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Enron Mail |
Date: Wednesday, April 25, 2001
Issue: Electricity Crisis, Potential Natural Gas Crisis What is Happening: Check-in Session BACKGROUND "California could cut electricity consumption by as much as 4 percent this summer under a plan that aims to shift the way the cost of power is communicated and billed to the state's biggest users. The $35 million program, which has been endorsed by Gov. Gray Davis and is being considered by state regulators, would entail installing 15,000 new meters and upgrading 5,000 more to reflect the hourly price of electricity. The state's largest users, (the 21,000 customers who consume more than 200 kilowatts of electricity at any given time,) would receive the meters and have the option of participating in "real-time" pricing. By using these meters, they can moderate their behavior to use less when supply is tight or more when it is available" (Contra Costa Times 4-24-01). RECENT CHANGES AND DEVELOPMENTS "SB 28X (Sher) passed out of the Assembly yesterday on a 67-4 vote. The legislation is expected to cost the state $3.2 million to implement. Key provisions of SB 28x would: (1) Require cities, counties and other local agencies to submit initial comments on a power plant application within 45 days of its filing. (2) Require the California Energy Commission to issue final decisions on certifying "repowering" projects -- modernization of existing plants -- within 180 days, instead of a year. (3) Extend by 17 months -- until Dec. 31, 2002 -- an expedited siting process for temporary power plants, known as "peakers." (4) Mandate that power plants required to renovate their facilities to reduce air pollution do so by Jan. 1, 2004, under the auspices of the state Air Resources Board. (5) Require payment of unemployment-compensation benefits to workers left jobless in any week because of unscheduled power outages caused by shortages of supply. (6) Provide incentives for "distributed generation" in which homeowners or merchants produce electricity for themselves and others using solar panels, turbines or other such equipment. Utility fees, called "standby charges," would be waived up to 10 years for most such customers (Sacramento Bee 4-24-01). ? "Los Angeles County government expects to nearly double its energy bill for next year, from $75 million to a whopping $140 million, a hike that will cut into the county's surplus and could force service cuts if prices continue to rise through what all sides predict will be a difficult year in the state's energy crisis" (LA Times 4-24-01). "California has spent $5.1 billion from the state budget purchasing electricity this year" (LA Times 4-24-01). WHAT THE REPUBLICANS ARE SAYING Assembly Republicans supported SB 28x, which passed Monday by a vote of 67-4, but some said it doesn't go far enough in solving the energy crisis. "We'd like to see more siting bills," said Assemblyman Tony Strickland, R-Thousand Oaks. "We need more electricity supply and generation. Anyone who thinks this is enough to solve the crisis is really in Disneyland." The Assembly Republican Caucus ? Member Services Division 916-319-3901 THE GOOD, THE BAD, AND THE UGLY "California's economy is decelerating, and the state is spending many billions of dollars -- how many, exactly, is still unknown -- on power purchases to prevent blackouts. The combined effect of these separate, if interrelated, factors is to hammer the state budget in ways that no one in the Capitol considered possible. The Davis administration's bean counters have concluded, Capitol sources said Monday, that the state's revenues for the 2001-02 fiscal year will run several billion dollars under forecasts, thanks largely to the severe decline in the state's high-technology industry. The state could absorb a sharp dip in its tax revenues if its reserves were available. Davis had anticipated starting the 2001-02 fiscal year July 1 with $6.6 billion in general-fund reserves and ending it a year later with nearly $4 billion still in the kitty. The newly discovered revenue shortfall would have reduced the reserves but not wiped them out. Those numbers, however, don't take into account the nearly $6 billion that the state has committed to buying power, continuing at the rate of $2 billion a month, and only a tiny portion of the outlay being covered by utility ratepayers. At current rates, the state will be in the hole by $10 billion by July 1" (Sacramento Bee 4-24-01).
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