Davis' criticism of Texas misdirected, report finds 
Lynda Gledhill, Mark Martin, Chronicle Staff Writers
Tuesday, July 10, 2001 
,2001 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/07/10/M
N48875.DTL 
Sacramento -- Texas-based electricity generators have received the brunt of 
criticism from Gov. Gray Davis for gouging California during the power 
crisis, but financial information released yesterday shows the lion's share 
of the money went elsewhere. 
Companies with headquarters in Texas garnered less than 10 percent of 
California's multibillion-dollar energy purchases, while public and private 
energy companies from Canada to Georgia to California got the rest. 
The $424 million that went to Texas companies may still be more than the 
state should have been charged, and administration officials are attempting 
to get refunds from a host of companies, both in and out of Texas. 
Earlier this year, Davis lambasted the Bush administration for not acting 
against power firms in his home state. "What's going on here, pure and 
simple, is unconscionable price-gouging by the big energy producers -- most 
of them, incidentally, located in Texas," he said in May. 
Yesterday, a spokesman for the governor broadened the verbal assault, saying 
the Texas firms are representative of the many other out-of-state generators 
who have also gouged California. 
"Anywhere they wear cowboy hats, they probably have handkerchiefs across 
their face because they are robbing us blind," said Steve Maviglio, Davis' 
spokesman. 
The latest financial information is contained in a report by the state 
Department of Water Resources detailing $7.2 billion in power purchases from 
Jan. 17 through the end of May. 
About $5.2 billion of that was spent on the spot market where power buys are 
made a day, hour or even a few minutes before the electricity is actually 
used. 
Because the spot purchases are made with little notice, they are the most 
expensive kind of power on the market. The state was forced to step in and 
buy the power when the credit ratings of California's major utilities dropped 
as the energy crisis worsened. The crisis was caused by a series of events 
that forced the utilities to pay more for electricity than they could recover 
from customers. 
The numbers released yesterday show that Texas companies weren't alone in 
receiving a share of the energy crisis pie. Some $1.2 billion went to Mirant, 
an Atlanta-based company. Mirant has refused to turn over documents 
subpoenaed by the state Legislature as part of its investigation into alleged 
market manipulation. Mirant could face contempt proceedings. 
Municipal generators have also fared well during the energy crisis. Powerex, 
a wholly owned power marketing subsidiary of Vancouver-based BC Hydro, 
received $1 billion from the state for spot market electricity. 
The Los Angeles Department of Water and Power, which Davis said charged 
higher average spot market prices than some generators, received $331 
million. 
E-mail Lynda Gledhill at lgledhill@sfchronicle.com. 
,2001 San Francisco Chronicle ? Page?A - 9