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From:jeff.dasovich@enron.com
To:alan.comnes@enron.com, angela.schwarz@enron.com, beverly.aden@enron.com,bill.votaw@enron.com, brenda.barreda@enron.com, carol.moffett@enron.com, cathy.corbin@enron.com, chris.foster@enron.com, christina.liscano@enron.com, craig.sutter@enron.com, dan
Subject:CA Secretary of State Bill Jones Denounces "Free-Wheeling EnergySpending Spree"
Cc:
Bcc:
Date:Tue, 13 Mar 2001 09:46:00 -0800 (PST)

----- Forwarded by Jeff Dasovich/NA/Enron on 03/13/2001 05:46 PM -----

=09Jean Munoz <jmunoz@mcnallytemple.com<
=0903/13/2001 05:47 PM
=09=09=20
=09=09 To: Katie Kaplan <kaplan@iepa.com<, "'Andy Brown (E-mail)'"=20
<ABB@eslawfirm.com<, "'B Brown Andy (E-mail)'" <andybrwn@earthlink.net<,=20
"'Baker Carolyn (E-mail)'" <cabaker@duke-energy.com<, "'Bob Escalante=20
(E-mail)'" <rescalante@riobravo-gm.com<, "'Bob Weisenmiller (E-mail)'"=20
<rbw@mrwassoc.com<, "'Curtis Kebler (E-mail)'"=20
<curtis_l_kebler@reliantenergy.com<, "'Douglas Kerner (E-mail)'"=20
<DKK@eslawfirm.com<, "'Greg Blue (E-mail)'" <gtbl@dynegy.com<, "'Jan=20
Smutny-Jones (E-mail)'" <smutny@iepa.com<, "'Jeff Dasovich (E-mail)'"=20
<Jeff.Dasovich@enron.com<, "'Joe Ronan (E-mail)'" <joer@calpine.com<, "'Joh=
n=20
Larrea (E-mail)'" <john.g.larrea@williams.com<, "'John Stout (E-mail)'"=20
<John_H_Stout@reliantenergy.com<, "'Julee Malinowski-Ball (E-mail)'"=20
<jmball@ns.net<, "'Kassandra Gough (E-mail)'" <kgough@calpine.com<, "'kent=
=20
Palmerton (E-mail)'" <kent.palmerton@williams.com<, "'Kristin Vellandi=20
(E-mail)'" <kvellandi@pstrategies.com<, "'Lynn Lednicky (E-mail)'"=20
<lale@dynegy.com<, "'Marty Wilson (E-mail)'" <mwilson@pstrategies.com<,=20
"'McNally Ray (E-mail)'" <rmcnally@mcnallytemple.com<, "''Nam Nguyen'=20
(E-mail)'" <nam.nguyen@powersrc.com<, "'Norton Kelli (E-mail)'"=20
<knorton@mcnallytemple.com<, "'Paula Hall-Collins (E-mail)'"=20
<paula.hall-collins@williams.com<, "'Pigott Jack (E-mail)'"=20
<jackp@calpine.com<, "'Richard Hyde (E-mail)'" <rwhyde@duke-energy.com<,=20
"'Rob Lamkin (E-mail)'" <rllamkin@seiworldwide.com<, "'Roger Pelote=20
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<smara@enron.com<, "'Theo Pahos (E-mail)'" <tpahos@ppallc.com<, "'Tom Ross=
=20
(E-mail)'" <tross@mcnallytemple.com<, "Carol H Hudson (E-mail)"=20
<Chudson@iepa.com<, steven kelly <steven@iepa.com<, "'Anne Kelly (E-mail)'"=
=20
<kelly@hnks.com<, "'Chuck Cole (E-mail)'" <ccole@advocation-inc.com<,=20
"'Delany Hunter (E-mail)'" <dhunter@smithandkempton.com<, "'DJ Smith=20
(E-mail)'" <djsmith@smithandkempton.com<, "'Hedy Govenar (E-mail)'"=20
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(E-mail)'" <Oharen@hmot.com<, "'Mike Monagan (E-mail)'" <mrmonagan@aol.com<=
,=20
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<robbiz@cwo.com<, "'Ron Tom (E-mail)'" <Rtom@govadv.com<, "'Scott Govenar=
=20
(E-mail)'" <sgovenar@govadv.com<, "'Susan Mccabe (E-mail)'"=20
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<deborah.fiorito@dynegy.com<, <tcwillia@duke-energy.com<
=09=09 cc:=20
=09=09 Subject: CA Secretary of State Bill Jones Denounces "Free-Wheeling E=
nergy=20
Spending Spree"


