Please see the following articles:

Sac Bee, Wed, 5/23: New views emerging on power: More elected officials
support the concept of planned blackouts.

Sac Bee, Wed, 5/23: Californians' priorities for solving the crisis are
outlined in a Field Poll

Sac Bee, Wed, 5/23: Utility seeks OK of diesel use to avoid outages

Sac Bee, Wed, 5/23: Lawsuit wants to cap cost of power

Sac Bee, Wed, 5/23: All spin, no juice: Energy debate shifts from policy to
politics

SD Union, Wed, 5/23: Majority supports energy price caps, new nuclear plants

SF Chron, (AP)Wed, 5/23: Burton, Hertzberg demand FERC puts price caps on
electricity

SF Chron, Wed, 5/23: Nuclear power's California comeback
FIELD POLL: Majority wants new plants built

SF Chron , Wed, 5/22: Lawsuit asks court to order energy price caps

SF Chron , Wed, 5/22: Energy crisis not real, state's residents say
But poll results show most expect more blackouts

SF Chron, Wed, 5/23: Supervisor sees energy up on S.F. rooftops
Sunniest areas would have solar panels

Mercury News, Wed, 5/23: California economy braces for $5.7 billion electric
rate hike

OC Register, Wed, 5/23: Blackouts may come with early warning

OC Register , Wed, 5/23: Controller questions electricity cost

OC Register, Wed, 5/23: Rate increase to hit harder than thought

Energy Insight, Wed, 5/23: Giving FERC expanded eminent domain power a hot
button

Individual.com, Wed, 5/23: Energy Shortages, Price Caps and Windfall Profit
Taxes Lessons Never Learned

Individual.com, Wed, 5/23: California Religious Leaders Set Bush Energy Plan
Against "Biblical Standards of Stewardship, Justice" at Federal Building Rally

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New views emerging on power: More elected officials support the concept of
planned blackouts.
By John Hill
Bee Capitol Bureau
(Published May 23, 2001)
If Californians are to be left in the dark, they should at least know when to
break out the candles or send the workers home.
That's the growing sentiment among a range of elected officials, including
Gov. Gray Davis, who are pushing the idea of planning power blackouts and
giving businesses and residents ample warning.
On Tuesday, the Democratic governor's office said Davis supports longer
public notice than the 24 hours called for under a proposal by the California
Independent System Operator, which runs the state's power grid.
Assemblyman Mike Briggs, R-Fresno, introduced a bill that would lay out a
blackout schedule for the summer. Businesses could make plans for the
possible blackout days and also be assured that on all other days the lights
would stay on.
Briggs called his plan an improvement on the existing system in which "every
day is a potential blackout day."
A Senate committee, meanwhile, discussed planned blackouts as part of a
strategy to gain leverage over electricity generators by declaring that the
state will not pay above a certain amount for power. The state would ask
Washington and Oregon to join the so-called "buyers' cartel."
If the power generators refused to sell at the lower prices, the state would
gut it out with planned blackouts.
"Let's use the blackouts against the generators," Michael Shames, head of the
San Diego-based Utility Consumers' Action Network, told the Energy, Utilities
and Communications Committee. But Shames and others stressed the need for
warnings of at least 12 hours and blackouts no longer than 90 minutes.
"Absent that management of blackouts, we don't see how the buyers' cartel
could work," Shames said.
On a visit to Chicago on Monday, Davis said he talked to officials about the
city's system for giving the public warning days before possible power
blackouts, with definite notice right before.
"There is no reason to keep that secret from the public when their safety is
likely to be jeopardized," Davis told reporters Tuesday. The governor said he
plans to meet in the next few days with managers at ISO to explore the idea
of a system like Chicago's.
The grid operator announced Monday that it will try to give the public at
least a half-hour notice of outages, but many officials said Tuesday the
public needs even more warning. Davis aides said the governor's plan will go
beyond ISO's.
There are potential pitfalls. Criminals might make their own plans, taking
advantage of deactivated alarms. And some say that a schedule of blackouts
might increase the number of outages.
If people have been warned that a blackout is coming, and a last-minute
supply of electricity makes it unnecessary, grid managers would have to
decide whether to call it off, said Dorothy Rothrock, vice president of the
California Manufacturers & Technology Association.
If they did, it would add uncertainty to future warnings, she said, possibly
leading them to order unnecessary blackouts.
"Obviously, there are trade-offs," Rothrock said.
Still, the idea of planning blackouts seems to be gaining ground as a way for
the state to get back some control of the energy crisis, sorely lacking in
recent months.
"It would help us as Californians to say, 'The hell with you, George Bush,
we're going to handle this ourselves,' " said Jim Overman, 68, of Elk Grove.
Overman said he has been burning up the phone lines trying to persuade anyone
who will listen that scheduled blackouts will make everyone's lives easier.
Briggs said he has been told by constituents, including irrigators and food
processors, that scheduled blackouts are the way to go.
Irrigators would know that they shouldn't plan on getting water on a day that
their electronic gates might be closed.
Businesses could tell workers to stay home on a blackout day, or arrange for
backup power generators, he said.
"We would be very interested in it," said Ed Yates, senior vice president of
the California League of Food Processors.
Power blackouts are chaotic for processing plants, Yates said, requiring some
plants to be re-sterilized and shutting down operations for more than a day.
Some processors might choose to close on days when they faced a blackout, he
said, losing revenue but avoiding the loss of thousands of pounds of food.
"It doesn't solve the problem, but it helps manage a very difficult
situation," he said.
Briggs said that his plan would result in possible blackout days every two
weeks. The plan would assume that a certain number of customers would have to
turned off to keep the grid operating. If the electricity shortage went above
that amount, people might still face unanticipated blackouts, Briggs said.
One question is public safety. Some are queasy about burglars knowing when
blackouts will occur. But pluses include the ability to arrange for temporary
stop signs at road intersections, or families being able to arrange for a
sick relative to be moved.
"If the police have only five minutes notice, they can't get to difficult
intersections to direct traffic, they can't help paramedics, fire departments
and ambulances get where they have to be," Davis said.
The manufacturers' association and other business groups haven't endorsed the
idea yet, but say it's worth a look.
"It's preferable to random, rolling blackouts," Rothrock said.

The Bee's John Hill can be reached at (916) 326-5543 or jhill@sacbee.com.

Californians' priorities for solving the crisis are outlined in a Field Poll
By Dan Smith
Bee Deputy Capitol Bureau Chief
(Published May 23, 2001)
Californians have some clear ideas on how to solve the energy crisis: build
more nuclear power plants, cap the wholesale price of electricity and relax
air-quality standards to allow older plants to be upgraded.
And, according to a Field Poll released Tuesday, they're not so hot on the
recently approved $13.4 billion bond authorization to pay for electricity, or
the idea of Gov. Gray Davis seizing power plants through eminent domain.
Poll architects said responses may be somewhat colored by respondents'
unfamiliarity with all the issues or skepticism on the causes of the state's
power woes. Nearly 60 percent said it essentially is an artificial crisis
created by power companies to make money.
But on one longstanding issue -- nuclear power -- the poll showed a clear
preference and a dramatic shift in public opinion.
In the highest recorded support for nuclear power in California since before
the Three Mile Island disaster in 1979, 59 percent say they favor more
nuclear plants in the state to provide electricity.
Support among registered voters grows to 61 percent, with 33 percent opposed.
Among Democrats, 53 percent support more nuclear plants, and three-fourths of
Republicans and 55 percent of others agree.
"The change in attitude is very significant because they know this issue,"
Field Poll Director Mark DiCamillo said.
Californians' support for nuclear power reached nearly 70 percent in the
mid-1970s in the aftermath of a nationwide energy crisis. But it plummeted to
37 percent in 1979 after the partial meltdown at Pennsylvania's Three Mile
Island plant and fell to 33 percent in 1984 -- the last time Field surveyed
the question.
In 1989, voters demanded that the Sacramento Municipal Utility District's
Rancho Seco nuclear plant be shut down. The utility complied and has spent
more than $200 million decommissioning it during the past 12 years.
Although the poll results are in line with some private surveys done recently
by nuclear-energy advocates, opponents say the Field Poll opinions could be
misleading because the issue has been dormant for so long. Not since the late
'70s has an application for a nuclear plant been filed in the United States.
Only two operate in California -- San Onofre in San Diego County and Diablo
Canyon in San Luis Obispo.
"When the (poll) questions are on issues that people haven't thought about
that much lately, you do get some aberrant results," said Bill Magavern, a
lobbyist for the Sierra Club. "People right now are obviously concerned about
electricity, but they haven't really thought about what it would be like to
have a nuclear power plant in the neighborhood."
The Field Poll results lend support to at least one aspect in the national
energy plan recently released by President Bush, who called for more nuclear
power plants nationwide.
But poll respondents were even more insistent that the Federal Energy
Regulatory Commission should impose caps on wholesale energy prices despite
opposition from the Bush administration. The poll showed 70 percent of all
adults and 68 percent of registered voters -- including 57 percent of Bush's
fellow Republicans -- support the price controls.
"It really does expose the Bush administration to long-term serious problems
in California if they're perceived as not willing to help the state in this
regard," DiCamillo said. "The public really thinks (price caps) should be
imposed."
Republicans in the survey support price caps despite Bush opposition, and
Democrats narrowly oppose the move by Democratic lawmakers and Davis to
authorize the largest bond sale in national history to pay for power
purchases.
Among all adults, 38 percent approve of the move, and 52 percent oppose it.
Democrats disapprove of the bonds by a 46 percent to 44 percent margin.
Californians' desire for clean air is softening in the face of the energy
crunch, respondents said.
By a margin of 51 percent to 41 percent, poll respondents say they would
maintain air-quality standards rather than relax them to build plants. That
support is down from a Field survey in January, when 59 percent said they'd
rather maintain standards. Moreover, a majority (53 percent) say they would
relax air-quality standards to get older plants back in operation, an
increase from 47 percent in January.
Slight majorities support a state-run public power authority (54 percent) and
state-owned power transmission lines (51 percent), but DiCamillo said that
some poll respondents were probably not familiar with all the implications of
those moves.
Responses to the idea of Davis seizing power plants if prices continue to
rise this summer fell somewhat down partisan lines, with Democrats in favor,
50 percent to 42 percent, and Republicans opposed, 52 percent to 32 percent.
Overall, the idea was rejected by 48 percent of adults and favored by 44
percent.
A strong majority of registered voters, 56 percent, oppose additional
offshore oil and gas drilling to ease the energy crunch, and 38 percent favor
it.

