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enron_labeled_emails_with_subjects-llama2-7b_finetuning

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<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Barton Talking Points Body:: Here are Barton talking points per our conversation last night. We will separately send a favorable Washington Post article on FERC's meeting yesterday as it relates to RTOs. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Portal Body:: Attached are some late night thoughts on the portal. Most of this is focussed on the portal for opinion leaders but some of it could be applicable to the comemrcial portal as well. Could you forward this to Palmer ... for some reason my address book doesn't pull him up when I'm off the system. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: More Than Words Body:: Dear Jeff There aren't any corporate speak words that can express what I feel so I will use plain English: I am thrilled that I will be working for you at Enron. I look forward to helping you and your team continue to transform Enron into the number one company in the world and into the best company in the world. I have sent my bio to Steve Kean and will send him my list of my preferred California contacts. By mid-week I will send you a cleaned-up version of the suggestions I outlined in our meeting. I look forward to the next steps. It is an honor to be working with you again. I pledge to you my very best. Sincerely [IMAGE] Contact Information E-mail kevinscott@onlinemailbox.net Phone (213) 926-2626 Fax (707) 516-0019 Traditional Mail PO Box 21074 ?Los Angeles CA 90021 - image001.png - image002.gif What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential - Voicemail Messages Body:: These were the messages in your voicemail: 1. 10/18/01 - Margaret Allen ....needed your advice on whether her sister should take job with Cal-Pine or Kinder Morgan 2. 10/19/01 - Adrianne Engler ....regarding candidantes that you were suppose to phone interview. (you have sent her an email since this) 3. 10/23/01 - Bob Shults(X3-0397)....they met with Nymex last week and are getting ready send the proposal ont eh document you saw last week. He wants to make sure that you are okay with this and dont have any issues. What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Depart 1:05/Arrive 2:41 Body:: Meet with Commissioner Ebert in Biloxi - Confirmed 7/1/97 Contact is Paige - 601-436-4833 What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Challenge to exercise of Eminent Domain - Confidential Attorney Work Product Body:: USA: UPDATE 1-Calif. seizes stranded SoCal Edison energy contracts. 02/02/2001 Reuters English News Service (C) Reuters Limited 2001. SAN FRANCISCO Feb 2 (Reuters) - California Gov. Gray Davis on Friday blocked the California Power Exchange from liquidating stranded energy contracts held by cash-strapped utility Southern California Edison seizing the assets for the state. The governor's office said the order issued late on Thursday and put in effect on Friday was needed to preserve the contracts' value for power-starved California consumers. I am using my emergency powers to seize options to buy very inexpensive power that would otherwise be lost forever Davis said in a statement. These options will provide reliable power through the end of the year. It is important to protect these contracts for the people of California he said. A Los Angeles judge on January 24 issued a temporary injunction valid for a week blocking the exchange's sale of the contracts. The California Power Exchange (CalPX) said Davis' order nullified a Los Angeles County Superior Court decision earlier Friday that authorized CalPX to liquidate Edison's forward market positions. The exchange said they had sought to liquidate the contracts to recover about $255 million that Edison has failed to pay to CalPX market participants. While agreeing to transfer the contracts to the state the exchange pointed out that the law requires that California pay a reasonable value for them which it estimated at nearly $652 million on today's market. Delivery of the first contracts which total 2.8 million megawatt hours is scheduled to begin Monday February 5. One megawatt hour is roughly the amount of electricity needed to light 1000 homes for 60 minutes. Davis is desperately seeking cheap power for the state after the utilities' financial meltdown pushed them to the market's sidelines. Spot market purchases for the state are currently being made by the Department of Water Resources but at typically higher prices than in the forwards market. Block forward energy contracts secure electricity deliveries over a given block of time at a price agreed months in advance shielding the buyer from the kind of price volatility that has recently roiled the short-term spot market. The overall value of SoCal Edison's contracts agreed last year for power to be delivered in 2001 was not immediately known but CalPX officials said last month they hoped their liquidation would cover the $215 million SoCalEdison owned the exchange. SoCal Edison the utility subsidiary of Rosemead Calif.-based Edison International has warned it is no longer able to meet its financial obligations after running up a debt of nearly $5 billion buying wholesale power in the spot market where prices have soared ten-fold over the past few months amid a regional energy shortage. The utility is blocked by the state's 1996 deregulation law from passing these high wholesale prices down to consumers who are still protected by a rate freeze. That same deregulation legislation created the CalPX making it the state-sanctioned exchange for electricity trading. SoCal Edison was among the biggest buyers on the exchange. CalPX crushed by a mountain of debt it is unable to recover from Edison has shut its spot market operations and is winding down its business affairs. Copyright 2000 Dow Jones & Company Inc. All Rights Reserved. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Houston City Officials Reception - July 31st Body:: We don't know yet. He has been invited and we expect most will show up but we won't know until they do. Enron Energy Services From: Karen Owens 07/20/2000 09:04 AM To: Steven J Kean/HOU/EES@EES cc: Subject: Re: Houston City Officials Reception - July 31st Is Gordon Quan attending? What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: fyi Body:: Please send to the distribution list ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: NYTimes.com Article: The Real Wolf Body:: Please respond to vkaminskiThis article from NYTimes.com has been sent to you by vkaminski@aol.com. /-------------------- advertisement -----------------------\ Looking for better IT solutions? Toshiba is uniting digital mobile and network innovations in a bold new vision of Information Technology for today and tomorrow. Take a closer look at life in the new Digital Age. And imagine how good IT can be. Visit Toshiba.com for more details. The Real Wolf RECKONINGS By PAUL KRUGMAN ecently I received a letter from an economist I respect chiding me for my Naderite columns on the California energy crisis. He just didn't believe that market manipulation by power companies could possibly be an important issue it sounded too much to him like the sort of thing one hears from knee-jerk leftists who blame greedy capitalists for every problem be it third-world poverty or high apartment rents. The left has cried Wolf! so many times that sensible people have learned to discount such claims. But now a bona fide wolf has arrived whose predatory behavior is doing terrible damage to our most populous state - and nobody will believe it. True California would be heading for a summer of power shortages even if it had never deregulated. And even if there was workable competition in the wholesale electricity market prices in that market would spike during periods of peak demand transferring billions of dollars from either taxpayers or consumers to the generators. But the evidence is now overwhelming that there isn't workable competition in California's power market and that the actions of generators gaming the system have greatly magnified the crisis. The key fact is that California has somehow remained in a state of more or less continuous power shortage and very high wholesale prices regardless of the level of demand. A rash of outages has kept the electricity market conveniently - and very profitably - short of supply even during periods of low demand when there ought to be lots of excess capacity. As Frank Wolak the Stanford economist who also advises the state's power grid has pointed out an outage at a power plant is a lot like an employee calling in sick. You can't tell directly whether he is really sick or has chosen to take the day off for other reasons but you can look for circumstantial evidence. And such evidence has convinced Mr. Wolak that generators use forced outages strategically to withhold capacity from the market - a view shared by a growing number of other researchers. Which brings us to the latest move by the Federal Energy Regulatory Commission. On Wednesday the commission apparently decided to offer California some relief and put new price caps in place on the California electricity market. I say apparently because the more you look at the plan the less likely it seems to be any help at all. Indeed the measure was passed on a 2-to-1 vote with William Massey - the one commissioner who has been sympathetic to calls for price controls - voting against it on the grounds that it would be ineffectual. What's wrong with FERC's plan? First it caps prices only in emergency conditions - ignoring the fact that electricity prices have stayed at hard- to-explain levels even when there is no emergency. In effect the plan is laid out as if the electricity market were really competitive in spite of all the evidence that it is not. Second even those emergency price caps are full of loopholes offering extensive opportunities for what Mr. Wolak calls megawatt laundering - selling power to affiliated companies that for one reason or another are exempted from the price controls (for example the controls do not apply to imports from neighboring states) then selling it back into the California market. Severin Borenstein of the University of California Energy Institute adds that because the allowed price depends on the cost of generation at the least efficient plant generators will have a clear incentive to produce inefficiently: I predict we will find some plants we never heard of before that are suddenly operating again and they will be pretty inefficient. The general verdict seems to be that this is not a serious plan. There are serious proposals to mitigate the crisis out there - indeed last fall Mr. Wolak submitted a proposal that was well received by other experts - but FERC has ignored all of them. The charitable interpretation is that FERC still doesn't get it that it just can't bring itself to believe that this time the wolf is real. The uncharitable interpretation is that last week's action was meant to fail. The Medley Report an online newsletter calls the FERC plan a grand exercise in posturing without substance . . . a very clever temporary move by the Bush administration to deflect any political fallout from the looming disaster. Whatever the explanation the plain fact is that FERC and the administration have yet to offer California any significant relief. Visit NYTimes.com for complete access to the most authoritative news coverage on the Web updated throughout the day. Become a member today! It's free! http://www.nytimes.com?eta HOW TO ADVERTISE For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web please contact Alyson Racer at alyson@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com write to help@nytimes.com. Copyright 2001 The New York Times Company What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Annual Meeting Q&A Body:: Currently an announcement is scheduled for mid may so there may be more public information available then. In the meantime I would answer the question as follows: Enron will continue to focus its attention on the commercial light manufacturing and industrial end user markets. Enron continues to explore opportunities to serve the residential market and we believe that the market presents opportunities that were not available even a couple of years ago (for example the rising acceptance of online purchasing by consumers presents low cost customer acquisition and account management possibilities that didn't exist when Enron last moved into residential markets). We believe however that the residential market opportunity is best pursued through a separate entity outside of Enron Mary Clark@ENRON 04/20/2000 02:31 PM To: Steven J Kean/HOU/EES@EES Maureen McVicker/HOU/EES@EES cc: Subject: Annual Meeting Q&A Steve we need to include a potential question in the Q&A document that addresses if Enron will get back into the residential business (i.e. Resco). Could you provide an answer to this question. I need by end of biz Monday. Thanks. Mary What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: NXE Energy CNRS (French Agency) Confidential Executive Summary Report Body:: Attention: Mr. Kenneth L. Lay. Chairman & CEO Enron Energy Houston Dear Mr. Lay: Please find the attachment of the NXE Energy Executive Summary Report prepared by Dr. M. X. Francois The Director of the Fluid Mechanics Laboratory of the French National Scientific Research Agency (CNRS). The Submission of this and all other information is of course confidential. The report combined with conversation's held with Dr. Francois recommends that because of the success of the Alpha Prototype testing we should proceed with an Industrial Beta model with certain modification's to the circuit piping system design and insert a turbine and generator after completing sizing and a designed computer model. Again wishing you and Enron the best NXE Energy David Taylor Co-Founder & CSO Telephone (toll free) 877 696-0800 Cell Phone : 415 722 2846 - cogen_exec_sum4.doc What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Lay/Skilling Talking Points for Bush Admin Meetings and Calls Body:: To add to what Rick said I would add that effective DSM requires that price signals be sent to customers AND customers have the ability to repond -- even Mr. I See Market Power Under Every Bush Dr. Frank Wolak has as one of his key solutions -- competitive retail markets. Sue Mara Enron Corp. Tel: (415) 782-7802 Fax:(415) 782-7854 Richard Shapiro 04/04/2001 11:07 AM To: Linda Robertson/NA/Enron@ENRON cc: Steven J Kean/NA/Enron@Enron Joe Hartsoe/Corp/Enron@ENRON Tom Briggs/NA/Enron@Enron James D Steffes/NA/Enron@Enron Paul Kaufman/PDX/ECT@ECT Janine Migden/NA/Enron@Enron Jean Ryall/NA/Enron@ENRON Aleck Dadson/TOR/ECT@ECT Ricardo Charvel/NA/Enron@Enron Jeff Dasovich/NA/Enron@Enron Susan J Mara/NA/Enron@ENRON Jose Steve Montovano/NA/Enron@Enron Subject: Re: Lay/Skilling Talking Points for Bush Admin Meetings and Calls I think these are quite good...the missing piece I would argue that we need to include is a talking point on the need for FERC to focus significant resources on the identification and elimination of market power in electricity markets and the need to encourage the development of distributed generation and more effective demand - side response mechanisms partly in response to market power concerns. This is a huge issue in getting wholesale electricity markets to work effectively i.e to create discernable consumer welfare benefits.... and we ( Enron ) need to talk about this this issue and concern and talk about it frequently and w/ the same passion we talk about the need for open markets. Linda Robertson 04/04/2001 12:09 PM To: Steven J Kean/NA/Enron@Enron cc: Richard Shapiro/NA/Enron@Enron Joe Hartsoe/Corp/Enron@ENRON Tom Briggs/NA/Enron@Enron Subject: Lay/Skilling Talking Points for Bush Admin Meetings and Calls Steve per our conversation yesterday in Houston what do you think of these TPs? To be used by both Ken and Jeff in conversations and meetings with the Bush Administration. - Skilling Talking Points.doc What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Senate May Mark Up Electricity Title Next Week Body:: I have received confirmation from Senate staff that the Senate Democrats on the Energy Committee met this morning and tentatively decided to go along with Chairman Bingaman's desire to move up the mark up of the electricity title from later this month as earlier expected to next Thursday Sept. 13. They are not sure they can do it all in one day. Acting on 9/13 as desired now depends on the reaction of the committee's Republicans. Not sure they will cooperate with moving quickly. I am on my way to the Senate for an RTO meeting and expect to obtain a copy of the draft electricity language implementing the Bingaman White Paper the language was just distributed to committee members this afternoon but I understand that Bingaman's staff had worked on it behind the scenes with Comr. Massey. Will advise once I have it hand. John What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Mid Year PRC Meetings Body:: for meeting file ----------------- What should this email be categorized as? [/INST] Empty message (due to missing attachment) <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Meeting with Debra Body:: Anne That's great. The meeting is at 3:00 in or area on th 19th. Vince What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Follow-up from Meeting with Andy Black Body:: Jim -- Please see attached from EPSA on their meeting today with Andy Black Chairman Barton's chief energy adviser. I have my own one-on-one with Andy at 4 pm tomorrow. Would you have a minute to read the EPSA memo and a list that Andy sent me (which I will forward separately) and we could chat about these issues tomorrow before the 4pm -- just so I have everything in perspective going into the meeting? I am open to any time tomorrow except 10 am (EDT). Please let me know. Thanks. ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Hi, Body:: Jinbaek Great I look forward to working with you. Please call me during the next few days (713) 853 3848 and we can chat about the projects. Please contact Molly Magee to talk about the first day orientation program. Her E-mail address is molly.magee@enron.com and her phone number is (713) 853-4804. Vince What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Important - CPUC Motion - Confidential Attorney ClientPrivil ege and Work Product Body:: Does anyone have an idea as to why marketers including EPMI are not included in the list of subject companies: Exh. B? Since EPMI is not a subject of the motion why should it answer? Lying in the weeds may be a more prudent course of action. >>> Fergus Gary S. <GFergus@brobeck.com> 11/07/00 10:08PM >>> I just spoke with Mary to make sure we have the same information. Here are the facts we have so far. On November 4th the CPUC filed a motion with FERC to adopt the form of protective order that the CPUC entered to compel the production of documents and to shorten time to answer. According to Exhibit B (read to me by Nancy Pickover at Bracewell) the following CPUC moved against the following entities: AES Williams Duke Dynegy Reliant and Southern. Enron entities were NOT named in exhibit B. This is not to say that we could not be easily added to the group. While the motion reads as if the CPUC was moving against everybody in fact in footnote 2 they state they are only moving against the entities named in Exhibit B. We will have Exhibit B in hand first thing tomorrow via FEDEX to confirm this. To repeat Enron is not named yet. Thanks Gary What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Congressional Hearing in S.D. on the 11th Body:: Could you work with Allison to get the needed information to cathy. ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Black Mesa Pipeline Co Body:: fyi ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential Information and Securities Trading Body:: To:TAYLOR MARK Email:mark.taylor@enron.com - 7138537459 Enron Wholesale Services - Office of the Chairman From: Mark Frevert Chairman & CEO Mark Haedicke Managing Director & General Counsel Subject: Confidential Information and Securities Trading To keep pace with the fluid and fast-changing demands of our equity trading activities Enron Wholesale Services (EWS) has recently revised its official Policies and Procedures Regarding Confidential Information and Securities Trading (Policies and Procedures). These revisions reflect two major developments: (1) our equity trading activities have been extended into the United Kingdom and (2) in an effort to streamline the information flow process the Review Team will play a more centralized role so that the role of the Resource Group is no longer necessary.You are required to become familiar with and to comply with the Policies and Procedures. The newly revised Policies and Procedures are available for your review on LegalOnline the new intranet website maintained by the Enron Wholesale Services Legal Department. Please click on the attached link to access LegalOnline: If you have already certified compliance with the Policies and Procedures during the 2001 calendar year you need not re-certify at this time although you are still required to to review and become familiar with the revised Policies and Procedures. If you have not certified compliance with the Policies and Procedures during the 2001 calendar year then you must do so within two weeks of your receipt of this message. The LegalOnline site will allow you to quickly and conveniently certify your compliance on-line with your SAP Personal ID number. If you have any questions concerning the Policies or Procedures please call Bob Bruce at extension 5-7780 or Donna Lowry at extension 3-1939. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RTO Meeting With Chairman Barton Body:: Late yesterday afternoon EPSA's legislative affairs committee (about 10 of us) met with Chairman Barton and staff to discuss his draft RTO language. Meeting lasted 45 minutes. Interestingly no one was there from either Reliant or El Paso. We had what the diplomats would call a frank exchange of views. Can't say we moved Barton very much if at all except we did have a chance to go over the staff to point out specific flaws in the draft even based on his view of how RTOs should come about (I gave several very specific examples like the 40000 MW provision and other limits on FERC discretion on size and scope as well as procedural rights for transmission owners but not the rest of us etc.). Chairman Barton's fundamental view is that Congress not FERC should determine how RTOs come about. And that the market and the industry should determine how RTOs are shaped etc. not FERC. He bristled at one point and said he had more faith in us than he had in FERC or we had in ourselves to determine how RTOs come about going so far as to saying that under his draft they would be our RTOs -- meaning those of us present. I pointed out this is wrong because under his draft the transmission owners particularly those least likely to join up would have all the leverage. I said that the basic flaw in the draft is that it assumes there are only two parties to the transaction -- FERC and transmission owners -- forgetting the rest of us including consumers. He said we could become transmission owners if we wanted to!!! On the 40000 MW size minimum he said many experts had advised them this is the correct number. We said that putting a number in to the statute ran counter to his oft-stated desire for a fair process to produce RTOs driven by market forces not regulators. The two elements of good news -- Barton reconfirmed that a markup this year is very unlikely AND he expressed that he would not spend too much time on electricity next year if it started to crowd out other issues like Clean Air Act Amendments and nuclear waste legislation. This suggests a strategy possibility in terms of running out the clock. He said he has the votes by a wide margin to report the RTO draft but will entertain some changes. He said the only reason he has not marked up the bill is that the Sept. 11th terrorist attacks have taken attention away from the issue and subcommittee members are not engaged on the issue. He said those of us who support could roll the dice with them but that there are things that only Congress can do -- like getting all transmission owners into RTOs -- and that these statutory changes are so important that we should not oppose the draft. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: FERC "Linda Breathitt" Strategy Contact Body:: Zausner is kind of a mixed bag. I think he's strong intellectually and has some influence but I don't trust him to keep our strategy and contacts confidential. What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Greening the Enron Building Mtg Body:: nan What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: The Governors Natural Gas Summit: Responding to the Challenge Body:: Yes thanks. Lay is going to be giving the keynote. It may be a hard story to assemble: the gas market is deregulated and structured pretty much the way we would like to see it done in both gas and power markets yet we still have high prices. It's a bit of a stretch to blame it all on OPEC. I'm interested in any views you may have. David Haug@ENRON_DEVELOPMENT 09/01/2000 10:30 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: The Governors' Natural Gas Summit: Responding to the Challenge I assume you are involved in this but just in case... - - -DLH ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Havamann Litigation PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT COMMUNICATION Body:: I am in London this week and will be meeting with David Best on Thurs to discuss. Thanks for your inquiry. I'll let you know after the meeting. Gail Brownfeld@ENRON_DEVELOPMENT 01/30/2000 10:45 AM To: Richard B Sanders@ECT cc: Robert C Subject: Havamann Litigation PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT COMMUNICATION Richard Did your office get everything it needed from David Best to do the wire transfer of the settlement funds? Is there anything you need us to do on the remaining bit of the claim against the underwriters? I believe you all have retrieved the whole file however let me know if there is anything we can do to help. I will be in the UK during the week of February 14 if there is something I can do while I'm there let me know. Thanks. GAIL What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: EES Staff Meeting, in 791 - per Julies cc:Mail on 9/5 Body:: EES Budget meeting ? What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Sac Bee Fri 7/27: Hopes dim for a quick Edison deal SD Union Fri 7/27: Sempra's trading unit generates a windfall LA Times Fri 7/27: Smog Rules May Be Eased LA Times Fri 7/27: Federal Caps Didn't Deter Higher Prices SF Chron Fri 7/27: Calpine profits double on skyrocketing sales Escalating power prices inspire plant building program SF Chron Fri 7/27: Generators continue to set high electricity prices SF Chron Fri 7/27: THE ENERGY CRUNCH Environmental suit against power plant Expansion called danger to slough OC Register Fri 7/27: Let's make a real deal with Edison (Editorial) LA Times Fri 7/27: California Sempra Continues Improved Results LA Times Fri 7/27: California Calpine Doubles Earnings Beats Forecasts Energy: San Jose-based company credits higher electricity prices in California and sales from new plants LA Times Fri 7/27: Cap No Bar to Higher Prices Power: Cal-ISO study says suppliers continued to charge as much as five times more than the U.S.-imposed limits WSJ Fri 7/27: Calpine Net Soars On Added Plants Sempra Profit Rises Hopes dim for a quick Edison deal By Kevin Yamamura Bee Capitol Bureau (Published July 27 2001) The Assembly will not return this week to consider a plan to save California's second-largest utility from bankruptcy all but ending hopes that legislation would reach Gov. Gray Davis by a mid-August deadline. A group of legislators and Davis staffers has worked this week on an agreement that would restore Southern California Edison's credit and relieve the state of having to purchase energy for the utility. Assembly leaders who convened the group set an ambitious schedule that would have led to a vote today had they reached consensus and been able to recall enough of the 80 Assembly members from summer recess destinations. But the newly formed plan which would issue $2.9 billion in consumer-backed bonds in exchange for several Edison concessions remains too rough for a vote said Paul Hefner a spokesman for Assembly Speaker Robert Hertzberg D-Sherman Oaks. Hefner was quick to note that Hertzberg has the Assembly on call for the scheduled monthlong break and is prepared to ask members to return if a deal comes in the next three weeks. But staff and lawmakers said earlier that organizing a mass return after today would prove nearly impossible because Assembly members are expected to travel throughout the state and beyond. Davis set an Aug. 15 deadline in his original Edison deal and recently said he could call a special session forcing legislators to return if they do not authorize a plan by then. His spokesman Steven Maviglio said Thursday the governor is not ruling out that idea but is waiting to see what comes of further legislative discussions. It's pretty clear that everyone's working pretty hard to form a consensus but they're just not there Maviglio said. The governor is optimistic about the Aug. 15 date. Even so Edison does not expect a solution by then. Company officials stated earlier this week that they would wait for a political deal at least until lawmakers return Aug. 20. The Bee's Kevin Yamamura can be reached at (916) 326-5542 or kyamamura@sacbee.com Sempra's trading unit generates a windfall \ objattph By Craig D. Rose UNION-TRIBUNE STAFF WRITER July 27 2001 Sempra Energy the parent company of SDG&E reported a 25 percent surge in profit to $137 million last quarter but said yesterday it lost money on the sale of electricity under a long-term contract to California. On the other hand Sempra said its largest source of profits was its energy trading unit a middleman that earned $69 million during the quarter buying and selling energy produced by others. The results underscore the transformation of relatively simple utility companies into diversified energy holding companies that have learned to profit in new ways from the deregulation of electricity and the turmoil in energy markets. The surprising announcement -- that a company lost money selling power during California's run-up in electricity prices -- was explained by Sempra as an intentional consequence of the long-term contract it signed with the state to provide power. Stephen Baum chairman and chief executive officer of Sempra said the company agreed to provide a steep discount to California during the summer months but would recoup the losses later in the 10-year deal. California sought long-term electricity purchase contracts so it could reduce its purchases in daily and near-term power markets where prices reached record levels. Critics say Gov. Gray Davis rushed into long-term deals because of concerns about getting through next year's election. They also say the contracts will saddle customers with higher costs for years. The governor has acknowledged that long-term contracts might cause consumers to pay relatively high prices for electricity in later years but he maintains it is a fair price to pay for lowering prices that were devastating the state economy. Michael Shames executive director of the Utility Consumers' Action Network in San Diego said the steep discount Sempra provided to the state on power this summer raised questions about the governor's proposal to help San Diego Gas & Electric Co. clear a debt of $750 million. SDG&E says it is owed that money for power purchases on behalf of its customers. In a media conference last month Davis said the agreement would eliminate the threat of a possible balloon payment for consumers who he said might have faced the so-called balancing account debt as early as next year. Shames says the proposal which took the form of a memorandum of understanding or MOU is costly for consumers and a bonanza for Sempra. He said the relatively cheap power provided by Sempra this summer makes the MOU sound like more of a hidden payback to Sempra than a real relief plan for local ratepayers. Shames said he will release an analysis of the state's Sempra plan next week. The state Public Utilities Commission is expected to rule on the plan in August. A Sempra spokesman said there is no connection between discount power and the tentative agreement to clear the $750 million debt. Doug Kline the Sempra spokesman said the power contract with the state was signed in early May and the agreement on the balancing account was reached in mid-June. Sempra Energy Trading meanwhile said only 10 percent of its $69 million profit was earned from sales of energy in the western region which includes California. The trading operation earned $40 million in profit during the comparable period last year. California's Independent System Operator which manages most of the state power grid and other investigators have said trading and bidding strategies were tools used by energy companies to raise prices during the California power crisis. Though Sempra earned money on trading its wholesale power generating business lost $9 million during the quarter. Baum said the discounts on electricity provided the state were the prime cause of the loss for Sempra Energy Resources but added that a plant outage also contributed. Sempra Energy Resources which co-owns a generating plant near Las Vegas with Reliant Energy earned $2 million during the second quarter last year. Baum added that Sempra's long-term contract with the state -- under which it will provide up to 1900 megawatts -- has allowed its wholesale business to pre-sell about half the power it expects to generate from the Nevada plant which will be expanded and three generating facilities it expects to build. Profits at SDG&E slipped to $37 million during the quarter ended June 30 down from $40 million last year according to Sempra. SDG&E whose business is restricted to delivering gas and electricity said it provided increased customer service during the crisis which lowered profits. Wall Street analysts generally applauded Sempra's results noting that the company was ahead of its plan to generate at least a third of its profits from its newer businesses by 2003. They're really two years ahead of schedule for their non-utility businesses said Brian Youngberg an analyst with Edward Jones & Co. Bud Leedom a San Diego-based analyst with Wells Fargo Van Kasper said Sempra's move into energy trading now seems shrewd. We never dreamed they were setting themselves for a windfall like this Leedom said. Investors pushed Sempra shares up 17 cents yesterday to close at $25.49 in trading on The New York Stock Exchange. Bloomberg news service contributed to this report. Smog Rules May Be Eased Power plants: EPA proposes a sweeping change in how utilities' emissions are curbed a flexible approach favored by the industry. By GARY POLAKOVIC and ELIZABETH SHOGREN Times Staff Writers July 27 2001 WASHINGTON -- U.S. Environmental Protection Agency Administrator Christie Whitman proposed sweeping changes Thursday in the regulation of power plant pollution that would replace five of the government's toughest programs with a single flexible approach favored by utilities. Whitman outlined a plan for cleaning up major components of power plant smog that represents a significant departure from the EPA's traditional regulatory dictums. She called for a major expansion of pollution credit trading which up to now has had varying success. Under the new plan the EPA would scrap some of the most stringent measures devised by the agency to deal with power plant emissions. One provision to be set aside aims to cut harmful mercury emissions another is meant to reduce emissions from Midwestern power plants by 85% another is designed to restore visibility at national parks. Especially unpopular with industry one measure known as new source review requires the installation of advanced pollution controls whenever power plants are expanded or modified. It too would be phased out. New source review is certainly one of those regulatory aspects that would no longer be necessary Whitman told Sen. George Voinovich (R-Ohio) at the hearing by the Environment and Public Works Committee. All of those [programs] could be aligned into one regulatory process that she said would work better than existing rules. Whitman's comments offer the first peek into the administration's plans for cleaning some of the dirtiest polluters left in the nation. Debate over the administration's clean-air approach has shifted to Congress as it considers whether to revise the national Clean Air Act. The magnitude of the proposed revisions caught environmentalists by surprise but buoyed industry representatives who say existing controls are costly and inefficient. She has raised an appalling prospect of junking virtually every rule and strategy to deal with emissions of electric companies in return for some vague industry-sought plan for an emissions trading scheme said Frank O'Donnell executive director of the Clean Air Trust an environmental advocacy group. If they go forward with this it means a wholesale fight over the Clean Air Act in Congress. After the hearing Whitman stressed that the overall goal is to clean the air more efficiently than current rules do. Although the administration has not yet released a so-called multipollutant cleanup strategy Whitman contended that collapsing several regulations into one far-reaching approach would be easier for regulators and industry to manage. What we're looking for is targets under this legislation that significantly clean up the air beyond what our current regulatory statutory requirements would do Whitman said. She added that new source review for example could potentially be no longer necessary if you have the right kind of targets set in a multi-emissions bill. We have to wait and see where the targets are set. Utilities have lobbied Vice President Dick Cheney's energy task force to prevent the EPA from aggressively enforcing the new source review regulation. Industry and administration officials say the provision is onerous and prevents plant upgrades although EPA officials say it is a key tool for forcing dirty old plants to cut emissions by up to 95%. During the Clinton administration federal officials charged that 32 coal-fired power plants in several Southern and Midwestern states ignored a requirement that companies install advanced emission controls when their plants were upgraded. The government reached settlement with three utilities but a provision in the Bush administration's energy plan stalled those enforcement actions pending a review of power plant controls. C. Boyden Gray attorney for the Electric Reliability Coordinating Council and former White House counsel for the first President Bush in the 1980s praised the administration's proposal. He said major utility companies he represents including Southern Co. Duke Energy Co. and the Tennessee Valley Authority could clean up with greater flexibility and less cost under the plan outlined by Whitman. To put everything in a market-incentives basis is a great step. It would be a real breakthrough and a plus for the business community Gray said. For example Gray said EPA has four separate measures to control nitrogen oxides from power plant combustion including programs to cut acid rain ozone and haze. Another program scheduled to take effect in May 2004 requires power plants in 19 states to cut summer emissions by 1 million tons annually. He said those programs can be confusing and costly and could easily be replaced by a credit-trading program run largely by power companies. Under the program being considered by the Bush administration an emission limit could be established at hundreds of power plants followed by annual reductions in mercury a toxic metal as well as smog-forming nitrogen and sulfur oxides. However a provision to reduce carbon dioxide a gas implicated in global warming was dropped under industry pressure. Power companies that reduce beyond their limits could sell emission credits which represent a pound of pollution to companies that exceed their limits. Although industry and free-market advocates favor such programs they are not without controversy. The record of market-driven programs is mixed. On the one hand the nation's acid rain program uses marketable permits and is widely credited with cutting sulfur oxides at less cost. On the other hand the world's first market-driven program to tackle urban smog has not worked in Los Angeles where nearly 400 power companies and manufacturers failed to achieve significant cleanup for the nearly eight years the program has been in effect. Further many environmental groups are wary of market-driven programs because by design they preclude active government intervention. Critics say such programs could potentially limit public review of power plant operations allow emissions to concentrate in poor communities and slow efforts to cut haze in national parks downwind from plants that elect to buy pollution credits instead of cleaning up. The Bush administration's power plant strategy was aired before the Senate Environment and Public Works Committee which is chaired by Sen. James M. Jeffords (I-Vt.) whose dramatic departure from the GOP threw control of the Senate to the Democrats. Jeffords is proposing legislation different from the administration's approach that would control four power plant pollutants including the greenhouse gas carbon dioxide an approach rejected by the Bush administration. Prospects appear to be increasing that Congress will pass one or more measures designed to reduce carbon dioxide emissions a belated response to this week's decision by more than 180 countries to deal with the problem without the involvement of the United States. Indeed in recent weeks several members in the GOP-led House and Democratic Senate have voted on bills with the intention of disassociating themselves from President Bush's environmental policies before the next election. Among the votes the House struck down a provision supported by the Bush administration that could hinder progress on global climate change policy. The Senate banned new coal mining and oil and gas drilling in national monuments. Other recent rebuffs included rejections of administration initiatives on such issues as the Endangered Species Act hard-rock mining regulations and offshore drilling for oil and gas. Copyright 2001 Los Angeles Times <http://www.latimes.com> Federal Caps Didn't Deter Higher Prices Power: Cal-ISO study says suppliers continued to charge as much as five times more than the imposed limits. By NANCY VOGEL TIMES STAFF WRITER July 27 2001 SACRAMENTO -- After federal regulators limited wholesale electricity prices last month big private sellers of power in California continued to ask as much as five times more for electricity than the federal cap according to a confidential study by state grid operators. The analysis by the California Independent System Operator covers only the first week after the caps were imposed June 20. Cal-ISO has submitted the data to federal regulators for potential investigation. The report is a summary of what Cal-ISO calls possible anti-competitive behavior by Duke Energy Williams Cos. Mirant Corp. Reliant Energy and Dynegy Corp. In a truly competitive market we would expect these suppliers to bid very close to their actual operating cost said Greg Cook senior policy analyst with Cal-ISO's Department of Market Analysis. The state did not necessarily purchase any power at the high prices being demanded. Instead the significance of the bids is that they show how California could find itself paying exorbitant prices for electricity again if hot weather returns and conservation slackens said Frank Wolak a Stanford University economist who studies the California electricity market. The bottom line is that the generators are putting out these bids in expectation of high demand he said. If weather all of a sudden gets really hot from Southern to Northern California the bids submitted by generators could be very costly to California. Cal-ISO calculated the cost of production for each company based on the efficiency of its power plants and estimates of what each paid for natural gas to fuel the plants. The average cost for the five was $105 per megawatt-hour which closely matches the federal price limit in California which now stands at $101 per megawatt-hour. According to the power bidding procedures companies that bid at or below their cost of production often still get paid a higher price allowing them to make a substantial profit. On average four of the five companies submitted bids either slightly below or slightly above their cost of production. But with the exception of Atlanta-based Mirant each company at times submitted bids that were substantially higher. Houston-based Reliant for example bid as much as $540 per megawatt-hour more than five times its estimated cost. Overall Reliant's average bid was close to costs according to the analysis. Cal-ISO identified companies by code in its report. Sources familiar with the study identified the companies for The Times. The Cal-ISO report singled out Supplier 5 identified by sources as Charlotte N.C.-based Duke Energy saying the company continues to bid significantly in excess of its operating costs. Duke owns two large power plants on the central coast. It marked up its bids an average of 88% beyond its cost to produce electricity according to the analysis. For example it cost Duke $85 to $121 to generate a megawatt-hour of electricity in the time period studied the report shows but the company offered to sell a megawatt-hour from $149 to $195. Duke spokesman Tom Williams on Thursday said The use of the data in some cases doesn't appear to add up and in all cases appears to be selective and could easily be misunderstood. Duke sells nearly the entire output of its power plants under long-term contracts and not on the spot market which the Cal-ISO report studied he noted. Reliant spokesman Richard Wheatley said We're looking at the data and we question whether or not it is correct. A combination of cool weather heavy conservation the start-up of new power plants and recently signed long-term power contracts that guarantee supplies have eased the state's electricity crisis in recent weeks. Market prices that as recently as May averaged $271 per megawatt-hour have dropped to less than $100 per megawatt-hour. The more abundant power supplies have freed grid operators to ignore higher-priced bids. But they will have to consider paying such prices to avoid blackouts if supplies tighten Wolak said. Such a scenario would test the effectiveness of the Federal Energy Regulatory Commission order issued June 19 he said. The bids of the five companies analyzed were offers of sales to Cal-ISO a Folsom-based agency that manages the electrical transmission grid serving 75% of California. Cal-ISO buys power on short notice to smooth the flow on the state's electrical freeway and avert blackouts. As California's fledgling market began to go haywire last fall Cal-ISO workers struggled to purchase as much as 30% of the state's power demand with just hours to spare. Since then the market has stabilized and Cal-ISO's purchases now amount to roughly 5% of the electricity California consumes. RELATED STORY Power profits: Power plant operator Calpine said its quarterly profit more than doubled. C2 Copyright 2001 Los Angeles Times <http://www.latimes.com> Calpine profits double on skyrocketing sales Escalating power prices inspire plant building program Carolyn Said Chronicle Staff Writer Friday July 27 2001 2001 San Francisco Chronicle </chronicle/info/copyright> URL: BU234287.DTL> Fueled by high electricity prices power generator Calpine Corp. reported strong second-quarter results yesterday. Calpine of San Jose said profit for the quarter ended June 30 almost doubled to $107.7 million (32 cents per share) from $59.5 million (20 cents) during the year-ago quarter. Revenue almost quadrupled to $1.61 billion from $417.2 million a year ago. Excluding charges related to the acquisition of Canada's Encal Energy Calpine's net income was $132.2 million (39 cents) well above the 31 cents per share predicted by analysts according to Thomson Financial/First Call. Calpine is on an ambitious path to expand its roster of generating plants. By the end of 2005 it expects to have 75000 megawatts in operation in the United States including 12000 megawatts in California. A megawatt is about enough power for 1000 homes. The company which generates 2428 megawatts in California this summer opened the state's first two major power plants in a decade. The new plants in Yuba City (Sutter County) and Pittsburg generate 547 and 555 megawatts respectively. Combined with a new plant in Arizona that sells power to California Calpine's new facilities helped the state stave off threatened blackouts this summer Chief Executive Officer Peter Cartwright said. Calpine is building the 847-megawatt Delta Energy Center in Pittsburg scheduled to open in May and a 750-megawatt plant in Kern County due in June 2003. It is also awaiting an August decision by the California Energy Commission on its proposed 600-megawatt Metcalf Energy Center in San Jose. California is a very good market for us said Bill Highlander a Calpine spokesman. The pricing in California has benefited Calpine. However he said the company was not one of the traders that focused on making top dollar in California's volatile spot market because its business model concentrated on selling electricity through long-term contracts. During the past few months Calpine signed 10-year and 20-year contracts with the state for as much as 2500 megawatts at prices ranging from $58.60 to $73 per megawatt hour. With most of its plants fired by natural gas Calpine wants to control about a quarter of the gas it uses Highlander said. Its April purchase of Encal Energy for $1.77 billion more than doubled its gas reserves to about 1. 7 trillion cubic feet equivalent according to Hoover's Online. Calpine's stock closed up $1.08 at $36.89 yesterday. E-mail Carolyn Said at csaid@sfchronicle.com 2001 San Francisco Chronicle </chronicle/info/copyright> Page B - 1 Generators continue to set high electricity prices Friday July 27 2001 2001 Associated Press URL: 0359EDT0121.DTL> (07-27) 00:59 PDT LOS ANGELES (AP) -- Power wholesalers continued to demand higher prices for energy despite federal regulation that capped electricity rates according to a confidential report by the California Independent System Operator. In one case an energy company charged as much as five times more for electricity than the federal cap which were imposed June 20. State grid operators have given the study to federal regulators for a possible investigation the Los Angeles Times reported Friday. Five companies were identified by code in the report and sources familiar with the study named the wholesalers for the Times. They include Duke Energy Dynegy Corp. Mirant Corp. Reliant Corp. and Williams Cos. The average price charged by the five power companies was $105 per megawatt-hour which closely matches the federal price limit in California set at $101 per megawatt-hour. Four of the five companies submitted bids either just below or just above their cost of production. Houston-based Reliant however asked as much as $540 per megawatt-hour in some cases. Overall the company's average bid was close to costs the report said. The state wasn't required to purchase power at the rates set by wholesalers but the bids reflect a potential repeat of charging exorbitant electricity prices if temperatures soar and conservation dwindles said Frank Wolak a Stanford University economist who studies the California electricity market. The bottom line is that the generators are putting out these bids in expectation of high demand he said. If weather all of a sudden gets really hot from Southern to Northern California the bids submitted by generators could be very costly to California. The Cal-ISO report singled out Duke Energy noting it continues to bid significantly in excess of its operating costs. The report shows the company's cost to produce electricity was between $85 and $121 but it offered to sell a megawatt-hour from $149 to $195. Cal-ISO calculated the cost of production for each company based on the efficiency of its power plants and estimates what each paid for natural gas to fuel the plants. The use of the data in some cases doesn't appear to add up and in all cases appears to be selective and could easily be misunderstood said Duke spokesman Tom Williams. 2001 Associated Press THE ENERGY CRUNCH Environmental suit against power plant Expansion called danger to slough Christian Berthelsen Scott Winokur Chronicle Staff Writers Friday July 27 2001 2001 San Francisco Chronicle </chronicle/info/copyright> URL: MN236840.DTL> An environmental group filed suit yesterday to overturn a permit granted to Duke Energy Co. to expand a major power plant south of Santa Cruz. Saying the permit was illegally awarded the suit warns that the resulting project will damage the ecologically important Elkorn Slough. Voices of the Wetlands accuses the board that awarded the permit of violating federal law by not requiring Duke to use the best possible technology to minimize impacts on the environment around the Moss Landing power plant. If plans to expand the plant proceed without change the group said it would kill off critical organisms at the bottom of the food chain. The suit filed in Monterey County against the California State Water Resources Control Board and the regional board that serves the central coast seeks a court order to return the case to the regional water district so that more environmentally sensitive cooling technology can be ordered for use at the plant. State officials said yesterday that the issues raised in the suit were considered and rejected during the initial permit approval process last year and again during the appeal process this year. The case comes amid enormous pressure on state officials in light of California's energy crisis to rapidly accelerate power plant approvals and expand the amount of power generation available. Against this backdrop the state water board on June 21 essentially rejected environmental groups' appeal that had sought to overturn the district board's decision approving the Moss Landing expansion permit. On another front board members of the California Energy Commission took testimony earlier this week on a proposal to curtail public review of plant project proposals with one board member Robert A. Laurie acknowledging in an interview that he believed in some cases it posed one of the most time- consuming aspects of project approval. A recommendation is expected within the next month. Duke of Charlotte N.C. bought the Moss Landing plant from Pacific Gas & Electric Co. in 1998 when the Northern California utility sold off many of its facilities to prepare for deregulation of the energy market. The plant was built in 1950 using a cooling system technology that sucks water out of the Elkorn Slough and Monterey Bay to cool generating turbines before spitting the water out into the Pacific Ocean. The group says wildlife conditions and sea otter population have improved markedly since PG&E mothballed many of the generating units at Moss Landing in 1995. But Duke now is proposing to resurrect parts of the cooling system in a major expansion that will make Moss Landing the state's largest power plant after its completion next summer. With an output of 2538 megawatts the plant when completed is expected to account for 30 percent of all new electricity generated in California next year serving about 2.5 million households in the Monterey Santa Cruz and southern Santa Clara County areas including San Jose. Regional water quality board officials declined comment yesterday citing the pending litigation. But in public documents filed yesterday water officials said cooling alternatives had been considered and rejected. The documents did not elaborate on why they were not mandated. Duke had acknowledged during the process that more ecologically sensitive technologies were available but at prohibitive costs of $20 million to $50 million more. Deborah Sivas an attorney for the Earthjustice Environmental Law Clinic which filed the suit on behalf of Voices of the Wetlands considered the best technology alternatives mandatory not optional. She said the board had not considered alternative approaches in reaching its conclusions. E-mail the writers at swinokur@sfchronicle.com and cberthelsen@sfchronicle.com 2001 San Francisco Chronicle </chronicle/info/copyright> Page A - 3 Let's make a real deal with Edison July 27 2001 By JONATHAN LANSNER The Orange County Register When any government official tries to play business executive it's time to get nervous. Take the Edison bail out as evidence. At its essence the deal works like this: Taxpayers give the utility a big pile of cash the state gets some old rickety transmission lines in return. Don't be fooled: The power bounty is basically a political ploy. The state doesn't need to control electric distribution. What politicos need is a face-saving trade as evidence that this is a business deal - not a government handout. The state probably should just write the check and eat its losses. But if bureaucrats wanted real remuneration from this bail out California would eye some juicy Edison assets. As a public service I'll list a few. Now for argument's sake I won't differentiate between the utility and its parent company Edison International. Hey lawyers built those walls between the two. Let 'em figure out how to take 'em down. For starters you'd figure an energy-strapped state would like some regional power plants no? Like the San Onofre facility. However it might be laughable to see Sacramento-types defending their future handling of the local nuclear plant. OK if that's a tad too dicey for the state how about a coal-fired plant in Nevada? Heck Edison had a buyer at half a billion bucks before the state oddly quashed that deal. Maybe the state could grab it from Edison -- then flip it to pay off electricity-related debts. Of course buying one of the out-of-town power plants that Edison's sister company in Irvine has acquired might be educational for Sacramento. Owning a plant in Illinois or Pennsylvania or possibly New Zealand might show state honchos how easy - or not - it is to rig supply and prices. Alternatively the state could demand a small entity called Edison Capital. Basically it's a bank. One specialty: the politically correct field of affordable-housing lending. A good fit for bureaucrats. Speaking of money there's the Edison pension plan. Governments are really good at running retirement benefits. Heck California already has a huge one. There's got to be some economies of scale - real cash savings - in merging the Edison plan with some state pension fund. Do note that Edison's plan might be overfunded by about $400 million. You can bet though that the state would never have the nerve to play 1980s corporate raider: profiting by grabbing some of a company's overfunded retirement kitty. Finally there's Edison International Field in Anaheim. Stadium naming-rights contracts must have some value since corporations always seem to fight over these promotional gimmicks. (The utility's parent company paid $50 million in 1997 for two decades of free publicity.) Imagine the buzz the state could get out of the huge sign age on a nationally renowned stadium. Plus maybe the Angels could be good corporate citizens and tie into this deal. It's possible they'd allow a slight change in the team name to better emphasize the state's role in the ballpark. So how does California Angels sound to you? Business Financial Desk California Sempra Continues Improved Results NANCY RIVERA BROOKS 07/27/2001 Los Angeles Times Home Edition Page C-2 Copyright 2001 / The Times Mirror Company Sempra Energy on Thursday reported another quarter of higher earnings and revenue a sharp contrast to California 's bigger and beleaguered investor-owned utilities. Although California 's electricity crisis has pushed Southern California Edison and Pacific Gas & Electricity into insolvency--and PG&E into U.S. Bankruptcy Court--the parent of San Diego Gas & Electric and Southern California Gas continues to post improved results on the strength of its non-utility businesses. Net income for the period ended June 30 rose 25% to $137 million or 66 cents a share up $25 million or 55 cents earned a year ago the San Diego-based utility holding company said. Revenue jumped 40% to $2.1 billion. Pretax operating income rose 24% to $291 million. Sempra's earnings came in just ahead of the 65-cent average estimate of analysts surveyed by First Call/Thomson Financial. Our strong second-quarter performance is primarily the result of our efforts to accelerate growth through new businesses Stephen L. Baum Sempra's chairman chief executive and president told analysts in a conference call. Sempra is in a vastly different position than Edison International and PG&E Corp. because its electric utility arm was able to avoid the deep financial woes afflicting their respective Southern California Edison and Pacific Gas & Electric utilities. SDG&E was first to sell its power plants two years ago and thus was freed from a rate freeze. That in turn allowed the utility to pass along to customers the soaring costs of electricity beginning last summer. The state Legislature eventually rolled back and capped the rates for SDG&E customers but promised the utility it would be allowed to recover those losses. Edison and PG&E however continued to accumulate staggering debts because their retail rate freezes remained in place. In contrast Sempra is solvent with $1.5 billion in cash and $1 billion in available credit Baum said. The performance of its utilities was lackluster with Southern California Gas earning $47 million unchanged from the second quarter of 2000 and SDG&E earning $37 million down from $40 million in the year-ago period. But Sempra's unregulated businesses--including energy trading power plant construction and operation international electricity operations and energy services--turned in an overall strong performance contributing 39% of the parent company's earnings. Sempra's trading unit provided most of that profit contributing $69 million to second-quarter net income compared with $40 million in the same quarter last year. Sempra's stock gained 17 cents to close at $25.49 on the New York Stock Exchange. Business Financial Desk California Calpine Doubles Earnings Beats Forecasts Energy: San Jose-based company credits higher electricity prices in California and sales from new plants. 07/27/2001 Los Angeles Times Home Edition Page C-2 Copyright 2001 / The Times Mirror Company Calpine Corp. one of the biggest U.S. power-plant builders said Thursday that second-quarter earnings more than doubled beating estimates because of higher electricity prices in California and sales from new plants. Profit from operations rose to $132.2 million or 39 cents a share from net income of $59.5 million or 20 cents a year earlier. Revenue almost quadrupled to $1.61 billion. San Jose-based Calpine opened plants in the U.S. with a combined capacity of 1545 megawatts--enough to light 1.5 million average homes--and benefited from existing plants in California . Calpine has insulated itself from rising fuel costs by buying natural-gas fields to supply its plants. Given the strategy they have chosen they're following through quite well said Andre Meade an analyst at Commerzbank Capital Markets Co. They are growing from a small base and adding a lot of plants so we'd expect high growth. Profit topped the 31-cent average estimate of analysts surveyed by First Call/Thomson Financial. Calpine said it expects to earn $2 a share this year. The average First Call forecast was $1.92 with a range of $1.80 to $2.04. Calpine's shares rose $1.08 or 3% to close at $36.89 on the New York Stock Exchange. The shares had fallen 21% this year amid concern that generators might have to give back some of the profit they made selling power in California during the last year. In addition cooler-than-normal weather and conservation efforts recently reduced power prices in the state. Calpine runs or is building natural gas plants in 29 U.S. states and Canada that produce more than 30000 megawatts of power. The company plans to more than double capacity to 70000 megawatts by the end of 2005. Calpine this month opened the $350-million Sutter plant California 's first major generator in more than a decade. The company is building 11 plants to run during times of peak demand in the state and getting permits for four more James Macias who oversees Calpine's West Coast power plants said in a conference call with analysts and investors. Separately Arlington Va.-based AES Corp. a power producer that supplies California and operates in 27 countries said second-quarter profit fell 20% because of losses tied to currency fluctuations and the sale of a U.S. electricity retailer. Net income fell to $112 million or 21 cents a share from $140 million or 28 cents a year earlier. Sales rose 26% to $2.21 billion. California Metro Desk Cap No Bar to Higher Prices Power: Cal-ISO study says suppliers continued to charge as much as five times more than the U.S.-imposed limits. NANCY VOGEL 07/27/2001 Los Angeles Times Ventura County Edition Page B-1 Copyright 2001 / The Times Mirror Company SACRAMENTO -- After federal regulators limited wholesale electricity prices last month big private sellers of power in California continued to ask as much as five times more for electricity than the federal cap according to a confidential study by state grid operators. The analysis by the California Independent System Operator covers only the first week after the caps were imposed June 20. Cal-ISO has submitted the data to federal regulators for potential investigation. The report is a summary of what Cal-ISO calls possible anti-competitive behavior by Duke Energy Williams Cos. Mirant Corp. Reliant Energy and Dynegy Corp. In a truly competitive market we would expect these suppliers to bid very close to their actual operating cost said Greg Cook senior policy analyst with Cal-ISO's Department of Market Analysis. The state did not necessarily purchase any power at the high prices being demanded. Instead the significance of the bids is that they show how California could find itself paying exorbitant prices for electricity again if hot weather returns and conservation slackens said Frank Wolak a Stanford University economist who studies the California electricity market. The bottom line is that the generators are putting out these bids in expectation of high demand he said. If weather all of a sudden gets really hot from Southern to Northern California the bids submitted by generators could be very costly to California . Cal-ISO calculated the cost of production for each company based on the efficiency of its power plants and estimates of what each paid for natural gas to fuel the plants. The average cost for the five was $105 per megawatt-hour which closely matches the federal price limit in California which now stands at $101 per megawatt-hour. According to the power bidding procedures companies that bid at or below their cost of production often still get paid a higher price allowing them to make a substantial profit. On average four of the five companies submitted bids either slightly below or slightly above their cost of production. But with the exception of Atlanta-based Mirant each company at times submitted bids that were substantially higher. Houston-based Reliant for example bid as much as $540 per megawatt-hour more than five times its estimated cost. Overall Reliant's average bid was close to costs according to the analysis. Cal-ISO identified companies by code in its report. Sources familiar with the study identified the companies for The Times. The Cal-ISO report singled out Supplier 5 identified by sources as Charlotte N.C.-based Duke Energy saying the company continues to bid significantly in excess of its operating costs. Duke owns two large power plants on the central coast. It marked up its bids an average of 88% beyond its cost to produce electricity according to the analysis. For example it cost Duke $85 to $121 to generate a megawatt-hour of electricity in the time period studied the report shows but the company's bids ranged from $149 to $195 per megawatt-hour. Duke spokesman Tom Williams on Thursday said The use of the data in some cases doesn't appear to add up and in all cases appears to be selective and could easily be misunderstood. Duke sells nearly the entire output of its power plants under long-term contracts and not on the spot market which the Cal-ISO report studied he noted. Calpine Net Soars On Added Plants Sempra Profit Rises By Rebecca Smith 07/27/2001 The Wall Street Journal Page B4 (Copyright (c) 2001 Dow Jones & Company Inc.) Calpine Corp. reported net income nearly doubled in the second quarter reflecting the independent power producer's aggressive plant-building program. Meanwhile the parent of a San Diego utility said profit rose 25%. Calpine of San Jose Calif. said net was $107.7 million or 32 cents a share up from $59.5 million or 20 cents a share a year earlier. The latest results which were in line with analysts' expectations included a special charge of seven cents a share related to Calpine's purchase of Encal Energy Ltd. a natural-gas company. Revenue grew even more strongly soaring to $1.61 billion from $417.2 million. Separately Sempra Energy parent of electric utility San Diego Gas & Electric reported profit rose to $137 million from $110 million a year earlier. Revenue jumped 40% to $2.1 billion from $1.5 billion. Sempra Chairman Steve Baum attributed the growth which stands in marked contrast to the financial woes of California 's other electric-utility-owning energy companies to Sempra's unregulated operations. Calpine's profit increased despite paying substantially more for natural gas to fuel its plants. It spent an average of $4.80 per million British Thermal Units for natural gas up from $3.31 a year before. At the same time Calpine's revenue per megawatt hour of electricity sold also rose to $71.03 in the latest period from $64.80 a year earlier. At Sempra Mr. Baum said profit from Sempra's biggest utility unit San Diego Gas & Electric fell 7.5% to $37 million from $40 million. Results were flat at its gas-distribution company Southern California Gas Co. Sempra Energy Trading was the big profit center generating half its total profit or $69 million compared with $40 million a year earlier. Mr. Baum said Sempra's stock which trades at a low price/earnings multiple of 10 still is being affected negatively by the California situation. He also said the company made less money in spot-power markets than in prior quarters but nevertheless intends to invest $2 billion in new power plants. In 4 p.m. New York Stock Exchange composite trading Calpine shares rose $1.08 to $36.89 while Sempra climbed 17 cents to $25.49. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: PLEASE READ & RESPOND Body:: Yes. Contact either Gia or John and get the ball rolling. Thanks Michael Terraso 08/18/2000 04:20 PM To: Steven Kean cc: Maureen McVicker=20 Subject: PLEASE READ & RESPOND Steve I received this note from Jeff Keeler who is on the government affai= rs=20 distribution list. Would you also want the EHS groups to work with Gia or= =20 John in developing value added documentation for this year's budget process= ? =20 Mike ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Houston Body:: I'm checking. Melissa loves talking about Houston real estate (one of the many quirks I love her for). I'll find out when she can do it. Ricardo Charvel 03/12/2001 01:00 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: Houston Steve As you might have expected Elsa already had a to do list a budget information on schools etc. I really did not have to discuss about moving to Houston. The conversation was more around when and how. On Friday I have to be in Houston for an EBS meeting on Mexico. I am planning to arrive there on Thursday morning to talk to Rick to Dan Reck and to Shawn Cumberland. I also need to find out about relocation and visas etc. I am writing you to thank you for your generosity in your advice and for helping me and encouraging me in making this important decision. I am also wirting because I am taking your word on Melissa's knowledge of the real estate market inside the loop. Elsa is coming with me on Thursday morning and we would like to see if it is possible for us to meet with Melissa on Thursday Friday or Saturday for advice and orientation. (Of course you would be welcome to the real estate working session!!) Please let me know. Thanks again Ricardo What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential Information and Securities Trading Body:: To:WILLIAMS WILLIAM Email:bwillia5@enron.com - 503-464-3730 Enron Wholesale Services - Office of the Chairman From: Mark Frevert Chairman & CEO Mark Haedicke Managing Director & General Counsel Subject: Confidential Information and Securities Trading To keep pace with the fluid and fast-changing demands of our equity trading activities Enron Wholesale Services (EWS) has recently revised its official Policies and Procedures Regarding Confidential Information and Securities Trading (Policies and Procedures). These revisions reflect two major developments: (1) our equity trading activities have been extended into the United Kingdom and (2) in an effort to streamline the information flow process the Review Team will play a more centralized role so that the role of the Resource Group is no longer necessary.You are required to become familiar with and to comply with the Policies and Procedures. The newly revised Policies and Procedures are available for your review on LegalOnline the new intranet website maintained by the Enron Wholesale Services Legal Department. Please click on the attached link to access LegalOnline: If you have already certified compliance with the Policies and Procedures during the 2001 calendar year you need not re-certify at this time although you are still required to to review and become familiar with the revised Policies and Procedures. If you have not certified compliance with the Policies and Procedures during the 2001 calendar year then you must do so within two weeks of your receipt of this message. The LegalOnline site will allow you to quickly and conveniently certify your compliance on-line with your SAP Personal ID number. If you have any questions concerning the Policies or Procedures please call Bob Bruce at extension 5-7780 or Donna Lowry at extension 3-1939. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Ed Segners Staff meeting, in 50M Dining Room Body:: John Stauffacher? What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: nan Body:: Jeff wouldn't be able to leave until late the 23d or early on the 24th and would need to be back by late on the 27th What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Sac Bee Wed 6/20: Weather an early test for fee caps:=20 Any severe jump in prices will likely be curbed experts say Sac Bee Wed 6/20: State to borrow up to $5 billion to buy energy Sac Bee Wed 6/20: Dan Walters: Once burned lawmakers are very wary of Davis-Edison agreement SD Union Wed 6/20: Senate Democrats lay back to see if FERC action=20 provides rate relief=20 SD Union Wed 6/20: House panel erases Bush energy cuts LA Times Wed 6/20: Davis Regulators Face Off at Hearing LA Times Wed 6/20: Energy on Agenda but Issue Is Blame LA Times Wed 6/20: Blackout Forecasts' Dark Side LA Times Wed 6/20: FERC Move Short-Circuits for Hard Price Caps LA Times Wed 6/20: Plan Won't Raise Rates Davis Says LA Times Wed 6/20: State to Pay Electric Bill With Loan Not Taxes LA Times Wed 6/20: Edison Unveils Blackout Warning Plan LA Times Wed 6/20: State Joins Challenge to Bush on Air-Conditioner=20 Standards LA Times Wed 6/20: New Price Caps Not a Deterrent Power Firms Say LA Times Wed 6/20: The FERC's Action Is Good Bad Ugly (Commentary) SF Chron Wed 6/20: Davis OKs stopgap loan=20 CRISIS POWERS: Action sidesteps Legislature SF Chron Wed 6/20: Experts say state must seize the day=20 ANALYSIS: Price caps set stage for future SF Chron Wed 6/20: California's energy crisis hits Northwest like a tidal= =20 wave SF Chron Wed 6/20: Davis demands nearly $9 billion for electricity=20 overcharges SF Chron Wed 6/20: Fed price caps placate Demos=20 But Feinstein's bill to regulate energy producers was more strict SF Chron Wed 6/20: Potrero Hill power plant hit by 2 lawsuits=20 Neighbors city ask court to cut back hours of operation SF Chron Wed 6/20: Washington wakes up Mercury News Wed 6/20: Feinstein halts electricity price caps bill=20 Mercury News 6/20: FERC's fixes have fallen short (Commentary) OC Register Wed 6/20: Easing the crunch on costs of power (Commentary) Individual.com (Bridgenews) Wed 6/20: [B] POWER UPDATE/ US Senate panel to hold off vote on Calif. cap bill=20 Individual.com (Bridgenews) Wed 6/20: [B] FERC order seen having little= =20 effect on US generator profits Individual.com (PRnewswire) Wed 6/20: SCE Unveils Rotating Blackout Web S= ite and Public Notification Plan=20 Individual.com (AP) Wed 6/20: Edison CEO/ Ruling Hasn't Helped NY Times Wed 6/20: At Last Action on California (Editorial) NY Times Wed 6/20: Regulators' Order Could Bring Broad California Power= =20 Accord Wash. Post Wed 6/20: Davis Finds Hope in Calif. Power Crunch NY Times Wed 6/20: The Lesson of When to Give Aid to Free Markets --- Weather an early test for fee caps: Any severe jump in prices will likely b= e=20 curbed experts say. By Dale Kasler Bee Staff Writer (Published June 20 2001)=20 California electricity prices have shot back up recently potentially posin= g=20 an early test of a new federal price-control plan that takes effect today.