|
|
Enron Mail |
Please see the following articles:
Sac Bee, Thurs, 6/7: GOP scraps House energy bill Sac Bee, Thurs, 6/7: Norton open to drilling off Santa Barbara SD Union, Thurs, 6/7: Energy relief bill mired in dispute over price caps= =20 SD Union, Thurs, 6/7: Escondido eyed profit from Hanover plant SD Union, Thurs, 6/7: Increased hydropower behind price drop SD Union, Thurs, 6/7: PUC could expand utility discounts to low-income=20 ratepayers LA Times, Thurs, 6/7: Senator Fires Warning Shot on Power Costs SF Chron, Thurs, 6/7: Power switch -- contracts now in limbo=20 Nosedive in electricity prices will let state deal from strength SF Chron, Thurs, 6/7: Developments in California's energy crisis SF Chron, Thurs, 6/7: House GOP leaders backing away from short-term fix SF Chron, Thurs, 6/7: Power switch -- contracts now in limbo=20 Nosedive in electricity prices will let state deal from strength SF Chron, Thurs, 6/7: Senator ready to strong-arm energy panel=20 New committee chairman to give regulators 2 weeks to set price caps SF Chron, Thurs, 6/7: Underwriters wary of bond deal=20 State needs funds to cover costs of buying power Mercury News, Thurs, 6/7: It's looking better on energy front =20 Contra Costa Times, Thurs, 6/7: Four-day week for city halls? Contra Costa Times, Thurs, 6/7: Labor leaders demand power plant takeovers Contra Costa Times, Thurs, 6/7: Senate shift puts pressure on FERC OC Register, Thurs, 6/7: A power-bill surge OC Register, Thurs, 6/7: Energy notebook Many experts see light at the end of the crisis sooner than expected OC Register, Thurs, 6/7: Market spotlight: PG&E woes push down share of=20 power generators=20 OC Register, Thurs, 6/7: California ISO's independence at issue=20 OC Register, Thurs, 6/7: We still don't get it (Commentary) A history of price controls: They didn't work for Sumeria, they won't work= =20 for California Individual.com (PRnewswire), Thurs, 6/7: Exponent Advises CPUC on Rolling= =20 Blackout Exemptions=20 Individual.com (AP), Thurs, 6/7: Calif. Targeted in Antitrust Probe Individual.com (PRnewswire), Thurs, 6/7: More Utilities, Industries Must=20 Reduce Power Purchases From BPA To Hold Rates Down=20 Individual.com (PRnewswire), Thurs, 6/7: SCE Customers to See Major Changes= =20 to June Bills Adding Group Numbers Will Help Consumers Prepare for Rotating Blackouts;=20 Conservation Rebates, Discounts Available to Income-Qualified Customers=20 ---------------------------------------------------------------------------= --- ----------------------------------------------- GOP scraps House energy bill=20 By David Whitney Bee Washington Bureau (Published June 7, 2001)=20 WASHINGTON -- Republican leaders in the House abruptly scuttled any further= =20 work on an emergency electricity bill for California on Wednesday, saying= =20 they were unable to reach agreement with Democrats on reining in sky-high= =20 wholesale power costs.=20 "It became clear we would not be able to come to agreement," said Rep. Bill= y=20 Tauzin, R-La., chairman of the Energy and Commerce Committee.=20 Rep. Joe Barton, R-Texas, the energy subcommittee chairman whose panel wrot= e=20 the bill last month, blamed House Minority Leader Dick Gephardt, D-Mo., for= =20 forcing Democrats to insist that wholesale rates be based on the cost of=20 production to stem price gouging.=20 Stunned Democrats disputed just about everything committee Republicans said= .=20 "We are disappointed that the Republican leadership canceled this opportuni= ty=20 to bring price relief to California," said Rep. Henry Waxman of Los Angeles= ,=20 the senior Democrat on the energy panel.=20 "The Federal Energy Regulatory Commission, the White House and now the=20 Republican Congress has decided it won't help California," Waxman said. "We= =20 feel an outrage that we won't get to mark up a bill that is supposed to hel= p=20 Californians."=20 In the Senate, however, where Democrats took charge Wednesday with a one-vo= te=20 majority, Democratic leaders threatened congressional action unless federal= =20 regulators took immediate steps to bring down wholesale rates.=20 Sen. Jeff Bingaman, D-N.M., the new chairman of the Senate Energy and Natur= al=20 Resources Committee, gave federal regulators two weeks to act, saying that= =20 his panel may resort to legislation.=20 Pending before the committee is legislation sponsored by Sen. Dianne=20 Feinstein, D-Calif., that would peg the wholesale price of electricity to i= ts=20 cost of production, plant by plant, plus a margin that would allow for a=20 reasonable profit.=20 Feinstein said she's hopeful that, barring a change of heart by regulators,= =20 her bill will move shortly.=20 Behind the congressional sniping is a deep political divide. The Republican= s=20 are opposed to anything that looks like government intervention in the=20 marketplace, while Democrats believe that government cannot sit by idly whi= le=20 the pocketbooks of consumers are emptied because of a dysfunctional=20 electricity market.=20 Price controls have been the sticking point all along on Barton's bill. Mos= t=20 of its controversial environmental rollbacks were excised before it came to= a=20 subcommittee vote, and Republican leaders admitted that much of what was le= ft=20 already was being implemented by the Bush administration and Gov. Gray Davi= s.=20 "There has already been demand reduction, supply improvement and action by= =20 the California governor adopting several features of this bill," Tauzin sai= d.=20 "California is improved today because this bill moved as far as it has."=20 In an effort to break the stalemate, Republican leaders were prepared to=20 offer as a compromise legislation sponsored by Sacramento Rep. Doug Ose, th= e=20 Republican chairman of the House Government Reform Committee's energy panel= .=20 Ose's bill grew out of an April order by the Federal Energy Regulatory=20 Commission to control rising prices by instituting a spot-market ceiling=20 based on the cost of production at the least-efficient, most costly plant= =20 selling into the market during a power emergency. Ose's bill would make tha= t=20 order effective every day, all day.=20 But Waxman said Ose's legislation is "not viable." "The effect would be to= =20 give the least-efficient, dirtiest plant a guarantee to the highest prices,= =20 and extend that to the rest of the generators," he said.=20 Tauzin said the committee was sending a letter to the commission Wednesday= =20 urging it to consider Ose's proposal, but Ose's own letter touting his=20 approach already is on file at the commission.=20 Ose said he was disappointed that his legislation "fell victim to partisan= =20 politics."=20 "It appears that the Democratic leadership in Congress is more interested i= n=20 rescuing Governor Davis' re-election campaign than providing immediate reli= ef=20 to California consumers," he said.=20 Barton said he believed there were enough votes on the committee to defeat= =20 Democratic price-control amendments and to pass his bill, but that it=20 probably would have drawn only two or three Democrats on final passage.=20 That margin was too slim for the committee to demonstrate bipartisan suppor= t=20 as the measure headed to the House floor. And with the clock running out on= =20 being able to do anything for California this summer, Barton and Tauzin=20 decided to pull the plug.=20 "This is not the end of this process," Tauzin said, saying that leftover=20 provisions of the Barton measure will be taken up when the committee=20 addresses broader energy legislation this summer.=20 But Democrats, too, said the issue isn't over.=20 Waxman said they're beginning a drive immediately to collect the necessary= =20 218 signatures on a petition to force the House Republican leadership to=20 bring cost-based wholesale pricing legislation to the floor.=20 The Bee's David Whitney can be reached at (202) 383-0004 or=20 dwhitney@mcclatchydc.com.