The Bee's Dan Smith can be reached at (916) 321-5249 or smith@sacbee.com.

Utility seeks OK of diesel use to avoid outages
By Chris Bowman
Bee Staff Writer
(Published May 23, 2001)
Desperately seeking megawatts, San Diego Gas & Electric Co. wants to pay
local industries to fire up their high-polluting emergency diesel generators
this summer to relieve the electricity grid and avoid rolling blackouts.
If approved by the state Public Utilities Commission, the proposal could
increase the region's generating capacity by up to 50 megawatts, enough to
serve about 50,000 homes and significantly minimize if not eliminate planned
blackouts.
"Customer willingness to participate has been quite strong, if the proper
incentives are in place," said Debra Reed, president of SDG&E, which serves
3 million consumers in San Diego and southern Orange counties.
The utility estimates the program would cost $15 million.
Environmental opposition to date has come mainly from the state's chief
air-pollution enforcer, the California Air Resources Board, which can
influence but has no direct control over air pollution rules set by San
Diego-area elected officials.
The board contends that the San Diego region, which already suffers some of
the worst smog in the nation, would see its air quality deteriorate further
if the notoriously dirty diesel generators are deployed en masse.
Most diesel generators have few or no pollution controls and, megawatt for
megawatt, spew about 500 times more smog-forming emissions of nitrogen oxides
than do new power plants fired by natural gas, said Michael Kenny, air board
executive officer. The standby diesels also pump out significantly more
particles of soot that can lodge deep in the lung and cause cancer.
"The SDG&E proposal would expend ratepayer dollars on extremely polluting and
expensive power, decrease participation in more sound conservation programs
and not make a significant difference in the number or extent of blackouts,"
Kenny said in a letter of opposition.
The utilities commission is scheduled to vote on the proposed "rolling
blackout reduction program" Thursday in San Francisco.
Many utilities have offered similar financial incentives to get businesses
off the power grid at times of peak demand. The San Diego utility's plan,
however, would take power-shedding where it has not gone before by explicitly
rewarding the use of higher-polluting power sources.
"We have not gone down that path," said Kevin Payne, Southern California
Edison's director of technical support for customers. Edison is proposing
cleaner alternatives than diesels to get power-intensive businesses off the
grid when supplies are tight.
Officials at Pacific Gas & Electric said they, too, have stopped short of
enlisting the use of diesel generators.
"We definitely see merit in being able to avert blackouts, and the diesel
generator being the tool to do that, but we have concerns about the
environmental impacts," said Staci Homrig, a PG&E spokeswoman.
Under the San Diego utility's plan, participating businesses would turn on
backup generators at the utility's request and simultaneous disconnect from
the electricity grid when power supplies are at Stage 3 -- nearly depleted.
Utility officials say the diesels would run "in strict compliance with all
rules" of local, state and federal air pollution enforcement agencies. But
unlike most local air pollution control districts, San Diego County's allows
unlimited use of emergency generators when rolling blackouts appear imminent.
Richard Smith, assistant director of the San Diego County Air Pollution
Control District, said his board of elected officials believes the deployment
of backup diesels would not only spare businesses millions of dollars in lost
revenue but would also shield San Diego residents from greater pollution that
would come when even more standby generators kick in during a blackout.
PG&E officials say it would be unfair for one area of the state to avoid
power outages by cranking up dirty diesels when other areas of the state go
dark, spokeswoman Homrig said.
"If there are going to be blackouts, it should be blackouts for everybody,"
she said.

The Bee's Chris Bowman can be reached at (916) 321-1069 or cbowman@sacbee.com
.

Lawsuit wants to cap cost of power
By Kevin Yamamura
Bee Capitol Bureau
(Published May 23, 2001)
Key lawmakers touted their lawsuit filed Tuesday against federal energy
regulators as a last-ditch maneuver to relieve California from summer
blackouts and high electricity costs.
Filed on behalf of the Legislature and the city of Oakland, the suit charges
that the Federal Energy Regulatory Commission has failed to fulfill its legal
duties by allowing generators to charge unreasonable rates for power in
California.
The lawsuit, filed by Senate President Pro Tem John Burton and Assembly
Speaker Robert Hertzberg, seeks immediate caps on wholesale energy rates and
refunds from past purchases.
The two Democrats noted that power prices shot up from $33 a megawatt in 1999
to as high as $1,900 earlier this year. Burton suggested a $200 cap is
reasonable.
"The people of California need some relief, some protection from these
outrageous prices," Hertzberg said. "In our judgment, the law is clear -- it
is clear that the federal regulators are ignoring the law."
Under the Federal Power Act, FERC is charged with setting "just and
reasonable" wholesale energy prices.
The commission adopted a plan in late April that would cap rates once
reserves fall below 7.5 percent, in what is called a Stage 1 power emergency.
But California officials denounced that plan as ineffective, noting that the
state needs relief before emergencies strike.
High energy costs have helped drain more than $6 billion from the state's
general fund since California began purchasing electricity for utilities in
January.
In addition, the state faces at least 260 hours of power blackouts this
summer, according to the North American Electric Reliability Council. Those
outages are a health threat to California's most vulnerable residents, Burton
said.
But Jan Smutny-Jones, who represents wholesale generators as executive
director of the Independent Energy Producers Association, said a suit would
solve none of California's problems.
"We need to tone down the political rhetoric and fix problems rather than try
to litigate this," he said. "This lawsuit will not add one megawatt of
generation to the system nor will it decrease demand in California."
Gov. Gray Davis, who has attacked the Bush administration for not capping
energy prices, said he supports the lawsuit.
"I support all efforts to recoup the windfall profits that these generators
have recovered by gouging our utilities at the cost of having to be passed
off in some form or fashion to the customers over time," the Democratic
governor said.

The Bee's Kevin Yamamura can be reached at (916) 326-5542 or
kyamamura@sacbee.com.

