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Sue Mara Enron Corp. Tel: (415) 782-7802 Fax:(415) 782-7854 ----- Forwarded by Susan J Mara/NA/Enron on 05/01/2001 05:27 PM ----- "Chris Micheli" <cmicheli@carpentersnodgrass.com< 04/30/2001 06:19 PM To: "Susan McCabe" <smccabe@mccabeandcompany.net<, "Sue Mara" <smara@enron.com<, "Steven Kelley" <steven@iepa.com<, "Steve Ponder" <steve_ponder@fpl.com<, "Stephanie Newell" <stephanie-newell@reliantenergy.com<, "Scott Sadler" <sadlersa@earthlink.net<, "Scott Govenar" <sgovenar@govadv.com<, "Sandi McCubbin" <smccubbi@enron.com<, "Ron Tom" <rtom@govadv.com<, "Roger Pelote" <roger.pelote@williams.com<, "Robert Ross" <robbiz@cwo.com<, "Rina Venturini" <rventurini@teamgsi.net<, "Richard Hyde" <rwhyde@duke-energy.com<, "Rachel King" <rachel.king@elpaso.com<, "Phil Isenberg" <isenberg@hmot.com<, "Paula Soos" <paula_soos@covantaenergy.com<, "Mike Monagan" <mrmonagan@aol.com<, "Maureen O'Haren" <oharen@hmot.com<, "Marie Moretti" <mmoretti@mccabeandcompany.net<, "Lynn Lednicky" <lale@dynegy.com<, "Kent Palmerton" <kent.palmerton@williams.com<, "Katie Kaplan" <kaplan@iepa.com<, "Kassandra Gough" <kgough@calpine.com<, "Julee Ball" <jmball@ns.net<, "John Stout" <john_h_stout@reliantenergy.com<, "John Larrea" <john.g.larrea@williams.com<, "Joe Ronan" <joer@calpine.com<, "Jeff Dasovich" <jeff.dasovich@enron.com<, "Jean Munoz" <jmunoz@mcnallytemple.com<, "Jan Smutny Jones" <smutny@iepa.com<, "Jack Pigott" <jackp@calpine.com<, "Hedy Govenar" <hgovenar@govadv.com<, "Greg Blue" <gtbl@dynegy.com<, "Fred Pownall" <fred_pownall@ka-pow.com<, "Delaney Hunter" <dhunter@s-k-w.com<, "Chuck Cole" <ccole@advocation-inc.com<, "Bev Hansen" <bhansen@lhom.com<, "Anne Kelly" <kelly@hnks.com<, "Andy Brown" <abb@eslawfirm.com<, "John Norwood" <janorwood@norped.com<, "Pete Conaty" <pcaceo@pacbell.net<, "Matt Kilroy" <matt.kilroy@pge-corp.com<, "Cary Rudman" <cjrudman@softcom.net<, "Carolyn McIntyre" <cmcintyre@sempra.com<, "Barbara LeVake" <blevake@syix.com<, "Pat Pape" <ppape@calpine.com<, "Mohammed Alrai" <mohammeda@calpine.com<, "Kent Robertson" <kentr@calpine.com<, "Katherine Potter" <katherip@calpine.com<, "Juan Rodriguez" <juanr@calpine.com<, "Eileen Koch" <eileenk@calpine.com<, "Bill Highlander" <highlander@calpine.com<, "Aymee Ramos" <aymeer@calpine.com< cc: Subject: SB 1x hearing today As you may know, SB 1x (Soto/Scott) passed the Senate Appropriations Committee by an initial vote of 7-3 (the bare minimum). Senator Soto said that the Legislature must make a "bold proposition" with this bill. She said that this experience is "like no consumer has been gouged before." The Legislature must cap rates. This bill guarantees a generous profit to generators. Senator Scott said that these generator profits have been gained off of consumers. According to FERC, over $500 million in excess profits have been reaped. Californians have been "royally mistreated" by generators. This "money has left the state (to Texas and other places)." This bill is the only solution. The PUC can change the $80 rate. Based upon the January Field Poll, Californians support this concept. We have to "stand up to the generators and say no more." Supporters were: TURN and CTRA (Lenny Goldberg). Lenny said that the FERC will not give any relief to CA ratepayers, so the Legislature has to. This bill needs to be combined with the power authority by Senator Burton to hold prices down. Other supporters of the bill included: Congress of CA Seniors; CalPIRG; CA Consumer Federation; CA Labor Federation; SEIU; Public Power Now. SEIU (public employee union) said that this bill is "the only way to put caps on rates." Opponents were CMTA ("this is the wrong medicine for solving the problem"); WSPA (does nothing to resolve the shortage of energy; we should be doing bills to stimulate greater investment in supply); Intergen said that they are looking at California market, but will not build with this bill out there. CA Wind Energy Assn (QFs oppose this bill because the rate is too low); and IEP (most productive answer to our problem is the build power plants). Senator Battin said that the price cap is lower than some of the Governor's long-term contracts at $86 per hour. Senator Scott said that the munis are, indeed, covered by the bill. He also said that the PUC can change the rates contained in this bill. Scott also said that the PUC can exempt renewables under the bill. Senator Bowen stated that the $80 figure should be removed from the bill ("this price may be inappropriate"). She suggested using the "FERC proxy price." She suggested that they look at an exemption for contracts with the state. She saw no reason to exempt the renewables because they would make a bundle with an $80 cap. Senator Poochigian said he was concerned about the majority vote issue (because this bill is allegedly revenue neutral). Scott said all of the money raised by the bill will go to ratepayers. He said that Legislative Counsel gave him an opinion (I don't know if it is written or verbal) that this scheme was permitted. Poochigian said it was ironic that the PUC was being given the authority to set rates under this bill. Senator Scott stated that they would take as an author's amendment to exclude all long-term contracts from the provisions of this bill. Next stop for the bill is the Senate Floor. Chris Micheli, Esq. Carpenter Snodgrass & Associates 1201 K Street, Suite 710 Sacramento, CA 95814 (916) 447-2251 FAX: (916) 445-5624 EMAIL: cmicheli@carpentersnodgrass.com
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