= =20 Warm weather has sent wholesale prices doubling this week partially=20 reversing a dramatic slide that had some state officials believing they'd= =20 tamed the wildly unpredictable California electricity market.=20 The rebound in prices would be expected said Arthur O'Donnell editor of= =20 the California Energy Markets newsletter. It's 110 degrees in Phoenix and= =20 it's 100 degrees (in Sacramento) and points in between.=20 Prices this week moved back above $100 a megawatt hour about double what= =20 they were last week -- although well below the roughly $300 suppliers were= =20 charging California in mid-May. Prices showed signs of stabilizing Tuesday= =20 analysts said.=20 Experts said the Federal Energy Regulatory Commission's new price-mitigatio= n=20 plan is likely to curb the most severe price spikes. This will eliminate t= he=20 astronomical prices said Severin Borenstein director of the University o= f=20 California Energy Institute.=20 But the plan probably won't bring California a cascade of cheap power=20 either.=20 Prices likely will bump up constantly against FERC's new price caps which= =20 will fluctuate from time to time and they're not likely to go much below t= he=20 caps unless there's a significant glut of energy said Peter Stiffler of th= e=20 energy consulting firm Economic Insight Inc.=20 Traders will always trade in at the price ceiling Stiffler said. They'r= e=20 going to offer power at the highest price they can.=20 The fluctuating FERC caps are tied to the production costs of the=20 least-efficient most-expensive generating plant operating in California wh= en=20 supplies are tight and an official power alert is declared by the state's= =20 Independent System Operator which runs most of the power grid. When there= =20 isn't a power alert prices can't exceed 85 percent of the price establishe= d=20 during the most recent alert.=20 FERC said the system would begin today with a cap of $108.49 a megawatt hou= r=20 but would rise to $127.64 if a power alert is declared.=20 But the cap can fluctuate significantly. Under the old FERC plan the price= =20 cap in May was set at $267 a megawatt hour. The old plan was similar to the= =20 new system but applied only to California and only kicked in during power= =20 alerts.=20 With the caps flexible generators could have incentives to withhold power = at=20 some plants in order to raise the caps said Stanford University economist= =20 Frank Wolak.=20 The FERC plan still doesn't solve the problem of withholding said Wolak= =20 chairman of the ISO's market surveillance committee.=20 Wolak also said he's afraid FERC will let power generators exaggerate their= =20 costs in order to bump up the caps.=20 The good news is they seem to be more serious Wolak said of the=20 oft-criticized commissioners. But given how many times we've been taken in= =20 I'm wary.=20 In addition generators will be allowed to exceed the price caps if they ca= n=20 justify it to FERC officials. Borenstein said FERC in the past has allowed= =20 generators to justify just about every price level imaginable and he's=20 suspicious that the commission will let generators do the same in order to= =20 evade the new price controls.=20 State officials while cautiously optimistic about the plan were upset tha= t=20 FERC will allow a 10 percent price premium on electricity because of the ri= sk=20 of selling to the California market.=20 We recognize that the risk of nonpayment in California continues to be=20 greater than in other states the commission said in its written opinion= =20 released late Tuesday.=20 Gov. Gray Davis' spokesman Steve Maviglio called the premium ludicrous=20 because the state Department of Water Resources has been buying electricity= =20 ever since the state's troubled utilities exhausted their credit in=20 mid-January.=20 The state is as creditworthy a buyer as you can get Maviglio said.=20 Experts said the plan also won't correct the state's energy imbalance.=20 None of this is going to have much effect on blackouts Borenstein said.= =20 This is solving part of the problem I'm worried people will think=20 everything has been solved.=20 The emphasis now has to be on getting California to conserve he added.= =20 A spokesman for power generators Gary Ackerman said the price controls=20 could worsen shortages this summer and will discourage generating firms fro= m=20 investing in the new power plants the West desperately needs.=20 Builders are going to sit on the fence and think about this said Ackerma= n=20 head of the Western Power Trading Forum.=20 Acting in the face of mounting political pressure and unrelenting criticism= =20 from California FERC voted Monday to impose round-the-clock price controls= =20 throughout the 11-state Western region.=20 The FERC plan replaces a three-week-old plan that applied only to Californi= a=20 and took effect only when power reserves fell to below 7 percent of demand= =20 and an official power alert was declared.=20 By extending the plan to the entire West experts said the commission=20 probably put an end to the phenomenon known as megawatt laundering in=20 which power was shipped out of California and then re-imported. Imported=20 power wasn't subject to the old price controls.=20 The new controls said consultant Stiffler significantly narrow the abili= ty=20 of a trader to move power around and play the market.=20 The Bee's Dale Kasler can be reached at (916) 321-1066 or dkasler@sacbee.co= m. State to borrow up to $5 billion to buy energy=20 By Emily Bazar Bee Capitol Bureau (Published June 20 2001)=20 State Treasurer Phil Angelides announced Tuesday that he will borrow up to = $5=20 billion to pay for future power purchases a move he said was necessary to= =20 avoid a continued drain on California's budget and cuts in other state=20 programs.=20 Since mid-January energy purchased by the state Department of Water=20 Resources on the spot market and under long-term contracts has come out of= =20 the state's general fund the source of most state spending.=20 Once the loan becomes final by the end of next week however energy will b= e=20 purchased with the proceeds.=20 Made possible by an emergency order from the governor the loan ultimately= =20 will be paid off by customers of the state's investor-owned utilities throu= gh=20 their electricity rates.=20 In essence it stops the general fund bleeding Angelides said.=20 The state has so far committed $8.2 billion from the general fund to=20 electricity purchases. Of that amount Angelides said the Department of Wat= er=20 Resources has actually spent about $6.1 billion through June 12 on power=20 purchases and has received about $900 million back from customers'=20 electricity rates.=20 Officials expect the loan to finance power purchases through September whe= n=20 they plan to issue up to $13.4 billion in revenue bonds.=20 The bonds will reimburse the general fund and and pay off the loan.=20 This gives the state some more running room some more cushion in case=20 anything goes awry with the bond sale to make sure ... the state does not r= un=20 out of general fund money jeopardizing education programs law enforcement= =20 programs children's and health services the Democratic treasurer said.= =20 Angelides said he has obtained firm commitments for $3.5 billion from JP=20 Morgan and Lehman Brothers at a blended interest rate of about 4.5 percent.= =20 If the long-term bonds are not issued by Oct. 31 the interest rate would= =20 climb to about 7 percent.=20 Lawmakers initially had hoped to close the short-term loan in May and float= =20 the long-term bonds shortly thereafter. However Republicans in the state= =20 Legislature balked at the plan forcing the delay of the bond sale until=20 mid-August.=20 Rather than wait Gov. Gray Davis invoked his emergency powers to allow for= =20 the loan and circumvent the delay.=20 Assembly Republicans don't mind that the governor used his emergency powers= =20 to expedite the loan said James Fisfis a spokesman for the caucus. Instea= d=20 he said they're concerned the loan could backfire and hurt Californians.= =20 If the larger bond offering falls through the penalties and added interes= t=20 could add up on ratepayers' bills he said.=20 But Angelides argued that the loan would benefit ratepayers on several=20 fronts: Power generators can no longer argue the state should pay a credit= =20 premium on electricity he said and for the most part will not be able to= =20 walk away from long-term energy contracts that have provisions requiring th= e=20 Department of Water Resources to obtain external financing by July 1.=20 Outside the Legislature the announcement drew praise from financial analys= ts=20 who had criticized the state for buying power with taxpayer money.=20 In late April for instance Standard & Poor cited fears over the state's= =20 mounting power costs when it downgraded California's credit rating on state= =20 bonds.=20 But S&P managing director Steven Zimmermann called the governor's executive= =20 order a step in the right direction.=20 We're very happy Zimmermann said. We were very anxious for the state to= =20 take the general fund out of the energy purchasing position it's been in.= =20 The Bee's Emily Bazar can be reached at (916) 326-5540 or ebazar@sacbee.com= . Dan Walters: Once burned lawmakers are very wary of Davis-Edison agreement (Published June 20 2001)=20 The Capitol's politicians rarely attempt to resolve big complicated policy= =20 issues preferring to occupy their time with relatively trivial matters --= =20 which also tend to be the priorities of well-heeled and generous interest= =20 groups.=20 And when they even acknowledge a need to address something big they'll oft= en=20 just nibble at the edges rather than confront the underlying conflicts=20 squarely. That's been the pattern on water transportation population grow= th=20 and public education to name but a few of many examples.=20 The Capitol completed just one comprehensive or seemingly comprehensive b= it=20 of policymaking during the last quarter-century. But the issue on that=20 occasion was electric utility deregulation which has exploded into an ener= gy=20 crisis of monumental proportions. And that experience is having a paralyzin= g=20 effect on the Capitol's denizens.=20 Some Capitol old-timers call it 1890 disease named after the number of t= he=20 1996 bill that created California's fatally flawed system of pricing electr= ic=20 power. The legislation was written largely by lobbyists for affected intere= st=20 groups and then presented to the full Legislature for take-it-or-leave-it= =20 approval. The measure was passed without a single dissenting vote even=20 though only a few lawmakers even began to understand its ramifications.=20 It was a huge failure of the legislative process virtually a dereliction o= f=20 duty and those who participated have been doing some fancy explaining. But= =20 given the history both veteran legislators and those who came to the Capit= ol=20 after 1996 are very leery about putting their names on additional pieces of= =20 energy policy that could backfire if the real-world outcome is markedly=20 different from the purported effects.=20 One example is the $43 billion in long-term energy supply contracts=20 negotiated by Gov. Gray Davis' administration to end the state's dependence= =20 on volatile spot market prices. When the long-term contracting program was= =20 authorized by the Legislature early this year it was on the assurances of= =20 the administration that it could obtain large quantities of power at cheap= =20 prices. But by the time that the contracts were made final months later t= he=20 average price was 25 percent higher than what was stated earlier while the= =20 spot market had fallen dramatically. Now the long-term contracts that seeme= d=20 like such a good idea in January and February could become financial=20 albatrosses.=20 An even more telling example is the deal Davis made with Southern Californi= a=20 Edison to keep the utility from joining Pacific Gas and Electric in=20 bankruptcy. The utilities accumulated at least $13 billion in debts in six= =20 months buying power at prices much higher than they were allowed to=20 recapture from their customers. Consumer groups are denouncing the Edison= =20 deal as a corporate bailout that would impose multibillion-dollar burdens o= n=20 customers while imposing virtually no financial onus on Edison or its=20 creditors. And the deal's critics are pouncing on legislators' reluctance t= o=20 do something that might haunt them later -- especially in 2002 a critical= =20 election year.=20 Five years ago lawmakers and the utilities foolishly foisted this=20 deregulation scheme onto California consumers and now the governor and=20 Edison expect the ratepayers to pay billions more to save the utilities fro= m=20 their own mismanagement and bad policy decisions consumer gadfly Harvey= =20 Rosenfield said Tuesday as legislative hearings opened on the Edison deal.= =20 This time the whole world is watching the Legislature.=20 Harry Snyder of Consumers Union echoed Rosenfield's pledge to hold=20 legislators accountable. It looks a lot like 1890 Snyder said. It's too= =20 big (and) this is the same process all over again.=20 The sheer complexity and potential ramifications of the deal are weighing= =20 heavily on lawmakers. This is not a Mother's Day resolution Senate Energ= y=20 Committee Chairwoman Debra Bowen said wryly as the hearings began. Davis an= d=20 Edison lobbyists are pulling out all the stops but legislators are very= =20 very nervous about taking another big step that could generate public=20 backlash.=20 The Bee's Dan Walters can be reached at (916) 321-1195 or dwalters@sacbee.c= om . Senate Democrats lay back to see if FERC action provides rate relief=20 By Finlay Lewis COPLEY NEWS SERVICE=20 June 19 2001=20 WASHINGTON =01) Key Senate Democrats called a truce Tuesday in the politica= l=20 wars raging over California's energy crisis as they adopted a wait-and-see= =20 posture over the Federal Energy Regulatory Commission's latest order=20 restricting electricity prices across much of the West.=20 Senators of both parties expressed relief over FERC's action on Monday. But= =20 Sen. Dianne Feinstein D-Calif. said she was skeptical that the order woul= d=20 end wholesale price manipulation by power providers or result in refunds to= =20 overcharged ratepayers.=20 Feinstein and Sen. Gordon Smith R-Ore. have prepared legislation seeking = a=20 much tighter pricing formula than the one FERC used. But she asked that the= ir=20 bill be set aside temporarily in deference to the agency's action.=20 I think we should wait and see what happens Feinstein said during a Sena= te=20 Energy and Natural Resources Committee hearing on the FERC order.=20 Democrats on the committee pressed FERC Chairman Curtis L. Hebert and the= =20 four other commissioners on why they had not acted sooner to control the=20 daily price turbulence in the California energy market. A market-interventi= on=20 order issued by FERC in April was designed to cope only with energy-supply= =20 emergencies despite pleas by California Gov. Gray Davis and other Californ= ia=20 Democrats for more drastic measures.=20 It's time to stop blaming and start problem-solving said Hebert a=20 Republican appointed chairman by President Bush.=20 Hebert noted that electricity prices on the volatile spot market have dropp= ed=20 considerably since the April order. Prices on the energy futures market hav= e=20 also tumbled as have natural gas prices =01) a key component in the cost o= f=20 electricity.=20 On Monday FERC unanimously ordered around-the-clock restraints on wholesal= e=20 electricity prices in California and 10 neighboring states over the next 15= =20 months.=20 As was the case with the April measure prices will be pegged to the costs = of=20 the least efficient power provider when reserves in California fall below 7= =20 percent. But when reserves are more plentiful the prices will drop to 85= =20 percent of the level established during supply shortages.=20 The order also provides for a 22-day period involving arbitration and revi= ew=20 by an administrative law judge for resolving price-gouging allegations and= =20 providing refunds in cases of improper pricing.=20 Adamantly opposing price controls earlier FERC acted after coming under=20 intense pressure from lawmakers of both parties. Republicans said they were= =20 worried that their GOP colleagues in California would have been blamed and= =20 possibly imperiled at the polls if FERC had failed to act.=20 Bush who also took a hard line against price caps blessed FERC's action= =20 after it was taken.=20 Hebert criticized the bill advanced by Feinstein and Smith as an attempt to= =20 solve California's problem by bureaucratic fiat.=20 Their measure would calculate wholesale electricity prices based on the=20 reported production costs of the individual generators with an added=20 allowance for a profit margin.=20 Hebert argued that the mitigation price that FERC will establish is not = a=20 blunt arbitrary figure that bears no resemblance to market conditions and = is=20 subject to political pressures and whims.=20 Meanwhile Commissioner William Massey made it clear that he harbors=20 misgivings about the FERC measure although he supported it.=20 He said the agency should have acted earlier to avoid the subsequent=20 carnage in California has failed to provide guidelines that would assure= =20 refunds to overcharged consumers and has acted questionably in allowing pow= er=20 providers to impose a 10-percent surcharge to cover credit-worthiness risks= .=20 Massey a Democrat who has consistently criticized his colleagues for movin= g=20 too slowing in the California crisis also said he wondered whether the ord= er=20 would provide an unintended incentive for generators to continue using=20 inefficient units in order to assure higher profit margins for their more= =20 modern facilities.=20 Sen. Barbara Boxer D-Calif. said she would propose legislation later this= =20 week designed to assure refunds to customers who have had to pay unfair=20 prices for their electricity.=20 If FERC won't do it ... Congress should Boxer said.=20 A spokesman for Sen. Jeff Bingaman D-N.M. chairman of the committee said= =20 Bingaman agreed with Feinstein on the need for a time-out while the FERC=20 order is being implemented.=20 Gov. Davis will testify today (6/20) before the Senate Government Affairs= =20 Committee which is investigating FERC's role in the crisis. Hebert and the= =20 other commissioners will also appear.=20 House panel erases Bush energy cuts=20 By Alan Fram ASSOCIATED PRESS=20 June 19 2001=20 WASHINGTON =01) A House subcommittee voted Tuesday to spend $1.2 billion mo= re=20 next year than President Bush proposed for energy and water programs=20 underlining lawmakers' sensitivity to the West's power problems and their= =20 desire for home-district projects.=20 The $23.7 billion measure approved by voice vote by a panel of the House= =20 Appropriations Committee is normally one of the more routine of the 13=20 annual spending measures Congress must approve. But with this year's=20 escalating battle between Bush and Democrats over energy policy the=20 measure's profile has been raised.=20 The bill would provide $18.7 billion for the Energy Department $641 millio= n=20 more than Bush requested and $444 million more than this year. Fiscal 2002= =20 which the bill covers begins Oct. 1.=20 It also includes nearly $4.5 billion for the Army Corps of Engineers and th= e=20 hundreds of water projects it has under way across the country $568 millio= n=20 more than Bush proposed but $73 million less than this year.=20 The measure was approved shortly after top members of the committee met wit= h=20 Bush at the White House.=20 Participants said Bush and the lawmakers reaffirmed their goal of keeping t= he=20 price tag of the 13 bills to $661 billion which is one-third of the overal= l=20 federal budget. That would be a 4 percent boost over 2001 which many=20 Democrats =01) and some Republicans in private =01) say is too low.=20 He said there would be attempts to raise this as we go through the process= =20 and let's stick with him said Rep. Sonny Callahan R-Ala. chairman of th= e=20 energy and water subcommittee.=20 Illustrating the pressures Republicans face David Sirota spokesman for th= e=20 Democrats on the committee said the bill lacked the new spending needed fo= r=20 renewable energy and other programs that could help alleviate power=20 shortages.=20 Under the bill approved Tuesday renewable energy programs would get $377= =20 million $100 million more than Bush wanted and $1 million more than this= =20 year. Nuclear energy basic energy sciences biological and environmental= =20 research and a study of whether spent nuclear fuel should be stored at a=20 Nevada site would all get about what Bush proposed.=20 The bill's $7.03 billion for environmental cleanups is $699 million more th= an=20 Bush proposed. Programs aimed at containing the nuclear arsenals of former= =20 Soviet states would get $845 million $71 million more than Bush's plan.=20 Members voted to hold the brief meeting behind closed doors after citing th= e=20 national security sensitivity of publicly discussing some of the nuclear=20 weapons programs covered by the bill.=20 Davis Regulators Face Off at Hearing From Reuters=20 ?????WASHINGTON -- California Governor Gray Davis a Democrat today blamed= a=20 Republican-led energy regulatory agency for not doing enough to help his=20 energy-starved state and demanded refunds of $6.7 billion for alleged=20 price-gouging by power generators. ?????Davis whose political future has been linked to his state's electrici= ty=20 woes was testifying at a Senate hearing with members of the Federal Energy= =20 Regulatory Commission. ?????The hearing marked the first time that Davis met face to face with all= =20 five FERC commissioners. ?????FERC regulates interstate electricity markets and has jurisdiction to= =20 order refunds by power generators found to have overcharged utilities. ?????Earlier this week the agency led by a Republican majority rejected= =20 Davis' pleas for strict caps on prices that soared above $400 per megawatt= =20 hour last month. ?????Sen. Joseph Lieberman the former Democratic vice presidential nominee= =20 heads the Senate Governmental Affairs Committee that quizzed the FERC=20 commissioners and Davis on efforts to stabilize the chaotic Western=20 electricity market. ?????Davis accused FERC of failing to act aggressively against alleged=20 price-gouging by out-of-state generators. ?????To date not a single penny in refunds has been returned to=20 Californians Davis said. It is unconscionable for the generators to prof= it=20 from their egregious overcharges. FERC must move quickly to enforce the law= =20 and order the energy companies to give back the money. ?????Davis said the state is owed refunds of at least $6.7 billion.=20 California's grid operator has estimated that from May 2000 to May 2001=20 power generators charged the state nearly $9 billion more than a competitiv= e=20 market would warrant he said. ?????California the nation's most populous state has been hit with a seri= es=20 of rolling blackouts the bankruptcy of its largest utility and an economi= c=20 slowdown since the power crisis began last year. ?????The state is expected to convene a criminal grand jury to investigate= =20 whether some power generators withheld supplies shut down plants or=20 exploited the bidding process to drive up prices. Out-of-state generators= =20 deny any illegal activity saying the high prices simply reflect supply=20 shortages. ?????Today also marks the day that FERC's newly expanded price mitigation= =20 program goes into effect in all 11 Western states with a wholesale price=20 limit of $107.9 per megawatt hour linked to a market formula. The plan had= =20 previously applied only to California during emergency power outages. ?????Since FERC's action earlier this week Senate Democrats dropped a=20 legislative effort to strictly cap electricity prices in the West. However= =20 California Democrats in the House were still trying to force a full vote on= a=20 package of energy amendments including a price cap. ?????The Bush administration and many Republicans oppose price caps=20 contending they would discourage more power production. ?????Separately today the U.S. Energy Department issued a study that=20 supported the White House's view that strict price caps would hurt not hel= p=20 California. ?????The study found California faces about 113 hours of rolling blackouts= =20 this summer a level that would double if wholesale prices were capped at= =20 $150 per megawatt because some 3600 megawatts of generating capacity would= =20 shut down. An alternative approach of setting a price cap based on producti= on=20 costs plus $25 per megawatt would delay or close about 1300 megawatts of= =20 capacity scheduled to be built in the state according to the study. ?????However lawmakers from both political parties have scrambled for some= =20 kind of solution to address the shortages in California well before the=20 congressional elections next year. ?????The FERC plan expands an existing price mitigation program in=20 California to 10 other Western states. The plan which runs through Septemb= er=20 2002 means that during nonemergency periods the price for wholesale power= =20 cannot exceed 85 percent of the cost of electricity sold during a Stage 1= =20 power shortage emergency in California. ?????A Stage 1 emergency is declared when electricity supplies fall below 7= =20 percent of demand on the Western power grid. ?????The plan also imposes a 10 percent surcharge on all power sales into= =20 California as financial protection for generators reluctant to sell to the= =20 state's financially weak utilities. ?????Davis was due to meet the two newest FERC commissioners Patrick Wood = of=20 Texas and Nora Brownell of Pennsylvania today. Both are former utilities= =20 regulators in states that successfully deregulated their power industry and= =20 nominated to the agency by President Bush. Copyright 2001 Los Angeles Times=20 NEWS ANALYSIS Energy on Agenda but Issue Is Blame=20 Politics: Gov. Davis will try to sway voter anger toward the GOP as he face= s=20 a Senate panel.=20 By RONALD BROWNSTEIN Times Political Writer=20 ?????WASHINGTON--When California Gov. Gray Davis testifies at a high-profil= e=20 Senate hearing today the issue formally on the table will be the expanded= =20 electricity price controls that federal regulators approved this week. But= =20 the session's political subtext will be the escalating struggle between Dav= is=20 and national Republicans to determine where California voters look for=20 solutions--and blame--for the state's power woes. ?????In both California and Washington Republican strategists believe Davi= s=20 is trying to manufacture a succession of conflicts with the White House tha= t=20 will allow him to run in 2002 as much against President Bush as against=20 whomever the state GOP nominates in the gubernatorial race. In return=20 Republicans are trying to shift the focus back toward Davis--most=20 aggressively through a California-wide television advertising campaign=20 organized by Scott Reed a former executive director of the Republican=20 National Committee. ?????Our goal is to get the focus back to Sacramento where it belongs= =20 Reed said. ?????Both sides see the same prize in this tug of war: the opportunity to= =20 determine where most Californians direct their anger during what could be a= =20 long hot summer of power shortages. ?????The situation is that the public's minds are not made up on this=20 issue--whether it is Sacramento or Washington who has acted too little too= =20 late said Mark Baldassare a pollster at the independent Public Policy=20 Institute of California. That gives both sides an opportunity to get their= =20 messages out. The stakes are fairly high in terms of how the public in=20 California ends up assessing blame over the next few months. ?????A Slight Uptick in Davis' Popularity ?????Overall Davis' political situation appears to be stabilizing. After= =20 months of runaway power costs the prices the state pays for wholesale=20 electricity are falling and new plants will come online next month. And=20 following a free fall in private polls Davis has seen his numbers tick bac= k=20 up slightly. Similarly a poll financed by independent power generators=20 showed that in mid-June for the first time in months Californians were=20 becoming slightly more confident that the crisis is easing. ?????Within the state Capitol Davis is asserting himself demanding that= =20 lawmakers hold hearings on his rescue plan for Southern California Edison. = On=20 Monday he released details of a similar plan for San Diego Gas & Electric.= =20 Last week he announced an agreement that is likely to increase generation = by=20 alternative energy producers who account for about a fourth of the state's= =20 supply. ?????This guy is changing said state Sen. Steve Peace (D-El Cajon) who = a=20 few months back had been urging that Davis take a more aggressive stance on= =20 the crisis. There is a difference in his demeanor and focus. ?????Yet the energy crisis still looms as a vast cloud over a reelection=20 campaign that once looked like a stroll on the beach. ?????The paradox for Davis is that the substantive victory for pricecontrol= =20 advocates at the Federal Energy Regulatory Commission meeting this week may= =20 complicate his political goal of maintaining a heavy focus on Washington.= =20 Though Davis and some congressional Democrats portrayed FERC's decision as= =20 insufficient it appears to have lanced the pressure for federal legislatio= n=20 to impose the tighter price controls that Davis supports.=20 ?????Sen. Dianne Feinstein (D-Calif.) a principal sponsor of that bill on= =20 Tuesday announced she would shelve the measure for six months to give the n= ew=20 FERC plan time to work. ?????As a result the political effect of the FERC ruling could be to shift= =20 the focus away from Washington back toward decisions in Sacramento which i= s=20 exactly what Republicans prefer. Gray Davis is the dog that finally caught= =20 the car said Dan Schnur a San Francisco-based GOP consultant. Davis is= =20 going to keep screaming about price caps and refunds but now Republicans c= an=20 point to substantive action. ?????Davis: 'Much More They Should Do' ?????For months Davis has criticized Bush for refusing to support=20 electricity price controls and other measures that the governor says could= =20 ease California's energy crunch. At almost every opportunity Davis offers= =20 the same message: California is taking the steps it needs to but Washingto= n=20 has failed to help enough. That was precisely Davis' message Monday when FE= RC=20 significantly expanded the limited price caps it had imposed previously. ?????While saying that FERC had finally taken a step in the right=20 direction Davis added: There is much more they should do--including=20 providing refunds to California for alleged overcharges. The overall tone o= f=20 Davis' statement was much more skeptical about FERC's action than the remar= ks=20 from Feinstein who described the decision as a giant step forward. ?????Aides say Davis plans to repeat that two-part message in his appearanc= e=20 today before the Senate Governmental Affairs Committee chaired by Sen.=20 Joseph I. Lieberman (D-Conn.). In his testimony and in a round of schedule= d=20 television appearances Davis will demand that FERC order refunds in the=20 range of $5 billion to $6 billion to the state aides said. Davis also will= =20 distribute to every member of Congress a 177-page book chronicling the=20 state's response to the crisis. ?????Inside the Bush White House some officials see in Davis' cool respons= e=20 to FERC's decision more evidence that the governor is determined to use the= =20 White House as a foil in his reelection campaign. The prevailing view one= =20 official said is that no matter what concessions the administration offer= s=20 Davis will immediately raise the bar and demand something else--the way he= =20 did by talking about rebates as soon as FERC offered tougher price controls= . ?????That is Davis' M.O. said one official involved in the White House's= =20 energy strategy. He asks the administration to do something the=20 administration does it and then he attacks the administration for not doin= g=20 enough. . . . He needs someone to blame. ?????Davis aides reject that characterization arguing that the governor is= =20 merely representing the state's interests against an administration that th= ey=20 maintain is favoring energy producers over consumers. But Davis advisors=20 acknowledge that they have used focus groups to test campaign messages that= =20 pin the blame for the energy crunch primarily on Davis' Republican=20 predecessor Pete Wilson and a Republican president who has failed to sto= p=20 his rich friends in the energy industry from gouging consumers one aide= =20 said. ?????You don't have to tell people in focus groups more than once how this= =20 is connected the Davis aide said. ?????Gubernatorial Rivals Are Free of Blame ?????Baldassare the independent pollster notes it may be especially=20 imperative for Davis to keep Bush's energy decisions in the spotlight becau= se=20 none of his potential Republican opponents in 2002--California Secretary of= =20 State Bill Jones former Los Angeles Mayor Richard Riordan or businessman= =20 William E. Simon Jr.--is easily tagged with complicity in the problem. Non= e=20 of them were really involved in the decision-making over deregulation=20 Baldassare said. The only one else to blame in a political sense is=20 Washington and the Bush administration. ?????The new independent advertising campaign against Davis was inspired=20 largely by the fear of that strategy succeeding--damaging the standing in= =20 California not only of Bush but also of other Republicans particularly tho= se=20 in Congress. Reed whose American Taxpayers Alliance is funding the ads sa= id=20 he decided to launch the campaign after Davis appeared to gain the upper ha= nd=20 in the media debate following Bush's visit to California late last month. ?????The Bush trip really changed the terms of debate about Davis' problem= =20 and made it more of a possible national Republican problem Reed said. Th= e=20 entire terms of debate turned around and was focused on the issue of price= =20 caps as opposed to negligence on Davis' behalf. Our group is attempting to = go=20 out and engage Davis. ?????To engage Davis Reed's group which has not revealed its donors is= =20 spending what he said would be $1.5 million on an initial ad criticizing=20 Davis this week though a spot check of TV stations around the state=20 indicated a far more modest buy. Reed said the group is planning to air a n= ew=20 ad as soon as this week. ?????Democrats plan to answer the ads with attacks of their own and will be= =20 filing complaints with the IRS and other federal agencies about the anonymo= us=20 funding of the Reed ad. ?????Today's Senate hearing will give Davis another chance to respond to th= e=20 GOP and make his case for greater help from Washington. But Lieberman aides= =20 acknowledge the hearing is likely to be much less confrontational than it= =20 would have been if FERC had not acted Monday. The agency's decision change= d=20 the dynamic the aide said. ?????That assessment may apply not only to the conflict between FERC and it= s=20 critics but also equally to the hostilities between Davis and the White Hou= se. ---=20 ?????Times staff writers Dan Morain in Sacramento and Mark Z. Barabak in Lo= s=20 Angeles contributed to this story. Copyright 2001 Los Angeles Times=20 Blackout Forecasts' Dark Side=20 If optimists are wrong and the power runs out California's energy crisis= =20 could quickly cost lives and cripple the economy.=20 By JENIFER WARREN Times Staff Writer=20 ?????It's here. Summer 2001 the blackout season is only a day away. ?????Already Californians anticipate power outages when temperatures rise. = By=20 August the occasional annoyances endured so far--stoplights gone dark=20 computers air conditioners and elevators idled--could seem almost quaint. ?????Gov. Gray Davis insists we needn't worry. Four large new power plants= =20 are firing up soon he said and government's best and brightest are lockin= g=20 up still more megawatts to help meet our peak summer need. Californians=20 Davis predicts will valiantly heed his call to conserve helping the state= =20 survive the hot months no sweat. ?????With luck he'll be right. Power prices have stabilized and some ener= gy=20 analysts are wondering whether California may have tamed the blackout beast= . ?????But what if those plants don't get built in time people don't trim=20 their electricity use 7% and energy imports are more meager than expected? ?????And what if the state gets hit by a summer that is not moderately hot= =20 as Davis bets but blistering record-setting hot? ?????Government experts who ponder such questions don't expect disaster in= =20 the coming months. But they are planning for it nonetheless. ?????At best they say Californians can expect some gridlocked=20 intersections an occasionally overloaded 911 system perhaps some business= =20 bankruptcies certainly inconvenience. At worst the Western power grid cou= ld=20 crash causing uncontrolled blackouts that might lead to looting=20 contaminated water supplies even civil unrest. ?????How bad could this summer get? said state Sen. Joe Dunn (D-Santa Ana= ).=20 This summer could be the worst disaster to ever hit the state of Californi= a. ?????Imagine it's a Thursday morning in the third week of July. Relentless= =20 heat grips California the curse of a stubborn high-pressure ridge that jus= t=20 won't budge. ?????As air conditioners from Redding to Chula Vista lumber to life manage= rs=20 of the state's power grid in Folsom gulp their third and fourth cups of=20 coffee stare at a bank of computers and begin to fret. ?????Demand is jumping. Supply is static Canada and Arizona have nothing t= o=20 sell. It's looking tight. ?????Thirty minutes later the picture is gloomier. A brush fire shuts down= =20 transmission lines near Fresno squeezing supply in the Central Valley. In= =20 the Bay Area the unusual heat drives demand well past projections. ?????By noon things look bleak. Operators of the Diablo Canyon nuclear powe= r=20 plant near San Luis Obispo have cut output by 80%. The trouble? Chunks of= =20 kelp have lodged in one of the plant's seawater intake valves creating a= =20 clog like one that plagued the facility in January. ?????With a chorus of groans the grid's keepers scour the market for power= =20 to offset the Diablo loss. No luck. As the mercury climbs and the Golden=20 State economy roars into full swing electricity consumption ticks upward= =20 minute by minute. And when managers of a power plant near Long Beach cut=20 output because of a cracked turbine everyone knows what it means. ?????Alert the utilities. It's lights out California for the fourth day i= n=20 a row. ?????Dr. J. Michael Leary dreads blackouts--not personally but=20 professionally. Leary is an emergency room physician in the desert city of= =20 Rancho Mirage. When air conditioners go on the blink there the=20 victims--scores of them mostly old folks--wind up in his ER. ?????In a normal year 75% of his emergency patients are geriatrics. Like= =20 infants the elderly are unusually vulnerable to the heat. When blackouts= =20 hit they are most at risk. ?????It's as if you lived in Maine and they turned the heat off in January= =20 Leary said. This is an extreme environment we live in. The effects can be= =20 devastating. ?????Many desert seniors are on fixed incomes and live in mobile homes som= e=20 of them poorly insulated boxes that turn into ovens under the brutal summer= =20 sun. Take away the air conditioning and the humans inside start baking qui= ck. ?????For Leary the specter of continual back-to-back blackouts in=20 July--and some predict in June and August too--conjures images of an=20 82-year-old man living alone in one of those mobile homes taking medicati= on=20 for heart disease. The cardiovascular drugs plague the man with numerous si= de=20 effects one inhibits his body's ability to cool itself. ?????When a person gets overheated body temperature eventually rises=20 uncontrollably. Then comes a nasty spiral of effects and pretty soon you = go=20 into shock Leary said. Everything just shuts down. ?????On average each year 371 Americans die from heat-related causes more= =20 than the number killed by earthquakes tornadoes hurricanes lightning and= =20 floods combined. In 1995 a record hot spell in Chicago killed 465 people.= =20 Eleven Californians died from the heat in 1998. ?????A new report by the United Seniors Assn. predicts that more than half = a=20 million elderly Californians could need hospitalization for heat-related=20 ailments this summer.=20 ?????Some communities have laid plans for cooling shelters wading pools an= d=20 other measures to provide relief. But will all who need help get it? Or get= =20 it in time? ?????Out in the desert paramedics expect a crush of 911 calls when the pow= er=20 goes out and the ill frail and frightened seek help. Leary and others at= =20 Eisenhower Medical Center will be waiting armed with ice packs cooled IVs= =20 and ventilators. ?????I am very very worried the doctor said. I think we'll see a great= =20 toll in human suffering even mortality. ?????California's tomato processors are no less anxious. They wash cook= =20 peel chop mash and can about 1 million tons of tomatoes a week from July = to=20 October--enough to account for half the world's supply. For them a string = of=20 unexpected power losses could mean economic ruin in a matter of days. ?????The reason lies in the peculiar nature of food processing--a sterile= =20 system instantly contaminated if the power fails and the plant's precise=20 temperature is disturbed. ?????Once a batch of tomatoes is tainted it must be thrown out--all 50000= =20 pounds. The plant must then be sanitized a painstaking process that takes= =20 about 36 hours. ?????If you get hit by blackouts every third day for say two weeks you'= re=20 starting stopping cleaning restarting--it's a nightmare said Jeff Boes= e=20 president of the California League of Food Processors. You could lose thre= e=20 batches and be out $40 million before you knew what hit you. ?????Meanwhile farmers with still more truckloads of tomatoes line up=20 outside the plant waiting to be paid for their crop: If we can't process= =20 them the farmers have spent an entire season growing them for nothing=20 Boese said. ?????In Sonoma County the object in peril is the chicken. Egg producers=20 equip their laying houses with fans and swamp coolers to keep the hens=20 comfortable. Power is also needed to run giant refrigerators filled with eg= gs. ?????In a blackout those hens can overheat in no time said Rich Matteis= =20 of the Pacific Egg and Poultry Assn. In 20 or 30 minutes you could have= =20 100000 birds die. ?????Many large producers have backup generators but they are not designed= =20 for ongoing intensive use. Will they hold up? Small-scale egg producers=20 often have no backup power at all. ?????Hundreds of other California businesses could suffer if summer shapes = up=20 as bad as some predict. ?????The Valero Refining Co. of California northeast of San Francisco=20 produces 115000 barrels of gasoline a day. Because restarting a refinery i= s=20 a complicated task two or three blackouts close together could prompt=20 officials to shutter it until electricity supplies stabilize--costing=20 California about 10% of its gasoline supply. ?????At a Berkeley medical laboratory doctors say power losses to their=20 freezers could destroy bone marrow needed to give young leukemia patients= =20 lifesaving transplants. The state's 400 dialysis centers where patients=20 without kidney function go to have their blood cleansed every other day ar= e=20 in the same fix. Few have backup generators so when an outage hits=20 technicians must crank the machines by hand. ?????Most Californians of course face far more ordinary consequences. The= =20 scoreboards will fizzle at summer softball games joggers on treadmills wil= l=20 be stopped in their tracks electric organs will go silent leaving choirs = to=20 sing without accompaniment. ?????Parents will be asked to retrieve children from day-care centers when= =20 the lights and cooling systems conk out. Anniversary lunches may be ruined= =20 when restaurants cannot grill salmon or blend margaritas. ?????Most people will tolerate occasional disturbances psychologists say= =20 doing their part in a time of crisis. But what if such irritations become a= n=20 everyday fact of life? ?????Hundreds of essential energy users--including prisons fire=20 departments and airports--are protected from blackouts and hundreds more= =20 have applied for exemptions. That means the pool of people bearing the=20 blackout burden is shrinking so more frequent outages are likely. ?????Blackout predictions vary widely but at least one forecaster a=20 consultant for California water districts anticipates an outage almost eve= ry=20 afternoon of every workday this summer if temperatures are unusually warm. ?????Californians are accustomed to trash compactors giant-screen TVs and= =20 having the Internet at their fingertips. How much deprivation will they=20 tolerate? ?????So far the version of blackouts we've experienced hasn't looked too= =20 scary to people--it happens on a workday in the afternoon and you basical= ly=20 have to come home and reset your VCR said Dan Kammen a professor of ener= gy=20 and society at UC Berkeley. ?????But if outages become daily events and start to invade the evening=20 hours the public mood could change abruptly. ?????When there's a disaster or crisis or trauma people tend to act=20 heroically and work together said Robert Butterworth a Los Angeles=20 psychologist and trauma specialist. But the civilized behavior only lasts = a=20 short period. Then people start acting in unpredictable ways. ?????That tendency may be exacerbated Butterworth said by the nature of t= he=20 energy crisis--not a natural disaster but a man-made one. ?????People start to look for a scapegoat he said. People will look for= a=20 target and there's a tendency to strike out at whoever is closest to you. ?????One place that tendency may surface Butterworth said is on=20 traffic-clogged roads. Blackouts already have led to scores of accidents. A= dd=20 summer heat to the mix and repeat the pattern day after day at rush hour= =20 and motorists' patience could wear thin law enforcement officials say. ?????We're bracing for . . . possible acts of violence and road rage sai= d=20 Sacramento County Sheriff's Lt. Larry Saunders. ?????Lon House is the water consultant who predicts California could see=20 blackouts almost every summer weekday. Among the worries for the 440 water= =20 agencies he represents: losing the ability to pump water during wildfire=20 season. ?????I'm telling them to be ready for a major earthquake every day this=20 summer--meaning all your power is out throughout your district for multiple= =20 hours House said. ?????House insists he isn't an alarmist. But on top of the fire fears he= =20 warns that blackouts of more than a few hours would allow air into water=20 pipes contaminating supplies. If that happens Californians would be urged= =20 to boil their water until the system can be disinfected from one end of the= =20 pipe to the other. ?????Though rolling blackouts are risky they remain essentially a controll= ed=20 phenomenon occurring when and where the grid managers and utilities decide= .=20 Far more frightening--and devastating--are unexpected cascading outages th= at=20 could shut down the entire Western power grid. It happened in August 1996= =20 leaving 4 million people without power during a triple-digit heat wave. ?????The problem began when power lines in Oregon sagged into trees and shu= t=20 themselves off. That triggered a chain reaction of automatic switch-offs an= d=20 oscillating surges of energy that ultimately shut down all four of the main= =20 power arteries between California and the Pacific Northwest. ?????That robbed the system of thousands of megawatts--enough to power the= =20 city of Seattle four times over--and scattered outages across California an= d=20 six other Western states. Thousands of customers were without power for mor= e=20 than a day. ?????Though such an episode is rare California grid managers say it is mor= e=20 likely today because the system is taxed by the ever-increasing load of=20 electricity it bears. ?????The system is very dynamic and when it's heavily loaded and highly= =20 stressed like it is now the smallest little thing could cause big trouble= =20 said Kevin Bakker who oversees California's connection to the greater=20 Western power grid.=20 ?????If a massive uncontrolled outage should hit the ramifications could = be=20 dizzying said Mike Guerin chief of law enforcement for the state Office o= f=20 Emergency Services. Police departments would probably go to tactical alert= =20 guarding against looting by criminals who might take advantage of disabled= =20 alarm systems and darkened street lights. ?????In hot areas cities might convert municipal buses--parked with air=20 conditioners running--into cooling shelters Guerin said. The state would= =20 provide emergency generators to nursing homes and others in need while the= =20 California National Guard might be called into action. ?????With this kind of blackout scenario you're not worried about the=20 bologna going bad in the refrigerator Guerin said. We're talking about= =20 doctors doing surgeries on backup generators for three days. We're talking= =20 about a lot of things we don't like to think about. ---=20 ?????Times staff writers Nancy Vogel and Alexander Gronke and researcher=20 Patti Williams contributed to this story. Copyright 2001 Los Angeles Times=20 FERC Move Short-Circuits Push for Hard Price Caps=20 By RICHARD T. COOPER and JANET HOOK Times Staff Writers=20 ?????WASHINGTON--The Federal Energy Regulatory Commission's decision to=20 impose full-time price ceilings on wholesale electricity in California and= =20 the West appears to have deflated the congressional drive for a return to= =20 traditional utility regulation. ?????Sen. Dianne Feinstein (D-Calif.) calling the price mitigation syste= m=20 FERC unveiled Monday a giant step forward announced Tuesday that she is= =20 pulling back her bill to force a return to the cost of service pricing=20 system that prevailed before deregulation. Republican Sen. Gordon Smith of= =20 Oregon a co-sponsor agreed as did Sen. Jeff Bingaman (D-N.M.) chairman = of=20 the Senate Energy Committee. ?????House Democrats vowed to fight on for tougher controls but they were= =20 given little chance to succeed. ?????As a result although the political blame game will rage on the reali= ty=20 of a long ugly summer for California appears to have arrived: at least=20 several months of tears toil sweat--and fast-rising electric bills. ?????California consumers are likely to face an unpleasant paradox energy= =20 analysts said: Given present power shortages blackouts are virtually=20 inevitable this summer. And since state authorities are beginning to let= =20 high wholesale prices flow through into retail bills after months of=20 subsidies many consumers could face higher charges at the same time their= =20 lights begin to flicker. ?????Even if FERC's order succeeds and wholesale prices fall as they have= =20 begun to do in recent weeks consumers' bills are likely to rise. Since=20 retail charges lag well behind wholesale prices closing the gap will=20 probably mean a period of higher costs for consumers regardless of what=20 happens in wholesale markets. ?????There is light at the end of the tunnel energy analysts said but it = is=20 probably a year away. And reaching it they said depends in part on=20 government officials taking no action that might spook investors and disrup= t=20 present plans for expanding the region's capacity to generate and deliver= =20 more power. ?????The new FERC system which its designers said would provide temporary= =20 price relief while preserving incentives for energy investment imposes=20 cost-based curbs on wholesale prices throughout the West and covers all suc= h=20 sales not just those during periods of extreme shortages as did the order= =20 issued in April. ?????FERC Chairman Curtis L. Hebert Jr. told the committee the new system= =20 will prevent megawatt laundering and other potential abuses. He said his= =20 agency is committed to ferreting out any forms of market misbehavior 24=20 hours a day seven days a week. ?????With the apparent collapse of demands for more intervention Congress= =20 now seems ready to give FERC a year or more of leeway to see whether its pl= an=20 will curb wholesale prices and create what FERC member Linda Breathitt a= =20 Democrat called a breathing spell in which California and the West can= =20 repair their dysfunctional markets. ?????It still remains to be seen whether there can be manipulation but I= =20 think we should wait and see Feinstein said Tuesday at a Senate Energy=20 Committee meeting attended by all five FERC members. The commissioners call= =20 their new system price mitigation not price caps but Feinstein said it= =20 amounts to the same thing. ?????Whether you call it price mitigation or something else a rose is a= =20 rose is a rose said Feinstein a member of the energy committee. ?????And Sen. Barbara Boxer (D-Calif.) appearing before the committee as a= =20 witness said: I was very pleased with [Monday's] about-face by FERC. I=20 believe they have a new tone. ?????Democrats on the other side of the Capitol pledged to keep fighting fo= r=20 traditional regulation but with Republicans in control of the House the= =20 struggle appears to be largely symbolic. ?????House Democrats wanted to introduce amendments on price controls and= =20 other energy policy to a mid-year supplemental appropriation bill due to co= me=20 before the House today. However GOP leaders expected to block Democrats fr= om=20 even offering the amendments on procedural grounds. ?????The most sweeping of the amendments would set cost-based limits on=20 wholesale energy prices in the West. Rep. Henry A. Waxman (D-Los Angeles) a= nd=20 other sponsors insisted that the measure is still needed in spite of the FE= RC=20 action which he said would continue to provide windfall profits to=20 generators encourage suppliers to withhold power and do too little to=20 restrain the price of natural gas. ?????He called the FERC policy an experiment that is using California and= =20 other Western states as subjects. ?????Similarly Rep. Nancy Pelosi (D-San Francisco) said: Although the FER= C=20 decision [Monday] is a step in the right direction I am concerned it does= =20 not remove incentives for energy suppliers to withhold power drive up pric= es=20 and gouge consumers. ?????The commission went as far as it did in part because of the specter of= =20 broader price control legislation Pelosi said. They felt the heat they s= aw=20 the amendments coming and decided to act. ?????And Rep. Bob Filner (D-San Diego) in an interview Tuesday said he wi= ll=20 press ahead with legislation to impose hard price caps. I would advise the= =20 senators that after a year of dealing with these price gougers that they wi= ll=20 easily manipulate this latest order he said calling it a Swiss cheese= =20 order--full of holes.=20 ?????Feinstein's shift put House Democrats in an awkward political position= =20 because it came just as they prepared to make their big push for tougher=20 controls. But the Democrats tried to minimize the differences in legislativ= e=20 strategy. ?????She too is waiting to see if the FERC experiment works Waxman said.= =20 I'm a little more skeptical but we're both watching carefully. ?????As a political matter a Democratic leadership aide acknowledged the= =20 FERC order muddies the debate at a time when Democrats have been working ha= rd=20 to make it a defining issue--and one they had hoped would help them win=20 control of the House in the 2002 elections. ?????It's hard to describe to people what the difference is between what w= e=20 want and what FERC has done said the aide. ?????And Republicans said FERC's action had clearly taken the wind out of t= he=20 sails of price control efforts that some GOP strategists feared might have= =20 passed the House. ?????I would have thought [it would pass] last week said John Feehery= =20 spokesman for House Speaker J. Dennis Hastert (R-Ill.). But now with what= =20 FERC did it takes a lot of air out of the balloon. ?????I think the FERC action will dissipate that strong push agreed Emil= y=20 Miller a spokeswoman for House Majority Whip Tom DeLay (R-Texas). It will= =20 take the heat off. ?????House Majority Leader Dick Armey (R-Texas) said the message to Democra= ts=20 was It's time to come off your political high horse. ?????He said he wanted to keep Democrats from offering their price control= =20 amendment to Wednesday's supplemental appropriation bill because the propos= al=20 is a political statement not a policy statement. ---=20 ?????Times staff writers Megan Garvey and Richard Simon contributed to this= =20 story. Copyright 2001 Los Angeles Times=20 Plan Won't Raise Rates Davis Says=20 Edison: Governor seeks to assure Senate where Democrats say action is a=20 bailout of nearly bankrupt utility.=20 By CARL INGRAM Times Staff Writer=20 ?????SACRAMENTO--Gov. Gray Davis sought to assure the state Senate on Tuesd= ay=20 that his plan to save Southern California Edison from threatened financial= =20 collapse would work without increasing customer rates. ?????Davis sent assurances to the Senate Energy Committee through his top= =20 attorney Barry Goode who helped negotiate the controversial proposal with= =20 the utility. ?????Senate Republicans have taken a wait-and-see attitude on the plan. But= =20 they generally contend that the business of utilities belongs in the hands = of=20 private enterprise. ?????But Democrats in both houses have charged that the deal between Democr= at=20 Davis and Edison represents a state bailout of the nearly bankrupt=20 Rosemead-based utility. The analysis is shared by leading consumer activist= s. ?????At the first in a series of Senate hearings on the package which is= =20 considered all but dead in its current form Sen. Byron Sher (D-Palo Alto)= =20 voiced concerns about political problems with the plan. ?????He asked Goode who was flanked at a witness table by Edison executive= s=20 whether monthly bills of the utility's customers would increase as a=20 consequence of approval of the governor's package. ?????Our models say there will be no additional impact on the ratepayers= =20 Goode replied. ?????Other members appeared ready to pursue rate increase questions but=20 Chairwoman Debra Bowen (D-Marina del Rey) cut them short. She said the issu= e=20 would be fully examined at a later hearing. ?????To spare Edison from going into bankruptcy and to restore its=20 credit-worthiness Davis and executives of the utility reached a complex=20 compromise in April the centerpiece of which was a state purchase of=20 Edison's transmission grid for about $2.8 billion more than twice its book= =20 value. ?????Edison has estimated that it owes $3.5 billion to creditors including= =20 wholesale power generators as a result of deregulation of retail electrici= ty=20 prices in 1996. ?????Because of a freeze in retail rates Edison was prohibited from passin= g=20 its energy costs to customers. ?????Other features of the deal include dedicating a portion of consumer=20 rates to help pay off the debt a guaranteed 11.6% rate of return to Edison= =20 on its sales and investments and termination of an ongoing Public Utilitie= s=20 Commission investigation into financial dealings of Edison's parent company= =20 Edison International. ?????The energy committee held the hearing for fact-finding purposes and di= d=20 not consider the Edison bill SB 78x by Sen. Richard Polanco (D-Los Angeles= ). ?????But the Davis-Edison deal has angered consumer activists who contende= d=20 that bankruptcy for Edison would be preferable. ?????They deplored it as a bailout that would cost Edison customers $5=20 billion to $7 billion. ?????If the Legislature makes the mistake of forcing the ratepayers of=20 California to pay one more penny to bail out these companies we will put [= an=20 initiative] right on the ballot said Harvey Rosenfield of the Foundation= =20 for Taxpayer and Consumer Rights. ?????Consumer organizations in 1998 put to the voters an initiative to junk= =20 the 1996 deregulation law. The measure failed. ?????Rosenfield Harry Snyder of Consumers Union and Matt Freedman of the= =20 Utility Reform Network all asserted at a news conference that the Davis=20 rescue program should be killed. ?????Snyder who opposed deregulation said the governor's bill is shaping = up=20 as a replay of 1996. ?????It's too big too complicated. . . . This is the same process that=20 brought about this [deregulation] disaster Snyder said. ?????Separately San Diego Gas & Electric agreed Monday to sell its=20 transmission grid to the state for about $1 billion on the same terms as=20 Edison. ?????With all the controversy surrounding the Edison deal the chance of=20 SDG&E winning legislative approval of its sale is slightly better than 50%= =20 said Stephen L. Baum chief executive of Sempra Energy parent of SDG&E. ?????I think there's a widely shared view in the Legislature that they don= 't=20 want the state in the long-term business of power procurement. . . . In ord= er=20 to get Edison back into that business there has to be this infusion of=20 capital to pay off past electricity debts and make the utility=20 credit-worthy Baum said. ---=20 ?????Times staff writer Nancy Rivera Brooks contributed to this story. Copyright 2001 Los Angeles Times=20 State to Pay Electric Bill With Loan Not Taxes=20 By MIGUEL BUSTILLO Times Staff Writer=20 ?????SACRAMENTO--California taxpayers who have had to bankroll billions of= =20 dollars in electricity purchases for the teetering power utilities will so= on=20 no longer see their money evaporate at record rates under an executive ord= er=20 by Gov. Gray Davis. ?????As early as next week the order will stop the hemorrhaging of the sta= te=20 budget by allowing Treasurer Phil Angelides to borrow $5 billion to buy=20 electricity. That money is expected to cover power purchases until this fal= l=20 when the state plans to sell an unprecedented $12.5 billion in bonds to rep= ay=20 the general tax fund and buy future electricity. ?????Angelides said Tuesday that he has already lined up $3.5 billion in=20 loans from two Wall Street firms and expects to secure at least another=20 billion by next week when he plans to close the deal and obtain the money. ?????The loan is critical he said because without it electricity purchas= es=20 would completely deplete state coffers as early as October. ?????In essence it stops the general-fund bleeding Angelides said. Wha= t=20 this interim financing does is take the pressure off the general fund and= =20 hopefully avert a cash crisis. ?????The loan could also ease concerns on Wall Street that California's ris= ky=20 entry into the power business has placed the state budget in a precarious= =20 position. Those concerns were one of the main reasons two major credit rati= ng=20 agencies downgraded the state earlier this year. ?????We have been looking forward to this day said Ray Murphy a vice=20 president at Moody's Investors Service one of the two firms that downgrade= d=20 California's credit rating. We view this as a positive first step toward= =20 getting the state out of the power business. We wanted the state to get the= =20 general fund out of the business as quickly as possible. ?????California has allocated $8.2 billion in taxpayer money for electricit= y=20 since January because the state's private utilities became too saddled with= =20 debt to continue purchasing power on the open market. and massive blackouts= =20 loomed. ?????Under a plan devised by Davis and approved by the Legislature the sta= te=20 budget is supposed to be reimbursed for the power purchases with the bond= =20 issue the largest in American history. The bonds in turn are to be paid= =20 off by utility ratepayers through their monthly bills. ?????The bond issue however has been delayed by partisan politics and=20 complex legal issues raised by the bankruptcy of Pacific Gas & Electric Co.= =20 the state's largest private utility. ?????A bond sale initially planned for May is now scheduled for late=20 September according to Angelides' latest estimate. The state's Public=20 Utilities Commission still needs to take a number of technical actions befo= re=20 the sale can take place. ?????As a result the state budget has been drained for power purchases far= =20 longer than initially anticipated--a situation that has imperiled spending = on=20 education transportation and other critical needs at least temporarily. ?????Angelides had earlier sought to secure a $4-billion bridge loan to rep= ay=20 the state budget for power purchases until the bonds were sold but was=20 rebuffed by Republicans in the Legislature who argued that the loan was no= t=20 necessary. ?????Davis' executive order issued late Monday as part of the Democratic= =20 governor's emergency powers during the energy crisis gives Angelides the= =20 authority to press ahead. ?????But it does not allow the treasurer to use the loan to repay the budge= t=20 for the billions spent so far this year on electricity as he had originall= y=20 intended. Rather it permits Angelides to use the loan proceeds to assist t= he=20 Department of Water Resources the state agency buying power with its futu= re=20 electricity expenses. ?????If the bond issue is further delayed Angelides estimated the loan=20 would gives California another four to six months before it would begin to= =20 run out of money. Furthermore the loan closes a potential loophole that=20 existed in the long-term contracts Davis had signed to stabilize the cost o= f=20 electricity which would have let power suppliers walk away from the deals = if=20 the state had not secured a source of financing by next month. ?????But Republicans warned that by entering into a bridge loan deal withou= t=20 knowing when the bonds would be sold Davis and the Democrats were incurrin= g=20 major risks that could further drive up the price tag of the crisis. ?????The loan carries a blended interest rate of about 4.5% but if it is n= ot=20 repaid by Oct. 31 the rate jumps to 7%. Because the loan is to be repaid b= y=20 the bonds which have been marred by a history of delay GOP officials=20 Tuesday were already calling the bridge loan a bridge to nowhere. ?????The thing that is most troubling is that the governor did not bother = to=20 consult with anyone said Assembly Republican leader Dave Cox (R-Fair Oaks= )=20 who learned of Davis' order from reporters. It's disappointing but the=20 governor does not seem to recognize there is a legislative branch. Copyright 2001 Los Angeles Times=20 Edison Unveils Blackout Warning Plan=20 Technology: The utility will notify customers by Internet and telephone whe= n=20 power might go out.=20 By DANIEL HERNANDEZ Times Staff Writer ?????Southern California Edison on Tuesday unveiled a system that will=20 forecast coming blackouts over the Internet and by telephone.=20 ?????Ordered by the state to create a warning system for customers as=20 California enters a summer that will almost certainly include rotating=20 blackouts Edison is also preparing to use automatic phone calls faxes and= =20 wireless communications to alert subscribers to outages.=20 ?????With these steps Edison is complying with an order by the state Publi= c=20 Utilities Commission which in April told the company to notify customers o= f=20 coming outages. Privately held Pacific Gas and Electric Co. established a= =20 similar program months ago.=20 ?????Edison previously opposed a notification system arguing that such a= =20 system could incite looters and burglars. But police agencies including th= e=20 Los Angeles County Sheriff's Department saw more danger in not warning=20 customers said Richard Rosenblum an Edison senior vice president. ?????On balance [we concluded] it was preferable for public safety to mak= e=20 that information available Rosenblum said. ?????Consumer advocates said Edison's notification system is welcome if=20 tardy. ?????It's fair to say that Edison has been a little behind where PG&E has= =20 been in trying to implement this said Mike Florio an attorney with the= =20 Utility Reform Network and a member of the California Independent System=20 Operator board which runs the state power grid. ?????Edison's Web site www.sce.com now features a pop-up screen that warn= s=20 of any blackouts coming in the next hour. It also links to a page which ca= n=20 be reached at www.outagewatch.com that forecasts which outage groups wil= l=20 be cut off next in the event of rotating blackouts. Detailed maps outline= =20 which areas are included in each group.=20 ?????The new Web features are expected to handle about 4 million simultaneo= us=20 users. Beginning this month Edison customers also can learn their block=20 number by looking at their bills said Edison spokesman Gil Alexander. ?????Outage information also will be made available on an automated phone= =20 line (800) 611-1911. ?????Edison officials are negotiating with another company to provide=20 additional warnings by e-mail fax phone and wireless communications. SDG&= E=20 which like Edison was required to inform customers of outage forecasts has= =20 moved more quickly providing large industrial customers with blackout=20 notification via pager since June 4. ?????Up-to-the-minute outage reports also will be provided in several=20 languages to radio and TV stations Edison officials said. ?????Edison officials emphasized that the new alert system can never be 100= %=20 accurate and that sudden blackouts although rare are always a possibilit= y.=20 ?????We have planned as aggressively as we think is warranted understandi= ng=20 that you can't predict how your customers will respond Alexander said. Copyright 2001 Los Angeles Times=20 State Joins Challenge to Bush on Air-Conditioner Standards=20 Regulations: U.S. rolled back Clinton rule from 30% increase in efficiency = to=20 20% on manufacturers' urging.=20 By JENIFER WARREN Times Staff Writer=20 ?????California and two other states joined environmentalists Tuesday in=20 suing the Bush administration over its decision to weaken efficiency=20 standards for home air conditioners. ?????The lawsuit caps weeks of criticism heaped on the administration after= =20 it rolled back a rule requiring manufacturers to increase the efficiency of= =20 air conditioners 30% by 2006. ?????That rule was adopted by President Clinton during his final days in=20 office and after years of research and debate. California and other=20 states--including Texas--endorsed it as a way to substantially cut energy u= se=20 and improve air quality. ?????But after reviewing the rule at the industry's behest Bush=20 administration officials in April sliced the mandated increase to 20%. The= =20 higher standard they said would have made home coolers too expensive=20 especially for the poor. ?????Conservationists and consumer groups blasted the policy change callin= g=20 it shortsighted at a time when California and other states are enduring an= =20 energy crunch. ?????In California residential air-conditioning accounts for about 15% of= =20 the peak energy demand. Weakening efficiency standards critics say will= =20 require as many as 60 new power plants nationwide four in California. ?????This is a time when we need to conserve electricity and reduce our=20 dependence on the large energy generators and importers state Atty. Gen.= =20 Bill Lockyer said in an interview. Weakening this standard is precisely th= e=20 wrong message at precisely the wrong time. ?????In their lawsuit Lockyer and the attorneys general of New York and=20 Connecticut allege that federal law bars the U.S. Department of Energy from= =20 softening an appliance efficiency standard. A separate but similar suit was= =20 filed by the Natural Resources Defense Council the Consumer Federation of= =20 America and another nonprofit group. ?????Joe Davis the Energy Department's deputy spokesman said there would = be=20 no immediate comment on the suit filed in federal court in Manhattan. He= =20 added however that we believe all of the actions of our decision-making = in=20 the air conditioner standards are well within the law. ?????When Clinton's rule was issued in January his outgoing energy=20 secretary Bill Richardson said the payoff in power savings and cleaner ai= r=20 would be one of the administration's greatest environmental achievements. ?????But a trade association representing air conditioner manufacturers=20 challenged the new rule arguing that it would dramatically increase costs = of=20 the units--priced between $2000 and $4000--and thus discourage people fro= m=20 replacing old ones. ?????The Department of Energy sided with the industry group in April.=20 Officials said Clinton's proposal would have added $335 to the price of a n= ew=20 air conditioner while the lower 20% standard would boost prices only abou= t=20 $213. ?????Others however say those figures do not take into account the=20 economies of scale gained when manufacturers increase production of the mor= e=20 efficient units. When Congress passed the first efficiency standard for air= =20 conditioners in the late 1980s industry said the sky was falling and tha= t=20 it would increase the cost of air conditioners by $700 said Andrew Delask= i=20 executive director of the nonprofit Appliance Standards Awareness Project. = In=20 fact he said U.S. Department of Commerce data showed no price jump. ?????Dan Reicher the assistant secretary of Energy under Clinton who overs= aw=20 development of the stricter standards added that high-efficiency air=20 conditioners are not some exotic untested technology. ?????There are lots and lots of air conditioners already meeting the=20 standards--between 5% and 10% of the units sold today he said. ?????Although most manufacturers support the Bush rollback the second=20 largest maker of air conditioners--Houston-based Goodman Global Holding=20 which produces the Amana brand--opposes it saying any higher upfront costs= =20 would be recovered by consumers in lower utility bills. ?????On Tuesday the company's president John Goodman issued a statement= =20 supporting the lawsuit saying the tougher standard would give consumers a= n=20 enormous cost saving U.S. energy consumption will drop and our environment= =20 will benefit from reduced air pollutant emissions and greenhouse gases. ---=20 ?????Times staff writer James Gerstenzang in Washington contributed to this= =20 story. Copyright 2001 Los Angeles Times=20 New Price Caps Not a Deterrent Power Firms Say=20 Regulation: Producers are unhappy with the federal action but say it is=20 unlikely to discourage them from constructing new plants.