All spin, no juice: Energy debate shifts from policy to politics

(Published May 23, 2001)

If the spin machines of the Davis and Bush administrations generated
electricity, California wouldn't have to worry about blackouts.
Unfortunately, political hot air won't drive a turbine.
Both Gov. Gray Davis and Vice President Dick Cheney have stepped up their
finger-pointing campaigns, with the governor blaming Bush for abandoning
California, and Cheney blaming Davis for ignoring the problem until it blew
into a crisis.
But while the governor and the White House play blame games, some of the real
policy work sits uncompleted. As temperatures soar and June approaches, there
is nothing close to a consensus on the three unresolved challenges of the
power crisis: returning the state's investor-owned utilities to solvency;
preventing independent generators from exploiting a broken wholesale power
market; and keeping alternative generators producing power at reasonable
rates.
For the somewhat distant future, some policy pieces have fallen into place.
The need for more power will be met by plants under construction and in the
approval process. The state's $800 million investment in new conservation and
efficiency initiatives will dampen demand for power. The creation of a state
public power authority gives California a tool to deal with imbalances in the
electricity marketplace.
But the immediate crisis offers only unpleasant and controversial choices,
all of them heavily freighted with political risk. Decisions about rescuing
the utilities or controlling wholesale prices hinge on different ideological
views of the proper role of government in the marketplace and the causes of
the electricity mess. And the stakes are extraordinary, both for California's
economy and for political positioning in the national battle over energy
policy and future elections.
In the absence of quick policy action, though, all of the finger-pointers
stand to lose. Cheney is right about Davis' dilatory approach to the power
crisis, but dead wrong in shirking federal responsibility for what comes
next. The federal government alone has authority to restrict the wholesale
price of power to what is just and reasonable. This is the law, and the Bush
administration refuses to enforce it.
As long as the sky is the potential limit on wholesale electricity prices,
both for purchases past and present, it's harder for the political system to
resolve the past debts of the utilities and the contractual relationships
with alternative generators. If the Bush administration wants to turn the
political heat on Davis and Sacramento, it must do its own job first. The
only thing preventing that is a near fanatical belief that with electricity,
the free market can do no wrong.

Majority supports energy price caps, new nuclear plants

By John Marelius
UNION-TRIBUNE STAFF WRITER
May 23, 2001
Californians are sharply divided over a host of proposals to address the
energy crisis, with a new statewide poll showing caps on wholesale
electricity prices the most popular fix and a $13.4 billion bond to buy power
for the state the most unpopular.
The nonpartisan Field Poll shows the Bush administration's refusal to
consider energy price controls at odds with Californians, who support caps
overwhelmingly, 70 percent to 24 percent.
Though that might give Gov. Gray Davis ammunition to escalate his criticism
of White House passivity in the crisis, the most aggressive action the
governor has taken to date registers strong disapproval.
?  Coalition's generator plan rejected
?  Davis trims outlook for new power
?  Water district may seek additional bids to build power plant
?  Proposed plant caught in city-state tug of war
Fifty-two percent of the 1,015 California adults surveyed said they oppose
the record $13.4 billion bond issue authorized by Davis and the Legislature
to purchase power over the next two years. Only 38 percent thought the bond
issue was a good idea and 10 percent had no opinion.
Concerning other proposals, 54 percent to 36 percent support creating a
state-run power authority to operate power plants and 51 percent to 41
percent favor the state buying transmission lines from utilities.
A narrow plurality, 48 percent to 44 percent, opposes the idea of Davis
invoking the governor's emergency powers to seize power plants.
The telephone survey was conducted from May 11 to Sunday. According to
statistical theory, such a poll is accurate 95 percent of the time within a
margin of error of 3.2 percentage points.
While the Field Poll shows the energy problems have not shaken Californians'
long-held opposition to permitting off-shore oil drilling and relaxing clean
air standards, it revealed a stunning reversal on nuclear power.
Nearly three in five in the survey, 59 percent, said they favor building more
nuclear power plants; 36 percent was opposed. That represents a turnabout
from 1984 when 33 percent supported nuclear power plants and 61 percent
opposed them.
"The resurgence of public support for nuclear power is something I never
would have predicted before we did the survey," said Mark DiCamillo,
associate director of the Field Poll. "But it's been 20-some years since
Three-Mile Island (the Pennsylvania nuclear plant accident) and it seems that
the safety record is there."
Reaction to many of the electricity proposals broke heavily along partisan
lines and reflected the two major parties' attitudes toward government.
While Democrats favored creating a public power authority, purchasing
transmission lines and seizing power plants, Republicans were strongly
opposed to these ideas.
But asked about rate caps, members of both parties were heavily in favor.
Republicans favored rate caps 57 percent to 37 percent. With Democrats,
though, the gap was twice as wide, 79 percent to 17 percent.
"This is one area where the federal government and the Bush administration is
exposed to long-term damage here in California," said DiCamillo.
At the same time, the pollster said, Davis has not made the case for such a
large bond issue to alleviate a crisis the majority of Califorians believe
has been artificially exacerbated to drive up the profits of energy
companies.
"It's a huge bond issue and I think the sheer size of it is dragging it down
some," DiCamillo said. "I think the cynicism that the public has about the
causes of this and why this whole crisis has come to be really prevents the
public from supporting this kind of money for this purpose."

Burton, Hertzberg demand FERC puts price caps on electricity
DAVID KRAVETS, Associated Press Writer
Wednesday, May 23, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/23/state0
344EDT0119.DTL&type=news
(05-23) 00:44 PDT SAN FRANCISCO (AP) --
California's Democratic legislative leaders asked a federal appeals panel
Tuesday to order federal regulators to cap wholesale electricity prices.
"The people of California need some protection from these outrageous prices,"
said Assembly Speaker Robert Hertzberg.
The move by Hertzberg of Van Nuys and Senate President John Burton of San
Francisco came after unsuccessful lobbying by Gov. Gray Davis and other
lawmakers to get the Federal Energy Regulatory Commission to impose strict
price caps.
"The citizens of California are suffering immediate irreparable harm as a
result of FERC's abrogation of its duty to establish just and reasonable
rates for electricity," the lawmakers wrote to the 9th U.S. Circuit Court of
Appeals, which has jurisdiction over FERC.
The lawmakers, joined by the city of Oakland, said California's looming
threat of continued blackouts "are an imminent threat to the health, welfare
and safety of every California citizen."
"There's a danger this entire economy can come unwound," warned former
governor and now Oakland Mayor Jerry Brown. He plans to recruit his fellow
mayors to also pressure FERC.
However, Assembly Republican Leader Dave Cox of Fair Oaks questioned whether
the federal court will intervene in the commission's ongoing regulatory
decisions. "If the court takes it, it's meritorious. If not, it's political,"
Cox said.
The suit comes after more than a year of wholesale power prices reaching
historically high levels. In December, prices in California reached $200 per
megawatt hour -- and they have skyrocketed to as much as $1,900 per megawatt
hour during peak times since then.
The Bush administration ardently opposes price caps and President Bush has
declined Davis' request to urge FERC to impose strict caps.
Vice President Dick Cheney, chief architect of the administration's energy
plan released last week, said capping prices would not increase energy
supplies or reduce demand.
"We get politicians who want to go out and blame somebody and allege there is
some kind of conspiracy ... instead of dealing with the real issues," Cheney
said Sunday.
Cheney criticized Davis, a Democrat, for what he called a "harebrained
scheme" to use the state's budget surplus to buy power because California's
two largest utilities face enormous financial problems.
For the short term, the Bush administration has approved Davis' request to
expedite permits for new power plants and has ordered federal facilities in
California to reduce energy consumption 10 percent this summer.
Sacramento and the White House appear locked in a high-voltage war of
rhetoric over energy policies. There is broad bipartisan dissatisfaction in
Sacramento with Washington's response to California's energy crisis -- the
result of its own 1996 deregulation rules.
Last month FERC did order a one-year cap on electricity sold into California
during power emergencies, when power reserves fall below 7 1/2 percent. The
agency did not set a price and also required the state to join a regional
transmission organization, which could limit California's ability to control
its own power grid.
Davis called the plan a "Trojan horse," and state power regulators dismissed
the cap as inadequate, saying it would profit power generators at ratepayers'
expense.
In addition, Davis and state lawmakers sharply criticized FERC for
considering requiring the state's power grid operator to add a surcharge on
power sales to pay generators the money they are owed by the state's two
large financially strapped utilities.
The case filed Tuesday is Petitioners v. Federal Energy Regulatory
Commission, 01-70812.
,2001 Associated Press ?