=20 Norton open to drilling off Santa Barbara By David Whitney Bee Washington Bureau (Published June 7, 2001)=20 WASHINGTON -- Interior Secretary Gale Norton, testifying at a House hearing= =20 Wednesday, did not rule out resumption of oil and gas exploration off the= =20 California coast, particularly near Santa Barbara, where offshore areas are= =20 not covered by a leasing moratorium.=20 "This is very bad news for the north Santa Barbara Channel," Rep. George=20 Miller of Martinez, a senior Democrat on the House Resources Committee, sai= d=20 after the hearing.=20 Norton appeared before the committee to discuss the Bush administration's= =20 energy policy, one provision of which calls upon the Interior Department to= =20 review legal and policy issues concerning offshore development.=20 Norton said the administration will abide by moratoriums in effect until 20= 12=20 on leasing off much of the West Coast, Florida and the Carolinas.=20 But when asked by Miller about existing lease areas off Santa Barbara and t= he=20 Florida coast that are not covered by the moratoriums, Norton indicated tha= t=20 there is nothing to prevent additional leasing activity now and that, in th= e=20 case of Florida, a departmental review already is under way.=20 Miller called that a concern because of efforts in the Santa Barbara area t= o=20 buy back outstanding leases.=20 "They are clearly setting their sights on the leases," Miller said. "You re= ad=20 all the directives from the Minerals Management Service, the Department of= =20 Interior's energy opinions -- you pull all those together -- and it's prett= y=20 clear they want to figure out how to get them into production. They are=20 looking at a range of laws that have to be changed, and I think weakened, t= o=20 bring those into production."=20 An advisory committee recently recommended that the Interior Department=20 launch a test program to identify the five top offshore natural gas deposit= s=20 around the country to see if deals could be reached with local and state=20 officials to lift drilling moratoriums.=20 Norton declined comment on the issue, saying the recommendation had not=20 reached her desk.=20 The Bee's David Whitney can be reached at (202) 383-0004 or=20 dwhitney@mcclatchydc.com.=20 Energy relief bill mired in dispute over price caps=20 By Finlay Lewis=20 COPLEY NEWS SERVICE=20 June 7, 2001=20 WASHINGTON -- Prospects for prompt action in the House to ease California's= =20 energy crisis virtually vanished yesterday, as Republicans scuttled a=20 short-term relief bill when Democrats refused to drop demands for wholesale= =20 electricity price caps.=20 At the same time, Sen. Tom Daschle, D-S.D., used the occasion of his first= =20 day as Senate majority leader to set the stage for a two-house, partisan=20 showdown by throwing his weight behind price caps.=20 "I will support all necessary efforts to meet that goal," Daschle said in a= =20 letter to Sen. Dianne Feinstein, D-Calif., who is sponsoring price-cap=20 legislation.=20 President Bush is adamantly opposed to price caps, a position backed by mos= t=20 leading Republicans.=20 Rep. Billy Tauzin, chairman of the House Energy and Commerce Committee, sai= d=20 a potential agreement on the energy relief measure collapsed in the lower= =20 house because Democrats insisted on including price caps. Republicans blame= d=20 House Minority Leader Richard Gephardt, D-Mo., for scuttling the deal.=20 "Gephardt .?.?. apparently has made a decision to kowtow to the more radica= l=20 elements of the Democratic caucus in the House, and the centerpiece of thei= r=20 policy is price caps," said Rep. Joe Barton, R-Texas, an energy subcommitte= e=20 chairman who prepared the Republican version of the bill.=20 California Democrats on the energy committee immediately fired back, claimi= ng=20 Tauzin, R-La., had reneged on a pledge to involve them in negotiations over= =20 the bill during the Memorial Day recess.=20 "We never heard from them," said Rep. Henry Waxman of Los Angeles, who is= =20 carrying the Democratic House bill. He denied Gephardt was calling the=20 Democratic shots on the negotiations and contended that a partisan deal on= =20 the bill was never close at hand.=20 Rep. Jane Harman, D-Redondo Beach, blamed an "ideological group" within the= =20 White House and the House GOP caucus with opposing the imposition of=20 "temporary, short-term, cost-plus rates .?.?. that will end the gaming in t= he=20 system."=20 Some California Republicans seemed uneasy by the impasse.=20 "It's going to be a long, hot, difficult summer," said Rep. Mary Bono, R-Pa= lm=20 Springs, referring to anticipated blackouts across the state as air=20 conditioners crank up.=20 The Democratic measure in the House would pressure the Federal Energy=20 Regulatory Commission to roll back soaring wholesale electricity rates, whi= ch=20 have forced California utilities to the brink or into bankruptcy. The state= =20 has been buying power for California's major utilities, spending some $8=20 billion since January.=20 Power generators in some cases charge more than $3,000 per megawatt-hour in= =20 California, though the average cost has been estimated about $300 -- still = 10=20 times higher than it was a year ago. Recently, costs have dropped=20 dramatically.=20 A megawatt-hour can power between 750 and 1,000 homes.=20 Specifically, the bill carried by Waxman seeks to force federal regulators = to=20 impose a rate-setting formula on electricity generators allowing them to=20 recover only their production costs plus a reasonable rate of return.=20 The Bush administration opposes price controls, contending it would=20 discourage the investments needed to develop new energy sources.=20 The Waxman bill now in limbo attempts to do a number of things: improve the= =20 electricity transmission system to get rid of a bottleneck in the Central= =20 Valley; provide assistance to help the poor pay their energy bills; and gra= nt=20 Gov. Gray Davis the authority to temporarily waive some air-pollution limit= s=20 to increase power production when blackouts are imminent.=20 Some of the provisions have been advanced on a separate track by the Bush= =20 administration.=20 Tauzin told reporters that while the House bill is going nowhere, he=20 acknowledged the Democratic takeover in the Senate means there's "no=20 avoiding" an eventual House vote on price caps.=20 He suggested that the GOP strategy may be to play for time. Consumer=20 conservation efforts, among other things, have resulted in decreased=20 wholesale prices in California, at least temporarily. He also cited prospec= ts=20 that new sources of energy may be coming on line.=20 But Daschle made clear in his letter to Feinstein that he is ready to move= =20 ahead with price caps. He noted a recent media report wrongly stated he was= =20 opposed to price controls.=20 "Unless FERC acts soon, your legislation should be taken up and passed to= =20 direct FERC to take action," Daschle wrote.=20 In another energy-related matter, Interior Secretary Gale Norton told a Hou= se=20 committee the administration did not rule out resumption of oil and gas=20 exploration off the California coast, particularly near Santa Barbara where= =20 offshore areas are not covered by a leasing moratorium.=20 "This is very bad news for the north Santa Barbara Channel," California Rep= .=20 George Miller, a senior Democrat on the House Resources Committee, told=20 Scripps-McClatchy Western Service.=20 Norton appeared before the committee to discuss the administration's energy= =20 policy, one provision of which calls upon the Interior Department to review= =20 legal and policy issues concerning offshore development.=20 Norton said the Bush administration will abide by moratoriums in effect unt= il=20 2012 on leasing off of much of the West Coast, Florida and the Carolinas,= =20 according to Scripps-McClatchy.