look at the Oakland Trib article on Lockyer, if you haven't seen it
----- Forwarded by Sandra McCubbin/NA/Enron on 05/24/2001 11:28 AM -----

	Gus Perez
	05/24/2001 10:33 AM

		 To: Ann M Schmidt/Corp/Enron@ENRON, Bryan Seyfried/LON/ECT@ECT, Elizabeth
Linnell/NA/Enron@Enron, filuntz@aol.com, James D Steffes/NA/Enron@Enron,
Janet Butler/ET&S/Enron@ENRON, Jeannie Mandelker/HOU/ECT@ECT, Jeff
Dasovich/NA/Enron@Enron, Joe Hartsoe/Corp/Enron@ENRON, John
Neslage/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Sherriff/LON/ECT@ECT,
Joseph Alamo/NA/Enron@Enron, Karen Denne/Corp/Enron@ENRON, Lysa
Akin/PDX/ECT@ECT, Mark Palmer/Corp/Enron@ENRON, Mark
Schroeder/Enron@EnronXGate, Markus Fiala/LON/ECT@ECT, Michael R
Brown/LON/ECT@ECT, Mona L Petrochko/NA/Enron@Enron, Nicholas
O'Day/AP/Enron@Enron, Peggy Mahoney/HOU/EES@EES, Peter Styles/LON/ECT@ECT,
Richard Shapiro/NA/Enron@Enron, Rob Bradley/Corp/Enron@ENRON, Sandra
McCubbin/NA/Enron@Enron, Shelley Corman/ET&S/Enron@ENRON, Stella
Chan/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Steven J Kean/NA/Enron@Enron, Susan
J Mara/NA/Enron@Enron, Mike Roan/ENRON@enronXgate, Alex
Parsons/EU/Enron@Enron, Andrew Morrison/LON/ECT@ECT, lipsen@cisco.com, Janel
Guerrero/Corp/Enron@Enron, Shirley A Hudler/HOU/ECT@ECT, Kathleen
Sullivan/NA/Enron@ENRON, Tom Briggs/NA/Enron@Enron, Linda
Robertson/NA/Enron@ENRON, Lora Sullivan/Corp/Enron@ENRON, Jennifer
Thome/NA/Enron@Enron, jkradin@marathon-com.com,
rlichtenstein@marathon-com.com, syamane@marathon-com.com,
ken@kdscommunications.com, hgovenar@govadv.com, sgovenar@govadv.com,
bhansen@lhom.com, Carin Nersesian/NA/Enron@Enron, Robert
Neustaedter/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Shelk/NA/Enron@Enron,
Chris Holmes/HOU/EES@EES, Evan Hughes/HOU/EES@EES, Roberta
Staehlin/HOU/EES@EES, Lamar Frazier/HOU/EES@EES, Mary Schoen/NA/Enron@Enron,
Ban Sharma/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
		 cc:
		 bcc:
		 Subject: Energy Issues -thurs

Please see the following articles:

Sac Bee, Thurs, 5/24: Davis to push backup diesel

Sac Bee, Thurs, 5/24: Bush-Davis meeting set for energy crisis

Sac Bee, Thurs, 5/24: Energy Digest: GOP unveils plan to help utility

Sac Bee, Thurs, 5/24: Few escape blame for crisis in poll

Sac Bee, Thurs, 5/24: New views emerging on power
More elected officials support the concept of planned blackouts

Sac Bee, Thurs, 5/24: Californians' priorities for solving the crisis are
outlined in a Field Poll

Sac Bee, Thurs, 5/24: Offshore drilling waits in the wings

SD Union, Thurs, 5/24: Bush, Davis to meet, discuss state's energy crisis

SD Union, Thurs, 5/24: California Democrats seek price caps on electricity

SD Union, Thurs, 5/24: Mexico: No limit on number of new plants to be built

SF Chron, Thurs, 5/24: Potential governor candidate launches Northern
California tour

SF Chron, Thurs, 5/24: POLL: Californians dissatisfied with government
handling of energy crisis

SF Chron , Thurs, 5/24: Energy crisis to cast long shadow
A look at what energy crisis means to future

SF Chron , Thurs, 5/24: Chronicle readers' suggestions for coping with
California's energy crisis

SF Chron, Thurs, 5/24: Davis to order 1-hour notice of blackouts

SF Chron, Thurs, 5/24: Californians angry across the board in energy crisis

SF Chron, Thurs, 5/24: Council lowers hurdles to renewable energy

SF Chron, Thurs, 5/24: New tips on power squeezing

Mercury News, Thurs, 5/24: House panel calls off vote on Calif power bill

Mercury News, Thurs, 5/24: Davis proposal for more diesel power draws
environmental criticism

Individual.com, Thurs, 5/24: Filing for Hayward Project Includes Request for
Expedited Review

Individual.com, Thurs, 5/24: California Governor Signs Bill to Speed Up
Approval for Power Plants

Oakland Tribune, Thurs,  5/24: Lockyer: Probe may spark suit
Criminal charges could follow evidence of price gouging

NY Times, Thurs, 5/24:

WSJ, Thurs, 5/24:
______________________________________________________________________________
_________________________

Davis to push backup diesel
By Chris Bowman
Bee Staff Writer
(Published May 24, 2001)
In a major reversal of environmental policy, Gov. Gray Davis will announce a
plan to relieve California's overloaded electricity grid this summer by
paying businesses to run their high-polluting backup generators in advance of
anticipated blackouts, a top energy adviser to the governor said Wednesday.
"The backup generators will help us get through the summer," said S. David
Freeman, who recently resigned as general manager of the Los Angeles
Department of Water and Power to lead Davis' drive for energy conservation.
Freeman said he would leave it to Davis to disclose details of the plan.
"The governor will announce what he's going to do," he said Wednesday in a
wide-ranging interview on energy issues with The Bee.
Roger Salazar, the governor's deputy press secretary, would not confirm when
or whether Davis would make such an announcement.
"I don't know that the governor has signed off on anything like that,"
Salazar said.
Under the plan, participating businesses would turn on backup generators and
simultaneously disconnect from the electricity grid when power supplies are
at Stage 3 -- nearly depleted.
The state would pay the companies for the much-needed power that would be
saved by converting to diesel generation.
Deploying diesel-powered generators -- the dirtiest of internal combustion
engines -- to forestall blackouts is another sign of the governor's struggle
to get more megawatts flowing through California.
Earlier this week Davis lowered his estimate of the amount of new power that
will come on line this summer from 5,000 megawatts to 4,000 megawatts. A
megawatt is enough power for 750 to 1,000 households.
The diesel plan also marks a significant turnabout in the Davis
administration's policy.
The governor and his appointees at the state Air Resources Board uniformly
have rejected such proposals from industries, utilities and the operator of
the state's electricity grid, arguing that routine use of the backup diesels
would endanger public health.
San Diego Gas & Electric has one such proposal scheduled for a vote today by
the Davis-appointed state Public Utilities Commission.
Environmentalists who have been catching word of the Davis plan this week
argue that it would shatter the governor's repeated promises to stand firm on
air quality standards during the energy crisis.
A letter signed Wednesday by several of the state's leading environmental
organizations, including the American Lung Association of California, urged
Davis to reconsider.
"Given your awareness of the public health threats of diesel emissions,
please stop and have these proposals considered in a more thoughtful and
public manner," the letter states.
Freeman argued, however, that the additional health threat from non-emergency
use of diesel generators is "marginal" compared with the health and safety
problems triggered by power outages.
"This is a no-brainer," Freeman said. "You've got human lives at stake here.
This is a scary situation."
Freeman cited, for example, people on life-support systems that could go awry
in blackouts.
But Sandra Spelliscy, attorney for the environmentalist Planning and
Conservation League, countered, "If the health impacts are so marginal, why
has the governor's own air quality enforcement agency opposed this?"
Industries ranging from hospitals to food processing plants and data
management centers have diesel-powered generators -- some the size of
locomotives -- that kick on when a storm or earthquake knocks out power.
Unlike diesel-powered trucks and buses, most diesel standby generators run
with little or no pollution controls because they are intended only for
emergencies.
Though the latest models run cleaner and more efficiently, most generators in
use today produce about 500 times more emissions of smog-forming nitrogen
oxides per megawatt-hour as a new natural gas-fired power plant, according to
air board engineers. Further, the diesels spew high amounts of breathable
soot particles that can cause cancer, the engineers say.
Davis' plan would limit the use of the generators to days when the grid
operator declares a Stage 3 alert, meaning the power supplies are running low
and rolling blackouts may be ordered to keep the state's entire grid from
collapsing, according to Freeman.
Salazar, the governor's spokesman, said only, "Any backup generation
involving diesel will have to be used as a last resort to prevent blackouts."
Environmentalists who are trying to head off the plan said it would have the
state paying participating businesses at least 35 cents per kilowatt-hour,
roughly three times the rate consumers typically pay for electricity. Freeman
would not confirm the pay rate.
The Davis administration has offered generators willing to sell new power
exclusively to the state 50 percent discounts on the air emission credits
they would need to comply with smog rules.
For operators of existing power plants, the governor has agreed to have
taxpayers pay the entire cost of polluting above allowable limits in order to
keep the lights on.
The latest plan to pay companies to run the dirty diesels during energy
alerts further loosens the environmental reins.

