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Enron Mail |
----- Forwarded by Jeff Dasovich/NA/Enron on 03/12/2001 10:50 AM -----
"Ronald Carroll" <rcarroll@bracepatt.com< 03/08/2001 10:20 AM To: <douglass@arterhadden.com<, <mmilner@coral-energy.com<, <rreilley@coral-energy.com<, <acomnes@enron.com<, <dfulton@enron.com<, <jdasovic@enron.com<, <jhartso@enron.com<, <jsteffe@enron.com<, <mary.hain@enron.com<, <smara@enron.com<, <snovose@enron.com<, <gackerman@wptf.org< cc: Subject: Fwd: Calif. clears state water agency to collect power payments ----- Message from "Tracey Bradley" <tbradley@bracepatt.com< on Thu, 08 Mar 2001 08:11:46 -0600 ----- To: "Paul Fox" <pfox@bracepatt.com< cc: "Jeffrey Watkiss" <dwatkiss@bracepatt.com<, "Ronald Carroll" <rcarroll@bracepatt.com< Subject: Calif. clears state water agency to collect power payments Wednesday March 7, 8:22 pm Eastern Time Calif. clears state water agency to collect power payments SAN FRANCISCO, March 7 (Reuters) - California regulators took another step on Wednesday to allow the state's Department of Water Resources (DWR) to collect payments for power supplies purchased by the state agency. The California Public Utilities Commission (CPUC), which sets gas and electric rates, approved an order for the water agency to recover the taxpayers' money it is spending to buy electricity for customers of the state's two biggest -- and nearly bankrupt -- utilities. There currently is no mechanism allowing the DWR to collect money for buying power on behalf of the utilities. The CPUC's approval, however, did not set actual rates for the 24 million people served by PG&E Corp.'s (NYSE:PCG - news) Pacific Gas and Electric unit (PG&E) and Edison International's (NYSE:EIX - news) Southern California Edison subsidiary. An ``interim'' rate -- called the California Procurement Adjustment -- may be proposed by late next week and will require another vote by the regulators. Under Gov. Gray Davis's plan to stabilize the California power business, the water agency has been charged with purchasing electricity to meet the state's short and long-term needs. Davis, however, is trying to avoid politically unpopular rate hikes, instead recovering the water agency's cost from a portion of existing utility electricity rates. DWR has been spending up to $50 million a day for short-term energy supplies and negotiating long-term contracts with independent power generators. On Monday, Davis announced 40 deals or preliminary agreements to buy power from 20 generators, with delivery scheduled anywhere from four months to 10 years, and one deal lasting 20 years. The state government has been thrust into the power business because PG&E and SoCal Edison are awash in some $13 billion of red ink and generators will no longer do business with them. The utilities have accumulated the debt since last spring due to terms of California's flawed electricity deregulation scheme that forced them to pay soaring prices for wholesale power that they could not collect from their retail customers because of a rate freeze. A California consumer group warned after the CPUC action today that once a rate is decided, the water agency may be in a position to set higher rates for the utilities' customers. Nettie Hoge, head of The Utility Reform Network (TURN), a consumer advocate group, warned the water agency ``could say that it needs more revenue from ratepayers for its costs and there would be no reviews by the CPUC to decide if the increases were prudent.''
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