Nuclear power's California comeback
FIELD POLL: Majority wants new plants built
Carla Marinucci, Chronicle Political Writer
Wednesday, May 23, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/23/M
N208173.DTL&type=news
In a startling shift from views held consistently for more than a generation,
energy-strapped Californians now strongly favor nuclear power as a means of
providing more electricity, a Field Poll shows.
The statewide poll released today shows that 59 percent of those surveyed
support building new nuclear power plants in the state -- compared with 36
percent who oppose the idea and 5 percent undecided.
The breakdown is even more dramatic for registered voters who were among the
1,015 Californians polled -- 61 percent in favor and 33 percent opposed, with
6 percent undecided.
That represents the first time since 1978 -- a year before the nuclear
accident at Three Mile Island -- that Californians have approved of more
nuclear power. And it is a complete reversal from the last time Field polled
on the issue in 1984, when Californians rejected more nuclear power by a
2-to- 1 ratio.
"This is a big deal. . . . The state's current energy crisis has just set off
a chain reaction of public support for nuclear power," said Mark DiCamillo,
director of the Field Poll. "The public's fear of nuclear power is being
mitigated by the long-term experience with nuclear power in other states, . .
.
and it is letting down its fears."
At the same time, the poll shows a majority of Californians want air
pollution controls to remain in place and reject offshore oil drilling and
greater use of coal-fired power plants to provide more energy.
Significantly, although once the subject of passionate "no nukes" protests
and controversial initiatives in California, nuclear power now has a majority
of support among Democrats, Republicans and independent voters alike, the
poll showed.
While Californians gave thumbs up to a power source being pushed by the Bush
administration for the long term, they also backed federal price ceilings on
energy -- a short-term measure rejected repeatedly by the administration.
Seven in 10 Californians surveyed say a federal price limit on energy would
be a good thing -- echoing Gov. Gray Davis' adamant call for such action
since the energy crunch became apparent last winter.
Despite the opposition from Bush and Republican leaders, 57 percent of
registered Republican voters in California support price limits as do an
overwhelming 79 percent of Democrats.
DiCamillo says the findings clearly dramatize that "the consequences of not
having federal price caps will be quite severe for the Bush administration as
we go into the summer and have blackouts."
California voters see the price limit proposal as the "one way out . . . for
the state to continue to buy (power)," he said. "The one proposal the public
really wants is something that the state itself cannot do. . . . It requires
the assistance of the federal government."
The poll, underscoring the shifting political landscape created by
California's deepening energy woes, came even as Vice President Dick Cheney
was making another high-profile plea for more nuclear energy.
"We want to assess the potential for nuclear energy to make a major
contribution in terms of improving air quality," said Cheney, speaking in
Washington, D.C., before the Nuclear Energy Institute. He called nuclear
power "a very important part of our energy policy today in the United
States."
The Field Poll findings on nuclear energy were met with enthusiasm by the
nuclear industry -- and harsh criticism from environmentalists.
"It's not surprising," said Mitch Singer, spokesman for the group that Cheney
addressed yesterday. "People are seeing an industry running efficiently,
running safely, pumping out a lot of electricity and with no emissions into
the atmosphere. What's happening here is the growing consensus and
recognition that nuclear energy needs to be part of a diverse portfolio for
the country."
Singer said California's nuclear power plants -- in San Onofre and in Diablo
Canyon -- provide California with 17.8 percent of its electricity needs,
at an average production cost of 1.83 cents per kilowatt hour.
NUCLEAR'S TV ADS
But Ann Mesnikoff, spokeswoman for the national offices of the Sierra Club,
said voters have been inundated by expensive TV ads by the nuclear industry
-- which fail to mention the dangers.
"When people start seeing truck or rail shipments running through the center
of the state, will they be reminded that nuclear power generates the most
dangerous (waste) substances we've created?" she asked.
"Nuclear power should not be part of our 21st century energy plan," she said.
"It's expensive, it's slow, it's dangerous. It's not a plan that will provide
California with quicker, cleaner and safer energy."
The Field Poll generally asked for the views of Californians on the proposed
solutions to the state's energy crunch. Among its results, Californians
surveyed:
-- Reject, by 52 percent to 38 percent, the major solution thus far offered
by Davis and the Legislature -- issuing the sale of up to $13.4 billion in
revenue bonds to help the state purchase power over the next two years.
CYNICISM ABOUNDS
"They think it's very expensive," DiCamillo said. "They're very cynical about
why they're in this (energy crisis) and they look at this as just a big
gaping hole in the state's long-term budget."
-- Support, by 54 percent to 36 percent, the idea of a state-run public power
authority to operate power plants.
-- Support, by 51 percent to 41 percent, Davis' proposal to buy power lines
that transport electricity from the private utility companies.
-- Oppose, by 48 percent to 44 percent, the idea of Davis using his emergency
powers to seize private power plants if energy prices rise this summer. Half
of Democrats favor the idea, but a majority of Republicans oppose it.
-- Reject the use of more coal-fired power plants, by 48 percent to 40
percent, and offshore drilling of oil and gas wells, by a 48 percent to 44
percent margin.
-- Support maintaining air quality standards in general 51 percent to 41
percent, but by 53 percent to 39 percent favor relaxing standards in some
areas to allow older power plants to produce again.
The statewide poll of 1,015 California adults was taken May 11 to Sunday. It
has a margin of error of plus or minus 3.2 percentage points.

E-mail Carla Marinucci at cmarinucci@sfchronicle.com.
Field Poll / Californians' reactions to energy crisis
   Support for building more nuclear power plants to provide more electricity
took a dramatic rise in the survey, marking a shift in the attitudes
Californians have had toward nuclear power since 1979. The survey shows a
majority of residents still oppose increasing other forms of power production
to provide more electricity, though opposition to building more coal-fired
plants is less than in previous surveys on this issue.
   May survey results by voter affiliation
              Registered
               voters     Democrats  Republicans  Other

   Nuclear power
Favor            61%        53%         75%        55%
Oppose           33%        41          20         37
No opinion        6%         6           5          8
.
   Offshore oil drilling(x)
Favor            38%        23%         56%        41%
Oppose           56%        73          35         56
No opinion        6%         4           9          3
.
   Coal-fired power
Favor            38%        32%         45%        40%
Oppose           52%        57          42         58
No opinion       10         11          13          2
   (x) Allowing more oil and gas well drilling in state tidelands along
California seacoast
   The results are based on a telephone survey conducted May 11 to 20 by the
Field Institute. The survey of 1,015 California adults was completed in
either
English or Spanish using random digit dialing methods. This poll has a margin
of error of plus or minus 3.2 percentage points.
   Chronicle Graphic

,2001 San Francisco Chronicle ? Page?A - 1

Lawsuit asks court to order energy price caps
Bob Egelko, Chronicle Staff Writer
Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N193624.DTL&type=news
California's legislative leaders and the city of Oakland asked a federal
court today to order federal regulators to limit the prices charged by
suppliers of electricity to the state.
The Federal Energy Regulatory Commission acknowledged last November that
wholesale prices of power sold into California were not "just and reasonable"
but has violated its legal obligation to curb those rates, the suit charged.
It was filed by Senate President Pro Tem John Burton, D-San Francisco,
Assembly Speaker Robert Hertzberg, D-Sherman Oaks, and the city of Oakland in
the U.S. Court of Appeals in San Francisco, where FERC orders can be directly
challenged. The suit says emergency intervention by the court is needed with
California facing worsening power shortages, escalating costs and the
prospect of summer blackouts.
In addition, FERC is about to act on requests by out-of-state suppliers for
three more years of authority to sell electricity to California at market
rates, the suit said.
State officials "have been repeatedly complaining to FERC about obvious
price-gouging for well over a year, and pleading with FERC to act," the suit
said. "These pleas have fallen on deaf ears.
". . . With continued blackouts a certainty this summer . . . it will not be
long before fender-benders once again become fatalities, before traffic
irritation escalates into full-blown road rage, before air conditioner
failures leave fragile people in sweltering, life-threatening conditions,
before elevators become prisons, and before minor fires become infernos."
FERC has resisted price caps during both the Clinton and Bush
administrations. Late last month, the commission ordered a one-year cap on
the price of electricity sold into California, but only when power reserves
fall below 7.5 percent. Legislative leaders and Gov. Gray Davis say the
action was inadequate.
,2001 San Francisco Chronicle ? Page?A - 12

Energy crisis not real, state's residents say
But poll results show most expect more blackouts
Carla Marinucci, Chronicle Political Writer
Tuesday, May 22, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/22/M
N175993.DTL&type=news