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

Bush-Davis meeting set for energy crisis
By David Whitney
Bee Washington Bureau
(Published May 24, 2001)
WASHINGTON -- President Bush will meet next week with Gov. Gray Davis to talk
about California's worsening electricity crisis amid a shifting political
dynamic on Capitol Hill that increasingly favors some controls on West Coast
wholesale electricity prices.
Details for the Bush-Davis meeting were still being worked out Wednesday, but
the fact that the Republican president is meeting with the Democratic
governor, who is often mentioned as a possible challenger in 2004, was seen
as a sign that the White House is facing increasing political heat on the
energy issue.
"California is a very big state," said White House spokesman Ari Fleischer.
"It represents one-sixth of the United States. It's the sixth-largest economy
in the world. And the president is very pleased to sit and talk with Governor
Davis. It's important."
Davis' spokesman, Steve Maviglio, said electricity price caps will be at the
top of the governor's agenda for the meeting on Tuesday or Wednesday. But
Fleischer did not commit the president to that kind of meeting.
In his first visit to the state since the campaign last year, the president
will spend Monday night in Los Angeles and Tuesday night in Fresno.
Until now, the White House has steadfastly refused to meet with any elected
Democrat from California about the energy crisis despite repeated pleas from
the Democratic congressional delegation.
Price controls have become the mantra of California Democratic lawmakers and
a handful of Republicans, but the Bush administration has flatly dismissed
them as counterproductive to increasing power generation in the
megawatt-short state.
In recent weeks, however, there has been a developing shift in the attitude
toward price controls on Capitol Hill. Bush's two nominees to the Federal
Energy Regulatory Commission, whose names were forwarded to the Senate floor
Wednesday for confirmation, declined to rule out price controls once they are
seated on the panel.
And the apparent decision by Vermont Sen. James Jeffords to abandon the
Republican Party would put Democrats in control of the Senate, moving Sen.
Jeff Bingaman of New Mexico, a price-control advocate, to the helm of the key
Senate Energy and Natural Resources Committee.
California Sen. Dianne Feinstein, a committee Democrat, said Wednesday that
she has talked to Bingaman and that he committed to moving her legislation to
temporarily peg wholesale prices to the cost of production.
Four Republican House members from California have also endorsed some form of
price-control legislation.
On Wednesday, Rep. Doug Ose, R-Sacramento, announced that he is introducing a
bill that, while not technically a price cap, would give greater price relief
for West Coast consumers than federal regulators or the Bush administration
have been willing to offer.
Ose, chairman of the House Government Reform Committee's energy subcommittee,
said his bill would extend throughout the West a price-mitigation plan
approved last month by the FERC. But instead of that plan taking effect only
during power emergencies as the commission directed, it would operate around
the clock under Ose's bill to peg spot market prices at the cost of
production of the least-efficient plant selling into the California market.
Ose said his bill would encourage generators to sell their power through
long-term contracts rather than on the volatile spot market.
"I am looking for a middle ground," Ose said.

The Bee's David Whitney can be reached at (202) 383-0004 or
dwhitney@mcclatchydc.com.

Energy Digest: GOP unveils plan to help utility
By Jim Sanders
Bee Capitol Bureau
(Published May 24, 2001)
State Assembly efforts to develop a bipartisan proposal to help Southern
California Edison pay off massive debts and avoid bankruptcy hit a dead end
Wednesday when Republicans released a plan of their own.
The move could force Democrats to sidestep Republicans and vote along party
lines on an alternative to Gov. Gray Davis' proposed $2.76 billion state
purchase of power lines.
Assembly Republican leader Dave Cox of Fair Oaks said Wednesday's split was
necessary because there are few differences between the governor's plan and
the Democrats' plan.
The Republican plan rejects the notion of purchasing transmission lines or
hydroelectric facilities.
Key components call for dedicating a portion of consumer rates to allow
Edison to pay off $3.5 billion in debts. In return, ratepayers would receive
either an equity stake in future power plants or the right to purchase
electricity at discount rates.

Few escape blame for crisis in poll
By Dan Smith
Bee Deputy Capitol Bureau Chief
(Published May 24, 2001)
Utility companies and out-of-state power generators continue to get the
lowest marks for their performance in California's energy crisis, but Gov.
Gray Davis' grades have slipped dramatically over the past five months,
according to a Field Poll released Wednesday.
And Californians, it turns out, blame plenty of people for the state's power
woes -- except themselves.
Every player in the power drama gets poor marks except "residential energy
consumers," which 39 percent of poll respondents say are doing a good or very
good job to improve the energy situation. Only 22 percent think they are
doing a poor or very poor job.
Public opinion of residential consumers' efforts has improved since January,
when 32 percent thought they were doing a poor job and only 26 percent gave
them high marks.
"The public sees themselves as conserving energy," said Field Poll Director
Mark DiCamillo. "That's the only positive movement in the survey."
For Davis, who faces re-election next year, the movement is far from
positive.
In the January poll, the Democratic governor received good marks from 41
percent of those surveyed, average grades from 31 percent and poor ratings
from only 22 percent.
But when the Field Institute conducted its recent poll between May 11 and
Sunday, opinions about Davis flip-flopped. After months of energy angst, a
handful of power blackouts and two rate increases, only 27 percent think
Davis is doing a good job, while 38 percent gave him failing grades. The poll
also shows that Californians believe the crisis will continue by an average
of a year and a half, well through the upcoming re-election battle.
"All the rhetoric Davis used with some positive effect early on is not going
over well any more," DiCamillo said. "The public is starting to view this as
a long-term problem, not some temporary policy shift."
Still, Davis fares far better than his adversaries in the crisis -- President
Bush, Vice President Dick Cheney and the energy industry.
The public's view of energy interests, which was pretty dim in January, drops
even lower in the May poll. Utility companies received bad ratings from half
the public in January, but 57 percent now believe they are doing a poor or
very poor job. Out-of-state energy generators, whom Davis has accused of
gouging ratepayers, fell from 44 percent low ratings in January to 55 percent
in the May poll.
Bush, the Federal Energy Regulatory Commission and the state Public Utilities
Commission are not far behind, drawing poor grades from more than half the
public. Cheney, the architect of Bush's energy proposal, received low ratings
from 43 percent. The January Field Poll did not ask about Bush and Cheney
because they had not yet taken office.
Davis has repeatedly bashed FERC for not imposing wholesale price caps on
electricity, and has called Cheney "grossly misinformed" on the state's
energy problems. Cheney, in turn, has called Davis' energy proposals
"harebrained" and "goofy."
The state Legislature receives poor marks from 41 percent of those polled,
while only 16 percent believe it is doing a good job.

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

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
?Related graphic
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.

Offshore drilling waits in the wings

(Published May 23, 2001)

WASHINGTON -- The release today of a piece of President Bush's energy policy
has California lawmakers squirming.
A natural gas advisory panel is set to unveil a 56-page report looking at
whether moratoriums on offshore oil and gas development should be lifted. It
will also name specific sites for possible drilling.
Rep. Anna Eschoo, D-Palo Alto, said Tuesday that if the Bush administration
tries to undo moratoriums protecting more than 170 million acres off the
California coast, it would be like "targeting a missile at us."
So far, the Bush administration hasn't taken any direct action. The energy
policy he released last week calls for more oil and gas development, but its
only recommendation about offshore drilling was that the secretaries of
interior and commerce re-examine current laws and executive orders "to
determine if changes are needed."
Today's report is to urge selection of five of the most promising gas
prospects in offshore areas covered by moratoriums in a pilot program aimed
at eventual drilling. The report doesn't say where those five pilot areas
should be. But Reps. Lois Capps, D-Santa Barbara, and Mike Thompson, D-Napa,
are fearful that Morro Bay in San Louis Obispo County and the Eel River Basin
in Humboldt County in their districts are likely choices.
-- David Whitney

Bush, Davis to meet, discuss state's energy crisis

By Finlay Lewis
COPLEY NEWS SERVICE
May 23, 2001
WASHINGTON ) After weeks of holding California and its electricity crisis at
arm's length, President Bush will plunge into the problem next week during a
two-day visit to the state that will include a possible energy summit with
California Gov. Gray Davis.
White House press secretary Ari Fleischer told reporters Wednesday that the
state's energy crisis will be "at the top of the list" when the president and
the governor meet. The president's aides said that the time and place for the
meeting are still being worked out.
Bush's visit to the state will be his first since last fall's campaign. With
their party enjoying only a slim majority in the U.S. House, some California
Republicans have expressed dismay over their state's absence from the
president's extensive post-inaugural travel schedule, fearing that the energy
crisis could cost some GOP lawmakers their seats in next year's elections.

Fleischer's announcement Wednesday of the meeting with Davis and its emphasis
on energy caught many by surprise because the White House had given no hint
until then that the president would address the issue during his upcoming
trip to California.
However, Davis called the White House on Tuesday night proposing a meeting
with the president specifically to discuss energy.
He followed up with two letters on Wednesday expressing the need for quicker
action on the energy front: "Californians can't afford to wait four or five
years for a permanent solution. We need relief today."
In the longer of two letters, Davis wrote: "You and I don't agree on
everything. But here's something we do have in common: we both inherited an
energy mess. And the people that elected us expect us to clean it up."
Davis also offered in the letters to "introduce" Bush to "business owners and
everyday citizens who have been personally affected by this energy crisis."
Fleischer said Wednesday that Bush would meet with "business leaders and
energy consumers."
Asked who initiated the meeting with Davis, Fleischer suggested the
president's schedule had been drawn up independently of Davis' suggestions.
"This is a case of they both want to meet with each other, and we're very
pleased to be able to make it work out," he said.
As for the meeting with the business leaders, Fleischer said, "The president
has several events on his schedule that already include business leaders and
energy consumers, and so it very well may happen that we're each suggesting
similar things, which would be a healthy sign."
Bush's itinerary also includes a stop on Tuesday at the Camp Pendleton Marine
Corps Base designed to showcase his order directing the military to cut their
energy use by 10 percent at California facilities.
Fleischer said that the president wanted "to talk about how the federal
government is going to be a strong partner to the state of California in the
cause of energy conservation to help ease the burden in California as they go
through the summer months when demand is high and blackouts are most at
risk."
The White House released an outline of the president's California itinerary
on Tuesday afternoon. It indicated that the visit would not give prominent
attention to the state's energy woes.
Fleischer declined to say whether the president would expand on his energy
plan in any way while in California.
Davis and other California Democrats have been sharply critical of the Bush
administration for failing to take decisive action to help alleviate the
electricity shortage's toll on the state and its citizens.
They are backing legislation due to come to a key vote on Thursday before the
House Energy and Commerce Committee that would cap electricity rates in the
state. The administration and most of the state's Republican lawmakers oppose
the measure.
Last week, Bush showcased an administration task force report on the nation's
energy challenges that stressed long-range solutions focused mainly on
increasing the supply of fossil fuels and an expanded role for nuclear power.
The report also suggested incentives to encourage energy conservation and
greater fuel efficiency.
Bush's trip will begin on Monday when he flies from a Memorial Day event in
Arizona to Los Angeles where he will spend the night. He will return to
Washington on Wednesday night after a visit to the Fresno area.
Bush assumed office despite losing the nation's most populous state by a
decisive margin and then launched into the most ambitious travel schedule of
any modern president. It included stops in 27 states ) not California.

