The CMTA Fall Conference scheduled for
               October 30 - November 2 has been canceled.
  ------------------------------------------------------------------------
                           Legislative Weekly
                            October 15, 2001
                           Issue 40, Volume 3

                     A weekly publication from the
           California Manufacturers & Technology Association
     detailing legislative and regulatory developments in Sacramento

ECONOMIC SUMMIT

In the wake of repeated economic blows on the state?s business community
and announcements of losses, layoffs and declining tax revenues, the
Governor has stated his intention to hold an Economic Summit in early
November with business and labor leaders, and professional economists to
identify and discuss measures to stimulate California?s economy.   The
date and participants will be announced this week.  Governor Davis is
also considering the possibility of calling a Special Legislative
Session to enact such measures immediately.   In an effort to avoid or
minimize a looming State budget deficit, the Department of Finance has
instructed state agencies to cut their budgets by 15%.

CMTA?s members are devising a priority list of policies that should be
adopted to help mitigate the effects of the international economic
cooling and hopefully, stave-off recession in this state.

POWER AUTHORITY MEETING

Renewables and the Power Authority
At an October 5 Consumer Power and Conservation Financing Authority
(Power Authority) meeting in San Francisco, Chairman David Freeman
acknowledged that renewable peaking capacity may comprise a significant
portion of the 15 percent reserve the Authority expects to establish to
prevent future price spikes in the cost of electricity.

Freeman indicated that the Authority has received proposals for 18,000
MW in peaker capacity, which have been evaluated and winnowed down to
3,000 MW.  While commitments to build these peaker facilities have not
yet been formalized, the Power Authority is moving forward with
proposals for a few hundred renewable megawatts.

Freeman also indicated that at least two state biomass plants are at
risk of shutting down.  He believes that these plants should continue to
run, despite the high costs associated with this market.  Power
Authority staff has been asked to look at options to keep the plants
operating, and to report back to the Power Authority.

Board member Donald Vial expressed concern at the way in which the Power
Authority is looking at the 15 percent reserve.  He believes that the
reserve should be a working capacity margin used to phase out dirty
plants and to move into, and to promote renewables.

Board member John Stevens pointed out that the Power Authority has
limited funding with which to purchase peaking capacity, and reminded
the members that any plan must reasonably balance the costs associated
with the generation capacity.

Department of Water Resources Update
The Power Authority also received a report from staff of the Department
of Water Resources (DWR) who indicated that the Department is looking at
load curtailment, renewables and new supplies that ideally are north of
Path 15.  The Department believes it has been instrumental in keeping
the spot market under control and minimizing the number of blackouts
experienced this summer.  The Department also gave a great deal of
credit to customers who have been instrumental in preventing blackouts
through conservation.

The Department will be updating its energy portfolio needs, and posting
its information on its website at www.cers.water.ca.gov, sometime next
week.

Public Utilities Commission Natural Gas Infrastructure Report
Barbara Hale, the Director of Strategic Planning at the Public Utilities
Commission (PUC) provided an update on the Natural Gas Infrastructure
Report that is due to the Power Authority by November 15.  Ms. Hale
indicated that the PUC is working with the California Energy Commission
(CEC) to evaluate the adequacy of the natural gas infrastructure,
including interstate pipelines, intrastate pipelines, local
distribution, storage and backbone.  The PUC fully expects to have the
report finalized and ready to deliver to the Power Authority by November
15.

Preliminary findings indicate that in-ground storage is at 85 percent of
capacity, a healthy margin to meet demands through the winter.  While
there still is room to inject additional natural gas, the PUC is
expecting a moderate winter with low gas demand.
Chairman Freeman requested that the Natural Gas Infrastructure Report
also include a forecast of natural gas availability from the lower 48
states and Canada, as well as whether or not California may depend on
these sources to meet its needs.

Board Member Vial questioned if the unbundling of storage has been
successful.  Ms. Hale replied that the PUC is monitoring non-core use,
and that preliminary findings indicate that many non-core customers are
increasing their use of storage.

