart@cmta.net,bhauck@cbrt.org,Bill_Dombrowski@ka-pow.com,jeanne.cain@calchamber.com,"DiMare,
Dominic"
<Dominic.DiMare@calchamber.com>,Dorothy_Rothrock@ka-pow.com,kclark@cbrt.org,Derek_Naten@ka-pow.com,Bill_Booth@ka-pow.com,DJ_Smith@ka-pow.com,CPRG_Meeting@ka-pow.com,Evelyn_Kahl@ka-pow.com
CC: thull@ka-pow.com,David_Fogarty@ka-pow.com,Al_Lundeen@ka-pow.com

Attached is a letter faxed today to Commissioner Lynch from Californians
for Energy Action opposing adoption of the proposed DWR rate agreement.

(See attached file: PUC letter 10.1.01,rev 2.doc)