(Lewis reported from Washington and Sweeney from Sacramento.

California Democrats seek price caps on electricity

By Finlay Lewis
COPLEY NEWS SERVICE
May 22, 2001
WASHINGTON ) Accusing power generators of price gouging, a group of
California House Democrats vowed Tuesday to try again this week to legislate
price caps in order to bring down the energy bills in the state.
Rep. Henry Waxman, a Los Angeles Democrat and author of the price-cap
measure, said he would offer the measure as an amendment on Thursday. At that
time the House Energy and Commerce Committee plans to complete work on a bill
designed to reduce the number of blackouts expected in California this summer
due to shortages in the supply of electrical power.
Waxman and other Democrats seized on Republican fund-raising events on Monday
and Tuesday nights involving President Bush and Vice President Cheney,
charging the Republican administration with exacerbating the California
situation by doing the bidding of the oil and gas industry in return for
campaign contributions.
"This is a contrived crisis in order to wreck our environmental protection
laws," Waxman said. "It is a contrived crisis in order to produce 1000
percent increases in profits for some of these generators."
On the agenda when the committee meets Thursday will be a bill by Rep. Joe
Barton, R-Texas, that would allow California Gov. Gray Davis to temporarily
waive some air pollution limits to increase power production in the state
when blackouts are imminent.
It also would include:
  federal help to ease a power transmission bottleneck in the Central Valley;
  mandated power savings at federal facilities;
  state discretion in adjusting daylight savings time;
  an easing of the ties of some small, independent power generators to large
utilities.
Earlier this month, a subcommittee chaired by Barton rejected Waxman's
price-cap amendment as some California Republicans complained that the idea
of limiting power rates was politically inspired and would do nothing to
solve California's crisis.
The Bush administration and the energy industry oppose price caps, saying
that such an approach would distort the market and worsen the electricity
shortage in California and many other western states by discouraging
exploration and production.
Waxman's plan would require federal regulators in many cases to tie wholesale
power rates to production costs, plus a "reasonable" profit.
At the press conference, Rep. Bob Filner, D-San Diego, derided Republican
opposition to price caps.
Referring to wholesale power generators, Filner argued, "They were making
money at $30 a megawatt; now they are charging up to $2,000. Believe me: They
can make money off the market with a cost-base rate. They have done it for
100 years. They can continue doing it."
Rep. Jane Harman, D-Redondo Beach, said that California Republicans on the
energy committee would suffer politically if they give into pressure from
party leaders to oppose the price-cap bill.
"There are no party affiliations for rate payers," said Harman, a committee
member. "Republicans and Democrats have both seen the gouging of their rates
in California."

Mexico: No limit on number of new plants to be built

Energy chief says 'anyone who requests a permit will get it'
By Diane Lindquist
UNION-TRIBUNE STAFF WRITER
May 22, 2001
Mexican Energy Secretary Ernesto Martens said yesterday that Mexico won't set
any limit on the number of power plants in Baja California supplying
electricity north of the border.
"Since there's a window of opportunity here because of the need in California
for electricity, anyone who requests a permit will get it," Martens said
after speaking at the Institute of the Americas' 10th annual Latin American
Energy Conference in La Jolla.
Power plant construction in Baja California has become one of the most
immediate solutions to California's electricity shortfalls. At least three
plants being built in Baja California in the next four years will send
electricity north of the border, where blackouts have interrupted normal
activity.
One facility, a Sempra Energy Corp. power plant near Mexicali, will export
all of its electrical output to consumers north of the border. The San Diego
company's project gained quick approval from Mexican authorities because the
facility is not subject to restrictions imposed on private companies that
supply electricity to the Mexican market.
Other Mexican energy officials have said several other enterprises are
interested in building similar facilities in Baja California.
Such a mushrooming of projects is prompting concern on both sides of the
border that the plants might have harmful effects on natural resources and
public health and safety.
In his speech, Martens emphasized Mexico's commitment to preserving the
environment and local communities.
But afterward, he said Mexico will approve any number of Baja California
projects to serve California consumers.
"I don't see any limit. The only limit is the ability of the interconnecting
lines to transmit the electricity that is produced," he said.
With a capacity of only 400 megawatts each, the two transmission
interconnections linking the electricity grids of California and Baja
California will not be able to transmit all of the 1,500 megawatts of
electricity for the California market produced by the new Baja California
plants -- let alone any additional facilities.
Sempra, whose San Diego Gas & Electric subsidiary owns both the
interconnecting lines, plans to upgrade the interconnector near Mexicali,
spokesman Michael Clark said yesterday. The improvement will transmit
electricity from Sempra's plant in Baja California to the company substation
in Imperial Valley. The other connection links San Diego and Tijuana.
Clark said he doesn't know how the other companies building Baja California
plants plan to transmit their electricity. Representatives of the firms could
not be reached yesterday.
Even if the companies find a way to send electricity across the border, the
California grid system presents another obstacle.
To prepare for the possibility of more demands on the Southern California
grid, the Imperial Irrigation District is analyzing what capacity it has for
transmitting supplies on its lines and how to assess tariffs for the service.
"It's become very important because of our proximity to Mexico," said
district spokesman Ron Hull.
The ability to transmit electricity is only one force limiting plant
construction in Baja California. Another is the supply of fuel to drive the
facilities.
Sempra again is a key player in this area. It plans to build a North Baja
Pipeline that will supply natural gas to its own and two other power plants
in Baja California and the proposed Otay Mesa plant in San Diego. The
pipeline won't provide fuel for any other facilities.
"It's fully subscribed," said Clark. "In the future if there is enough
demand, the compression could be increased."
Energy Secretary Martens, however, hinted at the possibility of new natural
gas supplies in Baja California. He said Mexico wants liquified natural gas
facilities to be built in Rosarito Beach and Ensenada.
While several companies have expressed an interest in such an operation,
Martens' comments were the first to indicate that two, and not one, might be
approved for Baja California.

Potential governor candidate launches Northern California tour
ALEXA HAUSSLER, Associated Press Writer
Thursday, May 24, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/24/state1
726EDT0229.DTL&type=news
(05-24) 00:01 PDT LIVERMORE, Calif. (AP) --
Republican William E. Simon Jr. says he won't decide until the first week of
June whether to jump into the race for governor, although he appeared to be
campaigning for the job this week.
Trailed by a group of reporters Wednesday, the wealthy Pacific Palisades
investment banker visited Lawrence Livermore National Laboratory and took a
few jabs at both Democratic Gov. Gray Davis and his potential GOP primary
opponent, Secretary of State Bill Jones.
"I think there's a leadership crisis in Sacramento," said Simon, who
criticized Davis' handling of the state's power crisis.
"You have the same elected people today trying to figure out a solution to
the crisis that got us into the crisis," Simon said.
Pressed to explain how he would end the crisis that has brought rolling
blackouts and soaring power bills, Simon said he still is preparing his own
plan.
The son of Ford administration Treasury Secretary William E. Simon insisted
he has yet to make a final decision on whether to run in 2002, adding he
would make up his mind by June 4 after consulting with his family.
Asked if he has any ties to companies profiting from the power crisis, Simon
said he owns a "small piece" of a Texas-based company that makes equipment
used in extracting or processing oil and natural gas.
Before founding his investment banking firm with his father in 1988 he was an
assistant U.S. attorney in New York.
Simon started forming a campaign team in March, including John Herrington,
former U.S. energy secretary under President Reagan and former chairman of
the state Republican Party.
Of potential primary opponent Jones, Simon said: "He seems like a perfectly
nice fellow. ... I just don't think that he provides the contrast to Gray
Davis that I do."
,2001 Associated Press

POLL: Californians dissatisfied with government handling of energy crisis

Thursday, May 24, 2001
,2001 Associated Press
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2001/05/24/state0
922EDT0156.DTL&type=news
(05-24) 06:22 PDT SAN FRANCISCO (AP) --
Over the past four months, Californians have developed increasingly negative
feelings toward state and federal officials and agencies involved in
California's energy crisis, according to a Field Poll released Thursday.
A large number of those surveyed are also fearful that Pacific Gas &
Electric's bankruptcy filing will make it more difficult for the company to
provide service to its customers.
Fifty-seven percent of those questioned in May by the Field Institute, a San
Francisco-based nonpartisan polling organization, gave California's private
electric utilities a poor rating. That's more than the 40 percent of
respondents who rated the utilities performance as poor in January.
The same negative feelings held true for out-of-state energy providers.
Fifty-five percent of respondents this month rated their performance as poor,
a noticeable increase from the 44 percent of respondents who gave them a poor
rating in January.
Specifically, those surveyed were asked to rate the job being done by
officials and groups working to improve the energy situation in the state.
The poll found that:
* The percentage of those surveyed who gave the state Public Utilities
Commission a poor rating rose from 42 percent in January to 52 percent in
May.
* 41 percent of those surveyed gave the state legislature a poor rating in
May, as opposed 36 percent in January.
* 38 percent gave Gov. Gray Davis a poor rating in May for his handling of
the state's energy woes, a sharp increase from 22 percent who gave him a poor
rating in January.
The Federal Energy Regulatory Commission also drew negative ratings from
respondents. In May, 52 percent said FERC was doing a poor job, as opposed to
40 percent who gave the commission a rating of poor in January.
Those surveyed were also asked if PG&E's bankruptcy would make it more
difficult for the company to supply electricity to customers, and 49 percent
said they thought it would.
The poll, which questioned 1,015 California adults between May 11 and May 20,
has a margin of error of plus or minus 3.2 percentage points, the institute
said.
,2001 Associated Press ?