=20 By NANCY VOGEL and THOMAS S. MULLIGAN Times Staff Writers=20 ?????The expanded electricity price limits approved by federal regulators= =20 could squeeze big energy traders but will probably not discourage power pla= nt=20 construction in California electricity producers said Tuesday. ?????Power plant owners and marketers said they had not had time to digest= =20 the 53-page order and thus could not say exactly how it would affect=20 California and the 10 other Western states it covers. ?????But the companies generally asserted Tuesday that the order would not= =20 deter them from investing in the vast power-starved Western region--though= =20 they have often raised such a prospect in arguing against price controls. ?????Whatever its long-term effects Monday's order by the Federal Energy= =20 Regulatory Commission appeared to have an immediate effect in dampening=20 prices in California's volatile daily or spot market. ?????The order does not take effect until today but the prospect of new=20 measures aimed at limiting prices appeared to tame markets Tuesday.=20 Californians used more electricity at the late-afternoon peak than on any d= ay=20 this year yet market prices hovered around $100 a megawatt-hour. ?????That is well below the average of $284 a megawatt-hour that the state= =20 paid for electricity from January through April with prices soaring as hig= h=20 as $1900 at times of tight supply. ?????All the markets in the West have come down said Mike Wilczek senio= r=20 power markets reporter for Platts the energy market information division o= f=20 the McGraw-Hill Cos. It's bearish news. ?????Nevertheless several generators minimized the effects of the FERC=20 order contradicting earlier warnings from some industry sources and=20 officials of the Bush administration who consider price limits to be=20 impediments to future investment in power plants. ?????Calpine will have no problem operating under this order said Joe=20 Ronan vice president of regulatory affairs for San Jose-based Calpine Corp= .=20 which has three power plants under construction in California and plans to= =20 build at least three others. ?????The federal order lasts only until September 2002 he said and becaus= e=20 it sets prices based on the cost of running the most expensive inefficient= =20 power plant in the market it should guarantee the owners of modern plants = a=20 profit. ?????Another company planning major investments in California Duke Energy= =20 Corp. of North Carolina said it will not be seriously affected by the=20 federal order because it has sold the output of its four California plants= =20 well into the future. ?????We've already forward-sold 90% of our generation for 2001 and 70% for= =20 2002 company spokesman Pat Mullen said. ?????Reliant Energy Inc. of Houston which owns five power plants in=20 California was not so sanguine about the federal order but it has not=20 backed away from plans to install more generators. ?????We remain committed to California as hard as it is to do business he= re=20 today spokesman Richard Wheatley said. We have plans that are on the=20 drawing boards for at least one possibly two projects. ?????On Monday Reliant Chief Executive Joe Bob Perkins called the FERC=20 action more of a political response than an acknowledgment of the gap=20 between electricity supply and demand in California. ?????Price caps don't work Perkins said and he warned California=20 consumers against assuming that the energy crisis is over simply because=20 wholesale electricity prices have recently dropped to their lowest levels i= n=20 a year. ?????Prices are falling because of mild weather not price controls he sai= d. ?????Without sound economics that increase available supply and reduce pea= k=20 demand . . . consumers can only hope for favorable weather and look forward= =20 to [rolling blackouts] Perkins said. ?????Energy analyst Frederick Schultz of Raymond James & Associates in=20 Houston called the FERC order a nonevent to the California generators=20 because so much of their power is now being sold through long-term contract= s. ?????However every long-term deal reduces the size of the electricity=20 market which supplies about 20% of California's needs. And that in turn= =20 limits trading opportunities for such firms as Enron Corp. which profit on= =20 the daily market's ups and downs Schultz said. ?????Enron representatives did not respond to calls for comment. ?????The federal order imposes round-the-clock price curbs on wholesale=20 electricity sold in 11 Western states that are connected by transmission=20 grids. ?????Under the order traders say market prices will probably hover around= =20 $100 a megawatt-hour depending upon the price of the natural gas that fuel= s=20 most of the state's electric generating plants. Though that is well below= =20 recent market prices it is higher than the average of about $32 a=20 megawatt-hour that California utilities paid in 1999 before the state's=20 deregulated market spiraled out of control. ?????The FERC order dictates that the price for spot market electricity=20 across the West will be based on the cost of producing one megawatt-hour of= =20 power at the least-efficient plant selling to California grid operators. Ma= y=20 31 when a previous FERC order based on a similar formula took effect the= =20 price set was $127 a megawatt-hour. ---=20 ?????Vogel reported from Sacramento Mulligan from New York. Copyright 2001 Los Angeles Times=20 Wednesday June 20 2001=20 The FERC's Action Is Good BadUgly=20 By PETER NAVARRO ?????The Federal Energy Regulatory Commission's new wholesale price caps wi= ll=20 save the Western states literally tens of billions of dollars in electricit= y=20 bills. As wonderful as that sounds the FERC order still allows wholesale= =20 generators to extract enough windfall profits to drive the region into=20 recession.=20 ?????The FERC's approach may also perversely lead to more air pollution and= =20 natural gas shortages.=20 ?????Let's look at what the FERC did right. First the order approved Monda= y=20 establishes price caps on a 24/7 basis rather than simply during power=20 emergencies--a long overdue reform.=20 ?????Second the order protects the entire West not just California. This= =20 regional cap will end megawatt laundering whereby in-state generators so= ld=20 power across California lines and then resold it back into the state to eva= de=20 caps.=20 ?????Third the order closes the ridiculous broker loophole that made the= =20 FERC's previous price caps Swiss cheese. Before generators could redirect= =20 their sales from the market to energy brokers who were exempt from the pric= e=20 caps.=20 ?????So where did the FERC go wrong? The problem may be traced to the two= =20 competing methods of imposing price caps and the all-important concept of= =20 economic rent.=20 ?????Economic rent in the wholesale electricity market is the market pric= e=20 of electricity minus the producer's cost where cost includes not just labo= r=20 and fuel but a fair profit on the invested capital as well. In traditiona= l=20 regulation this fair profit is calculated very simply as the market cost o= f=20 the money borrowed to build the power plant.=20 ?????Under this definition if the producer's cost is a nickel a kilowatt= =20 hour and he can sell it for 35 cents--as producers in the West have been=20 doing--the producer can extract 30 cents of economic rent from consumers.= =20 ?????In California the extraction of such economic rent through market=20 manipulation has taken place on a grand-theft scale. In 1999 California's= =20 electricity bill was about $7 billion. Last year it was almost $30 billion= =20 for roughly the same amount of electricity. This year California's bill is= =20 well on its way to $50 billion annually.=20 ?????To stop this rip-off Gov. Gray Davis proposed cost-based price caps= .=20 Such caps are calculated on a plant-specific basis. Each generator is allow= ed=20 to recover its cost of production including the fair profit but not a pen= ny=20 more.=20 ?????Thus for example a newer highly efficient plant generating power at= a=20 nickel per kilowatt hour would collect a nickel. The oldest least efficien= t=20 plant that generated power for 20 cents would be allowed to collect 20 cent= s.=20 ?????By setting different prices for different plants the economic rents a= re=20 driven to zero. Yet each generator still has a fair profit incentive to=20 produce. From a public policy perspective it's the best of all possible=20 worlds. And it was categorically rejected by the FERC. Instead the FERC se= ts=20 a single price for all generators based on the cost of the least efficient= =20 plant.=20 ?????The obvious problem with this umbrella pricing rule is that it still= =20 allows generators to extract billions in economic rent from consumers.=20 ?????In our previous example and under the FERC's rule the least efficien= t=20 plant still collects 20 cents a unit to recover costs. However the most=20 efficient plant producing power at a nickel-per-kilowatt also collects 20= =20 cents rather than a nickel and thus extracts a full 15 cents of economic=20 rent.=20 ?????Thus under the FERC's rule wholesale generators still will be able t= o=20 capture tens of billions of dollars more from consumers and businesses than= =20 under Davis' cost-based rule.=20 ?????The FERC's approach is still subject to the same kind of strategic=20 gaming that has been the hallmark of this crisis. Generators will ensure th= at=20 during peak times when the price cap is being established the most=20 expensive possible plant is in operation--whether it needs to be or not. Th= is=20 will peg the price at the highest level.=20 ?????In addition the FERC provides generators with a perverse incentive to= =20 run their least efficient units more often. Since these least efficient=20 plants are also the highest polluting the result will be dirtier air.=20 Moreover the excessive running of these plants may also put a strain on=20 already stretched natural gas supplies. These least efficient plants use up= =20 to 40% more natural gas to produce a unit of electricity.=20 ?????The bottom line: The FERC done good. But it could have done a lot=20 better. And the way things stand now there still is a danger that higher= =20 electricity costs could push California and the rest of the West--and=20 eventually the nation--into a nasty recession.=20 - - - Peter Navarro Is an Associate Professor of Economics and Public Policy at U= c=20 Irvine. E-mail: Pnavarro@uci.edu Copyright 2001 Los Angeles Times=20 Davis OKs stopgap loan=20 CRISIS POWERS: Action sidesteps Legislature=20 Greg Lucas Sacramento Bureau Chief Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL: .DTL=20 Circumventing the Legislature Gov. Gray Davis used his emergency powers=20 yesterday to authorize borrowing up to $5 billion for energy purchases in= =20 advance of a record bond issue.=20 Sidestepping the Legislature with a stroke of the pen Davis' action=20 indicates that the state may need more time to prepare a $12.5 billion bond= =20 issue this fall the largest sale of its kind in history.=20 The Democratic governor's action was swiftly assailed by the Republican=20 leadership.=20 This is not a dictatorship. It's a democracy said Assembly GOP leader Da= ve=20 Cox of Carmichael. There is a judiciary a legislative side and an executi= ve=20 side and everyone has roles and responsibilities. Yet we continue to have= =20 the governor say 'I'm the only one around here that makes any difference.= =20 The rest of you shall do my bidding.' =20 Normally it is the Legislature that has the power to raise and spend money= =20 and a governor may not spend a cent unless lawmakers allow him to.=20 But Davis has broad powers under the state of emergency which he declared = in=20 January to combat California's energy crisis.=20 NO ADVANCE NOTICE The governor's aides declined to comment on yesterday's executive order and= =20 gave no advance notice of it.=20 This executive order authorizing a bridge loan will allow us to get=20 California's General Fund out of the power-buying business was the=20 governor's only comment in a written statement issued last night.=20 State Treasurer Phil Angelides said lawyers had advised him and the governo= r=20 that such borrowing could be authorized by an executive order.=20 The loan from Wall Street will temporarily fill the $5.2 billion -- and=20 growing -- hole in the state budget created when the state began buying=20 electricity on behalf of the state's cash-starved utilities in January.=20 The idea is to tide the state over until a larger bond sale of $12.5 billio= n=20 can be arranged later this year. A portion of that sale will pay back the= =20 $5.2 billion borrowed from Wall Street.=20 'STOPS THE BLEEDING'=20 It stops the general fund bleeding said Angelides. It takes the pressur= e=20 off and hopefully we'll avert a cash crisis.=20 The state runs out of internal borrowing power sometime in October. Angelid= es=20 said the loan would buy the state another four to six months.=20 The idea of a loan was floated earlier this year.=20 Cox and other GOP lawmakers objected wondering why the state should pay=20 interest on borrowed money when it could still borrow from various accounts= =20 within the state budget.=20 They refused to vote for a bill authorizing the larger bond sale of $12.5= =20 billion forcing a delay in issuing it until at least Aug. 14.=20 The idea of borrowing from Wall Street appears to have been abandoned sinc= e=20 both Davis administration and legislative budget-writers said the state cou= ld=20 keep borrowing internally into October well after the bond sale.=20 Yesterday's executive order authorizing the borrowing suggests that neither= =20 Angelides nor Davis are confident that the steps needed to prepare the $12.= 5=20 billion bond issue for market can be completed before then.=20 Angelides had previously said he hoped to sell the bonds in early September= .=20 Yesterday he said the governor's hope is to still sell long-term bonds by= =20 Sept. 30.=20 ACT OF DESPERATION? Sen. Tom McClintock R-Northridge described the executive order as an act = of=20 desperation that would suggest they are expecting the large bond sale to= =20 occur later rather than sooner.'=20 Numerous actions must be completed before the bond sale.=20 Among them are the approval by the Public Utilities Commission of several= =20 deals with the state and utilities to ensure that enough money from=20 consumers flows back to bond buyers to pay off interest and principal.=20 Although Davis' executive order authorizes $5 billion in loans Angelides h= as=20 only lined up $3.5 billion.=20 So far only two lenders have come forward to offer the state a loan J.P= =20 Morgan with $2.5 billion and Lehman Brothers with $1 billion at an interes= t=20 rate of 4.5 percent. If the long-term bonds are not sold by Oct. 31 that= =20 will increase to 7 percent.=20 Angelides said he hoped to line up another $1 billion by next week when th= e=20 loan deal occurs.=20 Assuming a loan of $4.5 billion Angelides said the state would pay out $8= =20 million in fees.=20 E-mail Greg Lucas at glucas@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 Experts say state must seize the day=20 ANALYSIS: Price caps set stage for future=20 David Lazarus Chronicle Staff Writer Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL: DTL=20 One day after federal authorities ordered long-sought electricity price cap= s=20 throughout the West analysts said yesterday it is up to California to=20 respond with measures to bring an end to the state's long frustrating=20 experiment with deregulation.=20 Possible steps the experts point to include raising power bills easing=20 pollution controls and spending billions of dollars in taxpayers' money on= =20 new plants.=20 Gov. (Gray) Davis and his team have been making this up week by week sai= d=20 Paul Joskow director of the Center for Energy and Environmental Policy=20 Research at the Massachusetts Institute of Technology.=20 It's time for them to get together with the Federal Energy Regulatory=20 Commission (FERC) to come up with some solutions he said. The state need= s=20 to get down to business and decide how the power market is going to look 18= =20 months from now.=20 Easier said than done. To date California's strategy for tackling its ener= gy=20 woes largely has consisted of wheedling cajoling and all but begging feder= al=20 officials to come to the rescue.=20 Now that the federal regulators have gone much of the way toward granting t= he=20 state's wishes analysts said Davis and other officials must act swiftly an= d=20 decisively to further remedy California's prolonged power troubles.=20 For his part however the governor feels that federal regulators have not= =20 done enough. He will push today during congressional hearings in Washington= =20 for billions of dollars in refunds for California ratepayers.=20 FERC has taken some first steps but the proverbial fat lady hasn't sung= =20 said Steve Maviglio a spokesman for Davis.=20 This persistent focus on federal assistance could slow progress toward a=20 lasting solution to California's problems some analysts believe.=20 We are still likely to experience blackouts this summer said Michael=20 Zenker director of Cambridge Energy Research Associates in Oakland. It's= =20 not yet clear that the state will do what it can to address other aspects o= f=20 the problem.=20 Put simply such steps would require enormous political courage -- and woul= d=20 be very expensive. In the end taxpayers and ratepayers will bear the burde= n=20 for this prolonged fiasco.=20 Among measures under consideration:=20 -- Raising electricity rates even higher. Although Californians got the=20 largest rate increase in state history last month even higher charges woul= d=20 promote conservation and lessen the need for California to borrow billions = of=20 dollars in the bond market.=20 -- Loosening emissions restrictions for power plants statewide. This would= =20 provide more electricity during shortages but turn back the clock on=20 California's strict environmental standards.=20 -- Building new plants at taxpayers' expense. This would guarantee a steady= =20 supply of juice but would leave the state struggling for years to recoup th= e=20 huge investment costs.=20 Of the three easing pollution controls is the easiest first step and the= =20 most likely analysts said. Such environmental protections have been roundl= y=20 criticized by power industry officials who claim the restrictions have=20 hampered the construction of new generating plants.=20 Taxpayer-financed power plants are possible under a new state power authori= ty=20 backed by the governor but the timing and financing remain undecided.=20 Higher electricity rates could be the toughest move to make analysts agree= .=20 They note that Davis will seek re-election next year and doesn't want to be= =20 seen as the governor who sent voters' power bills into the stratosphere.=20 Already critics are trying to paint him as the governor who was asleep at= =20 the power switch.=20 As federal regulators were moving at last on the price-cap front this week= =20 another big development took place closer to home Monday when Davis disclos= ed=20 a tentative deal with Sempra Energy's San Diego Gas & Electric Co. The plan= =20 calls for the state to purchase the utility's 1800 miles of power lines fo= r=20 nearly $1 billion.=20 As with a similar accord reached with Southern California Edison the Sempr= a=20 deal is intended to counter the catastrophic effects of California having= =20 deregulated wholesale power prices but not allowing the state's utilities t= o=20 pass on costs to customers.=20 Between them California's three major utilities have rung up more than $15= =20 billion in debt.=20 Here too the state appears unsure how to proceed. Both the Sempra and=20 Edison agreements require approval from the Legislature. It's anyone's gues= s=20 whether such approval is forthcoming.=20 It's going to be a really really tough sell said Nettie Hoge executive= =20 director of The Utility Reform Network in San Francisco. These aren't=20 fabulous deals.=20 ONE SCENARIO FOR UTILITIES Rather she believes the agreements will be reworked so that less taxpayer= =20 money changes hands while allowing the utilities to retain possession of=20 their power systems.=20 Hoge said this could subsequently influence a speedy resolution of Pacific= =20 Gas and Electric Co.'s bankruptcy proceedings. If it can avoid selling off= =20 key assets like power lines PG&E may be more open to any settlement plans= =20 put forward by the state.=20 The utilities are all going to end up with similar deals Hoge forecast.= =20 State Senate President Pro Tem John Burton D-San Francisco isn't so sure.= =20 He observed that the Edison deal hinges on a sale of the utility's power=20 lines to the state while the Sempra accord could stand even without such a= =20 transaction.=20 The two deals are totally unrelated Burton said adding that approval of= =20 the Edison accord is very much in flux. A bankruptcy filing by the state'= s=20 second-largest utility remains a distinct possibility he said.=20 This would only increase the importance of price caps in bringing some=20 stability back to California's power market.=20 While the state's current rate freeze will continue cushioning consumers fr= om=20 the volatility of wholesale electricity prices the caps -- or price=20 mitigation as federal regulators are calling it -- will limit the amount= =20 that power generators can charge on the open market.=20 SYSTEM HAS FLAWS It is not a perfect system: Power companies can base prices on the cost of= =20 running the least-efficient -- and thus costliest -- generating facility. B= ut=20 this amount almost certainly will be below some of the more outrageous pric= es=20 seen when the sky was the limit.=20 On at least one occasion this year California's wholesale power price topp= ed=20 $3000 per megawatt hour compared with just $30 about a year ago.=20 This is a plan that is good for California good for the Pacific Northwest= =20 and good for the entire West said FERC Chairman Curt Hebert.=20 That remains to be seen. As it stands the price caps will remain in effect= =20 through next summer.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 California's energy crisis hits Northwest like a tidal wave=20 Jeff Hammarlund Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/E D165509.DTL=20 THERE WAS a time when many Northwesterners thought we could watch=20 California's energy crisis from a safe distance.=20 We have since learned that a major energy crisis does not stop at the Golde= n=20 State's borders but instead rolls over the Northwest like a tidal wave= =20 wreaking havoc with our economy and overwhelming our carefully crafted ener= gy=20 policies.=20 As one Northwest utility official put it We learned that everyone else is= =20 the tail. California is the dog.=20 To understand why the Northwest is now facing its own energy crisis and how= =20 the energy problems in the Northwest and California each affect each other= =20 one must understand how the Northwest gets its power.=20 In the Northwest falling water is our primary fuel. Depending on the=20 available snowpack hydroelectricity produced at more than 200 dams in the= =20 Columbia River basin generates between 60 and 75 percent of the region's=20 electricity. About two-thirds of this hydropower comes from 29 dams owned a= nd=20 operated by the two federal agencies the U.S. Army Corps of Engineers and= =20 the Bureau of Reclamation.=20 By taking advantage of the region's geography and climate the Columbia's= =20 hydroelectric dams have produced some of the least expensive electricity in= =20 the nation power that has been the economic backbone of the region.=20 However the Columbia's hydrosystem also has two curses.=20 One is that water conditions can vary greatly and right now the Northwest= =20 and California are in the middle of an extreme drought. The second is the= =20 dams' negative impact on salmon. These dams operate under a federal salmon= =20 recovery plan established under the Endangered Species Act that calls for= =20 more water to be sent over spillways to help push the salmon downstream=20 instead of through the dams' power-generating turbines.=20 That power is sold at cost and transmitted to Northwest consumer-owned=20 utilities by yet another federal agency called the Bonneville Power=20 Administration. These cost-based rates cover the expense of repaying the= =20 U.S.=20 Treasury for the cost of developing these hydropower projects moving the= =20 power over massive transmission lines and supporting efforts to restore th= e=20 dwindling salmon runs.=20 Under federal law Northwest consumers get preferred access to the relative= ly=20 low-cost power. Any surplus power can be sold most often to California's= =20 municipal and investor-owned utilities.=20 This Northwest regional preference to federal power was part of the deal= =20 that led to the construction of the massive transmission lines called the= =20 intertie which first connected the Northwest with California and the=20 Southwest in the late 1960s.=20 For decades the intertie worked almost flawlessly and to everyone's benefi= t.=20 During the summer when air conditioners caused California's power use to= =20 peak many California utilities would supplement their needs by turning to= =20 the Northwest. In the winter when Northwest electric furnaces are turned o= n=20 for space heating California utilities would return the favor and ship the= ir=20 surplus power north.=20 Recently the BPA has had to purchase large blocs of power on the wholesale= =20 market to meet its contractual obligations to its Northwest customers.=20 The same exorbitant wholesale prices that began to plague California last= =20 year have also affected the Northwest meaning that the BPA has been runnin= g=20 out of money and is now in danger of defaulting on its debt obligations to= =20 the Treasury.=20 California's deregulation plan has affected energy relations between the tw= o=20 regions in other ways. For example the BPA has historically sold surplus= =20 power to California for relatively low prices. However the state's=20 deregulation law made it almost impossible for California utilities to ente= r=20 into favorable long-term contracts.=20 Instead power had to be purchased at the much higher market clearing pric= e=20 on the short-term spot market.=20 The BPA has taken extraordinary steps to help California keep the lights on= .=20 At times the agency even declared energy emergencies which allowed it to= =20 temporarily override salmon protections and use the water to generate power= =20 for California rather than sweep salmon over the dams. California officials= =20 have praised the BPA for its cooperation but Northwest environmentalists a= nd=20 tribal leaders complain that the BPA has been helping California address it= s=20 energy crisis by selling salmon down the river.=20 The Northwest will be helped by FERC's decision yesterday to extend limited= =20 temporary price restrictions it had imposed in California in the spring to= =20 other Western states during severe shortages. The order should also be good= =20 for California. Without consistent price restrictions throughout the West= =20 power marketers would simply skip California during an emergency and sell a= t=20 higher prices elsewhere.=20 But not everyone is happy with the decision. Many critics say the rates are= =20 still too high and some critics said in s published report that the order= =20 rewards inefficiency by pegging price ceilings to the costliest California= =20 gas plants.=20 The half-hearted response from FERC along with continuing supply shortages= =20 and other problems make it likely that California will continue to face=20 rolling blackouts and high utility bills -- even though they may not be as= =20 high as we once feared.=20 The Northwest may follow suit next winter.=20 Some in our region fear that some desperate California political leaders=20 might try to wrest control of the BPA and a large portion of the Columbia= =20 Basin's hydropower. The 6600 megawatts of hydropower from the Columbia's= =20 federal dams would only offer a few drops in the bucket for California's=20 massive 50000-megawatt system but its loss would devastate the Northwest= =20 economy.=20 The four Northwest governors (of Washington Oregon Idaho and Montana) and= =20 more than 40 state legislators met in February and agreed to explore ways t= o=20 ensure that the Northwest does not lose its regional preference to the=20 Columbia's hydropower.=20 Northwest governors have had some productive meetings with Gov. Gray Davis= =20 and his staff this year regarding power sharing and there are encouraging= =20 signs that trust is growing at this and other levels.=20 Just last week officials from the BPA California's Department of Water=20 Resources and the California ISO agreed on a plan that outlines when and h= ow=20 the BPA may be able to help California during the expected summer shortages= .=20 We will soon find out whether our two regions will succeed in collaborating= =20 with or cannibalizing each other as we enter the next phase of the West Coa= st=20 energy crisis.=20 Ultimately California's experience with energy deregulation makes the case= =20 for a strong and supportive federal role in the energy markets. It also=20 reinforces the view that electricity should be treated as an essential=20 service and be sold at cost by utilities that are owned and controlled by t= he=20 public rather than as a commodity and sold at the highest price.=20 In fact something like a California power authority that places California= =20 in charge of its own destiny makes more sense to me all the time.=20 Jeff Hammarlund is an adjunct associate professor and research fellow at th= e=20 Mark Hatfield School of Government at Portland State University where he=20 teaches graduate courses on energy policy. He is also president of Northwes= t=20 Energy and Environmental Str=20 2001 San Francisco Chronicle ? Page?A - 19=20 Davis demands nearly $9 billion for electricity overcharges=20 H. JOSEF HEBERT Associated Press Writer Wednesday June 20 2001=20 2001 Associated Press=20 URL:=20 ation al1103EDT0569.DTL=20 (06-20) 08:03 PDT WASHINGTON (AP) --=20 California Gov. Gray Davis demanded that power generators refund nearly $9= =20 billion in electricity overcharges and complained that federal regulators= =20 have looked the other way while energy companies bilked our state.=20 Davis told a Senate hearing Wednesday that the decision by the Federal Ener= gy=20 Regulatory Commission to curtail price spikes in California and 10 other=20 Western states was a step forward. But its actions do nothing about the=20 overcharges over the past year he said.=20 The governor a Democrat has been criticized by Republicans who charge he= =20 has allowed the California power crisis to get out of hand.=20 Davis defended his actions saying the state has stepped up approval for ne= w=20 power plants and strengthened conservation programs. He also said the state= =20 has little control over price gouging by out-of-state power generators.=20 The governor once said he could solve California's problems in 15 minutes.= =20 ... But it appears that California has continued to try and hide the true= =20 cost of power by having the state pay for it instead of the utilities=20 putting California taxpayers in jeopardy said Sen. Frank Murkowski=20 R-Alaska.=20 Murkowski said many of the alleged overcharges are by public power entities= =20 not under FERC jurisdiction=20 Sen. Joe Lieberman D-Conn. chairman of the Governmental Affairs Committee= =20 said the FERC which regulates wholesale electricity sales has been slow t= o=20 respond and surprisingly reluctant to assure that electricity prices are= =20 just and reasonable as required by the 1934 Federal Power Act.=20 The agency's response to the Western power problem raises serious question= s=20 about whether (FERC) has or will oversee the newly deregulated energy=20 markets not only in the West but across the rest of the country.=20 The federal agency whose commissioners were to testify later in the day= =20 imposed limited market-based price caps on Monday in California and 10 oth= er=20 Western states from Washington to Arizona. The agency also ordered the=20 parties to attend a conference next week to try to work out agreements on= =20 overcharges and other issues.=20 Months ago the FERC singled out $124 million in alleged overcharges by pow= er=20 generators. The power companies have since challenged the agency's findings= =20 and the matter remains in dispute.=20 To date not a single penny in refunds has been returned to California=20 complained Davis. He said that between May 2000 and the beginning of this= =20 month power generators are believed to have overcharged California $8.9=20 billion.=20 They must be required to give us back our money said Davis. It is=20 unconscionable that FERC looked the other way while energy companies bilked= =20 our state for up to $9 billion.=20 The state spent $7 billion for electricity in 1999 and $27 billion in 2000= =20 and is projected to pay nearly $50 billion this year said Davis. Power=20 generators have been able to exert extreme power over our energy market h= e=20 said.=20 Davis rejected Republican criticism that the state is not addressing the=20 problem. He said newly approved power plants will provide 20000 additional= =20 megawatts of electricity by 2003 including 4000 megawatts by the end of= =20 this summer. Everything that can be done to bring reliable affordable=20 energy to California is being done ... except wholesale price relief he= =20 said.=20 This administration has minimized this crisis (for) more months said Sen= .=20 Patty Murray D-Wash. alluding to President Bush's repeated refusal to urg= e=20 the FERC to mitigate electricity prices. Bush has strongly opposed price=20 controls although he indicated support for FERC's limited price mitigation= =20 effort this week.=20 Murray said the government should issue a disaster declaration so that=20 businesses can get low-income loans and require that FERC press its=20 investigation into price gouging and demand refunds not only in California= =20 but in the Pacific Northwest where electricity prices have also skyrockete= d.=20 Republicans continued their opposition to more stringent price caps based o= n=20 the cost of generation at individual power plants.=20 Having a federal agency try to determine what is a just and reasonable pri= ce=20 is laughable said Sen. Fred Thompson of Tennessee the committee's rankin= g=20 Republican. Hard price caps don't work when supply is the problem. ... The= y=20 make a bad situation worse he said.=20 After FERC issued its limited price control order this week Senate Democra= ts=20 on Tuesday said they would drop legislation to require more stringent=20 cost-based price caps on Western electricity sales.=20 Democrats in the House however said they would continue to pursue a bill= =20 requiring the FERC to take more aggressive action.=20 2001 Associated Press ?=20 Fed price caps placate Demos=20 But Feinstein's bill to regulate energy producers was more strict=20 Carolyn Lochhead Chronicle Washington Bureau Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/M N145950.DTL=20 Washington -- With federal regulators moving to cap prices on wholesale=20 electricity California's Dianne Feinstein and other Senate Democrats=20 yesterday withdrew their threat to do it for them.=20 A rose is a rose by any other name Feinstein declared to the five member= s=20 of the Federal Energy Regulatory Commission the day after they unanimously= =20 imposed a sweeping price ceiling on electricity throughout eleven western= =20 states.=20 I'm very grateful Feinstein told the commissioners who were called to= =20 testify to the Senate Energy and Natural Resources Committee. Let's watch= =20 and wait and see how this order works.=20 Feinstein had been leading the Democratic charge in Washington to force FER= C=20 to impose price controls indeed yesterday's hearing had been intended to= =20 highlight the agency's inaction. Gov. Gray Davis is still billed to appear= =20 today at another Senate panel headed by Sen. Joe Lieberman D-Conn. to=20 investigate price gouging.=20 The 60-page FERC order which takes effect at midnight tonight and remains= =20 until September 2002 limits prices based on the cost of the least-efficien= t=20 and therefore highest-cost generating plant. It is intended to mimic the w= ay=20 a competitive market functions.=20 While Democrats hailed FERC's move power generators and marketers warned= =20 that it would backfire leading to more blackouts and stifling investment i= n=20 new power plants.=20 It doesn't create or conserve a single megawatt in California or the West= =20 said Enron spokesman Mark Palmer. Government price controls always have=20 unintended consequences and history has proven that those have never been= =20 good for consumers.=20 Joe Bob Perkins president and chief operating officer of Reliant Energy= =20 bluntly called the price caps a political response to California's crisis= =20 that ignores the basics of supply and demand.=20 Price caps don't work Perkins said in a statement. This fact has been= =20 proven over and over in the context of virtually every business sector in= =20 which government regulators have experimented with such measures.=20 The Bush administration which has fought electricity price caps since taki= ng=20 office in January yesterday insisted that FERC had actually spurned them.= =20 It's important to note that FERC rejected price controls said White Hous= e=20 spokesman Ari Fleischer who instead called it a market-based mitigation= =20 plan.=20 He added the order is in keeping with the president's desire to help the= =20 state of California and to make certain that there is no illegal price=20 gouging carried on by any companies.=20 FERC's action coincided with the arrival of two new Bush appointees to the= =20 agency Patrick Henry Wood III a former Texas utility regulator and Nora= =20 Mead Brownell a former Pennsylvania regulator.=20 The soft-spoken boyish-looking Wood yesterday sought to allay Feinstein's= =20 lingering concerns that the new price control scheme would still permit=20 generators to manipulate the market.=20 Feinstein's bill would have gone further than the new FERC plan imposing a= =20 cost-of-service based price cap that would return California to the=20 regulatory regime it had before its 1996 electricity restructuring.=20 I am personally not allergic to that sort of remedy Wood told the panel = -=20 - a position that is toxic to the Bush administration's former opposition t= o=20 price caps. The cost-of-service regime was good enough for 80 years Wood= =20 said. We're trying to move away from it but we can still do it.=20 FERC's action followed by Feinstein's bill withdrawal quickly defused a= =20 mounting political confrontation between the Bush White House and Democrats= =20 over price caps -- one that saw Capitol Hill Republicans beating a retreat.= =20 Democrats argued that Bush by refusing to impose price controls was=20 allowing out-of-state generators based mostly in Texas to gouge California= =20 consumers.=20 The administration especially Vice President Dick Cheney and Energy=20 Secretary Spencer Abraham had insisted that price controls would backfire = by=20 reducing electricity sales and power plant investment making the state's= =20 blackouts worse.=20 Yesterday Sen. Gordon Smith an Oregon Republican who co-sponsored=20 Feinstein's bill as much as said the White House would have lost the fight= .=20 Smith said their measure would have won large majorities in both the Senat= e=20 and House had it gone to a vote.=20 E-mail Carolyn Lochhead at clochhead@sfchronicle.com=20 2001 San Francisco Chronicle ? Page?A - 11=20 Potrero Hill power plant hit by 2 lawsuits=20 Neighbors city ask court to cut back hours of operation=20 Rachel Gordon Chronicle Staff Writer Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/M N238116.DTL=20 The San Francisco city attorney joined forces with environmental and=20 community groups and sued in federal court yesterday to force the operator = of=20 the Potrero Hill power plant to cut its ramped-up electricity output until= =20 more rigorous pollution controls are installed.=20 The plant run by Mirant Corp. increased its output in response to Gov. Gr= ay=20 Davis' move to relax environmental laws on power producers and generate mor= e=20 electricity for Californians.=20 The lawsuits filed against Mirant in U.S. District Court allege the compa= ny=20 is illegally operating its so-called peaker plants. The suits appear to be= =20 the first challenge in California to Davis' efforts to produce more power.= =20 The Potrero Hill plant which runs during times of peak demand has a total= =20 of six turbines that generate 156 megawatts of electricity enough to power= =20 156000 homes. Each turbine is permitted to operate 877 hours a year -- a= =20 threshold that already has been exceeded.=20 Mirant struck a deal March 30 with administrators of the Bay Area Air Quali= ty=20 Management District -- the regional agency that regulates air pollution -- = to=20 run the plants as much as needed to keep up with the energy demand. In=20 return Mirant will pay $20000 per ton of excess emissions of nitrogen=20 oxides a pollutant that causes smog. The company placed $400000 on deposi= t.=20 The Mirant Corporation is behaving like an outlaw and the air district is= =20 their willing accomplice in violating clean air laws said Mike Thomas an= =20 organizer with Communities for a Better Environment one of the plaintiffs.= =20 The other groups that sued are Bayview-Hunters Point Community Advocates an= d=20 Our Children's Earth.=20 The city filed a separate suit over the same issue.=20 The lawsuits ask the court to order Mirant to stop operating beyond the 877= -=20 hour cap until it obtains new permits. The city and environmental groups=20 argue the permits for expanded operation are required by the federal Clean= =20 Air Act.=20 The lawsuits also demand that more stringent pollution controls be installe= d=20 on the peakers. The increased power production poses a potentially serious= =20 health risk to the people who live and work in the surrounding neighborhood= =20 the plaintiffs charge.=20 Because the peaker plants weren't originally intended to run full time the= y=20 aren't equipped with the most up-to-date pollution controls.=20 The plaintiffs also allege the air district regulators violated the=20 California Environmental Quality Act by failing to conduct thorough reviews= =20 of the expanded operation and not allowing for public comment.=20 We as a city are not saying no to power. We're saying there's a process an= d=20 they need to follow it said San Francisco Supervisor Sophie Maxwell who= =20 represents District 10 where the power plant is located.=20 Terry Lee a spokesman for the air district said her agency and Mirant did= =20 nothing illegal. Mirant spokesman Patrick Dorinson concurred.=20 They pointed to Davis' executive orders earlier this year that gave power= =20 companies the right to step up production without going through the normal= =20 permit process and adhering to the stricter pollution controls.=20 William Rostov an attorney for Communities for a Better Environment=20 contends Davis does not have authority to override federal air quality laws= .=20 Lee said the U.S. Environmental Protection Agency signed off on the=20 governor's plan.=20 The plant near 23rd and Illinois streets long has been a target of=20 neighbors trying to close it. Mirant is hoping to build a new 540-megawatt= =20 plant on the site that uses cleaner-burning natural gas. The existing plant= =20 burns highly polluting distillate oil.=20 Lee said the money Mirant is paying for the extra emissions will help reduc= e=20 air pollution in Potrero Hill. The efforts include placing filters on Muni= =20 diesel fuel buses that operate in the neighborhood and installing a lower-= =20 polluting engine on a tug boat that runs off the nearby shores.=20 Is this a perfect situation? No Lee said. But under the governor's=20 executive orders this is the way we're proceeding.=20 E-mail Rachel Gordon at rgordon@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 13=20 Washington wakes up=20 Wednesday June 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/E D40132.DTL=20 WASHINGTON after all does feel our pain. Partial but reasonable price=20 controls will contain wholesale electricity prices beginning today under a= =20 long-sought ruling by the Federal Energy Regulatory Commission. It's about= =20 time.=20 Where was this agency until now and why the sudden willingness to help?=20 Politics.=20 At first the Bush administration denounced controls as market interference= =20 that would chase off investment in power generation.=20 But the peril has spread beyond California to other Western states whose= =20 governors are Republicans. Mid-term elections for Congress are coming up ne= xt=20 year. Also the White House was besieged by California Republicans and=20 business groups worried about blackouts and price gouging.=20 President Bush finally sounded the retreat the day before the commission=20 vote. He could accept a mechanism that would mitigate any severe price= =20 spike. He insisted that the final results were not firm price controls=20 which arguably they are not.=20 Gov. Gray Davis who begged for help for months said the final package=20 didn't go far enough. What he wanted were tougher limits pegged to generati= on=20 costs plus a profit figure of 30 to 50 percent.=20 The final formula approved by the commission amounts to a loose-fit limit= =20 that should dampen the absurd price surges that have endangered the state.= =20 The 24/7 plan rewards modern plants by setting prices based on the=20 least-efficient power producers. It covers 11 states not just sickly=20 California.=20 There is room for doubt. Canny operators may find ways to exploit the prici= ng=20 mechanism. Also California will be whacked with a one-state-only surcharge= =20 of 10 percent. The commission took no action on another Davis complaint tha= t=20 power generators may have overcharged the state by $6.2 billion.=20 Still the new limits may be the most anyone could expect. Consider how far= =20 Washington has come: A hidebound ideology has given way to real-world=20 recognition of a huge problem. U.S. Sen. Dianne Feinstein acknowledged as= =20 much yesterday when she dropped a measure to impose stricter price limits.= =20 California's troubles aren't over. Conservation remains supremely important= .=20 New power plants need approval and speedy construction. The financial damag= e=20 to state utilities and the state's coffers needs attention. The severity of= =20 summer blackouts is a wild card.=20 The federal controls add a measure of protection from this volatile mix. It= 's=20 a shame that help didn't come sooner.=20 2001 San Francisco Chronicle ? Page?A - 18=20 Feinstein halts electricity price caps bill=20 Posted at 12:15 a.m. PDT Wednesday June 20 2001=20 BY JIM PUZZANGHERA=20 Mercury News=20 WASHINGTON -- Like a steam valve on an overheating boiler the move by=20 federal regulators to enact broad new electricity price controls in the Wes= t=20 has relieved much of the growing political pressure for stronger action --= =20 for now.=20 Sen. Dianne Feinstein removed one major source of that pressure Tuesday.=20 Satisfied that the Federal Energy Regulatory Commission has taken ``a giant= =20 step forward'' in curbing California energy prices Feinstein withdrew her= =20 legislation to enact price caps on wholesale electricity prices throughout= =20 the West.=20 ``Let's watch and wait and see how this order works'' the California=20 Democrat told members of the commission during a Senate hearing.=20 But while the battle over the actions of federal regulators may have=20 subsided the larger political war over energy prices continues.=20 California Gov. Gray Davis who has been pounding away for weeks at the Bus= h=20 administration for not providing enough help to the state will step into t= he=20 fray here today. The governor will appear at a Senate hearing where he will= =20 praise federal regulators for moving in the right direction with the new=20 plan. But he's also expected to continue to press for harder price caps and= =20 criticize federal regulators for taking months to act while the state drain= ed=20 billions from its budget to pay for electricity.=20 In addition Davis will question some aspects of the plan such as the lack= =20 of strong action on forcing refunds from suppliers. ``He wants to make sure= =20 that Congress gets the message loud and clear that we want our money back= =20 from the overcharges by generators'' said Davis media representative Steve= =20 Maviglio.=20 But the Republicans are just as eager to lay responsibility for the=20 electricity crisis on Davis who is up for re-election next year. A=20 hard-hitting Republican-backed TV ad campaign in California organized by=20 Scott Reed a former executive director of the Republican National Committe= e=20 blames the governor for failing to act quickly when the crisis first emerge= d.=20 The politics of shifting blame are likely to set the tone for the hearings= =20 organized by the new Democratic chair of the Senate Governmental Affairs=20 Committee Sen. Joe Lieberman D-Conn. Davis and all five FERC commissioner= s=20 have been invited to the hearing to determine if the commission has lived u= p=20 to its legal obligation to ensure ``just and reasonable'' electricity price= s=20 in California.=20 Price controls=20 With that oversight hearing pending this week the commission called a=20 special meeting Monday and took stronger action. It expanded existing=20 electricity price controls around the clock and to 11 Western states. Under= =20 the commission's plan ceiling prices will be set that suppliers can exceed= =20 as long as they provide justification for the higher price. A hard price ca= p=20 would set a price that could not be exceeded.=20 Commission Chairman Curt Hbert a Republican said politics played no role= =20 in enacting the new plan. But Commissioner William Massey one of two=20 Democrats on the five-member commission acknowledged that political pressu= re=20 in recent weeks from Republicans and newly empowered Democrats in the Senat= e=20 had an impact.=20 ``We are an independent agency but we operate in a highly charged political= =20 environment. I would not imply that we did not rule on an independent basis= =20 here but you know this is Washington D.C. for God's sake'' Massey told= =20 the Mercury News on Tuesday. ``I think that it was enlightening to the agen= cy=20 that this wasn't just a Democratic question this was Democrats and=20 Republicans throughout the West saying `My God solve this problem.' And s= o=20 we hope we have.''=20 The White House which had opposed any form of price controls also moved t= o=20 adjust to this political reality.=20 ``To the degree that it is a market-based program this is in keeping with= =20 what the president said and the president is pleased to be able to help=20 California in that manner'' White House press secretary Ari Fleischer said= .=20 ``It does not change the president's fundamental view that a separate=20 economic matter which would be price controls would not be productive.''= =20 But Democrats are eager to point to the shift as evidence that the White=20 House realized it was paying too high a political price for its earlier=20 position insisting that the electricity crisis was largely California's=20 problem to solve.=20 ``The Bush administration is realizing the jig is up. The game is over''= =20 said Sen. Barbara Boxer D-Calif. ``Their attitude of hands-off has hurt th= em=20 deeply.''=20 Democrats in the House have vowed to continue pushing for a vote on their o= wn=20 price-caps bill. The legislation is adamantly opposed by Republican leaders= =20 in Congress who believe FERC's actions Monday are enough government=20 intervention.=20 ``I hope that its actions are based on market principles not political=20 half-measures'' said House Majority Whip Tom DeLay R-Texas. ``It's now ti= me=20 for Governor Davis to stop pointing fingers and shifting blame.''=20 Feinstein has vowed to quickly resurrect her bill if electricity prices sho= ot=20 up dramatically. Boxer said she will introduce legislation to force FERC to= =20 order power suppliers to refund what the state says are billions of dollars= =20 in overcharges for electricity purchases.=20 Meeting on refunds=20 The commission has set up a conference for the state suppliers and utiliti= es=20 to settle the contentious refund issue by July 10. If no settlement can be= =20 reached under the auspices of an administrative law judge the judge will= =20 make a recommendation to the commission and it will resolve the dispute=20 Hbert said.=20 Massey had supported Feinstein's legislation to force him and his fellow=20 commissioners to enact price caps. But after the commission unanimously=20 approved its expanded price-control plan he joined the four other=20 commissioners Tuesday in urging the Senate Energy and Natural Resources=20 Committee not to pass such a law.=20 The commission's chair Hbert strongly warned against legislative action= =20 saying ``I believe in my heart and I know in my educated mind that we ar= e=20 on the right track.''=20 But the issue disappeared Tuesday as Feinstein and the Republican co-sponso= r=20 of the price-cap legislation tabled their plan.=20 ``I think it renders substantially moot the legislative efforts that she an= d=20 I were pursuing'' Sen. Gordon Smith R-Ore. said of the commission's new= =20 price-control plan. ``And I do believe that effort would have won large=20 majorities in the Senate and the House and so I think what you are doing i= s=20 reflecting the will of the elected representatives of the American people.'= '=20 Feinstein said that whatever the commission calls the plan it is close=20 enough to hard caps to merit a chance to work.=20 ``I view this action by FERC as a giant step forward and I'm very grateful = to=20 you'' she told the commissioners. ``I also view the fact that Senator Smit= h=20 and I have worked hard on this bill perhaps has been helpful in urging you= =20 along.''=20 FERC's fixes have fallen short=20 Published Wednesday June 20 2001 in the San Jose Mercury News=20 BY FRANK WOLAK=20 ON Monday for the third time in the past eight months the Federal Energy= =20 Regulatory Commission the agency charged with regulating wholesale=20 electricity prices in California implemented remedies that it claims will= =20 set just and reasonable wholesale electricity prices. This is a case where= =20 the third time is unlikely to be a charm.=20 As chairman of the Market Surveillance Committee of the California=20 Independent System Operator the independent committee formed by FERC to=20 monitor the California market I have analyzed the results of FERC's previo= us=20 attempts. They reveal a misunderstanding of important details of the=20 California electricity market. It is therefore not surprising that they hav= e=20 been ineffective.=20 Starting in November of 2000 FERC acknowledged that wholesale prices in=20 California during the summer of 2000 were unjust and unreasonable. Its=20 December 2000 order implemented the first set of remedies. Both the=20 California Power Exchange Market Monitoring Committee and the committee I= =20 chair pointed out important shortcomings in FERC's analysis of the Californ= ia=20 market and argued that its remedies would most likely harm rather than=20 enhance market performance.=20 At this time FERC also did not order refunds for the unjust and unreasonab= le=20 prices even though it acknowledged the prices reflected the exercise of=20 market power which is the ability of a producer to force prices higher. Th= e=20 Federal Power Act requires refunds under these circumstances. But FERC said= =20 it was unable to find specific instances of firms exercising market power.= =20 This makes no sense. If FERC finds that prices indicate market power then= =20 the generators who bid those prices are exercising market power.=20 Following the implementation of these remedies conditions in the Californi= a=20 market deteriorated far beyond what had been predicted by the two market=20 monitoring committees. Even though January and February are the lowest dema= nd=20 months of the year average wholesale electricity prices were almost 10 tim= es=20 higher in 2001 than they were during the same two months of 2000 and almost= =20 double the average price during the summer of 2000. In January March and= =20 May California experienced several days of rolling blackouts and had syste= m=20 emergencies almost every day during January and February of 2001.=20 IN April FERC made another round of market rule changes designed to lead t= o=20 just and reasonable prices. However in response to growing pressure from= =20 Congress less than 10 days after these remedies were implemented FERC=20 enacted its most recent order.=20 Before Congress declares victory it should verify that FERC's most recent= =20 plan achieves the following two goals.=20 First the plan should guarantee that the average price of wholesale=20 electricity paid by California over the next two years is equal to the=20 average price that would occur in a competitive electricity market with=20 California's current supply and demand conditions and fuel costs. The Feder= al=20 Power Act requires not just a high probability of just and reasonable rates= =20 it requires that they occur with certainty.=20 The second goal is to alter the incentives faced by all market participants= =20 so that it will no longer be profit-maximizing for a firm to withhold=20 electricity from the market in order to drive up prices.=20 FERC's most recently implemented plan does not achieve either of these goal= s=20 although it does come closer than any previous attempts.=20 One solution satisfying both of these goals has been proposed to FERC. In a= =20 December report to FERC the Market Surveillance Committee of the Californi= a=20 ISO proposed a one-time regulatory intervention. This intervention would=20 require that each generator serving California sign a forward contract=20 guaranteeing that California consumers can purchase 75 percent of the=20 generator's expected output over the next two years at a specified=20 competitive benchmark price. Once a firm has signed these forward contracts= =20 it is free to sell all remaining energy in the western U.S. wholesale marke= t=20 at whatever price it can obtain.=20 The obligation to provide power under the contracts and the incentive to= =20 sell 25 percent of power at unrestricted prices would prevent generators= =20 from withholding power.=20 Unless FERC implements a solution satisfying these two goals Congress shou= ld=20 require FERC to suspend the market-based pricing authority for all supplier= s=20 in the Western U.S. for the next two years and order all sales during this= =20 period at cost-of-service prices. This will guarantee that FERC meets the= =20 statutory mandate of the Federal Power Act in California. Frank Wolak is a professor of economics at Stanford University.=20 Wednesday June 20 2001=20 Easing the crunch on costs of power=20 It could have been worse. Yesterday the Federal Energy Regulatory Commissio= n=20 expanded limited price caps on electricity to cover 11 Western states and t= o=20 last 24 hours a day during an emergency.=20 This follows an action in April that imposed caps only in California during= =20 the hours the state declared a power emergency.=20 Under the new rules when reserves are below 7 percent in the California= =20 Independent System Operator spot markets ... the maximum price that can be= =20 charged for spot market sales ... will be 85 percent of the highest hourly= =20 price that was in effect during the most recent Stage 1 [emergency] called = by=20 the ISO the FERC explained yesterday. The order will last until Sept. 30 2001.=20 The action came after intense pressure by Democrats and the Bush=20 administration on the FERC whose three Republican and two Democrat members= =20 all voted for the new controls. It also comes after continuing stories about gouging by suppliers. On=20 Sunday the Register reported how Tulsa-based Williams an energy supplier= =20 manipulated the market to keep prices high.=20 And after Gov. Gray Davis last week attacked Los Angeles' government-run=20 Department of Water and Power for gouging the state on electricity purchase= s=20 reported the Los Angeles Daily News the DWP caved in and agreed to start= =20 selling the state power at 'cost'. The new FERC ruling certainly is better than the demand for across-the-boar= d=20 continuous price controls demanded by Gov. Davis and other Democrats. They're trying to let the market do the best it can under tremendous=20 pressure Robert Michaels a professor of economics at Cal State Fullerton= =20 told us of the FERC members. It's explicitly only for one kind of power= =20 that on short-term so-called spot market kinds of exchanges. Most power is= =20 under other kinds of contracts not touched. The main effect of the new order is that unlike full-blown price controls= =20 it should not discourage the construction of new power generators.=20 [B] POWER UPDATE/ US Senate panel to hold off vote on Calif. cap bill=20 June 20 2001=20 (BridgeNews) June 19 2124 GMT/1724 ET=20 TOP=20 STORIES:=20 US Senate panel to hold off vote on Calif. power cap bill=20 San Francisco June 19 (BridgeNews) - U.S. Senate Energy and Natural=20 Resources Committee Chairman Jeff Bingaman D-N.M. plans to hold off on=20 voting on a bill for U.S. West power price caps following a request by fell= ow=20 senators Dianne Feinstein D-Calif. and Barbara Boxer D-Calif. according= =20 to an aide in Bingaman's office Tuesday. ( Story .20121 )=20 IPE says merger with ICE complete will keep IPE name=20 New York June 19 (BridgeNews) - London's International Petroleum Exchange= =20 has completed its merger with the Intercontinental Exchange an electronic= =20 market for the trading of energy and metals products IPE Chief Executive= =20 Richard Ward said Tuesday. He said the company will still be called the IPE= .=20 His statement follows ICE's announcement Monday that all of conditions of i= ts=20 recommended offer to acquire the issued share capital of IPE Holdings had= =20 been satisfied or waived and that the offer was unconditional. ( Story=20 .17970 .19353 )=20 OF=20 INTEREST:=20 --AMERICAS--=20 FERC order seen having little effect on US generator profits=20 San Francisco June 19 (BridgeNews) - A U.S. Federal Energy Regulatory=20 Commission order to impose a soft price cap on U.S. West wholesale power= =20 prices will likely have little significant effect on producer profits from= =20 electricity sales while the order is in effect over the next year industry= =20 analysts said Tuesday. Some analysts cautioned that some producers without= =20 long-term contracts could be negatively affected by the order. ( Story .203= 40=20 )=20 White House says FERC power plan helpful step for California=20 Washington June 19 (BridgeNews) - The White House Tuesday said action take= n=20 Monday by the federal energy regulators to extend limits on electricity=20 prices in California is and can be a helpful step for the beleaguered=20 state. ( Story .18824 )=20 Calif. ISO rescinds Tues blackout forecast supplies still tight=20 New York June 19 (BridgeNews) - While the California Independent System=20 Operator has rescinded its forecast of possible blackouts for Tuesday the= =20 agency running the Golden State's electricity grid is currently projecting= =20 very little surplus power generated in the state for the day. ( Story .1491= 3=20 )=20 Three states sue DOE over air conditioning standards ruling=20 New York June 19 (BridgeNews) - Attorney generals of California Connectic= ut=20 and New York along with several consumer groups sued the Department of Ener= gy=20 to block a Bush Administration plan allegedly designed to weaken efficiency= =20 standards for residential appliances including air conditioners and heat= =20 pumps. The complaint filed Tuesday in Manhattan federal court calls the=20 administration short sighted and seeks to invalidate its rule changes. (= =20 Story .18548 )=20 NY New England ISOs expand power reserve sharing agreement=20 New York June 19 (BridgeNews) - The Independent System Operators (ISO) for= =20 New York (NYIOS) and New England (ISO-NE) have agreed to expand their=20 reserve-sharing agreement to allow for each ISO to draw on available reserv= es=20 in the other region in the event of a system interruption according to a= =20 statement issued Tuesday by ISO-NE. ( Story .19283 )=20 AGA Preview: US natural gas inventories seen up 85 to 95 bcf=20 New York June 19 (BridgeNews) - The American Gas Association (AGA) is=20 expected to report Wednesday that U.S. natural gas stocks have risen by 85= =20 billion to 95 billion cubic feet (bcf) for the week ended Friday according= =20 to a BridgeNews survey of brokers analysts and traders. The AGA will relea= se=20 the storage report at 1400 ET Wednesday. ( Story .1856 )=20 --ASIA/PACIFIC--=20 GAIL planning 20-bln-rupee gas pipeline in southern India=20 New Delhi June 19 (BridgeNews) - India's state-owned Gas Authority of Indi= a=20 Ltd. plans to lay a new 500-kilometer-long natural gas pipeline connecting= =20 the two southern states of Kerala and Karnataka at a cost of 20 billion=20 rupees the Press Trust of India said Tuesday. The pipeline will carry 6=20 million cubic meters of gas. ( Story .12193 )=20 Indonesia official sees power cuts by 2004 unless new units built=20 Jakarta June 19 (BridgeNews) - Indonesia will face power cuts by 2004 unle= ss=20 additional generating capacity is built Eddie Widiono president director = of=20 state power group PLN said at an industry seminar here on Tuesday. But=20 experts warned that the capital markets were unwilling to finance the=20 billion-dollar investments needed and the public sector could not afford it= .=20 ( Story .12536 )=20 Indonesia to restructure PLN raise power tariff says minister=20 Jakarta June 19 (BridgeNews) - The government aims to revive investment in= =20 Indonesia's power sector with a scheduled 17.5% rise in electricity prices= =20 this year and a later $3 billion debt equity swap to restructure state powe= r=20 company PLN minister of energy and mines Purnomo Yusgiantoro said Tuesday.= =20 PLN will negotiate directly with independent power producers (IPPs) to=20 install additional capacity he added. ( Story .10568 )=20 Indonesian minister claims ExxonMobil to resume Aceh operations soon=20 Jakarta June 19 (AFP) - PT Exxon Mobil Indonesia will resume oil and gas= =20 production in separatist-plagued Aceh province in early July ending a free= ze=20 of more than three months for security reasons a minister said Tuesday. (= =20 Story .10751 )=20 --EUROPE/MIDDLE EAST--=20 Czech's Temelin nuclear plant reactor to be restarted in July=20 Prague June 19 (AFP) - Reactor number one at the controversial Temelin=20 nuclear plant in the Czech Republic will be restarted on July 21 after bein= g=20 shut down for two months for repairs the plant's spokesman announced=20 Tuesday. The reactor was shut down in early May when faults were detected i= n=20 its non-nuclear secondary circuit the latest in a series of technical=20 glitches discovered since it was first put into service in October last yea= r.=20 ( Story .16716 )=20 British Energy: Sizewell B power plant back onstream=20 London June 19 (BridgeNews) - The 1188-megawatt Sizewell B nuclear power= =20 plant has been back onstream for a few days a spokeswoman for operator= =20 British Energy told BridgeNews Tuesday refusing to detail when exactly the= =20 plant was recommissioned and whether its available capacity had since been= =20 utilized by the market. ( Story .12928 )=20 Germany's Mueller says nuclear phase-down formula won't disrupt=20 Berlin June 19 (BridgeNews) - The formula for shutting down German nuclear= =20 power plants should cut atomic generating capacity only one-sixth by 2010= =20 insufficient to raise fears of shortages said Economics Minister Werner=20 Mueller. ( Story .12337 )=20 TURKEY CRISIS: Press: Govt late on IMF pledged power sell-offs=20 Ankara June 19 (BridgeNews) - The Turkish Cabinet has decided to propose t= o=20 the parliament to extend the transfer of operational rights of power plants= =20 to the private sector by another four months once again violating pledges= =20 made to the IMF when securing a U.S. $10 billion bailout package after the= =20 February crisis Sabah newspaper reported Tuesday. The government in its n= ew=20 IMF-supported program pledged to complete transfer of the rights by=20 end-June. ( Story .11978 )=20 se SPOT= =20 NEWS LINKS:=20 THE=20 MARKETS:=20 US FUTURES: UK FUTURES .1908 NY Natural Gas Pre-Opg .1795 IPE Nat Gas Review=20 .1906 NY Natural Gas Review .1794 IPE Nat Gas Midday=20 .1747 NY Natural Gas=20 US/CANADA CASH NATURAL GAS UK/EUROPE CASH NATURAL GAS .1894 Henry Hub natural gas .1807 UK Spot Gas=20 .1884 US/Canada Spot Natural Gas=20 US CASH ELECTRICITY UK/EUROPE CASH ELECTRICITY .8575 California PX: Next day .1892 UK Power Index=20 .8576 .8577 WSCC Forwards (AM/PM) .1889 Nordic Power Market=20 .8585 .8586 PJM Forwards (AM/PM) .1890 Spanish Power Market=20 .8593 .8594 Cinergy Forwards (AM/PM) .1844 UK EFA Power Market=20 .8597 .8598 Entergy Forwards (AM/PM) CANADA CASH ELECTRICITY=20 .8601 .8602 ERCOT Forwards (AM/PM) .5637 Canadian Power Market=20 .8603 New England Forwards=20 .8587 .8600 TVA Forwards (AM/PM)=20 OTHER=20 .1873 US Nuclear Plants Operating Status=20 .2029 BRIDGE CALENDAR: US POWER: Key events to watch=20 .2030 US Utility Deregulation Digest=20 .1704 US Utility M&A Digest=20 SYMBOL=20 LINKS:=20 Click below for adamb chart in Athena NATURAL GAS=20 NYMEX - IPE - NYMEX ELECTRICITY=20 Palo Verde electricity - COB electricity- Cinergy electricity - Entergy electricity - PJM electricity - BridgeNews=20 Send comments to gennews@bridge.com=20 [B] FERC order seen having little effect on US generator profits=20 June 20 2001=20 By Christine Cordner San Francisco June 19 (BridgeNews) - A U.S. Federal Energy Regulatory=20 Commission order to impose a soft price cap on U.S. West wholesale power= =20 prices will likely have little significant effect on producer profits from= =20 electricity sales while the order is in effect over the next year industry= =20 analysts said Tuesday. Some analysts cautioned that some producers without= =20 long-term contracts could be negatively affected by the order.=20 * * * FERC's decision to expand the soft price cap throughout the western grid i= s=20 not very painful for generators Barry Abramson UBS Warburg analyst said= =20 in a research note. The expanded soft price cap will have little impact on= =20 the earnings of the wholesale generating companies. By definition every=20 other power plant is more efficient than the least efficient power plant a= nd=20 thus every other power plant should be able to make a good profit selling a= t=20 the soft price cap.=20 Furthermore on most days most of the power that is produced is sold at= =20 prices below the soft price cap so the soft-price cap has little impact on= =20 the overall earnings of the wholesale generators in the region Abramson= =20 said.=20 FERC on Monday unanimously voted 5-to-0 to expand wholesale price caps to t= he=20 10 western states comprising the Western Systems Coordinating Council. FERC= =20 also expanded the price caps on wholesale power to 24 hours per day seven= =20 days per week from limits only during supply emergencies when reserve=20 margins in California fall below 7%.=20 Under the order wholesale power prices will be limited to 85% of the price= =20 in effect during the final hour of the most recent emergency when Californ= ia=20 is not in a supply emergency. The proxy price will be based on the costs fo= r=20 the least efficient power plant used to generate electricity on that day as= =20 well as the price for natural gas.=20 Generators investor-owned utilities and independent power producers=20 however can receive more than the proxy price if they can justify the high= er=20 generation costs. The plan also allows a 10% surcharge on all wholesale pow= er=20 sales in California in order to account for credit risk.=20 In a research note JP Morgan analysts Jim Von Riesemann and Anatol Feygin= =20 said that earnings for generating companies should remain relatively intac= t=20 and valuations look attractive especially for AES Mirant and NRG.=20 Robert Winters a Bear Stearns analyst said The near-term actions by the= =20 FERC (and the focus on Monday's meeting) the heightened political rhetoric= =20 and the weakening in gas and power prices across much of the U.S. over the= =20 past month has led to the weakness in the shares of the wholesale energy=20 companies...We believe very attractive buying opportunities are being creat= ed=20 within certain areas of the wholesale energy sectors where companies are no= w=20 trading at discounts to their projected earnings growth range.=20 Winters said there were buying opportunities with Williams which continue= s=20 to be our top pick in the wholesale energy space and with Enron Corp.=20 But Abramson noted that the order does not allow producers to mark up the = r=20 price of spot power for resale above the soft price cap which could affec= t=20 some profit margins.=20 The FERC plan should make it challenging for some to repeat the growth of= =20 the last couple of quarters in the West particularly those that without=20 long-term contracts. It appears that the plan would likely dampen volatilit= y=20 although price caps can have unexpected consequences said Merrill Lynch= =20 analyst Steven Fleishman.=20 On a relative basis we believe companies that have locked up much of thei= r=20 capacity under long-term contracts and have efficient baseload power are be= st=20 positioned under the new FERC plan Fleishman said in a note. He said=20 Calpine Dynegy NRG Energy and Williams stand to benefit the most from thi= s=20 scenario.=20 Companies that could be challenged are those with less long-term contracts= =20 that are more dependent on inefficient peaking plants and that could be=20 affected by less volatility in the West Fleishman said. The big question= =20 is how well the marketers positioned their books ahead of this changed=20 environment. He said Reliant Resources since it appears to have the least= =20 contracted in the West for 2002.=20 The plan which will be in effect from Wednesday to Sept. 30 2002 follows= =20 pleas from California Gov. Gray Davis to control wholesale prices which he= =20 said cost the state roughly $50 billion this year.=20 The state's largest utility Pacific Gas & Electric declared bankruptcy=20 earlier this year citing losses from high wholesale prices. End=20 SCE Unveils Rotating Blackout Web Site and Public Notification Plan=20 June 20 2001=20 ROSEMEAD Calif. June 19 /PRNewswire/ via NewsEdge Corporation -=20 Southern California Edison (SCE) today unveiled its enhanced Web site and= =20 public notification process to help guide the public through possible=20 rotating power blackouts when ordered by the California Independent System= =20 Operator (Cal-ISO).=20 We have been able to increase significantly the amount of outage informati= on=20 available to our customers because we want to empower them with critical= =20 information to prepare for and safely cope through power blackouts said P= am=20 Bass SCE's senior vice president of customer service. We recognize that t= he=20 more information customers have before and during rotating outages the=20 better equipped they will be to address the concerns and safety of their=20 families and employees.=20 Bass said customers have indicated they want to know four basic things when= =20 rotating blackouts occur: the location the duration whether it affects=20 them and what they should and should not do to safely get through the=20 outages. SCE offers several information resources that address these concer= ns=20 -- through toll-free phone lines through news media updates and now throu= gh=20 an expanded user-friendly rotating outage Web site.=20 All of these sources will tell customers that the outages rotate among=20 electrical circuits across SCE's vast service area for about one hour as= =20 directed by Cal-ISO. They will also list the likely affected customer group= s=20 and communities and even provide geographic maps outlining the specific=20 neighborhoods. Customers will also be able to access practical tips on how = to=20 prepare and function safely through outages.=20 Customers can find out the group their home or business is assigned to by= =20 identifying their alphanumeric Rotating Outage Group Number which now=20 appears directly under the customer's name and address in the top left corn= er=20 of the bill's front page. When Cal-ISO predicts possible rotating outages= =20 SCE will immediately announce which groups may be affected through its outa= ge=20 hotline -- (800) 611-1911 -- its Web site -- www.sce.com -- and through the= =20 news media.