The overwhelming majority of Californians say the state's power crisis is
"very serious" and blame the big energy companies for creating and
manipulating shortages, results of a new Field Poll show.
"In the public's view . . . this is a manufactured crisis -- not a real
crisis," Mark DiCamillo, director of the statewide Field Poll, said
yesterday. "That cynicism permeates a lot of things. . . . The public is not
sold on the explanations as to why we're in the crisis we're in."
The poll results, released yesterday after a year of energy woes, underscore
Californians' increasing concerns about the energy crisis and their growing
list of personal conservation efforts to deal with it. The poll of 1, 015
California adults was conducted May 11 to Sunday.
CONSUMPTION, CONSERVATION
In what may be the first such tally of statewide conservation efforts,
California residents said they reduced their power consumption by an average
of 8 percent -- an effort motivated by the energy crisis.
The new poll results also dramatized that Californians are "very attentive"
to news reports and information about the energy crisis as a way of bracing
themselves for the effects of increased rates and power outages.
But so far, it is not the politicians who are the object of their wrath -- it
is big energy, DiCamillo said.
"They're the bad guys," he said. "But (in the public's view) no one has been
able to stop them. No one is winning this."
The findings of the latest Field poll:
-- Three quarters of the Californians polled deemed the energy crisis "very
serious," and 20 percent said "somewhat serious" -- compared with just 5
percent who said they didn't see it as a problem. That is similar to a
California Public Policy Institute survey released Monday that showed 82
percent of those polled believe the energy crunch is a "big problem."
-- Despite the widespread media coverage of the effects of blackouts, many
Californians said they were not personally inconvenienced, the poll results
showed. Just 11 percent reported being inconvenienced "a great deal" by
blackouts, and another 16 percent say they have been affected "some" by the
problems, compared with 16 percent who said they'd had "a little"
inconvenience, and 11 percent who said "none." Almost half said they had not
experienced a blackout at all.
-- One-third said they expected to be inconvenienced "a great deal" by
blackouts during this coming summer, the poll showed.
-- Only 1 in 5 residents say rate increases have so far created serious
problems for them -- and nearly half say they haven't been affected at all,
the poll showed. But most Californians say they are fully aware new rate
increases have been passed by the Public Utilities Commission, and "you can
see the pain level goes up fairly dramatically," said DiCamillo. "They're
bracing themselves for the worst."
WHAT LIES AHEAD
DiCamillo said the poll results confirm how deeply Californians fear what may
lie ahead in the energy arena.
"Up to this point, (rate increases and blackouts haven't) really touched a
strong nerve, but they really feel it's coming," he said. "They don't know
how it will affect them. . . . They're looking at the politicians as if
they're impotent in the face of these changes."
The Field Poll has a margin of error of plus or minus 3.2 percentage points.
Tell us what you think -- What are your suggestions for saving energy? Send
your best tips to Energy Desk, San Francisco Chronicle, 901 Mission St., San
Francisco, CA 94103; or put your ideas in an energy-efficient e-mail to
energysaver@sfchronicle.com.

E-mail Carla Marinucci at cmarinucci@sfchronicle.com
Field Poll
 Californians' reactions to energy crisis
   More than half of Californians surveyed this month by the Field Poll say
the energy crisis is more a product of the energy companies' efforts to drive
up rates than a real shortage. Despite that view, 85 percent say they're
trying to conserve energy.

-- Which is closer to your view - that the current electricity shortage is
real or is an attempt by energy companies to increase rates?
               Attempt to increase rates   Real shortage  No opinion
May survey             59%                     36%           5%
January survey         57%                     36%           7%
May survey results by household income:
  Less than $20,000    54%                     37%           9%
 $20,000 to $40,000    62%                     34%           4%
 $40,000 to $60,000    59%                     36%           5%
 $60,000 to $80,000    57%                     37%           6%
  More than $80,000    55%                     42%           3%

-- Degree to which residents say they have cut back on electricity usage
since
the start of energy crisis: Percentage of residents who . . .
Have not been able to conserve   15%
Have cut back electricity use (median percentage cutback 8%):
    5%            17%
   10%            25%
   15%            14%
   20%            13%
   More than 20%  11%
.
Can't estimate % of savings 5%

The results are based on a telephone survey conducted May 11 to 20 by the
Field Institute. The survey of 1,015 California adults was completed in
English and Spanish using random digit dialing methods. This poll has a
margin
of error of plus or minus 3.2 percentage points.
Chronicle Graphic

,2001 San Francisco Chronicle ? Page?A - 13

Supervisor sees energy up on S.F. rooftops
Sunniest areas would have solar panels
Rachel Gordon, Chronicle Staff Writer
Wednesday, May 23, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/23/M
N193839.DTL&type=news
San Francisco -- Rooftops in San Francisco's sunniest neighborhoods would be
covered with power-generating solar panels to help ease the city's energy
crunch under an ambitious plan proposed by Supervisor Tom Ammiano.
It is envisioned that at full capacity the project would generate 50
megawatts of electricity -- enough to power 50,000 homes -- which would make
it the largest such solar program in the nation.
The project, as conceived by Ammiano, would be a public-private partnership.
The city would help with financing and private contractors would build and
maintain the equipment, which would be installed on commercial and
residential buildings.
Ammiano hopes to ask voters in November to approve a Charter amendment that
would allow the Board of Supervisors to issue revenue bonds to pay for the
project. The bond debt would be paid back with money made from the sale of
the electricity and lease payments from participating building owners;
property taxes would not be raised. The city would tap into state and federal
subsidies for solar power to bring the costs down.
"Our local dialogue about the energy crisis has been missing a key component:
a commitment to renewable energy that will be directly beneficial to local
residences and businesses," Ammiano said Monday. "The project will stake out
the city's commitment to clean, renewable energy."
The solar power could be used by the buildings on which the equipment is
housed, with any excess going to the power grid serving the city.
"It's not going to be power in the hands of people who are playing games with
us. It puts power in local control," said Rick Shattuc, consumer advocate for
The Utility Reform Network, a consumer rights group.
San Francisco Chamber of Commerce vice president Jim Mathias said the idea is
intriguing. But he wants to see the numbers crunched.
"Financing will be a big challenge," Mathias said. "Economies of scale will
help bring down costs, but it is unclear if a project focused on the sunny
neighborhoods of San Francisco will be big enough in scale to make the
numbers work."
Paul Fenn, director of Local Power, an Oakland advocacy group, helped Ammiano
develop the proposal. He said the costs could run into the hundreds of
millions of dollars.
Although San Francisco is more famous for its fog than its sunshine, Fenn
said, studies have shown the city has considerable capacity to go solar,
particularly in neighborhoods on the south side. To generate 50 megawatts,
solar panels equivalent to about 100 football fields would have to be
installed on rooftops, he said.
E-mail Rachel Gordon at rgordon@sfchronicle.com.
,2001 San Francisco Chronicle ? Page?A - 17

California economy braces for $5.7 billion electric rate hike
Posted at 6:29 a.m. PDT Wednesday, May 23, 2001
BY MICHAEL LIEDTKE

AP Business Writer

SAN FRANCISCO (AP) -- Higher power costs zapped restaurateur Marino Sandoval
and his customers even before California regulators decided how to allocate a
$5.7 billion electricity rate hike -- the highest in state history.
Faced with soaring natural gas rates that tripled his utility bill, Sandoval
last month raised prices at his popular Mexican restaurant chain, El Balazo,
by as much as 20 percent on some items. A giant burrito that cost $4.95 at
the end of March costs $5.95 today.
``We had to do it because it seemed like the price of everything, from our
beans to our tortillas, was going up almost every day. Our higher prices have
everything to do with the higher energy prices,'' said Sandoval, who runs six
restaurants in the San Francisco area.
From hotels to bagel shops, businesses throughout California have been
raising prices or imposing special surcharges to offset rising power costs.
Most of the increases so far have reflected higher natural gas costs, which
utilities have been passing along to customers.
Now, businesses and households are bracing for electricity rate increases
that could balloon the bills of the largest users of the state's two biggest
utilities, Pacific Gas and Electric Co. and Southern California Edison Co.
The higher rates, which will begin appearing in June's utility bills,
threaten to jolt the state's already-jittery economy.
``Pretty soon, we may see California staring down the barrel of a
recession,'' said Dave Puglia, a vice president for APCO, a public affairs
firm hired by California business interests to study the economic effect of
the state's energy woes.
By itself, the $5.7 billion rate increase approved in late March by the
California Public Utilities Commission probably isn't enough to topple the
state's roughly $1 trillion economy -- the sixth largest in the world.
After weeks of public hearings and intensive lobbying by various customer
groups, the commission voted last week how to spread the pain of those rate
hikes.
``It will cause some hardships, particularly for some small business owners,
but from the macro point of view, these rate increases aren't going to have a
major impact on California's output,'' predicted Sung Won Sohn, chief
economist for Wells Fargo & Co., which runs the biggest bank headquartered in
the state.
But some business leaders are worried the hike will represent the coup de
grace for many companies already reeling from rising expenses for gasoline,
natural gas, health care benefits and workers' compensation insurance.
Against this backdrop, many employers also face pressure to raise their
workers' wages to help pay for California's high housing costs.
``If this keeps up, at some point, we are going to reach a breaking point in
the economy,'' said Allan Zaremberg, president of the California Chamber of
Commerce.
The California Chamber is part of the California Alliance for Energy and
Economic Stability, a coalition that sought to shift more of the electricity
rate increase from businesses to households.
Under the plan approved by the PUC, businesses are expected to pay about $4.6
billion more for electricity and households will pay an additional $1.1
billion.
Even if they are spared on their utility bills, consumers still will be
pinched by higher prices for goods and services as businesses pass along
their electricity price increases.
The rate increases mean that utility bills will consume about 25 percent to
30 percent of a big manufacturer's budget, Puglia estimated, up from about 15
percent now.
``I wouldn't be surprised if we see some companies go out of business because
of this,'' said Justin Bradley, director of energy programs for the Silicon
Valley Manufacturing Association, a high-tech trade group.
Even if they don't shut down completely, many companies likely will lay off
workers as they cut costs to pay for power. The California Manufacturers and
Technology Association estimates the energy crisis will result in the loss of
135,755 jobs -- or about 40,000 more than the entire dot-com industry has
laid off nationwide during the past 16 months.
Painful though they may be, most economists say higher electricity rates and
some resulting layoffs are a better alternative than the increased number of
blackouts that probably would have occurred if retail prices hadn't been
raised.
Even though the monthly utility bill at one of his restaurants rose from
$1,500 last year to $4,500 this year, Sandoval said customers continue to
pour into his El Balazo restaurants despite higher menu prices.
``Business is so good that I have been too busy to think about whether I am
going to have to raise my prices again,'' he said. ``If I have to, I will. I
don't think people are going to stop eating because of this.''