Energy crisis to cast long shadow
A look at what energy crisis means to future
Mark Simon
Thursday, May 24, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/24/M
NS121240.DTL&type=news
What we need to do is tune in, turn off and drop out.
Tune in to how you use energy. Turn off those things that use electricity.
And drop out of the power grid by using alternative power sources and
alternatives to power sources.
That's the only thing we can do in the short term.
In the long term, you can almost see what will be coming down the pike.
As the state's energy problems worsen, as the state throws its surplus down a
rathole, as our own utility bills skyrocket and as blackouts roll across the
state, someone will write a statewide ballot initiative and get it on the
ballot.
It will do two things.
First, it will undo the deregulation of the state's energy industry. It will
try to put everything back the way it was.
Second, it will punish the producers of power and energy.
It will levy some new fee or tax or it will regulate the industry as a public
utility or it will require that the state take over the industry entirely.
Huge amounts of money will be spent against it. Opponents will outspend
supporters by a substantial amount.
TV ads will run constantly, predicting dire consequences if the initiative is
approved.
We'll be told it will be bad for business. Labor leaders will tell us that it
will cost jobs. Experts will say it will have no effect on the problem, or
make the problem worse.
All of that will probably be true.
The initiative will pass easily.
It will pass because it will appear to address what are widely understood as
the two main causes of the current energy crisis -- a badly bungled
deregulation and unbelievably greedy energy producers.
It will pass because the initiative's authors will understand that most of us
are furious about the way this mess was created and that we're eager to take
it out on the industry leaders we see as the leading villains.
It will pass precisely because all the people who will tell us it shouldn't
are the people who got us into this disaster in the first place, and we won't
believe them.
It's much harder to say whether the energy crisis will have more immediate
political repercussions for some of the elected officials we might blame for
the problem -- such as the state Legislature and Gov. Davis, who could have
done something about this a year ago and chose not to.
Yes, the latest polls make it clear that Californians are furious with Davis
and the Legislature.
But elections for office are not yes/no propositions -- you don't get to vote
up or down on Davis.
They are a contest between two major party candidates, which means elections
are always a matter of comparisons -- Davis compared with his opponent.
Someone has to come along and convince voters he or she can do the job better
than Davis.
There might, indeed, be such people. It's unlikely one of those people will
appear on the ballot in 2002, however.
The current political landscape is heavily populated with profiles in
discouragement -- people who, fearful of losing, lack the nerve to run
against a well-financed incumbent.
The great irony here is that voters thought term limits would solve that
problem -- rather than being stuck with a well-financed incumbent, we'd force
him out of office.
In reality, we're stuck with the well-financed incumbent until his term
limits are up -- in six or eight years.
That does nothing to solve the problems that might arise in those six to
eight years. It has done nothing to embolden would-be candidates. Now, they
just meekly wait their turn.
And it has made a shambles of the legislative process by populating the
Capitol with people who don't know what they're doing, only where they're
going next. Meanwhile, the people who do know what they're doing have been
kicked out office.
It's no coincidence that the deregulation mess was made in a Legislature full
of people elected during the term-limit era.
A statewide initiative, brave candidates, ending term limits -- those are all
things that will happen in the future.
Right now, it's time to tune in, turn off and drop out.
Tune in to what you are doing as an individual consumer -- cast a critical
eye at your own habits.
Turn off your appliances, your lights, your air conditioner and reduce your
individual energy consumption. It's much easier than it appears.
Energy consumption has dropped in my household by more than a third by
switching off some lights, converting to fluorescent light bulbs, turning
down the refrigerator and connecting some appliances to a power strip, so
that they truly are turned off.
Finally, drop out of the power grid. Look for other ways to power your home
-- most notably solar power, which is readily available.
Find other alternatives to high-consumption appliances, such as clotheslines.
Drop out.
They can't gouge you if they can't get to you.
Simon can be seen 7:30 p.m. Fridays on The Chronicle's "Peninsula This Week"
on cable Channel 26, and at other times on local access channels. You can
reach him at (650) 299-8071, by fax at (650) 299-9208, or e-mail at
msimon@sfchronicle.com. Write him c/

Power tips
Chronicle readers' suggestions for coping with California's energy crisis

Thursday, May 24, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/24/M
N59652.DTL&type=news
I live in Sacramento, where we do use air-conditioning in the summer. I
covered two skylights with aluminum foil to keep the heat out. Two east-
facing windows have exterior roll-up blinds. . . . I adjusted my pool pump
from six hours per day to two hours from 6 to 8 a.m. This saves electricity
and puts the usage in the morning, which is not the peak usage. I keep my
computer power strip and music/VCR power strip switched off. This alone saves
about one kilowatt hour per day. I replaced four of my most used lights with
fluorescent bulbs. You really don't need to change all of your bulbs, just
the ones that are on for several hours per day. So far, I've cut about
one-third of my usage, with very little lifestyle change.
Martin R. Fraser
Sacramento
Household air conditioners are energy guzzlers. Consider, instead, the merits
of an evaporative cooler (a.k.a. swamp cooler), ideal in low-humidity locales
such as California. They consume only about 25 percent of what it would take
to operate an air conditioner.
Martha Kimmich
Walnut Creek
The suggestion that a frost-free refrigerator's compressor will run less if
ice cubes are put in Tupperware because it won't waste energy trying to
"defrost" trays of ice cubes is pure nonsense. The duration of the defrost
cycle is controlled by a timer, which turns on a heater for a fixed duration
of time daily. Putting ice in Tupperware will, in fact, prevent the cubes
from "evaporating" (technically - sublimating) as they do when left in their
trays for long periods, and as such is a good idea - but not because the
compressor will run less.
Jack Petit
The five major league baseball teams in California need to move to a day-
only schedule for the rest of the year. That will also mean no Monday night
games for the NFL teams this fall or winter. . . . No more private and public
tennis clubs leaving their lights on their courts late into the night. . . .
Attempt to combine or limit the venues in which public meetings are held.
Often these halls are overly well-lighted, with only a few citizens
attending. Reduce hours amusement parks are opened, and reduce the amount of
lighting in underused areas. Limit the hours movie theaters are open. The
matinees are sparsely attended, but use a lot of power to light and cool the
theater.
Hugh Cavanaugh
When is San Francisco going to catch up with the rest of America and begin to
install high-density sodium vapor lamps (the "yellow light") in place of all
of its outside public lighting? They use one-third the energy of "white
light" and put out three times the light. Also, if the state would give
building owners a tax incentive to install "motion sensor"-controlled
lighting systems, all these empty office buildings' lights could safely be
shut off at night when these large buildings are empty.
Rollin W. Roberts
Require that all businesses keep their doors shut when open for business. One
day recently on upper Market Street when it was 55 degrees and windy, I took
a tally and 60 percent of the businesses had their doors open.
Bill Choisser
San Francisco
After your dishwasher has completed the wash cycle, open the door, pull out
the racks and there will be a big whoosh of steam. The hot temperature of the
dishes and glasses themselves (from the wash cycle) creates instant
evaporation. In a minute your dishes are dry and cool. The only reason for a
drying cycle is because they're enclosed.
Dan Lucas
(One reader) wrote she turns off all her large appliances, including TV/VCR,
at the breaker box, when not in use. These appliances do not use power when
the switches are off, except maybe a clock. Most circuit breakers are not
rated for switching purposes. They are for over-current protection only. Over
time you will damage them with continual on/off switching.
Tom DeMerritt
Send your comments and suggestions to Energy Desk, San Francisco Chronicle,
901 Mission St., San Francisco, CA 94103; or send e-mail to
energysaver@sfchronicle.com.