=20 When outages are forecasted or actually begin customers can determine if= =20 their group is part of the current outage or likely to be included in the= =20 next round since SCE generally interrupts groups in numerical order with= =20 some exceptions. For example customers can now hear on the morning news=20 whether Cal-ISO is predicting outages for the day. By calling the hotline o= r=20 checking www.sce.com they can learn which groups would likely be interrupt= ed=20 if circumstances turn out as predicted. If their group number is on the lis= t=20 of groups likely to be interrupted the customer could take steps to prepar= e=20 for the likelihood of rotating blackouts affecting their home or business= =20 that particular day.=20 It should be noted that group numbers may change without advance notice for= =20 operational reasons or when state regulators revise their policy regarding= =20 customers exempted from blackouts. SCE will notify customers of such change= s=20 as quickly as practical.=20 Visitors to SCE's customer Web site www.sce.com will find the following= =20 helpful enhancements:=20 -- The site displays outage group numbers and corresponding communities=20 affected during recent current and predicted rotating outage=20 incidents.=20 -- When customers click on the name of a community affected by an outage= =20 they are taken to a detailed street map of the affected circuit.=20 -- The Web site offers general outage information and links including=20 outage preparation and safety tips grid status information from Cal-=20 ISO frequently asked questions about rotating outages and=20 conservation tips.=20 -- A dynamic home-page pop-up window will change messages depending on=20 state power conditions. For example during a Stage 2 Emergency=20 customers will be directed to information about potential outages.=20 During a Stage 3 Emergency in which rotating outages are underway the=20 box will provide a hotlink to group numbers and communities currently=20 affected and likely to be affected should outages likely continue.=20 For customers who don't have Internet access SCE provides essentially the= =20 same Web site information through an automated outage phone line (800)=20 611-1911. This service makes it possible to obtain outage information=20 immediately without waiting. Among major features:=20 -- Customers can call at any time to learn the Rotating Outage Group=20 Number assigned to their home or business.=20 -- When customers experience a power blackout they can call to determine= =20 whether they are part of a rotating outage incident or if their=20 circuit has been affected by a routine interruption such as a car or=20 construction accident.=20 -- During rotating blackouts customers can learn if their circuit is=20 currently affected or may be affected in the coming hours and which=20 portions of specific communities may be affected.=20 -- When customers call they should have their account number and group=20 number handy. However if customers call during a rotating outage=20 incident and do not know their group number they will be able to=20 obtain information by entering their zip code.=20 SCE's media relations office has developed strategic communications=20 partnerships with radio and television stations that provide frequent live= =20 updates to the public including information about circuit groups affected = or=20 likely to be affected by outages.=20 It should be further noted that while SCE is committed to providing as much= =20 advance public notification about pending rotating blackouts it can only d= o=20 so as it receives timely notification from Cal-ISO.=20 SOURCE Southern California Edison=20 CONTACT: Corporate Communications of Southern California Edison=20 626-302-2255 www.edisonnews.com=20 Web site: http://www.sce.com (EIX)=20 Edison CEO/ Ruling Hasn't Helped=20 June 20 2001=20 By LESLIE GORNSTEIN AP Business Writer LOS ANGELES (AP) via NewsEdge Corporation -=20 A federal ruling this week limiting wholesale energy prices in 10 Western= =20 states hasn't been enough to pull Southern California Edison any further fr= om=20 the brink of bankruptcy Edison International chief John E. Bryson said=20 Tuesday.=20 The state's second-largest utility is no further from or closer to bankrupt= cy=20 now than it was ``two weeks four weeks six weeks ago'' Bryson told a pre= ss=20 conference before a speech to Town Hall Los Angeles a public policy forum.= =20 Bryson is chairman president and chief executive officer of Edison=20 International parent of subsidiary Southern California Edison which serve= s=20 4.2 million customers.=20 Bryson said however that he senses a warming among state legislators to a= =20 proposed bailout deal between his company and the state.=20 That deal would supply billions of dollars to Edison in exchange for years = of=20 cheap power and possibly the utility's power lines.=20 ``Interest has at least intensified in Sacramento on the part of legislator= s=20 to take steps _ debate continues exactly what steps _ to have Edison health= y=20 and to take the state out of the power business and so on'' Bryson said.= =20 Such lawmaker approval is required for the deal to survive. Key lawmakers= =20 surrounding the deal were not immediately available for comment.=20 In his Town Hall address Bryson used the forum as a kind of open plea to= =20 state legislators listing what he called a series of widespread myths that= =20 might be keeping leaders from acting.=20 ``The first myth is that somehow Southern California Edison is seeking a=20 bailout from taxpayers'' Bryson said. ``Only the reverse is true.''=20 Instead Bryson said it was Edison who bailed out California by keeping th= e=20 lights on even when the utility's power costs far exceeded its revenues.=20 Secondly Bryson said Edison and its investors are not profiting from the= =20 power crisis and SoCal Edison's parent did not act improperly by collectin= g=20 money from the utility earlier this year.=20 That money was later given to shareholders a move that outraged consumer= =20 groups.=20 Bryson also warned that a SoCal Edison bankruptcy would severely hurt=20 California's economy by scaring away new businesses and investment capital.= =20 ``Inaction would deeply hurt the state of California and all of us'' he=20 said.=20 Editorial Desk Section A=20 At Last Action on California=20 ?=20 06/20/2001=20 The New York Times=20 Page 22 Column 1=20 c. 2001 New York Times Company=20 After months of dithering the Federal Energy Regulatory Commission took so= me=20 potentially meaningful steps on Monday to contain the wholesale price of=20 electricity in California and elsewhere in the Western United States. Anxio= us=20 not to be seen as caving in to public pressure or abandoning its fidelity t= o=20 the free market the White House described the new policy as ''consistent= =20 with where the president has been all along.'' Gov. Gray Davis of Californi= a=20 for his part said the policy did not go far enough and of course only= =20 time will tell whether it does. But to many others including Senator Diann= e=20 Feinstein of California the move amounted to the first significant federa= l=20 intervention in the California wholesale market since the crisis began last= =20 year. Ms. Feinstein withdrew her own price-cap bill pending the outcome of= =20 the new plan.=20 Under the new arrangement approved unanimously by a reshuffled five-member= =20 Regulatory Commission price limits will be based on the cost of producing= =20 electricity at the least efficient generator. The formula covers the sale o= f=20 electricity for immediate delivery -- the so-called ''spot market'' that=20 supplies about 20 percent of California 's needs and that California turns = to=20 when it is desperately trying to keep the lights on. The companies will be= =20 allowed to charge higher prices during peak periods but not the huge sums= =20 they command today.=20 In addition the constraints will apply throughout 10 other Western states= =20 presumably eliminating any incentive for generators to withhold power from= =20 the California market in order to obtain a higher price elsewhere. The=20 controls are to expire in September of next year which should relieve some= =20 of the administration's earlier fears that constraints of any kind would=20 discourage investment in new and badly needed sources of supply.=20 The benefits will not immediately be felt by California consumers. Both=20 individuals and businesses have recently been hit by rate increases belated= ly=20 imposed by the state's Public Utilities Commission at Mr. Davis's request.= =20 But the new plan should ultimately benefit taxpayers by lessening the impac= t=20 of higher energy costs on the state government which has been buying power= =20 on behalf of the state's two largest utilities both essentially insolvent.= =20 Recent estimates have suggested that California which paid $7 billion for= =20 electricity two years ago could pay as much as $50 billion this year.=20 Until quite recently the president and his energy czar Dick Cheney had=20 seemed almost indifferent to California 's needs. But Republican members of= =20 Congress from California and other Western states have been growing=20 increasingly restive as they contemplate the potential political fallout in= =20 the midterm elections of 2002. In addition the two newest members of the= =20 regulatory commission both Bush appointees have expressed sympathy for=20 California 's plight. Whatever the reason the administration appears to ha= ve=20 seen the light even though it is reluctant to admit it. National Desk Section A=20 Regulators' Order Could Bring Broad California Power Accord By LAURA M. HOLSON with JEFF GERTH ?=20 06/20/2001=20 The New York Times=20 Page 14 Column 3=20 c. 2001 New York Times Company=20 LOS ANGELES June 19 -- An order by federal regulators that power generator= s=20 enter settlement talks with the State of California could open the door to = a=20 sweeping compromise of the financial issues in the state's power crisis=20 energy industry analysts and executives said today.=20 But the question that remains -- and it is a vital one they said -- is=20 whether the Federal Energy Regulatory Commission has the wherewithal to for= ce=20 the warring parties to hammer out an understanding that at its heart is a= s=20 much about politics as about money.=20 The commission on Monday gave California regulators and power generators=20 until July 9 to come up with a plan for settling accounts between the=20 generators and California 's struggling utilities. The power companies are= =20 owed billions but the state has accused them of price-gouging. If the=20 parties cannot reach some agreement an administrative judge will step in a= nd=20 recommend a settlement to the commission instead.=20 Asked at a Senate hearing in Washington today to clarify what he hoped to= =20 accomplish as a result of the two weeks of settlement talks the commission= 's=20 chairman Curtis L. Hebert Jr. was noncommittal. The parties he explained= =20 need two things for the talks to succeed: a deadline and uncertainty.=20 Senator Dianne Feinstein Democrat of California expressed skepticism abo= ut=20 the undertaking. Ms. Feinstein said at the hearing held by the Senate Ener= gy=20 and Natural Resources Committee that she was concerned that the commission= =20 had laid out ''no rules'' for the talks.=20 ''Very little if any money has changed hands as a result of prior=20 settlement conferences'' she said.=20 Many industry executives and state officials have not yet seen the=20 commission's order and they were scrambling today to figure out exactly wh= at=20 they were being asked to do.=20 ''Without seeing what exactly is in the order who knows?'' said Sean=20 Gallagher a staff lawyer for California 's Public Utilities Commission.=20 ''But we wouldn't turn our noses up at participating in negotiations.''=20 Gary Ackerman executive director of the Western Power Trading Forum a=20 coalition of energy traders and electricity generators noted that the=20 federal regulators' timetable ''has a very short fuse.'' And the fact that= =20 the state's biggest utility the Pacific Gas and Electric Company has file= d=20 for bankruptcy will complicate efforts to reach a comprehensive agreement = he=20 added.=20 ''I don't hold high hopes that a settlement would work out'' Mr. Ackerman= =20 said ''but I commend the FERC for taking a stab.''=20 Moreover the parties to the settlement talks may lack an element vital to= =20 successful negotiations: trust.=20 Several California entities including the Public Utilities Commission are= =20 investigating whether generators took advantage of consumers by charging=20 excessive prices for power. The Independent System Operator which runs the= =20 state's power grid released a study in March concluding that Californians= =20 might have been overcharged for electricity by more than $6 billion. One=20 state government negotiator said the California attorney general's office= =20 could file a suit against the power generators in the next few weeks.=20 And as state officials including Gov. Gray Davis continue to hurl attacks= =20 at the generators calling them pirates and profiteers the companies and= =20 California utilities are blaming legislators saying they failed to address= =20 the power crisis quickly enough.=20 In March Duke Energy one of the companies the state has accused of=20 profiteering offered to negotiate a broad settlement but Governor Davis= =20 ruled out calling off the state's inquiries as part of any agreement.=20 The outlines of Duke's proposal included a compromise on the money owed by= =20 California utilities in exchange for the dropping of private lawsuits=20 California 's complaints to federal regulators and the state investigations= .=20 Duke would have admitted no wrongdoing.=20 In formal proceedings the power generators to date have vigorously fought= =20 discounting the debts they are owed by California .=20 The Federal Energy Regulatory Commission has ordered generators to refund= =20 nearly $130 million in what it judged to be overcharges. Today one of the= =20 commissioners William L. Massey said 80 percent of that money had not bee= n=20 collected. A Section=20 Davis Finds Hope in Calif. Power Crunch Rene Sanchez and Peter Behr ?=20 06/20/2001=20 The Washington Post=20 FINAL=20 Page A06=20 Copyright 2001 The Washington Post Co. All Rights Reserved=20 LOS ANGELES June 19 -- Sinking in the polls under attack by a new=20 Republican advertising campaign and still struggling to avert a summer of= =20 blackouts California Gov. Gray Davis (D) nevertheless seems heartened abou= t=20 the latest developments in the power crisis that has engulfed his state and= =20 threatened his political career.=20 On his first trip to Washington in months Davis will detail California 's= =20 plight Wednesday in testimony to a Senate committee newly led by sympatheti= c=20 Democrats -- one important reason for his optimism.=20 But he has others: Conservation is taking hold in the state and prices for= =20 power on the daily spot market are dropping. California has managed to avoi= d=20 rolling blackouts so far this month in part because it has been spared a= =20 heat wave.=20 Federal regulators under pressure even from Republican lawmakers decided= =20 Monday to impose more controls on prices that energy suppliers can charge= =20 California . Two new power plants are scheduled to begin producing=20 electricity in weeks. California also has recently secured more than a doze= n=20 deals for power over the next decade a move Davis contends will stabilize= =20 the volatile wholesale market for energy.=20 In short Davis and his aides say their concerted political strategy and=20 efforts to ease the crisis are beginning to pay off.=20 The bottom line is that we're stabilizing prices and assuring the power wi= ll=20 be there without additional rate increases said Steve Maviglio a spokesm= an=20 for the governor. But he added: We're not ready to say the war is over. It= 's=20 still going to be a tight summer.=20 Whether any or all of those steps will keep the lights on in California thi= s=20 summer or help solve an array of other financial problems the crisis has= =20 caused is hardly clear.=20 In fact California 's power shortfall could produce 113 hours of rotating= =20 outages this summer according to a U.S. Department of Energy study schedul= ed=20 to be released Wednesday.=20 Since California 's two largest utilities fell into financial ruin this yea= r=20 forcing the state to spend nearly $5 billion to buy power directly and=20 saddling residents with huge new rate increases the support that Davis onc= e=20 had from a majority of voters has vanished. Recent polls suggest that he=20 could have trouble winning a second term.=20 Consumer advocates here are besieging him saying that the $43 billion in= =20 long-term power deals that Davis has signed could lock residents into payin= g=20 artificially high utility rates for years. Some contend that all he has=20 gained from Washington is political cover.=20 The Bush administration has created this toothless price cap mechanism tha= t=20 will be used as political protection but certainly not consumer protection= =20 said Doug Heller a director of the Foundation for Taxpayer and Consumer=20 Rights.=20 Davis has stuck mostly to the same political script. He is demanding more= =20 federal help for California -- on Monday he called the Federal Energy=20 Regulatory Commission's decision merely a step in the right direction --= =20 and he is denouncing out-of-state energy suppliers and their Republican=20 allies.=20 Today Republicans launched a $1.5 million advertising offensive that blame= s=20 Davis for the state's energy crunch. The spots running on English and=20 Spanish-language media describe the crisis as Grayouts from Gray Davis.= =20 Scott Reed the GOP strategist who runs the American Taxpayers Alliance=20 which funded the ad campaign said his group wants to counter the governor'= s=20 spin. The blame game has to end said Reed.=20 But Davis's aides say the ads are a sign that Republicans sense California = 's=20 energy predicament could deepen GOP political troubles in the state.=20 Privately some Republican lawmakers pushing for more federal assistance sa= y=20 they are worried that in midterm congressional elections next fall the GOP= =20 could lose House seats in California that it needs to hold a majority.=20 Today's hearing will bring both Davis and his adversaries on the Federal=20 Energy Regulatory Commission before the Senate's Governmental Affairs=20 Committee chaired by Sen. Joseph I. Lieberman (D-Conn.).=20 Instead of a committee debate on California 's electricity prices the focu= s=20 of the session may be shifting toward the billions of dollars of alleged=20 overcharges by energy suppliers.=20 Under growing pressure from both parties in Congress FERC's commissioners= =20 responded Monday with far more extensive price controls than they had been= =20 willing to consider previously. They extended April price controls that had= =20 applied only to times of power emergencies to all hours of the day through= =20 September 2002. And they expanded the controls to cover 10 other western=20 states.=20 California Sens. Dianne Feinstein and Barbara Boxer both Democrats said= =20 FERC's action was a positive step and agreed to delay efforts to direct the= =20 commission to clamp down on California 's energy prices. We're willing to= =20 give them a chance to see if it works Boxer told reporters.=20 Now Davis will press his demands that FERC recover some $8 billion in=20 alleged overcharges by wholesale power suppliers since the crisis began -- = a=20 far larger amount than the $124.5 million in refunds that FERC has so far= =20 assessed.=20 Whether there is even a chance of a peace process is unclear. Just last wee= k=20 California Attorney General Bill Lockyer announced plans to convene a=20 criminal grand jury to investigate whether power generators illegally=20 conspired to drive up electricity and natural gas prices.=20 The governor could face other new problems. Several of California 's major= =20 independent power generators said the price controls and state lawsuits=20 against the generators made it more difficult to justify expanding operatio= ns=20 in California a warning echoed today by Energy Secretary Spencer Abraham.= =20 But heading into the summer California 's power prices are much lower than= =20 they were a month or two ago with daily or spot power prices averaging $= 78=20 per megawatt hour in June compared to $372 in April.=20 Both Davis and the FERC commissioners are taking credit. S. David Freeman= =20 Davis's energy adviser said that the long-term power contracts the state h= as=20 signed the new power plants and favorable weather have tamed prices.=20 FERC Chairman Curt Hebert Jr. said Monday that the limited price restraints= =20 that the commission imposed on wholesale electricity sales in April have be= en=20 a key reason for the price decline.=20 Sanchez reported from Los Angeles and Behr from Washington. Staff writers= =20 Mike Allen and Juliet Eilperin contributed to this report from Washington.= =20 Contact: National Desk Section A=20 The Lesson of When to Give Aid to Free Markets By DAVID E. SANGER ?=20 06/20/2001=20 The New York Times=20 Page 14 Column 3=20 c. 2001 New York Times Company=20 WASHINGTON June 19 -- Three weeks ago George W. Bush addressed a sympathet= ic=20 audience of business executives at the Century Plaza Hotel in Los Angeles a= nd=20 declared that his administration ''will not take any action that makes=20 California 's problems worse and that's why I oppose price caps'' on=20 electricity .=20 As he spoke the Democratic governor of California Gray Davis sat=20 impassively on the dais preparing to meet Mr. Bush and then denounce him f= or=20 failing to protect California consumers from an electricity market gone wil= d.=20 Today the White House halfheartedly welcomed action by federal regulators = to=20 impose throughout the West a system that looks and smells a lot like price= =20 caps -- though the White House said it was something different.=20 ''This is not a price control'' Ari Fleischer the White House spokesman= =20 said. ''This is a market-based mitigation plan that now will extend to 11= =20 Western states.''=20 In fact it bore some resemblance to a proposal made by 10 leading economis= ts=20 who urged a middle ground between fixed prices and a deregulated electricit= y=20 market. Mr. Davis used their proposal to support his position in favor of= =20 limited price restraints when Mr. Bush visited California .=20 The White House shift from outright opposition to price controls to its mor= e=20 nuanced position today exemplifies how Mr. Bush has tempered his embrace of= =20 completely unfettered markets in recent weeks. He didn't have much choice.= =20 As the threat of blackouts loomed demands for action rose from officials o= f=20 both parties and from consumers in the West. It was almost possible to hear= =20 sighs of relief at the White House today that the Federal Energy Regulatory= =20 Commission -- an independent body in the Energy Department -- had moved to= =20 turn down the political heat.=20 In fact while some House Democrats are still pressing for firmer caps on= =20 prices Senators Dianne Feinstein Democrat of California and Gordon H.= =20 Smith Republican of Oregon withdrew a bill that would have placed strict= =20 price controls on electricity sold in Western markets.=20 Senator Feinstein said the White House could call yesterday's regulatory=20 action ''mitigation'' or anything else it pleased.=20 ''A rose is a rose by any other name'' she said today.=20 And a free market is not always free. Two weeks ago the administration said= =20 it would rescue steel companies and steelworkers who have long complained= =20 about unfair competition from South Korea Taiwan China Brazil Germany= =20 Russia and Ukraine. The White House defended the action by saying it was th= e=20 only way for the industry to adjust to a new competitive environment.=20 Last month with no major announcements at the White House the Bush=20 administration voted for International Monetary Fund aid to two countries= =20 Turkey and Argentina that (like California ) had made some economically=20 disastrous political decisions.=20 In each case Mr. Bush's economic orthodoxies were tempered by political=20 realities.=20 The California crisis was one thing when it involved a Democratic governor = in=20 a state Mr. Bush lost by a million votes it was another one of his aides= =20 conceded today when congressional Republicans from around the West were=20 warning Mr. Bush that blackouts and sky-high prices could blow up in his=20 first year in office.=20 ''We heard from a lot of members of Congress who feared that Republicans=20 would be tarred with worsening the problem even though it happened on Gray= =20 Davis's watch'' the political aide said. ''The president took that on=20 board.''=20 Similarly the steel decision was partly about enforcing laws against=20 ''dumping'' foreign products in the market -- and partly about Mr. Bush's= =20 desire to convince labor unions not to block his trade agenda. Like=20 Californians coping with higher energy prices the steelworkers need time t= o=20 adjust to a new world the administration said.=20 ''Open markets improve the lives of people by increasing opportunity choic= e=20 and economic freedom'' Robert B. Zoellick Mr. Bush's trade representative= =20 said in an interview today. ''But compassionate conservatism also recognize= s=20 the reality that the effects of rapid change fall harder on some communitie= s=20 and industries'' which he said need ''vital breathing space to adapt to= =20 change.''=20 While Mr. Bush expressed deep reservations about I.M.F. bailouts during the= =20 presidential campaign the situation seemed a bit more complicated once he= =20 got to Washington. The State and Defense Departments feared that if Turkey= =20 were engulfed in economic chaos and blamed the United States for failing t= o=20 come to its aid its leaders might be less inclined to let American fighter= =20 jets use its territory to mount missions over Iraq.=20 So given the choice between letting the Turkish people pay a high price for= =20 political mistakes -- Californians take note -- and weakening American=20 pressure on Saddam Hussein Mr. Bush decided that economic niceties were le= ss=20 important than political consistency. Mr. Bush chose the Pentagon over the= =20 Treasury.=20 Administration officials said these actions did not represent a retreat fro= m=20 let-the-markets-prevail orthodoxy.=20 Lawrence B. Lindsey Mr. Bush's chief economic adviser said in an intervie= w=20 today that he opposed price caps at the beginning of the California crisis= =20 and that he opposed them now. But he would not criticize the federal=20 commission for ''mitigating'' price spikes in the market.=20 ''What they are trying to do is achieve two incompatible missions --=20 preserving what is called 'just and reasonable pricing' and assuring an=20 adaquate supply of electricity '' Mr. Lindsey said. Yet the reality he=20 added is that new supplies of electricity will not become available for a= =20 year or more. ''FERC is doing its best to square that circle in the face of= =20 the fundamental problem which is inadequate supply'' he said.=20 That is the kind of argument that keeps economists happily arguing for hour= s.=20 It is not likely to be the kind of argument Mr. Bush himself is likely to= =20 engage in for long. As one of his political advisers said the other day=20 ''Don't think about this purely in terms of megawatts. We need to produce= =20 more electricity but we also need to produce some more seats in the=20 House.''=20 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Meeting Notice - California Document Production Issues Body:: calendar ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Tax Valuations for YR2000 Body:: FYI ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: EGEP Sale Announcement Body:: Please make sure that nothing goes out internally or externally without the approval of Cliff Baxter or Mark Metts. We need to continue our usual vetting process through both PR and IR but need also to add Cliff and Mark. In getting the OK from Cliff and Mark we must have no OKs by default -- ie because we haven't received comments or a response on time. If anybody needs help getting to Cliff or Mark then Mark Palmer Karen Denne or I can help. Thanks What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: NWE Proposed Language to ABX2 82 -- Need to know if we support these --CONFIDENTIAL -- LEGISLATIVE STRATEGY Body:: New West is proposing these amendments to the bad bill AB XX 82. Its view is that it wants to start getting Some interest in the PX credit issue to see if they can get it into a bill. They acknowledge that AB XX 82 is a bad bill. We will be having a teleconf on this tomorrow with all the ESP consolidated billers. So far I've told New West that it would likely be better for them if Enron stays away from formally supporting this given the target on our face in the Legislature. More important I need to know if EES would like to see some PX credit language in legislation. I have some questions about the approach New West took in modifying the legislation so I have a call into them. Sue Mara Enron Corp. Tel: (415) 782-7802 Fax:(415) 782-7854 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Stock Options Body:: Sorry for the delay. I have asked the question and should have an answer in a day or two. . . . don't do anything rash in the meantime. Jane M Tholt@ECT 05/07/2001 12:15 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: Stock Options Hi Steve. I know you are extremely busy but I was just wondering if you found out about whether the 3 year period apllies to all options or just the ones in that program. Question 2) does the 3 year time frame apply to only options that are vested at the time of departure or does it apply also to options which vest over the 3 year time frame. I look forward to hearing from you. Thank you. What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Senator Feinstein Body:: yes Linda Robertson 03/01/2001 07:47 AM To: Steven J Kean/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron cc: Subject: Senator Feinstein Apologized that she could not meet with Steve yesterday. She would like to have this meeting. She asked that we schedule this for your next trip to DC. I think we should do this meeting soon. Do you want me to get on her calendar and then build a day of meetings around her meeting? Or wait until you are otherwise back in town? What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: ISO-NE failure to mitigate ICAP market -- Release of ISO NE confidential information Body:: You are forwarding these messages to the wrong Dana Davis. Try Mark Dana Davis Jr. From: Thane Twiggs@ENRON_DEVELOPMENT on 12/13/2000 02:03 PM To: Jeffery Ader/HOU/ECT@ECT Mark Bernstein/HOU/ECT@ECT Scott Healy/HOU/ECT@ECT Janelle Scheuer/HOU/ECT@ECT Tom Dutta/HOU/ECT@ECT Dana Davis/HOU/ECT@ECT Paul J Broderick/HOU/ECT@ECT Chris Dorland/HOU/ECT@ECT Gautam Gupta/HOU/ECT@ECT Michael Brown/NA/Enron@Enron John Llodra/Corp/Enron@ENRON George Wood/Corp/Enron@Enron Joe Gordon/Corp/Enron@Enron Stephen Plauche/Corp/Enron@Enron Jennifer N Stewart/NA/Enron@Enron David Guillaume/NA/Enron@Enron Tom May/Corp/Enron@Enron Robert Stalford/NA/Enron@Enron Jeffrey Miller/NA/Enron@Enron Narsimha Misra/NA/Enron@Enron Joe Quenet/NA/Enron@Enron Paul D Thomas/NA/Enron@Enron Ricardo Perez/NA/Enron@Enron Kevin M Presto/HOU/ECT@ECT Sarah Novosel/Corp/Enron@ENRON Christi L Nicolay/HOU/ECT@ECT cc: Subject: ISO-NE failure to mitigate ICAP market -- Release of ISO NE confidential information The New England Conference of Public Utilities Commissioners (NECUPUC) filed an Answer if Support of the Motion of the Maine Public Utilities Commission for Disclosure of Information. NECUPUC supports the request for the release of the unredacted copies of ISO-NE's September 21 2000 Answer in this case. In the alternative they would ask that the Commission provide to the regulators that are parties to the proceeding unredacted copies of the ISO's September 21 2000 Answer subject to an appropriate protective order. Duke Energy North America (DENA) filed an Answer that opposes the MPUC request for public information. DENA argues that only a three month lag in the release of confidential information is impermissible under a prior FERC ruling in the NSTAR Services Co. case which set out a six-month lag rule for the release of information. Their second argument was that the request seeks information for all NEPOOL markets and not just the ICAP market which is subject to the suit. If the FERC authorizes the release of confidential information then it should be subject to a protective order which contains the following: The information may only be used for the purposes of this docket. Only specifically named reviewing Reps associated with the MPUC may review the information. The confidential materials may not be removed from the NE-ISO's premises. The reviewing rep must execute a nondisclosure certificate. Answer to the MPUC's Motion for Disclosure of Information from Northeast Utilities Service Company and Select Energy and request for expedited commission action. NUSCO and Select Energy Support MPUC's request for disclosure of information that the ISO has filed under seal but opposes the selective disclosure of this information to the MPUC and other regulatory commissions and not other participants. NUSCO and Select Energy request expedited action due the financial implications and there is also considerable uncertainty regarding prices in the residual ICAP market in January February and March of 2000 due to the suspended settlement pending Commission guidance. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Computers Body:: Tell him we are sending his note on to the appropriate person. MARY CLARK 04/03/2001 03:23 PM To: Steven J Kean/NA/Enron@Enron cc: Maureen McVicker/NA/Enron@Enron Subject: Computers Steve I need your help in responding to this question. Mary ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Natural Resources and Energy MBA students Body:: Barry Thanks for your message. I am forwarding it with my recommendation to Billy Lemmons who is in charge of our analyst/associate program. Vince What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Catch Up Body:: Joe I could not find the issue. I think I have dumped all the copies of the publication. I am in London next week. Vince What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Request for Confidential Information by the GAO Body:: We need another request for confidentiality. Please call me. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Computer Based Communications Training Initiative - Response Reminder for Feedback Body:: In my interview I stressed that a big part of the communication problem is the narrow and impermanent nature of the information about what's going on at Enron. Narrow because for every significant activity there are only a few who are in the loop and impermanent because very little information is committed to writing (most of it is exchanged in person or over the phone). This is I believe what lies at the heart of complaints about cross-department communication. We now have some solutions emerging -- software that enables more people to record and post information in HTML format on company intranet sites. I suspect that using such tools will face two obstacles: learning how to use them (ie there's a huge need for training) and making it part of our culture as a knowledge/learning organization Richard Amabile 08/18/2000 05:20 PM To: Mike McConnell/HOU/ECT@ECT Louise Kitchen/HOU/ECT@ECT David Gorte/HOU/ECT@ECT Cindy Olson/Corp/Enron@ENRON James Prentice/GPGFIN/Enron@ENRON Jan Johnson/GPGFIN/Enron@ENRON Mark Koenig/Corp/Enron@ENRON Sharon Butcher/Corp/Enron@ENRON Mary Clark/Corp/Enron@ENRON Gina Taylor/OTS/Enron@Enron Mike Stewart/Corp/Enron@ENRON Dave Schafer/OTS/Enron@ENRON David A Terlip/Corp/Enron@Enron Joe Kishkill/SA/Enron@Enron Marie Hejka/Corp/Enron@ENRON Craig Childers/HOU/EES@EES Craig H Sutter/HOU/EES@EES Kirk Kathleen A John Keith James C Ray Bennett/HOU/EES@EES Joseph W George Wasaff/NA/Enron@Enron Elizabeth Tilney/HOU/EES@EES Michael R Brown/LON/ECT@ECT Andrew S Fastow/HOU/ECT@ECT Billy Lemmons/Corp/Enron@ENRON Steven J Kean/HOU/EES@EES Scott Yeager@ees Eric Thode/Corp/Enron@ENRON Marie Hejka/Corp/Enron@ENRON Cynthia Barrow/HR/Corp/Enron@ENRON John Thompson/LON/ECT@ECT Nigel Sellens/LON/ECT@ECT David Oxley/HOU/ECT@ECT Drew C Lynch/LON/ECT@ECT Marla Barnard/Enron Communications@Enron Communications robert.jones@enron.com Kimberly Rizzi/HOU/ECT@ECT Scott Janie willie.williams@enron.com Scott Tim O'Rourke/Corp/Enron@Enron Miguel Padron/SA/Enron@Enron Gerry Chatham/Corp/Enron@ENRON Cindy Skinner/HOU/ECT@ECT Ranendra cc: ksargent@cognitivearts.com Subject: Computer Based Communications Training Initiative - Response Reminder for Feedback This is a reminder that we would like your feedback/input on the items mentioned below regarding the Computer Based Communications Training Initiative. Please respond by the close of business Monday August 21 otherwise we will need to move ahead with the responses received by that time. Dick Amabile ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Fwd: Portland Consultants Investigation Finds California Has Capacity for Electricity Needs Body:: FYI Content-Transfer-Encoding: quoted-printable Date: Tue 17 Oct 2000 08:53:16 -0500 From: Tracey Bradley <tbradley@bracepatt.com> To: Deanna King <dking@bracepatt.com> Paul Fox <pfox@bracepatt.com> Ronald Carroll <rcarroll@bracepatt.com> Subject: Portland Consultant's Investigation Finds California Has Capacity for Electricity Needs Mime-Version: 1.0 Content-Type: text/plain charset=US-ASCII Content-Disposition: inline FYI - It sounds like this consultant's findings are being questioned by many in the industry including by the CAISO. Portland Ore.-Based Firm Says California Has Capacity for Electricity Needs Dan McSwain North County Times Escondido Calif. ( October 17 2000 ) Oct. 13--PORTLAND Ore.--A private investigation of state power markets has come to the conclusion that California had plenty of electricity generating capacity this summer. The state enjoyed a 32 percent reserve margin even as wholesale prices soared and the state's power manager declared 36 separate power emergencies because California was thought to be in the grips of a critical shortage according to the investigation. The author of the investigation's preliminary report Portland-based economist and utility industry consultant Robert McCullough said at a conference of analysts power traders and electricity industry regulators Thursday that he has found evidence that generators and trading companies manipulated the production of power from June through August to create a false shortage and push up prices. The Encina power plant in Carlsbad provides a stark example: it ran at well below its full capacity for much of June even though wholesale power prices ---- and consumer electricity bills ---- shot to well above the generating plant's cost of production. The actual production of electricity by the plants was determined by an analysis of data from the Environmental Protection Agency which monitors emissions. We are seeing a lot of under-generation McCullough said. This is market power in action. Market power is a term used by economists to describe the ability of market participants -- in this case suppliers -- to influence prices. Many of the industry experts present at the conference Thursday reaffirmed their belief that supply shortages were very real this summer and contributed to high prices but several participants said deregulation has reduced the amount of market information that is available to analysts. Mainstream economists have questioned the accuracy of data from federal agencies including the EPA. Conventional explanations for the low energy production observed in San Diego County are scant. Encina's operators a joint venture of energy giants Dynegy Inc. and NRG Energy Inc. called Cabrillo Power confirmed that the power plant had no abnormal maintenance problems. The San Diego Regional Air Quality Board said Wednesday that the power plant was well within its state-mandated pollution limits. But David Lloyd the corporate secretary of Cabrillo denied that the Encina plant has been used to game the San Diego County power markets. That can't possibly be right Lloyd said of McCullough's analysis. In North County we were right on the ragged edge of being off (an emergency shutdown because of heavy output). Without knowing the specific details of time and which units were on or off I can't comment Lloyd said. We certainly don't want to be accused of anything wrongful he said. We don't have that much power in California and for us to be shutting down in California to push up the price somewhere else doesn't make sense for us. We want to run all we can when the prices are high. Electricity prices have soared to record levels since May resulting in a doubling and tripling of power bills this summer for the 1.2 million customers of San Diego Gas & Electric Co. and causing an estimated $5 billion in losses for Southern California Edison and Pacific Gas & Electric. State lawmakers have intervened on behalf of San Diego County consumers with a retail rate cap but the law in turn created a looming IOU that could grow beyond $300 million if high wholesale prices persist. No fewer than five private state and federal investigations are under way to assess the competitiveness of power markets in the interconnected Western states. The investigations also seek to answer charges that the companies which produce and trade electricity have either figured out how to exploit deregulated markets to outmaneuver regulators or have engaged in outright manipulation in order to increase profits. Inquiries by the California Public Utilities Commission Electricity Oversight Board and attorney general along with a Federal Energy Regulatory Commission investigation were launched in July and August. Staff investigators of the state and federal commissions said this week that they are still in the process of issuing subpoenas and gathering market data. McCullough was hired in late May by the Seattle city utility and a consortium of large industrial power consumers in the Pacific Northwest to investigate the price spikes. His effort is thought to be the first to complete an exhaustive analysis of state and federal information that tracks the amount of electricity that was available and compares it to the amount of power that was actually used. Chief among McCullough's findings was that demand for power was lower this summer than what was forecasted by the Western Systems Coordinating Council a federal agency that is charged with ensuring the stability of the vast web of power transmission lines that connect California to 13 other Western states British Columbia and northern Mexico. McCullough provided a copy of his preliminary findings Tuesday to the North County Times and the initial reaction of the state's energy community was one of deep skepticism. EPA data is notoriously unreliable said Frank Wolak a Stanford professor and the chairman of the market surveillance committee of the California Independent System Operator the agency that manages the state grid and which has paid enormous sums for emergency power this summer. To gauge the actual output of power plants that burn fossil fuel McCullough used emissions data from the EPA. Greed would get the best of anybody Wolak said. I found a lot of hours where in-state generators were exceeding nameplate capacity. These guys were cranking it out. Wolak in a study of power markets for the system operator did conclude however that exercise of market power by power generators and traders was the major cause of higher prices this summer. At the conference in Portland most of the panelists did not openly criticize McCullough's analysis but implicitly disputed his conclusions by attributing higher prices and the presumed exercise of market power to a very real shortage of electricity generating capacity among the Western states. Low hydroelectric production in the Pacific Northwest and high temperatures in the Southwest were blamed for limiting California's ability to import electricity. Others said state and federal regulators along with market participants themselves won't really know what happened until more experts look at hard market information that is in short supply. Ron Eachus the chairman of the Oregon Public Utilities Commission said market information is routinely withheld from regulators the public and buyers of electricity but is shared among power generators and trading companies. If the market is sharing it with themselves but not us I don't buy that Eachus said. Tim Belden is the vice president of West Trading for Enron North America the largest marketer and trader of electricity in the world. Enron takes the unique stand that more information which has been labeled proprietary by companies such as when a plant is being run and how much the electricity is selling for should be made available instantly to the markets. Is there a smoking gun out there or are market participants behaving rationally? Belden said. California is characterized by secret black box market models that nobody understands he said. If you've got nothing to hide release the data. ----- To see more of the North County Times or to subscribe to the newspaper go to http://www.nctimes.com (c) 2000 North County Times Escondido Calif. Distributed by Knight Ridder/Tribune Business News. SRE SCE.Q PCG What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Washington DC Body:: pena - 1:30 Spurling @11:15 and D'Amato @12:00 11:15 D'Amato 12:00 Sperling 1:30 Pena meeting - Tentative 3:30 Janel Guerrero Flying up on company plane. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: TW Gas Sales: PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT PRIVILEGE Body:: Julia and Steve--here are some questions I've sent to Darrell on the TW Cal. border line pack sales. I'd like him to pull in the right people to get me the answers so we will be prepared if we need to explain these events. Darrell--I thought I'd better let your bosses know that I've been putting more stuff on your already full plate. Thanks all. DF ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: DRAFT response to Greenpeace Kyoto letter Body:: I think Mike should sign Peter Styles@ECT 04/20/2001 04:57 AM To: Jeffrey Keeler/Corp/Enron@ENRON cc: Michael Terraso/OTS/Enron@ENRON Steven J Kean/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron Mark Palmer/Corp/Enron@ENRON Jackie Gentle/LON/ECT@ECT Kate Bauer/EU/Enron@Enron Paul Hennemeyer/LON/ECT@ECT Doug Wood/LON/ECT@ECT Kelly Kimberly/Enron Communications@Enron Communications@ENRON Catherine McKalip-Thompson/Enron Communications@Enron Communications@ENRON Lauren Iannarone/NY/ECT@ECT Rob Bradley/Corp/Enron@ENRON Mary Schoen/NA/Enron@Enron Stacey Bolton/NA/Enron@Enron Lisa Linda Robertson/NA/Enron@ENRON Nailia Dindarova/LON/ECT@ECT Subject: Re: DRAFT response to Greenpeace Kyoto letter Jeff: Following our conference call yesterday Nailia and I will send you a European Government Affairs mark-up later today. We'll try to incorporate any views expressed by Paul Hennemeyer and Doug Wood too. Jeffrey Keeler@ENRON 19/04/2001 22:00 To: Michael Terraso/OTS/Enron@ENRON Steven J Kean/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron Mark Palmer/Corp/Enron@ENRON Jackie Gentle/LON/ECT@ECT Kate Bauer/EU/Enron@Enron Paul Hennemeyer/LON/ECT@ECT Doug Wood/LON/ECT@ECT Peter Styles/LON/ECT@ECT Kelly Kimberly/Enron Communications@Enron Communications Catherine McKalip-Thompson/Enron Communications@Enron Communications Lauren Iannarone/NY/ECT@ECT Rob Bradley/Corp/Enron@ENRON cc: Mary Schoen/NA/Enron@Enron Stacey Bolton/NA/Enron@Enron Lisa Jacobson/ENRON@enronXgate Linda Robertson/NA/Enron@ENRON Subject: DRAFT response to Greenpeace Kyoto letter Attached is a first draft of a response to Greenpeace's April 5 letter to Jeff Skilling asking for Enron's answers to some specific questions on the Kyoto Protocol and climate change. Similar letters were delivered by Greenpeace Europe in native languages to Enron's offices in the UK Netherlands Spain and Belgium. I have attached a copy of one of the letters below. All the questions are the same in each. I have drafted a response with the goals of: 1) Being responsive to Greenpeace without being defensive or without greenwashing. We have an already-published public statement on climate change and a very positive solution-oriented story to tell with many facts and accomplishments to back up our statements. I think our letter can land in the stack that they consider positive responses and not in the stack of non-responses or we don't care responses. 2) Steering away from directly answering the no-win questions about Kyoto. I think we can respond to the letter in a way that provides meaningful answers to the general themes of the letter. I have discussed this with many of you already but I strongly feel that we should not get dragged down into debates over what we like/dislike support/oppose about Kyoto....we'll quickly get into questions we can't now answer and may never be able to answer. I'd prefer it if we rise above the politics of the issue and look solution-oriented by saying counties and companies should continue to be engaged in this important issue. 3) Developing corporate-wide messages that we can use in multiple applications -- arming our PR and govt. affairs advocates with a tight script to use in their efforts responding to shareholder inquiries and annual meeting Q&A Ken Lay or other executive speeches and presentations something for our Corporate Responsibility annual report. Sorry for the long preamble but climate change has become a very sensitive issue of late and our message/strategy needs to be very coordinated and we need to have one clear set of statements that everyone in the company can understand and use. With that said I also believe that these messages should be used very carefully as the subject matter is complex and straying too far from the basics can be dangerous. We should designate one or two clear spokespeople that can answer any follow up to the Greenpeace letter by press or policymakers and really stick to the boundaries of what's in our response letter. There is also the issue of customizing responses from the European offices using this letter as a template and adding a few examples of Enron good deeds in the local areas. I am not opposed to doing so but would again appreciate being able to review these responses before they go. Please let me know if you have other views. I would like to send our response by early next week maybe even Monday 4/23 if we can turn it around that fast. Thank you for your input and assistance and I look forward to your reply. Jeff Jeffrey Keeler Director Environmental Strategies Enron Washington DC office - (202) 466-9157 Cell Phone (203) 464-1541 What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Confidential information Body:: Nanette: Changes are made. I'll have the attached document signed and faxed to you tonight. You can fax your executed document back to me at (713) 646-3490. Thanks Leslie Hansen Nanette Crist <NCrist@prebon.com> 11/20/2000 03:38 PM To: 'Leslie.Hansen@enron.com' <Leslie.Hansen@enron.com> cc: Subject: RE: Confidential information Leslie--A few nits. Prebon Energy Inc. in the first sentence should not have a comma. Clause (a) in the carve-out as to what constitutes Confidential Information should start that is or becomes... I would put as demonstrable by the receiving party in parens at the end of clause (c). That's it. If you want to have the agreement signed and faxed to me at 201-557-5973 I'll have George sign it tonight or in the morning before the call and send it back to you. Thanks. What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Barton Staff Meeting Body:: Yesterday I spent about 45 minutes with the three key energy staff to the H= ouse Energy and Commerce Committee -- Andy Black (for Barton) and Sean Cunn= ingham and Jason Bentley (the energy counsels to the full committee). We m= et at my request to discuss Barton RTO draft. (The group EPSA meeting with= Chairman Barton that was to have been yesterday afternoon has been resched= uled for next Tuesday.) =20 Key points from the meeting -- =20 1. They do not expect the Barton Subcommittee to mark up the electricity l= egislation this year. Time is running out and Members of the subcommittee = are not focused on the issue. Instead they plan to continue working on th= e issue at the staff level. Probably will be another draft version circula= ted and then a version will be introduced by Barton as a formal bill by the= end of the year. The earliest they see any kind of vote is late Jan. or ea= rly February. =20 2. Barton feels strongly that FERC should not be the tail wagging the do= g on RTO policy. =20 3. On particulars of the bill they are clearly reconsidering the 40000 = MW minimum threshold for the size of an RTO. They are getting pulled in bo= th directions they say and are inclined to drop the 40000 MW number -- p= ossibly leaving it to FERC to set a number. They conceded that the mechani= cs of the draft make it unlikely that the 18 month deadline for all trans= mission owners to get into an approved RTO would stick. They consciously c= hanged the normal judicial standard of review for FERC actions from arbitr= ary and capricious to preponderance of the evidence because they think o= therwise the courts will rubber stamp FERC. Spent a lot of time on how the= draft would aid and abet the recalcitrant utilities and that the overall n= ature of the draft assumes there are only two parties to this -- FERC and t= he transmission owners -- while the rest of those truly affected -- from us= to others -- are left out. Sean said we could still intervene but I said= that was the truly pro forma aspect of their process since FERC's hands an= d our's would be tied by the rights given to transmission owners to drag = their feet. =20 Bottom line -- FERC has a window until next Spring without likely congressi= onal interference at least not of the formal legislative variety to both= move on RTOs and improve its relations with Congress. FERC staff has been= pushing the committee staff on concerns similar to our concerns. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: RTO Question Body:: On this same subject of Chairman Wood I am told that he met with Rep. Doug Ose (energy subcommittee chairman of the Government Reform Committee) and Ose's energy advisory board on Wednesday of this week and said similar things. He made a big deal out of a Big Mac analogy -- saying that whether you ordered one in Portland Oregon or Portland Maine the product is the same. With RTOs he supposedly said this meant if the rules are standardized the number of RTOs becomes less important. Those in the room including EPSA staff came away with the impression that Wood is backing away from only 4 RTOs based on this and other comments. Ditto on a 12/15/01 deadline. On the positive side he did say that he had been consulted on the Administration's comments on the Bingaman bill and agreed that legislation without RTO language or bundled/unbundled is OK. He understands the high risk that Congress would go the wrong way on these issues. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: UC-CSU-Enron press release Body:: I know we got a lot of grief on the Hill when we had our fight with UC/CSU. Now we have settled and this release will go out (with some modification) today. ----------------- What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: External Affairs Meeting in 50M03, conference bridge 853-3233 passcode 3000, you are the host Body:: Reed -- USAir 1062 arr. 10:02 Anthony Duenner -- 6235 Mark Muller Darrel Dunson -- 602-492-8570 Distribution list labels & copying Craig Goodman (Equitible Re 202333-0311(h) What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Confidential - Executive Committee Assistants Body:: Shanna I certainly believe that Jennifer is better than Kim. Jeff is certainly the appropriate judge but she is very young and has a lot yet to learn. This comment is not meant as a cut down at all. John's questionable judgement shouldn't just be trumped however. My thoughts m Shanna Funkhouser@ENRON 01/30/2001 07:44 PM To: Mike McConnell/HOU/ECT@ECT Jeffrey A Shankman/HOU/ECT@ECT cc: Subject: Confidential - Executive Committee Assistants Mike and Jeff I wanted to let you know that Kim Hillis is being promoted from Sr. Admin to Executive Assistant. Cathy Phillips Nicki Daw and Kay Chapman are also Executive Assistants. Please let me know if we need to re-visit a promotion for Jennifer and whether it should be considered now mid year or at a later time. Thanks Shanna What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: <<Concur Expense Document>> - March 2001 AMEX Body:: ----------------- What should this email be categorized as? [/INST] Empty message <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: AP Wire services Tues 3/20: Calif. Officials Order Blackouts Dow Jones News Tues 3/20: California Panel to Order Utilities to Make $1= =20 Billion in Back Payments SF Chron 3/20: As Davis Seeks Money Lawmakers Want Answers=20 Members of both parties angry at lack of dialogue Fresno Bee Tues 3/20: Jones rips state on energy crisis Sac Bee Wed. 3/21: Day 2 -- Battling blackouts: Payment plan sought to= =20 restart small plants Sac Bee Wed. 3/21: Hospitals take hit seek power guarantee Sac Bee Wed. 3/21: Lodi still won't pull the plug San Diego Union Tues. 3/20: Blackouts hit for second day break seen=20 Wednesday San Diego Union Tues. 3/20: State power regulators working on energy=20 rescue=20 San Diego Union Tues. 3/20: Federal regulators scored for not ordering= =20 more California refunds LA Times Wed. 3/21: Second Day of Blackouts Disrupts 500000 Home and= =20 Businesses LA Times Wed. 3/21: Fragile Supply Network Apt to Fail LA Times Wed. 3/21: Elevator Anxiety is Riding High LA Times Wed. 3/21: State says it's accelerating plan to buy Power=20 Utilities' Grid LA Times Wed. 3/21: L.A. Long Beach File Suits Over Gas Companies'=20 Prices LA Times Wed. 3/21: Davis OKs Subsidy of Pollution Fees LA Times Wed. 3/21: As Losses Mount Companies work around outages LA Times Wed. 3/21: Commentary: A Blackout on Answers LA Times Wed. 3/21: Commentary: Rolling Blackouts: Blatant Extortion SF Chron Wed. 3/21: Utilities' Demand Blocks Bailout=20 NEGOTIATIONS HIT SNAG: PG&E Edison want end to price freeze if they sell= =20 transmission lines to state SF Chron Wed. 3/21: Utilities' Demand Blocks Bailout=20 BLACKOUTS ROLL ON: Weather increased consumption blamed SF Chron Wed. 3/21: Manners Go Out the Window=20 Pedestrians in peril as drivers turn darkened S.F. streets into free-for-al= l SF Chron Tues. 3/20: Historic Blackouts in State=20 Bay Area learns to cope SF Chron. Tues. 3/20: Second day of rolling blackouts in power-starved= =20 California Mercury News. Wed. 3/21: Bay Area Residents Learning to roll with=20 Blackouts Orange County Wed. 3/21: Powerless Again Orange County Wed. 3/21: The iceman shunneth effects of hourlong blacko= ut Orange County Wed. 3/21: Traffic officials are seeing red over blackout= s Orange County Wed. 3/21: Alternative power producers cut back or shut= =20 down as payments from big utilities lag Orange County Wed. 3/21: O.C. saves its energy -- for blaming others Orange County Wed. 3/21: Blackout readiness on agenda Dow Jones Energy News Wed. 3/21: Calif To Order Utils To Pay Small=20 Generators Up Front-Gov Dow Jones Energy News. Wed. 3/21: PG&E Says It Is Negotiating With=20 Qualifying Facilities Energy Insight Wed. 3/21: New York at the Crossroads --- Calif. Officials Order Blackouts=20 By PAUL CHAVEZ Associated Press Writer=20 LOS ANGELES (AP) - State power managers ordered rolling blackouts across=20 California for a second straight day Tuesday as demand for electricity agai= n=20 exceeded supply.=20 The same factors that collided to strap California's power supply on Monday= =20 hit again officials with the Independent System Operator said. Those inclu= de=20 reduced electricity imports from the Pacific Northwest numerous power plan= ts=20 offline for repairs and higher-than-expected demand because of warm=20 temperatures.=20 A two-unit Southern California plant that the ISO hoped would be working=20 Tuesday had not been fixed. One of its units might go online at noon to hel= p=20 the situation the ISO's Jim Detmers said.=20 In addition hydroelectric power imports from the Northwest were 800=20 megawatts lower than Monday he said. The ISO oversees most of the state's= =20 power grid.=20 --- California Panel to Order Utilities to Make $1 Billion in Back Payments By Jason Leopold 03/20/2001 Dow Jones Business News (Copyright (c) 2001 Dow Jones & Company Inc.) Dow Jones Newswires=20 LOS ANGELES -- The California Public Utilities Commission will order Edison= =20 International's Southern California Edison and PG&E Corp.'s Pacific Gas &= =20 Electric unit to pay small power generators that are qualified utilities=20 about $1 billion in past-due payments in order to keep the plant owners fro= m=20 dragging the utilities into an involuntary bankruptcy proceedings and to= =20 also ensure the generation units keep pumping out electricity people=20 familiar with the matter told Dow Jones Newswires late Monday. Gov. Gray Davis state Sen. Debra Bowen and Assemblymembers Fred Keeley an= d=20 Robert Hertzberg all Democrats spent most of the day y trying to hammer o= ut=20 an agreement with the so-called qualifying facilities alternative power=20 producers that use the wind sun steam and biomass to generate electricity= =20 for the state on supply contracts and past payments the utilities failed t= o=20 make.=20 The qualifying facilities which represent about one-third of the state's= =20 total power supply and signed contracts to sell power directly to the=20 utilities under a government mandate would then agree to sign power-supply= =20 contracts with the utilities for a period of five to 10 years for about $79= a=20 megawatt hour for the first five years and about $61 a megawatt hour=20 thereafter two sources involved in the negotiations said.=20 The PUC is expected to issue a draft resolution on the issue sometime this= =20 week one source said.=20 The lawmakers wouldn't comment on the details of their talks Monday.=20 Representatives with SoCal Ed (EIX) and PG&E (PCG) said they were unaware= =20 Gov. Davis and his administration were meeting on the issue.=20 The utilities are more than $13 billion in debt and have failed to make=20 payments on their qualifying-facilities contracts since November. PG&E has= =20 paid some of its qualified facilities just a fraction of what they are owed= .=20 Legislation To Restructure QF Rates Stalls In Senate Energy Committee=20 Mr. Keeley had recently drafted legislation along with state Sen. Jim=20 Battin a Republican from Palm Desert that would have restructured the rat= es=20 the qualified facilities charge the utilities from $170 a megawatt hour to= =20 $80 a megawatt hour for five years.=20 The bill SB47X stalled in the Senate Energy Committee of which Ms. Bowen= =20 chairs. SoCal Ed opposed the legislation saying the rates were still too= =20 high. A utility spokesman said the qualified-facilities rates should be=20 reduced to under $50 a megawatt hour.=20 But the lawmakers and the governor is trying to avoid the need for=20 legislation largely because there isn't much support in both houses for su= ch=20 a bill and the chance that it won't be passed in time to keep the qualified= =20 facilities from dragging the utilities into involuntary bankruptcy=20 proceedings the legislative source said.=20 The PUC will take over the issue from the Legislature the source said.=20 Monday about 3000 megawatts of qualified-facilities generation went offli= ne=20 because the companies that operate the power plants can no longer afford to= =20 buy natural gas used to fuel the plants due to the utilities' failure to pa= y=20 money owed to the companies said Jim Detmers vice president of operations= =20 for the state's Independent System Operator.=20 The outages triggered a major shortfall in the state which resulted in near= ly=20 eight hours of statewide rolling blackouts Monday.=20 Many owners of the qualified-facilities said without immediate relief they= =20 would likely force SoCal Ed and possibly PG&E into involuntary bankruptcy= =20 perhaps as soon as Thursday.=20 One such facility CalEnergyOperating Co. wants to be freed temporarily fr= om=20 its contract with the utility and be allowed to sell its electricity to thi= rd=20 parties until the utility is able to pay its bills. CalEnergy is an affilia= te=20 of MidAmerican Energy Holdings Co. which is majority owned by Warren=20 Buffet's Berkshire Hathaway Inc. (BRKA).=20 The company sued SoCal Ed last month and the case is scheduled to be heard= =20 Thursday in Imperial County Superior Court. If a judge delivers an=20 unfavorable ruling CalEnergy and other unsecured creditors would drag SoCa= l=20 Ed into involuntary bankruptcy three executives with the companies involve= d=20 said.=20 CalEnergy is said to be organizing a bankruptcy petition now circulating=20 among six of Southern California Edison's independent power suppliers and= =20 could file the petition very quickly if it fails in its suit Thursday said= =20 executives with three of the six companies.=20 Write to Jason Leopold at jason.leopold@dowjones.com=20 Copyright (c) 2001 Dow Jones & Company Inc.=20 All Rights Reserved --- --- As Davis Seeks Money Lawmakers Want Answers=20 Members of both parties angry at lack of dialogue=20 Lynda Gledhill Greg Lucas Chronicle Sacramento Bureau Tuesday March 20 2001=20 2001 San Francisco Chronicle=20 Sacramento -- The Legislature has warned it may block further state purchas= es=20 of electricity as lawmakers' frustration with Gov. Gray Davis' handling of= =20 the energy crisis increases.=20 A test may come soon because Davis asked yesterday for another $500 million= =20 to continue buying power.=20 Sen. Steve Peace D-El Cajon chairman of the Joint Legislative Budget=20 Committee wrote to Davis' Finance Department on Friday that the committee= =20 might deny further spending requests in the absence any discernable=20 progress from the Public Utilities Commission to ensure that the state wou= ld=20 get its money back.=20 Members of the committee both Republican and Democratic said they support= ed=20 Peace's call for more oversight of the spending given the lack of=20 information from Davis on details of the state's power purchases.=20 He's been holding things close to the chest and that bothers me said Se= n.=20 John Vasconcellos D-Santa Clara. I want to know a lot more.=20 Sen. Dick Ackerman R-Fullerton said the administration has been=20 stonewalling us about how much is being spent and how much power we're=20 getting for it. When the state is spending that kind of money at a minimum= =20 legislators should know for what.=20 The state had spent $2.6 billion on electricity through March 11. Davis'=20 request for more money would put the state at the $3 billion mark by the=20 middle of April. The state is spending an average of $49 million a day.=20 The money is supposed to be paid back through the rates collected from=20 utilities' customers. It is up to the PUC to decide how to divide that mone= y=20 among the state the utilities and the utilities' debtors. The commission i= s=20 scheduled to take up the issue at its March 27 meeting.=20 The problem is that there appear to be more demands on the money than there= =20 is money to go around.=20 The utilities have said they need the money to pay off some of their=20 creditors. Among those looking for cash are alternative-power generators th= at=20 were selling electricity to Pacific Gas and Electric Co. and Southern=20 California Edison. Half of them have shut down because they have not been= =20 paid.=20 Earlier this month the PUC granted the Department of Water Resources whic= h=20 has been purchasing electricity for the state the power to recoup its full= =20 costs through rates.=20 It's unclear whether that can be accomplished without raising electricity= =20 prices though Davis has insisted he can solve the crisis without boosting= =20 rates.=20 Lawmakers said they approved the bill that allowed the state to buy power i= n=20 the belief such purchases would be a stopgap until the Davis administration= =20 could sign long-term contracts with power suppliers. However only about 19= =20 contracts have been signed to date out of 42 agreements. If all the=20 contracts are signed they will account for about 70 percent of the power= =20 California is expected to need.=20 It was our expectation some of these contracts would kick in said=20 Assemblywoman Carole Migden D-San Francisco. This was designed to only be= =20 bridge money to avert a power disaster. We should hold firm and come up wit= h=20 a plan.=20 I recall about three weeks ago when we first asked about one of these $500= =20 million letters Migden said. We said maybe this one is necessary but=20 there won't be carte blanche approval of any future requests. I'm pleased= =20 Sen. Peace is taking that approach.=20 To Assemblyman George Runner R-Lancaster Peace's letter was another way= =20 for the Legislature to send a message we need to be in this loop. We're jus= t=20 getting a small little dribble of information which just creates more=20 questions.=20 A spokesman for the Department of Finance said officials hoped to work with= =20 the committee members about their concerns.=20 --- --- Jones rips state on energy crisis=20 Secretary of state hints that he'll take on Davis in 2002.=20 By John Ellis=20 The Fresno Bee (Published March 20 2001)=20 Officially he's Bill Jones secretary of state for California. Unofficiall= y=20 he's Bill Jones 2002 gubernatorial candidate.=20 The evidence is right there between the lines -- in the subtleties of his= =20 speeches their subject matter and the way Jones carries himself when he's= =20 in public.=20 Monday was no different as Jones addressed a Rotary Club luncheon in Fresn= o=20 full of people who are assuming -- though nothing is official -- that the= =20 Fresno native will soon announce his intention to challenge Gov. Davis next= =20 year.=20 Bill they call me governor Chas Looney a former Rotary Club district= =20 governor quipped to Jones. I look forward to the day we all can call you= =20 governor.=20 Jones then proceeded to deliver a speech to a packed house in the DoubleTre= e=20 Hotel that touched on his accomplishments as secretary of state but quickl= y=20 moved to his main topic: California's crumbling infrastructure and how the= =20 energy crisis is affecting the state.=20 Always in the background but never mentioned by name was Davis. Jones was= =20 careful to hew to the Rotary rule that speeches steer clear of partisan=20 politics.=20 Still Jones looked sounded and acted like a candidate for governor and= =20 near the end of his speech he promised his decision would come soon.=20 The Fresno Republican's speech began by highlighting his work in passing th= e=20 Three Strikes and You're Out initiative in 1994.=20 Jones also talked of his efforts to remove 2 million inactive California=20 voters from the rolls.=20 But it was clearly the energy crisis and its ramifications -- an issue=20 Republicans feel they can pin on Davis and the Democratic-controlled=20 Legislature -- that was the centerpiece of the speech.=20 Today the energy crisis is being driven he said by a lack of power plant= =20 construction. And while billions go to solve the crisis he said the state= =20 faces $100 billion in unmet infrastructure needs -- everything from school= =20 repair to road repair.=20 Doesn't that scare you? Jones asked.=20 He then recounted the warning signs -- ignored by the state he said -- of= =20 the looming energy crisis.=20 He cited the initial warnings that the deregulation bill was flawed last= =20 summer's request by Edison and Pacific Gas & Electric to allow forward=20 contracting and the Republican request for a special session to deal with t= he=20 energy crisis. All ignored Jones said.=20 Now Edison and PG&E are near bankruptcy and the state finds itself steppin= g=20 up as a creditor. And the solution now becomes California getting into the= =20 energy business he said. Or even carrying it to a greater degree not= =20 just in the short term to buy power to keep the lights on. I'm talking abou= t=20 basically socializing the energy business.=20 Jones said he prefers low-interest loans to Edison and PG&E taking the=20 electric grid as collateral.=20 I just do not believe in California getting into something it does not kno= w=20 how to do -- has never done before -- on top of all of our other=20 obligations he said.=20 It really worries me that California will not be able to endure that type = of=20 obligation.=20 Jones said polls now show increasing numbers of residents saying the state = is=20 headed in the wrong direction.=20 I feel obligated to speak out and say there is a better way Jones said. --- --- Day 2 -- Battling blackouts: Payment plan sought to restart small plants By Dale Kasler and Carrie Peyton Bee Staff Writers (Published March 21 2001)=20 Blackouts rolled across California for a second straight day Tuesday=20 snarling traffic darkening businesses and sending state officials scrambli= ng=20 to craft a payment plan to revive the wind farms and other critically neede= d=20 small energy producers that have shut down because of financial woes.=20 On a day when another 570000 customers lost power Gov. Gray Davis said th= e=20 Public Utilities Commission and the Legislature would move promptly to orde= r=20 Pacific Gas and Electric Co. and Southern California Edison to start paying= =20 those small energy producers for their electricity. Davis said the two=20 utilities will face considerable fines if they don't pay up.=20 But several of the producers known as qualifying facilities said they= =20 doubted Davis' plan would go far enough to get them back in operation. And = it=20 wasn't clear whether the plan would keep the increasingly impatient=20 alternative producers from hauling one or both of the big utilities into=20 bankruptcy court as some have threatened.=20 The shortage of power from the qualifying facilities -- plus a near-record= =20 heat wave (downtown Sacramento topped off at 83 degrees one degree short o= f=20 the 84 degree record set in 1960) a lack of hydropower and other problems = --=20 prompted the state's Independent System Operator to order a second day of= =20 blackouts starting mid-morning. But the blackouts hit only about half as ma= ny=20 Californians as Monday's with late afternoon conservation efforts helping= =20 balance supply with demand.=20 The blackouts usually about an hour long hit about 7600 Sacramento=20 Municipal Utility District customers in Elk Grove and south Sacramento=20 County. PG&E customers in suburban counties were affected as well.=20 The order darkened shops in San Francisco's Chinatown and was blamed for a= =20 crash that left two motorists seriously injured in the Los Angeles suburb o= f=20 South El Monte. A Sun Microsystems Inc. factory in Newark had to close for= =20 several hours.=20 Most Californians took the blackouts in stride though. Elk Grove High Scho= ol=20 students filed outside to play hacky sack. Coffee shop patrons in Davis=20 milled outdoors enjoying the unseasonably warm weather.=20 Yet the blackout order was met with outright defiance by one municipal=20 utility. The city of Lodi refused to cut power to its residents Monday or= =20 Tuesday saying it shouldn't have to suffer because of the financial crisis= =20 afflicting PG&E and Edison.=20 The outlook for today and the near future was brighter as several big powe= r=20 plants came back on line after repairs. ISO officials also praised=20 Californians' conservation efforts which had faltered in the morning but= =20 came on strong in the afternoon helping to prevent further blackouts. By= =20 evening the grid was in a relatively mild Stage 2 power alert.=20 But the second day of blackouts -- plus an increasing threat of utility=20 bankruptcy -- pushed Davis to the brink. The governor cobbled together a=20 payment plan to rescue the qualifying facilities -- some 600 wind farms=20 geothermal plants and other alternative-energy generators whose production= =20 has become increasingly vital in recent days.=20 Under Davis' plan the Legislature and the PUC would order PG&E and Edison = to=20 pay the qualifying facilities for power delivered after April 1. The=20 utilities are required to buy power from the qualifying facilities under a= =20 1978 federal law designed to bring cheaper and cleaner forms of electricity= =20 to market.=20 Davis said the PUC would release a proposed order late Tuesday that would= =20 require the utilities to pay the qualifying facilities $79 a megawatt hour= =20 for five-year contracts or $69 for 10-year contracts. The Legislature also= =20 would have to pass a law authorizing the PUC to issue such an order.