=20 But when asked by Miller about existing lease areas off Santa Barbara and t= he=20 Florida coast that are not covered by the moratoriums, Norton indicated the= re=20 is nothing to prevent additional leasing activity now, and that, in the cas= e=20 of Florida, a departmental review already is under way.=20 Escondido eyed profit from Hanover plant=20 Sides were close, but deal crumbled By Jonathan Heller=20 UNION-TRIBUNE STAFF WRITER=20 June 7, 2001=20 ESCONDIDO -- You don't need much to build a small power plant: A jet engine= =20 off a junked 747, a generator, some emission-control systems and a permit t= o=20 build somewhere.=20 But how much money can you make on such an investment? Most people have no= =20 idea exactly how much. But a rare glimpse into the big-money world of energ= y=20 production can be found in Escondido, where a deal for a proposed 49-megawa= tt=20 plant on city-owned land recently went sour.=20 Documents obtained by The San Diego Union-Tribune show that the deal, if it= =20 had gone through, would have guaranteed the city up to $27 million over 10= =20 years, and made a millionaire of the city's energy consultant.=20 The Houston-based Hanover Co. was willing to gamble about $35 million to=20 build a "peaker" plant on leased land in the city's public works yard. The= =20 plant was designed to run part-time, feeding energy into the region's power= =20 grid during times of peak demand.=20 Hanover and the city negotiated in secret for more than three months before= =20 the deal fell apart. But the two sides appeared close to an agreement on=20 several key points:=20 ?The city would have made $1 million a year in rent, plus a share of the=20 profits from the sale of wholesale electricity. In a figures adjusted for= =20 inflation, the city was expecting to earn from $6.7 million to $27 million= =20 over the initial 10-year lease.=20 ?Hanover was expecting average rate of return of about 37 percent, accordin= g=20 to conservative estimates, and recouping its $35 million within five years.= =20 Any profits above that were to be split 60 percent for Hanover, 40 percent= =20 for the city.=20 ?Dean Tibbs of Concord, a consultant hired by the city, was paid $100 an ho= ur=20 and stood to make 10 percent of any revenue the city received. Tibbs' incom= e=20 was projected to be from $1 million to $3.9 million over 10 years.=20 Whether this deal is typical of other peaker plant proposals around the=20 county is not clear. Most of those are on private property, and not subject= =20 to public disclosure. Some think the Escondido proposal was too optimistic.= =20 "Those numbers are phenomenal," said Brian O'Neill, vice president of=20 Alliance Power, which is building several power plants in other parts of th= e=20 state. "That's absolutely very rich."=20 "I would never enter in a deal like that," agreed Dale Mesple, an energy=20 consultant with Ramco, a San Diego company that is building a similar power= =20 plant on private property on Escondido's West Mission Avenue. "The develope= r=20 is taking all the risk."=20 The deal would have achieved Escondido's stated goal of a power plant with = no=20 financial risk to the city. Its biggest cost would have been paying Tibbs.= =20 When council members learned how much he stood to make, they asked him to= =20 restructure his contract. But that never happened because the deal fell=20 through and he was fired. Tibbs, who did not return phone calls seeking=20 comment, was paid $26,500 for 265 hours of work.=20 Mesple said it was smart of Escondido to load Tibbs' contract with incentiv= es=20 -- such as the 10 percent commission -- because the city had no expertise.= =20 "This way, the city's interests and his interests were aligned," he said.= =20 "This is a tremendous multibillion-dollar business and you don't just=20 arbitrarily step into that."=20 City Council members were reluctant to discuss the proposed plant, which wa= s=20 debated mostly in closed sessions. But Councilwoman June Rady said she=20 opposed the deal because it wouldn't benefit ratepayers.=20 "It was a deal for the power-generating industry and a deal for the=20 consultant," she said. "I could not see where there was a good deal for the= =20 people of Escondido."=20 Ratepayers might not have benefited, but Escondido would have cashed in on= =20 the electricity crisis.=20 The one-acre parcel at the city's public works yard was appraised at about= =20 $350,000, a small fraction of the minimum guaranteed return of $6.7 million= =20 the city would have earned, according to a report done for the city by Keys= er=20 Marston Associates. "On this basis alone, KMA finds that the proposed lease= =20 will provide significant financial benefit to the city," the report said.= =20 It was unclear exactly why Hanover rejected the deal. A Hanover=20 representative did not return calls seeking comment, but a letter from=20 Hanover executive Chet Erwin to the city said the proposal was "excessively= =20 landlord-oriented."=20 Erwin also complained about "significant public opposition to the plant."= =20 That comment was mysterious to city officials because details of the propos= al=20 were never released to the public. There was, however, some public oppositi= on=20 to other power plants proposed in the city.=20 Experts in the power-plant industry said they were not surprised that Hanov= er=20 backed away. While it stood to make millions, its lease payments and revenu= e=20 sharing might have made it hard to make a profit in the future if energy=20 prices nose-dived.=20 "A million dollars a year (in rent)? I don't think electricity prices are= =20 going to be there for the next 10 years," said Alliance's O'Neill.=20 Bob Therkelsen, deputy director of the California Energy Commission, said h= e=20 had heard of deals where cities have been able to charge almost whatever th= ey=20 wanted to lease land to power plant developers. "This is an interesting tim= e=20 and lots of interesting arrangements are coming out of this," Therkelsen=20 said. But the big question was whether Hanover had long-term contracts to= =20 sell its electricity.=20 "Prices are high now but there's no certainty they're going to last more th= an=20 a couple of years," Therkelsen said.=20 Increased hydropower behind price drop=20 By Craig D. Rose=20 UNION-TRIBUNE STAFF WRITER=20 June 7, 2001=20 Experts say state electricity prices are falling because of a surprising=20 level of hydropower, cooler weather, increased supplies and pressure from= =20 investigations into industry practices.=20 But despite the recent price declines, they note, electricity costs remain= =20 nearly 50 percent above last year and volatile, with few believing Californ= ia=20 has seen an end to its power crisis.=20 Peak prices slipped yesterday another $15, falling to a range of $62 to $79= =20 per megawatt hour, according to Bloomberg News. This compares with market= =20 prices that were routinely more than $300 per megawatt hour from late winte= r=20 into the early weeks of spring.=20 Future prices have also declined with contracts for delivering power in Jul= y=20 reportedly available for about $175 per megawatt.=20 Gary Ackerman, executive director of the Western Power Trading Forum, an=20 industry group, said hydropower -- the cheapest electricity source -- has= =20 been running at roughly average levels despite below average levels of=20 snowpack in the mountains.=20 Ackerman said the correlation between snowpack levels and water runoff is= =20 imperfect. He added that there was no certainty that runoff levels would=20 continue at average levels through the summer.=20 A spokesman for Sempra Energy Trading, a sister company of San Diego Gas &= =20 Electric Co., agreed that increased hydropower was helping to lower prices.= =20 The spokesman also noted that some power plants in California that had been= =20 out of commission have returned to service.=20 The state had a record number of plants out of service for months because o= f=20 what suppliers said were required maintenance outages or unplanned=20 breakdowns.