Activities Related to Renewable Energy and Conservation
Staff at the Power Authority reported that coordination between the PUC
and the Power Authority is necessary to optimize conservation, energy
efficiency, and demand response.  Specifically, the Power Authority is
putting together a residential loan program; financing for efficiencies
in public buildings; and, financing for small commercial and industrial
upgrades.  The Power Authority believes that the small commercial and
industrial market is the most under-served, due to the multiple demands
on owners and their lack of resources.  The Power Authority is looking
at ways to assist these customers in retrofitting their facilities.

At the other end of the spectrum, the Power Authority believes that
large commercial and industrial customers require the least assistance.
The Power Authority believes these customers are well served under
current programs, but acknowledged that many of the demand response
programs would be better coordinated under the administration of just
one agency.

Finally, Board Member Vial questioned why there has been little emphasis
on real time pricing.  Power Authority staff agreed that real time
pricing has not been a priority, and that the infrastructure to
implement a real time pricing program does not currently exist.  Staff
did indicate, however, that a recent $35 million investment in meters
should help to incentivize these programs.

Freeman concluded that it is important for the Power Authority to build
on the momentum of conservation, and he acknowledged that technology
finally is being priced such that real time pricing makes sense and
likely will be an integral part of the Power Authority?s program.

Laura Doll Named as New Executive Director
Laura Doll of Austin, Texas was approved as the Chief Executive Officer
of the Power Authority at the October 5 Board meeting.  Most recently,
Doll was Director of Customer Service for Grande Communications.  She
also has held the positions of Senior Vice President for Planergy, as
well as Chief Administrative Officer for Austin Energy.  Doll received a
master of public affairs from the University of Texas at Austin, and a
bachelor of arts degree from Virginia Polytechnic Institute.  She will
receive an annual salary of $200,000.

COMPUTER RECORDS CONFIDENTIALITY BILL VETOED (AGAIN)

Governor Davis vetoed SB 147 by Senator Debra Bowen (D-Marina Del Rey)
on October 8.  The bill would have required employers to prepare and
distribute by hard copy or electronically, a company monitoring policies
and practices notice to each employee, to collect and verify their
understanding of the notice, and file and maintain each employee?s
signed notice indefinitely.  This is the third time Senator Bowen?s
notice bill has been vetoed by the Governor and we hope that the bill
has struck out.

In his veto message, the governor referred to some of the concerns
expressed by employers such as the need to monitor and control the use
of company property for business purposes.  Also employers are
potentially liable for the misuse of computers for improper purposes,
such as sexual harassment, defamation and the like, so employers have a
legitimate reason to monitor e-mail and computer files from time to
time.

The Governor said in closing his veto message, ? I support reasonable
privacy protections for employees in the workplace and my Administration
proposed amendments which would carry out the intent of the bill without
imposing undue regulatory burdens and potential legal exposure to
businesses for doing what any employee should assume is the employer?s
right when they accept employment.  Senator Bowen rejected the proposed
amendments. Thus, I must veto the bill a third time.?

This is a significant victory for employers.  The bill had the potential
to open up Pandora?s box on employee notices in the workplace by greatly
expanding the scope, confirmation and tracking of notices.  CMTA
applauds the Governor?s veto of SB 147.

GOVERNOR SIGNS MERCURY LEGISLATION

Governor Davis has signed legislation to place new controls on products
containing mercury.  SB 633 by Senator Byron Sher (D-Palo Alto) places
new controls on the disposal of appliance and vehicle components found
to contain mercury.

"I am signing this bill because it will help reduce the amount of
mercury added to the environment by broken and discarded thermometers,
novelty products, and by mercury-containing electrical switches that are
not removed before junked vehicles are crushed or shredded," said Davis.

SB 633 also bans the sale of new automobiles in California after January
1, 2005 that contain mercury electrical switches.


LATE BREAKING NEWS:

SB 71 (Burton D-San Francisco), Workers' Compensation, vetoed by the
Governor.


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