=20 But the situation was far from resolved late Tuesday and PG&E and Edison= =20 were likely to oppose at least portions of Davis' plan.=20 Edison is willing only to make some kind of partial payments going forward= =20 said Thomas Higgins a senior vice president with parent company Edison=20 International. We have a limited amount of resources available to us in=20 rates ... and that's the constraining factor.=20 PG&E which has been making partial payments to the qualifying facilities= =20 said it could pay them in advance in full for future power deliveries.=20 But PG&E said such payments would eat up half the $400 million it has=20 available each month to buy power -- and unless it gets a rate hike there= =20 wouldn't be enough to pay the qualifying facilities and cover other expense= s=20 including the cost of reimbursing the state Department of Water Resources f= or=20 the power the agency is buying on behalf of the troubled utility.=20 PG&E's proposal could represent a challenge of sorts to state officials:=20 Accept less money for the water department or raise rates.=20 State officials need to resolve who they want to see paid PG&E spokesman= =20 John Nelson said. There is a limited pool of money.=20 For his part Davis insisted that the water department would be first in li= ne=20 to be paid and he said the PUC will issue a proposed order to that effect.= =20 We are getting paid before anybody else Davis said.=20 Hundreds of qualifying facilities are out of commission because PG&E and=20 Edison haven't paid them. The situation has robbed the state of several=20 thousand badly needed megawatts and is a key reason blackouts have been=20 ordered. In normal times the facilities produce more than 20 percent of=20 California's electricity.=20 Some of the qualifying facilities have been threatening to haul one or both= =20 of California's beleaguered utilities into bankruptcy court unless they get= =20 paid soon saying a bankruptcy filing might be the only way they can save= =20 their businesses.=20 You've got to take care of the QF problem or the whole thing blacks out= =20 said Jerry Bloom a lawyer representing one group of qualifying facilities.= =20 (State officials) are starting to understand.=20 One thing that was fairly certain about Davis' still-sketchy payment plan: = It=20 wouldn't cover PG&E and Edison's existing debt to the qualifying facilities= =20 estimated at more than $1.48 billion.=20 In their current financial state the utilities say they can't afford to pa= y=20 the existing debt. In addition paying the debt would create a major=20 complication: Other creditors including the big power generators would=20 surely haul Edison and PG&E into bankruptcy court on the grounds that they= =20 weren't being treated fairly.=20 You can't give preferential payment treatment to one class of creditors ov= er=20 another PG&E's Nelson said. You virtually assure that (the other=20 creditors) have to file an involuntary bankruptcy proceeding against you.= =20 But without full payment it wasn't clear how many of the qualifying=20 facilities would be able to restart.=20 Executives at several plants -- the ones that run on natural gas -- said=20 they're not sure their gas suppliers will deliver unless the existing debts= =20 are cleared up.=20 We need to convince a gas company to supply us said Ed Tomeo of UAE Ener= gy=20 Operations Corp. which had to shut off its 40-megawatt Kern County plant= =20 Tuesday. We're a company that already owes millions of dollars for gas=20 supplies. How do you coax them to sell you millions more?=20 It's wishful thinking ... that the gas suppliers are going to sell us gas= =20 Robert Swanson of Ridgewood Power said.=20 I>Bee Capitol Bureau Chief Amy Chance and staff writers Stuart Leavenworth= =20 Bill Lindelof Pamela Martineau and the Associated Press contributed to thi= s=20 report. --- --- Lodi still won't pull the plug By Carrie Peyton Bee Staff Writer=20 (Published March 21 2001) In a growing rebellion against blackouts the city of Lodi has twice refuse= d=20 to cut power to its residents despite an order from Pacific Gas and Electri= c=20 Co.=20 The small city-run electric system is among many disgruntled utilities=20 including the Sacramento Municipal Utility District that believe their=20 contractual pledges to cut back during emergencies were never meant for tim= es=20 like this.=20 It's been a philosophical debate up to this point. Now I guess we've drawn= a=20 line in the sand said Lodi utility director Alan Vallow.=20 PG&E said it is reviewing its interconnection contract the agreement that= =20 links Lodi to the grid through PG&E-owned high-voltage lines to determine= =20 what action it will take next.=20 It's unfortunate that while the city of Lodi has received the benefit of= =20 this agreement for years they are unwilling to bear the burden of this=20 statewide energy shortage said PG&E's Jon Tremayne.=20 One utility coalition the Northern California Power Agency believes that= =20 PG&E has already violated that agreement by not lining up enough power for= =20 customers.=20 The agency wrote PG&E on Friday saying that its members -- municipal=20 utilities and irrigation districts -- believe they aren't required to=20 participate in blackouts prompted by financial disputes.=20 And SMUD which has been considering dropping out of future blackouts will= =20 be watching the response to Lodi said SMUD board President Larry Carr.=20 Some SMUD directors say they're ready to go to court to force the issue. So= =20 is Lodi population 58000 said Vallow.=20 I've heard an Edison executive describe this as a natural disaster akin to= =20 an earthquake. That's crap. This is a man-made event he said.=20 Lodi said it will still help in genuine emergencies such as fires or toppl= ed=20 transmission lines. But it decided that on Monday and Tuesday that wasn't t= he=20 case.=20 You have 3000 megawatts of QFs (qualifying facilities) offline because=20 their bills haven't been paid. Well guess what? Somebody ought to pay thos= e=20 ... bills Vallow said. --- --- Blackouts hit for second day break seen Wednesday=20 By Audrey Cooper ASSOCIATED PRESS=20 March 20 2001=20 SACRAMENTO =01) Rolling blackouts hit California for a second straight day= =20 Tuesday closing souvenir shops in San Francisco's Chinatown snarling=20 traffic and plunging schools and offices around the state into darkness.=20 Roughly a half-million homes and businesses from San Diego to the Oregon=20 border faced outages blamed on the same factors that collided to force=20 blackouts Monday =01) unseasonably warm weather reduced electricity import= s=20 from the Pacific Northwest numerous power plants offline for repairs and= =20 less power provided by cash-strapped alternative-energy plants.=20 Five rounds of outages in San Diego affected about 74000 customers. State= =20 power grid officials expected to have enough electricity to avoid further= =20 outages through at least Wednesday although the supply remained tight.=20 State power regulators working on energy rescue=20 Federal regulators scored for not ordering more California refunds=20 ?=20 Gov. Gray Davis blamed the blackouts in part on the failure of Southern=20 California Edison and Pacific Gas and Electric Co. to pay millions of dolla= rs=20 they owe qualifying facilities power suppliers that use cogeneration =01= )=20 steam from manufacturing plus natural gas =01) or solar wind and other=20 renewable energy to generate electricity.=20 State power grid officials say California this week has lost about half the= =20 electricity QFs normally provide. Several cogeneration plants say they=20 haven't been paid by Edison and PG&E for weeks and can't afford to buy=20 natural gas to fuel their plants.=20 Davis said the utilities are taking in money from customers but still faili= ng=20 to pay the QFs. The state has been spending about $45 million a day since= =20 January to buy power for customers of Edison and PG&E which are so=20 credit-poor that suppliers refuse to sell to them.=20 It's wrong and irresponsible of the utilities to pocket this money and not= =20 pay the generators Davis said at a Capitol news conference Tuesday evenin= g.=20 They've acted irresponsibly and immorally and it has to stop.=20 Southern California Edison officials said in a written statement that the= =20 utility is intent on paying creditors and working with the PUC to pay QFs f= or=20 future power sales. PG&E representatives were out of the office late Tuesda= y=20 night and didn't immediately return calls from The Associated Press seeking= =20 comment.=20 John Harrison of the Northwest Power Planning Council a consortium that=20 monitors power use in several Western states said blackouts on the first d= ay=20 of spring are an ominous sign of what lies ahead this summer.=20 We're in trouble he said. We will likely be able to meet our needs this= =20 summer but there won't be much to send to California.=20 Tuesday's outages began at 9:30 a.m. PST and continued in 90-minute waves= =20 until about 2 p.m. when the Independent System Operator lifted its blackou= t=20 order.=20 Grid officials credited an influx of power from the Glen Canyon hydroelectr= ic=20 plant on the Utah-Arizona border.=20 The blackouts were blamed for at least one serious traffic accident.=20 Two cars collided at an intersection without traffic lights in the Los=20 Angeles suburb of South El Monte leaving two people with serious injuries= =20 California Highway Patrol Officer Nick Vite said.=20 Ventura Foods in Industry sent its employees out for an early lunch after= =20 blackouts shut down its phones and computers.=20 This is mild weather for this time of year. I don't know what's going to= =20 happen in the summer manager Frank Hynes said. This is going to have a= =20 serious impact on the state's economy. They can't just keep shutting people= =20 down.=20 Statewide demand was higher than expected because of warm spring weather.= =20 Temperatures reached record highs across California on Monday including th= e=20 80s and low 90s in Southern California. They were expected to be somewhat= =20 lower Tuesday but still in the 70s and 80s.=20 The ISO hoped demand would start to subside and conservation would kick in= =20 but that did not happen Tuesday morning.=20 We have not seen the kind of conservation we saw back in January when th= e=20 first blackouts hit ISO spokesman Patrick Dorinson said. If we don't have= =20 conservation efforts that just means that's more power we have to take off= =20 the grid.=20 In San Francisco's Chinatown souvenir shops normally bustling with visitor= s=20 were forced to shut down. Nearby irritated customers waited for a bank to= =20 reopen.=20 It's no good for anybody =01) stores or businesses or people said Yin Su= n=20 Chan among those in line.=20 PG&E the state's largest utility accounted for most of the customers=20 affected.=20 At least 438000 PG&E residential and business customers were affected as o= f=20 early afternoon spokesman Ron Low said.=20 Edison cut power to about 50000 customers. Edison was ordered to cut less= =20 power than PG&E and saved some due to conservation programs including one= =20 that lets the utility shut off air conditioning for 118500 residential and= =20 business customers when the power supply is tight.=20 About 73400 San Diego Gas & Electric customers were hit by the blackouts.= =20 Los Angeles whose municipal utility is not on the grid that serves most of= =20 California wasn't included in the blackout order.=20 More than 1 million homes and businesses statewide experienced outages=20 Monday.=20 California's power crisis is expected to get even worse this summer when= =20 temperatures soar and residents crank their air conditioning.=20 Natural gas supplies are tight water supplies are down and the state is=20 spending tens of millions of dollars each day to buy electricity for Edison= =20 and PG&E who say they are nearly bankrupt due to high wholesale power cost= s.=20 Edison and PG&E say they have lost more than $13 billion since last June to= =20 climbing wholesale electricity prices the state's 1996 deregulation law=20 prevents them from recouping from ratepayers.=20 Adding to the problems the state this week lost about 3100 megawatts from= =20 QFs. One megawatt is enough power to serve about 750 households.=20 The plants say they are owed about $1 billion for past sales to PG&E and=20 Edison.=20 PG&E said it is offering to prepay the QFs starting next month to get them= =20 back in operation. Negotiations were expected to continue Wednesday.=20 California Co-Generation Council attorney Jerry Bloom said he supports=20 proposals that will get the Qfs paid but the promise of future payments ma= y=20 not be enough.=20 PG&E and Bloom said the utility's prepayments hinge on an upcoming Public= =20 Utilities Commission decision on whether the utility's rates are sufficient= =20 to pay its bills and cover the state's power purchases on its behalf which= =20 amount to $4.2 billion since early January.=20 Davis said the PUC planned to issue a draft order late Tuesday directing th= e=20 utilities to pay their future QF bills.=20 It plans to take action on that order next Tuesday Davis said. The=20 Legislature plans to approve a bill in the meantime giving the PUC the=20 authority to issue such an order and fine the utilities if they fail to=20 comply he said.=20 Davis said he is confident the utilities and the state can pay their bills= =20 without further rate increases for Edison and PG&E customers.=20 --- --- State power regulators working on energy rescue=20 By Karen Gaudette ASSOCIATED PRESS=20 March 20 2001=20 SAN FRANCISCO =01) State power regulators continue to delay the release of= =20 guidelines that will determine a portion of the money the Department of Wat= er=20 Resources can recoup from financially troubled utilities for electricity it= =20 has bought on their customers' behalf.=20 These guidelines will help the water department determine whether it must= =20 raise consumer power rates to reimburse the state for the more than $3=20 billion it has committed to buying electricity.=20 Assemblyman Fred Keeley D-Boulder Creek said Tuesday that the Public=20 Utilities Commission would likely have to raise rates by 15 percent to cove= r=20 the state's costs and the utilities' bills.=20 The PUC guidelines were most recently delayed by a letter from DWR Director= =20 Thomas Hannigan asking that the water department receive a percentage of=20 ratepayer money collected by the utilities equal to the percentage of=20 electricity it provides to utilities.=20 The DWR currently buys around 40 percent of the power used by Pacific Gas a= nd=20 Electric Co. Southern California Edison Co. and San Diego Gas and Electric= .=20 Under the DWR's proposal the utilities would have to hand over 40 percent o= f=20 the money they continue to collect from ratepayers.=20 The DWR would then also receive whatever money remains after the utilities= =20 subtract their own generation and long-term contract costs the letter said= .=20 That amount would become the California Procurement Adjustment =01) an am= ount=20 that will help the state retrieve money spent on power purchases and help= =20 establish the size of state revenue bonds that are currently estimated to= =20 total $10 billion.=20 The state plans to issue the bonds in May to help pay off the more than $3= =20 billion Gov. Gray Davis' administration has committed to power purchases=20 since January to help the utilities climb out of debt.=20 Ron Low a spokesman with PG&E said the utility objects to paying the DWR= =20 such a large sum claiming it would interfere with efforts to pay its=20 qualifying facilities =01) power plants that use the sun wind biomass o= r=20 natural gas to generate about one third of the state's electricity.=20 The nearly bankrupt utilities owe the QFs more than $1 billion for=20 electricity they have produced since November said Jan Smutney-Jones=20 executive director of the Independent Energy Producers.=20 Hannigan also said in the letter the DWR intends to use its authority to=20 raise consumer electricity rates to recoup any money not reimbursed through= =20 the CPA and other means.=20 The Public Utilities Commission expected to release the guidelines last wee= k=20 but was delayed by debates over legislation that would slash the rates of= =20 environmentally friendly power plants under contract to provide electricity= =20 to the investor-owned utilities.=20 Without knowing how much ratepayer money the utilities need to pay these=20 qualifying facilities for future electricity it's unknown how much money= =20 they'll have on hand to pay the DWR.=20 In a written statement PUC Administrative Law Judge Joseph DeUlloa said th= at=20 he would issue a temporary decision on the CPA as soon as is practical.= =20 Pacific Gas and Electric Co. and Southern California Edison Co. say they ha= ve=20 lost more than $13 billion since last June to climbing wholesale electricit= y=20 prices that the state's 1996 deregulation law prevents them from recouping= =20 from ratepayers.=20 --- --- Federal regulators scored for not ordering more California refunds=20 By H. Josef Hebert ASSOCIATED PRESS=20 March 20 2001=20 WASHINGTON =01) House Democrats asked federal energy regulators Tuesday why= they=20 are not going more aggressively after alleged overcharges for wholesale=20 electricity in California and ordering more refunds.=20 The Federal Energy Regulatory Commission has asked suppliers to justify $12= 4=20 million in sales during the first two months of the year or refund the mone= y=20 but critics charge that thousands of additional questionable sales are not= =20 being challenged.=20 The three commissioners testifying at a hearing of the House Commerce=20 subcommittee on energy were asked why they limited their refund demands to= =20 only power sales that occurred during so-called Stage 3 alerts of acute pow= er=20 shortages in California.=20 It appears to me a price is unreasonable when it is unreasonable and not= =20 just during a power alert said Rep. Rick Boucher of Virginia the panels'= =20 ranking Democrat.=20 The commission last week ordered six power generators to justify some 1000= =20 transactions during February in the California market whenever the price wa= s=20 above $430 per megawatt hour and occurred during a Stage 3 emergency alert.= =20 But the lawmakers were told Tuesday that 56 percent of another 14168=20 transactions occurring outside a Stage 3 emergency also exceeded the $430= =20 trigger but are not being questioned.=20 The line was drawn to limit the scope of the refund said agency=20 commissioner William Massey a Democrat who strongly opposed the refund=20 actions because he said they were too limited.=20 Chairman Curtis Hebert a Republican defended the way the commission decid= e=20 on what transactions to challenge saying that it sought to replicate market= =20 conditions as they existed at the time of the sales.=20 We deserve a better explanation retorted Boucher.=20 Massey said that agency's investigation of overcharges for January also=20 failed to consider thousands of transactions that exceeded the refund trigg= er=20 because they did not occur during Stage 3 supply emergencies.=20 Managers of California's electricity grid state regulators and utilities= =20 have accused the agency of refusing to aggressively investigate price gougi= ng=20 by wholesalers who have charged from $150 to $565 per megawatt hour as muc= h=20 as 20 times what prices were in 1999.=20 While Hebert and commissioner Linda Breathitt defended the commissioners=20 attempt to investigate whole electricity prices Massey has been highly=20 critical.=20 What message does the agency's scrutiny of prices send to the power=20 companies? he was asked.=20 It makes clear FERC is going to be looking for the wallet under the lamp= =20 post with the lights shining =01) and nowhere else replied Massey.=20 Meanwhile Massey and his two fellow commissioners also disagreed sharply = on=20 whether the energy agency should impose temporary price controls on the=20 wholesale power market in the West to dampen further expected price increas= es=20 this summer.=20 Massey said he fears a disasters in the making if some price restraints a= re=20 not imposed by FERC which regulates wholesale electricity sales. We need = a=20 temporary time out he said.=20 But Massey is in the minority on the commission. Both Hebert and Breathitt= =20 are against price caps arguing they will have long-term detrimental impact= =20 on power supply.=20 The Bush administration has made its opposition to interfering in the=20 wholesale markets well known for weeks. Vice President Dick Cheney's task= =20 force is to unveil an energy plan in about a month that is expected to lean= =20 heavily on energy production.=20 --- --- Second Day of Blackouts Disrupts 500000 Homes and Businesses=20 Power: Grid operators say the shortage should ease in the next few days bu= t=20 officials see a grim summer.=20 By MITCHELL LANDSBERG and ERIC BAILEY Times Staff Writers=20 A traffic signal that stopped working during Tuesday's rolling blackouts le= d=20 to this collision be tween a car and a truck at an intersection in El Monte= .=20 The outages ran from 9:30 a.m. to 2 p.m. AP ?????Electricity blackouts rolled through California for a second straight= =20 day Tuesday disrupting business in one of the world's most technologically= =20 advanced economies and leaving schoolchildren groping in the dark. ?????Jinxed by a combination of bad luck and bad decisions utilities were= =20 forced to cut off power to more than half a million homes and businesses fr= om=20 San Diego to the Oregon border. ?????By day's end there was some good news from the operators of the=20 statewide power grid who said the situation had eased and appeared likely = to=20 improve for the next few days. And Gov. Gray Davis announced a proposed=20 solution to one vexing problem: the utilities' failure to pay the state's= =20 small alternative power generators many of whom have stopped producing=20 power as a result. ?????Davis called the utilities shameful for failing to pay and praised= =20 the alternative power generators which include solar wind and geothermal= =20 energy producers as good corporate citizens who produced power although= =20 they weren't being paid. ?????We are anxious to pay the [small producers] who are dropping like=20 flies Davis said. ?????Despite the progress it was hard for some people to look on the brigh= t=20 side after enduring outages that took place when the state's hunger for pow= er=20 was almost 50% less than at its summer peak. ?????This is a taste almost like an appetizer of a really unpalatable me= al=20 that's going to be served up this summer said Michael Shames of the Utili= ty=20 Consumers' Action Network in San Diego himself a victim of a rolling=20 blackout that hit his office in San Diego early Tuesday. ?????Power officials have warned that this could be a grim summer in=20 California since demand for electricity sharply rises when people turn on= =20 air conditioners. The state has been struggling to meet its power needs in= =20 recent months because of rising prices and a flawed deregulation plan that= =20 has left the two biggest private utilities on the brink of bankruptcy. Stat= e=20 leaders have so far failed to agree on a comprehensive plan to solve the=20 problems. Wally Quirk teaches a business class in a borrowed classroom Tuesday at=20 Sonoma State after the state's rolling blackouts cut the power to his usual= =20 classroom which does not have any windows. SCOTT MANCHESTER / The Press Democrat ?????The latest round of blackouts began about 9:30 a.m. Tuesday when the= =20 California Independent System Operator which runs the statewide grid=20 determined that the demand for electricity was 500 megawatts more than the= =20 supply--an imbalance that meant the state was short on the power needed to= =20 supply electricity to about 375000 homes. ?????Grid operators blamed a confluence of events including warmer weather= =20 outages at several major power plants including one unit of the San Onofre= =20 nuclear power station a reduction in imports from the Pacific Northwest a= nd=20 the shutdown of many alternative energy producers. Similar blackouts Monday= =20 were the first since January. ?????The situation improved somewhat by late Tuesday morning with some=20 supplies restored and Californians conserving energy and Cal-ISO was able = to=20 halt the rolling blackouts at 2 p.m. ?????Once again customers of the Los Angeles Department of Water and Power= =20 were spared although the municipally owned utility said its electrical=20 surplus was smaller than usual. The DWP like Southern California Edison w= as=20 affected by an outage at the huge Mohave power plant in Nevada as well as = by=20 planned outages at several of its facilities. ?????As in the past by far the biggest impact was felt by customers served= =20 by Pacific Gas & Electric the state's largest utility which cut power to= =20 438000 homes and businesses. ?????Edison cut power to 47462 customers in about 40 cities but eventuall= y=20 was able to avoid blackouts by shutting off the air conditioners of some of= =20 the 118500 customers who participate in a voluntary cutoff program. ?????San Diego Gas & Electric cut power to 73400 customers. ?????Innovative Ways of Coping ?????As on Monday most people took the outages in stride as an annoying b= ut=20 ultimately unavoidable inconvenience. ?????In Palmdale four schools lost power during one of the hourlong=20 blackouts but teachers and students pressed on in the sunlight pouring=20 through windows and skylights. At Barrel Springs Elementary Principal Cruz= =20 Earls said the biggest problem came when students had to go to the bathroom= :=20 Hand in hand they made their way through darkened hallways with flashlight= s. ?????All in all it wasn't a terrible experience. Then again the weather= =20 wasn't that hot Tuesday with a high of 79 in Palmdale so the shutdown of= =20 air conditioners wasn't much of a hardship. I don't want to think about th= e=20 conditions this could create in May or June Earls said. ?????Businesses of all kinds complained about the lack of warning for the= =20 outages--and sometimes found innovative ways to get around the problem. ?????Rattled by news reports of Monday's rolling blackouts El Burrito=20 Mexican Food Products in the city of Industry started its Tuesday shift at = 2=20 a.m. to beat the clock in the event of an outage. That hunch paid off.=20 Workers had just finished cooking and packaging the last batches of salsa a= nd=20 masa when the lights went out at 10:20 a.m. ?????Company owner Mark Roth said the firm will continue working odd hours = to=20 avoid further outages. But he isn't buying the line from the utilities that= =20 they can't provide advance warning because of concerns about looting and=20 rioting. ?????We're ready to do whatever it takes to get through this thing he=20 said. But they've got to give us some notification. ?????At Big O Tires in Elk Grove just south of Sacramento owner Daniel Cr= um=20 had his 14 workers take an early lunch break or head to the warehouse to=20 reorganize the goods. Without electricity they couldn't repair brakes or= =20 align front ends. ?????I'd never let them be idle said Crum. ?????At least two minor traffic accidents were blamed on the outages. ?????The blackouts resulted from a convergence of factors. ?????Demand was slightly higher than expected probably because of=20 unseasonably warm weather. Supplies were tighter than usual in part becaus= e=20 of several outages including that at the Mohave plant half of which was= =20 brought back on line by the end of the day. ?????The San Onofre Nuclear Generating Station was still limping along=20 without power from one of its two 1100-megawatt units which was shut down= =20 Feb. 3 after a half-hour fire in a nonnuclear part of the plant. Edison=20 which operates San Onofre initially estimated the unit would be out for=20 several weeks but recently said extensive damage to parts of the turbine= =20 will keep the unit out of commission until mid-June. ?????Shipments from the drought-stricken Pacific Northwest which generates= =20 most of its electricity from large dams were also down. ?????Each time we take a measurement we're closer to the all-time record= =20 for the driest year said Dulcy Mahar spokeswoman for the Bonneville Powe= r=20 Administration the network of federal dams that provides the region with= =20 much of its electricity. We've been doing what we can but we simply don't= =20 have power to sell. ?????Finally there was the problem of the small and alternative energy=20 producers which have shut down plants because they haven't been paid by th= e=20 private utilities since November. Those outages have cost the state about= =20 3000 megawatts of electricity enough for about 2.3 million homes. ?????You're seeing the system freeze up said David Sokol chairman and C= EO=20 of MidAmerican Energy Holdings Co. which runs eight geothermal plants in t= he=20 Imperial Valley through its subsidiary CalEnergy. His company hasn't shut= =20 down yet but Sokol said smaller companies couldn't continue to sell their= =20 energy to utilities for free. ?????Why should we fund Edison? he asked. That's just ridiculous. ?????A Choice of 2 Rate Plans ?????Davis joined lawmakers in the Capitol on Tuesday to outline his plan t= o=20 get the producers running again. He said utilities have had no right to=20 collect money from ratepayers and then not use the funds to repay the small= =20 producers. The state has spent billions to buy power from large conventiona= l=20 producers on behalf of the utilities but has refused to pick up the tab for= =20 alternative energy. ?????The utilities acted in a shameful manner by putting money in their=20 pockets that was designed to pay the [small producers] Davis said. ?????The plan outlined by Davis would allow the generators to choose betwee= n=20 two rate plans. They could decide to be paid 7.9 cents per kilowatt-hour ov= er=20 five years or 6.9 cents a kilowatt-hour over 10 years. ?????The utilities must begin paying the generators the new rates beginning= =20 April 1 or face fines Davis said. ?????The question of how the companies will get paid the about $1.5 billion= =20 they are owed remains unresolved. That issue will be decided in coming week= s=20 as Davis' negotiators continue to work on rescue plans for the state's=20 financially hobbled private utilities. ?????PG&E spokesman Ron Low said the state's largest utility did not take= =20 kindly to Davis' criticism and noted that the governor's plan is similar t= o=20 a proposal that PG&E made last week to producers. ?????Jan Smutny-Jones executive director of a trade group that includes so= me=20 of the small generators described the plan as a positive step. ?????The governor got it right in that it's not acceptable for small power= =20 producers to continue to generate and not be paid Smutny-Jones said. But= =20 we'll need to see what the order says the devil will truly be in the=20 details. ?????Grid operators said the state's overall energy situation eased by midd= ay=20 Tuesday because of repairs at the Mohave plant and another large plant at= =20 Ormond Beach and because the Western Area Power Administration came up wit= h=20 300 megawatts of electricity from Glen Canyon Dam. ?????Also grid spokesman Patrick Dorinson said conservation savings spiked= =20 upward after earlier complaints that Californians weren't conserving. ?????We saw the people of California probably conserve 900 megawatts today= =20 he said. That was probably the difference. ---=20 ?????Times staff writers Andrew Blankstein Jose Cardenas Marla Dickerson= =20 Noaki Schwartz Nicholas Riccardi Doug Smith Rebecca Trounson and Richard= =20 Winton in Los Angeles Miguel Bustillo and Julie Tamaki in Sacramento Mari= a=20 La Ganga in San Francisco Stanley Allison Matt Ebnet Scott Martelle=20 Dennis McLellan Monte Morin Jason Song Mai Tran and Nancy Wride in Orang= e=20 County and Richard Simon in Washington contributed to this story. --- --- Fragile Supply Network Apt to Fail=20 By JENIFER WARREN and ERIC BAILEY Times Staff Writers=20 ?????A lot of people were caught off guard by the blackouts that swept over= =20 California this week. Debra Bowen wasn't one of them. ?????As chairwoman of the state Senate Energy Committee she is=20 intimately--and painfully--familiar with the state's energy supply. And she= =20 is willing to share a secret: It's a fragile system capable of collapse at= =20 any time. ?????That knowledge keeps Bowen awake at night particularly with the=20 approach of summer when power demand surges as Californians get reacquaint= ed=20 with their air conditioners. ?????I sound a bit less like Chicken Little today don't I? Bowen said=20 Tuesday as chunks of the state once again were forcibly darkened. I know = a=20 lot of people don't feel we have a problem. But we have a very very big=20 problem. ?????With the recent slowdown in Stage 3 emergencies a sense of calm had= =20 settled over the energy debate and even some legislators were speaking wit= h=20 guarded optimism about the hot months ahead. ?????On Tuesday however a creeping sense of doom was almost palpable amon= g=20 energy watchers and previous supply forecasts--which predict that the stat= e=20 may yet escape summer blackouts--were being given a second look. ?????The outages of the last two days are something that Californians are= =20 going to have to get used to for July and August said Michael Zenker=20 California director of Cambridge Energy Research Associates. The=20 Massachusetts consulting firm is predicting about 20 hours of blackouts thi= s=20 summer. ?????At the California Independent System Operator which manages 75% of th= e=20 statewide power grid officials said the energy cushion the state had in=20 recent weeks was in some ways a phantom caused by heavy imports of power. ?????Cal-ISO spokesman Patrick Dorinson said people may have been deluded= =20 into a false state of comfort: Maybe there is a tendency to think things= =20 have improved he said. In fact they haven't. ?????More than anything this week's events illustrate the delicate balance= =20 of factors that keep California illuminated from the multitude of supply= =20 sources to the weather. ?????Temperatures were higher than usual. Alternative-energy suppliers--who= =20 haven't been paid in months by the cash-strapped utilities--cut their outpu= t.=20 Suppliers in the Northwest--which faces a drought--slashed exports. Equipme= nt=20 breakdowns and maintenance at power plants--much of it unanticipated--took= =20 13000 megawatts offline. A utility-run program that gives businesses=20 discounts in exchange for cutting power during emergencies is all but dead. ?????The fragility of the system is such that a small perturbation can tur= n=20 everything upside down very easily said Gary Ackerman executive director= =20 of the Western Power Trading Forum a group of electricity generators and= =20 traders. ?????One factor receiving particular attention is the dip in supply caused = by=20 unscheduled maintenance. To help officials predict available supply=20 generators provide an annual maintenance plan that is updated regularly. ?????In addition however facilities sometimes shut down for unexpected=20 reasons: leaking tubes burnt-out transformers cracked turbines and faulty= =20 feed pumps. At one point Tuesday about 8200 megawatts were unavailable=20 because of unscheduled shutdowns. That's enough to supply about 6 million= =20 households and up from 5700 megawatts a week ago. ?????The huge 1400-megawatt Mohave power plant near Laughlin Nev. which= =20 supplies Southern California Edison and the Los Angeles Department of Water= =20 and Power was felled Monday by a transformer problem. That was enough to= =20 push the state into blackouts. ?????A growing number of skeptics however question whether those reasons= =20 are always valid accusing generators of withholding power to shrink supply= =20 and drive up prices. ?????There's no way to verify it so you've got to take their word for it= =20 said Frank Wolak a Stanford University economist who studies California's= =20 electricity market. And given that it's very profitable for these things t= o=20 occur you start to wonder if they're creating an artificial scarcity. ?????Tom Williams of Duke Energy said the Houston-based company is working= =20 hard to keep its California power plants which are capable of producing=20 3351 megawatts of electricity in operation after months of near-continuou= s=20 operation. ?????It's like riding a moped across the country he said. They're just= =20 not meant to run this hard. ?????Last week the state Senate formed a committee to investigate charges = of=20 market manipulation by power suppliers. The chairman state Sen. Joe Dunn= =20 (D-Santa Ana) says the issue of unscheduled plant shutdowns is on his agen= da. ?????The problem is: How does one prove that a particular outage was part = of=20 a deliberate strategy to deprive the state of kilowatts rather than a resu= lt=20 of normal business operations? Dunn said. ---=20 ?????Times staff writer Nancy Rivera Brooks contributed to this story. --- --- Elevator Anxiety Is Riding High=20 Emergencies: Workers in skyscrapers worry about blackouts trapping them in= =20 their buildings. Some take the risk in stride others make plans to take th= e=20 stairs.=20 By JOHN M. GLIONNA and JOE MOZINGO Times Staff Writers=20 ?????SAN FRANCISCO--In Susan Clifton's highly placed opinion sunny Tuesday= =20 would have been a picture-perfect day to work atop one of the tallest=20 buildings in San Francisco a scenic city littered with soaring skyscrapers= . ?????But Clifton--like many other high-rise office dwellers in blackout-pro= ne=20 parts of California--couldn't help but feel some high anxiety at the prospe= ct=20 of being stranded by electrical outages that were sweeping across the state= =20 for a second day. ?????I think about it all the time said Clifton a 21-year-old=20 receptionist at Deutsche Bank's offices on the 48th floor of a tower in the= =20 city's financial district who recently moved from rural Virginia. The way = I=20 see it Californians take a lot of things on faith working atop tall=20 buildings with all these earthquakes and power outages. ?????For Long Beach office worker Dave Suhada the anxiety has taken the fo= rm=20 of elevator phobia: a fear of getting stuck on an 80-degree day crammed in = a=20 pod of sweating heavy-breathing humans with no way out. ?????I'm just eyeing the buttons to see which one I could push as fast as = I=20 can if the power goes out he said.=20 ?????For 20-year-old Lisa Riley it means entering the elevator each day in= =20 her Long Beach office building with a prayer. I just could not get stuck f= or=20 an hour and a half she said nodding nervously. Often she now opts for th= e=20 stairs. ?????In San Francisco emergency services officials say that most of the=20 city's office buildings are equipped with backup generators to run elevator= s=20 and security equipment in the event of a blackout. ?????Fire Department spokesman Pete House said the city has 19 trucks with= =20 experts trained to extricate people trapped in elevators. Firefighters=20 handling blackout-related emergencies rescued a person trapped in a downtow= n=20 building Tuesday and handled five elevator mishaps Monday. ?????Christopher Stafford didn't get caught inside an elevator Monday but= =20 suffered the next-worst thing: being stranded in his 15th-floor apartment= =20 after the power failed when he went home for lunch. ?????So the 41-year-old real estate worker trooped down the stairs to the= =20 lobby and even made some new friends along the way helping a few elderly= =20 women who were struggling down the stairs. ?????It was a pain he acknowledged. But I have to tell you: I really li= ke=20 my panoramic view so it's worth the hassle. ?????Nowadays Sherrie Tellier makes sure her cellular phone is in hand whe= n=20 she gets in the elevator. She got trapped once before and the emergency=20 phone didn't work. It's amazing she said how small an elevator seems when= =20 you can't get out. It's like a broom closet.Now there's a sigh of relief= =20 every time the door opens. ?????Some high-rise office workers said Tuesday that they preferred not to= =20 think about the perils of going without power and being vulnerable and=20 isolated so high up. ?????But on the 42nd floor of San Francisco's Transamerica Tower Sasha=20 Monpere wasn't fazed by the chance that during a blackout her building's= =20 backup generators wouldn't kick in. ?????Hey I'm young and I'm healthy. I can always walk down the stairs= =20 said the 29-year-old receptionist. I've done the Statue of Liberty. It can= 't=20 be any worse than that. And walking down 42 flights is a lot easier than=20 walking up all those stairs. ?????Likewise with Phil Ip who works on the 52nd--and top--floor of San=20 Francisco's tallest skyscraper. The 25-year restaurant veteran says he has= =20 the utmost faith in modern technology. ?????We're safe even up here said Ip assistant general manager of the= =20 Carnelian Room a restaurant atop the Bank of America building. You should= =20 see the engineer's room in this building. It's like a big steamship. They'r= e=20 equipped for anything that could happen. ?????One floor below Cheryl Martin hears every day about people's fear of= =20 heights. In the year since she began answering phones in a law office she= =20 has often escorted clients afraid of express elevators that shudder and ris= e=20 so fast that passengers' ears pop from the altitude gain. ?????Everybody and I mean everybody asks 'So what happens during a pow= er=20 outage?' she said. ?????Rory Thompson said he believes in karma and is sure that if the rollin= g=20 blackouts come calling his office will be spared. In July 1993 Thompson's= =20 building was the site of an incident known as the 101 California St.=20 massacre in which gunman Gian Luigi Ferri killed eight people and wounded= =20 six before killing himself. ?????This building has already had its bad day he said. They say that t= he=20 day after a crash is the safest day to ride an airline. So I'll take my=20 chances with the rolling blackouts. --- State Says It's Accelerating Plan to Buy Power Utilities' Grid=20 Government: Talks with Edison are reported near completion but agreement= =20 with heavily indebted PG&E has a way to go.=20 By RONE TEMPEST and DAN MORAIN Times Staff Writers=20 ?????SACRAMENTO--As blackouts hit California for a second day Tuesday a ke= y=20 consultant to Gov. Gray Davis said negotiations to buy the power grid owned= =20 by the state's largest utilities are proceeding at an accelerated pace. ?????Wall Street consultant Joseph Fichera said talks with Southern=20 California Edison could be wrapped up within days although those with PG&E= =20 are much less advanced.=20 ?????The administration and PG&E have not reached even an agreement in=20 principle he said. PG&E which has more debt than Edison says its=20 transmission lines are more extensive than those of its Southern California= =20 counterpart. ?????The state wants to buy the utilities' transmission lines and other=20 assets for about $7 billion to provide cash to the utilities help stabiliz= e=20 the electricity supply and ease the power crunch that has plagued Californi= a=20 for months. To research the grid purchase Fichera said the state has had = to=20 pore over 80000 documents just to assess the utilities' liabilities. ?????We are working at a good pace said Fichera chief executive of the= =20 New York firm Saber Partners. . . . If we get to a deal-breaker it might= =20 be longer. ?????By making Fichera who is also a consultant to the Texas Public=20 Utilities Commission available to reporters Tuesday the Davis=20 administration was clearly trying to reassure the public that progress is= =20 being made on the governor's plan to pull the state out of the crisis. ?????Since mid-January when the big utilities' credit failed and suppliers= =20 stopped selling to them the state has spent nearly $3 billion buying=20 electricity from a handful of large suppliers in Texas Oklahoma Georgia a= nd=20 North Carolina. Not a cent has gone to the hundreds of alternative energy= =20 suppliers in California who provide about a quarter of the state's=20 electricity. ?????The Monday and Tuesday blackouts occurred partly because many of the= =20 cash-strapped alternative suppliers including solar biomass and wind powe= r=20 units cut their normal supply to the system in half. They say Edison and= =20 PG&E have not paid them since November the utilities say they are out of= =20 cash. ?????Assemblyman Fred Keeley (D-Boulder Creek) said the plight of the=20 alternative suppliers has dragged on because of the complexity of dealing= =20 with almost 700 individual contractors. ?????Another delaying factor said Keeley who with state Sen. Jim Battin= =20 (R-La Quinta) worked for almost three months to come up with a legislative= =20 plan to lower the small producers' prices was the huge enmity . . .=20 manifested between the utilities and the qualifying facilities. These peopl= e=20 just don't like each other. ?????This week's blackouts provided two painful lessons for the Davis=20 administration: ?????* When it comes to electricity size doesn't matter--every kilowatt=20 counts. During peak use a small wind power facility in Riverside County ca= n=20 make the difference between full power and blackouts. ?????* There is no such thing as a partial solution. Unless the whole energ= y=20 equation is balanced the parts don't work. ?????For the Davis plan to work several key elements need to come together= =20 or utility customers will almost certainly face rate increases above the 19= %=20 already set in motion: ?????* The cost of power purchased by the state must be reduced through=20 long-term contracts with the big out-of-state producers. ?????These contracts the details of which the Davis administration has kep= t=20 confidential are still being negotiated by Davis consultant Vikram Budhraj= a=20 of the Pasadena firm Electric Power Group. The administration says it has= =20 concluded 40 contracts with generators about half of which have been signe= d. ?????According to the most recent statistics released by the Department of= =20 Water Resources which buys power for the state current prices are still= =20 well above the rate state Treasurer Phil Angelides says is necessary for a= =20 planned $10-billion bond offering to succeed. ?????The bonds set for sale in May will be used to reimburse the state fo= r=20 the money it will have spent by that time to buy electricity. The state is= =20 currently spending at a rate of $58 million a day to buy power. If prices= =20 stay high the $10 billion in bonds will not cover the state's power=20 purchases by the end of the summer. ?????Angelides says he cannot proceed with bridge financing for the bonds= =20 until the Public Utilities Commission devises a formula to guarantee that a= =20 portion of utility bills will be dedicated to bond repayment. Angelides has= =20 estimated that under the January law that put the state in the power buyin= g=20 business the state must be reimbursed $2.5 billion annually and that $1.3= =20 billion is needed to service the debt. ?????PUC Administrative Law Judge Joseph R. DeUlloa is expected to announce= =20 his ruling on the reimbursement rate later this week leading to a PUC vote= =20 on the matter as early as next week. ?????* The rates charged for electricity by the alternative producers know= n=20 as qualifying facilities must be cut at least in half down from an averag= e=20 of more than 17 cents per kilowatt-hour. In his news conference Tuesday=20 Davis said he will ask the PUC to set QF rates at 6.9 cents for 10-year=20 contracts and 7.5 cents for five-year contracts. ?????Meanwhile PUC Chairman Loretta Lynch a Davis appointee said Tuesday= =20 that the commission will vote next week on a proposed order requiring=20 Southern California Edison and Pacific Gas & Electric to pay the QFs for=20 electricity in the future. Lynch said a recent PUC assessment showed that t= he=20 utilities have enough cash on hand for that. ?????We are trying to make sure the folks providing the power get paid= =20 Lynch said. The qualified facilities have demonstrated that they haven't= =20 been paid and that it is impairing their ability to provide power. ?????The utilities contend that if they pay the small providers what they o= we=20 them there will not be enough money left to pay other creditors. ?????There is not enough money in the current rate structure to pay the=20 [alternative producers] pay the [Department of Water Resources] and pay th= e=20 utilities for their generation said John Nelson a spokesman for PG&E. ?????* The utilities must sell to the state the power they produce=20 themselves mainly from hydro and nuclear sources at a rate only slightly= =20 above the cost of producing it. This is tied to the ongoing negotiations=20 between the Davis administration and the utilities to restore the=20 near-bankrupt utilities to solvency. ---=20 ?????Times staff writers Julie Tamaki Miguel Bustillo and Tim Reiterman=20 contributed to this report. --- L.A. Long Beach File Suits Over Gas Companies' Prices=20 Energy: Separate actions allege a conspiracy and gouging. Suppliers blame= =20 rising demand and a fluctuating market.=20 By TINA DAUNT and DAN WEIKEL Times Staff Writers=20 ?????Seeking damages that could reach into the billions of dollars the= =20 cities of Los Angeles and Long Beach on Tuesday filed separate lawsuits=20 alleging that a coalition of gas companies illegally conspired to eliminate= =20 competition drive up natural gas prices and discourage the construction of= =20 electricity generating plants in California. ?????Officials from the two cities alleged that Southern California Gas Co.= =20 San Diego Gas & Electric and El Paso Natural Gas Co. violated the state's= =20 antitrust law and engaged in unfair and fraudulent business practices that= =20 caused gas prices to skyrocket. ?????The cities are the first California municipalities to take action=20 against the gas companies. A number of similar lawsuits filed by antitrust= =20 attorneys state regulators and private citizens are pending elsewhere. ?????The energy companies deny any impropriety. They contend that Californi= a=20 is the victim of its own soaring electricity demand and overreliance on=20 fluctuating spot markets for natural gas. ?????The conspiracy theories that have been promoted have no basis in=20 reality said Denise King spokeswoman for Southern California Gas' parent= =20 company Sempra Energy which also was named in the suits. Southern=20 California Gas continues to look out for the best interest of its customers= . ?????The lawsuits filed in Los Angeles County Superior Court accuse the=20 companies of conspiring to manipulate the price of natural gas by agreeing = to=20 kill pipeline projects that would have brought ample supplies of cheaper=20 natural gas to Southern California. ?????They allege that executives for the energy companies made the pact=20 during a meeting in a Phoenix hotel room five years ago to discuss=20 opportunities arising from the state's newly deregulated electricity mark= et. ?????The fulfillment of the illicit plan has had devastating effects on=20 Southern California gas consumers according to Los Angeles' suit. Gas=20 prices in the Southern California market have skyrocketed and the Southern= =20 California gas consumers are paying the highest prices in the nation. ?????In recent months natural gas prices have tripled across the nation fo= r=20 a number of reasons including a shortage of supplies to meet demands for= =20 home heating. Prices have increased far more in California where natural g= as=20 is a central factor in the state's energy crisis. The state relies on the= =20 clean-burning fuel to generate half its electrical power. ?????This not only led to price-gouging of all natural gas consumers from= =20 homeowners to government to industry but it contributed to the current=20 electrical power crisis in California said City Atty. James K. Hahn a=20 mayoral candidate who urged the City Council to pursue the case. ?????Chris Garner Long Beach's utility director said that since November= =20 the average residential bill for gas in Long Beach has more than doubled t= o=20 $175 a month. Some customers he said have seen rate increases of 500%. ?????The people of Long Beach are being gouged by energy conglomerates who= =20 are artificially manipulating the supply of natural gas and reaping excess= =20 profits at the expense of the public said City Attorney Robert Shannon. ?????Holding a special meeting the Los Angeles City Council voted 12 to 0= =20 Tuesday to file the suit. ?????If the allegations are true they are extremely serious said=20 Councilman Mike Feuer who is a candidate to succeed Hahn as city attorney.= =20 And there appears to be some important evidence that substantiates the=20 allegations in the complaint which means that this lawsuit is I think mo= re=20 than a viable lawsuit. ?????Councilman Mark Ridley-Thomas added: We cannot tolerate this and we= =20 must use the full weight of the law to try to correct it. ?????A growing number of lawsuits around the state are targeting California= 's=20 natural gas suppliers. El Paso Corp. which owns the main pipeline=20 transporting out-of-state gas to Southern California has been targeted=20 repeatedly by utility companies state regulators and antitrust attorneys.= =20 ?????Some of the first antitrust lawsuits were filed against Sempra Energy = in=20 December. They were brought by Continental Forge Co. a Compton-based=20 aluminum forging business and Andrew and Andrea Berg who own a business i= n=20 San Diego. ?????The cities' lawsuits request that the defendant companies be barred fr= om=20 such conduct in the future and they seek civil penalties and damages. ?????Shannon estimates that Long Beach could collect more than $100 million= =20 in damages including triple penalties for antitrust violations. ?????We are filing this for our citizens Shannon said. They include the= =20 poor the elderly people living on fixed incomes and small business owners= . ?????The Los Angeles suit was filed on behalf of all Californians. Official= s=20 place damage estimates in the billions.=20 ?????Hahn however warned council members that it could take the city a ye= ar=20 or more to resolve the suit. ?????Lawsuits take time Hahn said. We are hopeful we can enter into=20 meaningful discovery to disclose what's been going on. --- Davis OKs Subsidy of Pollution Fees=20 Smog: As part of secret deal to get long-term energy contracts state would= =20 pay for some of the credits that allow excess power plant emissions. Critic= s=20 renew call for full disclosure.=20 By DAN MORAIN Times Staff Writer=20 ?????SACRAMENTO--As part of his closed-door negotiations to buy electricity= =20 Gov. Gray Davis has agreed to relieve some generators from having to pay=20 potentially millions of dollars in fees for emitting pollutants into the ai= r=20 Davis said Tuesday. ?????Davis announced two weeks ago that his negotiators had reached deals= =20 with 20 generators to supply $43 billion worth of power during the next 10= =20 years. ?????However the Democratic governor has refused to release any of the=20 contracts or detail various terms contending that release of such=20 information would hamper the state's ability to negotiate deals with other= =20 generators and therefore ultimately would raise prices Californians pay for= =20 electricity. ?????Sources familiar with the negotiations speaking on condition of=20 anonymity said the agreement reached with Dynegy Inc. a power company bas= ed=20 in Houston is one that includes language requiring that the state pay the= =20 cost of credits that allow emissions. Dynegy spokesman Steve Stengel declin= ed=20 to discuss the company's deal with the state. ?????We couldn't get them to sign contracts it was a sticking point Dav= is=20 said of the decision to pay the fees of some generators. We had to lock do= wn=20 some power so we were not totally dependent on the spot market. ?????The fees in question are part of an emission trading system known as= =20 RECLAIM. Under the system companies are allotted a certain amount of=20 allowable pollution. If their operations pollute more companies are requir= ed=20 to purchase credits on an open market. Currently the credits cost about $45= =20 per pound of pollution--an amount that can lead to a bill of well over $10= =20 million a year for a power plant. ?????The South Coast Air Quality Management District which regulates=20 pollution in the Los Angeles Basin is considering steps to significantly= =20 lower the cost of the system--a step that could considerably cut the state'= s=20 potential cost Davis said. ?????Senate Energy Committee Chairwoman Debra Bowen (D-Marina del Rey)=20 defended the decision to cover the power company's costs. ?????It is a question of whether it brings down the price of power she= =20 said. If it brings down the price of power I don't have a problem with it= . ?????Nevertheless word that the contracts could bind the state to pay=20 pollution fees caused some critics of Davis' policy to renew calls for Davi= s=20 to reconsider the secrecy surrounding the power negotiations. The payment= =20 provision underscores the fact that the contracts involve more than merely= =20 the prices the state will pay for its megawatts the critics note. ?????The Legislature should have known about it said Senate President Pr= o=20 Tem John Burton (D-San Francisco). It is going to cost taxpayers money. It= =20 makes you wonder. . . . This was a policy issue that was never discussed wi= th=20 the Legislature. ?????V. John White a lobbyist for the Sierra Club who also represents=20 alternative energy producers called the contract proposal a horrible=20 precedent. ?????Until we know exactly what the state has agreed to and how much of a= =20 subsidy this represents we can't determine how serious the breach of=20 principle this is White said. ?????Another critic of the secrecy of the negotiations Terry Francke=20 general counsel for the California First Amendment Coalition said the=20 provision in question raises the possibility that there are other=20 [concessions] that have not yet come to light. ?????In the summer when demand for power is highest some generators=20 probably will exceed pollution limits set by regional air quality managemen= t=20 districts. ?????To avert blackouts state officials might ask the companies to keep=20 plants running. In such cases some sources familiar with aspects of the=20 contracts said the contract language could be interpreted to suggest that= =20 the state would cover any fines--although Davis said Tuesday the state will= =20 not cover the cost of fines. ?????A recent Dynegy filing with the Securities and Exchange Commission=20 underscores the rising cost of pollution-related measures. The company whi= ch=20 is partners with NRG Energy in three California plants in El Segundo Long= =20 Beach and Carlsbad in San Diego County said its aggregate expenditures fo= r=20 compliance with laws related to the regulation of discharge of materials in= to=20 the environment rose to $14.3 million in 2000 from $3.6 million in 1999. ?????A South Coast Air Quality Management spokesman said Dynegy's facilitie= s=20 appear to be fairly clean--although Sierra Club lobbyist White said Dynegy= =20 has been seeking a permit at one of its plants to burn fuel oil which is= =20 dirtier than natural gas. ?????Davis said he intends to make this information public but he added= =20 that we do not want to put the public's interest in jeopardy by asking the= m=20 to pay higher prices. ?????Nobody likes the notion that [the administration is] not being fully= =20 forthcoming Davis said. But I also have a corollary responsibility that = I=20 don't stick these generators with a higher rate. --- As Losses Mount Companies Work Around Outages=20 By MARLA DICKERSONJERRY HIRSCH and NANCY CLEELAND Times Staff Writers=20 ?????As blackouts moved from theory to reality many Southern California=20 businesses spent Day 2 assessing their losses and digging in for what they= =20 expect to be a long hot summer. ?????An hour without electricity may be an inconvenience for most residents= .=20 But for manufacturers and many other businesses even a brief loss of power= =20 can generate tens of thousands in losses. ?????Whether shaping metal or making salsa businesses of all kinds=20 complained Tuesday about the lack of warning of impending outages even as= =20 they sought sometimes creative ways to work around the loss of power. ?????Rattled by news reports of Monday's rolling blackouts Industry-based = El=20 Burrito Mexican Food Products started its Tuesday shift at 2 a.m. Workers h= ad=20 just finished cooking and packaging the last batches of salsa and masa when= =20 the lights went out at 10:20 a.m. ?????We dodged a bullet said El Burrito founder Mark Roth. Losing a day= 's=20 production of salsa would have cost me $15000 to $20000. ?????But other companies weren't so fortunate. ?????Long Beach-based Delco Machine & Gear was still totaling up its losses= =20 from Monday's blackout which amounted to at least $30000 in lost wages an= d=20 production said Nick Campanelli vice president of manufacturing. The=20 company a division of Florida-based B/E Aerospace Inc. makes parts for th= e=20 aerospace industry. The sudden loss of power caused its sophisticated metal= =20 cutting and grinding machines to crash ruining precision parts in producti= on. ?????But the losses don't end there. He said employees will need to spend= =20 hours resetting the equipment. Campanelli is particularly irked that the=20 company received no warning. ?????Five minutes' notice he fumed. That's all I needed. ?????Although businesses such as Campanelli's typically receive no warning= =20 that they are about to lose power insurance companies count the rolling=20 blackouts as planned events a determination that in most cases=20 disqualifies a business from making a claim. ?????I know it must be frustrating for businesses who have the power go of= f=20 suddenly but these outages are planned by the grid operators said Pete= =20 Moraga of the Insurance Information Network of California. That means it= =20 would not be a covered peril in a traditional business insurance policy. ?????Typically business insurance covers loss of profit and damage from=20 unforeseen events such as fires or windstorms. The component of the policy= =20 that covers interruptions in business kicks in after a given amount of time= =20 elapses usually 24 to 48 hours. ?????Business polices can be written to include unusual coverages Moraga= =20 said but he has never heard of a policy that covers losses from a rolling= =20 blackout. ?????Some companies are taking measures not to get caught in a situation=20 where a blackout can hurt them. ?????The region's largest steel supplier shut down for two hours Monday aft= er=20 Southern California Edison called to warn of tight supplies. ?????We just can't take a chance said Lourenco Goncalvez president of= =20 California Steel Industries Inc. in San Bernardino County. We have a lot o= f=20 safety issues. People could get hurt. ?????Goncalvez said the plant has multiple 20-ton and 25-ton overhead crane= s=20 that operate with electromagnetic devices which would fail if they lost=20 power suddenly. Falling materials could injure workers below he said. We= =20 have been asking to be exempt from rolling blackouts he said. ?????Goncalvez said he couldn't put a price on the lost production at the= =20 24-hour plant and said he worried more about the long term. ?????Two hours is nothing he said. My concern is this thing will start = to=20 happen almost every day. If it will be like this all summer you can be sur= e=20 it will have dramatic consequences for the entire economy. . . . We're goin= g=20 to have a shortage of steel products in California. Maybe the government do= es=20 not consider this is serious. We'll see. ?????At Sport Chalet a La Canada Flintridge-based chain of 22 sporting goo= ds=20 stores in Southern California an administrative assistant monitors the sta= te=20 power situation hoping to warn any stores that are in danger of losing=20 power said Craig Levra the company's chief executive. ?????Levra said the assistant was assigned the monitoring duties last year= =20 when rolling blackouts were still only a threat. ?????The chain put in place an emergency plan--similar to what it would do = in=20 a major earthquake. Backup power will kick on emergency lights and allow th= e=20 cash registers to complete transactions. Employees are instructed to escort= =20 customers from the building safely Levra said. ?????Other businesses however have plans to remain open during the 60- to= =20 90-minute blackouts. ?????When power went out at two Cheesecake Factory restaurants in Orange=20 County on Monday afternoon the eateries switched to serving cold dishes su= ch=20 as sandwiches and salads said Howard Gordon senior vice president of the= =20 Calabasas Hills-based chain. ?????The restaurants had enough backup power to operate emergency lights an= d=20 cash registers. Large windows provided the rest of the light Gordon said. ?????So far the 99 Cents Only Stores chain has missed the shotgun pattern = of=20 the blackouts. But with nearly 100 stores in California company President= =20 Eric Schiffer believes it is only a matter of time before the lights go out= =20 at one of its outlets. ?????Though the stores have some backup power the chain has systems in pla= ce=20 to operate without it. Its cash registers can open mechanically Schiffer= =20 said. Because an item sells for a multiple of 99 cents sales clerks are=20 equipped with blackout sheets that calculate a customer's tab including= =20 tax. All the clerk has to do is count the number of items in the shopping= =20 cart and check the tables on the sheet. ?????This week's power crunch has been exacerbated by the fact that so-call= ed=20 interruptible electricity customers no longer face large penalties if they= =20 decline to shut down their operations when supplies get critically low. ?????The Public Utilities Commission suspended the fines in January to ease= =20 the burden on about 1400 businesses that found themselves bearing the brun= t=20 of the crisis to prevent rolling blackouts in the rest of the state. ?????According to Edison about 10% of its interruptible customers are=20 complying with requests to curtail electricity usage during crunch time. Bu= t=20 Scott Keller isn't among them. ?????The owner of Chino-based STC Plastics Inc. said he was forced to shut= =20 down more than 20 times since September costing him as much as $10000 in= =20 lost production per day. He ignored requests Monday and Tuesday to curtail= =20 usage and said he doesn't feel a twinge of remorse. ?????If I'm shut down I can't pay my workers he said. I'd feel more=20 guilty about that. ?????But this is one area where insurance eventually might help. Moraga sai= d=20 some carriers are developing plans that would cover penalties for continuin= g=20 to use power after they have been asked by a utility to cut back. --- Wednesday March 21 2001=20 A Blackout on Answers=20 Davis needs to do a better job in communicating to Californians about the= =20 electricity crisis. In the absence of that cynicism grows.=20 ?????The oil shocks of the 1970s from the Arab oil embargo to the Iran-Ira= q=20 war were dead simple compared with the California power shortage. Then th= e=20 problem was a lack of imported oil and the chief symptom was long lines and= =20 high prices at gas stations. Politicians urged conservation: Turn down the= =20 heat drive fewer miles buy more efficient cars. People understood the cau= se=20 of the crisis and the benefit of their actions. Today it's a different stor= y=20 and a damnably complicated one that gives consumers no place--or actually= =20 too many places--to focus their anger.=20 ?????The last two days of rolling blackouts including previously exempt=20 Southern California have not reduced power demand or at least not enough.= =20 Consumers are suspicious: Are out-of-state power companies holding back=20 production? Did utilities really not have enough money to pay alternative= =20 energy producers--the little guys who combined could produce enough power= =20 to prevent the blackouts? And what happened to long-term power contracts t= he=20 state-bargained deal that was supposed to stabilize the crisis?=20 ?????The frustrations are vast and there are too many gaps in the story. I= f=20 it's just a pack of thieves creating an artificial shortage as even some= =20 consumer organizations charge why should anyone sacrifice to conserve? Tha= t=20 in a nutshell is the problem that Gov. Gray Davis the state Legislature a= nd=20 the Public Utilities Commission face.=20 ?????Davis for one has to level with the public and stop acting as if he= =20 can fix the crisis. He has proved he can't at least not without reductions= =20 in usage and most likely rate increases. If Davis who is notoriously=20 averse to delivering bad news had leveled with the public about the=20 fragility of the current system the last two days of blackouts statewide= =20 (except in places with full municipal power like Los Angeles) might not ha= ve=20 come as such a shock.=20 ?????The Legislature tried and failed earlier to solve the alternative ener= gy=20 producers' nonpayment problems with a very complicated bill. Tuesday night= =20 Davis and legislators announced a simpler plan that would set lower more= =20 flexible rates for alternative power but also force the utilities to pay fo= r=20 future purchases.=20 ?????Which leads to the utilities themselves. With the state shelling out= =20 billions for power from the major generators how could Southern California= =20 Edison and Pacific Gas & Electric still not have the cash flow to pay the= =20 alternative producers? That motley collection of biomass solar wind and= =20 cogeneration companies has been shutting down for nonpayment--some of them= =20 because natural gas suppliers have cut them off. PG&E has made some payment= s=20 but SCE has paid zilch though a spokesman says it hopes to strike a deal t= o=20 start paying this week.=20 ?????Without enough honest information conspiracy scenarios fill the holes= .=20 Bad news is better than no news something Davis seems not to quite realize= .=20 By today or Thursday the weather will cool and some plants taken down for= =20 repair will come back online. The blackouts may cease but the crisis will b= e=20 just as deep as it was Monday and Tuesday. It is up to Davis to do a better= =20 job of persuasively explaining why. Otherwise the cynicism grows.=20 --- Wednesday March 21 2001=20 Rolling Blackouts: Blatant Extortion=20 ?????* Re Rolling Blackouts Hit Southland for First Time as Production=20 Falls March 20:=20 ?????So here we are 22 years after the notorious gas shortage having=20 another gun held to our head by an opportunistic energy consortium. Back in= =20 1979 we all had to wait in long lines just to pay more for gasoline. Now = we=20 have to face food in our freezers thawing and simmering in our homes during= =20 hot summer days just to earn the honor of paying more for electricity.=20 ?????Of course as soon as the rates are up and the environmental concerns= =20 are shoved aside watch how plentiful power will be. When is somebody in=20 government going to stand up for the consumer and stop this blatant form of= =20 extortion?=20 ?????JOHN JOHNSON=20 ?????Agoura Hills=20 * * * ?????So customers of PG&E and Edison are shielded from soaring wholesale= =20 prices? Some shield: turning off all our power without so much as a moment= 's=20 notice endangering lives and disrupting businesses just to keep our=20 electricity prices unreasonably low. Let's lift the rate caps to get the=20 lights back on. And if I need to be shielded from soaring prices I'll turn= =20 my own lights off.=20 ?????ANDREW LOWD=20 ?????Claremont=20 * * * ?????This state needs adequate reliable electricity to run a diverse=20 economy. Both political parties and business interests are at fault. This= =20 crisis demands top priority aimed at lasting solutions.=20 ?????The most immediate solution is fast-tracking of added generating=20 capacity. Freeway bridges were rebuilt in record time after the Northridge= =20 quake so we know it can be done. That is the type of effort that is needed= =20 immediately.=20 ?????Since Democrats hold the governorship and control both state legislati= ve=20 houses they are in the driver's seat. If the lights go out the Democrats = go=20 out. If this state government can't solve the problem we need a new=20 government that can.=20 ?????STEVE ANDERSON=20 ?????Huntington Beach=20 * * * ?????The alleged energy crisis in California is entirely contrived to relax= =20 environmental pollution standards and to raise energy rates. It's curious= =20 that the L.A. Department of Water and Power which was not deregulated is= =20 not currently experiencing an energy crisis. PG&E and Edison are both part = of=20 national and multinational corporations. Why should utility customers have = to=20 pay for their economic problems or gross mismanagement?=20 ?????Several power plants were taken off-line for routine maintenance=20 which may not have been so routine. Energy is a vital necessity if these= =20 companies can't provide it at a reasonable affordable rate then they shoul= d=20 be replaced by companies that can be taken over by the government or=20 de-deregulated. There is an abundance of solar energy in California of whi= ch=20 only a small fraction is being utilized. There is no shortage of energy in= =20 California only a shortage of intelligence will and honest politicians.= =20 ?????CHARLES B. EDELMAN=20 ?????Los Angeles=20 --- Utilities' Demand Blocks Bailout=20 NEGOTIATIONS HIT SNAG: PG&E Edison want end to price freeze if they sell= =20 transmission lines to state David Lazarus Chronicle Staff Writer Wednesday March 21 2001=20 2001 San Francisco Chronicle=20 URL:=20 /21/M N114450.DTL=20 California's near-bankrupt utilities are demanding that higher electric rat= es=20 be a part of any deal to sell the state their power lines The Chronicle ha= s=20 learned.=20 A rate increase -- perhaps of more than 50 percent according to earlier=20 industry estimates -- would certainly draw a firestorm of protest from=20 consumer groups and force Gov. Gray Davis to backtrack from earlier pledges= =20 that rates would remain unchanged.=20 Nevertheless sources close to negotiations on the deal said Pacific Gas an= d=20 Electric Co. and Southern California Edison are attempting to make higher= =20 rates a condition for agreeing to a bailout scheme in which they would sell= =20 the state their transmission systems and some land.=20 The sources said the talks hit a new snag this week when state officials=20 realized that fine print sought by the companies could require the Public= =20 Utilities Commission to pass along all of the utilities' costs to ratepayer= s.=20 The sources said this would end a rate freeze that shields consumers from= =20 runaway wholesale electricity prices.=20 The inclusion of potential rate increases in the talks reflects the growing= =20 complexity of a deal originally intended by Davis to stabilize the finances= =20 of PG&E and Edison so banks would resume loans to the cash-strapped=20 utilities.=20 The negotiations subsequently have expanded to involve a state purchase of= =20 the utilities' transmission networks and acquisition of utility-owned land= =20 including spectacular coastal property near PG&E's Diablo Canyon nuclear=20 power plant.=20 Now they also have embraced further deregulation of California's=20 dysfunctional electricity market.=20 Clearly one of the terms being discussed is the regulatory environment= =20 said Joseph Fichera head of Saber Partners a New York investment bank tha= t=20 is advising Davis in the talks.=20 The past situation has not worked well he added. The utilities want som= e=20 certainty about their future.=20 TENTATIVE DEAL WITH EDISON To date the governor has announced a tentative agreement with Edison for t= he=20 state to buy the utility's power lines for almost $3 billion. Discussions= =20 with PG&E for a similar accord have dragged on for weeks.=20 An Edison official asking that his name be withheld acknowledged yesterda= y=20 that an end to the rate freeze is an expected result of the power- line sal= e.=20 Once the details of the pact are complete dominoes will fall the offici= al=20 said. One of the dominoes is the rate freeze.=20 A PG&E spokesman declined to comment.=20 In fact both Edison and PG&E have been aggressively seeking an end to the= =20 rate freeze for months.=20 The two utilities have a lawsuit pending in federal court demanding that th= e=20 PUC immediately raise rates so the utilities can recover almost $13 billion= =20 in debt accrued as a result of the freeze.