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Enron Mail |
----- Forwarded by Jeff Dasovich/NA/Enron on 03/14/2001 06:23 PM -----
=09Jean Munoz <jmunoz@mcnallytemple.com< =0903/14/2001 05:49 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 (E-mail)'" <roger.pelote@williams.com<, "'Stephanie-Newell (E-mail)'"=20 <stephanie-newell@reliantenergy.com<, "'Sue Mara (E-mail)'"=20 <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 <hgovenar@acom2.com<, <mmoretti@mccabeandcompany.net<, "'Maureen OHaren=20 (E-mail)'" <Oharen@hmot.com<, "'Mike Monagan (E-mail)'" <mrmonagan@aol.com<= ,=20 "'Phil Isenberg (E-mail)'" <isenberg@hmot.com<, "'Robert Ross (E-mail)'"=20 <robbiz@cwo.com<, "'Ron Tom (E-mail)'" <Rtom@govadv.com<, "'Scott Govenar= =20 (E-mail)'" <sgovenar@govadv.com<, "'Susan Mccabe (E-mail)'"=20 <sfmccabe@mindspring.com<, <rtemple@mcnallytemple.com<,=20 <megan.beiser@edelman.com<, <tracy.fairchild@edelman.com<,=20 <deborah.fiorito@dynegy.com<, <tcwillia@duke-energy.com<, <mstultz@epsa.org= <,=20 <lchurch@epsa.org< =09=09 cc:=20 =09=09 Subject: IEP News Update Following is the latest IEP news =01. including an Associated Press story t= hat=20 quotes Jan's response to the State Senate Investigation announced earlier= =20 today. Thanks, Jean ______________________________________ March 14, 2001, Wednesday, BC cycle 5:10 PM Eastern Time SECTION: State and Regional LENGTH: 941 words HEADLINE: California lawmakers probe energy markets for manipulation BYLINE: By JENNIFER COLEMAN, Associated Press Writer DATELINE: SACRAMENTO, Calif. BODY: State lawmakers announced Wednesday they will investigate whether energy wholesalers manipulated California's power and natural gas markets to drive= up prices, a probe they say could lead to action by the state attorney general= . Meanwhile, federal regulators said they will make several changes in oversight to expand the West's power supply, including speeding approval of natural gas pipeline projects and letting major power users who cut=20 consumption resell the electricity they save. In California, Senate leader John Burton announced creation of a committe= e=20 to investigate the state's volatile electricity market. A similar Assembly pan= el has been formed to look into natural gas prices. Both expect to begin heari= ngs next month. The state has been struggling with a tight electricity supply since summe= r due in part to high natural gas prices and power plant outages for schedule= d=20 and unplanned maintenance. Burton said he suspected electricity wholesalers shut down plants to crea= te an artificial shortage and boost prices. If lawmakers find evidence of that= , they will turn it over to the state attorney general for action, which coul= d include prosecution and court action to seek refunds. "Clearly, early evidence suggests that there has been market manipulation= by the power generators which led to rolling blackouts and then higher=20 electricity prices," said Burton, D-San Francisco, referring to outages that hit Northe= rn Californians twice in January. California saw a modest 4 percent increase in demand in one year, while wholesale power prices in that time rose 328 percent, he said. Committee Chairman Joe Dunn said the panel will ask energy wholesale executives to testify, and issuing subpoenaes if necessary. Duke, Dynegy,= =20 Mirant and Reliant will be among major providers included, he said. Jan Smutny-Jones, executive director of the Independent Energy Producers= =20 industry group, said wholesalers will cooperate, but warned that if it=20 becomes a "witch hunt" it could discourage them from building plants in California. "We believe this investigation will find nothing except that power produc= ers have been working around the clock to keep the lights on in California," he= =20 said in a written statement. Burton said the investigation could affect any rescue deal Gov. Gray Davi= s=20 crafts with the state's two largest utilities, Pacific Gas and Electric and Southern California Edison. Davis is negotiating the state purchase of transmission lines owned by Edison, PG&E and a third investor-owned utility, San Diego Gas & Electric, = to help Edison and PG&E pay their wholesale power bills. Lawmakers need to know how much of the money owed to the wholesalers "is reasonable and how much of it was basically gaming the system," Burton said= . The power generators blame the high prices on poor planning by California= =20 lawmakers who voted to deregulate the state's electricity market in 1996. That law prevents PG&E and Edison from passing on high wholesale prices t= o their customers. The utilities say they are nearly $14 billion in debt and = on the brink of bankruptcy due to wholesale power prices that have soared sinc= e June, in part because of rising natural gas prices. Wholesalers have cut off their credit, leading the state to buy power for them. California has committed $3.7 billion in tax money to such purchases= =20 since early January and plans to recoup it from utility customers over several=20 years. The California Independent System Operator, which oversees the state's po= wer grid, says generators imposed "unjust and unreasonable" charges totaling $5= 55 million during December and January. The Federal Energy Regulatory Commission, a strong supporter of=20 deregulation, last week found that wholesalers have been overcharging for California=20 electricity, ordering 13 companies to refund $69 million. It gave the=20 companies until March 23 to appeal. Attorneys general in California, Washington and Oregon are pursuing simil= ar investigations. U.S. Rep. Anna Eshoo, D-Calif., has asked the Justice=20 Department and Federal Trade Commission to launch inquiries. Sen. Bill Morrow, R-Oceanside, said he wasn't "overly impressed with investigative