JONES DENOUNCES LACK OF OVERSIGHT AND ACCOUNTABILITY
OVER MONTHS OF FREE-WHEELING ENERGY SPENDING SPREE
CALLS FOR STATE CONTROLLER TO AUDIT ALL ENERGY-RELATED EXPENSES AND=20
CONTRACTS; URGES GOVERNOR TO BEGIN MONTHLY BRIEFINGS WITH LEGISLATIVE=20
BI-PARTISAN LEADERSHIP ON PROGRESS OF POWER PLANT CONSTRUCTION AND DETAILS =
OF=20
LONG-TERM CONTRACTS

LOS ANGELES - Denouncing the fact that there is currently no oversight or=
=20
accountability for the billions of taxpayers' dollars that are being spent =
by=20
the Governor and his administration, Secretary of State Bill Jones totals=
=20
called on State Controller Kathleen Connell to begin an immediate full and=
=20
complete audit of all energy-related financial transactions. As chief=20
financial of officer for the state, the controller has the sole=20
responsibility to "provide sound fiscal control over both receipts and=20
disbursements of public funds and to determine legality and accuracy of eve=
ry=20
claim against the state."

"There is no oversight and no accountability to ensure that the taxpayers' =
=20
money is being spent wisely," Jones sad. "The enormous outlays of money to=
=20
purchase energy on a daily basis as well as these binding long-terrn=20
contracts will have a tremendous fiscal impact on the state for years to co=
me=20
- I believe essentially, mortgaging our future for our children and=20
grandchildren."

Additionally, Jones called on Governor Davis to immediately meet with=20
legislative bi-partisan leaders to brief them fully as to the terms and cos=
ts=20
of all contracts and purchases on the spot market just as the President's=
=20
team meets with congressional leaders to discuss issues of
national security.

Jones also strongly urged the Governor to begun monthly briefings immediate=
ly=20
w=06=15th legislative leaders to provide on-going updates on the progress o=
f new=20
power plant construction and an up-to-date report of California's power=20
supplies to ensure adequate resources for the upcoming summer months

"The Governor believes that the solution to our energy crisis lies in the=
=20
state getting into the power business - I do not. As a result, Davis has=20
created a de-facto state Power Authority that's spending cash at an alarmin=
g=20
rate, some $45 million a day; $1.5 billion a month," said Jones. "And he's=
=20
just signed the state up for some $43 billion in long-tern contracts for=20
which we don't know the terms, length or total energy supply secured."=20

Jones noted that when the utility companies were regulate the Public=20
Utilities Commission (PUC) had the responsibility to look over their should=
er=20
and ensure that the ratepayers were protected and fairly treated. Yet all t=
he=20
governmental agencies that should be looking into the energy spending spree=
=20
are now controlled or appointed by the govemor, including the PUC, the Litt=
le=20
Hoover Commission, the Electricity Oversight Board, the Department of=20
Finance, the Resources Agency, the Department of Water Resources, the Energ=
y=20
Commissions the Independent Systems Operator and the now-defunct Power=20
Exchange.

According to a recent Wall Street Journal article (3/08/01), David Mills,=
=20
trading floor manager of the Bonneville Power A.dndnistation questioned=20
Califomia's purchases on the spot market, saying that the water agency=20
[California Departnent of Water Resources] has at times offered to pay $50 =
to=20
$100 per megawatt hour more than the available market price." Mills added=
=20
that power buyers for the state "agree to prices that make you wonder =06? =
you?d=20
at least think they?d check to see what the prevailing price is before=20
throwing out their offer."=20

"As President Bush has said so often, it's not the government's money, it's=
=20
the people's money" Jones sa=06=15d. "The people of California deserve to =
know=20
what the terms of this high-stakes energy game are since it's being played=
=20
with taxpayers' money."

Jones criticized the governor?s repeated refusal to fulfill numerous Public=
=20
Records Act requests from Assemblyman Tony Strickland (R-Thousand Oaks),=20
several news media and other organizations, calling his denial for=20
information based on a government code provision regarding protection of th=
e=20
"public interest " an assault on the public's common sense.

"I believe that the real =01@public interest' lies in a full accounting to =
the=20
public of how the Governor has spent their money - and what kind of a deal=
=20
we're actually getting," Jones concluded.

# # #