=20 They have been trying a lot of things to get the rate freeze ended in=20 various forms said Carl Wood who sits on the PUC. Adding it to the=20 present talks is consistent with past behavior.=20 Wall Street has taken note that the negotiations no longer appear to be=20 making progress.=20 Paul Patterson an energy industry analyst at Credit Suisse First Boston= =20 told clients on Monday that the discussions may have lost some momentum in= =20 recent days. He did not give a reason.=20 For his part the governor sounded unusually cautious about the course of t= he=20 talks when asked late last week if a breakthrough was imminent.=20 SECRET STICKING POINTS We are going to take the transmission systems and the land that's deeded= =20 and we will work out an agreement Davis said at an appearance in San Jose= .=20 But there are a number of sticking points in the talks with PG&E that I'm= =20 not going to reveal.=20 One of those sticking points apparently is an insistence that the sale of= =20 utility assets include a long-sought lifting of the rate freeze.=20 Sources said lawyers from both PG&E and Edison had inserted the related ter= ms=20 into draft accords affecting each utility and that the full impact of the= =20 additions was not realized by state officials until this week.=20 One source said the language was just convoluted enough to slip beneath the= =20 radar screen of state negotiators. But the upshot once the words had been= =20 parsed was that the PUC effectively would lose control over power rates.= =20 CREDITWORTHINESS ON THE TABLE In Edison's case the terms of the tentative deal include the governor aski= ng=20 the PUC to support the creditworthiness of the utility.=20 This would ensure that future investments in both utility distribution and= =20 utility generation plants are provided fair returns of and on capital=20 consistent with current authorized returns and capital structure provisions= =20 it says.=20 Sources said the provision could be interpreted as a guarantee from the sta= te=20 that Edison would be permitted to recoup all outstanding costs from=20 ratepayers.=20 There may be some assumptions about this language that the rate freeze end= s=20 if it is adopted the Edison official said adding that he saw no reason t= o=20 disagree with such assumptions.=20 But Fichera Davis' adviser in the talks insisted that nothing is set in= =20 stone and that the negotiations are proceeding without a hitch.=20 This is a very complex transaction he said. God and the devil are in th= e=20 details.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- --- Utilities' Demand Blocks Bailout=20 BLACKOUTS ROLL ON: Weather increased consumption blamed=20 David Lazarus Chronicle Staff Writer Wednesday March 21 2001=20 2001 San Francisco Chronicle=20 URL:=20 /21/M N156508.DTL=20 Hundreds of thousands of Californians went without electricity for a second= =20 day yesterday as unusually warm weather and a high number of idle power=20 plants prompted blackouts throughout the state.=20 State officials said electricity usage rose yesterday even though condition= s=20 were largely unchanged from a day before. They surmised that fewer=20 Californians were conserving power.=20 We need people to really focus on that implored Patrick Dorinson a=20 spokesman for the Independent System Operator manager of the state's power= =20 grid. The more people can do the better it will be.=20 Rolling blackouts were ordered by the ISO about 9:30 a.m. and were suspende= d=20 at 2 p.m. after several plants that had been down for repairs returned to= =20 service. Additional power also was obtained from a plant in Arizona.=20 Utilities estimated that about 560000 customers were affected yesterday= =20 compared with more than 1 million a day earlier.=20 This week's blackouts marked the first time that people in Los Angeles shar= ed=20 the pain with those in San Francisco. Blackouts in January were confined to= =20 the northern part of the state.=20 FEWER AFFECTED IN SOUTH However Southern California Edison's burden was considerably lighter=20 yesterday than that of Pacific Gas and Electric Co.=20 Karen Shepard-Grimes a spokeswoman for the Southern California utility sa= id=20 only about 50000 customers went without power compared with nearly 440 0= 00=20 for PG&E.=20 Affected areas in the south included Palm Springs Santa Monica Long Beach= =20 and Pomona.=20 We're not in the business of turning customers' lights off Shepard- Grim= es=20 said. We're in the business of keeping lights on.=20 In PG&E's case things were tougher because low rainfall means that less=20 power is currently available from dams throughout the Pacific Northwest.=20 Ron Low a spokesman for the utility said blackouts were experienced by PG= &E=20 customers from Eureka to Bakersfield.=20 Our goal was to carry out the ISO's order with minimal impact on customers= =20 he said.=20 For its part San Diego Gas & Electric said about 75000 customers were=20 darkened.=20 Yesterday's blackouts began with PG&E customers in Block 12 and halted midw= ay=20 through Block 14. Customers in each block -- defined by power circuits rath= er=20 than geography -- typically will lose power for about 90 minutes before the= =20 service interruption rolls elsewhere.=20 Some cutoffs can last more than two hours however because of technical=20 problems switching individual blocks on and off.=20 NEXT UP: BLOCK 14 If additional blackouts are ordered today they will commence with the=20 remaining portion of Block 14 customers. (PG&E customers can determine thei= r=20 block by looking at the bottom left-hand corner of their monthly bill.)=20 The ISO's Dorinson said it is hoped that cooler weather and increased=20 generation will help avert further cutoffs this week.=20 Units are coming back into service that have been out he said. That wil= l=20 help a great deal.=20 Roughly 15000 megawatts of generating capacity was offline yesterday=20 including half of the alternative-energy plants which are unable to afford= =20 natural gas to run their turbines.=20 Many of the plant owners say they have not been paid by PG&E and Edison sin= ce=20 November. They are asking federal regulators for permission to sell their= =20 electricity elsewhere.=20 At the same time one of two units at the Mohave Generating Station in Neva= da=20 damaged in a fire Monday returned to service yesterday easing the load on= =20 California's grid.=20 The plant partly owned by Edison is not expected to return to full output= =20 until tomorrow.=20 PROBING SHUTDOWNS Nearly a third of California's generating capacity is currently down for=20 scheduled or unexpected maintenance. State regulators are investigating=20 whether some plant owners might be deliberately shutting down to drive pric= es=20 higher or reduce operating costs.=20 Loretta Lynch president of the Public Utilities Commission on Monday call= ed=20 the number of idle plants highly suspicious.=20 Dorinson at the ISO said that about 12000 megawatts of mainstream capacity= =20 was offline yesterday compared with roughly 10000 megawatts last year at= =20 this time.=20 --=20 Tell Us What You Think=20 Can you save 20 percent on your energy usage? Gov. Gray Davis is offering= =20 rebates for Californians who save on power starting in June and if you've= =20 got a strategy for conserving The Chronicle wants to hear it. We'll be=20 writing about the hardest-working energy savers in a future story. To get= =20 involved Write to the Energy Desk San Francisco Chronicle 901 Mission St= .=20 San Francisco 94103 or e-mail --=20 THE ENERGY CRUNCH -- Blackouts: About 560000 Californians including 440000 in Northern=20 California lost electricity yesterday for 90 minutes at a time.=20 -- Areas affected: Blackouts hit parts of blocks 12 and 14 and all of block= =20 13 yesterday. In the event of further blackouts the remainer of block 14= =20 would be next followed by block 1.=20 -- Outlook: Officials say blackouts are less likely today as temperatures a= re=20 expected to cool and power plants that have been offline for maintenance=20 resume generating electricity.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- --- Manners Go Out the Window=20 Pedestrians in peril as drivers turn darkened S.F. streets into free-for-al= l=20 Steve Rubenstein Chronicle Staff Writer Wednesday March 21 2001=20 2001 San Francisco Chronicle=20 URL:=20 /21/M N173178.DTL=20 Nobody got plowed into yesterday at Fifth and Howard streets in San=20 Francisco. Many came close.=20 The power outage that darkened the traffic lights at the frenetic South of= =20 Market intersection for more than an hour also darkened the souls of untold= =20 numbers of drivers sending motoring manners into the toilet.=20 The law says motorists are supposed to treat an intersection with=20 nonfunctioning traffic lights as a four-way stop. That means everyone stops= =20 then takes turns -- one by one -- creeping through the intersection.=20 Tell that to the two people in motorized wheelchairs who were nearly creame= d=20 by two eastbound SUVs.=20 Or to the young Swedish couple who had traveled halfway around the globe= =20 only to scamper through the intersection barely ahead of an office supply= =20 truck.=20 Or to the New Jersey tourist who proclaimed that California drivers during= =20 power outages were proof positive that the Chaos Theory lives and breathes.= =20 Some motorists stopped and took turns but many didn't. Some sped into the= =20 intersection immediately behind the vehicle in front without themselves=20 stopping at the white line. Some sailed through with a rolling stop and a= =20 warning honk. Some blasted through without stopping or honking.=20 I'm scared to death said Brian Walters of Dorchester N.J. after making= =20 it across Howard Street. This is organized madness. I subscribe to the Cha= os=20 Theory and this is what it looks like.=20 Sydney Freedman a tourist from Sydney walked briskly across the darkened= =20 crossroads smiling grimly.=20 I'll chance it he said.=20 He looked back and saw a woman in a motorized wheelchair nearly get squishe= d=20 by a westbound Chevy.=20 You have to be authoritative in this town when you cross the street he= =20 said. Especially that lady.=20 Therese Anderson and Andreas Sandstrom from Sweden raced across as quickl= y=20 as their backpacks would allow.=20 In this country everyone is in such a hurry said Anderson.=20 Everybody drives like a madman added Sandstrom. They say 'I want to be= =20 home right now and I don't care what happens to anyone else.' =20 The couple paused to gaze in wonder at the intersection learning more abou= t=20 America in five minutes than a pile of guidebooks could tell them.=20 This intersection said Sandstrom reminds you not to take life for=20 granted.=20 A few minutes later Parking Control Officer Tom Butz arrived in his meter= =20 minder wagon and pulled his orange vest and whistle from the saddlebag. He= =20 strode brave and true into the center of the bullring planted himself=20 between the whizzing cars and began waving his arms as if conducting The= =20 Rite of Spring.=20 I'm all by myself he said. I know it's a little risky. I'd better keep = my=20 angels with me.=20 At that moment the angels were on duty in Menlo Park where a blacked-out= =20 intersection at El Camino Real and Santa Cruz Avenue backed up traffic so f= ar=20 that it stretched into neighboring Atherton.=20 It's a large intersection and traffic is slow anyway but now it is severe= ly=20 impacted said Police Sgt. Terri Molakides. We don't get any warning=20 either. When the power is out the power is out. It's not like we can make= =20 any plans.=20 In general motorists seemed more likely to obey the four-way-stop rule on= =20 the Peninsula and in the East Bay than in San Francisco.=20 In San Mateo County some police departments have stopped trying to make=20 advance plans to cover darkened intersections. San Mateo Police Sgt. Kevin= =20 Rafaelli said putting up signs and posting officers sometimes caused proble= ms=20 rather than solving them.=20 If people just follow the law (and) stop at the intersection they can=20 handle it better than we do if we're out there he said. People are sort = of=20 getting used to it and are dealing with it.=20 In Berkeley and Emeryville motorists stopped one at a time at temporary st= op=20 signs with no apparent problems. At University Avenue and Sacramento Stree= t=20 in Berkeley Officer Matt Meredith said motorists were behaving themselves.= =20 That wasn't the case a while back when a driver who didn't stop at an=20 intersection during a blackout was broadsided by someone who did Meredith= =20 said.=20 The thing to remember is to stop and look he said.=20 TRAFFIC TIPS To avoid a collisions during blackouts the California Highway Patrol offer= s=20 this advice to motorists:=20 -- Treat any intersection with inoperative traffic lights as a four-way sto= p.=20 Each vehicle must stop when arriving at the white limit line then proceed= =20 only when safe taking turns.=20 -- If two vehicles arrive at the intersection at the same time the motoris= t=20 on the left must yield to the motorist on the right.=20 -- Never insist on taking the right of way even if you are entitled to it.= =20 -- Follow the directions of a police officer or traffic control officer=20 whose directions take precedence over lights or signs.=20 Chronicle staff writers Henry K. Lee and Matthew B. Stannard contributed to= =20 this report. / E-mail Steve Rubenstein at 2001 San Francisco Chronicle ? Page?A - 8=20 --- --- Historic Blackouts in State=20 Bay Area learns to cope=20 Jonathan Curiel George Raine Justino Aguila and Matthew B. St Tuesday March 20 2001=20 2001 San Francisco Chronicle=20 URL:=20 /20/M N219412.DTL=20 Today's rolling blackouts caused concern throughout the Bay Area including= =20 Colma where the sudden lack of power apparently caused a fire.=20 A light fixture at the Home Depot store in Colma caught fire around 10:45 a= .=20 m. 15 minutes after Pacific Gas and Electric Co. ordered blackouts for the= =20 area. No one was hurt.=20 I was in the back of the store when the power outage started said Dave= =20 Cole a consultant from Pacifica who was shopping for bolts and screws. We= =20 lost maybe 90 percent of the lights then maybe 10 percent of the lights ca= me=20 up. Then I heard a guy saying 'Get a ladder get a ladder!'=20 One of the lights on the ceiling had caught on fire and a couple of peopl= e=20 were getting ladders and fire extinguishers.=20 Store managers whisked everyone out of the store and Colma firefighters=20 arrived to make sure the blaze was extinguished.=20 At 11 a.m. Cole was waiting to get back into the store which was still=20 closed.=20 I need my bolts he said.=20 Elsewhere the San Francisco Fire Department had to rescue people stuck in = an=20 elevator at 2001 Embarcadero North said fire department spokesman Pete=20 Howes.=20 Scores of residents and businesses near the Embarcadero including the Levi= =20 Strauss & Co. headquarters were affected by the blackout.=20 At Levi Strauss this morning Phil Marineau the president and chief=20 executive officer led his 1300 employees by example using only minimal= =20 lighting for a meeting in his office at 10 a.m.=20 Employees were sent e-mails minutes after PG&E's 9:30 a.m. notification tha= t=20 a blackout was possible. The e-mails said workers should frequently save wo= rk=20 on their computers and that they should remain in the building and stand b= y=20 for further instructions.=20 Emergency lighting in hallways and stairwells were operated by generators.= =20 All elevators descended to the ground floor but one remained operating=20 through a generator.=20 Worked nicely said Jeff Beckman a company spokesman.=20 Yesterday -- the first day that rolling blackouts returned -- Shannon=20 Cashman's home in Walnut Creek was a difficult place to be.=20 Cashman's 4-year-old daughter Madison suffers from a brain defect that=20 stops her from breathing during sleep. The girl depends on a ventilator tha= t=20 runs on electricity.=20 Recently hospitalized and with a weakened immune system Madison badly need= ed=20 a nap yesterday afternoon. But when the Cashmans' power went out about noon= =20 it meant reading and coloring instead of rest for the girl and a little mor= e=20 anxiety than normal for her mother.=20 If this was a major earthquake or something like that and we couldn't use= =20 the ventilator we'd take her to the hospital said the 33-year-old Cashma= n.=20 Otherwise we'll just wait for the power to come back on.=20 In a stroke of irony yesterday the lights went out and computer screens we= nt=20 dark at the San Francisco offices of the state Public Utilities Commission= =20 the agency some people blame for the energy crisis and others look to for t= he=20 solution.=20 At a Petco animal store in Redwood City nocturnal leopard geckos that=20 weren't familiar with the state's power woes thought it was night and awoke= =20 from their routine daytime slumber.=20 The geckos clung to the glass of their cages as manager Sally Daine and her= =20 employees misted lizards and watched frozen mealworms melt.=20 The worst thing is some of the reptiles need heat but it's so hot I don'= t=20 think it will matter she said.=20 At Auto Pride Car Wash a few blocks away Dan Giudici watched as the team o= f=20 employees he supervised washed cars the old-fashioned way -- with buckets a= nd=20 hoses. The company's big mechanical car wash went unused.=20 Customers didn't seem to mind the manual wash said Giudici who was chargi= ng=20 half-price. But he was running out of towels.=20 Even those who hoped they were immune to power problems were affected.=20 Palo Alto runs its own utility but the electricity began winking out about= =20 12:30 p.m.=20 The city depends on a distribution line of the state grid so it is=20 vulnerable to blackouts said Linda Clerkson public relations manager for= =20 Palo Alto Utilities. In addition the city relies on PG&E for some of its= =20 power she said.=20 Businesses were caught by surprise.=20 Well at least it happened in a better time than the morning said Nick= =20 Badiee owner of the Lytton Roasting Co. coffee house. My toaster went out= =20 and the coffee began getting cold so I lost three or four people who walke= d=20 out the door. I'm not angry yet but I would say I am concerned.=20 For one Milwaukee woman visiting San Francisco the blackout was an=20 unexpected lesson in the problems of electricity deregulation.=20 Cindy Wilburth a financial consultant who advises Wisconsin utilities cam= e=20 to the Bay Area for vacation but left yesterday with important research for= =20 her job.=20 This has been a huge learning lesson for Wisconsin Wilburth said as she= =20 waited for a bus outside the powerless Comfort Inn by the Bay in Cow Hollow= .=20 Wilburth said her state and others that once eyed deregulation are now=20 backing off.=20 It just makes me realize how we've gotten ourselves in a pinch in a free= =20 economy she said.=20 As she mused about the predicament in which the state has found itself her= =20 friend was just thankful to get out of here.=20 I love the cold compared to this said Cindy Stuckey of Milwaukee. At= =20 least I know I can stay in my home secure and warm.=20 Across the street at the Travelodge By the Bay Rolando Gutierrez had=20 already lost three guests just an hour into the blackout.=20 This is the richest state and this is a rich city -- plenty of people want= =20 to come here he said. We shouldn't be suffering these blackouts.=20 Chronicle staff writers Jaxon Van Derbeken Mark Martin Henry K. Lee=20 Michael McCabe Bernadette Tansey and Marshall Wilson contributed to this= =20 report.=20 2001 San Francisco Chronicle ? Page?A - 1=20 --- --- Bay Area residents learning to roll with blackouts=20 Posted at 9:58 p.m. PST Tuesday March 20 2001=20 JOHN=20 WOOLFOLK=20 AND STEVE=20 JOHNSON=20 Mercury News=20 As rolling blackouts swept the state for a second straight day Tuesday=20 Californians already seasoned by droughts and earthquakes were learning to= =20 live with yet another upheaval: periodic power outages.=20 Blackouts are still a novelty in Southern California -- hit for the second= =20 time Tuesday -- but they're almost routine for Bay Area residents who have= =20 seen four days of outages this year and now expect many more as temperature= s=20 rise. Toting flashlights avoiding certain roads and even shutting off thei= r=20 coveted hot tubs they're adjusting to life in California's new Dark Age.= =20 ? ? Karen T. Borchers--Mercury News When the lights went out at Grant Elementary School in San Jose on Tuesday= =20 morning teacher Renee Johnson took her second-grade students out to the la= wn=20 to read to them. Marjorie Meagher now looks at her clock before taking the elevator she need= s=20 to get around her two-story San Jose home fearing she'll get stuck during= =20 rolling blackouts.=20 ``They tend to happen on the hour or half-hour so I try not to use it=20 then'' said Meagher 74 who is disabled. ``I'm very careful. My own=20 personal fear is getting stranded in the elevator.''=20 From 750000 to about 1 million customers lost power for an hour or so in= =20 stages Tuesday as a rash of power plant outages and record temperatures in= =20 San Jose and elsewhere triggered a critical shortage.=20 As was the case Monday when 1.2 million to 1.8 million customers were=20 affected Tuesday's outages were split between the northern and southern=20 parts of the state. Blackouts began at 9:30 a.m. and lasted until 2 p.m. wh= en=20 authorities obtained extra power from other Western states. Outages were=20 considered less likely today.=20 But people are preparing anyway. Like low-flow toilets and earthquake kits= =20 flashlights and generators may be emerging as another fact of life in the= =20 Golden State.=20 In San Francisco's Inner Sunset district Han Yong Park had the satisfied= =20 smile of a well-prepared man having bought a portage generator for his Park= 's=20 Farmers Market five months ago.=20 Tuesday morning the generator churned loudly on the sidewalk positioned= =20 between the tomatoes and green beans. Inside clerks tallied purchases on= =20 electric cash registers.=20 Park motioned down the street where neon signs were dark and some=20 restaurants closed. ``No one else in the area has a generator'' he said.= =20 Energy officials say such equipment will come in handy this summer. Power= =20 supplies are expected to be so strained that Californians should expect man= y=20 more rolling blackouts.=20 ``I don't want to kid anybody'' said Patrick Dorinson spokesman for the= =20 California Independent System Operator which manages the power grid for mo= st=20 of the state. ``Supplies are very very tight. When you look at such a big= =20 state and such a large shortfall I think we have to prepare ourselves. It'= s=20 very possible that going into this spring and summer we're going to see som= e=20 very difficult days.''=20 Combination of factors=20 The multiple causes that conspired to darken California on Tuesday=20 underscored the difficulty officials face in keeping the lights on.=20 The thermometer shot to record-breaking levels at some locations in the Bay= =20 Area driving up power demand. San Jose hit 83 compared with an average 66= =20 degrees for March 20 and breaking the record high of 80 set in 1960.=20 What's more 12000 megawatts of power were unavailable because plants had= =20 shut down for maintenance or because cash-strapped utilities haven't paid= =20 them.=20 And consumer conservation has been spotty. While state energy officials say= =20 conservation rose from 5 percent in January to 8 percent in February grid= =20 managers said this week Californians weren't saving enough energy. They eve= n=20 revised their estimate of how much homes a megawatt can power down from=20 1000 homes to 750 to reflect greater consumption.=20 Improved conservation later in the day helped stave off a second wave of=20 outages they said.=20 Many shrug off the threat of rolling blackouts.=20 ``I think I've gotten used to it'' said Mary Carlson 58 of San Jose who= =20 took her granddaughter for a walk and read the paper during blackouts in=20 January. ``I just go with the flow. I'm not going to get too excited about= =20 it. If they turn the power off it's no big thing.''=20 Erica Finn secretary at Acacia Glass in San Francisco said she wasn't too= =20 upset when blackouts shut down the credit card machines electric sanders a= nd=20 phones. She bought coffee pulled a chair into the sun and popped Madonna= =20 into her portable CD player.=20 ``I have to brush up on my tan and get paid for it'' she said.=20 But for others the consequences are potentially serious.=20 At a Palo Alto dental office the blackouts interrupted root canals for thr= ee=20 patients. Dentists Darrell Dang Robert McWilliams and Kurtis Finley insert= ed=20 temporary fillings by hand rescheduled the procedures and went to lunch.= =20 The receptionist used a cell phone to cancel the afternoon's appointments= =20 frustrated that there's no way to prevent a repeat of Tuesday's fiasco if t= he=20 blackouts continue.=20 A new routine=20 Others have taken everyday steps to cope with the threat of losing power.= =20 Stephen O'Reilly a 34-year-old San Jose engineer who often drives to see= =20 clients said he avoids side streets because blackouts could darken signal= =20 lights and tie up intersections.=20 ``I used to take back roads to avoid traffic but I'm trying to use the=20 freeways more because there are no lights'' said O'Reilly adding that he'= s=20 shut down his electric hot tub to help conserve power.=20 At Pasta Primavera in San Mateo manager Chris Harris has stocked up on=20 candles and has plans to buy a generator for his restaurant. When blackouts= =20 arrived just before the lunch crowd Tuesday and cut power to ventilation=20 fans he even considered revising his menu replacing smoke-producing chick= en=20 and shrimp with simple marinaras and alfredos.=20 ``I don't know if you'd want to dine with the smell of smoke'' Harris said= =20 as customers trickled into his darkened restaurant on Fourth Avenue. ``If= =20 this is going to continue through the summer it's going to affect our=20 pockets.''=20 San Francisco International Airport which agreed months ago to shut down i= ts=20 massive air conditioners to save power during shortages is now routinely= =20 stuffy.=20 On Tuesday the temperature reached a steamy 85 degrees inside the airport's= =20 North Terminal which serves most of United Airlines' flights.=20 ``It's become uncomfortable if not intolerable'' said Ron Wilson airport= =20 spokesman. ``It's like getting in a car that's been left in the sun all day= .=20 It's much hotter inside. .?.?. We've turned on the fans but they're just=20 moving the hot air.''=20 Hospitals cut off=20 Several hospitals complained they lost power Tuesday saying they thought= =20 they were exempt. PG&E said hospitals with sufficient backup generation to= =20 power themselves can be turned off. But state regulators said they could no= t=20 confirm that statement and hospital officials scoffed at the suggestion.= =20 ``Every hospital has backup power generation but it only covers 30 to 40= =20 percent of the hospital'' said Roger Richter a senior vice president with= =20 the Hospital Council.=20 Nonetheless hospitals are coping with the situation.=20 ``Our patients are concerned for sure'' said Jackie Floyd head nurse at= =20 the Satellite Dialysis Center South in San Jose which lost power. ``But=20 while it's a pain we can handle the blackouts. We're kind of getting the= =20 idea here that this a problem and we have to adjust.''=20 But while Californians may be adjusting they're not at all pleased.=20 ``I'm frustrated with this power thing'' said Ana Rivera who manages the= =20 Wash Club in San Francisco where washers and dryers had stopped mid-cycle.= =20 ``Who do you blame? No one wants to accept blame.'' Sara Neufeld Ann Marimow Kim Vo Frank Sweeney Barbara Feder Aaron Davi= s=20 Gil Duran and Dave Beck contributed to this report.=20 --- --- Powerless again=20 Outages were lighter after generators came back online and conservation=20 efforts kicked in. Blackouts may be averted today.=20 March 21 2001=20 By TONY SAAVEDRA JOHN HOWARD CHRIS KNAP and JEFF COLLINS The Orange County Register=20 The Ridgewood Power methane-burning plant at the Olinda Alpha landfill in= =20 Brea is producing 3.3 megawatts down from five because Edison owes it $1.= 5=20 million and cranking up to full power is no longer a priority Photo: H. Lorren Au Jr. / The Register ? ? A second day of statewide blackouts ratcheted up the frustration level=20 Tuesday on the streets of Orange County and in Sacramento as consumers=20 demanded solutions from politicians unable to give them.=20 There was a bit of good news though: Blackouts may be averted for the rest= =20 of the week after temperatures moderated two stalled generators came back= =20 online and conservation efforts kicked into gear.=20 ?=20 Some Orange County residents took the blackouts in stride. In Mission Viejo= =20 above the West Coast Football Club's under-16 boys team scrimmages under= =20 gas-powered lights Tuesday. The club has been running to conserve energy=20 Photo: Kevin Sullivan / The Register ? ? Consumers were able to save 900 megawatts - enough to light about 675000= =20 homes - by cutting power usage said Patrick Dorinson spokesman for the=20 Independent System Operator which oversees 75 percent of the state's=20 electricity grid. That helped the ISO halt the blackouts Tuesday afternoon.= =20 Californians are back on the conservation trail and we appreciate it=20 Dorinson said.=20 Power regulators Tuesday morning predicted there would be twice as many=20 outages as Monday when more than 1 million consumers statewide lost power = in=20 one-hour to 90-minute increments.=20 Luis Pagan an assistant at the Santa Ana Animal Shelter waits out the=20 blackout Tuesday with one of the shelter's dogs up for adoption Photo: Paul E. Rodriguez / The Register ? ? Beginning at 9:30 a.m. Tuesday blackouts tangled intersections in Costa=20 Mesa forced Huntington Beach students to study by flashlight and stilled= =20 cash registers in Santa Ana. About a half-million homes and businesses were= =20 unplugged statewide before 2 p.m. Power was restored to most of Southern=20 California by 11:30 a.m. Outages affected more than 9200 consumers in Oran= ge=20 County.=20 The ISO had expected more severe outages to hit at the peak hour of 7 p.m.= =20 but was able to keep the lights on as downed power plants came back online= =20 and imports from other states increased.=20 While outages were lighter than Monday the blackouts aggravated consumers= =20 who doubted that Gov. Gray Davis lawmakers and electricity officials are= =20 doing enough to keep the power flowing in California.=20 ?=20 Zulema Avarez left and Erica Ramirez said they were caught off-guard when= =20 the power went out so they closed the fashion store in Santa Ana where the= y=20 work Photo: Paul E. Rodriguez / The Register ? ? I think this is insane said Charlee Lang 63 of Costa Mesa. Gray Davis= =20 didn't do his job for a long time he didn't get serious until November. We= =20 need to demand immediate action be taken.=20 Bill Brannick 65 of Costa Mesa added: There's a lot of complicity here= =20 and we're just innocent victims.=20 Davis in a Sacramento news conference said he inherited California's fail= ed=20 experiment with electricity deregulation enacted in 1996 under former Gov.= =20 Pete Wilson.=20 I think a fair assessment of this situation is that we were dealt a pretty= =20 bad hand here Davis said. No (new power) plant was approved in the 12=20 years prior to my being governor.=20 With summer peak demand expected to be 16000 megawatts higher than Monday= =20 and Tuesday more days of blackouts are forecast for coming months. Though= =20 Davis has signed long-term contracts to provide California with reliable=20 energy the deals haven't yet taken effect. Some suppliers won't start=20 providing electricity until the state reaches a so-far elusive agreement to= =20 help the utilities pay off billions in debt by buying their transmission=20 lines.=20 Assembly Republican Leader Bill Campbell R-Villa Park said that the effor= t=20 to resolve the state's energy crisis was floundering in the midst of unpai= d=20 bills stalled negotiations and rolling blackouts.=20 Tuesday began with 29 percent of California's power supply off line mostly= =20 from generating plants suddenly down for unscheduled maintenance. About 30= 00=20 megawatts was missing from so-called qualifying facilities or small power= =20 producers who have not been paid $1.8 billion by cash-strapped utilities an= d=20 say they can't afford to operate. Davis said he would ask the PUC to order= =20 utilities to begin paying the qualifying facilities for any energy supplied= =20 beginning April 1 but the payments would not apply to the outstanding debt= .=20 Some smaller producers threatened to force Edison into involuntary bankrupt= cy=20 if they are not paid soon.=20 Blackouts began Tuesday two hours earlier than on Monday as the ISO called= =20 on utilities to dump 500 megawatts. It was only the second day of blackouts= =20 for Southern California but the fourth for Northern California since=20 January.=20 The Disney Resort which includes Disneyland and the new California=20 Adventure voluntarily cut back one megawatt of electricity on Monday and= =20 again Tuesday said Anaheim Public Utilities.=20 All of the reductions were in backstage areas not seen by guests said Disn= ey=20 spokeswoman Chela Castano-Lenahan.=20 In other workplaces people tried to make do.=20 Flashlight beams bobbed in aisles at a Target in Santa Ana where the power= =20 stopped at 10:30 a.m. Workers escorted customers who continued shopping an= d=20 made their purchases at battery-powered cash registers. Customers were=20 eventually asked to leave when the batteries ran low.=20 Oh well no soda no sunglasses said one woman as she headed back to her= =20 car.=20 The Metro Pointe shopping center in Costa Mesa also went dark.=20 I was in the middle of making a reservation when everything went out sai= d=20 Peggy Thomas a sales executive for Travel of America along South Coast=20 Drive. All of us here went 'Oh no it's happened to us.' =20 Said one Costa Mesa police officer as he headed for his motorcycle and a= =20 blackout-related fender bender: You can thank the governor for that one.= =20 At Hawes Elementary School in Huntington Beach Principal Marie Smith was= =20 demonstrating to her third-grade class what would happen in a blackout. But= =20 before she could flip off the light switch the power died.=20 The kids thought she was joking.=20 Register staff writers Tiffany Montgomery Sarah Tully Tapia Nancy Luna J= im=20 Radcliffe Binh Ha Hong Theresa Salinas Eric Johnson and Danielle Herubin= =20 and the Associated Press contributed to this report.=20 --- --- The iceman shunneth effects of hourlong blackout=20 March 21 2001=20 By JIM RADCLIFFE The Orange County Register=20 Ken Ackerman owner of ABC Ice House in Laguna Niguel checks on his frozen= =20 inventory during Tuesday morning's rolling blackout. The ice managed to=20 endure the hourlong power outage Photo: Jebb Harris / The Register ? ? Ken Ackerman didn't sweat much when a blackout struck his Laguna Niguel ice= =20 business at 10:30 a.m. Tuesday.=20 The walk-in freezer at ABC Ice House held 8 tons of ice. And for an hour t= he=20 temperature in there rose from 20 degrees to 45 degrees.=20 But very little melted.=20 Ackerman said most refrigerators can handle blackouts as long as outages ar= e=20 less than two hours.=20 I think people are going to get used to one-hour blackouts and realize it'= s=20 not a problem'' Ackerman said.=20 The blackouts actually were profitable for Ackerman.=20 An Irvine laboratory struck by a power outage bought 100 pounds of dry ice = to=20 preserve human tissue.=20 More blackouts through the summer could be a boon for the ice business - or= a=20 bust.=20 It could mean more ice sales -- or that his supplier has trouble filling hi= s=20 orders.=20 It's going to be an interesting summer'' Ackerman said.=20 I have no idea if we'll make more or less.''=20 Traffic will be the biggest problem if blackouts continue Ackerman said.= =20 On Monday a nearby Costco that had lost power ordered 200 pounds of ice to= =20 keep its refrigerated goods cold.=20 But dead traffic lights and congested roads made it impossible to deliver t= he=20 ice before the outage ended. Costco canceled the sale.=20 We pride ourselves on getting our deliveries made in an hour Ackerman=20 said.=20 --- --- Traffic officials are seeing red over blackouts=20 Battery backups are planned by several cities to aid confused drivers.=20 March 21 2001=20 By HEATHER LOURIE The Orange County Register=20 Traffic backs up Tuesday at Crown Valley Parkway at Forbes Road in Laguna= =20 Niguel as drivers had to navigate their own way Photo: Jebb Harris / The Register ? ? Toby Tran approached an Aliso Viejo intersection and wasn't sure what to do= .=20 Ahead of him the traffic signal was dark a casualty of the rolling=20 blackouts that struck Orange County on Monday and Tuesday.=20 So Tran kept driving smacking into an oncoming car at the corner of Aliso= =20 Creek and Enterprise.=20 It just happened a shaken Tran 29 said from his Aliso Viejo home. I= =20 tried to stop and I couldn't. There was no light. Nothing.=20 Tran's accident Monday afternoon and several others like it underscore on= e=20 of the most significant dangers looming in the threat of future blackouts.= =20 Traffic signals that fade to black when the power goes out instead of=20 converting to flashing red make wrecks far more likely because drivers=20 become confused and frustrated traffic engineers and experts said Tuesday.= =20 I didn't know what to do said Tran who was on his way to a high school= =20 jogging track. Luckily I'm alive but I'm very scared.=20 On Day 2 of Southern California's power outages worried city officials=20 across Orange County hunted for ways to respond to paralyzed intersections= =20 when state regulators pull the plug.=20 We need to be ready said Hamid Bahadori traffic engineer in the city of= =20 Orange. This thing is only going to get worse in July and August.=20 One popular idea: installing emergency battery-backup units at traffic=20 signals to keep lights flashing red during blackouts. Several Orange County= =20 cities including Irvine Laguna Niguel and Orange are already moving to= =20 install the devices as early as this summer.=20 In our minds (a flashing light) is a vast improvement over a blacked-out= =20 signal said Dave Rogers Laguna Niguel traffic engineer. On Tuesday night= =20 his city was expected to approve the purchase of the battery packs for all = 74=20 of its traffic signals.=20 Timing in this case seems to be everything Rogers said. A lot of citi= es=20 had contemplated it. We just took it that extra step.=20 John Thai an Anaheim traffic engineer cautioned that cities need to do=20 adequate research and testing before they launch into such projects.=20 There is nothing that is foolproof Thai said. All this is new territory= .=20 Some cities are also considering rolling out temporary stop signs and sendi= ng=20 police officers to more intersections.=20 Although the state's vehicle code requires motorists to treat dead traffic= =20 signals like a four-way stop motorists often blow through the intersection= s=20 police said.=20 It's dangerous said Tustin police Lt. Mike Shanahan after several=20 near-wrecks in his city during Monday's outages. People are not very good = at=20 reacting to changes in their conditions.=20 Flashing red is something that catches your eye. It's a warning that=20 something is amiss but the absence of all lights is worse.=20 RELATED STORIES=20 =01=07 How to contact your Representatives =01=07 'Current' events =01=07 The iceman shunneth effects of hourlong blackout =01=07 Powerless again =01=07 Alternative power producers cut back or shut down as payments from b= ig=20 utilities lag =01=07 O.C. saves its energy -- for blaming others =01=07 Blackout readiness on agenda --- --- Alternative power producers cut back or shut down as payments from big=20 utilities lag=20 That is a factor in blackouts=20 March 21 2001=20 By HANH KIM QUACH The Orange County Register=20 Every megawatt of electricity counts in this deregulated energy market -=20 including the five megawatts generated from the Olinda Alpha landfill in=20 Brea.=20 The methane-burning plant is producing only 3.3 megawatts now because=20 Southern California Edison owes it $1.5 million and cranking up to full pow= er=20 is no longer a priority said Martin Quinn executive vice president of=20 Ridgewood Power which runs the plant.=20 We're doing maintenance now when we ordinarily wouldn't do it. Because we'= re=20 not being paid it was a good time to cut back'' Quinn said.=20 That scenario has been playing out across the state in the past two weeks a= nd=20 was a major factor in Monday's and Tuesday's blackouts.=20 Those who provide electricity through alternative means - burning methane o= r=20 wood chips or using cleaner-burning technology with traditional fossil fue= ls=20 - are not being paid for what they sell to the big utilities. So they eithe= r=20 can't afford to produce energy or see little incentive to do so.=20 On Monday their absence from the statewide electricity grid created a=20 1300-megawatt shortfall -- enough to power 1.3 million homes.=20 Taking that much power offline meant that any burp in the system would put= =20 the state under the minimum amount of electricity needed to avoid blackouts= .=20 When one conventional Southern California plant went down because of a=20 transformer fire Monday the blackouts began.=20 If all of California's (alternative) generators were operating yesterday a= nd=20 today rolling blackouts would have been avoided'' Quinn said Tuesday.=20 Within the next couple of weeks as the weather warms and alternative energ= y=20 producers continue to try and operate without money California could see= =20 twice as many of those producers go offline further increasing the potenti= al=20 for blackouts said Jan Smutny-Jones executive director of Independent=20 Energy Producers.=20 The alternative energy producers which provide about a third of the state'= s=20 energy are deemed so crucial that Gov. Gray Davis wants the Public Utiliti= es=20 Commission to order the utilities to pay them. As drafted though the orde= r=20 would only include payment on future sales it doesn't address existing deb= t.=20 The Legislature has been working since January to halve the rates that=20 alternative producers charge utilities and to require utilities to pay for= =20 November's energy by April 1. But that bill is still moving through the=20 Legislature.=20 Small plants threaten Edison with bankruptcy=20 Smutny-Jones said that if the small generators are not paid promptly sever= al=20 will attempt to force Edison into bankruptcy probably within a week.=20 Unlike the large natural-gas generators that have been paid by the state=20 Department of Water Resources alternative energy producers are locked into= =20 contracts with utilities. Collectively Pacific Gas & Electric and Edison o= we=20 alternative energy producers about $1 billion.=20 PG&E has paid about 15 cents for each dollar it owes.=20 Obviously they're a source of generation and looking at how much load ou= r=20 customers need they're a source that has provided energy'' said Jon=20 Tremayne Pacific Gas & Electric spokesman. We've been trying in good=20 faith to make payments on energy.''=20 But Edison has not paid any money. Edison's alternative energy director La= rs=20 Bergmann said the company will not pay until larger reforms are made in ho= w=20 the producers' rates are calculated.=20 But the company recognizes that its nonpayment is causing problems.=20 To the extent that there are hundreds of megawatts that are idled here it= =20 just exacerbates the (energy) problem. ... They're facing similar problems = to=20 what we faced - they don't have sufficient (income) coming in the door''= =20 Bergmann said.=20 Plants go into mothball mode=20 Millenium Energy in Kern County is owed $40 million total by PG&E and Ediso= n.=20 On March 1 the company shut down both of its coal and petroleum coke-burni= ng=20 plants and doesn't plan to bring them back up until it is paid.=20 Millenium's plants which use a special technology to reduce emissions=20 generate 150 megawatts of energy.=20 We've gone into mothball mode our machinery just sits there on cold=20 standby'' said President Mike Hawkins. We've been delivering free electro= ns=20 to the system in the hope that the system would resolve itself. But we can'= t=20 do that anymore.=20 One biomass plant in Lassen County has scaled back from 31 megawatts to=20 eight. Burney Forest Power burns wood chips to produce energy and has only = a=20 couple weeks' supply of chips left.=20 When you don't even know what you'll get paid it's hard to say 'Let's go= =20 out and get a bunch of fuel''' said Milt Schultz the plant's general=20 manager.=20 The sad thing is (the state) really can't afford to lose us.''=20 --- --- O.C. saves its energy -- for blaming others=20 March 21 2001=20 By RICHARD CHANG The Orange County Register=20 Darkened stores were forced to turn away customers as stock manager=20 Bridgette Kelly left does here at a Linens 'n Things in Costa Mesa. The= =20 store closed for 45 minutes Tuesday morning Photo: Michael Kitada / The Orange County Register ? ? Orange County residents are making efforts large and small to conserve=20 electricity as they face rolling blackouts and surging energy bills.=20 Reactions to the early spring crisis - with blackouts throughout the state= =20 Monday and Tuesday - are ranging from confusion to rage.=20 Many residents have taken practical steps such as turning off lights they'= re=20 not using waiting until off-peak hours to do their laundry and opening=20 windows instead of using air conditioning.=20 My house is full of Philips energy-saving light bulbs said Ray Rutledge= =20 48 of Buena Park. Our light bill has dropped 7 1/2 percent. We use=20 low-voltage outdoor lighting. We've got an energy-saving thermostat. It's s= et=20 back to 65 (degrees) in the wintertime.=20 Kim Wilson who lives in an unincorporated area of Orange County near Santa= =20 Ana and Tustin said he has cut down on lighting in his house and has reduc= ed=20 by half the time his pool cleaner runs. Still his energy bill remains abou= t=20 $400 a month.=20 I don't know what ... to do Wilson 57 said. We've cut back.=20 Wilson added that he is not pleased with the way government or the energy= =20 companies have handled the crisis.=20 I think it's disgusting. It's such political garbage. Who was it that made= =20 these decisions? Who got us into it?=20 'TRYING TO CONSERVE'=20 Jenny Hann 60 of Costa Mesa said her workplace has devised an emergency= =20 plan for conservation and future blackouts.=20 We're definitely trying to conserve as much as we can the bank=20 administrator said. Hann expressed frustration with the energy companies.= =20 When you see these executives that have been running the show and the mone= y=20 they're making it's bothersome she said.=20 Jennifer Souto 27 of Tustin said even though she's a stay-at-home mother= =20 she keeps the lights off all day. She doesn't use her air conditioning=20 either.=20 Souto said she was locked out of her house for 90 minutes Monday because a= =20 blackout cut power to her garage door. She says she's not sure who to blame= .=20 Paul Finch 38 of Westminster blames Edison and Gov. Gray Davis.=20 I don't believe info I get from Edison or from our illustrious governor= =20 Finch said. There's more to it than how they've represented it.=20 --- --- Blackout readiness on agenda=20 O.C. companies braced for outages Tuesday in different ways. Not all were= =20 struck but they felt the effects.=20 March 21 2001=20 By TAMARA CHUANG The Orange County Register=20 In case of a power failure Tuesday the Fluor Corp. in Aliso Viejo stocked= =20 elevators with homemade blackout kits filled with cookies flashlights and= =20 bottles of water.=20 They're in the elevators although we've been told not to use the=20 elevators said Lori Serrato a company spokeswoman. We're using the=20 stairwells waiting for our time of darkness.=20 Tales of anxious preparation were more common than actual blackouts for=20 Orange County businesses Tuesday.=20 Edison told some companies as special power users who've agreed to cut bac= k=20 when asked to expect to do so. Conexant Systems Inc. got a warning from=20 Edison and immediately shut down air conditioning and equipment not in use= =20 and stopped production. The blackout never came.=20 Kingston Technology Co. when notified by Edison on Tuesday morning=20 broadcast the warning on the company intercom. The company also e-mailed=20 employees a guide explaining the blackout.=20 It's already affected productivity. We've been busy getting all our e-mail= s=20 out before it happens said Heather Jardin a spokeswoman for the Fountain= =20 Valley computer memory maker.=20 Kingston still had power by day's end but in an emergency the company's= =20 manufacturing plants revert to Kingston's own power generators Jardin said= .=20 Heart valve maker Edwards Lifesciences turned on its backup generators=20 Tuesday morning because of the potential for there to be a blackout in ou= r=20 area said company spokesman Scott Nelson. But (as of 3:30 p.m.) the=20 blackout didn't materialize Nelson said.=20 At the regional office in Irvine Verizon Wireless implemented conservation= =20 efforts such as motion sensors that shut off lights after 30 minutes of=20 inactivity and separate heating and air conditioning units on all floors.= =20 Some of the company's cell sites in Orange County and Los Angeles did lose= =20 power Monday and Tuesday but they automatically switched to backup battery= =20 sources.=20 Other companies - PacifiCare ICN Pharmaceuticals Beckman Coulter and=20 Allergan - said they took precautions turning out some hallway lights and= =20 communicating safety procedures to employees.=20 Disneyland Ingram Micro in Santa Ana and Western Digital Corp. in Lake=20 Forest all were prepared.=20 But none reported blackouts by day's end.=20 Some county businesses did get hit.=20 Businesses along the 900 block of South Coast Drive - including 14 stores a= t=20 the Metro Point shopping center in Costa Mesa - went dark about 10:20 a.m.= =20 All of a sudden it was dark said Henry Gonzalez manager of Boudin Baker= y.=20 We ran out of coffee. We couldn't bake anything. We tried to accommodate a= s=20 best as we can.=20 Other stores simply closed during the blackout frustrating shoppers.=20 We walked over to (Marshalls) and it was dark and there was a sign on the= =20 door that said 'Due to the blackout we're closed' said shopper Roberta= =20 Allison a West Virginia tourist. Don't they warn people here? Do they jus= t=20 whack the power off?=20 Marshalls employees escorted customers out of the store when the power went= =20 out. Other stores including Nordstrom Rack and Best Buy were not affected= .=20 Across the street from the center employees spilled out of office building= s=20 cheering and waving their hands in victory as power outages forced them to= =20 halt work.=20 Lots of people just walked out of the office to run errands said Amy=20 Bateman a loan officer at Capital Funding Group in Costa Mesa.=20 She said her office building at 940 South Coast Drive went dark for about= =20 70 minutes. Like dozens of others in the building she was working at her= =20 desk when the computers and lights went dark.=20 We've just been sitting around. We can't do anything said Bateman.=20 The blackout hit other businesses on Monday.=20 Buy.com employees spent their hour without power using their wireless=20 Blackberry pagers to answer and send e-mail.=20 The Crazy Horse Steakhouse in Irvine lost power after the lunch rush said= =20 Donna Mulkey the restaurant's manager. Since the broilers remained hot th= e=20 cooks kept cooking and the customers kept eating. When they finished waite= rs=20 calculated the bills by hand.=20 At Broadcom Corp. in Irvine the power went out just before Rep. Christophe= r=20 Cox was to tour the facility.=20 It struck me as particularly ironic Cox told members of the House=20 subcommittee on energy and air quality Tuesday that Broadcom's co-founder= =20 Henry Samueli spent the hour before the meeting using a letter opener to= =20 open his paper mail and sitting by the window so he could get some sunlight= =20 to read.=20 Cox R-Newport Beach told the panel which was holding a hearing on=20 California's electricity crisis that the entire company could not functio= n=20 during this period of time and the same was true for more than a million=20 people he said. It's a Third World experience in California.=20 Register reporters Chris Farnsworth Dena Bunis Bernard Wolfson Nancy Lun= a=20 Eric Johnson Elizabeth Aguilera and Jennifer Hieger contributed to this=20 story.=20 --- --- Calif To Order Utils To Pay Small Generators Up Front-Gov 03/21/2001=20 Dow Jones Energy Service=20 (Copyright (c) 2001 Dow Jones & Company Inc.)=20 SACRAMENTO Calif. (AP)-- California regulators will order the state's two= =20 largest utilities to pay small independent power generators in advance a= =20 move Gov. Gray Davis hopes will bring a quick end to the blackouts that=20 darkened California this week.=20 Davis accused PG&E Corp. (PCG) unit Pacific Gas & Electric Co. and Edison= =20 International (EIX) unit Southern California Edison of taking in money from= =20 customers while failing to pay the generators known as qualifying=20 facilities which produce up to one-third of the state's power. As a result= =20 he said the utilities are partly responsible for this week's blackouts.=20 It's wrong and irresponsible of the utilities to pocket this money and not= =20 pay the generators the governor said at a Capitol news conference Tuesday= =20 evening. They've acted irresponsibly and immorally and it has to stop.=20 The state lost about 3100 megawatts or enough electricity to power 3.1=20 million homes on Tuesday from alternative energy plants that say they can'= t=20 afford to keep operating because the utilities haven't paid their bills in= =20 weeks. The utilities which are near bankruptcy owe the QFs about $1=20 billion. Pacific Gas & Electric has made partial payments.=20 As reported by Dow Jones Newswires Southern California Edison met with=20 representatives of the governor Tuesday to discuss plans to begin making=20 partial payments to the QFs. Pacific Gas & Electric which called Davis'= =20 statements inappropriate and unjustified said it has informed the QFs an= d=20 the governor's office that it plans to begin paying the QFs in full going= =20 forward.=20 Davis said the PUC planned to issue an order next week directing the=20 utilities to prepay future bills to the QFs.=20 Edison and PG&E say they have lost more than $13 billion since last June to= =20 climbing wholesale electricity prices which the state's 1996 deregulation= =20 law prevents them from passing on to ratepayers. California has been spendi= ng=20 about $45 million a day since January to buy power for the utilities'=20 customers but hasn't included QF-generated power in its purchases.=20 Keepers of the state's power grid were cautiously optimistic that Californi= a=20 might get through Wednesday without another day of rolling blackouts after= =20 two idle plants were returned to service. A Stage 1 power alert the mildes= t=20 of three forms of alerts was called around 6 a.m. Wednesday as power=20 reserves fell to around 7 percent.=20 About a half-million customers were hit by Tuesday's blackouts which snarl= ed=20 traffic and plunged schools and businesses into darkness from San Diego to= =20 the Oregon border. Tuesday's outages began at 9:30 a.m. and continued in=20 90-minute waves until about 2 p.m. when the ISO lifted its blackout order.= =20 They were blamed for at least one serious traffic accident.=20 The blackouts were caused by a combination of problems including=20 unseasonably warm weather reduced electricity imports from the Pacific=20 Northwest numerous power plants being shut down for repairs and the loss o= f=20 power from QFs.=20 Meanwhile a leading lawmaker on energy issues said the PUC may soon have t= o=20 raise rates by about 15% to cover the state's costs and its utilities' bill= s.=20 My sense is that people will appreciate having some certainty and being ab= le=20 to plan for it said Assemblyman Fred Keeley. They don't have to like it= =20 but I think they'll appreciate it.=20 Davis has said he is confident the utilities and the state can pay their=20 bills without further rate increases.=20 --- --- PG&E Says It Is Negotiating With Qualifying Facilities 03/21/2001=20 Dow Jones Energy Service=20 (Copyright (c) 2001 Dow Jones & Company Inc.)=20 (This article was originally published Tuesday)=20 =20 LOS ANGELES -(Dow Jones)- PG&E Corp. (PCG) unit Pacific Gas and Electric Co= .=20 said Tuesday it is offering small generators or qualifying facilities= =20 prepayment of $200 million per month so they will have the funds to return = to=20 the state power grid.=20 But high level sources at the qualifying facilities who are involved in the= =20 negotiations said PG&E's proposal is incomplete and doesn't address the iss= ue=20 of past due payments.=20 The sources said PG&E had discussions with some qualifying facility operato= rs=20 last week regarding the plan and it wasn't accepted at that time.=20 About 3000 megawatts of power from qualifying facilities or QFs have bee= n=20 off the state's grid since Monday because the generators weren't being paid= =20 by utilities and couldn't afford to continue operating. The QFs unavailable= =20 power was partly responsible for Monday and Tuesday's statewide rolling=20 blackouts.=20 Also Tuesday California Gov. Gray Davis will hold a press conference to=20 discuss progress made in negotiations with the QFs to revise their contract= s=20 with the state's two nearly-bankrupt utilities so that the utilities pay le= ss=20 for power.=20 Edison International (EIX) unit Southern California Edison also said Tuesda= y=20 it intends to make partial payments on an ongoing basis to some QFs.=20 Edison executives met with Gov. Gray Davis' negotiating team Tuesday to=20 discuss how and when SoCal Ed can begin to make payments and a spokesman= =20 said they hope to have a plan in a matter of days.=20 Pacific Gas & Electric Co. has made partial payments of about $51 million t= o=20 the QFs it contracts with but owes much more. Edison owes the QFs hundreds= =20 of millions of dollars and hasn't paid the QFs since November. Together th= e=20 two utilities owe QFs about $1 billion.=20 PG&E said it has been collecting about $400 million per month from ratepaye= rs=20 to pay QFs and other generators with which it has bilateral contracts the= =20 state grid operator for spot power purchases and costs of its own=20 generation.=20 The average combined bill for those costs exceeds $1.4 billion per month= =20 PG&E said.=20 This mismatch between revenues and costs requires tough choices. Since the= re=20 isn't enough money in rates to cover all these costs the Public Utilities= =20 Commission decision on how this $400 million will be allocated going forwar= d=20 will determine our ability to make advance payments to QFs said Gordon R.= =20 Smith the utility's president and CEO.=20 The PUC is responsible for implementing the legislation which allows the=20 state to buy power and will decide how much of utilities' ratepayer revenue= =20 will go to the state for power purchases and how much will go to the=20 utilities.=20 For several weeks a number of QFs have taken their generating units offlin= e=20 because they can no longer afford to buy fuel needed to run their units.=20 QFs supply California with one-third of its total power supply.=20 PG&E and SoCal Ed have almost $13 billion in purchased power undercollectio= ns=20 because they cannot collect full costs from customers protected by a=20 state-mandated rate freeze.=20 -By Jessica Berthold Dow Jones Newswires 323-658-3872=20 -(Jason Leopold contributed to this article.)=20 --- -------------------- Wednesday March 21 2001=20 By Dave Todd=20 dtodd@ftenergy.com=20 U.S. Energy Secretary Spencer Abraham declared this week that the Big Apple= =20 is on the verge of being bitten hard by power cuts and rising energy prices= . Delivering the keynote address at the U.S. Chamber of Commerce's national= =20 energy summit in Washington Monday Abraham said California is not the on= ly=20 state facing a mismatch between supply and demand what with electricity= =20 shortages predicted for New York City and Long Island this summer and low= =20 capacity margins threatening electricity reliability elsewhere across the= =20 country. But how likely is it that New Yorkers will face blackouts of the= =20 sort confronting Californians?=20 Not very says energy trade specialist Edward Krapels managing director of= =20 Boston-based METIS Trading Advisors. Krapels a consultant helping major=20 Northeastern utilities such as Consolidated Edison design market-hedging= =20 programs adamantly decried what he said are facile comparisons between=20 conditions in New York and California there being more differences than= =20 there are similarities between those two industrial cornerstones of the=20 country's economy in respect to energy security management.=20 First of all New York has a more varied portfolio of energy generation=20 sources than California he said. California has hydro nuclear and gas b= ut=20 when it lost a lot of hydro the state needed gas to pick up the slack and= =20 the capacity just wasn't there. In New York's case the state has oil and= =20 coal still in the mix and its overall dependence on gas is much lower than= =20 California's Krapels added.=20 New York avoids making same mistakes Portfolio diversity is one pillar of any effective plan to help New York=20 avoid the same errors made in redesigning California's marketplace. New=20 York's Independent System Operator (ISO) in a new report warning that the= =20 state is at an energy crossroads in terms of its capacity adequacy in the= =20 immediate future argues that a concerted effort is required to arrest=20 declining in-state generation capacity reserve margins and a strategy must= =20 be put in place whether or not new generation comes on-line in accordance= =20 with current anticipated scenarios.=20 A measure of New York's essential difficulty is that between 1995 and 2000= =20 statewide demand for electricity grew 2700 MW while generating capacity= =20 expanded by only 1060 MW. With no major new generating plants in downstate= =20 New York fully approved the gap is expected to continue to widen. To avoid= =20 a replication of California's market meltdown the New York ISO calculates= =20 the state's daily generating capacity needs to grow by 8600 MW by 2005 wi= th=20 more than half of that located in New York City and on Long Island.=20 Expressing concern this may be too big a burden for the current bureaucrati= c=20 process to bear the ISO wants to see a state-appointed ombudsman named to= =20 help would-be merchant power plant investors plow through red tape.=20 Increasing New York's generating capacity will also lessen the state's=20 escalating and risky reliance on out-of-state sources of electricity the= =20 ISO added. Since 1999 New York State has been unable to cover its reserve= =20 requirements from in-state sources.=20 Not everyone agrees with that analysis insofar as it argues for circling t= he=20 wagons inward. Some analysts believe the ultimate solution lies not in tyin= g=20 in more inwardly dedicated power but in expanding the marketplace by=20 breaking down inter-jurisdictional barriers. In any case New York energy= =20 regulatory authorities and those responsible elsewhere in the U.S. Northeas= t=20 such as PJM (Pennsylvania-New Jersey-Maryland) Interconnection and the New= =20 England Power Pool are in vastly better shape in terms of cross-border= =20 cooperation than California and its neighbors in that efforts are being mad= e=20 among various authorities toward developing an integrated regional=20 electricity market. In California by contrast the state's focus=01*for=20 example in the case of new gas-fired power plant development=01*has been t= o=20 ensure dedicated supply to the California market alone rather than on a=20 regional marketplace.=20 The New York ISO's new broad-based analysis of market-restructuring needs= =20 argues that the relatively stronger health of its reformed environment is= =20 due in large part to the ability of New York's utilities to enter into=20 long-term power contracts.=20 What needs to be done most it says is to move aggressively to build some = of=20 the more than 29000 MW of proposed new generation in the siting pipeline.= =20 In the meantime the 30200 MW of electricity New Yorkers used on a peak da= y=20 last summer shouldn't be eclipsed on too many days this coming summer (give= n=20 early long-range weather forecasts). Demand however is expected to increa= se=20 at an annual average rate of up to 1.4%.=20 So while New York City the rest of the state and adjacent parts might=20 breathe easy this year it could be a brief rest from the fray. Meanwhile = a=20 4% shortfall is still being planned for this summer that is not yet provide= d=20 for as authorities hurriedly seek to arrange new generation plants around= =20 Manhattan on Long Island and even on barges offshore.=20 One way or another whether it is the weather or the politics of siting new= =20 energy facilities it's going to be a hot time in the city.=20 Long-term solutions hit brick wall Meanwhile attempts at longer-term solutions continue to run into trouble.= =20 Last week Connecticut state regulators came out against a proposal to run = a=20 new underwater cable under Long Island Sound that Hydro-Quebec subsidiary= =20 TransEnergie U.S. Ltd. wants to build to pump more juice into Long Island= =20 Power Authority's load pocket. Despite strong promises from TransEnergie to= =20 be diligent in avoiding damage to oyster beds in Long Island Sound the=20 proposal failed to convince authorities who were persuaded the pipeline=20 project could lead to diversion of electricity from Connecticut.=20 In similar fashion private companies wanting to build 10 small independent= =20 power plants and temporary generators offshore New York City are running in= to=20 intense opposition from environmental groups and citizen organizations=01*s= ome=20 of whom have taken their cases to the state assembly in Albany.=20 The David vs. Goliath nature of such controversies has further alerted ener= gy=20 companies to the difficulties of addressing complex energy supply issues th= at=20 may ultimately devolve to people not wanting things in their backyard=20 regardless of what the alternative might mean to their fellow citizens or t= he=20 greater public good.=20 But suddenly in New York California's troubles=01*while still distant in = their=20 intensity=01* may not be so far away. By some estimates this summer's bill= s for=20 Consolidated Edison customers could be up as much as one third or more over= =20 last year's charges.=20 Letting the time slip when it comes to building new infrastructure isn't=20 going to make the pain go away.=20 =20 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: In Phoenix, AZ to talk to Catholic Diocene Physical Plant Managers - Body:: Lay the groundwork and educate them about what's going on around the country from a regulatory standpoint sensitize them to coming opportunities. Also Steve Barth will be there to talk about creative products / services we can offer. 1:00 - 2:30 presentation then q&a then cocktails and dinner sponsored by Enron. Per Gary von Fischer 614-792-6010 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: PERSONAL AND CONFIDENTIAL COMPENSATION INFORMATION Body:: Thanks for the information. It would be helpful if you would send the detailed worksheet that you mentioned. I am surprised to hear that the only restricted shares left are the ones granted this January. I have always elected to defer any distributions of restricted stock. I believe I selected the minimum amount required to be kept in enron stock (50%). Are you saying that all the previous grants have fully vested and been distributed to my deferral account? Thank you for looking into this issue. Phillip What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Request for Confidential Information by the GAO Body:: To All California Power Exchange Participants: Notice is hereby provided pursuant to Section 19.3.4 of the California Power Exchange Tariff that the United States General Accounting Office (GAO) as part of the ongoing investigation of California markets has requested the same information to be provided to the Federal Energy Regulatory Commission (FERC). Such information may be confidential under Section 19.3.2 of the Tariff. The manner in which the GAO will treat such confidential information is outlined in the attached letter. The GAO states that it has authority under 31 U.S.C. 717 to evaluate programs or activities of the Federal Government in this case deregulation of the electricity markets initiated by FERC. The GAO has requested the California Power Exchange to provide such information no later than Thursday October 5 2000. If you desire to assert a claim of privilege or confidentiality pursuant to legal authority the California Power Exchange will include your written assertion of that claim together with its submittal to the GAO provided that it is timely received. Your written statement should be directed to the GAO as follows: Mr. Jim Wells Director Energy Resources and Science Issues United States General Accounting Office Washington DC 20548 You may deliver your statement to the California Power Exchange as follows: Karen Koyano California Power Exchange 1000 S. Fremont Avenue Unit 20 Alhambra CA 91801 626.537.3173 facsimile Any written statement must be received by Ms. Koyano no later than Wednesday October 4 2000 5:00 p.m. Pacific Daylight Time to be included with any information delivered to the GAO. You are also free to take any other legal action you may deem appropriate in the circumstances of this investigation. Thank you. (See attached file: GAO Letter 9-22-00.doc) - GAO Letter 9-22-00.doc What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Sac Bee Wed 6/6: Businesses vie for blackout exemptions:=20 The PUC must decide who should be spared and the applicant list is very lo= ng Sac Bee Wed 6/6: PG&E ISO agree to court order on power bills Sac Bee Wed 6/6: Peter Schrag: Turning up the heat in Houston and=20 Washington (Editorial) SD Union Wed 6/6: Is trading an insider's game? SD Union Wed 6/6: Daily energy costs for state fall in past weeks=20 SD Union Wed 6/6: Five tiers sought in proposed rate boost SD Union Wed 6/6: Port budget large but power bills loom SD Union Wed 6/6: Continuous use urged for planned power plant=20 SD Union Wed 6/6: Rising energy prices threaten Poway troupe=20 SD Union Wed 6/6: Fair to use generators for midway attractions LA Times Wed 6/6: 'Hi My Name Isn't Justice Honey' and Shame on Lockye= r =20 (Editorial) LA Times Wed 6/6: U.S. Probes Alleged Pact Not to Build New Plants Power:= =20 Justice officials focus on Southland operations of two firms which deny=20 wrongdoing LA Times Wed 6/6: Natural Gas Power Prices Drop Sharply Energy:=20 More conservation mild weather are among factors keeping costs down exper= ts=20 say LA Times Wed 6/6: The State Utility Averts $1 Billion in Costs Courts:=20 PG&E and Cal-ISO agree to recognize Department of Water Resources as=20 purchaser of the power SF Chron Wed 6/6: Dramatic drop in cost of electricity=20 LOWER BILLS: Cheaper fuel milder weather credited SF Chron Wed 6/6: San Jose council gives green light to generating plant= =20 VOTE REVERSAL: Officials pressured to OK project SF Chron Wed 6/6: Developments in California's energy crisis SF Chron Wed 6/6: California conserves SF Chron Wed 6/6: L.A. power customers awash in cheap energy SF Chron Wed 6/6: PG&E doesn't want to pay for energy to avert blackouts Mercury News Wed 6/6: Metcalf plant gets preliminary approval=20 OC Register Wed 6/6: Feds probe AES Williams Individual.com (PRnewswire) Wed 6/6: Calpine Begins Construction of=20 Peaking Energy Center in Gilroy Calif.=20 Individual.com (PRnewsire) Wed 6/6: Reliant Urges FERC to Drop or Amend= =20 California Price Caps to Avoid Additional Shortages and More Blackouts Energy Insight Wed 6/6: Farm-fresh biopower --- Businesses vie for blackout exemptions: The PUC must decide who should be= =20 spared and the applicant list is very long. By Carrie Peyton and Dale Kasler Bee Staff Writers (Published June 6 2001)=20 Mixes for milkshakes and frozen coffees could spoil at ice cream parlors= =20 sickening customers.=20 Seniors getting their hair done would have to leave their dryers and go hom= e=20 with wet heads risking a chill.=20 Mall escalators could come to a sudden halt endangering shoppers who lose= =20 their footing.=20 Those are among the health and safety risks cited by more than 10000=20 businesses and government bodies asking state regulators to exempt them fro= m=20 rolling blackouts.=20 It is a list that mixes nursing homes and grocery stores outpatient surgic= al=20 clinics and beauty salons dialysis centers and country clubs.=20 A lot of people are treating this like a lottery said Subodh Medhekar of= =20 Exponent Inc. the consulting firm sorting through exemption requests for t= he=20 state Public Utilities Commission.=20 For many Medhekar said the rationale seems to be 'I'm pretty sure I won= 't=20 get exempted but what's the down side? Let's put in an application.' =20 Amid predictions that Californians could face dozens of rolling blackouts= =20 this summer state regulators are trying to update a decades-old list of wh= o=20 should be spared if the lights go out.=20 The Alta Sierra County Club in Grass Valley should be among those whose pow= er=20 stays on Sean O'Brien the club's golf course superintendent told=20 regulators in a nine-page application.=20 The country club telephones could go out making it harder to phone for hel= p=20 if someone has a medical problem while golfing he said in an interview.=20 And if the golf course's irrigation pumps shut down it would lose the=20 ability to quell small blazes -- leaving it to rely on a fire station O'Bri= en=20 said is about one-quarter mile away.=20 Placerville Dialysis wants an exemption too. As many as a dozen people the= re=20 can be having their blood pumped through an artificial kidney that cleans i= t=20 when their own kidneys no longer function properly.=20 When the power goes out everything just stops said manager Shirley=20 Carpenter. There is a way to manually return the blood by hand before it= =20 clots in the line. ... It would just be hectic.=20 It takes about five minutes of manual pumping to fully disconnect someone= =20 from a dialysis machine Carpenter said. And some patients can help by=20 operating their own pumps.=20 But she said I'm sure it would be kind of frightening to have your blood= =20 out in the line and the power off and they're pretty much tied to the=20 machine.=20 Pam Chin a hairdresser at the Loomis Beauty Salon said the owner sought a= n=20 exemption because people could get overheated if the air conditioning went= =20 out and older customers getting their hair set could be chilled if the=20 dryers shut off.=20 With about half the state already exempt from rolling blackouts the questi= on=20 of who else should stay connected has become a delicate one for utilities= =20 regulators and legislators.=20 Carl Wood the PUC commissioner who has taken the lead on blackout issues= =20 estimates that fewer than 1000 more utility customers can be exempted befo= re=20 they overload the rolling outage system designed to take stress off the=20 electric grid.=20 While about 6000 customers are classified as essential by the state's tw= o=20 largest utilities keeping them out of the blackout rotation also spares=20 about 5 million other customers who are served by the same circuits.=20 That multiplier effect will have to be weighed by the consulting firm by= =20 utilities and eventually by PUC commissioners who are scheduled to vote in= =20 early August on who should be added to existing standards.=20 The rules will apply to the state's investor-owned utilities Pacific Gas a= nd=20 Electric Co. Southern California Edison and San Diego Gas & Electric Co.= =20 but not to municipal utilities.=20 The Sacramento Municipal Utility District already rejected pleas for specia= l=20 exemptions from a medical lab a veterinary hospital nursing homes medica= l=20 facilities businesses and residents. SMUD believes they can weather=20 blackouts because they are not critical to public safety.