Blackouts may come with early warning
ISO plan for 30-minute notice also includes projections for the next day.
May 22, 2001
By MARY ANN MILBOURN
The Orange County Register
The public could get up to 30 minutes' warning that rolling blackouts are
likely under a plan proposed Monday by the state's power grid operator.
More information also would be available about the day's electricity supply
and demand, as well as a forecast on the likelihood of next-day rolling
blackouts.
The proposals are an effort by the Independent System Operator, which
operates the power grid, to respond to criticism that the six blackouts that
have occurred so far in California have caused costly disruptions of
communities and businesses. Problems have ranged from car accidents when
traffic signals went blank to lost production caused by computerized
equipment suddenly going down.
The additional lead time would help people prepare for the outages. For now,
however, Southern California Edison customers wouldn't be told where the
first outages would hit. The utility would publicize the locations of
subsequent outages.
Ernie Rodriguez, owner of Southern California Plastics in Santa Ana, said
anything would be helpful.
"Our equipment is very sensitive," said Rodriguez, whose company custom-
molds plastic. "We need to prepare our machines, and even 30 minutes would be
helpful."
But the ISO's proposal wasn't enough for some members of the Legislature who
have advocated prescheduled blackouts.
Assemblyman Mike Briggs, R-Fresno, plans to introduce a bill this week that
would require the state Public Utilities Commission to notify businesses and
homeowners of possible blackouts as much as one month ahead of time.
"We owe the people of this state some kind of schedule," Briggs said. "If
businesses and individuals knew what days their power could potentially be
shut off or blacked out, they could plan for that blackout accordingly."
The ISO's board of governors will consider the early- warning system at its
meeting Thursday. If adopted, it could go into effect May 30 and provide new,
more timely information on several fronts:
When demand is high, the ISO would issue forecasts to the news media,
emergency services and utilities of peak demand, supply and weather for the
next 24 hours.
A "power watch" would be issued when the ISO calls a Stage 1 alert, in which
reserves dip below 7 percent, or a Stage 2 alert, when the system is within 5
percent of running out of power.
The ISO would issue a "power warning" if there's a 50/50 chance that a Stage
3 alert, in which reserves fall below 1 1/2 percent, will be called.
Thirty minutes before a blackout occurs, the ISO would issue a "notice of
probable load interruption." If additional supply is found or demand is
reduced, no blackout would be necessary.
Steven Conroy, a spokesman for Southern California Edison, said he hadn't
seen the details of the policy but that it appears to work well with his
company's plans. Edison serves most of Orange County.
"The more information we can provide will be of value to our customers,"
Conroy said.
Beginning next month, Edison customers will get their rotating-outage group
number on their bills. Initially, Edison will use the group numbers only to
let customers know who might be next for blackouts once they start. The
company will use its Web site, a telephone voice recording and broadcast
media to get the word out.
Conroy, however, said the company is considering posting the group numbers
for the first areas to be blacked out. Officials have been reluctant to
announce where outages will hit for fear of theft and vandalism.
San Diego Gas & Electric, which serves 100,000 customers in south Orange
County, is already using pagers and e-mail to notify business customers of
power-grid conditions. Spokesman Ed Van Herick said the ISO warning might
give SDG&E time to let block groups know where initial blackouts will hit.
Also Monday, the Public Utilities Commission began accepting applications
from businesses seeking exemptions from rolling outages.
Exemptions are only granted to customers who provide essential services, such
as hospitals, fire and police stations, and air traffic control facilities.
The PUC will consider exemptions for businesses whose shutdown would
constitute a threat to public health and safety.
The deadline to apply is June 1. A decision on which businesses qualify for
exemptions is expected by Aug. 2.
As part of the statewide effort to gear up for the expected summer blackouts,
the California Energy Commission on Thursday will test a new computer system
that notifies cities, counties, special districts and some federal agencies
in the state about energy conditions.
The goal of the system is conservation, said Mara Bouvier, commission
contingency planning coordinator. The messages, sent via telephone and
e-mail, will detail energy forecasts and ask that agencies reduce power use.
About 800 cities, counties, special districts and federal agencies have
signed up for the statewide program to determine how much power could be
conserved during a Stage 3 emergency.
"We're going to see if there's notable conservation there,'' Bouvier said.
Bouvier characterized the effort as a civic duty by agencies "to show the
governor how the state will do what they can to conserve energy.''

Controller questions electricity cost
Connell says state might have to issue bonds, but Davis says state is meeting
goals.
May 22, 2001
The Associated Press
SACRAMENTO -- Controller Kathleen Connell on Monday questioned whether the
state can buy enough electricity cheaply enough to avoid borrowing more than
the $13.4 billion bond sale already approved by state lawmakers.
Connell said the state will need to issue an additional $3 billion to $5
billion in short-term debt this summer or risk running out of money this fall
until the long-term bond can be issued to repay the state treasury. The
increased amount could further stress the state's declining credit rating,
forcing higher interest rates for new borrowing.
Meanwhile, the state auditor released a report saying previous estimates that
the state could avoid blackouts this summer are overly optimistic. The Bureau
of State Audits also criticized the California Public Utilities Commission,
saying the commission hasn't responded to the crisis by expediting
transmission line projects.
The audit said the PUC contributes to delays by failing to work closely with
other agencies and in its decision-making relies too heavily on information
supplied by the investor-owned utilities.
Auditors, asked by lawmakers to review the state's energy regulators, also
said the California Energy Commission's extensive licensing methods slowed
down plant approvals. Of a dozen power plants licensed since 1996, only four
were completed within the 12-month rule, thus slowing the state's ability to
satisfy its electricity needs, auditors said.
Gov. Gray Davis' energy advisers said Monday that the state is meeting its
energy goals, despite doubts raised by Connell and other critics.
Davis' experts said their estimates are conservative, though they rely
heavily on Californians cutting back on their energy use this summer to help
drive down prices.
The estimates assume the state's consumers and businesses cut total
electricity use 7 percent, and the state already is hitting that projection,
said chief energy adviser S. David Freeman.
"That just knocks the stuffing out of the demand," Freeman said, driving down
prices as well.
A 7 percent reduction in energy use saves the state far more than 7 percent
on its power purchases, Freeman explained. That's because it comes straight
out of the state's purchases on the spot power market, where electricity is
far more expensive than power bought under long-term contracts.
Spot prices have dropped "dramatically" the past two weeks, said Davis
financial adviser Joseph Fichera.
The state has paid well under $100 per megawatt hour during off-peak periods
the past two weeks, administration officials said at a news conference.
Fichera said that should help cut the average price to near the $195 per
megawatt hour average Davis' plan assumes. The officials refused to give
specific price information or give the current average price. Davis earlier
said the state has paid as much as $1,900 per megawatt hours during times of
peak demand.
In addition, today the state will send Connell seven new power generation
contracts that will help boost supply this summer, Fichera said.
The state has in place contracts covering 43 percent of the power the state
needs to buy this month, 66 percent of next month's power needs, 48 percent
in July and 42 percent in August, Fichera said.
He said Davis' energy experts also have been accurate in predicting the
amount of the state's power purchases, despite Connell's doubts. In April
they predicted the state would spend $1.78 billion but actually spent $1.8
billion, a 1.4 percent variance, he said. He said this month's predictions so
far are proving accurate as well.
Connell also said she will use her post on the state's Board of Equalization
to host a hearing next month on whether generators should pay more property
taxes because the value of their power plants has increased with soaring
electricity prices.