efforts so far on the federal level with FERC and others in= =20 their willingness to actually turn over the stones." Tom Williams, spokesman for North Carolina-based Duke Energy, expressed annoyance at the news of a Senate probe. "It is wearing thin," said Williams, noting that Duke already has been subjected to federal investigations and has testified twice before the stat= e's legislative energy committee, with no findings of wrongdoing. The Assembly committee is investigating natural gas pipeline capacity and reserves. That committee plans to call gas company executives and FERC representatives to testify. Because natural gas is largely regulated by the federal government,=20 lawmakers are trying to determine whether they have authority to investigate market manipulation, said Assemblyman Fred Keeley, D-Boulder Creek. In Washington, FERC said it would overhaul its regulation of the Western energy market to increase supply. Changes include: - Letting large commercial power users sell power they save at a wholesal= e rate to be set by the commission. - Reallocating FERC staff to work on applications for natural gas pipelin= e and hydroelectric projects. - Urging hydroelectric plant operators to examine how they can more fully= =20 use their available water resources by adding or upgrading turbines or making= =20 other improvements. On the Net: California ISO: www.caiso.com FERC: www.ferc.fed.us GRAPHIC: AP Photos SC101-102 LOAD-DATE: March 14, 2001 10 of 28 DOCUMENTS The Associated Press State & Local Wire The materials in the AP file were compiled by The Associated Press. These materials may not be republished without the express written consent of The Associated Press. March 14, 2001, Wednesday, BC cycle 4:13 PM Eastern Time SECTION: State and Regional LENGTH: 203 words HEADLINE: Senate rejects utility bankruptcy bill BYLINE: By MARCY GORDON, AP Business Writer DATELINE: WASHINGTON BODY: A proposal that would have required California's financially troubled utilities to pay their power bills even if they file for bankruptcy protect= ion was rejected Wednesday by the Senate. Senaourt to avoid their debts," Wyden said. The proposal had brought objections from Sen. Dianne Feinstein, D-Calif.,= =20 who said it would put the Senate in the inappropriate position of deciding the "pecking order" of creditors in a bankruptcy proceeding. California's two biggest utilities, Southern California Edison and Pacifi= c Gas and Electric, say they've been pushed to the brink of bankruptcy by mor= e than $13 billion in high wholesale power costs that state law has barred th= em from recouping from consumers. Both were denied credit by electricity wholesalers earlier this year. To= =20 keep the lights on for their customers, the state in early January began spendin= g billions to buy power on their behalf. Meanwhile, Gov. Gray Davis is negotiating with Edison, PG&E and the state= 's third investor-owned utility, San Diego Gas & Electric Co., to purchase the= ir transmission lines. The governor says the state acquisition would give the utilities a much-needed influx of cash and help them pay their debts. LOAD-DATE: March 14, 2001 12 of 28 DOCUMENTS The Associated Press State & Local Wire The materials in the AP file were compiled by The Associated Press. These materials may not be republished without the express written consent of The Associated Press. March 14, 2001, Wednesday, BC cycle 2:37 PM Eastern Time SECTION: State and Regional LENGTH: 1326 words HEADLINE: California's electricity crisis at-a-glance BYLINE: By The Associated Press BODY: Here is a look at developments in California's electricity crisis: WEDNESDAY: - Sens. John Burton and Joe Dunn announce a Senate committee will=20 investigate whether power generators illegally manipulated California's electricity mar= ket to drive up prices over the past year. If the panel finds wrongdoing, the= =20 state attorney general should sue for refunds, Burton said. The committee will ask wholesalers' executives to testify, and subpoena t= hem if they refuse, said Burton, D-San Francisco, the Senate leader. - A legislative aide says the Senate panel is considering issuing subpoen= aes for wholesaler documents on the California market and asking the companies' executives to testify. - Duke Energy spokesman Tom Williams expresses annoyance at the news of a Senate probe, saying there have already been several investigations and no finding of wrongdoing. - Assemblyman Fred Keeley says the Assembly has formed a committee to loo= k into natural gas issues. Because natural gas is largely regulated by the=20 federal government, lawmakers are trying to figure out whether they have the author= ity to investigate whether supply and prices were manipulated. - Gov. Gray Davis' administration continues negotiations with Edison, PG&= E and San Diego Gas & Electric over the governor's plan to buy their=20 transmission lines to help Edison and PG&E pay their debts. - The state remained free of power alerts as power reserves stayed at=20 healthy levels. - Assembly members Fred Keeley and Hannah-Beth Jackson and environmental groups plan a news conference to urge approval of energy conservation and renewable energy proposals. TUESDAY: - Davis issues an executive order promising 20 percent rebates to Souther= n California Edison, Pacific Gas and Electric Co. and San Diego utility=20 customers who cut power use 20 percent this summer. - Legislative Analyst Elizabeth Hill's office says Davis is underestimati= ng California's summer electricity shortage. The state faces a shortfall of 3,= 900 to 7,100 megawatts during daily periods of peak demand, the report says. On= e megawatt is enough for about 1,000 homes. Using flawed state Energy Commission numbers, the governor is overestimat= ing how much new electricity