=20 People have counted on having dependable electricity for so long that some= =20 have widely varying ideas of who can do without it safely Medhekar said.= =20 Of the more than 500 Baskin Robbins ice cream parlors that dot California= =20 only five are listed on the PUC Web site as applicants for exemptions.=20 The site cautions that its list of 9239 electronic applicants hasn't been= =20 checked for duplicates -- or fiction. It includes hundreds of outlets of th= e=20 same drug store and supermarket chains dozens of related nursing homes and= =20 more than 400 dentists. Another 1200 commercial power users have applied b= y=20 fax.=20 Among those who have confirmed they want out of outages are the grocery=20 chains operated by West Sacramento-based Raley's which said it took the=20 action as part of united effort with all California grocers who are worrie= d=20 about food spoilage.=20 Others in the mix are Fairfield's Westfield Shoppingtown Solano formerly t= he=20 Solano Mall where officials sought the exemptions out of fear that shopper= s=20 would get injured if escalators came to a sudden halt.=20 The Yolo County Housing Authority asked for an exemption on behalf of its 7= 00=20 dwellings in the belief that the utilities offer exemptions for low-income= =20 Californians Executive Director David Serena said.=20 Serena added that many of the authority's occupants are older or disabled a= nd=20 could be endangered by a blackout.=20 Chevron Corp. acknowledged it couldn't show that a blackout at its refineri= es=20 would present imminent danger to public health or safety but it asked Go= v.=20 Gray Davis to support legislation exempting makers and transporters for=20 critical fuels saying a refinery shutdown would cut into the state's=20 gasoline supply.=20 Some businesses acknowledged that their applications are a long shot.=20 It's probably a stretch said Amanda Leveroni who owns Bacio Catering Co= .=20 of Chico about her request to the PUC. The public wouldn't be in danger.= =20 But we're a catering company -- somebody has planned for a year-plus for a= =20 wedding or some big event she added. I would be in such a huge situation= .=20 I'd have to send out for pizza.=20 The Bee's Carrie Peyton can be reached at (916) 321-1086 or=20 cpeyton@sacbee.com. PG&E ISO agree to court order on power bills By Claire Cooper Bee Staff Writers (Published June 6 2001)=20 SAN FRANCISCO -- Pacific Gas and Electric Co. and the operator of=20 California's power grid agreed Tuesday to a preliminary court order providi= ng=20 that the utility will continue to receive -- but not pay -- generators' bil= ls=20 for the state's purchases of the most expensive wholesale electricity.=20 The tab has been running at about $300 million a month.=20 The order which U.S. Bankruptcy Judge Dennis Montali said he'll sign will= =20 specify that the Independent System Operator will not procure power except= =20 for a creditworthy buyer who has agreed to pay the generator.=20 In California the only such potential buyer is the state Department of Wat= er=20 Resources. However the department which has avoided PG&E Co.'s bankruptcy= =20 proceedings by claiming sovereign immunity will not be controlled by the= =20 agreement. Montali pointed out that the department still could demand=20 reimbursement from PG&E.=20 Under the agreement the ISO will not press any claims against PG&E on beha= lf=20 of generators if they are not paid.=20 The proposed preliminary injunction was based on an April order by the=20 Federal Energy Regulatory Commission which forbade the ISO from purchasing= =20 power on behalf of any non-creditworthy buyer such as PG&E.=20 The ISO is appealing the FERC order. If the appeal succeeds the injunction= =20 will end.=20 Peter Schrag: Turning up the heat in Houston and Washington (Published June 6 2001)=20 Behind all the palaver about the predictable standoff at last week's energy= =20 summit between President Bush and Gov. Gray Davis one major political=20 development was missed.=20 Put simply in the past month the focus of the California energy crisis an= d=20 maybe the onus as well has moved east: from the state's (and Davis')=20 handling of the mess to the generating companies energy marketers and gas= =20 pipeline companies that have richly profited from it and thus to FERC the= =20 do-next-to-nothing Federal Energy Regulatory Commission and the Bush=20 administration.=20 That wasn't all Davis' doing -- far from it -- though it's been at the hear= t=20 of his message about energy industry pirates and profiteers. Bush's=20 misbegotten energy plan and the administration's political clumsiness also= =20 contributed mightily not least by inadvertently giving Davis the chance to= =20 get media exposure he could only have dreamed about.=20 More important there's the defection of Sen. James Jeffords from the=20 Republican Party and the resulting shift of control in the U.S. Senate whe= re=20 the next chair of the Energy Committee will be Sen. Jeff Bingaman of New=20 Mexico a co-sponsor of Sen. Dianne Feinstein's bill capping wholesale=20 electric rates for the next two years. And chairing the Committee on=20 Governmental Affairs will be Sen. Joseph Lieberman of Connecticut who's=20 already asked for an audit of energy prices.=20 Those changes will draw a lot more attention to recent studies showing that= a=20 handful of big generators -- Duke Power Reliant Mirant Dynegy and the hu= ge=20 energy-marketing firm Enron -- have gamed the market to drive wholesale=20 prices to levels that in the year 2000 sometimes reached 40 times the=20 prices of the year before.=20 The findings come not merely from economists at the California Independent= =20 System Operator the agency that manages the state's grid who estimate=20 overcharges resulting from market power at $6.2 billion for last year alone= .=20 They come also from Severin Borenstein and his colleagues at the University= =20 of California Energy Institute who conservatively calculate the=20 overcharges at $4.5 billion from Paul Joskow a widely respected energy=20 economist at MIT and from Edward Kahn an economic analyst in San Francisc= o.=20 In a recent paper published by the National Bureau of Economic Research=20 Joskow and Kahn conclude that there's considerable evidence that the high= =20 prices experienced in the summer of 2000 reflect the withholding of supplie= s=20 from the market by suppliers [generators or marketers] exercising market=20 power. That those high prices occurred not merely during peak usage but al= so=20 at off-hours when no one had ever seen a price spike before makes those= =20 spikes even more curious.=20 There is in addition the powerful suspicion that the huge increase in=20 natural gas prices that a subsidiary of El Paso Energy Co. now the largest= =20 gas company on Earth was charging on the California side of the=20 California-Arizona border wasn't merely the result of an innocent imbalance= =20 between supply and demand.=20 None of that may be illegal. If there's no collusion there are no violatio= ns=20 of antitrust laws. But it adds plenty of steam to the political argument. I= n=20 the 2000 election cycle alone energy companies kicked in some $64 million = in=20 political contributions 75 percent of it to Republicans. At a time when=20 those companies many of them located in the same Houston neighborhood are= =20 racking up astronomical profits and when their collective coziness with Bus= h=20 and the Republican Party is a lot more than rhetoric their vulnerability t= o=20 a vigorous Senate investigation ought to be obvious.=20 The clincher is Blackout a Frontline program that both symbolizes the= =20 shifting emphasis and reinforces it. (The program is scheduled to be aired = at=20 8 p.m. Friday on Sacramento cable Channel 7.) It isn't another recital of= =20 Californians worrying about their electric bills or about the stupidity of= =20 the state's deregulation scheme or how Davis dithered in addressing the=20 crisis. It is about those generators and marketers in Houston and North=20 Carolina men (and a few women) who regard themselves as the heroes of the= =20 new energy markets.=20 The piece is reported by Lowell Bergman who in working for both Frontline= =20 and the New York Times has already broken major print stories about Duke=20 Power's secret approach to Davis offering unspecified energy refunds in=20 return for an end to state investigations and lawsuits. Bergman also report= ed=20 private conversations between Enron chairman Kenneth Lay a major Bush=20 supporter and FERC chairman Curt Hebert regarding the influence that Lay= =20 could exercise with Bush to allow Hebert to keep his chairmanship if Hebert= 's=20 supported certain decisions Enron badly wants.=20 None of these recent events is likely to end Davis' political woes and the= y=20 may not produce the wholesale rate caps Feinstein wants and that most=20 economists think necessary -- or maybe any significant reduction in the=20 industry's predatory pricing. But they will surely help turn up the heat= =20 both in Houston and Washington. Six months ago FERC found wholesale prices= =20 were not fair and reasonable as federal law requires but did little abou= t=20 them. It will now have a lot more questions to answer.=20 Peter Schrag can be reached at Box 15779 Sacramento CA 95852-0779 or at= =20 pschrag@sacbee.com. Is trading an insider's game?=20 Buying selling of electricity is a growth business but some say deck is= =20 stacked against consumers By Craig D. Rose=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 While Californians decry deregulation's failure to deliver a competitive=20 market electricity wholesalers have quietly developed a vast and rapidly= =20 growing business of buying and selling power among themselves.=20 The deals take place on high-tech trading floors in Houston and elsewhere= =20 around the country as well as on Internet-based trading systems.=20 Some experts say this electricity trading is a key mechanism for raising=20 consumer power prices yet it's largely unregulated.=20 Electricity trading is like buying stock -- when you have ability to chang= e=20 the stock price said Frank Wolak a Stanford University economics profess= or=20 and member of the state grid operator's market surveillance group.=20 Energy companies say the buying and selling of contracts to deliver power= =20 provides risk management allowing plant owners to presell their electricit= y=20 lock in prices and avoid fluctuations. The rough and tumble of the free=20 market they add is the most efficient means of allocating a resource like= =20 electricity.=20 But industry critics say trading is far from a competitive market paradigm.= =20 In their view it's a means of communication -- a way for energy insiders t= o=20 collude and raise prices under the guise of competition.=20 To be sure the trading arms of major energy companies have emerged as star= s=20 in an industry where profit surges of 300 percent or 400 percent are not=20 uncommon.=20 The transactions shrouded in secrecy can leave ownership of a critical=20 commodity in unknown hands. Consider the case of power generated by AES=20 Corp.'s California plants.=20 In 1998 AES made a bold move. Immediately after purchasing power plants th= at=20 gave it control of 10 percent of the state's electric generating capacity= =20 the company sold the output from its plants for the next 20 years to Willia= ms=20 Cos.=20 Williams did not sit on this treasure trove of electrons. The Tulsa Okla.= =20 company soon sold 80 percent of what it bought.=20 It is difficult to say who owns that power now. Some might be owned by Semp= ra=20 Trading a sister company of SDG&E. Or some could be owned by Enron Corp.= =20 the nation's biggest electricity trader.=20 A spokeswoman for Williams conceded that Williams itself may have repurchas= ed=20 some of the electricity it sold earlier. But trading companies closely guar= d=20 their positions.=20 This much can be said with certainty: Electricity that AES sold for less th= an=20 5 cents per kilowatt-hour to Williams changed hands perhaps 10 times in the= =20 wholesale market and emerged at times in recent months with a price tag for= =20 consumers that was 300 percent higher.=20 Williams' trading profits increased by 523 percent in the first quarter thi= s=20 year. Advance sales All this buying and selling creates curious confluences.=20 In their attempt to deflect criticism over high prices generating companie= s=20 such as Duke Energy -- operator of the South Bay Power Plant in Chula and= =20 others in the state -- frequently note that they sell most of their=20 electricity far in advance. But they acknowledge less often that their=20 trading units may also be buying power which could boost the company's=20 electricity inventory.=20 Duke was the fourth biggest electricity trader last year and cited its=20 trading activity as a prime contributor to its wholesale business profits= =20 which soared 324 percent in the first quarter to $348 million.=20 It is a company's power traders who frequently direct plant operators to=20 increase or decrease the generation of power in response to market=20 conditions.=20 Energy companies have little option but to turn to trading for profits. One= =20 of the better kept secrets of electrical deregulation and its promise of=20 competition is that there is remarkably little competition in the productio= n=20 side of the business.=20 For one thing electricity is a commodity power from one company is=20 indistinguishable from that generated by others.=20 More important nearly all modern plants generate power from turbines built= =20 by a handful of manufacturers. The result? Modern plants owned by different= =20 companies produce power at nearly identical cost.=20 The cost of power produced by modern plants is all within a mil=20 (one-thousandth of a dollar) said Michael Peevey an adviser to Gov. Gray= =20 Davis and former president of Southern California Edison.=20 So the extraction of profit in the electricity business relies much more on= =20 trading. Traders' profits rise when prices are volatile -- plunging or eve= n=20 better rising sharply. Little regulation But despite the obvious temptation to manipulate the market the burgeoning= =20 electricity trading business has remained largely unregulated.=20 The Federal Energy Regulatory Commission does require quarterly filings fro= m=20 energy traders but these often provide incomplete information or at least= =20 little that has been of concern to FERC.=20 In fact although the trading of electricity grew more than a hundredfold= =20 from 1996 to 2000 FERC has taken no major enforcement action against a=20 trader. After the onset of the California crisis last year FERC has acted= =20 once. That was against Williams which agreed to pay $8 million without=20 admitting guilt to resolve an allegation that it withheld supply to pump up= =20 prices.=20 FERC's record of enforcement in the area of power trading stands in contras= t=20 to a long list of enforcement actions within other markets taken by the=20 Securities Exchange Commission and the Commodity Futures Trading Commission= .=20 FERC has recently added staff to its market oversight operations. But Willi= am=20 Massey a FERC commissioner says the agency's effort is still inadequate.= =20 Electricity can be flipped stripped and chopped up Massey said. It's a= n=20 extraordinarily complicated market.=20 The sophisticated marketers and traders have simply moved past us. We're= =20 kind of horse and buggy in our approach and they're out there in rocket shi= ps=20 flying around ... The problem is that sophisticated traders don't necessari= ly=20 produce reasonable prices. They produce profits.=20 Before deregulation electricity trading was a low-key affair. Regulated=20 utilities dealt power back and forth on a reciprocal basis to fill=20 electricity shortfalls in their control areas. There was little trading for= =20 profit until the mid-1990s after federal legislation and FERC rulings open= ed=20 the market.=20 Major traders include large energy companies sister companies of=20 California's major utilities and Wall Street firms. Market volatility In many ways the trading of power is similar to that of other commodities.= =20 But there are important differences. Because it cannot be stored and its us= e=20 is so fundamental the price of electricity is the most volatile of all.=20 When supplies are tight a single supplier can rapidly raise prices to=20 budget-busting levels as evidenced by Duke Energy's recent admission that = it=20 charged California nearly $4000 for a megawatt-hour of power a quantity= =20 that probably sold hours earlier for one-tenth of that sum or less.=20 Wolak the Stanford economist and state Sen. Joseph Dunn D-Garden Grove= =20 who is investigating the state power market say trading allows companies t= o=20 collude under the guise of competition. Instead of wringing out lowest cost= s=20 the wholesale trading market serves to raise prices they say.=20 As I trade to you and you trade to me we communicate to each other what= =20 price we would like to get said Wolak. It's not collusive. It's just=20 communicating price.=20 Mark Palmer a spokesman for Enron the nation's biggest power trader said= =20 California's problem is not the result of trading.=20 It's a result of shortages Palmer said.=20 Underscoring its emphasis on trading Enron's new headquarters tower in=20 downtown Houston rises from a six-story block of new trading floors=20 including expanded space for electricity trading.=20 Enron also pioneered trading in cyberspace and its Enron Online site claims= =20 to be the most active computer-based trading market.=20 The Houston company argues that consumers won't fully benefit from power=20 trading and deregulation until they have greater choice in choosing their= =20 power supplier. And the company says FERC has not done enough to open acces= s=20 to transmission lines which would allow traders to move power around the= =20 country. To that end Enron has lobbied hard for President Bush's plan for = a=20 national electricity grid.=20 Palmer says the notion that the price of electricity rises each time it is= =20 traded is mistaken.=20 The market is always looking for the real price of a commodity Palmer=20 said.=20 Dunn the California state senator says his investigation found a differen= t=20 function for trading. At a time when supply barely meets or falls short of= =20 demand he noted companies with electricity to sell have to worry only abo= ut=20 how high to set their price.=20 The trader is a pawn in the generator's game to drive up prices said Dun= n.=20 Trading develops a level of trust. You my alleged competitor will bid in= =20 the same patterns and I will respond not in a competitive pattern but in a= =20 complimentary pattern.=20 The state senator said his investigation found evidence that on several day= s=20 energy companies appeared to test their ability to drive prices up without= =20 being undercut by competitors.=20 This ability to drive up prices without competitive consequence is a key te= st=20 of market power the technical term for manipulation or price fixing.=20 But Dunn also conceded that antitrust violations can be hard to prove in=20 court. He suggested that even if the trading behavior falls short of=20 antitrust violations it remains anti-competitive and devastating for the= =20 California economy.=20 To Harry Trebing a utility industry expert and professor emeritus at=20 Michigan State University wholesale electricity trading is reminiscent of= =20 what took place in the 1920s and early '30s. Back then utility companies= =20 created complex networks of holding companies that traded stock among=20 themselves driving up prices in the process.=20 Undoing that scheme was a focus of President Franklin Roosevelt's=20 administration. Congress ended up barring national power companies and=20 tightening regulation of utilities in an effort to counteract their tenden= cy=20 to create markets that work only for insiders.=20 The broad goals of trading are the same Trebing said.=20 The goal is to maximize profits through raising prices.=20 Daily energy costs for state fall in past weeks=20 By Ed Mendel=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 SACRAMENTO -- In some of the first good news of the electricity crisis the= =20 Davis administration said yesterday that the daily cost of power purchased = by=20 the state for utility customers has dropped in recent weeks.=20 The price-drop news comes after an announcement that Californians conserved= =20 more energy than expected last month 11 percent and amid Davis=20 administration optimism that the Legislature may finally begin to move on a= =20 plan to keep Southern California Edison out of bankruptcy.=20 The developments if they turn out to be a trend and not temporary could b= e=20 among the first signs that Gov. Gray Davis' plan to end the electricity=20 crisis is beginning to work. But the administration isn't saying that.=20 We have had a few good days here lately said S. David Freeman a Davis= =20 power adviser. I don't think that I want to project.=20 Some power-market watchers began to speculate last month that prices may ha= ve=20 peaked earlier this year. Platts an energy information service said=20 yesterday that spot prices for the natural gas used by power plants are=20 falling this month.=20 The governor's press secretary Steve Maviglio told reporters yesterday th= at=20 the daily amount spent on power is now well below $50 million which was= =20 the average cost earlier this year.=20 A 12-day gap in the most recent notice to the Legislature that another $500= =20 million increment will be spent on power suggests that the daily average=20 during the last two weeks may have dropped down around $42 million.=20 Oscar Hidalgo a spokesman for the state power purchasing agency said that= =20 the average cost of power was under $40 million during the first four days = of=20 this month.=20 Maviglio attributed the lower cost to conservation the phasing in of cheap= er=20 long-term power contracts fewer power plants off-line for maintenance and= =20 cooler weather.=20 However he said The average cost is still way over what we paid last=20 year.=20 There was widespread skepticism in late April when the governor's consultan= ts=20 predicted that the $346 per megawatt-hour average paid by the state for=20 non-contracted power from April through June would drop to an average of $1= 95=20 from July through September.=20 We are still very comfortable with the projection that Mr. Fichera and=20 company estimated Maviglio said referring to Joseph Fichera of Saber=20 Partners in New York.=20 During a briefing on May 21 Fichera told reporters that the amount of powe= r=20 that the state would obtain under long-term contracts for May was expected = to=20 be about 43 percent of the total required the so-called net short.=20 Fichera said contracts already signed were expected to cover 66 percent of= =20 the net short in June 48 percent in July and 42 percent in August. He sai= d=20 contracts that had been agreed on in principle could increase those amounts= =20 to 73 percent in June 67 percent in July and 60 percent in August.=20 We are still on target. There are risks Fichera said yesterday among th= em=20 extended hot weather and power plant outages. No one is popping the=20 champagne corks until Sept. 30.=20 The governor's consultants based their forecast of power demand this summer= =20 on an estimate that Californians will reduce their electricity use by 7=20 percent.=20 The 11 percent reduction last month as compared to May of last year came= =20 before the sticker shock of rate hikes that begin this month for customers = of=20 Edison and Pacific Gas and Electric. And a $35 million ad campaign urging= =20 conservation has not hit full stride.=20 Maviglio said the administration plans to release some detailed information= =20 on Monday about the roughly $8 billion the state has spent buying power. Th= e=20 general fund will be repaid by a bond of up to $13.4 billion that ratepayer= s=20 will pay off over 15 years.=20 Legislative leaders have demanded detailed information about power purchase= s=20 before proceeding with the Edison plan. Assembly Democrats are working on a= =20 plan that de-emphasizes state purchase of the Edison transmission system an= d=20 would put most of the burden for paying off Edison's debt on businesses and= =20 large users not residences. Five tiers sought in proposed rate boost=20 Conservation would be promoted SDG&E says By Karen Kucher=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 A proposed rate increase for SDG&E customers to cover the high cost of=20 electricity should be imposed in five tiers to encourage conservation the= =20 company is advising state utility regulators.=20 The more electricity a customer uses the higher the rate would be.=20 SDG&E needs to raise its rates to bring in an additional $502 million=20 annually to pay the state for power purchases.=20 The state Public Utilities Commission is expected to rule on San Diego Gas = &=20 Electric's rate-increase proposal June 28.=20 The rate changes would remove a cap that has shielded most SDG&E customers= =20 from rising electricity prices for a year. The cap enacted by state=20 lawmakers in September 2000 and retroactive to June 2000 set rates at 6.5= =20 cents per kilowatt-hour.=20 Higher rates would mean the average SDG&E residential and small-business=20 customer's electricity bills would go up by 18 percent. Large commercial=20 users' bills would average 29 percent more.=20 Public hearings on the issue will be held next Monday and Tuesday in San=20 Diego El Cajon Escondido and San Clemente. These sessions will focus on= =20 small-business and residential consumers. Hearings on large commercial user= s=20 were held last month.=20 Earlier this year the PUC decided to allow the state's two largest=20 utilities Pacific Gas and Electric and Southern California Edison to char= ge=20 customers an extra $5.7 billion annually for electricity.=20 The state Department of Water Resources which has been buying power for=20 SDG&E customers since February asked SDG&E to generate a total of $915=20 million annually to cover the cost of electricity purchases.=20 With the proposed rate increases SDG&E could do that.=20 Large commercial customers would pay about 30 percent of the overall increa= se=20 and residential and small-business customers would pay about 70 percent sa= id=20 Ed Van Herik a spokesman for the utility company.=20 If the increase can be tiered as many as 60 percent of residential custome= rs=20 will see no rate increase if their electricity usage remains the same Van= =20 Herik said.=20 But customers who use more than 130 percent of their baseline -- considered= =20 the minimum amount of electricity needed by a household -- will be billed a= t=20 increasingly higher rates.=20 Residential and small-business customers who use a lot of electricity could= =20 pay as much as 17.89 cents per kilowatt hour for some power they consume.= =20 Consumer advocate Michael Shames said he is concerned the utility's proposa= l=20 does not spread the increases evenly among different types of users. He als= o=20 called for more scrutiny of the state's request.=20 People should tell PUC officials that this increase should not be a carte= =20 blanche or blank check approval said Shames the head of Utility Consumer= s'=20 Action Network. The PUC needs to ensure that the rate increase requested b= y=20 the (state) is reasonable.=20 The public hearings are scheduled for:=20 ?Monday 1 p.m. San Diego Concourse Copper Room 200 C St. San Diego.=20 ?Monday 7 p.m. El Cajon Community Center 195 E. Douglas Ave. El Cajon.= =20 ?Tuesday 1 p.m. Country Inn Hotel 35 Via Pico Plaza San Clemente.=20 ?Tuesday 7 p.m. Center for the Arts 340 N. Escondido Blvd. Escondido.= =20 Port budget large but power bills loom=20 Slowing economy also cause for worry By Ronald W. Powell=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 The rock is rolling financially but there are indications that the blues= =20 lurk on the horizon.=20 Officials of the San Diego Unified Port District -- headquartered in a=20 block-shaped building some employees call the rock -- are happy with a=20 projected 2001-2002 budget that is 5.1 percent larger than the current one.= =20 Total revenue is expected to reach $208.7 million $10.2 million above what= =20 is expected in the fiscal year that ends June 30.=20 Port commissioners gave preliminary approval to the budget yesterday and ar= e=20 scheduled to take a final vote July 10.=20 But a slowing economy and surging electric bills are causes for concern.=20 Electricity costs are expected to rise from $5 million to $8.2 million in t= he=20 coming fiscal year.=20 As far as trends we see a continuation of the growth we've experienced ov= er=20 the past five years said Bruce Hollingsworth the port's treasurer. But= =20 our percentage of growth will not rise as sharply.=20 Port revenues have grown steadily since the 1997-1998 fiscal year when $16= 3=20 million was generated.=20 The proposed budget calls for adding 24 employees to the port's 730-member= =20 work force. New hires will include three Harbor Police officers 10 employe= es=20 in the aviation division and four in maritime services.=20 The port operates Lindbergh Field and administers nonmilitary tidelands alo= ng=20 San Diego Bay. It is landlord to more than 600 waterfront businesses and=20 operates two marine cargo terminals and one cruise ship terminal.=20 The budget calls for growth in each of the port's primary revenue centers:= =20 aviation real estate and maritime services.=20 Passenger and cargo activity at Lindbergh Field is expected to generate $90= .7=20 million or $5 million more than expected in the current year. Most of that= =20 increase is expected to come from parking-rate increases at the airport and= =20 at the port's long-term parking lot on Pacific Highway.=20 Rent from hotels and other businesses that are port tenants are expected to= =20 total $63.1 million up $1.8 million from the current budget.=20 Increases in cargo and cruise ship traffic are expected to boost maritime= =20 income by $2.7 million to a total of $18.4 million.=20 The port expects to spend $157 million on construction projects. They inclu= de=20 $8.5 million to relocate the General Services Department from Eighth Avenue= =20 and Harbor Drive in San Diego to National City and more than $5 million for= =20 paving and improvements at the 10th Avenue Marine Terminal.=20 Rent revenue could grow substantially in future years. Four hotel projects = on=20 port property have won approval or are seeking it.=20 Jim Bailey president of Manchester Resorts told commissioners yesterday= =20 that he expects to break ground on a second Hyatt tower of 750 rooms by Jun= e=20 26. Port officials said revenue from that hotel would bring in an additiona= l=20 $3.7 million a year. It is scheduled to open in the summer of 2003.=20 Hollingsworth the treasurer said that if all four hotels are built the po= rt=20 could receive as much as $15 million a year in new revenue.=20 Continuous use urged for planned power plant=20 Escondido facility originally proposed for peak demand By Jonathan Heller=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 ESCONDIDO -- A proposed power plant in southwest Escondido that initially w= as=20 expected to run only during times of peak electricity demand probably will = be=20 allowed to run full time.=20 A state energy official who recommended approval of the plant yesterday has= =20 said the plant could operate as often as the state deems necessary.=20 The California Energy Commission was scheduled to vote on the project today= .=20 CalPeak Power of San Diego has asked the commission to approve a 49-megawat= t=20 plant on Enterprise Street near Vineyard Avenue. Referred to as a peaker= =20 plant such facilities typically are designed to supply energy only during= =20 times of peak demand.=20 The state limits the number of hours some plants can operate to keep=20 pollution at a minimum. A 44-megawatt peaker plant being built on West=20 Mission Avenue in Escondido by Ramco Inc. will be allowed to operate no mor= e=20 than 16 hours per day.=20 That plant is permitted to emit up to 5 parts per million of nitrogen oxide= =20 although its actual emissions are expected to be slightly lower said Dale= =20 Mesple a Ramco consultant. Nitrogen oxide is a component of smog.=20 The CalPeak plant if approved would be restricted to 2 parts per million = of=20 nitrogen oxide.=20 It was generally assumed that the CalPeak plant would operate under similar= =20 time restrictions as the Ramco plant. The potential for air pollution was= =20 among the chief concerns of residents who spoke at the City Council hearing= s=20 on the Ramco project and at the energy commission hearings about the CalPea= k=20 plant.=20 But under the terms of approval recommended by Energy Commission Chairman= =20 William Keese CalPeak's plant would be able to operate up to 8760 hours= =20 per year typically when the demand for electricity is high. That number= =20 equals 24 hours a day.=20 The actual number of hours would depend on the requirements of the state's= =20 Independent System Operator which manages the energy grid.=20 We certainly want to have the flexibility to run whenever we're needed= =20 said Mark Lyons CalPeak's development director. Exactly how often we will= =20 run is anybody's guess.=20 Escondido Councilwoman June Rady said she was frustrated by the possibility= =20 of the plant running full time. In Ramco's case the city and the county Ai= r=20 Pollution Control District made it clear how often the plant could operate.= =20 CalPeak chose to bypass the city's permitting process and went through the= =20 state Energy Commission which offers an expedited 21-day approval put in= =20 place by Gov. Gray Davis as an emergency measure.=20 I think Escondido has been absolutely ignored and there's a total lack of= =20 due process Rady said. It boils down to an issue of local control.=20 Although city officials objected to the commission pre-empting the city's= =20 land-use authority the commission maintained that Davis' order gave it the= =20 final say on this type of project.=20 If the commission gives final approval today the only remedy available to= =20 the city would be in court. At least three council members must vote to=20 initiate legal action.=20 Keese's recommended approval did take into account several city concerns=20 regarding landscaping. The CalPeak plant would be built near the entrance o= f=20 a planned high-tech business park and city officials were worried the=20 plant's appearance might hinder the ability to attract high-quality tenants= =20 to the park.=20 Mayor Lori Holt Pfeiler said she was not surprised by the commission's=20 recommendation.=20 I expected they would want to approve the project and that's why it was= =20 important for the city to weigh in with conditions we have in this=20 community Pfeiler said.=20 Rising energy prices threaten Poway troupe=20 By Brian E. Clark=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 POWAY -- Rising electricity rates may extinguish the stage lights this summ= er=20 for the Poway Performing Arts Company.=20 I'm afraid that if SDG&E gets the price increase it's asking for -- from 6= .5=20 cents per kilowatt-hour to 8.9 cents -- that we'll go under said Kathy=20 McCafferty spokeswoman for the nonprofit theater.=20 The volunteer organization produces its plays in a building at a Poway Road= =20 shopping center. It held three fund-raising performances over the weekend= =20 but officials were uncertain yesterday how much money was raised.=20 The group is not affiliated with the Poway Performing Arts Center and has= =20 been in business for 20 years.=20 McCafferty said the group built up a $2000 surplus last summer before ener= gy=20 prices began to surge.=20 That $2000 was a big reserve for us she said. It seemed like a ton of= =20 money but boy it went fast. And we're really energy-dependent. Our light= s=20 use a lot of power. And we're in Poway on the second floor of our building.= =20 It gets hot here and we have to use air conditioning.=20 But McCafferty acknowledged that the cost of power isn't the group's only= =20 problem.=20 In a recent letter to backers President Nan Katona said the organization= =20 also needs new blood to keep operating.=20 The truth is that lack of funding is just a symptom of the deeper problem= =20 which is lack of community support she wrote. Ironically audiences and= =20 reviewers recognize the Poway Performing Arts Company as one of the premier= =20 community arts theaters in San Diego.=20 Katona said some new volunteers had stepped forward to take leadership role= s=20 in the theater company since she wrote her letter last month. But she said= =20 rising electricity prices could still bring the group down.=20 If our energy bills double or triple we could be in dire straits she=20 said. It could push us over the edge financially.=20 McCafferty said it would be difficult for the theater to cut costs.=20 We can't run a much leaner operation she said. If our power prices go u= p=20 again we may still be forced out of business.=20 The theater is at 13250 Poway Road in the Lively Shopping Center. For more= =20 information call (858) 679-8085.=20 Fair to use generators for midway attractions=20 By Michael Burge=20 UNION-TRIBUNE STAFF WRITER=20 June 6 2001=20 DEL MAR -- The Del Mar Fair will generate its own electricity for thrill=20 rides on the midway this year instead of using energy from SDG&E.=20 In case there are planned or unplanned outages we still will be operating= =20 fairgrounds General Manager Timothy J. Fennell said.=20 Fennell decided to put the midway on generators because he didn't want the= =20 fairgrounds pulling power from the grid while county residents are coping= =20 with rolling blackouts at home and at work he said.=20 And the fair does not want to take a chance that a rolling blackout will=20 leave some people stranded in rides high above the grounds forcing an=20 evacuation.=20 The fairgrounds has been told it is exempt from rolling blackouts but rath= er=20 than take such a risk it will rent 13 diesel-fuel generators and produce=20 electricity on the midway. The rest of the fairgrounds will use power from= =20 San Diego Gas & Electric Co.=20 Fairgrounds operations manager Larry Baumann estimated it would cost the=20 fairgrounds $20000 more to generate its own electricity than to buy it fro= m=20 SDG&E.=20 Midway manager Donna Ruhm said it will be worth it.=20 Rides that require evacuation have to have backup power and they do Ruhm= =20 said. Now our service won't be interrupted.=20 It is not unusual for carnivals to generate their own power and the=20 fairgrounds has done so in the past. Fair officials removed the generators = 10=20 to 15 years ago to reduce noise on the midway.=20 The fair opens June 15 and ends July 4.=20 While the rest of the fairgrounds is on the SDG&E grid Baumann said backup= =20 generators can kick in during a typical 60-or 90-minute blackout allowing= =20 the fair to operate without serious difficulty. Those generators are not=20 linked to the midway.=20 All the generators are licensed by the state and meet emission standards= =20 fair officials said so they do not expect the noise and odor to be=20 excessive.=20 The fairgrounds is taking the precaution of providing its own power despite= =20 the fact that it probably will not go dark during a rolling blackout.=20 SDG&E has assured me that .?.?. the fairgrounds and the racetrack will not= =20 be on the curtailment (blackout) list during the fair and the races said= =20 Del Mar Fire Chief Jack Gosney.=20 The Del Mar Thoroughbred racing season begins July 18 and ends Sept. 5.=20 Gosney said SDG&E told him earlier this year that the fairgrounds was not= =20 subject to a forced outage because it shared a circuit with the Del Mar Fir= e=20 Station which is a 911 dispatch center and exempt from a blackout. But he= =20 said recent research showed that the fairgrounds is on a separate circuit.= =20 Nonetheless Gosney said SDG&E is exempting the fairgrounds and racetrack= =20 during the busy summer season.=20 The fairgrounds paid $137152.95 for its electricity usage from March 12 to= =20 April 10. It paid $51845.39 for electricity during the same period last ye= ar. ?=20 Wednesday June 6 2001=20 'Hi My Name Isn't Justice Honey' and Shame on Lockyer=20 By TOM G. PALMER ?????Here's what California Atty. Gen. Bill Lockyer said at a press=20 conference about Enron Corp. Chairman Kenneth Lay: I would love to=20 personally escort Lay to an 8-by-10 cell that he could share with a tattooe= d=20 dude who says 'Hi my name is Spike honey.'=20 ?????Here's why Lockyer should be removed from his office of public trust:= =20 First because as the chief law enforcement officer of the largest state in= =20 the nation he not only has admitted that rape is a regular feature of the= =20 state's prison system but also that he considers rape a part of the=20 punishment he can inflict on others.=20 ?????Second because he has publicly stated that he would like to personall= y=20 arrange the rape of a Texas businessman who has not even been charged with= =20 any illegal behavior.=20 ?????Lockyer's remarks reveal him to be an authoritarian thug someone whol= ly=20 unsuited to holding an office of public trust.=20 ?????But his remarks do have one positive merit: They tell us what criminal= =20 penalties really entail.=20 ?????Contrary to some depictions of prisons as country clubs they are=20 violent and terrible places. More and more politicians propose criminal=20 sanctions for more and more alleged misdeeds and as a result ever more kin= ds=20 of behavior are sanctioned by criminal penalties perhaps now even selling= =20 electricity. Those found guilty of such crimes are put into cages where th= ey=20 are deprived of their liberty and dignity and as Lockyer so clearly=20 acknowledged raped and brutalized. What's worse Lockyer has indicated tha= t=20 he believes that rape is an appropriate part of the system of punishments h= e=20 administers.=20 ?????Should it matter that Lay is a businessman? Imagine the outcry if the= =20 head of Enron were female. What would Lockyer's fellow Democrats have said = to=20 that?=20 ?????Should it matter that Lay is chairman of an electricity generator? Doe= s=20 the nature of his business justify threats to escort him to his own rape?= =20 Lockyer told the Los Angeles Times that he had singled out Enron's chairman= =20 because the Houston-based company is the world's largest energy trader.=20 ?????So apparently singling out a man for a heinous threat is OK because he= 's=20 the chairman of the world's largest energy trading company. That's accordin= g=20 to the man who as a state senator sponsored California's 1984 hate-crimes= =20 law. Evidently the crusader against intimidation on the basis of race=20 religion and sexual orientation feels no hesitation at all about intimidati= ng=20 someone and threatening him with the brutal use of physical force simply=20 because he heads the world's largest energy trading company.=20 ?????Lockyer and Gov. Gray Davis seem to think that the best way to keep th= e=20 lights on is to threaten electricity producers with brute force rather tha= n=20 to offer to pay competitive rates in competitive markets. Are energy=20 producers to blame for California's energy problems? No. Bad policies=20 including rigid controls on retail prices of electricity are the cause of= =20 the problem not the people who generate energy. Scapegoating producers and= =20 threatening them with violence is an old ploy of authoritarians. California= ns=20 should not stand for it.=20 ?????An Enron spokesman said that Lockyer's chilling stated desire to arran= ge=20 the rape of Lay does not merit a response. The spokesman is wrong. Lockyer'= s=20 remarks merit public disgrace and removal from office. After all rape is n= ot=20 a form of legal justice in America--is it?=20 - - - Tom G. Palmer Is a Senior Fellow at the Cato Institute in Washington. E-mai= l:=20 Palmert@cato.org Copyright 2001 Los Angeles Times=20 California Metro Desk=20 U.S. Probes Alleged Pact Not to Build New Plants Power: Justice officials= =20 focus on Southland operations of two firms which deny wrongdoing. MYRON LEVIN NANCY RIVERA BROOKS ?=20 06/06/2001=20 Los Angeles Times=20 Home Edition=20 Page B-1=20 Copyright 2001 / The Times Mirror Company=20 The U.S. Department of Justice has launched an investigation into whether t= wo=20 companies that control a large swath of Southern California 's electricity= =20 supply agreed to limit power plant construction potentially hindering=20 crucial energy production according to federal records and interviews.=20 The civil antitrust probe of Williams Energy Services and AES Southland=20 represents the Justice Department's first foray into the activities of ener= gy=20 suppliers who have reaped huge profits in California 's price-shocked marke= t.=20 AES disclosed the investigation which began last month in a filing with t= he=20 Securities and Exchange Commission on Tuesday. In its papers AES said the= =20 Justice Department is focusing on whether its agreement with Williams could= =20 constrain future power plant construction in Southern California .=20 The investigation comes at a time when the state is scrambling to get new= =20 generators built and running to avoid blackouts and economic problems.=20 The government alleges that AES and Williams agreed to limit the expansion = or=20 construction of new power plants near three facilities purchased by AES in= =20 1998 from Southern California Edison under the state's new deregulation pla= n.=20 The plants--in Long Beach Huntington Beach and Redondo Beach--are owned by= =20 AES but the electricity is sold by Williams. Under a 3-year-old deal know= n=20 as a tolling agreement Williams essentially rents out the capacity of the= =20 plants for annual payments to AES. Williams supplies natural gas to fire th= e=20 plants and sells the electricity under long-term contracts and in the costl= y=20 spot market.=20 Williams and AES have similar tolling agreements at plants in Pennsylvania= =20 and New Jersey. However AES spokesman Aaron Thomas said the Justice=20 Department's investigative requests have focused only on agreements between= =20 Williams and AES in Southern California .=20 Thomas would say only that the agreement at the center of the investigation= =20 is simply a delineation of how expansion or repowerings are done at the=20 facilities.=20 The three plants have a combined capacity of more than 3900 megawatts=20 enough to supply about 3 million homes. This summer AES is bringing anothe= r=20 450 megawatts on line by reactivating two mothballed generators in Huntingt= on=20 Beach.=20 Paula Hall-Collins a spokeswoman for Tulsa-based Williams Cos. said she= =20 believes that the investigation is unrelated to a recent inquiry by the=20 Federal Energy Regulatory Commission into whether AES and Williams=20 unnecessarily shut down plants to jack up prices. A portion of that=20 investigation was settled in April when Williams without admitting any=20 wrongdoing agreed to pay about $8 million.=20 We've always maintained that we've operated within the law and we're=20 certain the investigation by the DOJ will find we are operating legally= =20 Hall-Collins said.=20 Williams and AES are among the power plant owners and marketers that have= =20 been lambasted by Gov. Gray Davis because of gold-plated electricity prices= =20 that have pushed the state's biggest utilities to the edge of ruin and are= =20 steadily draining the state's budget surplus.=20 State officials are asking FERC to revoke the rights of AES and Williams to= =20 sell electricity at whatever price the market will bear. That right was=20 granted for three years beginning in 1998 by federal regulators when=20 California 's $28-billion electricity market was opened to competition.=20 Under that plan the rights of AES and Williams to sell into the market are= =20 the first to come up for renewal.=20 AES Southland and Williams Energy Services are both arms of large energy=20 companies--AES Corp. of Arlington Va. and Williams Cos. of Tulsa Okla. California Metro Desk=20 Natural Gas Power Prices Drop Sharply Energy: More conservation mild=20 weather are among factors keeping costs down experts say. RICARDO ALONSO-ZALDIVAR NANCY VOGEL ?=20 06/06/2001=20 Los Angeles Times=20 Home Edition=20 Page B-1=20 Copyright 2001 / The Times Mirror Company=20 WASHINGTON -- The wholesale prices of electricity and natural gas in=20 California have fallen sharply in recent weeks and experts said Tuesday th= at=20 the relief could be the harbinger of an energy turnaround.=20 Or it may be just a blip.=20 In the last couple of weeks California power prices have plunged to the=20 lowest levels since April 2000 traders say with electricity selling on so= me=20 days for less than $100 per megawatt-hour.=20 At night when demand slackens power sometimes sells for less than $20 per= =20 megawatt-hour. That is reminiscent of the days before prices went haywire= =20 last summer.=20 It is a drastically different scenario than the $500 to $800 the state paid= =20 during a spate of hot weather last month.=20 Meanwhile wholesale natural gas prices at a bellwether pipeline junction o= n=20 the Southern California -Arizona border dipped last week to their lowest=20 levels since November according to a publication that tracks the industry.= =20 Separately Southern California Gas Co. and Pacific Gas & Electric Co.=20 reported June rate cuts for their residential gas customers of 16% and 38%= =20 respectively.=20 Experts credited a combination of conservation mild weather a burst of=20 increased hydroelectric generation and lower natural gas prices for the dro= p=20 in electricity costs.=20 Conservation is starting to worry the generators which is nice to see= =20 said Severin Borenstein director of the University of California Energy=20 Institute in Berkeley. Californians used 11% less energy last month than in= =20 May 2000 according to the state Energy Commission.=20 I'm worried that if we don't push harder on conservation [prices] won't= =20 stay down Borenstein added.=20 On the natural gas side experts said the price decline is due to replenish= ed=20 storage within California a nationwide drop in the cost of the fuel and= =20 easing demand from power plants.=20 The number of shippers competing to get natural gas to the state has also= =20 increased with the expiration of a controversial contract on the El Paso= =20 pipeline system last week.=20 But economists were reluctant to make sweeping predictions based on the=20 latest indicators.=20 It's hard to draw specific conclusions said Bruce Henning who tracks th= e=20 natural gas markets for Energy and Environmental Analysis Inc. an Arlingto= n=20 Va. consulting firm.=20 How the summer turns out depends on the weather in the state Henning said= =20 adding The weather represents the balance in the Southern California=20 market.=20 Natural gas fuels most California power plants. With wholesale prices=20 recently averaging three to four times the rates charged elsewhere in the= =20 country state and federal officials have despaired of chances for=20 controlling electricity costs.=20 Last Friday however the daily price for immediate delivery of natural gas= =20 in Topock Ariz. a pipeline junction near the California border dipped to= =20 $7.85 per million British thermal units.=20 According to Natural Gas Week it was the first time since mid-November tha= t=20 the price at that location had fallen below $8 per million BTUs. One millio= n=20 BTUs is what a typical Southern California home uses in five or six days.= =20 Considered a bellwether for other pipeline systems serving California the= =20 Topock price reached a record $56.54 per million BTUs on Dec. 8. It stood a= t=20 $9.36 per million BTUs at the close of business Tuesday still below recent= =20 weekly averages.=20 Other industry publications have also picked up signals of price declines.= =20 Platts the energy information division of McGraw-Hill Cos. reported Tuesd= ay=20 that the price for monthly gas delivery contracts to California fell 22% in= =20 June following a nationwide trend.=20 But Henning said the drop in California prices is attributable to both lowe= r=20 prices around the country and a decline in the high markups for shipping ga= s=20 to California . Those markups which far exceed the cost of transporting ga= s=20 have drawn the attention of state and federal investigators.=20 Henning said the markups are declining as depleted storage levels in=20 California are replenished. Storage levels have been filling very rapidly= =20 and that fact is reflected in prices coming down he said.=20 The link between natural gas and electricity prices is a hotly debated=20 subject. Some experts say high-priced natural gas is driving up the cost of= =20 electricity . Others believe that record prices for power are raising the= =20 prices that generators are willing to pay for their fuel.=20 Electricity prices that range from $20 to $200 per megawatt-hour--instead o= f=20 the $150 to $500 per megawatt-hour paid in recent months--are great news fo= r=20 Gov. Gray Davis.=20 Average daily power prices in California for transactions through the=20 Automated Power Exchange have dropped from $149 per megawatt-hour last Frid= ay=20 to $110 per megawatt-hour Tuesday. The exchange is a private company that= =20 brings together electricity buyers and sellers and accounts for less than 1= 0%=20 of the state's market.=20 Davis spokesman Steve Maviglio said Tuesday that average daily power=20 purchases by the state have recently dipped below $50 million.=20 The state has sometimes had to pay more than $100 million a day since it=20 started buying power in January through the Department of Water Resources.= =20 The state stepped in because California 's two biggest utilities became too= =20 financially crippled to withstand the prices being charged by generators.= =20 Davis' plan to pay for past and future energy purchases with a $12.4-billio= n=20 bond issue hinges on an assumption that power prices will be driven down th= is=20 summer through long-term contracts conservation and the construction of ne= w=20 power plants.=20 UC Berkeley's Borenstein said conservation efforts have not gone far enough= .=20 You walk into most buildings and you still need a sweater he said. That= =20 ain't the way to hit the target.=20 If Californians conserved an additional 10% off their peak usage on hot=20 afternoons he said we could really break the backs of the generators we= =20 could really collapse the price.=20 Prices tend to skyrocket in California 's electricity market on hot=20 afternoons when demand soars and grid operators must scramble to purchase= =20 enough electricity . Cool weather which reduces demand for air conditionin= g=20 and conservation help keep the state from reaching such crisis situations.= =20 Borenstein said he believes generators are also asking less money for their= =20 electricity in part because of a federal order that took effect last month.= =20 The order limits the price power plant owners can charge when California 's= =20 supplies are strained.=20 Power sellers say there are more fundamental forces at work.=20 There's more supply relative to demand which is softening prices said= =20 Gary Ackerman executive director of the Western Power Trading Forum. The= =20 market is working and it's providing cheaper wholesale power more quickly= =20 than any regulatory scheme could ever do.=20 *=20 Times staff writer Dan Morain in Sacramento contributed to this story.=20 RELATED STORY=20 PG&E wins: The utility averted a $1-billion bill for power buys. B6=20 (BEGIN TEXT OF INFOBOX / INFOGRAPHIC)=20 A Blip or a Trend?=20 Daily natural gas prices at the California border with Arizona--considered = a=20 bellwether of the state's costs--have been declining in the last two weeks.= =20 *=20 Natural gas price per 1 million Btu=20 $9.36=20 Source: Natural Gas Week California Metro Desk=20 The State Utility Averts $1 Billion in Costs Courts: PG&E and Cal-ISO agree= =20 to recognize Department of Water Resources as purchaser of the power. TIM REITERMAN ?=20 06/06/2001=20 Los Angeles Times=20 Home Edition=20 Page B-6=20 Copyright 2001 / The Times Mirror Company=20 SAN FRANCISCO -- Pacific Gas & Electric Co. and the state's power grid=20 operator reached an agreement Tuesday that insulated PG&E at least=20 temporarily from more than $1 billion in power purchases the state made for= =20 its customers.=20 The California Independent System Operator sent $1.26 billion in invoices t= o=20 the utility for power purchases by the state Department of Water Resources= =20 for PG&E customers from January through March.=20 But the utility contended in Bankruptcy Court proceedings that it was not= =20 liable for such purchases and that continued purchases would cause annual= =20 losses of $4 billion.=20 After arguments before Judge Dennis Montali PG&E and Cal-ISO agreed that t= he=20 Department of Water Resources not PG&E purchased the power. Cal-ISO had= =20 argued that it was making the purchases on PG&E's behalf.=20 PG&E wants to be a utility and have obligations to serve customers but th= ey=20 don't want to pay for it Cal-ISO general counsel Charles Robinson said=20 later.=20 If PG&E refuses to pay the invoices Robinson said Cal-ISO will send the= =20 bills to the Department of Water Resources and officials there can decide= =20 whether to pursue claims in Bankruptcy Court. A spokesman for department= =20 which has authorization to sell $13 billion in bonds for power purchases= =20 said the agency will have no comment until the matter can be studied.=20 State agencies have stayed out of the bankruptcy proceedings hoping to=20 preserve their immunity from suits in federal court.=20 The agreement will be submitted for Montali's approval Monday but the judg= e=20 said it would not be binding on the department because no one represented t= he=20 agency in court.=20 PG&E's own production and contracts provide the majority of the power for i= ts=20 customers. But state legislation adopted this year allows the department to= =20 secure power contracts to serve customers of ailing utilities. When a=20 shortage threatens the power grid the department purchases additional powe= r=20 through Cal-ISO on the spot electricity market.=20 PG&E filed for Chapter 11 protection from creditors on April 6 saying it w= as=20 $9 billion in debt.=20 Dramatic drop in cost of electricity=20 LOWER BILLS: Cheaper fuel milder weather credited=20 David Lazarus Chronicle Staff Writer Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL: .DTL=20 California electricity prices have plunged unexpectedly to their lowest lev= el=20 in more than a year partly as the result of a simultaneous drop in prices= =20 for natural gas which fuels most power plants.=20 Make no mistake: Gas and electricity prices could surge upward again in=20 months ahead.=20 But for the first time since California's energy markets went haywire last= =20 summer industry experts are beginning to ask whether the state finally may= =20 have turned a corner in its battle with runaway power costs.=20 California is not yet out of the woods said Kelley Doolan who tracks=20 natural gas prices for energy market researcher Platts. But this is a very= =20 significant decrease in costs.=20 Along with lower gas prices the decline in electricity costs was attribute= d=20 by state and industry officials to milder weather which reduces demand for= =20 power. They also credited recent conservation efforts by consumers and=20 better-than-expected runoff at dams for hydroelectric plants.=20 Gary Ackerman executive director of the Western Power Trading Forum an=20 energy-industry association said these factors came together to produce th= e=20 lowest wholesale electricity prices since April 2000.=20 Electricity on the spot market could have been purchased yesterday for as= =20 little as $50 per megawatt hour he noted compared with more than $500=20 earlier this year.=20 If the weather stays this way we could have reasonable prices all summer= =20 Ackerman said. We may also have fewer blackouts.=20 It is tempting for Californians to be suspicious of virtually any swing in= =20 energy prices. If power companies manipulated prices on the way up as=20 critics have alleged might they not be up to some trick as prices head in= =20 the opposite direction?=20 Nettie Hoge executive director of The Utility Reform Network in San=20 Francisco speculated that generators are allowing electricity prices to fa= ll=20 so they can discourage federal regulators from taking a more active role in= =20 the dysfunctional California market.=20 They're trying to take the heat off she said.=20 Others cautioned that the lower prices may be nothing more than a statistic= al=20 blip.=20 This was just one month's decline said Michael Shames executive directo= r=20 of the Utility Consumers' Action Network in San Diego. We really have to s= ee=20 how this plays out in the future.=20 Steve Maviglio a spokesman for Gov. Gray Davis said the governor was very= =20 encouraged by the lower energy prices. Davis announced Sunday that=20 California's power use was down 11 percent last month from a year before.= =20 We're not there yet Maviglio said of whether an end to the state's power= =20 woes is in sight. But the trend is pointing in the right direction.=20 WHITE ELEPHANT Yet this sudden drop in energy prices does have a dark side: California cou= ld=20 end up with a huge white elephant after spending about $40 billion in publi= c=20 funds on long-term power contracts.=20 The logic behind the contracts which are at an average price of $69 per=20 megawatt hour over 10 years is that the state expected to pay below-market= =20 rates for electricity for a number of years before prices came down and=20 California found itself paying above-market rates.=20 If current trends continue though California will find itself paying=20 consistently above-market rates much sooner than expected making the long-= =20 term contracts a sweet deal for the same power companies that profited so= =20 handsomely during the state's darkest hours.=20 The contracts look really ugly right now said Shames at the Utility=20 Consumers' Action Network. They may be way overpriced.=20 Maviglio the governor's spokesman said it is too early to conclude that t= he=20 state did poorly negotiating dozens of long-term power contracts.=20 No one has a crystal ball on this he said.=20 CUSTOMERS' BILLS TO DROP In any case Pacific Gas and Electric Co. said yesterday that customers'=20 average gas bills will drop 26 percent this month to $26 and should stay ne= ar=20 that level all summer.=20 Platts which monitors average monthly spot prices found that the wholesal= e=20 price of gas at the California-Oregon border has tumbled nearly 42 percent= =20 since the beginning of May -- from $9.98 per million British thermal units = to=20 $5.81.=20 The wholesale gas price at the California-Arizona border fell 45 percent= =20 from $11.91 to $6.50. This compares with a 25 percent monthly decline in=20 average natural gas prices nationwide.=20 However California gas prices are still about 50 percent higher than they= =20 were a year ago whereas national prices are now below year-ago levels for= =20 the first time since last spring.=20 While cooler weather nationwide helped push gas prices down overall Doolan= =20 attributed the especially steep drop in California to a commensurate surge = in=20 prices last month related to fears of a long hot summer of rolling=20 blackouts.=20 You had state officials all but promising rolling blackouts this summer = he=20 said. That created enormous demand for electricity generation.=20 What has changed is that we've had weeks of mild weather Doolan observed= .=20 The electricity generators have not come out of the woodwork buying up all= =20 the gas.=20 This allowed utilities like PG&E to beef up gas inventories which eased=20 demand and resulted in substantially lower prices he said.=20 'BACK ON TRACK'=20 We're back on track to be completely full for winter said Staci Homrig = a=20 PG&E spokeswoman. That's a very good thing.=20 Gas prices historically dip in the spring and summer and then rise again in= =20 the winter. PG&E is forecasting that customers' average gas bills could ris= e=20 to as high as $75 in December if current trends continue.=20 However the precipitous drop in gas prices in recent weeks suggests that= =20 California's unusually high costs at last may be abating.=20 Individual power companies so far are reluctant to speculate on whether the= =20 drop in gas prices will have a lasting effect on electricity costs.=20 E-mail David Lazarus at dlazarus@sfchronicle.com.=20 2001 San Francisco Chronicle ? Page?A - 1=20 San Jose council gives green light to generating plant=20 VOTE REVERSAL: Officials pressured to OK project=20 Marshall Wilson Chronicle Staff Writer Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL: .DTL=20 In a clear sign that the political landscape has shifted because of the=20 state's power crisis the San Jose City Council gave a green light yesterda= y=20 for construction of a generating plant it had unanimously opposed in=20 November.=20 Yesterday's 10-to-1 vote came after months of mounting pressure for the cit= y=20 to reverse course and approve the controversial 600-megawatt Calpine plant = at=20 Coyote Valley.=20 That pressure -- increased by the occasional rolling blackout -- has come= =20 from nearly every corner of the state from elected officials to high-tech= =20 businesses and labor unions worried the power crisis will drain away jobs= =20 ruin the economy and lead to voter backlash over skyrocketing energy bills.= =20 Even the local branch of the NAACP and environmentalists pushed the council= =20 to approve the Calpine proposal -- despite overwhelming opposition from the= =20 plant's neighbors.=20 Council members did not hide their disdain yesterday for being forced to=20 reconsider their opposition to the so-called Metcalf Energy Center.=20 I'm holding my nose to vote for this thing said Councilwoman Linda=20 LeZotte.=20 I'm just as unhappy as everybody else Vice Mayor George Shirakawa said. = I=20 feel like no matter what happens we can't win.=20 GOVERNOR OFFERED HIS SUPPORT After the council's solid opposition in November Calpine appealed to the= =20 California Energy Commission which has the final say. The controversial=20 plant then received a huge boost in April when Gov. Gray Davis threw his=20 support behind it.=20 San Jose officials conceded yesterday that the energy commission was likely= =20 to override their opposition and grant approval within a few weeks. They sa= id=20 the commission's likely approval was stripping them of their power to decid= e=20 local land-use issues.=20 What I think has happened . . . is the governor and the Legislature at the= =20 state level have taken this out of our hands said Councilwoman Pat Dando.= =20 I don't think there's any chance at all the California Energy Commission i= s=20 going to turn down the Metcalf Energy Center Councilman Chuck Reed said.= =20 CONSTRUCTION MAY BEGIN SOON If given the go-ahead by the state Calpine could begin construction as ear= ly=20 as next month. The natural-gas fired plant would generate electricity by=20 mid-2003 company spokesman Kenneth Arbeu said.=20 At the urging of Mayor Ron Gonzales the council yesterday approved a new= =20 cooperation agreement with Calpine. The vote with Councilman Forrest=20 Williams casting the lone nay is preliminary while a final vote that is=20 scheduled for June 26.=20 Gonzales argued that the agreement did not amount to a flip-flop because it= =20 differs from what Calpine proposed in November.=20 The agreement approved by the council calls for increased monitoring of air= =20 pollution the use of treated wastewater to cool the plant which will redu= ce=20 discharges into San Francisco Bay and a $6.5 million community benefits= =20 package with the bulk going toward parkland acquisition Gonzales said.=20 This council has not changed its decision he said. What we've done is= =20 change the facility.=20 Critics incensed that the city was buckling to outside pressure vowed to= =20 change the council at the next election.=20 CONCERNS OVER HEALTH RISKS They raised concerns that boiled wastewater steam wafting over their homes= =20 from Calpine's plant could pose health risks. Jona Denz-Hamilton said more= =20 controls are needed to ensure the safety of neighbors like herself and her= =20 family and argued that new cleaner-burning technologies should be installe= d=20 at the plant.=20 It's too great of a risk she said.=20 Other critics said the state's energy woes will be solved and largely=20 forgotten by the time the plant opens in two years while the Santa Teresa= =20 neighborhood will be stuck with pollution for decades.=20 Approval seemed a given at the start of the more than three-hour hearing.= =20 Much of the afternoon's debate focused around plans to extend a pipeline fo= r=20 treated wastewater to the new plant.=20 Critics said Calpine was receiving a sweet deal by paying only $10 million = of=20 the $50 million cost of extending the pipeline. Several council members ask= ed=20 for a more detailed report into the financing plan before the final vote is= =20 taken June 26.=20 Chronicle staff writer Bill Workman contributed to this report.=20 E-mail Marshall Wilson at 2001 San Francisco Chronicle ? Page?A - 1=20 Developments in California's energy crisis=20 Wednesday June 6 2001=20 2001 Associated Press=20 URL:=20 tate1 053EDT0177.DTL=20 (06-06) 07:53 PDT (AP) --=20 Developments in California's energy crisis:=20 WEDNESDAY: * No power alerts Wednesday as reserves stay above 7 percent.=20 TUESDAY: * Gov. Gray Davis' administration says the state's electricity costs are=20 dropping substantially even as it asks state legislators for another=20 half-billion dollars for power purchases. That brings to $8.2 billion the= =20 amount the state is paying for electricity on behalf of three financially= =20 strapped utilities.=20 Spokesman Steve Maviglio says the cost to the state treasury has dropped in= =20 the last few weeks well below the $50 million dollars the state had been=20 paying on a typical day. He credits cooler weather conservation more powe= r=20 plants online and more long-term contracts with helping drive down the cost= .=20 * A state Senate committee agrees to issue subpoenas to eight out-of-state= =20 electricity generators demanding they hand over documents on bidding prici= ng=20 and other aspects of power sales in the state. The subpoenas would help a= =20 special Senate committee's investigation into whether the companies are=20 illegally profiteering from California's power crisis. The committee's=20 chairman says he expects the companies to resist setting the stage for a= =20 court battle.=20 * Oil giant Chevron threatens to cut gasoline production in California unle= ss=20 it is exempted from rolling blackouts. The San Francisco Chronicle says it= =20 has a copy of a letter sent Friday from Chevron chairman David O'Reilly to= =20 Davis. In the letter O'Reilly says the company will scale back gasoline=20 production at its Richmond and El Segundo plants operating those refinerie= s=20 only with power produced by generators at the sites.=20 * New U.S. Senate Majority Leader Tom Daschle D-S.D. supports Federal=20 Energy Regulatory Commission price caps. FERC must meet its obligation und= er=20 current law to ensure 'just and reasonable' prices for wholesale electricit= y=20 in the state of California. FERC has failed to meet this responsibility...= =20 Daschle says in a letter to Davis. Unless FERC acts soon Senator (Dianne)= =20 Feinstein's legislation should be taken up and passed to direct FERC to tak= e=20 action. I will support all necessary efforts to meet that goal.=20 * House Subcommittee on Energy Policy Natural Resources and Regulatory=20 Affairs Chairman Doug Ose R-Sacramento cites Electric Utility Week figure= s=20 that FERC's limited price caps helped cut California's power rates from $30= 0=20 to $108.47 per megawatt hour within an hour after taking effect last week.= =20 While he says more information is needed Ose uses the figures to tout his= =20 pending bill to impose the price caps around the clock and to all Western= =20 states.=20 * Pacific Gas & Electric Co. asks U.S. Bankruptcy Judge Dennis Montali to= =20 stop the manager of the state's power grid from buying electricity for=20 utility or charging it for any electricity bought after the utility filed f= or=20 bankruptcy on April 6. Separately the utility's creditors support its=20 request to the bankruptcy court to pay out $17.5 million in bonuses to the= =20 management team that guided the utility into bankruptcy.=20 * California Department of Water Resources reveals it is negotiating with= =20 municipal utilities to buy their surplus power. Department spokesman Oscar= =20 Hidalgo says talks began last week but no agreements are imminent.=20 * State lawmakers criticize a $3 million lobbying campaign by Southern=20 California Edison. The utility is telephoning shareholders to describe the= =20 dire consequences if the utility goes bankrupt. The call is then transferre= d=20 to the state Capitol so shareholders can implore lawmakers to support a=20 controversial plan to help the utility. Legislators and their staffers say= =20 the shareholders often are confused and scared their investments will be=20 degraded or wiped out.=20 * State Treasurer Phil Angelides joins an advocacy group for the poor in=20 urging the state's huge pension funds to use their economic power to levera= ge=20 power companies. The Pacific Institute for Community Organization says the= =20 two pension funds own at least $1.2 billion in stocks and bonds in most of= =20 the firms that sell electricity to California.=20 * The Assembly by a 69-0 vote approves a bill to spend $10 million on=20 environmental studies needed before Path 15 the inadequate transmission-li= ne=20 group between Northern and Southern California can be expanded. The bill= =20 moves to the Senate.=20 * Pacific Gas and Electric announces a decrease in natural gas prices down= =20 38 percent from May's rates and 66 percent lower than January's rates. The= =20 decline will bring the average residential gas bill to $26 when it goes int= o=20 effect June 7. Market analysts predict the rates will remain stable until= =20 December when demand is expected to increase with winter heating loads.=20 * No power alerts Tuesday as electricity reserves stay above 7 percent.=20 * Shares of Edison International closed at $10.05 down 53 cents. PG&E Corp= .=20 closed at $11.25 down 15 cents. Sempra Energy the parent company of San= =20 Diego Gas & Electric closes at $26.91 down 43 cents.=20 WHAT'S NEXT: * Davis' representatives continue negotiating with Sempra the parent compa= ny=20 of San Diego Gas and Electric Co. to buy the utility's transmission lines.= =20 THE PROBLEM: High demand high wholesale energy costs transmission glitches and a tight= =20 supply worsened by scarce hydroelectric power in the Northwest and=20 maintenance at aging California power plants are all factors in California'= s=20 electricity crisis.=20 Edison and PG&E say they've lost nearly $14 billion since June to high=20 wholesale prices the state's electricity deregulation law bars them from=20 passing on to consumers. PG&E saying it hasn't received the help it needs= =20 from regulators or state lawmakers filed for federal bankruptcy protection= =20 April 6.=20 Electricity and natural gas suppliers scared off by the two companies' poo= r=20 credit ratings are refusing to sell to them leading the state in January = to=20 start buying power for the utilities' nearly 9 million residential and=20 business customers. The state is also buying power for a third investor-own= ed=20 utility San Diego Gas & Electric which is in better financial shape than= =20 much larger Edison and PG&E but also struggling with high wholesale power= =20 costs.=20 The Public Utilities Commission has approved average rate increases of 37= =20 percent for the heaviest residential customers and 38 percent for commercia= l=20 customers and hikes of up to 49 percent for industrial customers and 15=20 percent or 20 percent for agricultural customers to help finance the state'= s=20 multibillion-dollar power buys.=20 2001 Associated Press ?=20 California conserves=20 Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL:=20 /06/E D86597.DTL=20 WHEN RAIN fails to fall from the sky Californians know why there is a=20 drought. But when rolling blackouts suddenly appeared in the dead of winter= =20 many of us wondered who was responsible for and who has profited from what= =20 now seems like an artificially created power shortage in the state.=20 Our skepticism proved to be right. Windfall profits were reaped by=20 electricity generators while natural gas importers extracted prices far abo= ve=20 the national average.