Rate increase to hit harder than thought
May 22, 2001
By CHRISTOPHER MARTIN
Bloomberg News
SAN FRANCISCO -- California's $5 billion electricity price increase will
affect more homes than expected because regulators used conflicting and
outdated data in estimates, utilities and regulatory officials say.
The California Public Utilities Commission voted, 3-2, last week to raise
rates for customers of Pacific Gas & Electric and Southern California Edison,
while sparing residential consumers who limit electricity use. Gov. Gray
Davis and other state officials said half of residential customers would not
pay higher prices.
But PG&E, California's largest utility, said only about 35 percent of
residential customers, or 1.6 million homes, will escape higher rates. Edison
said 45 percent of its residential customers will avoid the increase.
"I believe there are a lot more residential consumers facing higher rates
than the order shows," said Commissioner Richard Bilas, who voted against the
rate increase.
The PUC said half of all residential customers would be exempt from higher
power prices. Its analysis focused on electricity sales to homes, rather than
the number of customers. Under the PUC's method, 64 percent of Edison
residential sales and 62 percent of PG&E sales would be exempt from rate
increases.
Carl Wood, a Davis appointee to the PUC who voted in favor of the increase,
said the commission's estimates will probably prove to be wrong.
"It's very likely that more than half of residential consumers will see an
increase, especially this summer," Wood said.

Energy Shortages, Price Caps and Windfall Profit Taxes Lessons Never Learned

WASHINGTON--(BUSINESS WIRE)--May 22, 2001 via NewsEdge Corporation  -

By Craig G. Goodman, President of the National Energy Marketers
Association and former Director of Oil and Energy Tax Policy in the

Reagan and Bush Administrations

In the last year, we have experienced an energy crisis in
California, unprecedented prices for natural gas and high oil prices
on top of six interest rate increases, and four trillion dollars of
lost wealth in the stock market.

History has taught us many lessons about energy policy,
particularly about making new laws and regulations in response to a
"crisis." One thing our country, indeed the global economy, cannot
afford is to repeat the energy policy mistakes of our past.

During the Oil Embargo of the 1970s, OPEC withheld oil supplies
for a short time as a political gesture causing an oil price spike. In
response, the U.S. instituted the most complex scheme of energy price
and allocation controls since World War II.

Energy price caps and their aftermath caused more than ten years
of economic stagflation, rising oil imports, historic trade deficits,
massive wealth transfers in petrodollars to OPEC nations, gasoline
lines, unprecedented interest rates and declining U.S. energy
production.

At the very time we needed more U.S. energy supplies, our energy
price caps permitted oil produced everywhere else in the world to sell
on world markets for as high as $42 per barrel, while U.S. producers
were forced to accept $6-$11 per barrel.

Once prices were deregulated, prices fell to a low of $9 per
barrel, yet at the same time, the government taxed away approximately
$88 billion in capital needed to develop new energy supplies under the
name of "Windfall Profit Taxes." As a result, today we are nearly
twice as dependent on imported oil than when the Embargo began.

Politicians live for the next election, corporations live for the
next quarter's earnings and most of the rest of us live from paycheck
to paycheck. So how do we deal with the immediate political and the
financial pain of energy price spikes, shortages, blackouts,
environmental sensitivities, and its disproportionate impact on the
poorest Americans?

Price Caps and "Windfall" taxes are political salves that feels
good today and hurt tomorrow. These are bad policies that sound great,
help politicians get elected and hurts the average consumer after the
next election.

Are there any choices? Must we repeat the failed policies of the
1970s that ruined our economy for a decade? No we don't. There are
quick, effective and low cost policies to deal with our "energy
crisis." Indeed, there are numerous energy policy options that can
yield very significant short and long-term paybacks to U.S. Society.

Electricity represents the last vestige of 60 years of the most
complicated price and allocation controls known to man. The retail
U.S. energy business is one of the largest single businesses in the
world. It represents nearly a trillion dollars a year, of which,
energy is only about $300 billion.

Currently, however, utility bills include all manner of products,
services, information and technologies which are truly separate and
very competitive businesses.

In the U.S., there are very few true supply monopolies or demand
monopsonies. But between competitive sources of supply and demand
there are two, full-blown, government sanctioned monopolies.

One is an interstate transmission monopoly, and one is a local
distribution monopoly. Current rules governing these monopolies are
incredibly complex, hard to audit and impose enormously unnecessary
costs on consumers in many different ways.

To help consumers and lower energy prices quickly, monopoly
barriers to new energy supplies must be repealed, and aggressive
conservation and load reduction incentives must be implemented
immediately.

At the same time, both state and federal policies must squeeze the
monopoly profits out of the two monopolies between supply and demand
so that more competitive supplies can meet demand at lower prices.

States must also stop granting utilities a monopoly or competitive
advantages to provide competitive products, services, information and
technologies. Utilities should perform solely natural monopoly
functions. Regulated utilities should sell transportation services on
a "no frills" cost of service basis. Needed infrastructure investments
should be given targeted, performance-based incentives.

Regulations, tariff structures, interconnection rules, back up
rates and operational protocols should be uniform and designed to
permit competitive suppliers to provide all other energy-related
products, services, information and technologies at competitive, not
monopoly, prices.

Today we are witnessing the largest industrial restructuring in
the history of this country, possibly the world. Every other industry
that has deregulated has experienced 40 to 50 percent savings.

The U.S. market for energy and related products, services,
information and technology is nearly a trillion dollars a year. Even a
10 percent saving can save consumers as much as $100 billion a year,
every year, in perpetuity, without one penny lost in government
services.

CONTACT:  National Energy Marketers Association, Washington |
Craig Goodman, 202/333-3288 | Fax:  202/333-3266 |
cgoodman@energymarketers.com

California Religious Leaders Set Bush Energy Plan Against "Biblical Standards
of Stewardship, Justice" at Federal Building Rally

LOS ANGELES--(BUSINESS WIRE)--May 22, 2001 via NewsEdge Corporation  -

Religious Activists From Across California Sign "Let There Be Light:
An Open Letter to the President, Congress, and American People,"
Launching Grassroots Campaign to Promote Climate Justice, Conservation

Capping three days of strategic planning, representatives of major
American faith groups gathered today at an emergency interfaith rally
for energy conservation and climate justice at the Federal Building in
Westwood.

Faith leadership, including the Right Rev. Frederick H. Borsch of
the Episcopal Diocese of Los Angeles; the Rev. Albert G. Cohen,
director of the Southern California Ecumenical Council and executive
board member of California Interfaith Power and Light; Lee H. Wallach,
executive board member of the Coalition on the Environment and Jewish
Life of Southern California (COEJL/SC); and Barry A. Smedberg,
executive director of the San Fernando Valley Interfaith Council,
joined other faith leadership to sign and present "Let There Be Light:
An Open Letter to the President, Congress, and American People," at
the Westwood Federal Building in coordination with a Washington, D.C.,
interfaith rally on the steps of the Capitol.

Rabbi Harvey Fields, of Wilshire Boulevard Temple and co-founder
of the Los Angeles Interfaith Environment Council, who endorsed the
letter, stated: "Across America, we are not only seeing the rise in
energy consumption and costs of production, but also the threatening
results of rolling blackouts and dangerous policies which continue the
pollution and poisoning of our precious environment.

"Our religious traditions teach us that we are responsible not
only for the present care and conservation of the earth, but that we
owe to future generations of our children the gift of a sustainable
environment."

The open letter, signed by heads of denominations and senior
leaders across the spectrum of religious life, questioned whether the
administration's energy plan meets "biblical standards of stewardship
of God's creation, intergenerational equity, and social and economic
justice ... by depleting energy sources, causing global warming,
fouling the air with pollution, and poisoning the land with
radioactive waste."

Stated the Right Rev. Frederick Borsch, of the Episcopal Diocese
of Los Angeles and co-founder of the Los Angeles Interfaith
Environmental Council, "We, the people, must see -- and must help our
government leaders see -- that the core of our natural world and
conservation of fossil fuel energy are not just private matters but
things we must do together."

An endorsement of renewable and green energy programs, and a call
to action stressing that energy conservation is a morally responsible
choice that Americans and the administration must make, the rally was
assembled by the Los Angeles Interfaith Environmental Council (LAIEC)
and the Coalition on the Environment and Jewish Life of Southern
California (COEJL/SC), and co-sponsored by California Interfaith Power
and Light (CIPL) and the Bay Area Coalition on the Environment and
Jewish Life (BAY COEJL).