=20 Doug Kline, the Sempra spokesman, said the state's success at securing=20 long-term contracts has also taken pressure off spot markets.=20 A veteran power industry consultant said investigations into alleged market= =20 manipulation and a sharpened political focus on high prices have cooled the= =20 industry ardor for pushing the market as high as it might otherwise.=20 "When everyone was not looking, it was a lot easier (to keep prices high),"= =20 the expert said.=20 SDG&E said recent price declines have brought its retail power costs down t= o=20 7.7 cents per kilowatt hour -- the lowest since last summer -- but still 48= =20 percent more than last year's rates at this time.=20 Consumer advocates said beleaguered California electricity customers should= =20 hesitate to draw optimistic conclusions from the recent price declines.=20 "Even the current prices are ridiculously inflated," said Harvey Rosenfield= ,=20 of the Foundation for Taxpayer and Consumer Rights in Santa Monica.=20 Rosenfield said it was possible that the "energy cartel" had blinked in wha= t=20 he describes as its war on consumers. But he added that it is too soon to= =20 tell whether this will become permanent behavior. And he warned that=20 California still faces what he says are exorbitant prices from long-term=20 electricity contracts already signed by the state.=20 Michael Shames, executive director of the Utility Consumers Action Network,= =20 noted that the hottest months and potentially higher prices are ahead.=20 "These prices are not staying here," Shames said.=20 PUC could expand utility discounts to low-income ratepayers=20 By Karen Gaudette ASSOCIATED PRESS=20 June 6, 2001=20 SAN FRANCISCO =01) Reports of slipping energy prices aren't an indication t= hat=20 California is on its way out of the energy crisis yet, a state energy=20 regulator cautioned Wednesday.=20 "It really is premature to say that energy costs are on a downward trend,"= =20 said Jeff Brown, one of five members of the state Public Utilities=20 Commission. "We still have a tough summer to go through, and we still have= =20 the same inherent problems we had a month ago or a week ago."=20 Those "inherent problems" =01) high demand, low supply and a hunch that=20 suppliers purposely limit that supply to drive prices skyward =01) are stil= l=20 under investigation by the PUC and the state attorney general's office.=20 Short-term solutions, such as the electricity price caps Gov. Gray Davis so= =20 desperately wants, are vehemently opposed by the very officials who would= =20 have to enact them =01) the Bush administration and the Federal Energy=20 Regulatory Commission.=20 On Thursday, the PUC considers what state-level action it can take to curb= =20 California's power woes.=20 The meeting agenda includes a request from Commissioner Carl Wood to raise= =20 the discount that low-income utility customers receive on their electric=20 bills.=20 Ratepayers enrolled in the California Alternate Rates on Energy program=20 currently save 15 percent on their bills, though not all eligible ratepayer= s=20 have applied for the program.=20 Expanding the discount would mean either the utilities or ratepayers would= =20 have to absorb the $50 million to $60 million difference, Brown said. A sma= ll=20 portion of residential ratepayers' electric bills already goes to support= =20 CARE.=20 The welfare of small power plants fueled by solar, wind, geothermal, biomas= s=20 power or natural gas, which generate as much as a third of the state's ener= gy=20 supply, also is on the agenda.=20 The PUC plans to review whether payments it ordered the utilities to make t= o=20 those plants have been enough for the plants to resume producing as much=20 electricity as possible to help increase the state's meager supply of=20 megawatts.=20 The PUC recently ordered the utilities to pay the plants after Pacific Gas= =20 and Electric Co. and Southern California Edison Co. paid little or nothing= =20 for several months of electricity deliveries.=20 Both utilities owe the plants millions of dollars in back payments, but say= =20 so far they have kept up with PUC requirements.=20 Senator Fires Warning Shot on Power Costs=20 By RICHARD SIMON, Times Staff Writer=20 ?????WASHINGTON--The new Democratic chairman of the Senate energy committee= =20 bluntly warned federal regulators Wednesday to act more aggressively to rei= n=20 in electricity costs in coming weeks or prepare for Congress to intervene. ?????As Sen. Jeff Bingaman (D-N.M.) turned up the political pressure on the= =20 Federal Energy Regulatory Commission, House GOP leaders scuttled an emergen= cy=20 bill designed to help power-short California through a difficult summer. Th= e=20 measure became bogged down in partisan wrangling over price controls. ?????Bingaman's comments were a sign of the sudden shift in energy politics= =20 in Washington after Vermont Sen. James M. Jeffords' switch from Republican = to=20 independent and the Democrats taking control of the Senate. ?????In his first day as chairman of the Energy and Natural Resources=20 Committee, Bingaman urged the Bush administration to "step up to its=20 responsibility" to ensure that wholesale power rates charged in California= =20 are just and reasonable. ?????And new Senate Majority Leader Tom Daschle (D-S.D.) expressed similar= =20 sentiment in a letter to California Gov. Gray Davis. ?????"Unless FERC takes action," Daschle wrote, "I believe that Congress wi= ll=20 have to consider legislation to address the issue." ?????Bingaman is co-sponsor of a bill introduced by Sens. Dianne Feinstein= =20 (D-Calif.) and Gordon Smith (R-Ore.) that would direct FERC to limit prices= =20 while ensuring that power suppliers recover their costs and still make a=20 reasonable profit. The Bush administration has opposed price controls,=20 contending they would discourage power plant construction. ?????The Feinstein bill appeared unlikely to come up for a vote in the Ener= gy=20 Committee under the former chairman, Sen. Frank Murkowski (R-Alaska).=20 Feinstein said she hopes that if FERC doesn't act within a few weeks, the= =20 committee will take up her bill. "We intend to keep the pressure up," she= =20 said. ?????Even if such a measure were to pass the Senate, it would face stiff=20 opposition in the GOP-controlled House of Representatives and probably a=20 presidential veto. Nor is it clear to what extent Congress can dictate to= =20 FERC, an independent body, what actions to take. But with their newfound=20 power, the Democrats believe they can, at minimum, increase political and= =20 public pressure on the regulators. ?????On broader energy policy, the Democratic control of the Senate has=20 dashed GOP hopes for speedy approval of comprehensive energy legislation.= =20 Democrats complain that President Bush's energy plan relies too heavily on= =20 coal, oil and nuclear power. They are expected to push for greater emphasis= =20 on conservation, energy efficiency and renewable energy such as wind and=20 solar power. ?????Bingaman said that in the short term he hopes to boost energy assistan= ce=20 to low-income households, address gasoline price spikes--perhaps by revisin= g=20 the patchwork of regional fuel recipes--and reduce electricity prices in th= e=20 West. ?????In a breakfast meeting with energy reporters, Bingaman expressed hope= =20 that two new FERC commissioners would act more aggressively in response to= =20 electricity prices, which have bankrupted California's biggest private=20 utility, Pacific Gas & Electric, and cost the state billions of dollars. ?????But he noted that there are limits to what Congress can do. "Once a la= w=20 is on the books, and a federal agency is not enforcing it, then usually the= =20 remedy is in the courts," he said. Davis has threatened to sue FERC. ?????FERC officials said they did not want to get into a war of words with= =20 Bingaman and would let the agency's record speak for itself. "This agency i= s=20 continuing to work extremely hard on the issues facing the country in regar= d=20 to energy," said Walter Ferguson, a top staffer for FERC Chairman Curtis L.