Davis to order 1-hour notice of blackouts
Plan also in works to give law enforcement even earlier alerts
Lynda Gledhill, Chronicle Sacramento Bureau
Thursday, May 24, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/24/M
N2963.DTL&type=news
Sacramento -- Gov. Gray Davis will issue an executive order today requiring
that Californians be given at least one hour's notice before blackouts hit,
according to a top administration official.
The one-hour notice is double what the California Independent System
Operator, managers of the state's electrical grid, proposed earlier this
week. The ISO board is scheduled to discuss its plan at a meeting today.
Details of Davis' plan were still being worked out, said the administration
official, who spoke on the condition of anonymity. But any plan would have to
order the ISO to give more notice of potential blackouts.
Davis also hopes to give 48-hour and then 24-hour notices of probable
blackout scenarios. Administration officials said the two-day notice would go
to law enforcement, while everyone would get a 24-hour warning.
Business groups welcomed the executive order.
"We need to plan, we need to make adjustments in business schedules," said
Jeanne Cain, vice president for government relations for the California
Chamber of Commerce. "There are concerns about employee safety issues. The
more notice we have, the better we can accommodate the blackout."
Carl Guardino, an ISO board member and president of the Silicon Valley
Manufacturing Group, has been pushing for an advanced notification plan and
working with the governor.
"Sixty minutes is twice as good" as 30 minutes, he said.
With little doubt that blackouts will hit this summer, lawmakers have been
searching for a way to make them easier on residents and businesses.
"As much notice as possible would be helpful. It's helpful to have some
advance notice for planning purposes, but small businesses will still be hurt
by the blackouts," said Shirley Knight, assistant state director of the
National Federation of Independent Business.
"Most small businesses are in the service sector so they're open during the
day, which means small-business owners aren't going to be able to recoup
those blackout costs like a manufacturer might be able to," Knight said.
But one consumer group said Davis should be doing more to stop the blackouts
from happening in the first place.
"It's like saying you're going to know a half hour earlier that an earthquake
is coming," said Doug Heller of the Foundation for Taxpayer and Consumer
Rights. "We should be stopping blackouts by standing up to the energy
generators, rather than giving us an extra 30 minutes."
'POWER WATCH'
The Independent System Operator's proposed plan for forecasting potential
blackouts envisions a system that would provide a 24-hour notice of high-
demand days. A "Power Watch" would be declared whenever a Stage 1 or Stage 2
alert is likely, while a "Power Warning" would be issued whenever there is at
least a 50 percent chance of a Stage 3 alert, when electricity reserves drop
below 1.5 percent.
Until now, the agency has refused to give more than a few minutes' warning of
blackouts, saying it did not want to alarm people when there was still a
chance that a last-minute purchase of power could stave off blackouts.
Pacific Gas and Electric Co. said it would welcome the advance notice to be
able to notify customers who rely on electricity for life-critical equipment
and large businesses.
"We welcome advance notice from the ISO that would allow us to communicate to
customers about pending rotating outages," said Ron Low, a spokesman for
PG&E.
The public safety aspect must be taken into account, said one consumer group.
"Blackouts have serious consequences, not just economic," said Mindy Spatt,
spokeswoman for The Utility Reform Network in San Francisco. "They create
public safety hazards, and all of those issues cannot be addressed from
warnings. But knowing in advance is better."
E-MAIL ALERTS
The ISO also has been working to upgrade its Web site to provide the most
current information about how much electricity is being used and how much is
available. It will also establish a system this summer through which that
information can be sent in an hourly e-mail.
This information may make it easier for larger users of electricity to plan
their operations.
Enlightening advice to prepare for blackouts Here's some advice from PG&E and
local utilities about how to prepare for blackouts:
-- Have a flashlight and radio with fresh batteries available. If you light
candles, observe the usual safety precautions.
-- If the lights go out, check with neighbors to determine if your home alone
is affected. It may be a downed power line or some other problem, in which
case you should alert PG&E or your city electrical bureau.
-- Unplug or turn off all appliances, TVs and computers. Leave one light on
to warn you when the power comes back on.
-- When the power returns, turn one appliance on at a time to prevent power
surges.
-- Don't plug a generator into the wall; when the lights return, it can send
a high-voltage current through the system that can electrocute power workers.
-- Don't open your refrigerator, so your food will remain cold.
-- Tell children who are home alone to remain calm, turn off the TV and
computers and not to use candles.
Chronicle staff writer Greg Lucas contributed to this report. / E-mail Lynda
Gledhill at lgledhill@sfchronicle.com.

Californians angry across the board in energy crisis
Poll rates Bush worse than Davis
John Wildermuth, Chronicle Political Writer
Thursday, May 24, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/24/M
N222247.DTL&type=news

Californians are increasingly unhappy with the way Gov. Gray Davis has
handled the state's power crunch, but he has plenty of company in their
energy doghouse, a Field Poll shows.
The state's power companies, out-of-state energy providers, President Bush
and the Legislature all come out worse than Davis in the survey.
"Davis' ratings have gone down, but a lot of others are given lower ratings"
when people are asked to rank how the politicians and institutions are
handling the state's energy situation, said Mark DiCamillo, director of the
Field Poll.
Growing worries about the seriousness of the power problem have sent ratings
skidding for anyone connected with the energy business.
"Everyone has gotten tarred," DiCamillo said.
A solid 57 percent of those surveyed believe that Pacific Gas and Electric
Co. and the state's other private electric utilities have done a poor or very
poor job with the energy problem, with out-of-state power providers ranked
almost as low. But 54 percent also put Bush's efforts in the poor/very poor
category, and 52 percent consigned the Federal Energy Regulatory Commission
to the same level.
The growing disdain for the federal energy program probably can be linked
with the president's refusal to back limits on energy prices, which are
supported by a wide range of California residents, DiCamillo said.
"To the extent that federal officials are seen as not bending on that issue,
" he said, "I suspect that their ratings will continue to be rather dismal."
The survey showed that Davis has had some success in his attempt to deflect
the blame for California's energy woes from his office, but there are
indications that that strategy may not work forever.
Although 41 percent thought the governor was doing a good or very good job
with the power crisis in January, that number fell to 27 percent in the new
survey. The percentage of residents giving him poor or very poor marks jumped
to 38 percent, up from 22 percent in January.
The survey was conducted May 11 to May 20 of 1,015 California residents. It
has a margin of error of plus or minus 3.2 percentage points.
In the survey, Californians were quick to congratulate themselves on their
own response to the energy problem. The poll showed that 39 percent believe
residential energy consumers are doing a good or very good job responding to
the problem, up from 26 percent in January.
"People think they're making an effort to conserve," DiCamillo said. "In the
public's eye, it's everyone else that is not doing what they should be
doing."
The survey also shows that the public has few illusions about the seriousness
of the energy crunch. More than 80 percent believe it will be a year or more
before the energy crisis is resolved, and more than half are convinced it
will take at least two years to ensure a steady supply of electricity.
"The gravity of the situation is such that the public is bracing itself for a
long haul," DiCamillo said. "The state hasn't been able to fix the problem in
a hurry, and people don't believe it's going to happen."
The survey also showed that nearly half the state's residents believe that
PG&E's bankruptcy will make it harder to continue to supply electricity to
its customers while 59 percent say it would be a serious problem if
businesses began to leave the state because of the possibility of blackouts.
Concern about the continuing energy problem was strong across the state,
DiCamillo said.
"This is recognized as a major statewide issue," he said. "People think it
will have an effect on them, regardless of where they live."

E-mail John Wildermuth at jwildermuth@sfchronicle.com.
CHART (1):

Field Poll/Performance rating

May 2001 rating of the job being done by officials and groups in their
attempts to improve the energy situation in California.

Ranked in order of negative appraisals
                 Good/Very good   Fair   Poor/Very poor  No opinion
California's private electric utilities
                       15%         24%       57%            4%
Out-of-state energy providers
                       17          20        55             8
President George W. Bush
                       22          20        54             4
Federal Energy Regulatory Comm.
                       13          26        52             9
State Public Utilities Comm.
                       14          28        52             6
Vice President Dick Cheney
                       17          25        43            15
State Legislature      16          34        41             9
Gov. Gray Davis        27          32        38             3
U.S. Energy Sec. Spencer Abraham
                       16          26        37            19
Ind. and bus. energy consumers
                       27          33        34             6
Residential energy consumers
                       39          33        22             6

The Field Poll was conducted between May 11and May 20 with a statewide
telephone sample of 1,015 adults in either English or Spanish. According to
statistical theory, 95% of the sample would have an error of +/ 3.2
percentage
points.
Source: The Field Poll
Chronicle Graphic

CHART (2):

  Field Poll/ Resolving the energy crisis
How long will it take before the energy crisis is resolved and steady
supplies
of electricity (no blackouts) can be assured?
    8%    No opinion
   10%    > 5 years
   10%    6 mos
   11%    4-5 years
   13%    3 years
   24%    2 years
   24%    1 year
Source: The Field Poll, May 11-20, 2001
Chronicle Graphic

OAKLAND
Council lowers hurdles to renewable energy

Thursday, May 24, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/24/M
N189126.DTL&type=news
To encourage Oaklanders to take advantage of renewable energy, the city will
waive fees and expedite plans for residents and business owners who want to
install solar panels or other alternative energy generators.
Previously, getting the necessary permits could take as long as eight weeks
and cost more than $1,000.
But under a measure proposed by Mayor Jerry Brown and approved Tuesday night
by the Oakland City Council, the design review process will be waived if the
equipment installation meets certain requirements, such as matching the pitch
of a sloped roof. Permits will be free.
Compiled from Chronicle staff reports

THE ENERGY CRUNCH
New tips on power squeezing
Carolyn Said, Chronicle Staff Writer
Thursday, May 24, 2001
,2001 San Francisco Chronicle
URL:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/05/24/B
U190766.DTL&type=news
If you want to wrap yourself in the flag these days, there's no better way
than by promoting energy conservation.
Scientists from the Lawrence Livermore and Lawrence Berkeley national
laboratories held a news conference yesterday to highlight new technologies
and information sources to help consumers and businesses cut down on
electricity use this summer.
Flanked by tiny models of buildings with white roofs (up to 45 degrees cooler
than dark ones), big charts showing U.S. energy flow and an array of "energy
vampire" devices such as battery chargers that suck power whenever they're
plugged in, earnest researchers discussed ways Californians can reduce their
electricity use by 20 percent this summer.
Meeting the goal has a big payoff, besides the obvious one of averting
blackouts: Under the governor's 20/20 Rebate Plan, those who conserve 20
percent this summer compared with the same months last year will not only
shave that amount off their bills, but also get an equivalent rebate from the
state -- essentially saving 40 percent.
The technologies were a combination of new twists on humble objects and
futuristic geeks-only inventions:
-- WEB SITES. For folks who want to get a taste of the high-wire act lived
every day by California grid operators, energycrisis.lbl.gov gives real-time
data on the current supply and demand for electricity in the state. When you
see the purple line (forecast load) start to hover near the red line
(potential capacity), you know it's time to turn off the lights and hit the
Save button.
Lawrence Berkeley Lab is sponsoring three Web pages -- savepower.lbl.gov,
HomeEnergySaver.lbl.gov and HomeImprovementTool.lbl.gov -- that offer
customized conservation tips based on the user's climate and type of house --
saving 8 percent by using clotheslines instead of a dryer, for example.
-- LAMPS. Lawrence Berkeley scientists have created the eponymous "Berkeley
lamp," expected to go on sale in July for under $150. It's a high-performance
table lamp with two fluorescent bulbs that together use less than 110 watts,
but provide light equivalent to 300 or 400 watts. The lamp provides both
"uplight," for illuminating an entire room, and "downlight," for close tasks
such as reading. To be manufactured by Light Corp. of Minnesota, it will be
sold through the company's Web site at www.lightcorp.com.
Another, existing lamp -- a floor-standing torchere that uses compact
fluorescent bulbs instead of halogen bulbs -- is widely available in hardware
and lighting stores from a variety of manufacturers.
-- WINDOWS. "Low-emissivity" windows look as transparent as regular glass but
reflect infrared light, reducing heat transmission. The technology is now
available in about 40 percent of windows sold. Consumers can recognize
energy- efficient windows by a government "Energy Star" label; more
information is available at www.efficientwindows.org.
-- SCI-FI CHANNEL. At Lawrence Livermore Lab, scientists have been working on
technology that's not for average users, but could eventually bring us up to
date with the Jetsons.
Technologies include electromechanical (flywheel) batteries, which can bridge
the gap when the power goes off, thereby protecting sensitive electronic
equipment.
Then there are solid oxide fuel cells, which produce energy from fuel without
using combustion -- a technology of the future, both for vehicles and
stationary power.
The Livermore researchers are also studying ways to make geothermal energy
(which accounts for 6 percent of California's supply) more efficient and
methods to reduce nitrogen oxide emissions from diesel generators.
Further out, scientists hope to be able to store electricity, so energy from
wind farms, for example, could be used at the times it's needed the most,
instead of only when the weather cooperates.
E-mail Carolyn Said at csaid@sfchronicle.com.