generation will be online this summer, especially= =20 early in the season, and overestimates savings from conservation, the report says= . - The state Senate plans to form a special committee to investigate wheth= er power generators illegally manipulated California's electricity market to= =20 drive up prices. The suppliers vehemently deny such allegations. - Citing skyrocketing energy costs, particularly in the West, President B= ush backs off a campaign pledge and tells Congress he will not regulate carbon dioxide emissions from power plants. The decision comes after heavy lobbyin= g from the coal industry and is a blow to conservationists who see curbing emissions of such "greenhouse gases" as key to reducing global warming. - State Controller Kathleen Connell says legal issues prevent her from releasing records on state power purchases sought under the state open reco= rds law by The Associated Press and several other news organizations. Connell s= ays she is awaiting an opinion by Attorney General Bill Lockyer on whether she = can release the information. Davis opposes releasing it. - Secretary of State Bill Jones calls for an audit of the state's energy spending, saying the secrecy around the contracts for power purchases has l= ed=20 to a lack of oversight and accountability. - Proposals for two new power plants that could be running by summer have been received by the California Energy Commission. The plants, which togeth= er will produce 225 megawatts, will be fast-tracked through the application=20 process to help meet higher electricity demands this summer. That's roughly enough= =20 power for 225,000 homes. - Officials say guidelines expected Wednesday on whether Edison, PG&E or their customers will begin paying off the $3.7 billion in taxpayer money committed to buying power on their behalf will likely be delayed. - No power alerts are declared, as operators of the state grid continue t= o find enough electricity to meet demand. - Eight California counties expect to lose $11.1 million in property taxe= s=20 in the next five months because the five energy producers who owe the money sa= y they are due even more from Southern California Edison. Some school distric= ts=20 in those counties - Imperial, San Joaquin, Riverside, Alameda, Contra Costa,= =20 Inyo, Kern and San Bernardino - say the defaults could hurt their ability to fina= nce expansions or repairs. - Utah Gov. Mike Leavitt meets with Los Angeles city officials to discuss expanding a coal-fired power station in Utah to send electricity to Souther= n California.=20 - The United Farmworkers Union holds a protest in Blythe, a desert commun= ity near the Arizona border, to protest a proposed power plant opponents conten= d would pollute the air farmworkers breathe. - U.S. Rep. Anna Eshoo, a Palo Alto Democrat, asks U.S. Attorney General= =20 John Ashcroft to investigate whether electricity wholesalers engaged in unlawful trade practices to drive prices higher. - A 510-megawatt power plant in western San Diego County moved a step clo= ser to final approval. The Otay Mesa generating project won approval from the California Energy Commission's siting committee. The public 30 days to comm= ent on the plan. - Edison International stock falls 47 cents a share to close at $14.88; Pacific Gas and Electric Corp. stock closes at $14.24, dropping 28 cents a share. WHAT'S NEXT: - The Legislature considers dozens of bills to encourage energy=20 conservation, increase alternative power and streamline power plant siting. - The California Public Utility Commission meets Thursday to consider=20 whether to bar PG&E and Edison from laying off about 3,000 workers. The utilities s= ay=20 it could help them cut costs and ease their $14 billion debt. A PUC=20 administrative law judge says the layoffs could cause response times to customer outages t= o suffer. The PUC will also discuss restructuring the interruptible customer progra= m. The program gives big electricity users a discounted rate in return for=20 shutting down their power when the state is short of electricity. After January's=20 rolling blackouts, the PUC froze the program and said PG&E and Edison could no long= er fine interruptible customers for not complying. - An order from Davis requiring businesses to substantially reduce outdoo= r lighting after business hours takes effect Thursday. Businesses that fail t= o comply face a potential fine of $1,000 a day. - Attorneys for three generators and the ISO return to federal court Marc= h 19, when a judge is expected to decide whether power suppliers can be force= d=20 to sell to the grid. - Generators have until March 23 to appeal an order by federal regulators= to refund $69 million in January power charges. The Federal Energy Regulatory Commission required suppliers to justify prices exceeding $150 per megawatt hour. It determined last week that some sales were priced too high, even=20 taking into account high natural gas prices, air quality control costs and plant maintenance. THE PROBLEM: - High demand, high wholesale energy costs, transmission bottlenecks and = a tight supply worsened by scarce hydroelectric power in the Northwest and maintenance at aging California power plants are all factors in California'= s=20 electricity crisis. Edison and PG&E say they've lost $13.7 billion since June to high wholesa= le prices that the state's electricity deregulation law bars them from passing= =20 onto ratepayers, and are close to bankruptcy. Electricity and natural gas suppliers, scared off by the two companies' p= oor credit ratings, are refusing to sell to them, leading the state to start=20 buying power for the utilities' nearly 9 million residential and business customer= s. LOAD-DATE: March 14, 2001
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