= =20 Hebert Jr. ?????The commission actions "are our testament," Ferguson added. "The=20 interests of consumers are paramount, and we will act accordingly." ?????In the House, GOP leaders declared dead a bill that would have provide= d=20 some short-term help to California, such as federal aid to ease a notorious= =20 bottleneck in the state's power grid and authority for the governor to ease= =20 emission rules to boost power supplies during an emergency. ?????Democrats suggested that the legislation was killed to save California= =20 Republicans from a politically difficult vote on price controls. Republican= s=20 contended that Democratic leaders were unwilling to compromise. ?????Rep. Joe Barton (R-Texas), the bill's author, said the impasse made it= =20 unlikely that the legislation could pass Congress and clear the president's= =20 desk in time to help California this summer. ?????Barton complained that his GOP colleagues felt like Charlie Brown abou= t=20 to kick the football only to have the Democrats, like Lucy, pull it away at= =20 the last minute. ?????But Rep. Henry A. Waxman (D-Los Angeles) asserted, "We were never clos= e=20 to a deal." ?????"The Republicans say they cannot move forward on energy legislation=20 because Democrats refuse to support any energy legislation that does not=20 include wholesale price controls, and I say . . . right." added Rep. Bob=20 Filner (D-San Diego). "What good is a bill that does nothing for consumers?= " ?????House Democrats vowed to continue to press for price controls. Some=20 Republican leaders who have resisted price controls appeared to be softenin= g=20 their position, as long as it's called something else. ?????Rep. W.J. "Billy" Tauzin (R-La.), chairman of the House Energy and=20 Commerce Committee, said he was drafting a letter urging FERC to expand its= =20 "price mitigation" order that limits the price that power generators can=20 charge. ?????The order now applies only when the state's power supplies slip low=20 enough to trigger an energy emergency. Rep. Doug Ose (R-Sacramento) has=20 introduced legislation to expand the order to cover all times of day and th= e=20 entire Western region. ?????Democrats contend the Republican proposal doesn't go far enough. For= =20 example, the top price paid for power would still be set by the least=20 efficient generator, providing bigger profits for newer, more efficient=20 generators. ?????Davis said in a letter to lawmakers that the FERC order is a "faulty= =20 foundation on which to build relief for California. It is extremely limited= =20 in its scope and applicability and provides little, if any, real price reli= ef=20 for consumers and businesses in California." ?????FERC rules prevent staffers from commenting on specific matters=20 scheduled for commission action, such as any changes to the California pric= e=20 control plan. "That issue is pending and we are prohibited from commenting = on=20 it," said Ferguson. ?????Democrats contend that as Californians begin receiving higher utility= =20 bills in the mail, the pressure will grow on Washington officials to clamp= =20 down more vigorously on wholesale electricity prices. ?????But Rep. Mary Bono (R-Palm Springs), who has opposed price controls,= =20 said that at a recent town hall meeting in her district, "out of probably 3= 0=20 questions, one came up on caps. People in California are looking for real= =20 solutions, and they recognize that's a quick political fix." ---=20 ?????Times staff writer Ricardo Alonso-Zaldivar contributed to this story. Copyright 2001 Los Angeles Times=20 Power switch -- contracts now in limbo=20 Nosedive in electricity prices will let state deal from strength=20 David Lazarus, Chronicle Staff Writer Thursday, June 7, 2001=20 ,2001 San Francisco Chronicle=20 URL: http://www.sfgate.com/cgi-bin/article.cgi?f=3D/c/a/2001/06/07/MN177308= .DTL=20 Emboldened by an unexpected plunge in electricity prices, state officials= =20 said yesterday that they are prepared to press their advantage and walk awa= y=20 from nearly two dozen long-term power contracts that now are at above-marke= t=20 rates.=20 This represents a complete reversal from the state's position of just a few= =20 weeks ago, when officials were at the mercy of power companies and were all= =20 but begging for any available megawatts.=20 The state Department of Water Resources already has signed 38 contracts to= =20 purchase electricity at fixed prices over the next decade. But 23 other=20 contracts, or about 40 percent of the total, remain in negotiations.=20 "We may not need all 23," said Ray Hart, deputy director of the state=20 Department of Water Resources. The department so far has spent about $8=20 billion for electricity on behalf of California's cash-strapped utilities.= =20 If power companies are unwilling to meet the state's demands for more=20 favorable prices, he said, "I don't think all those contracts will come to= =20 term."=20 Steve Maviglio, a spokesman for Gov. Gray Davis, was quick to underline=20 California's changed fortunes as an electricity buyer.=20 "We're in the driver's seat now," he said. "There's no question about that.= "=20 Other officials were feeling similarly encouraged by California's stronger= =20 position to press their attack on power companies that they suspect of havi= ng=20 pushed electricity prices higher.=20 Larry Drivon, special counsel to a state Senate committee investigating=20 alleged price manipulation, said the sudden drop in power costs will not=20 derail attempts to determine if power companies illegally gouged customers.= =20 "Prices have gone down, but they're also capable of going back up again in = a=20 hurry," he said.=20 Electricity prices have tumbled to the lowest levels since April 2000 -- as= =20 low as $50 per megawatt hour yesterday, compared with more than $500 earlie= r=20 this year.=20 Experts attributed the drop to a decline in the price of natural gas, which= =20 is the fuel that runs most power plants. Milder weather has cut power deman= d=20 by reducing use of air conditioners, which in turn slashes the amount of ga= s=20 required by generators.=20 Experts also cited increased electricity production at plants and dams, as= =20 well as greater conservation by consumers and businesses.=20 "The Armageddon we thought we were facing this summer has backed away a bit= ,=20 " said Severin Borenstein, director of the University of California Energy= =20 Institute in Berkeley.=20 "These lower prices are saying that the market is not going to be as tight = as=20 expected," he said. "That means fewer blackouts."=20 It also means California's long-term contracts increasingly appear to be a= =20 raw deal if power prices continue to fall.=20 A state report to be released today says the average contract price is abou= t=20 $70 per megawatt hour over 10 years and that the average price over the nex= t=20 five years is $84 -- well above current market rates.=20 The average contract price in the third quarter of 2001 is $138, rising to= =20 $142 in the fourth quarter, the report says.=20 LOOKING FOR BETTER DEALS "I want to work for more favorable deals," said Hart at the Department of= =20 Water Resources.=20 However, he said, details of the accords will not be made available for the= =20 foreseeable future because that could jeopardize the state's bargaining=20 position in any subsequent talks with generators.=20 This contradicted a pledge from the governor last week that details of the= =20 contracts would be revealed within 30 days.=20 The Chronicle and other media outlets are suing for access to the accords,= =20 arguing that the public has a right to know how $40 billion in tax dollars = is=20 being spent.