Local activists and faith leadership who have already signed the
letter include: Rabbi Harvey J. Fields, Wilshire Boulevard Temple,
co-founder, Los Angeles Interfaith Environmental Council; Steven Koff,
executive director of B'nai B'rith, Southern California; Daniel
Sokatch, executive director of the Progressive Jewish Alliance; the
Rev. Paul A. Lance, Seaside Community Church; the Rev. Bill Miller,
United Methodist Federation for Social Action; the Rev. Peter
Moore-Kochlacs, Environmental Ministries; Rabbi Alan Henkin, director
of the Union of American Hebrew Congregations, Pacific Southwest
Council; the Rev. Susan Halcomb Craig, pastor, United University
Church, Los Angeles; the Rev. Bear Ride, director, Peace Center,
United University Church, Los Angeles; the Rev. Amy Aitken, Knollwood
United Methodist Church; Rhetta Alexander, Reseda First United
Methodist Church; and Rheva Nickols, Reseda First United Methodist
Church.

About the Los Angeles Interfaith Environmental Council (LAIEC)

The Los Angeles Interfaith Environmental Council's mission is to
repair, protect and preserve the environment while integrating God's
vision of sustainability, responsibility and advocacy for creation.

The council was founded by a joint effort of The Los Angeles
Department of Water and Power, Rabbi Harvey Fields of Wilshire
Boulevard Temple, the Right Rev. Frederick H. Borsch of the Episcopal
Diocese of Los Angeles, and other religious leadership in Southern
California. The council co-chairs are Michael Cunningham and Lee H.
Wallach.

About the Coalition on the Environment and Jewish Life

of Southern California (COEJL/SC)

The Coalition on the Environment and Jewish Life of Southern
California, a coalition of Jewish organizations spanning the spectrum
of Jewish religious and communal life, serves as the voice of the
organized Jewish community on a wide array of environmental issues.

COEJL is the Jewish member of the National Religious Partnership
for the Environment, the Los Angeles Interfaith Environmental Council
and California Interfaith Power and Light.

CONTACT: Los Angeles Interfaith Environmental Council |              Mary
Koukhab, 213/891-2965 | 310/650-2509 (cell)

Giving FERC expanded eminent domain power a hot button

By Rick Stouffer
rstouffer@ftenergy.com
President George W. Bush's brand new energy policy seems to have a little
something for everyone.

Within the policy's 105 recommendations, rules are streamlined, projects
funded, regulations eased, reviews ordered, tax credits doled out and
low-income families get more energy bill-paying assistance.

Still, few portions of the 163-page report have been shown mercy by
detractors spanning the political spectrum. But scant suggestions within the
Vice President Dick Cheney-overseen tome have generated the opposition than
has the call to extend the Federal Energy Regulatory Commission's (FERC)
authority to acquire at a fair price private land for the public good to
include transmission lines.

Why not transmission?
Dwight D. Eisenhower used eminent domain with the nation's interstate highway
system, and it has been used to expand the country's natural gas pipeline
system. Bush-Cheney say why not transmission lines?

The clash between the common good and individual rights*apparent since the
United States was founded*is moving into the power sector, industry watchers
say. And good or bad, right or wrong, may have little to do with whether or
not the president can indeed bestow eminent domain concerning transmission
lines on FERC.

"There is a very strong case to be made for the use of eminent domain here,
but politically it clashes with property rights and states rights advocates,"
said Pietro Novola, senior fellow, governmental studies at the Brookings
Institution in Washington, D.C.

A 'sleeping disaster'
Few people who comprehend that electricity is more than flipping a switch
doubt the need for more transmission capacity. But companies involved in
trying to site new wires know it's easier to construct a new power plant than
build transmission. NIMBYism (not in my backyard) is in full bloom when it
comes to new transmission*just ask American Electric Power about its West
Virginia-Virginia decade-long fight to construct a new transmission line.

"This is a sleeping disaster," said Jonathan Gottlieb, partner in the North
American Energy and Utility Products Group at Baker & McKenzie in Washington,
D.C., and former FERC attorney. "Granted, you need additional supply, you
need conservation, but you have a transmission system that is not connected
and which cannot support demand."

The president's energy policy report found that investment in new
transmission between 1990 and 1998 had fallen to $270 million, from more than
$1.2 billion. In addition, over the next decade, only 7,000 miles of new
transmission are to be added to the grid*just 4.4% of the existing 157,810
miles of wire.

There is a very strong case to be made for the use of eminent domain here,
but politically it clashes with property rights and states rights advocates.

"From the economics side, this idea [eminent domain] makes sense," said Craig
Pirrong, finance professor at the Olin School of Business at Washington
University, St. Louis. "It makes sense, but it's not necessarily going to
happen."

Coalitions of groups that normally would cross to the other side of the
street to avoid each other suddenly are locking arms and singing "Kumbaya."

Pirrong said there are three groups that certainly will look with disdain at
giving FERC the power to seize. These are vertically integrated utilities,
state public utility commissions and environmentalists. One could add to that
trio conservative western Republicans*members of Bush's own party*who never
have liked taking orders from those far-away Easterners.

"Traditional vertically integrated utilities look upon this as an
encroachment on their territories," Pirrong said. "It's similar to the Baby
Bell telephone companies: opening the last mile of their service territories
to competition has been extremely difficult. The state commissions generally
are very responsive to the local utilities and, of course, you have the
environmental interests."

NARUC is 'troubled'
The National Association of Regulatory Utility Commissioners (NARUC) has
registered its concern regarding expanded eminent domain power for FERC.

"We are very troubled with the President's position," said Chris Mele,
NARUC's legislative director. "We've consistently held that the siting of
transmission or generation belongs with the states. We are adequately
equipped to do it, and all the infrastructure there we put in place."

But "all that infrastructure" was built pre-deregulation, when each little
utility constructed its state- and federally-approved monopoly-fiefdom and
lived in peaceful coexistence with its neighboring utility. Those days*
excluding the effects of the California debacle*are over in about half the
states, with the remainder eventually to follow the same deregulation path.

Traditional vertically integrated utilities look upon this as an encroachment
on their territories.

Proponents say just as the development of the automobile led to the need for
an interconnected interstate highway system, the movement toward deregulation
in the power industry is leading the country toward a true interconnected
transmission system.

Gas considered national security issue
And, just as was the case when Ike conceived and started the ball rolling
concerning the interstate highway system, private property also has been
seized for energy-related projects. Baker & McKenzie's Gottlieb pointed out
that the development beginning in the 1930s of the nation's interstate
pipeline system was looked at from the broader perspective of national
security.

"Transmission developed as a local function, with a disconnected system,"
Gottlieb said.

Just having eminent domain in its quiver of powers makes it easier for FERC
to site pipelines; the threat of its use is a powerful stimulus, Washington
University's Pirrong said.

Many industry watchers point to the greater good scenario: If a new
transmission line is needed for the greater good of many, then the federal
government should have the power to move things off center, away from the
parochial.

"If you need interstate power, the companies involved cannot buy the
property, and the project is for the greater good, then sometimes the
government has to use eminent domain," said Jake Haulk, an economist and
managing director of the conservative think tank Allegheny Institute for
Public Policy in Pittsburgh, Pa. "We wouldn't think twice about taking
property for an interstate highway."

"Someone has to be able to step in to override purely local, parochial
feelings," said Jerry Pfeffer, energy industries advisor in the Washington,
D.C. office of the law firm Skadden Arps.

All politics is local
While the political rhetoric heats up, industry watchers say it all depends
on which way the western Republican delegations fall in*or out of*line behind
Bush.

"It's a real test of Tip O'Neil's famous saying that all politics is local,"
according to Pfeffer. "If the western Republicans vote as their constituents
wish, they will vote against giving eminent domain power to FERC. Or, will
they bite hard and vote with their president for that authority? It's a
classic case of local vs. presidential politics."


Greg, as per your request -

	*2001 bonus numbers - assumes no "fours or fives" get a bonus and is completely composed of cash no LTIP - $30M.

Regards
Delainey


If you are in Houston on Feb 10 and HAVE NOT PLANNED ON HAVING DINNER WITH
ME, then just don't plan on coming.  I mean, after your last lame excuse
about that hotel by the airport, I'm gonna take it real personal if the only
hotel room you can get this time is in Pearland.  Ya know what I mean...

Anyway, I have been thinking about you and wondering what you're up to.  For
the Enron Corp. Legal Conference, real cool people (like me) are signing up
for the raft trip, so as long as the weather's nice we're going to be
floating down the Guadalupe drinking some brews.  So if you were cool you'd
be hanging out with the cool group (like me)...what are your plans?!!