House panel calls off vote on Calif power bill
WASHINGTON, (Reuters) - The U.S. Energy and Commerce Committee has called
off, at least temporarily, a vote on legislation to aid California and other
states during this summer's expected electricity shortage.
Rep. Billy Tauzin, the Louisiana Republican chairman of the committee, said
lawmakers needed more time to seek a bipartisan deal to get agreement on
immediate help for power-starved California and the West.
``We may be on the verge of a very solid bipartisan agreement,'' Tauzin said.
He hoped that talks on Thursday would allow a vote on the pending legislation
as early as today.
The legislation was written by Republicans to reduce demand and encourage
more supply of power in California this summer. Many Democrats on the
committee objected to the bill, saying it needed a provision to cap wholesale
prices in the entire Western region or else it fails to help the situation.
Republican lawmakers, along with the Bush administration, strongly oppose
price controls.

Davis proposal for more diesel power draws environmental criticism
LOS ANGELES (AP) -- California would get a little power and a lot of
pollution from a proposal being considered by Gov. Gray Davis that would pay
owners of backup generators to produce electricity.
The proposal, one of several options the governor is considering, would pay
for diesel power -- which at its dirtiest is 500 times more polluting than
the cleanest natural gas power plants -- when electricity supplies are
stretched.
``If backup generators were to be used, it would only be as a last resort to
avoid blackouts,'' said Davis spokesman Roger Salazar. ``Unfortunately, we
are in an emergency situation. Everything is on the table.''
California's persistent power shortage has led to rolling blackouts around
the state several times this year, with more anticipated when hot summer
weather prompts people to use air conditioning.
If all of the state's backup generators ran full time, they would produce
about 425 tons of nitrogen dioxide per day. That's more than nine times the
pollution power plants produced on an average day in 1999, according to state
Air Resources Board data.
And the state would get only about 550 megawatts of electricity -- barely 1
percent of the state's peak power needs -- from the backup generators. That
would be enough to power about 550,000 homes.
``They could have a huge negative effect on air quality,'' said Ellen Garvey,
executive officer for the Bay Area Air Quality Management Agency. ``It's one
thing to run these generators during blackouts and emergency conditions, but
using them for other purposes could be devastating.''
Business groups that support the proposal include the League of Food
Processors, the California Manufacturers and Technology Association and San
Diego Gas & Electric.
``These generators could go a long way to taking some demand off the electric
grid and putting some supply back into the power system,'' said Gino DiCaro,
spokesman for the manufacturers and technology association.
Most of the state's 17,200 backup generators are small units that run on
diesel fuel and lack pollution controls. Some are rentals, and others can be
found at hospitals, office buildings, sewage treatment plants and university
labs.
Unlike backup generators intended for home use, which are not regulated,
industrial-sized units are limited in the number of hours they can operate.
But since the state's power crunch began, regional air-quality regulators
have issued emergency rules allowing them to run more frequently.
Diesel engines produce carcinogenic soot and oxides of nitrogen -- a building
block of asthma-inducing smog.

Small generators fight for payment from utilities
Posted at 11:24 p.m. PDT Wednesday, May 23, 2001
BY JENNIFER BJORHUS

Mercury News

BAKERSFIELD -- A gray cat picks its way through the lot of Oildale Energy, a
small natural gas-fired power plant on the city's gritty northeast edge. The
clamor of machinery and trucks -- sounds that meant prosperity here -- is
gone. Employees have painted Oildale's machinery, insulated the boilers and
tweaked the motionless 13-ton turbine.
Now they wait.
``It's kind of like a skeleton,'' says plant manager Mike Pankratz, surveying
the octopus-tangle of pipes and tanks.
Choked by the $10 million Pacific Gas & Electric Co. owes it, Oildale shut
down Feb.?6, taking its 40 megawatts of badly needed electricity with it. The
hush here is the sound of small generators locked in one of the most serious
issues of California's energy crisis -- one that state regulators plan to
wrestle with today.
Oildale is part of a growing legion of small generators, from geothermal to
gas-fired co-generation plants, battling California's utilities and state
price controls they say are crippling them. These small generators, owed
about $1.5 billion, supply up to a third of California's electricity.
At least 25 have sued Southern California Edison over unpaid bills. Four have
sued PG&E. And PG&E's bankruptcy proceedings in San Francisco are clogged
with motions from at least 19 small generators, including Oildale. In many
cases, these companies want to end their long-term supply contracts with the
utilities so they can sell their electricity on the more lucrative open
market.
``What this is, basically, is the revolt of the mice,'' said Bill Short with
Ridgewood Power Management, a New Jersey firm that has shuttered three
gas-fired generators in California and sued PG&E.
Officials to weigh debt
The companies are hoping for action from the California Public Utilities
Commission, which is scheduled today to weigh whether to order the utilities
to pay the back debt. Meanwhile, U.S. Bankruptcy Judge Dennis Montali wades
through motions filed by disgruntled generators and counter motions from
PG&E.
The deteriorating finances of some of the approximately 690 small generators
threatens California's fragile power supply just as the state heads into the
summer months up to 3,700 megawatts short.
The deep and often unexpected economic impacts of California's energy crunch
add up daily. In Oildale's case, the shutdown not only jeopardizes the jobs
of its 10 anxious employees, but those of more than 150 employees at the
refinery next door.
It's one of the biggest public policy botches in the energy crisis, some
energy experts argue. California is shooting itself in the foot by not
attending to the relatively clean and efficient small power suppliers in its
own back yard, they say. Gas-fired co-generation plants, which provide power
to nearby businesses and sell electricity to utilities, are some of the most
efficient producers in the state. And many of the small generators harness
renewable resources like the sun and garbage fumes, lessening the state's
dependence on high-priced natural gas.
``The idea that we're refusing to step in and help them while we're paying
through the nose to pay Dynegy and Williams and everybody else, this is just
nuts,'' said Severin Borenstein, director of the University of California
Energy Institute, mentioning companies that own major power plants in the
state. ``This is really a major blunder.''
The immediate crisis started in late January, Oildale's Pankratz explained.
That's when PG&E told the plant it was not going to pay for electricity
delivered in December. The news worried Oildale's gas supplier, Pankratz
said, which halted the plant's supply.
Pankratz turned off the plant's turbine.
The move socked Golden Bear Oil Specialties, the refinery that looms over
Oildale. Unable to operate without the cheap steam heat Oildale supplies,
Golden Bear cannot heat the asphalt and industrial oils it produces. Golden
Bear filed for bankruptcy April 23. Last week it announced plans to lay off
172 employees.
Golden Bear Chairman Carl Soderlind said Oildale, Golden Bear's exclusive
source of steam heat for nearly 20 years, was a key reason his group bought
the refinery four years ago. Having it go under was ``gut-wrenching,'' he
said.
Power unavailable
The California Independent System Operator, keeper of the state's electricity
grid, reports that 1,400 megawatts of power from small generators are off
line. It estimates that about half of that -- 700 megawatts, or energy for as
many as 700,000 homes -- is due to the financial squeeze of natural gas
prices, money owed by the utilities or both. Others say financial problems
have 1,100 megawatts off line.
Lawmakers haven't been much help. The state Assembly on March?22 rejected a
hastily crafted rescue bill meant to help buttress these companies. The issue
has languished in Sacramento.
Days later, the utilities commission ordered California's utilities to pay
the generators for electricity delivered in the future -- which saved many of
them -- but it did not order the utilities to pay the hefty back-due amounts.
It also set a new rate for what utilities should pay the generators for
electricity. That price is 22 percent lower and too low for business, some
argue.
The commission's position has been that the small generators should abide by
their existing contracts, said commission attorney Gary Cohen: ``To the
extent that some of them are facing financial hardship, the commission may
take a look at whether it can do anything to help them vis-a-vis the back
debt.''
The lack of stronger action to support these generators baffles some critics.
``It's like talking to a starving man on a desert island and saying, `How
long can you hold up until the ship comes?'?'' said V. John White, director
of the Center for Energy Efficiency and Renewable Technologies.
Some of the companies have appealed to the Federal Energy Regulatory
Commission, but regulators are waiting to see if the state and the courts can
resolve the issue.
``We're in what essentially amounts to an abusive relationship,'' said Short
with Ridgewood, the independent generator that has sued PG&E.
Two courts have allowed generators fighting Edison to suspend their
contracts. Five have lost their fights. Another five have won the right to
put a lien on Edison's assets.
In PG&E's battle, three of the four lawsuits are on hold because of the
bankruptcy. In the fourth, a judge allowed a generator out of the contract it
had terminated before the bankruptcy.
As for Oildale, it wants PG&E to pay the $10.5 million it owes or Oildale
wants to sell its electricity on the open market. It also wants PG&E to pay
what it calls ``a fair market value'' for its electricity.
If Oildale can't sell on the open market soon, it will be forced into
bankruptcy, its attorneys argue. Pankratz estimates his plant can hang in
limbo only three more months.
PG&E is fighting to keep its small generators, which it says are exaggerating
their damage. It reports that only a tiny fraction of its 300 generators are
off line.
Increased costs
If the plants were released from their contracts, PG&E could not afford to
pay the extra $284 million per month it estimates electricity would cost. The
state Department of Water Resources -- and ultimately ratepayers -- would
have to foot that bill.
A fast solution isn't likely from the bankruptcy court. The judge has made it
clear the generators raise a host of complicated legal questions.
Meanwhile, the clock ticks.
``We've all been a little tense,'' says Judy Andreatta, who has worked
Oildale's front desk for 10 years and worries about her job. ``It's just so
scary watching everything happen. Who'd ever think we'd lose power?''