=20 Senate President Pro Tem John Burton, D-San Francisco, said he plans to=20 discuss with colleagues how the drop in power prices can be used to=20 accelerate the release of the contracts.=20 "We can't know if the contracts show whether the state is being smart or=20 stupid until we see them," he said.=20 PRICE DROP OUT OF BLUE This much at least is clear: Almost no one could have forecast just weeks a= go=20 that wholesale electricity prices would drop below $100 this summer.=20 A few months ago, June electricity prices on the forward power market were= =20 running close to $400.=20 One reason for the changed outlook, ironically, is last week's heat wave,= =20 which left Northern California sizzling and would have been expected to cau= se=20 electricity prices to soar as millions of air conditioners kicked into gear= .=20 Instead, power prices remained steady, "and that really changed the=20 psychology of the market," said Brian Jordan, who monitors electricity=20 trading at energy market researcher Platts.=20 Michael Wilczek, another Platts analyst, said that price stability was=20 bolstered by an increased number of generating plants returning to service= =20 after spring repairs.=20 He also cited a surge in electricity output from regional dams as the high= =20 temperatures caused mountain snow to melt.=20 NIGHTMARE HAS ABATED "Now, things aren't looking like the nightmare scenario some people were=20 expecting," Wilczek said. "But it still could be a volatile summer."=20 Jeff Brown, a member of the state Public Utilities Commission, said the=20 situation could change "in a New York minute."=20 "It's only June," Brown said. "We've got to go through July, August and=20 September."=20 Paul Clanon, the head of PUC's energy division, agreed with Brown that=20 natural gas costs could spike again.=20 "I wouldn't hold out big hope for anyone that those decreases are going to = be=20 permanent," Clanon said.=20 Indeed, if there is one thing Californians have learned, it is that trying = to=20 guess where energy prices are headed is a sucker's game. In April, for=20 example, the August electricity price on forward markets was about $700.=20 Yesterday it was closer to $200.=20 This summer's weather will be the deciding factor in determining whether th= e=20 actual August price on daily markets will be as low as $30 or back up at th= e=20 $1,900 level seen earlier this year.=20 "The battle isn't over," said Borenstein at the UC Energy Institute. "But= =20 we've seen real progress."=20 Chronicle staff writer Bernadette Tansey contributed to this report. / E-ma= il=20 David Lazarus at dlazarus@sfchronicle.com.=20 ,2001 San Francisco Chronicle ? Page?A - 1=20 Developments in California's energy crisis=20 Thursday, June 7, 2001=20 ,2001 Associated Press=20 URL:=20 http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/06/07/s= tate1 105EDT0153.DTL=20 (06-07) 08:05 PDT (AP) --=20 Developments in California's energy crisis:=20 THURSDAY: * No power alerts Thursday as reserves stay above 7 percent.=20 WEDNESDAY: * No power alerts Wednesday as reserves stay above 7 percent.=20 * Federal antitrust regulators join the crowd of government authorities=20 looking for possible abuses in California's high-priced wholesale electrici= ty=20 market. The U.S. Justice Department last month opened an antitrust probe in= to=20 a power sales partnership between Arlington, Va.-based AES Corp. and Tulsa,= =20 Okla.-based Williams Energy. AES disclosed the investigation in a Securitie= s=20 and Exchange Commission filing this week.=20 * Reports of slipping energy prices aren't an indication that California is= =20 on its way out of the energy crisis yet, says Jeff Brown, one of five membe= rs=20 of the state Public Utilities Commission. He warns of "a tough summer" ahea= d=20 and says the state still has "the same inherent problems we had a month ago= =20 or a week ago."=20 * The Assembly, by a 42-7 vote, approves a resolution asking the Federal=20 Energy Regulatory Commission to "impose interim price caps until the=20 California power market has stabilized."=20 * Officials at the Del Mar Fair say they will keep midway rides going witho= ut=20 pulling power from the grid by operating on generators during the fair run= =20 from June 15 to July 4.=20 * Shares of Edison International close at $9.98, down 7 cents. PG&E Corp.= =20 closes at $11.07, down 18 cents. Sempra Energy, the parent company of San= =20 Diego Gas & Electric, closes at $26.71, down 20 cents.=20 WHAT'S NEXT: * Davis' representatives continue negotiating with Sempra, the parent compa= ny=20 of San Diego Gas and Electric Co., to buy the utility's transmission lines.= =20 THE PROBLEM: High demand, high wholesale energy costs, transmission glitches and a tight= =20 supply worsened by scarce hydroelectric power in the Northwest and=20 maintenance at aging California power plants are all factors in California'= s=20 electricity crisis.=20 Edison and PG&E say they've lost nearly $14 billion since June to high=20 wholesale prices the state's electricity deregulation law bars them from=20 passing on to consumers. PG&E, saying it hasn't received the help it needs= =20 from regulators or state lawmakers, filed for federal bankruptcy protection= =20 April 6.=20 Electricity and natural gas suppliers, scared off by the two companies' poo= r=20 credit ratings, are refusing to sell to them, leading the state in January = to=20 start buying power for the utilities' nearly 9 million residential and=20 business customers. The state is also buying power for a third investor-own= ed=20 utility, San Diego Gas & Electric, which is in better financial shape than= =20 much larger Edison and PG&E but also struggling with high wholesale power= =20 costs.=20 The Public Utilities Commission has approved average rate increases of 37= =20 percent for the heaviest residential customers and 38 percent for commercia= l=20 customers, and hikes of up to 49 percent for industrial customers and 15=20 percent or 20 percent for agricultural customers to help finance the state'= s=20 multibillion-dollar power buys.=20 ,2001 Associated Press ?=20 House GOP leaders backing away from short-term fix=20 H. JOSEF HEBERT, Associated Press Writer Thursday, June 7, 2001=20 ,2001 Associated Press=20 URL:=20 http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2001/06/07/n= ation al0411EDT0472.DTL=20 (06-07) 01:11 PDT WASHINGTON (AP) --=20 A partisan fight over price caps on Western electricity sales has brought a= =20 halt to House attempts to enact short-term energy legislation aimed at=20 helping California deal with this summer's power crisis.=20 House Republicans said Wednesday they were no longer pursuing the=20 legislation, but would concentrate on putting President Bush's long-term=20 energy plan into law, beginning with a bill aimed at addressing refinery=20 problems in making gasoline.=20 "We were no longer going to waste any more time to try to resolve an issue= =20 that can't be resolved," Rep. Billy Tauzin, R-La., chairman of the Energy a= nd=20 Commerce Committee, said in an interview, when asked about the dispute over= =20 electricity price caps.=20 Tauzin dismissed charges by Democrats that he was bottling up the=20 legislation, fearing a price cap was gaining momentum and might pass the fu= ll=20 House. "I think we would have prevailed on the floor as well," said Tauzin,= =20 an opponent of the price cap legislation.=20 Amid astronomical power prices in California and other parts of the West,= =20 there has been growing political pressure in Congress for legislation to=20 force federal regulators to take additional steps to rein in wholesale=20 electricity prices that have been ten times what they were pre-crisis in=20 1999.=20 California so far has paid nearly $50 billion for power this year, compared= =20 to about $7 billion in all of 1999. Utilities in the Northwest also have=20 sharply boosted prices as shortages in hydroelectric power have forced=20 purchasers to buy on the expensive spot market, driving up retail prices.