Just in case you haven't seen this.

gba

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From: "Phillip Muller" <PhilM@SCDEnergy.com>
To: "Gary Ackerman" <foothi19@idt.net>
Subject: Hydro solution
Date: Wed, 9 Aug 2000 14:09:37 -0700
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Here's the latest press release from PG&E

Proposal Uses Hydroelectric Power to Help Stabilize Energy Prices
Business Editors and Energy Writers
EDITORS: Please do not use ``Pacific Gas and Electric'' or ``PG&E'' when
referring to PG&E Corporation or its National Energy Group. The PG&E
National Energy Group is not the same company as Pacific Gas and Electric
Company, the utility, and is not regulated by the California Public
Utilities Commission. Customers of Pacific Gas and Electric Company do not
have to buy products or services from the National Energy Group in order to
continue to receive quality regulated services from Pacific Gas and Electric
Company.
SAN FRANCISCO--(BUSINESS WIRE)--Aug. 9, 2000--
As state swelters through long hot summers, cheap
hydroelectric power will ensure consumers pay less for electricity
Citing broad support from a coalition representing consumer advocates,
business, labor, agriculture and water interests, Pacific Gas and Electric
Company jointly filed an agreement with the California Public Utilities
Commission (CPUC) today to commit the utility's hydroelectric generating
plants to the effort to help provide needed stability in California's
fragile electricity market.
If approved by the CPUC, this settlement agreement creates a compact between
customer groups and Pacific Gas and Electric Company that would enhance the
economic and environmental benefits of the hydroelectric system for the
public. The agreement would supersede current plans for auctioning the
hydroelectric plants to third parties which were filed late last year. The
agreement calls for PG&E Corporation to retain the hydroelectric generation
system within a California-based affiliate. The other signatories to the
agreement include The Utility Reform Network (TURN), the Coalition of
California Utility Employees (CUE), Agricultural Energy Consumers
Association (AECA), California Retailers Association, Sonoma County Water
Agency, and Tuolumne Utility District.
``Parties came together to develop this proposal that will moderate prices,
and combined with the strong leadership steps taken by Governor Davis last
week, will help ensure consumers are protected from the volatility of the
market.'' said Gordon Smith, President and CEO of Pacific Gas and Electric
Company. ``We are gratified to have the support of large and small consumer
groups for this settlement.''
The power produced by these hydroelectric facilities will now be committed
to the market during the periods when the market needs it the most, thereby
reducing price volatility caused by supply shortages. Additionally, the
agreement returns 90 percent of any profits from hydroelectric operations to
customers. This sharing of revenues will act as a natural ``hedge'' for
customers against rising energy prices since, as market prices increase, so
will payments back to customers under the agreement.
``A key component of the settlement is a proposed agreement with the
California Independent System Operator (CAISO) that assures that power from
the hydroelectric assets will not be bid into the energy market in a way
that can raise power prices.'' said Nettie Hoge, executive director of TURN,
and strong supporter of the proposal.
The agreement's key components:
* Provides a revenue-sharing mechanism that returns 90 percent of profits
from the hydroelectric operations to customers
* Establishes a market value of $2.8 billion for the hydroelectric system
that can be used immediately to pay down ratepayer cost obligations
* Commits PG&E Corporation to establish a $70 million fund to enhance
environmental quality, water quality, and recreational opportunities
* Commits PG&E Corporation to donate or protect through conservation
easements approximately 140,000 acres of watershed lands for public use
* Honors all existing water agreements with downstream users
* Protects agricultural uses of the water
* Ensures the facilities will continue to be operated by a highly qualified
union workforce
``This settlement benefits both California consumers and PG&E's employees,''
said Jack McNally, Business Manager of IBEW 1245. ``Consumers will be
assured that hydroelectric plants will continue to be operated by the same
dedicated employees, will continue to provide low cost reliable energy to
California consumers, and will continue to be owned by a California company.
IBEW 1245 represents the union members who operate and maintain the
hydroelectric system.
``This agreement represents a fair valuation of the hydroelectric system,''
said Michael Boccadoro, director, Agricultural Energy Consumers Association,
``this agreement also protects the long-standing beneficial relationship
between the hydro operations and the agricultural users in the state.''
The settlement agreement filed at the CPUC will be subject to public
hearings and review under the California Environmental Quality Act (CEQA).
Interested parties will be able to provide comment prior to any CPUC
decision. Also, the hydroelectric system transfer requires approval from the
Federal Energy Regulatory Commission (FERC).
``The CEQA review process itself will ensure that there are no significant
environmental impacts as a result of this transfer,'' said Gordon Smith.
``In addition, keeping the hydroelectric facilities and associated watershed
lands together protects the public interest in these assets.''
The system includes 174 dams, 68 powerhouses, 360 miles of canals, tunnels,
and flumes, and approximately 140,000 acres of watershed land. The
hydroelectric system has a capacity of 3,896 megawatts, and provides a
clean, renewable, low-cost source of electricity particularly during periods
of high demand. The system currently delivers about 5 percent of
California's yearly electricity needs, and up to 10% of the State's
electricity demand during hot, summer days.
``We have enjoyed a positive working relationship with the folks at PG&E for
many years,'' said Tim McCullough, manager of the Tuolumne Utilities
District. ``This agreement ensures the water resource will continue to be
managed in a way that protects the interests of Tuolumne County residents.''
This agreement differs substantially from the transfer contemplated through
legislation at the end of August last year. The 1999 Legislative proposal
did not include the price stabilizing revenue sharing mechanism. Although
the 1999 legislative package ultimately failed to achieve consensus because
of the immense complexities of balancing interests through legislative
compromise, this year's regulatory filing fulfills the directives of the
1996 restructuring legislation and provides the kind of public and state
environmental review that will forge consensus.
PG&E Corporation, with 1999 operating revenues of almost $21 billion and
operations in 21 states, markets energy services and products throughout
North America through its National Energy Group. PG&E Corporation's
businesses also include Pacific Gas and Electric Company, the Northern and
Central California utility that delivers natural gas and electricity to one
in every 20 Americans.