Electricity notebook
FERC may renew price caps
May 24, 2001
From Register wire services
Federal regulators this week announced that they might reimpose caps on the
cost of transporting natural gas into southern California.
The Federal Energy Regulatory Commission on Tuesday gave the public 20 days
to comment on the possibility of reinstating caps, which were temporarily
suspended by the commission this year. The price controls were lifted in an
effort to expand the reach of deregulation.
This proposed action, said Sen. Dianne Feinstein, D-Calif., "could make a
real difference."
"Since FERC engaged in this experimental lifting of the cap, the price of
natural gas in Southern California has climbed to three times higher than the
rest of the nation,'' said Feinstein. Currently, she said, the price in
Southern California is $12.59 per million British Thermal Units and only
$3.70 in the rest of the Western region. Gas fuels most
electricity-generating plants in the state.
The commission also asked for comment on whether the caps should be limited
to California or include other Western markets.

Legislators search for a Plan B for Edison
Davis' tack is politically volatile. The aim still is to steer clear of
bankruptcy.
May 24, 2001
By HANH KIM QUACH
and KATE BERRY
The Orange County Register
SACRAMENTO Lawmakers this week will seek to swap the deal Gov. Gray Davis
made to rescue the state's No. 2 utility from financial ruin with something
more politically palatable.
Davis' deal, some have complained, is sweeter for Southern California Edison
than for taxpayers. So at least four proposals are being floated to supplant
that plan. But legislators are far from a consensus on any of them. Plans
emerge, recede and are reconfigured daily.
Energy experts and bankruptcy lawyers warn that too much legislative fiddling
could result in what neither side wants: bankruptcy for Edison.
Bankruptcy means the state would be stuck buying energy until both Edison and
Pacific Gas & Electric - which is already in bankruptcy - complete the
Chapter 11 process, which could take years, experts and lawmakers said.
The state's wallet would shrink, affecting its ability to build schools and
roads. Ratepayers might be on the hook for an additional $1 billion for the
company's legal fees, because bankruptcy would freeze its assets, said Brian
Bennett, vice president of Edison International, the utility's parent
company.
Southern California Edison has said it's willing to be flexible on the
governor's plan, which calls for the state to buy Edison's transmission grid
for $2.76 billion. Company officials wouldn't comment on the various
alternatives.
"We understand that the transmission deal is the subject of controversy and
are open to variations on it,'' Bennett said.
Steve Maviglio, Davis' spokesman, said the governor also remained committed
to his deal.
"Edison is going to survive,'' said Mitch Wilk, a member of the state Public
Utilities Commission from 1986 through 1991 and a past president of the
agency. But the question is "whether it will survive via the (plan) that the
governor negotiated or they do the same kind of thing PG&E did."
"There is still a very real risk that SCE will be forced into bankruptcy if
the Legislature tinkers too much with the deal, or fails to move ahead
promptly,'' Wilk said.
PG&E chose to file Chapter 11 last month because it was dissatisfied with the
progress of negotiations with Davis on a state rescue of the company. PG&E's
move was an embarrassment for Davis, who had vowed to keep the state's big
utilities solvent.
"One of the principal chips Edison has with the state is not filing for
bankruptcy,'' said Ed Feo, a lawyer involved with the PG&E case. "It would be
a black eye for the state. As long as the company stays out of bankruptcy,
they have something to trade."
Edison's creditors are still waiting to see how the utility fares with the
Legislature. Some have agreed to defer receiving payments until the end of
June.
Dean Vanech, president of New Jersey-based Carson Cogeneration, said a lot of
things need to happen before he and other creditors feel ready to drag Edison
into bankruptcy.
"In general, we would have to feel like there was absolutely no hope in a
deal being made,'' Vanech said. But, he admitted, "there's a concern that a
resolution will not be put on the table in any reasonable period of
time.''Meanwhile, Edison has vigorously lobbied the Legislature to approve
the transmission deal. The company has launched a public-relations campaign
to persuade the public that it is in its interest, said John Bryson, chief
executive of Edison International.
"Bankruptcy is a last resort,'' Bryson said in a recent interview. "We
believe there will be a solution.''
But changes are necessary, said Senate Leader John Burton, D-San Francisco,
"because people didn't like Plan A.''
Lawmakers cringed at some elements of the plan, which many thought was overly
generous to Edison: limiting investigation of the utility's parent's company
and guaranteeing the company an 11.6 percent annual return on investment.
Alternatives include: requiring power generators to accept up to one-third
less than the collective $3.5 billion they're owed; taxing Edison on its
property and using the tax to pay off its debts; and allowing Edison to build
more power plants. The latest proposal would require the state to sell bonds
to pay off Edison's debts and give the state the option to buy the
transmission lines later. Most of the proposals would require an extra
surcharge on ratepayers bills to pay off debts.
One hurdle the legislature faces: rallying two-thirds of each house behind
one plan, necessary any time the state spends money. Republicans have been
philosophically opposed to acquiring transmission lines, and half the
alternatives include that element.
But Stanford University professor James Sweeney thinks compromise is
possible. Lawmakers and the utility will strike a deal simply because a
second bankruptcy would tarnish the image of the state's political leaders.
Sweeney believes, however, the outcome might be more fair in court.
"Bankruptcies are messy ... but so is the political process,'' Sweeney said.
"We're in a situation where the leadership (politically) seems not willing to
bite the bullet. It may be better for our state to have a bankruptcy judge
who is very strong and who isn't planning for a higher office.''

Long Beach obtains lien on Edison's assets
The city is the fourth small supplier with an attachment on the utility.
May 24, 2001
By KATE BERRY
The Orange County Register
The city of Long Beach became the fourth small power supplier to get a lien
against the assets of Southern California Edison, a move that could push the
utility closer to bankruptcy.
Last week, Edison was ordered to freeze at least $9 million in bank accounts
to cover payments owed to Long Beach for power Edison bought from the city's
trash-to-energy plant.
Getting a lien on the utility's assets ensures the city will be paid, even if
the utility files for bankruptcy.
Stephen Pickett, Edison International's general counsel, said the utility
plans to appeal.
Long Beach also is suing Edison International, the utility's parent company,
for breach of contract, claiming the utility should not have transferred $4.7
billion to its parent company over a four-year period beginning in 1996, when
deregulation was implemented.
"Edison International was required to honor the debts of its subsidiary,''
said Robert Shannon, Long Beach's city attorney.
So far, Edison has been sued by 27 small power suppliers, known as qualifying
facilities, or QFs. The lawsuits either seek to put a lien on the utility's
assets to recover unpaid debts or attempt to terminate 20-year contracts to
provide power to Edison.
Edison owes QFs about $1 billion and is trying to combine the cases before a
single judge in Los Angeles.
But Long Beach differs from other power suppliers because it wants to stay in
its contract with Edison.
"We just want to be paid under our contract. We still want to deliver them
power,'' said Shannon.
As a municipality, Long Beach also did not have to post a bond to obtain a
lien as the other QFs must.
Ed Feo, a lawyer for wind, solar and biomass QFs, said liens on Edison's
assets could have a domino effect.
"Two things will accelerate a bankruptcy filing by Edison: Either the deal to
sell its transmission lines (to the state) is going nowhere and alternatives
are not acceptable - or if attachments are made to the company's property
that the utility doesn't want to run the risk of losing.''
Three other QFs have posted bonds to obtain liens against Edison. They
include Caithness Energy, which got a lien on Edison's 56 percent interest in
two qualifying facilities that make up the Mohave Generating Station in
Laughlin, Nev.; IMC Chemicals, a unit of IMC Global Inc. of Northbrook, Ill.,
and that won a $7 million lien; and Herber Geothermal Co. and Second Imperial
Geothermal Co., which is owned by Covanta Energy Corp., a former unit of
Ogden Corp., based in Fairfield, N.J.

Poll: 59% in state favor nuclear power
It's a reversal of views since the Three Mile Island accident.
May 24, 2001

The Associated Press
Fifty-nine percent of Californians now support building more nuclear plants,
according to a poll released Wednesday.
The last time the Field Institute polled Californians about nuclear energy
was 1984 - five years after the accident at Three Mile Island in Pennsylvania
- and it found 61 percent opposed to nuclear power.
"In my interpretation, the current energy crisis has some bearing on the
public's changed attitudes on nuclear power," said Mark DiCamillo, spokesman
for the nonpartisan polling organization.
"The public is searching for clean ways to add to the capacity."
The Field poll comes as the Bush administration pushes for a renewed look at
nuclear power. No utilities have ordered any new nuclear power plants in the
United States since 1978.
The poll of 1,015 California adults was taken May 11-20. The margin of error
was plus or minus 3.2 percent.
Carl Zichella, the Sierra Club's regional staff director, said Californians
have not thought about nuclear energy for about 20 years and do not have as
much information as they did around Three Mile Island.
"I think this number really reflects a lack of knowledge on the part of the
public about the problems that drove nuclear power underground," he said.
"The more people know about nuclear power, the less they're going to like
it."
Getting a new nuclear plant built faces two major problems: financing and
siting, said Rich Ferguson, research director for the Sacramento- based
Center for Energy Efficiency and Renewable Technology.
"We have just not seen any interest in the financial community to invest the
billions of dollars," he said.