= =20 Rep. Henry Waxman, D-Calif., had planned to offer an amendment to a=20 short-term energy bill that would force the Federal Energy Regulatory=20 Commission to peg wholesale electricity prices in the West to cost of=20 production plus a "reasonable" profit. Republicans have rejected the=20 amendment and when negotiations on a compromise failed Tauzin canceled a=20 series of votes on the bill Wednesday.=20 House Democratic leader Richard Gephardt of Missouri accused the Republican= =20 majority of "ignoring the concerns of millions of Americans" by foreclosing= =20 further action on short-term energy legislation, including price caps.=20 Democrats, who took control of the Senate on Wednesday, have said they woul= d=20 take up a price cap proposal shortly, although its prospects for Senate=20 passage are uncertain because of strong Republican opposition.=20 GOP congressional leaders are following the lead of President Bush, who=20 repeatedly has voiced his opposition to federal price controls arguing they= =20 will hinder development of more electricity supplies and add to the risk of= =20 blackouts. California officials and many Democrats contend price caps can b= e=20 structured in such a way as to provide adequate profits to spur investment.= =20 Likewise federal regulators have refused to impost cost-of-service price=20 caps.=20 "The president's not willing to do anything," said Waxman in an interview.= =20 "The Federal Energy Regulatory Commission is giving us the back of their=20 hands. Now the Republican Congress is telling us as well that they have no= =20 interest in the problem."=20 Tauzin said many of the provisions in the energy bill that had awaited a vo= te=20 in his committee -- such as additional money for low income energy assistan= ce=20 and a long-term plan to ease power grid congestion in California -- are bei= ng=20 done anyway.=20 "All they (Democrats) wanted is price caps, and they're not going to get=20 that," said Tauzin.=20 Instead, Tauzin said he was turning to legislation addressing Bush's broade= r=20 energy plan, beginning with measures to address gasoline price spikes. He= =20 said he hoped within a few weeks to move a bill easing the requirement for= =20 so-called "boutique" gasoline blends imposed to meet clean air requirements= .=20 It's not certain whether such legislation would come soon enough to ease th= is=20 summer's gasoline price problems, but Tauzin said it could help avert price= =20 spikes next summer.=20 The White House also has asked the Environmental Protection Agency to addre= ss=20 the boutique fuel issue administratively. Sen. Jeff Bingaman, D-N.M., the n= ew=20 chairman of the Senate Energy and Natural Resources Committee, also has=20 singled out this issue as one he wants to resolve in a way, he says, that a= ir=20 quality does not suffer.=20 Tauzin said that after the gasoline legislation, he planned to focus=20 attention on a package of energy efficiency and conservation measures,=20 followed by separate legislation addressing energy production issues.=20 ,2001 Associated Press ?=20 Power switch -- contracts now in limbo=20 Nosedive in electricity prices will let state deal from strength=20 David Lazarus, Chronicle Staff Writer Thursday, June 7, 2001=20 ,2001 San Francisco Chronicle=20 URL:=20 http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2001/06= /07/M N177308.DTL=20 Emboldened by an unexpected plunge in electricity prices, state officials= =20 said yesterday that they are prepared to press their advantage and walk awa= y=20 from nearly two dozen long-term power contracts that now are at above-marke= t=20 rates.=20 This represents a complete reversal from the state's position of just a few= =20 weeks ago, when officials were at the mercy of power companies and were all= =20 but begging for any available megawatts.=20 The state Department of Water Resources already has signed 38 contracts to= =20 purchase electricity at fixed prices over the next decade. But 23 other=20 contracts, or about 40 percent of the total, remain in negotiations.=20 "We may not need all 23," said Ray Hart, deputy director of the state=20 Department of Water Resources. The department so far has spent about $8=20 billion for electricity on behalf of California's cash-strapped utilities.= =20 If power companies are unwilling to meet the state's demands for more=20 favorable prices, he said, "I don't think all those contracts will come to= =20 term."=20 Steve Maviglio, a spokesman for Gov. Gray Davis, was quick to underline=20 California's changed fortunes as an electricity buyer.=20 "We're in the driver's seat now," he said. "There's no question about that.= "=20 Other officials were feeling similarly encouraged by California's stronger= =20 position to press their attack on power companies that they suspect of havi= ng=20 pushed electricity prices higher.=20 Larry Drivon, special counsel to a state Senate committee investigating=20 alleged price manipulation, said the sudden drop in power costs will not=20 derail attempts to determine if power companies illegally gouged customers.= =20 "Prices have gone down, but they're also capable of going back up again in = a=20 hurry," he said.=20 Electricity prices have tumbled to the lowest levels since April 2000 -- as= =20 low as $50 per megawatt hour yesterday, compared with more than $500 earlie= r=20 this year.=20 Experts attributed the drop to a decline in the price of natural gas, which= =20 is the fuel that runs most power plants. Milder weather has cut power deman= d=20 by reducing use of air conditioners, which in turn slashes the amount of ga= s=20 required by generators.=20 Experts also cited increased electricity production at plants and dams, as= =20 well as greater conservation by consumers and businesses.=20 "The Armageddon we thought we were facing this summer has backed away a bit= ,=20 " said Severin Borenstein, director of the University of California Energy= =20 Institute in Berkeley.=20 "These lower prices are saying that the market is not going to be as tight = as=20 expected," he said. "That means fewer blackouts."=20 It also means California's long-term contracts increasingly appear to be a= =20 raw deal if power prices continue to fall.=20 A state report to be released today says the average contract price is abou= t=20 $70 per megawatt hour over 10 years and that the average price over the nex= t=20 five years is $84 -- well above current market rates.=20 The average contract price in the third quarter of 2001 is $138, rising to= =20 $142 in the fourth quarter, the report says.=20 LOOKING FOR BETTER DEALS "I want to work for more favorable deals," said Hart at the Department of= =20 Water Resources.=20 However, he said, details of the accords will not be made available for the= =20 foreseeable future because that could jeopardize the state's bargaining=20 position in any subsequent talks with generators.=20 This contradicted a pledge from the governor last week that details of the= =20 contracts would be revealed within 30 days.=20 The Chronicle and other media outlets are suing for access to the accords,= =20 arguing that the public has a right to know how $40 billion in tax dollars = is=20 being spent.=20 Senate President Pro Tem John Burton, D-San Francisco, said he plans to=20 discuss with colleagues how the drop in power prices can be used to=20 accelerate the release of the contracts.=20 "We can't know if the contracts show whether the state is being smart or=20 stupid until we see them," he said.=20 PRICE DROP OUT OF BLUE This much at least is clear: Almost no one could have forecast just weeks a= go=20 that wholesale electricity prices would drop below $100 this summer.=20 A few months ago, June electricity prices on the forward power market were= =20 running close to $400.=20 One reason for the changed outlook, ironically, is last week's heat wave,= =20 which left Northern California sizzling and would have been expected to cau= se=20 electricity prices to soar as millions of air conditioners kicked into gear= .=20 Instead, power prices remained steady, "and that really changed the=20 psychology of the market," said Brian Jordan, who monitors electricity=20 trading at energy market researcher Platts.=20 Michael Wilczek, another Platts analyst, said that price stability was=20 bolstered by an increased number of generating plants returning to service= =20 after spring repairs.=20 He also cited a surge in electricity output from regional dams as the high= =20 temperatures caused mountain snow to melt.=20 NIGHTMARE HAS ABATED "Now, things aren't looking like the nightmare scenario some people were=20 expecting," Wilczek said. "But it still could be a volatile summer."=20 Jeff Brown, a member of the state Public Utilities Commission, said the=20 situation could change "in a New York minute."=20 "It's only June," Brown said. "We've got to go through July, August and=20 September."=20 Paul Clanon, the head of PUC's energy division, agreed with Brown that=20 natural gas costs could spike again.=20 "I wouldn't hold out big hope for anyone that those decreases are going to = be=20 permanent," Clanon said.=20 Indeed, if there is one thing Californians have learned, it is that trying = to=20 guess where energy prices are headed is a sucker's game. In April, for=20 example, the August electricity price on forward markets was about $700.=20 Yesterday it was closer to $200.=20 This summer's weather will be the deciding factor in determining whether th= e=20 actual August price on daily markets will be as low as $30 or back up at th= e=20 $1,900 level seen earlier this year.=20 "The battle isn't over," said Borenstein at the UC Energy Institute. "But= =20 we've seen real progress."=20 Chronicle staff writer Bernadette Tansey contributed to this report. / E-ma= il=20 David Lazarus at dlazarus@sfchronicle.com.=20 ,2001 San Francisco Chronicle ? Page?A - 1=20 Senator ready to strong-arm energy panel=20 New committee chairman to give regulators 2 weeks to set price caps=20 Carolyn Lochhead, Chronicle Washington Bureau Thursday, June 7, 2001=20 ,2001 San Francisco Chronicle=20 URL:=20 http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2001/06= /07/M N99766.DTL=20 Washington -- The new Democratic chairman of the Senate Energy and Natural= =20 Resources Committee warned yesterday that unless federal regulators act=20 within two weeks to intervene in California's electricity market, the Senat= e=20 will try to force them to do so.=20 But over in the House of Representatives, a partisan brawl over limits on t= he=20 wholesale price of energy led Republicans to withdraw their bill, which is= =20 intended to help California out of its electricity mess.=20 Even as Republicans insisted that price caps would never win approval in th= e=20 House, they sent a letter to federal regulators urging a tough stand on=20 market manipulation and all but conceded that the issue was beginning to hu= rt=20 them politically.=20 The actions put the two chambers -- and the two parties -- on a collision= =20 course over price controls that promises to play out in Washington through= =20 the summer, waxing or waning with California's expected blackouts.=20 The Bush administration strongly opposes controls, saying they would not=20 alleviate the blackouts and might make them worse. Gov. Gray Davis and=20 Democrats in Congress insist that price controls will solve the short-term= =20 problem by stanching the flow of money out of the state.=20 The effort by the Democrats has been given a boost by their takeover of the= =20 Senate. Soft-spoken and Stanford-educated Democratic Sen. Jeff Bingaman of= =20 New Mexico, who now heads the energy committee, warned he would wait severa= l=20 weeks to see if President Bush's two new appointees to the Federal Energy= =20 Regulatory Commission would take stronger action on prices.=20 Patrick Wood, head of the Texas public utilities commission, and Nora Mead= =20 Brownell, a Pennsylvania public utilities commissioner, were sworn in this= =20 week, and Wood is said to be in line for the regulatory commission=20 chairmanship.=20 Bingaman has co-sponsored California Democrat Dianne Feinstein's bill to=20 order the regulatory commission to impose price caps. Senate Majority Leade= r=20 Tom Daschle, D-S.D., wrote Feinstein on Tuesday saying he supported her bil= l,=20 too, and would try to bring it to a vote.=20 "I hope that FERC will act on its own volition," Bingaman said yesterday. "= I=20 don't think Congress has the experience to step in and do it for them."=20 But if the energy regulators are unwilling, he said, he would consider Sena= te=20 action.=20 In the House, however, Republicans charged the Democrats with using the pri= ce=20 caps issue purely to score political points with voters.=20 Rep. Billy Tauzin, the Louisiana Republican who heads the House Commerce=20 Committee, said he decided to pull the energy legislation late Tuesday=20 evening "for tactical and practical reasons," saying many of the proposals = --=20 such as plans to clear the state's Path 15 transmission bottleneck -- had= =20 already been adopted by Davis or Bush.=20 Tauzin also said that while Republicans had the votes to move the bill, it= =20 would pass narrowly and probably arrive too late to avert this summer's=20 expected problems.=20 Tauzin effusively praised Rep. Henry Waxman, D-Los Angeles, for making a=20 "very sincere effort" to bridge the partisan differences over price control= s.=20 But Texas Republican Joe Barton charged that House Democratic leader Dick= =20 Gephardt had short-circuited the talks so the Democrats could keep price=20 controls alive as a political issue.=20 "Mr. Gephardt apparently made a decision to kowtow to the more radical=20 elements of the Democratic caucus," Barton said. He said committee Democrat= s,=20 including Anna Eshoo of Palo Alto and Waxman, "would get real close" to=20 agreement, but then like Lucy with the football in the Peanuts cartoon,=20 pulled away at the last minute.=20 "It appeared to me that Mr. Gephardt did not want a deal," Barton said.=20 No sooner did the Republicans leave their press conference than Democrats= =20 charged into the same room to deny any such thing.=20 "We were never close to a deal," Waxman said. The Democrats said a proposal= =20 by Sacramento Republican Doug Ose to widen an April order by the Federal=20 Energy Regulatory Commission -- which imposes a benchmark price during Stag= e=20 3 power alerts and heightened scrutiny of power sales over that price -- wa= s=20 grossly inadequate.=20 Waxman charged that the Republicans were deliberately letting California=20 suffer.=20 "The FERC has said they weren't going to do anything to help California, th= e=20 president has refused to do anything to help California, and now the=20 Republican Congress is refusing to help us as well," Waxman said.=20 But Fresno Republican George Radanovich said the two parties had been in=20 serious discussions on a Democratic proposal to impose price caps until 80= =20 percent of the state's electricity purchases are locked into long-term=20 contracts.=20 But that fell apart, he said, when some worried whether 80 percent was the= =20 correct number and whether Congress should even be making such decisions.= =20 "For politics, they want to keep the price cap issue," Radanovich said of t= he=20 Democrats. "To me it's really a red herring. I think the governor's been=20 successful in trying to make this argument, and I think he needs to focus o= n=20 getting himself out of the electricity purchasing business, restoring the= =20 creditworthiness of the utilities and getting them into long-term contracts= .=20 If he'd put all his energy into those three things, we'd be out of this=20 problem."=20 The price-control clash
|