Filing for Hayward Project Includes Request for Expedited Review

PLEASANTON, Calif., May 23 /PRNewswire/ -- San Jose-based, Calpine
Corporation (NYSE: CPN) and San Francisco-based, Bechtel Enterprises Holdings,
Inc. today filed an Application For Certification (AFC) with the California
Energy Commission (CEC) for its proposed Russell City Energy Center in
Hayward, Calif.  The filing marks the beginning of an extensive CEC licensing
process required to build and operate an electricity generating facility in
California.  The filing included a request for expedited review that would
reduce the licensing review process period from 12 months to 6 months.

The proposed Russell City Energy Center would be a 600-megawatt, natural
gas-fired, combined-cycle electric generating facility located on
approximately 14 acres of land, zoned heavy industrial, at 3636 Enterprise
Avenue in Hayward.  The site is adjacent to the city of Hayward's wastewater
treatment plant, which would supply recycled water to the Energy Center. The
Russell City Energy Center would provide needed electricity for Hayward,
western Alameda County and the San Francisco Peninsula.

The modern technology used at the facility would allow for a greater than
90 percent reduction of certain emissions and is 40 percent more
fuel-efficient compared to older gas-fueled facilities in the Bay Area.

"The Russell City Energy Center will provide a vital new source of clean,
reliable electricity in the region," said Curt Hildebrand, vice president and
general manager of the Calpine/Bechtel Joint Development.  "We look forward to
working with the City of Hayward, Alameda County and the California Energy
Commission to develop a model Energy Center."

Submittal of the AFC represents the culmination of more than six months of
extensive engineering, technical and environmental studies.

"We are hopeful that the considerable groundwork that we have laid thus
far will make this project eligible for the six month CEC review process,"
Hildebrand added.  "We are seeking the expedited review to do everything we
can to help solve the state's energy crisis as quickly as possible."

Once the CEC determines that the application is complete, and determine
whether the project qualifies for the expedited review process, the official
review will begin.  As lead agency, the CEC will work with environmental and
government agencies in conducting its review and will hold local workshops and
hearings to encourage community participation. The expedited review process
would require the same environmental and technical standards as the longer
review period.  Based upon the successful licensing of the project,
construction could begin in summer of 2002, with commercial operation by
summer of 2004.

Copies of the AFC filings will be available through the CEC and at local
libraries. Summaries of the study will be posted on the Russell City Energy
Center website (www.russellcityenergycenter.com).  To receive additional
information on the CEC process, visit their website at www.energy.ca.gov.  For
more information on the Russell City Energy Center, call 510-704-8475.

Calpine Corporation, based in San Jose, Calif., is dedicated to providing
customers with reliable and competitively priced electricity.  Calpine is
focused on clean, efficient, natural gas-fired generation and is the world's
largest producer of renewable geothermal energy.  Calpine has launched the
largest power development program in North America.  To date, the company has
approximately 32,300 megawatts of base load capacity and 7,000 megawatts of
peaking capacity in operation, under construction, pending acquisitions and in
announced development in 29 states and Canada.  The company was founded in
1984 and is publicly traded on the New York Stock Exchange under the symbol
CPN.  For more information about Calpine, visit its Website at
www.calpine.com.

Bechtel Enterprises Holdings, Inc. is the development, financing and
ownership affiliate of the Bechtel organization, a global engineering and
construction firm.  Bechtel has been at the center of energy development since
the 1940's, having built more than 450 power stations with a total generating
capacity exceeding 250,000 megawatts.  Through its power development
affiliate, InterGen, and its own portfolio, Bechtel Enterprises has more than
17,600 megawatts of energy capacity in operations, under construction, or in
advanced development around the world.

This news release discusses certain matters that may be considered
"forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements regarding the intent, belief or
current expectations of Calpine Corporation ("the Company") and its
management. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve a number of
risks and uncertainties that could materially affect actual results such as,
but not limited to, (i) changes in government regulations, including pending
changes in California, and anticipated deregulation of the electric energy
industry, (ii) commercial operations of new plants that may be delayed or
prevented because of various development and construction risks, such as a
failure to obtain financing and the necessary permits to operate or the
failure of third-party contractors to perform their contractual obligations,
(iii) cost estimates that are preliminary and which actual cost may be higher
than estimated, (iv) the assurance that the Company will develop additional
plants, (v) a competitor's development of a lower-cost gas-fired power plant,
(vi) receipt of regulatory approvals or (vii) the risks associated with
marketing and selling power from power plants in the newly competitive energy
market. Prospective investors are also referred to the other risks identified
from time to time in the Company's reports and registration statements filed
with the Securities and Exchange Commission.

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SOURCE  Calpine Corporation

CONTACT:  Lisa Poelle, Public Relations Manager of Calpine/Bechtel Joint
Development, 408-995-5115, ext. 1285
Web site:  http://www.russellcityenergycenter.com
Web site:  http://www.calpine.com
(CPN)

California Governor Signs Bill to Speed Up Approval for Power Plants

LOS ANGELES, May 22, 2001 (Xinhua via COMTEX) -- Governor of California Gray
Davis on Tuesday signed a bill to speed up the process of approving
construction
of new power plants as a way to fight the ongoing power shortage.

"California is in a war with energy producers, and the best long-term weapon
is
to build more power plants," Davis said at a signing ceremony in Elk Grove,
California.

The bill will shorten the application process for a new or remodeled power
plant, as well as the time that local governments have to review proposals.

Davis said the new bill will speed up two energy projects that are in the
process right now, including a 900-megawatt plant in Palm Springs and a gas
storage project in Lodi that will store up to 12 billion cubic feet of natural
gas.

California has been suffering from a power crisis since last year, which has
caused repeated blackouts and sent the power rate spiraling.

The crisis is largely blamed on the 1996 deregulation law that forces the
utilities to buy electricity from the wholesale market at higher rates than
they
charge the customers. And the repairs of generators in some power plants and
the
warming weather have made things worse.

After the heavily indebted utilities could no longer afford to buying power
anymore, the state government has used more than 7 billion dollars of tax
money
so far this year to buy electricity on behalf of them.

Among other measures to ease the power shortage, the state government has
called
for residents to conserve electricity as much as they can, especially during
the
peak-hours during the day.Residents have been told to brace for a worse
situation during the incoming summer.

From the Oakland Tribune 5/24

Lockyer: Probe may spark suit
Criminal charges could follow evidence of price gouging
By Steve Geissinger
SACRAMENTO BUREAU
SACRAMENTO -- State Attorney General Bill Lockyer said Wednesday his
investigation of alleged multibillion-dollar price gouging by power
generators has laid the foundation for a successful civil case that could win
huge refunds.
"But the whole house hasn't been built," Lockyer said in an interview with
ANG Newspapers.
The attorney general said the probe he expects to complete in the next eight
weeks also may yet yield criminal charges, which could result in power
company officials being locked up "with my tattooed dude."
Lockyer, a former East Bay legislator, rattled electricity suppliers earlier
this week when he told the Wall Street Journal: "I would love to personally
escort (Enron Corp. Chairman Kenneth) Lay to an 8 x 10 cell that he could
share with a tattooed dude who says, 'Hi, my name is Spike, honey.'"
Houston-based Enron, like other energy-trading firms, has denied wrongdoing
in the California market. It dismissed Lockyer's comment as not warranting a
response butquietlyprotested to the Davis administration. Other power
companies have expressed outrage.
"I was trying to convey a message to ... the out-of-state energy generators,"
Lockyer said. "I decided to make the point with the energy generators that
they've got a serious fight on their hands."
The attorney general, however, conceded he has "felt guilty about it ever
since because I'm a prosecutor and I take pride in being careful about these
sorts of accusations or claims."
"But I know it won't be in print unless I find some sort of colorful way to
... pump up the rhetoric," he said.
"We don't care if they're multi-millionaires. We don't care if they run big
corporations. They're buccaneers. They're ripping us off.
"Now, while we're still in the legal analysis of whether it's legal or
illegal greed, it's clearly immoral. There's no debate about that."
Lockyer said his investigators are scrutinizing tens of thousands of
transactions and hundreds of thousands of documents to determine the strength
of the state's case.
"I think there is strong evidence that lays the foundation for a successful
civil action, but the whole house hasn't been built," Lockyer said.
A civil case could result in refunds that "disgorge the obscene profits," he
said.
The California Independent System Operator, which manages the state's
electric transmission grid, estimates that power suppliers may have
overcharged California by $6.8 billion since early last year.
The Federal Energy Regulatory Commission has so far tentatively ordered
California suppliers to make only tens of millions of dollars in refunds as
part of that agency's ongoing probe.
Lockyer said criminal charges will be filed if investigators find that
company officials intentionally engaged in unfair business practices.
The attorney general said he hopes to complete the work within the next eight
weeks despite what he called stalling tactics such as those by three energy
firms -- Reliant and Dynegy of Houston and Mirant of Atlanta.
The three companies agreed Tuesday to surrender copies of internal documents
that had been subpoenaed two months ago by Lockyer as part of the probe.
"They've been throwing $500-an-hour lawyers at us in high volume to drag
their feet and stall our investigation," Lockyer said.
The attorney general's comments come amid a flurry of lawsuits and
allegations by California officials against power suppliers, as well as
ongoing probes.
Besides the attorney and FERC, the Legislature, state Public Utilities
Commission, Cal-ISO and the California Electricity Oversight Board are all
conducting investigations.

,1999-2001 by MediaNews Group, Inc. and ANG Newspapers