=20 Timid federal overseers exact only wrist-slap penalties on the offending=20 energy firms. The White House scoffs at temporary controls for a=20 malfunctioning market. California's state government has ended up as the bi= ll=20 payer for the sickly utilities forking over $8 billion to generators. This= =20 number may hit $40 billion by year-end.=20 It's an infuriating tangle. All the more remarkable then that skeptical= =20 Californians have managed within two months to reduce their use of=20 electricity by 11 percent. The public's response to the governor's appeal f= or=20 energy conservation has exceeded expectations. Although many businesses hav= e=20 suffered enormous losses ordinary people have made relatively painless=20 sacrifices. People turned off their lights purchased energy-efficient=20 lightbulbs used air conditioning less and shut off their computers when no= t=20 in use.=20 Despite this remarkable civic compliance we still face an unconscionable= =20 lack of leadership. President Bush seems perfectly willing to allow Texas= =20 power companies to pummel the once-powerful California economy. He repeats = a=20 mantra about creating more supply -- which California is doing with 15 powe= r=20 plants under construction -- while ignoring the outsized sums paid to a=20 handful of energy generators.=20 At the same time Gov. Gray Davis who has given new meaning to the word=20 dithering has failed to make the tough and transparent decisions. He delay= ed=20 an inevitable rise in power rates. Davis also dragged his feet in openly=20 announcing new power contracts that commit California to billions in spendi= ng=20 over the next decade.=20 To Davis' credit he has urged California to conserve by laying out an $800= =20 million plan to cut power use and invest in energy-saving programs. The=20 message is getting out as higher rates take effect this month.=20 Despite a woefully unbalanced market and shortsighted leadership the peopl= e=20 of California have demonstrated that if there is a will there is a way.=20 Now it is time for our leaders to follow the wisdom of their constituents.= =20 2001 San Francisco Chronicle ? Page?A - 20=20 L.A. power customers awash in cheap energy=20 John Wildermuth Chronicle Staff Writer Wednesday June 6 2001=20 2001 San Francisco Chronicle=20 URL:=20 /06/M N133438.DTL=20 Los Angeles -- These are flush times for the city's Department of Water and= =20 Power and the energy executives are loving every minute of it.=20 As are their customers.=20 Private power companies throughout California have been raising rates and= =20 warning customers about a long hot summer filled with blackouts but the= =20 city- owned DWP has been keeping prices stable and the lights on for 1.2=20 million Los Angeles customers.=20 Our customers are being really nice to us said Angelina Galiteva the=20 utility's strategic planning director. They love the DWP.=20 Although Gov. Gray Davis' administration announced that the state had reduc= ed=20 its energy consumption 11 percent from a year ago those in Los Angeles had= =20 cut back less than half that -- and polls show they view the energy situati= on=20 less seriously than other Californians.=20 Public utilities such as Los Angeles water and power have seen their revenu= es=20 increase during the energy crunch because they can sell their excess power = at=20 higher prices than ever before in a market tilted toward sellers.=20 The rest of the state doesn't always feel that same warm glow. Davis has=20 accused the DWP and other California public utilities of putting exorbitant= =20 price tags on the excess electricity they sell to the rest of the energy-= =20 starved state.=20 It's a charge Los Angeles utility executives deny arguing that their exces= s=20 power is sold at cost plus 15 percent which they say is a fair return for= =20 their customers.=20 Without our support a million more homes (elsewhere in California) would= =20 have suffered rolling blackouts which is a powerful message Galiteva sai= d.=20 It wasn't supposed to be this way. When the power industry was deregulated = in=20 the late '90s energy giants like Pacific Gas and Electric Co. and Southern= =20 California Edison were expected to be the big winners. Now PG&E is in=20 bankruptcy and Edison is a short step away.=20 When deregulation came the experts said that the investor-owned utilities= =20 would become lean mean machines that would be better able to operate in th= e=20 new environment Galiteva said. But now public power has shown it can ser= ve=20 customers more efficiently at lower rates.=20 While much of the state worries about electrical supply Los Angeles=20 residents have been saved many of those concerns.=20 In a survey done last month by the Public Policy Institute of California 4= 8=20 percent of the people in the Bay Area thought that electricity cost and=20 availability were the most important issues facing the state. In Los Angele= s=20 however only 33 percent put the energy crunch on top. When questioned abou= t=20 the size of the power problem and the effect it would have on the state's= =20 economy Los Angeles residents were consistently less concerned than people= =20 elsewhere in California.=20 People in Los Angeles have been somewhat isolated from the energy crisis= =20 concluded Mark Baldassare who conducted the survey.=20 That doesn't mean the state's energy problems haven't had an effect. The DW= P=20 has seen a 3 percent to 5 percent reduction in some uses which officials= =20 have dubbed sympathy conservation. The utility also is offering its bigge= st=20 customers financial incentives to cut back on their power use.=20 Our average annual load growth is about 80 megawatts Galiteva said. By= =20 this summer we expect to have saved 40 megawatts through conservation. By= =20 December we expect 60 megawatts in savings.=20 The utility also is making a major attempt to create a conservation ethic= =20 among its customers. DWP's comfortable situation has made it possible to=20 offer them the carrot without the need to show them the stick.=20 Conservation no longer means doing without Galiteva said. Beer can be= =20 just as cold with a superefficient refrigerator. Rooms can be just as brigh= t=20 with superefficient light bulbs.=20 A Green Power program also is promoting the use of renewable energy=20 resources such as solar wind and hydroelectric power. About 75000 custome= rs=20 are paying an extra $3 per month to increase DWP's use of renewable power= =20 sources.=20 We're trying to give our customers a choice and a voice in determining the= =20 mix of power they use Galiteva said. They know they can do (conservation= )=20 now or see it being mandated later.=20 Los Angeles power officials -- and their customers -- know the DWP isn't=20 always going to continue as an island of tranquility in a sea of energy=20 turmoil. The utility's aging gas-fired plants have been affected by the=20 rising price of natural gas. Demand for energy continues to rise. In a deba= te=20 last month both candidates for mayor of Los Angeles agreed that increases = in=20 local power bills are inevitable.=20 But the DWP has been supplying power to Los Angeles since 1916 and its=20 executives believe that the state's deregulation disaster has shown the=20 advantages of the city-owned utility.=20 It's nice to be the lean mean green efficient machine that no one ever= =20 expected us to become Galiteva said.=20 E-mail John Wildermuth at 2001 San Francisco Chronicle ? Page?A - 13=20 PG&E doesn't want to pay for energy to avert blackouts=20 DAVID KRAVETS Associated Press Writer Wednesday June 6 2001=20 2001 Associated Press=20 URL:=20 tate0 306EDT0102.DTL=20 (06-06) 00:06 PDT SAN FRANCISCO (AP) --=20 Pacific Gas & Electric Co. has told a bankruptcy judge it should not have t= o=20 pay for what could amount to billions of dollars in spot-market energy cost= s=20 to avert blackouts.=20 The company's position was one of two developments that emerged Tuesday as= =20 the bankrupt utility tries to cope with fallout from California's power=20 crisis. The other development saw a group of creditors that PG&E owes=20 billions endorse $17.5 million in bonuses for top managers at the utility.= =20 San Francisco-based PG&E filed for bankruptcy protection in April after=20 racking up an $8.9 billion debt which under state law it could not recoup= =20 from customers.=20 Tuesday's court dispute centered on who pays for energy bought at the last= =20 minute to avoid blackouts.=20 PG&E said an April federal regulatory decision requires that electricity ca= n=20 only be sold to those with the ability to pay electricity generators. The= =20 state is the only player with such ability said PG&E attorney Jerome Faulk= =20 who argued that the utility shouldn't have to pay the $330 million in month= ly=20 spot-market energy bills.=20 Judge Dennis Montali said he may craft such an order. But he said the order= =20 would not preclude the state from suing PG&E to recover the cost.=20 In a separate but related development a committee charged with devising a= =20 payment plan for those creditors owed billions by PG&E said it will sign of= f=20 on the utility's plan to pay $17.5 million in bonuses to PG&E's management= =20 team.=20 Attorney Allan Marks who represents the committee said such payments are= =20 normal during large bankruptcy cases. Under the agreement which Montali wi= ll=20 consider at a June 18 hearing the company must quickly produce a debt=20 payment plan that passes judicial muster.=20 The utility said it needs the bonuses for a management retention program.= =20 Marks agreed. While the $17.5 million leaves less for creditors without a= =20 financial incentive PG&E's key top brass may not be willing to cooperate wi= th=20 a payment plan Marks said.=20 The main goal for the creditors' support here is to move the bankruptcy as= =20 quickly and smoothly as possible Marks said.=20 The Utility Reform Network a consumer watchdog group says PG&E is simply= =20 rewarding managers of a failed business effort.=20 They're just showering money on the same people who got them in this mess= =20 said TURN's Mike Florio.=20 The proposed bonuses would come on top of $50 million in bonuses and raises= =20 PG&E awarded just before the April 6 bankruptcy filing.=20 The case is In Re Pacific Gas & Electric Co. 01-30923 DM.=20 2001 Associated Press ?=20 Metcalf plant gets preliminary approval=20 Posted at 12:21 a.m. PDT Wednesday June 6 2001=20 BY MIKE ZAPLER=20 Mercury News=20 As the San Jose City Council approached its 10-1 vote Tuesday to give an=20 initial nod to Calpine's big power plant in South San Jose Councilwoman=20 Linda LeZotte perhaps captured the body's mood best.=20 ``I'm holding my nose to vote for this thing'' she said. ``Without faultin= g=20 the mayor or his staff quite frankly I think this deal stinks.''=20 Caught in what some members called a bind beyond their control the council= =20 gave preliminary approval to an agreement negotiated by Mayor Ron Gonzales= =20 and Calpine on the company's proposed 600-megawatt Metcalf Energy Center.= =20 Councilman Forrest Williams who represents the Santa Teresa neighborhood= =20 near the site cast the lone vote against the deal.=20 The agreement is scheduled to come back before the council for a final vote= =20 on June 26 but Tuesday's vote effectively shifts the battle to the courts= =20 where residents are expected to lodge a lawsuit in one final attempt to blo= ck=20 the plant.=20 Still Councilwoman Pat Dando and some of her colleagues raised questions= =20 about the deal they said they want answered before the final vote. Their=20 issues could be incorporated into the final deal.=20 Many of the concerns focused on a $50 million recycled water pipeline=20 Gonzales agreed to have the city build to accommodate the project $10=20 million of which would be reimbursed by Calpine over 30 years.=20 Pipeline possibility=20 Dando said that a private company Great Oaks Water may be willing to buil= d=20 the pipeline extension itself saving the city the $50 million expense.=20 Officials at Great Oaks were unavailable Tuesday.=20 Council members peppered staff with other questions. Many were alarmed by= =20 claims of the Silicon Valley Toxics Coalition which said that using treate= d=20 sewage water to cool the power plant could allow dangerous chemicals to see= p=20 into drinking water aquifers. An environmental services director said the= =20 recycled water meets federal specifications but that there is no protocol= =20 for testing other chemicals not included in those standards.=20 Councilman Ken Yeager asked why Calpine should be allowed to spread a $3.9= =20 million water connection fee over 10 years -- an arrangement that would=20 mandate an amendment to city law.=20 LeZotte meanwhile said she wants to hold Calpine accountable to install= =20 ammonia-free technology at the plant. Ammonia is highly hazardous and=20 residents say the use of the chemical to clean the plant is among their chi= ef=20 concerns.=20 The agreement requires the company to install technology to reduce or=20 eliminate the use ammonia when it becomes ``technologically and economicall= y=20 feasible.'' LeZotte said she wants a clear definition of ``feasible''=20 included in the deal.=20 Tuesday's vote marked a stark departure from the council's November vote to= =20 deny Metcalf. At the time council members said a power plant was=20 inappropriate for the area and many members said Tuesday that they still= =20 believe that.=20 Bowing to pressure=20 But with Gov. Gray Davis endorsing Metcalf in April and the California Ener= gy=20 Commission widely expected to override the city's denial this month counci= l=20 members said they had no choice but to cut the best deal it could and allow= =20 the project to proceed.=20 That explanation however didn't sit well with residents of the Santa Tere= sa=20 neighborhood adjacent to the Metcalf site one of whom accused Gonzales and= =20 the council of ``switching sides when the opposing team gets too close to t= he=20 goal line.''=20 Contact Mike Zapler at mzapler@sjmercury.com or at (408) 275-0140.=20 Feds probe AES Williams=20 Antitrust investigation looks into allegations of manipulated energy prices= =20 through reduced power-plant construction.=20 June 6 2001=20 By JAMES ROWLEY Bloomberg News=20 WASHINGTON - The U.S. Justice Department opened an antitrust investigation= =20 into California's electricity shortage by probing allegations that AES Corp= .=20 and Williams Energy Services Co. are limiting power-plant expansion to driv= e=20 up prices.=20 AES Corp. the biggest U.S. power-plant developer disclosed the=20 investigation in a filing with the U.S. Securities and Exchange Commission.= =20 The Justice Department is looking into a supply-and-marketing agreement=20 between AES' California power-plant unit and a Williams unit that supplies= =20 natural gas.=20 Williams owner of the second-largest U.S. natural-gas pipeline system als= o=20 markets the power produced by AES' three electricity plants in the state.= =20 The department alleges the agreement limits expansion of generating capacit= y=20 near some AES plants.=20 AES said it was cooperating with the Justice Department investigation whic= h=20 began last month into possible violations of Section 1 of the Sherman=20 Antitrust Act.=20 That provision outlaws any restraint of trade that stifles competition.=20 A shortage of generating capacity in California has led to soaring wholesal= e=20 prices and rolling blackouts and prompted Pacific Gas & Electric the state= 's=20 largest utility to seek bankruptcy protection in April.=20 Aaron Thomas a spokesman for AES based in Arlington Va. said the U.S.= =20 investigation started no more than a couple of weeks ago.=20 Williams spokeswoman Paula Hall-Collins said the Tulsa Okla.-based company= =20 is cooperating.=20 Gina Talamona Justice Department spokeswoman said the agency had no=20 immediate comment.=20 The investigation was opened several weeks after the Federal Energy=20 Regulatory Commission investigated AES plants in Long Beach and Huntington= =20 Beach designated must run under the Federal Power Act did not produce= =20 electricity for 10 days in April and May 2000. Williams agreed to pay the= =20 operator of California's electric grid $8 million to settle allegations tha= t=20 it overcharged for power.=20 FERC charged in March that the companies had a financial incentive to keep= =20 the units out of service to force the California Independent System Operato= r=20 to buy power from AES' plant in Redondo Beach at prices close to the=20 FERC-imposed cap of $750 per megawatt-hour.=20 AES said it was complying with a Justice Department demand for documents=20 about the agreement between its AES Southland LLC unit and Williams Energy= =20 Services Co. AES Southland which operates the three power plants was also= =20 asked to respond to interrogatories the company said.=20 The Williams unit supplies the natural gas to fuel the AES plants and marke= ts=20 the power they produce.=20 AES and Williams jointly produce and sell about 4000 megawatts in Californ= ia=20 -- 6 to 8 percent of the state's power -- enough electricity to light about= 3=20 million typical California homes.=20 AES shares dropped $2.05 to $42.54. Williams Cos. shares dropped $1 to=20 $38.20. Calpine Begins Construction of Peaking Energy Center in Gilroy Calif.=20 June 6 2001=20 SAN JOSE Calif. June 5 /PRNewswire/ via NewsEdge Corporation -=20 Calpine Corporation (NYSE: CPN) the San Jose Calif.-based independent pow= er=20 company today announced that initial construction of 135 megawatts (mw) of= =20 peaking generation capacity will begin during this week adjacent to its=20 existing Gilroy Power Plant in Gilroy Calif. Through an Application for=20 Certification (AFC) filed with the California Energy Commission (CEC) on=20 April 25 2001 Calpine proposed to add three 45-mw simple-cycle gas turbin= e=20 peaking units in the first of a two-phase process. The California Energy=20 Commission approved the project on May 21 2001.=20 Because the required natural gas water and transmission infrastructure=20 exists at our Gilroy plant it is an ideal site for the addition of peaking= =20 generation allowing for rapid installation of needed capacity. The first= =20 three units are expected to begin generating electricity this September= =20 commented Bryan Bertacchi Calpine Vice President - Western Region.=20 Upon completion the two-phase build out the Gilroy Energy Center will be a= =20 270-mw natural gas-fired simple-cycle peaking generation facility located= =20 on approximately 9.5 acres at 1400 Pacheco Pass Highway in Gilroy. Commerci= al=20 operation of Phase One is scheduled for September 2001. An additional three= =20 45-mw gas turbine generators will be installed in Phase Two with full=20 build-out estimated for May 2002. Phase Two requires the filing of an=20 additional application with the CEC and is subject to a four-month review= =20 process.=20 Initial construction will begin this week with site and civil engineering= =20 activities occurring for approximately six weeks at which time the site wil= l=20 be cleared and leveled. Foundation work and the installation of generation= =20 equipment will follow shortly thereafter and commissioning and testing wil= l=20 take place for a two to three week period prior to commercial operation in= =20 September 2001.=20 The Gilroy Energy Center web site has been created to host all information= =20 and updates related to this project. For additional information please vis= it=20 www.gilroypower.com.=20 Calpine Corporation based in San Jose Calif. is dedicated to providing= =20 customers with reliable and competitively priced electricity. Calpine is=20 focused on clean efficient natural gas-fired generation and is the world'= s=20 largest producer of renewable geothermal energy. Calpine has launched the= =20 largest power development program in North America. To date the company ha= s=20 approximately 32200 megawatts of base load capacity and 7200 megawatts of= =20 peaking capacity in operation under construction pending acquisitions and= =20 in announced development in 29 states and Canada. The company was founded i= n=20 1984 and is publicly traded on the New York Stock Exchange under the symbol= =20 CPN. For more information about Calpine visit its Website at=20 www.calpine.com.=20 This news release discusses certain matters that may be considered=20 forward-looking statements within the meaning of Section 27A of the=20 Securities Act of 1933 as amended and Section 21E of the Securities=20 Exchange Act of 1934 as amended including statements regarding the intent= =20 belief or current expectations of Calpine Corporation (the Company) and i= ts=20 management. Prospective investors are cautioned that any such forward-looki= ng=20 statements are not guarantees of future performance and involve a number of= =20 risks and uncertainties that could materially affect actual results such as= =20 but not limited to (i) changes in government regulations including pendin= g=20 changes in California and anticipated deregulation of the electric energy= =20 industry (ii) commercial operations of new plants that may be delayed or= =20 prevented because of various development and construction risks such as a= =20 failure to obtain financing and the necessary permits to operate or the=20 failure of third-party contractors to perform their contractual obligations= =20 (iii) cost estimates are preliminary and actual cost may be higher than=20 estimated (iv) the assurance that the Company will develop additional=20 plants (v) a competitor's development of a lower-cost generating gas-fired= =20 power plant and (vi) the risks associated with marketing and selling power= =20 from power plants in the newly competitive energy market. Prospective=20 investors are also cautioned that the California energy environment remains= =20 uncertain. The Company's management is working closely with a number of=20 parties to resolve the current uncertainty while protecting the Company's= =20 interests. Management believes that a final resolution will not have a=20 material adverse impact on the Company. Prospective investors are also=20 referred to the other risks identified from time to time in the Company's= =20 reports and registration statements filed with the Securities and Exchange= =20 Commission.=20 MAKE YOUR OPINION COUNT - Click Here=20 SOURCE Calpine Corporation=20 CONTACT: media Lisa Poelle ext. 1285 or investors Rick Barraza ext.=20 1125 both of Calpine Corporation 408-995-5115=20 Web site: http://www.gilroypower.com=20 Web site: http://www.calpine.com (CPN)=20 Reliant Urges FERC to Drop or Amend California Price Caps to Avoid Addition= al=20 Shortages and More Blackouts=20 June 6 2001=20 HOUSTON June 5 /PRNewswire/ via NewsEdge Corporation -=20 Reliant Energy (NYSE: REI) filed an emergency motion with the Federal Energ= y=20 Regulatory Commission (FERC) on Monday urging the agency to drop the=20 California price caps first applied May 29 or at a minimum amend them to= =20 reflect the true costs they are attempting to control. The current price=20 caps which send inaccurate market signals are actually decreasing supply= =20 and increasing demand thus worsening an already dire situation.=20 FERC has been publicly dedicated to an open market from the beginning of t= he=20 California power crisis. We encourage FERC to reexamine these price caps an= d=20 continue that dedication said Joe Bob Perkins president and chief=20 operating officer Reliant Energy Wholesale Group. Reliant is committed to= =20 helping keep the lights on in California this summer and wants to ensure th= at=20 if caps must remain part of the picture they actually help increase supply= =20 and fix the problem.=20 Although the price caps were first imposed less than a week ago they have= =20 already begun to damage the market by decreasing supply. The price caps are= =20 creating a myriad of problems:=20 -- Creates Misleading Signals - The price cap methodology is misleading=20 the public on the actual cost of power. Reported dispatch costs in=20 Southern California during emergencies is far below what the actual=20 financial settlements will be under the FERC's final market mitigation=20 order. This confusion results from the proxy price used for=20 dispatch utilizing an extremely distorted blended fuel cost index.=20 This index averages gas costs in northern and southern parts of the=20 state an impossibility in the actual market. This authorizes the=20 California Independent System Operator (ISO) to require that=20 generators dispatch power at reported market clearing prices well=20 below actual cost when back-up generation capacity begins to dip below=20 7.5 percent.=20 -- Depletes Power from Peaking Plants - The price caps distort dispatch=20 signals on peaking plants which in some cases may be run only a few=20 days of the year because of emission regulations. The current FERC=20 price controls encourage the ISO to purchase power from emergency=20 peaking plants before it is really needed even in the absence of a=20 stage three emergency. This depletes supplies that will by law run=20 out when blackout season intensifies later this summer. This power=20 from peaking units should only be purchased when blackouts are=20 imminent -- not in stage one or two emergencies.=20 -- Eliminates Price Signals for Retail Customers - Price caps remove=20 price signals for retail customers. Customers particularly=20 industrial companies which should be encouraged to curtail during=20 shortages are not encouraged to conserve power when dispatched price=20 caps keep prices below the actual cost to produce electricity.=20 -- Discourages Supply from Out-of-State - Suppliers outside of=20 California who are under no legal obligation to dispatch power during=20 an emergency in the state are not encouraged to increase available=20 production when reported market clearing prices are below their cost=20 to produce. During times of emergencies utilities across the Western=20 region are not likely to take on additional risks and costs if they=20 don't believe they will be fully compensated - a situation the current=20 price caps create.=20 MAKE YOUR OPINION COUNT - Click Here=20 SOURCE Reliant Energy=20 CONTACT: Maxine Enciso of Ketchum Public Relations Los Angeles=20 310-444-1303 for Reliant Energy or media Richard Wheatley of Reliant=20 Energy 713-207-5881=20 Photo: NewsCom: AP=20 Archive: http://photoarchive.ap.org PRN Photo Desk 888-776-6555 or=20 212-782-2840=20 Company News On-Call: or fax=20 800-758-5804 ext. 419090=20 Web site: http://www.reliantenergy.com (REI)=20 By Kathleen McFall kmcfall@ftenergy.com President George W. Bush's energy package encourages the use of biomass fue= ls=20 for both transportation purposes and electricity generation. They can=20 provide a reliable source of energy at a stable price and they can also=20 generate income for farmers landowners and others who harness them his= =20 administration's report said.=20 Despite this warm and fuzzy language however the administration offered n= o=20 tangible funding for the fledgling biofuels industry=01*other than an exten= sion=20 of an existing ethanol tax credit that was not due to expire until 2007=01*= a=20 significant disappointment and surprise to advocates of renewable=20 transportation fuels. The report did recommend expanding tax credits for biomass energy projects = to=20 include forest-related and agriculture fuel sources and threw its weighty= =20 support at a new credit for electricity produced from biomass co-fired with= =20 coal. These recommendations are already included in the president's 2002=20 budget.=20 We are pleased that the administration included expansion of the biomass t= ax=20 credit and hope that with congressional leadership we will see this=20 expanded provision signed into law this year said Katherine Hamilton=20 co-director of the American Bioenergy Association (ABA).=20 Unlike other portions of the recommended energy policy biomass energy=20 probably will not suffer under the recent change in Senate composition giv= en=20 Senate Majority Leader Tom Daschle's (D-S.D.) agricultural constituency and= =20 his previous support of the biofuels industry.=20 According to the National Energy Policy Development report biomass account= s=20 for about 76% of non-hydropower renewable electricity generation=20 representing a total of about 1.6% of total U.S. electricity supply.=20 Biopower advocates however envision an even greater market penetration in= =20 the coming decades and point to its environmental and ancillary advantages.= =20 For example given that biomass combustion can be carbon dioxide-neutral (i= f=20 the growth and use cycle is managed sustainably) environmental groups=20 support an expanded role. Farmers with marginal lands that could grow bioma= ss=20 fuel could enjoy economic benefits. With large amounts of wood residue the= =20 forest industry also stands to benefit from wider use of wood as a power=20 source.=20 Renewable energy offers a particular advantage to the lumber and paper=20 industry and many analysts project that the industry may soon become a net= =20 seller of electricity.=20 In the lumber and paper industries wood scraps are sometimes directly fed= =20 into boilers to produce steam for their manufacturing processes or to heat= =20 their buildings. For that reason renewable energy offers a particular=20 advantage to the lumber and paper industry and many analysts project that= =20 the industry may soon become a net seller of electricity said the energy= =20 policy report.=20 Co-firing with coal Biomass=01*usually wood or wood residue=01*has traditionally been burned di= rectly=20 in the industrial sector for heat or on-site electricity generation.=20 According to the U.S. Department of Energy (DOE) the existing 10 GW of=20 installed capacity are based on this direct-combustion technology.=20 For utilities and power-generating companies with coal-fired capacity=20 however biomass co-firing may represent one of the least-cost renewable=20 energy options said the DOE. The process involves blending different=20 materials in varying amounts with coal.=20 Not only does mixing biomass with coal reduce emissions it is likely to be= =20 cost-effective. Southern Co. estimates that a biomass plant alone could=20 generate power depending on its location at 4 to 11 cents/kWh. Given that= =20 the lower range of this corresponds to coal generation costs there are=20 clearly circumstances where biomass-coal co-firing would be economically=20 attractive today. Plus the environmental public relations benefit for=20 utilities with coal-fired capacity would be valuable.=20 Domestic biomass generation capacity could reach 20-30 GW by the year 2020 = by=20 co-firing at existing U.S. coal-fired power plants.=20 According to a recent report prepared by five National Laboratories domest= ic=20 biomass generation capacity could reach 20-30 GW by the year 2020 by=20 co-firing at existing U.S. coal-fired power plants.=20 A recent report by the United Nations Intergovernmental Panel for Climate= =20 Change (IPCC) also cites the potential of coal co-firing with biomass. The= =20 IPCC report concludes that co-firing in coal boilers results in the lowest= =20 cost and least technical risk of the examined approaches for biomass=20 conversion to electricity.=20 Working out the technical kinks Already said the DOE six power plants in the U.S. are currently co-firing= =20 coal and wood residue products on a regular basis. Another 10 plants have= =20 successfully tested co-firing over the last decade and at least six more= =20 plants are now conducting or planning tests.=20 For example Southern Co. is working with DOE the Southern Research=20 Institute and the Electric Power Research Institute to study ways to grow a= nd=20 harvest switchgrass to blend with coal as a fuel for power generation.=20 Ideally suited for the southeastern U.S. switchgrass is a rugged grass tha= t=20 can be grown on marginal agricultural land. Reaching heights of up to 12=20 feet it requires little fertilization and herbicide and can be harvested= =20 twice a year.=20 Harvesting methods co-milling of switchgrass and pulverized coal=20 pilot-scale co-firing tests and a full-scale demonstration of co-firing at= =20 Alabama Power Co.'s Plant Gadsden are part of Southern Co.'s collaborative= =20 project.=20 The U.S. Agriculture Department is also taking a role in exploring the=20 potential of biomass and coal co-firing as a means to give farmers new=20 markets especially for currently idle land. The agency recently authorized= =20 funding for three co-firing demonstration projects.=20 In Iowa the Chariton Valley Biomass Project is a cooperative effort to=20 develop warm and cool season grasses (such as switchgrass) to co-fire with= =20 coal at Alliant Energy's Ottumwa Generating Station. The project is designe= d=20 to generate a sustained supply of 35 MW of biomass energy. Eventually the= =20 grass could substitute for as much as 5% of the coal currently burned at th= e=20 plant.=20 In addition to reducing coal emissions the Chariton Valley Biomass Project= =20 will support the local farm economy.=20 In addition to reducing coal emissions the project will support the local= =20 farm economy because the grass and trees will come from acreage taken out o= f=20 production under the Agriculture Department's Conservation Reserve Program= =20 (CRP). CRP land is generally marginal land that the government subsidizes= =20 farmers to leave idle to both prevent erosion and protect commodity prices= =20 from product surpluses.=20 The Pennsylvania Switchgrass Energy and Conservation Project will produce= =20 switchgrass on CRP land for sale to a local cooperative's coal-fired=20 fluid-bed combustors.=20 In New York the Agriculture Department project will fund willow biomass=20 crops and switchgrass on CRP acreage in the central and western part of the= =20 state. The primary markets for the willow biomass are two coal-burning powe= r=20 plants and a small university central heating facility.=20 Land conflicts transportation may be obstacles As these pilot projects illustrate biomass conversion efforts may have the= =20 most significant potential in rural areas. Since biomass is widely=20 distributed it has good potential to provide rural areas with a renewable= =20 source of energy. The challenge is to provide =01( conversion and delivery = of=20 bioenergy to the marketplace in the form of modern and competitive energy= =20 sources said the IPCC report.=20 A potential drawback to co-firing is transportation. Transportation of=20 wood-based energy products is more costly per unit of energy than coal f= or=20 example and most analysts believe it will prove most economical to site=20 generation plants near biomass sources.=20 The generating plant or biorefinery must be located near to the resource t= o=20 minimize transport costs of the low-energy-density biomass as well as to=20 minimize impacts on air and water use the IPCC report said. However note= s=20 the report's authors economies of scale may be significant enough to offse= t=20 the transport costs involved.=20 A potential drawback over the long term however for biomass conversion is= =20 land use conflicts. The IPCC report notes that by 2100 the global land=20 requirement to feed the growing world population will increase substantiall= y.=20 Up until this time there may well be sufficient land to supply all demands= =20 for food fibre and energy but at some stage after that land-use conflict= s=20 could arise and before that competition for water and irrigation may be a= =20 constraint.=20 What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Dynegy/Enron Point of Contact Body:: =09Are there any plans for either Enron or Dynegy (or both) to initiate inf= ormation dissemination to Capitol Hill as is usually =09done in these situations? This is what I have experienced when on the H= ill and when representing companies either =09being acquired or doing the merger/acquisition. Our friends on the Hill= will wonder where we and they have been =09particularly if as is likely we may need them later on. Better to get= in with them on the ground floor. I know there is a =09lot going on but it would be beneficial to the merger approval process = to at least have informal contacts starting this week =09before they leave for Thanksgiving. =09Thanks for the conference calls to keep us up to date and for being cand= id in doing so. =09John What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Revised Merger Release & Q&A Body:: looks ok to me Karen Denne 03/13/2001 11:54 AM To: Mark Metts/Enron@EnronXGate Steven J Kean/NA/Enron@Enron cc: Subject: Revised Merger Release & Q&A fyi... ----------------- What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential Employee Info Body:: -Larry Jester(mid yr-superior and yr end-strong)-Reports to D. Gilbert-Smith .Real time trader great job looking for career advancement possibilities -Keller Mayeaux (mid yr-strong and yr end-satisfactory)-He was disgruntled at yr end and as a result he asked to get out of agreement and leave Enron now he w/d like to stay at Enron. Jester is preferable to Mayeaux. Other groups are recruiting Jester. What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: California Amendments DEFEATED! Body:: Congrats Linda Robertson 07/19/2001 09:44 AM To: Steven J Kean/NA/Enron@Enron Richard Shapiro/NA/Enron@Enron James D Steffes/NA/Enron@Enron mark s palmer/enron@enronXgate@Enron cc: Subject: California Amendments DEFEATED! John Shelk will provide a more thorough report in a later Email but I just wanted you to know that the Waxman price cap amendment was just defeated in full Committee markup and the Eshoo refund amendment was defeated. Both by sizable margins. What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: SCE Counter Claim -- Underreporting of Volumes -- Confidential -- Attorney Work Product Body:: JBennett <JBennett@GMSSR.com> 05/18/2001 01:25 PM To: Robert Williams (E-mail) Richard Sanders (E-mail) Mike Smith (E-mail) <msmith1@enron.com> Dennis Benevides (E-mail) <dbenevid@enron.com> George Phillips (E-mail) <gphillip@enron.com> cc: MDay <MDay@GMSSR.com> Subject: SCE Counter Claim -- Underreporting of Volumes -- Confidential -- Attorney Work Product After speaking with George Phillips yesterday about SCE's counterclaim against EES and EEMC regarding underreporting of usage to the ISO I think there may be some internal confusion (of which I may have contributed to) about the nature of SCE's counterclaim. As I understand from my review of certain documents received from SCE in response to our data requests review of an Executive Summary prepared by George Phillips on the issue and from my conversation with him yesterday EES and EEMC as a result of some problems with their settlement system did indeed underreport customers' usage to the ISO during the time period claimed by SCE. This has I believe resulted in two separate (although interrelated) points of contention with SCE -- of which only one is the subject matter of its counterclaim. First the underreporting resulted in Unaccounted For Energy (UFE) charges to the market. In correspondence sent by SCE to EEMC and EES during the last quarter of 2001 it appears that SCE was calculating the cost to the market from the EES/EEMC underreporting by applying the hourly day ahead market clearing price to the individual hourly variances. This cost to the market is overestimated however as SCE failed to take into account the fact that the ISO nets underreported amounts against overreported accounts to get a net amount of underreporting. This underreported amount is then allocated to all providers of physical load within a service territory through the assessment of UFE charges. Thus whatever the ultimate cost was determined to be SCE would not be allocated the entire amount. Second the underreporting of usage to the ISO results according to SCE in SCE paying EES and EEMC a PX credit for energy they never purchased. This claim is separate and apart from what SCE claims EES/EEMC cost the market in the way of UFE charges. What SCE is saying is that it believes that EES and EEMC only purchased on behalf of their customers the amount of energy which they reported to the ISO. EES' and EEMC's customers actually used more than the amount which EES and EEMC reported. SCE calculated the PX credit based on the amount used not reported. It is SCE's claim that EES and EEMC are not entitled to a PX credit on the delta as the market not EES and EEMC purchased those volumes. It is only the second point of contention which is the subject matter of SCE's counterclaim. SCE is alleging that it should not have to pay a PX credit to EES and EEMC for volumes that EES and EEMC did not purchase. SCE is claiming that we only purchased the amount we reported to the ISO. While SCE may believe that it should not have to pay any UFE charges as the result of EES/EEMC underreporting the UFE charges are not the basis of its counterclaim. Based on the above analysis I think that the most critical piece of information to refute the counterclaim is that despite the underreporting of volumes to the ISO EES and EEMC actually purchased on behalf of their DA customers those customers' full usage. Can we make such claim? and do we have data to back it up? Jeanne Bennett What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Daily Update/ Legislative activity - 08/24/00 Body:: I attended Cmmr. Wood's two-day hearing on Wholesale Markets which concluded today (8/24) in San Diego. Three Commissioner's were present (Wood Lynch and Neeper) with Duque and Bilas participating by phone. Administrative Law Judge Wetzel was present and a transcript was taken. The quasi-legislative hearing was the beginning of a record developed for the investigation into the workings of wholesale/retail markets. This session focused on Wholesale markets. There will be subsequent sessions on retail issues market structure and other related issues in the future. My conclusion from this session is that Wood is looking for support for increasing regulatory intervention in the market. Dan Larcamp Director of the Office of markets Tariffs and Rates FERC was present. He relayed FERC's concern of this matter and a desire to hold hearings in San Diego. He also relayed that Hoecker held a press conference announcing the opening of a 206 investigative proceeding into the operation of the wholesale markets in California which carried with it refund authority. The format of the hearing was to respond to pre-filed questions developed by Wood/Lynch. Each member of the panel would respond to the questions and any questions posed by the Commissioners the Judge or the CPUC Attorney. No questions were posed by members of the audience. Yesterday's panel of academics were comprised of: 1. Dr. Timothy Duane-UC Berkley 2. Dr. William Hogan-Harvard 3. Dr. Frank Wolak-Stanford (ISO Market Surveillance Committee) 4. David Marcus-Energy Consultant for the Coaltion of Utility Employees 5. Dr. Gene Coyle 6. Dr. Jean-Michel Glachant Universite Paris I Pantheon Sorbonne The panel was asked to speak as individuals and not on behalf of any institutions they may represent. While the purpose of the panel seemed to be to determine that market power was being exercised and that prices were too high and therefore not just and reasonable the panelist stopped short of blaming generators and market participants in behaving illegally. The concensus generally was that market power did exist at various times but the mere existence did not constitute bad behavior. None with the exception of Dr. Wolak who is in the process of doing a study using recent data as part of his role for the Market Surveillance Committee had done a study. There was some discussion though not much of the monopsony power of the utilities. I think ultimately the group conceded that scarcity of supply amplified concerns about the exercise of market power as even the increase in gas costs did not fully explain the recent spikes. Wolak believes that encourage utilities to enter into forward purchases will reduce the exercise of real-time market power. Hogan seemed to be there with Sempra's interests in mind. He continued to promote expansion of the ISO's abilities to dispatch load as well as maintain system reliability. There was alot of discussion about forward purchase ability for utilities so as to be less subject to volatile market prices. The concerns were also discussed about the appropriateness of a distribution utility making purchasing decisions on behalf of its customers. This included discussion of separation of these functions and the default provider role. Most everyone agreed that rolling back to a regulated market was not feasible without raising other major and serious concerns however there seemed to be support for some interim measures where cost-of-service regulation may be a good idea and that was during peak periods. All agreed that a demand response and price signals are important in the long-run although not to the extent currently experienced in San Diego. Today's panel included representatives from SDG&E SCE and PG&E TURN UCAN and ORA. While yesterday's panel maintained objectivity as to whether or not generators were exercising market power to the detriment of the system today's panel made no bones about the generators being to blame. SCE/PG&E indicated their need for relief for recovery of market costs in excess of the rate freeze. SDG&E was still on the hot seat for their inaction in hedging any of their supply. SDG&E brought up their failed PBR proposal and ORA and UCAN thought that that may be one way to incent the utility to be more responsible with their purchases. UCAN discussed the Governor's direction and the potential for putting rate caps into affect for residential and small commercial. He mentioned that C&I customers are experience difficulties as well. TURN raised the need for cost-based bid caps and cost-based peaking contracts. Mike Florio TURN urged against any further divestitute of assets and alleged market concentration on those assets that had been divested. In fact TURN urged the Commission to seek legislation to clarify the Commission's authority to order retention of assets. Neeper urged that part of the solution should be changing the current requirement to use the PX as the only authorized exchange although TURN disagreed. Bruno Gaillard 08/24/2000 06:09 PM To: SF Directors Edward Hamb/HOU/EES@EES Jennifer Rudolph/HOU/EES@EES Chris Hendrix/HOU/EES@EES Greg Cordell/HOU/EES@EES Harold G Buchanan/HOU/EES@EES Martin Wenzel/SFO/HOU/EES@EES Douglas Condon/SFO/EES@EES James M Wood/HOU/EES@EES Gary Mirich/HOU/EES@EES Dennis Benevides/HOU/EES@EES Roger Yang/SFO/EES@EES David Parquet@ECT mday@gmssr.com Paul Kaufman/PDX/ECT@ECT Marcie Milner/Corp/Enron@ENRON Mary Hain@Enron Harry Kingerski/HOU/EES@EES James D Steffes/HOU/EES@EES Richard Shapiro/HOU/EES@EES Peggy Mahoney/HOU/EES@EES Karen Denne@Enron Mark Palmer/Corp/Enron@ENRON Steven J Kean/NA/Enron@Enron Tim Belden/HOU/ECT@ECT cc: Subject: Daily Update/ Legislative activity - 08/24/00 Siting related bills 1. Good new - The Williamson Act passed the Senate 34-1 It should be heard at the assembly Saturday or Monday if it is not redirected to a Committee hearing. 2. There was a long meeting with Ducheny with regards to AB 970. The enviro's boycotted they want to draft a bill with Keeley. Labor was obstructionist - they wanted to gut all the expediting siting language with regards to all facilities except for the peaking plants. Rate Cap related bills 1. The Edison Language on Rate Stabilization may not go anywhere. Edison has not found an author because of the efforts of Enron and others lobbying against it. Furthermore there are signs that Gov. Davis opposes it. 2. The Governor's office has issued a proposed language for a rate cap bill. The language however is not available as of yet. It may be released today or tomorrow. SDG&E has shown concerns over the content of the bill. They seem to think that it is worse than initially proposed by the Governor in his press release. The bill includes retroactive rate caps through 6/1/00. The rate cap could reflect Wood's rate cap proposal (6.5 cts cap on the energy component The bill does not specify who or how the costs associated with the cap will be recovered. (The reasoning is that UDCs will be more cautious in their procurement if there is uncertainty on who is responsible for the costs.) All of this is speculative. We hope to see the actual language soon. 3. Enron has been working with the Republican leadership to promote a rate cap proposal similar to the amended language we have proposed for AB2290. The bill focuses only on SDG&E customers and our major principals are the following. The Interim Rate Cap should be limited to residential and small commercial customers plus specific institutions that have a significant public role such as schools and hospitals. The Interim Rate Cap should be limited to the period ending December 31 2001. The Interim Rate Cap must be structured so that any undercollection is eventually recovered from the same customers who benefit from the lower rates provided by the rate cap. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: NEW DRAFT OF ENRON STATEMENT Body:: As discussed. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: nan What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Body:: On the advice of my much esteemed spouse I would like to express great interest in this group. Thanks Gilbert R. Whitaker Jr. <grwhit@rice.edu> on 02/18/2000 04:09:37 PM To: skean@enron.com cc: Subject: Steve - I made a mistake in my earlier email. Our Council of Overseers does not yet have a written charter. However it really is a key advisory group to the Jones School. gil What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: Important - CPUC Motion - Confidential Attorney ClientPrivil ege and Work Product Body:: While I appreciate the virtue of flying below the radar if possible the matter here is complicated by the fact that FERC's discovery rules (18 CFR Subpart D) pertain only to proceedings set for hearing . . . and to such proceedings as the Commission may order. 18 CFR 385.401. In this case FERC stated that a trial-type hearing is not necessary . . . . and specifically rejected the use of a trial-type evidentiary hearing. Slip op. at 47-48 & n.97. Thus while I have not researched the matter as yet my preliminary view is that the CPUC's attempt to invoke FERC's discovery processes would appear to be outside the contemplation of FERC's Nov. 1 order and its regulations unless FERC specifically orders discovery in this case. (The CPUC seems to recognize the relevance of this consideration when it specifically attempts to equate paper hearings with trial-type hearings see page 1 of its Motion.) The CPUC's motion may prompt FERC to decide whether or not to allow discovery in this case under Rule 401. While the CPUC's motion does not apply directly to marketers FERC's ruling will be precedent in the event the CPUC or someone else hereafter serves discovery on other parties. As a result we need to consider whether laying in the weeds risks losing an opportunity to present our views on whether FERC should allow discovery in a paper hearing with an expedited decisional track particularly in light of the fact that Staff has already conducted. >>> Jeffrey Watkiss 11/08/00 10:31AM >>> Does anyone have an idea as to why marketers including EPMI are not included in the list of subject companies: Exh. B? Since EPMI is not a subject of the motion why should it answer? Lying in the weeds may be a more prudent course of action. >>> Fergus Gary S. <GFergus@brobeck.com> 11/07/00 10:08PM >>> I just spoke with Mary to make sure we have the same information. Here are the facts we have so far. On November 4th the CPUC filed a motion with FERC to adopt the form of protective order that the CPUC entered to compel the production of documents and to shorten time to answer. According to Exhibit B (read to me by Nancy Pickover at Bracewell) the following CPUC moved against the following entities: AES Williams Duke Dynegy Reliant and Southern. Enron entities were NOT named in exhibit B. This is not to say that we could not be easily added to the group. While the motion reads as if the CPUC was moving against everybody in fact in footnote 2 they state they are only moving against the entities named in Exhibit B. We will have Exhibit B in hand first thing tomorrow via FEDEX to confirm this. To repeat Enron is not named yet. Thanks Gary What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Dow Jones: Enron, Bushs Biggest Contributor Body:: nan What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential SNAP Special Report Body:: Confidential Rika I spoke to Kevin the other day and we discussed the attached special report. Please read over and call me to review. There was already a problem today a TMI Fred - Update 011016.xls What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: 1. London, June 28 - 29; 2. Houston, July 16 - 17 Body:: Shirley Just Zimin and Vasant if they are free. Vince What should this email be categorized as? [/INST] Personal but in professional context <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: 2000 eSpeak Schedule Body:: Looks like a full slate you're off to a great start. Maureen -- please put times and locations on my calendar as an fyi. Sarah Palmer@ECT 01/05/2000 02:24 PM To: Steven J Kean/HOU/EES@EES cc: Mark Palmer/Corp/Enron@ENRON Marie Hejka/Corp/Enron@ENRON Subject: 2000 eSpeak Schedule Steve: Attached are the eSpeak events currently scheduled for 2000. Please review at your convenience. Have a great day! The eThink Team What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Youre On! Body:: fyi ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Talking Points For Rep. Barton On Tauzin RTO Letter Body:: Linda requested some background and talking points on the pending RTO letter from Chairman Tauzin to FERC that is sitting on Chairman Barton's desk TODAY for his decision whether to co-sign the letter. While we have not seen the text we are told that it is anti-RTO and may go so far as to state or imply that FERC does not have authority to do what is doing with RTOs. (We know this is the view of one of Chairman Tauzin's counsels who formerly worked for Southern Co.). Chairman Tauzin has been contacted by Entergy and the Louisiana Public Service Commission to send the letter. I spoke to Chairman Barton's staff Andy Black this afternoon and relayed our concerns. The Barton Subcommittee is now expected to mark up an electricity bill in December (per a Republican Member meeting held this morning). ACTION ITEM: Call Rep. Joe Barton (202/225-2002) TALKING POINTS: 1. Should start with something about the Dynegy/Enron transaction (it will be strange if Mr. Lay or Steve calls Chairman Barton and does not start the conversation with some reference to the transaction). 2. Mentioning the transaction naturally leads into the importance of competitive wholesale markets for power both for consumers and for the largely Texas-based marketing trading and merchant power industries. 3. We understand that Chairman Barton has been approached by Chairman Tauzin about a letter to FERC on the RTO issue. We know Chairman Barton is well aware of Enron's strong support for FERC's RTO initiatives. We respect Chairman Barton's interest in seeing to it that Congress does not abdicate its responsibility to make energy policy. 4. If as we have been lead to believe the letter states or implies that FERC does not have authority to act in the RTO arena this will be seen as a potentially destabilizing development since FERC is so far down the road of creating RTOs. 5. While we understand some in Congress and elsewhere were concerned that FERC was moving too fast as of the last FERC meeting earlier this month that is no longer true even if it ever was true. While we think RTOs should be created sooner rather than later FERC is listening to state regulators and others who had concerns. 6. A letter from congressional leaders questioning FERC's authority goes too far in the direction of those who oppose any RTOs. Furthermore it is wrong as a matter of law. The D.C. Circuit held in the gas cases and in the power cases on Order 888 that FERC has authority to address systemic discrimination which is in large part what the RTOs are all about -- a remedy for iscrimination. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: nan Body:: Just received a voicemail from Stan. He knows Mike he does not have any spots for him right now. My suspicion is that the EES discussions are not ultimately going to yield fruit. We are probably going to have to discuss what's next. What should this email be categorized as? [/INST] Employment arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Mr. Lay is being honored by the Houston Rotary Club as Citizen of the Year. You are invited to attend luncheon. Vanessa Groscrand will follow up with details. Body:: Junior League by the Ritz starts at 12:00 there's an Enron table buffet line. Parking garage is adjacent to the Junior League. What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: How about lunch? Body:: A typical utility luncheon. ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: EBS Article for eBiz Body:: See attached From: Karen Denne/ENRON@enronXgate on 07/12/2001 08:33 PM To: Jim Fallon/Enron Communications@Enron Communications Ken Rice/Enron Communications@Enron Communications cc: Mark Palmer/ENRON@enronXgate Steven J Kean/NA/Enron@Enron Kelly Kimberly/Enron Communications@Enron Communications Subject: EBS Article for eBiz Jim and Ken -- Attached is an article for eBiz (our biweekly online newsletter) which we are scheduled to launch at 7:30 a.m. Friday. Kelly Kimberly has reviewed it but has asked that you view the article as well. Since only EBS employees received your memo about the restructuring -- and the rest of the employees did not receive any communication -- it is extremely important to provide information through this vehicle. Please let me know of your approval or if you have any questions. Thank you. Karen x39757 What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: DOE Task Force Meeting - Plymouth MA- Not going Body:: Bob Silvanik -- Council of State Governments annual meeting in Dec 8 (CEO panel including Skilling and Hydro Qubecs Kayee? Panel runs 10:45 - 12:15. (606)244-8250 What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: PRIVILEGED AND CONFIDENTIAL - Christopher Stelzer Draft Body:: Attached is the draft testimony of Christopher Stelzer on behalf of Avista Energy. If possible we would appreciate comments no later than 3:00 PM EST on Sunday August 26. Comments can be faxed to my attention at 202/338-2416 or emailed to cfr@vnf.com or gdb@vnf.com (Gary Bachman). Thank you. Cheryl Feik Ryan Van Ness Feldman P.C. 1050 Thomas Jefferson Street NW Washington DC 20007 202/298-1845 cfr@vnf.com This email message is intended solely for the individual or individuals named above. It may contain confidential attorney-client privileged information and/or attorney work product. If the reader of this message is not the intended recipient you are requested not to read copy or distribute it or any of the information it contains. Please delete it immediately and notify the sender by return email or by telephone. Thank you. - 107177_1.DOC What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Energy Issues Body:: Please see the following articles: Oakland Trib Wed 3/7: Breakthrough made in rescue of PG&E Bakersfield Californian Wed 3/7: El Paso Energy closes six valley power plants Contra Costa Times Wed 3/7: Still undecided: Who'll pay DWR for electricity SF Chron Wed 3/7: State Taxpayers In Dark on Details Of Energy Deal Sac Bee Wed 3/7: Lawmakers pitch fixes for region's energy woes Orange Co. Register Wed 3/7: Power plan called wrong LA Times - Wed 3/7: Bill to Cut Some Power Prices Stalls Sac Bee Wed 3/7: PG&E could face mutiny on outages: SMUD others may balk if utility orders summer blackouts SF Chron Wed 3/7: PUC to Decide Fate Of Utility Workers PG&E Edison want to trim costs by laying off thousands cutting service San Jose Mercury Wed 3/7: Power prices could soar during the summer SF Chron Wed 3/7: Power Plant Plans Cause Conflicts East county residents blast supervisors Contra Costa Times Wed 3/7: Supervisors set search for power plant sites Sac Bee Wed 3/7: Peter Schrag: California's $90 billion infrastructure gap Contra Costa Times Wed 3/7: PG&E power plan debated at hearing SF Chron Thurs. 3/8: State OKs 'Peaker' Power Plant at SFO / Temporary generator could be sending electricity to 50000 homes by August WSJ Thurs. 3/8: Crossed Wires: Major Kinks Emerge In Gov. Davis's Plan To Power California --- State's Outlays for Electricity May Be Hard to Recover Without Rate Increases --- Betting on Long-Term Deals ------------------------ Breakthrough made in rescue of PG&E State ready to pay $7 billion for lines By Steve Geissinger SACRAMENTO BUREAU SACRAMENTO -- Signaling a breakthrough in secret energy crisis talks the Davis administration disclosed Tuesday it may announce the framework of a pact to rescue the teetering Pacific Gas and Electric Co. next week. Things are going very well said Steve Maviglio a spokesman for Gov. Gray Davis. The state appears to be poised to pay at least $7 billion -- and possibly billions more -- for PG&E's high-voltage transmission lines as part of a deal to financially renovate the north-state utility according to sources familiar with the negotiations. But consumer advocates insisted that even the $7 billion price is too much to pay. And experts warned that a deal with PG&E will be more complex than with other utilities. PG&E representatives declined comment in keeping with their policy on the talks even though the Davis administration said an announcement could come as early as next week or the following week. The new timetable for an announcement was substantially sooner than in Davis' original forecast. Until late last week PG&E was still resisting the sale of its power grid despite the fact that Davis had announced the framework of an agreement with Southern California Edison. Davis expects to soon announce a similar deal with the San Diego Gas and Electric Co. However any such deal still would need federal approval. The investor-owned utilities trapped between high wholesale costs and lower regulated retail rates amassed nearly $13 billion in debts and were unable to buy electricity this winter. With the onset of rolling blackouts the state began brokering billions of dollars in emergency short- and long-term power purchases. Davis' strategy to ease the energy price and supply crisis includes bolstering both conservation and generation while fiscally refurbishing the nearly bankrupt utilities. As part of the rescue deal the utilities would have to drop legal actions seeking dramatically higher electricity bills environmentally shield wildlands they own sell power from their generators to Californians for the next decade and secure help with their debts from their parent companies. Together with the cash infusion from the sale of their power 26000-mile power grids the utilities would be allowed to sell bonds to raise funds and use customer money to pay them off. The state would upgrade the high-voltage lines and lease them back to the utilities for operation. In a reflection of the negotiations with the three utilities a Davis administration official said the deal with PG&E is proving to be more complex than with the other firms. Though PG&E finally agreed late last week to sell its transmission grid the utility apparently wants more than the $7 billion that Davis has offered according to sources. The figure is more than twice the book amount or the value placed on the system for purposes of accounting. And that's the markup that lured Edison into an agreement to sell its smaller portion of the transmission grid for $2.8 billion. But PG&E which fears an erosion of its economic base may be asking as much as $10 billion. Due to complexities in the state's 1996 deregulation of the industry PG&E is more likely to lose revenue than Edison as a result of selling its transmission lines according to experts. Big customers might be able to bypass the utility's remaining local distribution lines thereby eroding its customer base. Therefore the utility may view bankruptcy and sale of its transmission lines to the highest bidder as a potentially attractive alternative to selling its share of the grid to the state at too low a price. ---- El Paso Energy closes six valley power plants Filed: 03/07/2001 By CHIP POWER Californian staff writer e-mail: ppower@bakersfield.com El Paso Energy citing non-payment from Pacific Gas & Electric Co. said it has shut down six cogeneration plants this week. The smaller plants produced about 175 megawatts of electricity and are located primarily in the San Joaquin Valley said company spokesman Mel Scott. A megawatt can supply power to 1000 homes. At least 10 plants have closed in the past two weeks as a result of non-payment according to the state Independent System Operator which manages most of the state's electrical distribution. The El Paso Energy plants are operated with various partners and had not been compensated for December January and February deliveries said Scott. He said he did not know the total amount due but said the plants would be closed until PG&E's credit worthiness is improved. A cogeneration plant common in oil fields simultaneously produces heat energy and electrical or mechanical power from the same fuel in the same facility. Typically it produces electricity and steam which can be deployed to enhance oil recovery. Kern County is the state's leading oil-producing county. El Paso owns or has interests in more than 40000 miles of interstate and intrastate pipeline connecting the nation's principal natural gas supply regions to the five largest consuming regions in the United States namely the Gulf Coast California the Northeast the Midwest and the Southeast. El Paso closed up 99 cents on Tuesday or 1.4 percent at $71.49. The Houston-based company's stock price has ranged between $36.31 and $75.30 in the last 52 weeks. ---- Still undecided: Who'll pay DWR for electricity By Karen Gaudette ASSOCIATED PRESS SAN FRANCISCO -- The price tag is $3.2 billion and counting for electricity bought by the state Department of Water Resources for the customers of two nearly bankrupt utilities. Pacific Gas and Electric Co. Southern California Edison and the state disagree over how the DWR eventually will be reimbursed for its purchases on the expensive last-minute power market. So do the state power regulators who have the final call over who gets the money when. Under a recent law the DWR went into the electricity-buying business to help keep the two utilities from sinking further into their $13 billion debt. The state plans to retrieve the money by selling $10 billion in revenue bonds. The utilities continue to collect ratepayer dollars on that electricity which the bill's author Assemblyman Fred Keeley D-Boulder Creek says is meant to help them begin paying down their debt. In a recent letter however DWR officials requested that the state Public Utilities Commission order that a portion of that money be diverted to the state. But after the utilities subtract the costs of generating electricity payments to environmentally friendly power plants and other expenses there is no money left from ratepayer dollars to give to the DWR without sinking further into debt PG&E spokesman Ron Low said Tuesday. If it passed along money to the DWR our undercollection would grow by about $2.4 billion by the end of the year Low said. The commission unable to agree on the best course of action left the issue untouched at its last meeting but expects to revisit the issue when it meets this morning. Commissioner Richard Bilas is proposing an alternate plan that would have the DWR set its own revenue requirements that would be passed on to ratepayers. The PUC also is expected to respond to complaints from laid-off workers and customers that layoffs by utilities to cut costs have been hurting service. Commissioner Carl Wood warned at the last meeting that failure to provide safe and reliable service could mean fines for the utilities. Representatives from electrical workers unions the PUC and the utilities were to discuss the issue Tuesday afternoon. I don't think we believe that utilities can find a way out of their problems by laying off workers said Mindy Spatt a spokeswoman with the Utility Reform Network. We think consumers deserve safe and reliable service and we think they deserve it at a reasonable price. ---- State Taxpayers In Dark on Details Of Energy Deal David Lazarus Chronicle Staff Writer Wednesday March 7 2001 2001 San Francisco Chronicle Few people would purchase a car simply because the dealer said ''Trust me it's a great deal.'' Yet Gov. Gray Davis essentially is telling Californians just that about dozens of long-term power contracts. Because of confidentiality agreements with power companies the governor has revealed only scant details about the state's multibillion-dollar contracts for electricity over the next 10 years. Gov. Davis has our money and we can't see how he's spending it said Doug Heller a spokesman for the Foundation for Taxpayer and Consumer Rights in Santa Monica. We've been locked out of the room. Neither Davis nor power companies would divulge specific details about the price duration or scope of individual contracts. Each cited secrecy clauses that the governor's office said had been desired by both sides. What consumers do know is this: -- California has signed 40 contracts and tentative accords valued at about $40 billion to secure enough power to light 9 million homes over the next decade. -- The average purchase price of each deal is $69 per megawatt hour -- well above the $30 to $40 charged by power generators before California's energy market went haywire last summer. -- If as is widely expected wholesale power prices fall in years ahead the state nevertheless will be locked into paying above-market rates for electricity. But it is not known which generator agreed to part with the most power at the cheapest level or the full range of the prices in concocting the $69 average. Moreover it is unclear how shrewdly the state negotiated with taxpayer money in securing power on behalf of cash-strapped utilities. These agreements are the bedrock of our long-term energy policy Davis said Monday in announcing the deals. The governor's office defended the murky nature of the contracts yesterday. It's a business transaction in which private corporate information is included said Steve Maviglio a spokesman for Davis. That's the kind of information that never gets revealed. While additional elements of the contracts will be publicized in coming months he said the contracts themselves will remain a secret. You'll never see all the details Maviglio said. This did not sit well with many observers. It's a breach of public trust said Daniel Bacon a San Francisco attorney specializing in business law. A public servant spending public money shouldn't be able to keep the spending secret. But Gary Ackerman executive director of the Western Power Trading Forum an energy-industry association in Menlo Park called confidentiality agreements a necessary evil in transactions like this. He explained that no power company would agree to a long-term contract if rival firms could learn the terms of the accord. The company would be losing too much of its competitive edge in the marketplace Ackerman said. At the same time he noted that secrecy allowed the buyer -- in this case California taxpayers -- to secure more favorable terms with individual sellers. A high price with one generator would not necessarily be sought by all power providers. Still the fact that public funds are being used makes confidentiality in this case a different matter than say Cisco Systems' quietly negotiating to take over yet another tech rival. The public is in a very awkward position said Michael Shames executive director of the Utility Consumers' Action Network in San Diego. It has to rely on the good word and expertise of the governor and he has yet to demonstrate that he has expertise or good word in this field. Shames likened consumers to passengers in a plane being flown by a pilot without a license to fly. But what choice do we have? he asked. I don't see many other options available right now. There's the rub. No matter how bad a deal California may have cut to help meet its energy demands the alternative -- blackouts disruptions economic catastrophe -- is far far worse. On the other hand it already appears that the new contracts will not shield Californians from the threat of daily outages this summer when demand surges. Davis said only about 60 percent of the state's summertime electricity needs so far had been met. Part of the reason is that many power companies already have contracted for their output this year. Duke Energy said this was why it would not begin its nine-year contract with California until 2002 while Williams Cos. said it would only gradually increase the amount of available wattage in its 10-year contract. Both companies meanwhile will continue to profit this summer by selling into the volatile spot market where wholesale power went for as much as $1 500 per megawatt hour last year. You can't sell all your power into long-term contracts said Paula Hall- Collins a Williams spokeswoman. You save some for the spot market. Consumer groups worry that consumers will be hammered again this summer with sky-high power prices and then get nailed down the road by contracts for above-market rates. If we could look at the terms of the deals we'd see that California is being gouged for 10 years said Heller of the Foundation for Taxpayer and Consumer Rights. But the governor doesn't want us to see that. Ackerman of the Western Power Trading Forum said the state had gotten the best rates it could under current market conditions. California went for long-term contracts when everyone else moved in as well he said. Californians are paying a price for not acting sooner. ---- Lawmakers pitch fixes for region's energy woes By David Whitney Bee Washington Bureau (Published March 7 2001) WASHINGTON -- California members of Congress pleaded for everything from wholesale price caps to extending daylight-saving time an extra hour to help the region cope this summer with its persistent electricity shortage but none of the ideas seemed to catch fire at a House hearing Tuesday. People will die in California because of this crisis Rep. Brad Sherman a Los Angeles-area Republican warned the House Energy and Commerce Committee. Sherman testified that his idea for saving lives is to extend daylight-saving time by an extra hour so that there would be more daylight at the end of the day when power consumption surges. One of the peak demand periods for electricity occurs between 5 p.m. and 8 p.m. when the sun sets and people come home from work Sherman testified. If people come home and it is light out there is less of an inclination to turn a light on. Sherman said the state Legislature has called for congressional approval for states to be given authority to extend daylight-saving time and he cited analyses by the California Energy Commission and other agencies suggesting that it could cut power consumption by 1 percent to 2 percent. Sherman who was one of about a dozen California lawmakers presenting their views on the energy squeeze drew no questions from committee leaders about what his legislation might do to everything from airline schedules to television programming if West Coast states didn't agree on the same time standard. Most of the committee's questioning was on the more popular idea proposed by several California and Western lawmakers primarily Democrats to require the Federal Energy Regulatory Commission to impose caps on wholesale electricity prices that have gone wild because of a regional power shortage. Rep. Bob Filner D-San Diego charged that the price spiral has little to do with power shortages but a lot to do with a small cartel of generators bilking ratepayers. Rep. Jay Inslee D-Wash. said he brought up the idea of regional price caps with President Bush who was initially skeptical. But Inslee said that Bush warmed to the idea after being told that protections could be built into the caps so as not to discourage construction of new power plants. Upon hearing that Inslee said Bush invited him to meet with the president's Cabinet-level task force led by Vice President Dick Cheney on a national energy strategy. But Inslee said he can't get the group to meet with him. It's very disappointing Inslee said. Tuesday's hearing was part of a series the panel is holding on the California crisis so far without any emerging consensus on what if anything Congress should do. ---- Power plan called wrong Wall Street analysts say the governor's approach to the problem avoids the issue that caused the imbalance. March 7 2001 By DON THOMPSON The Associated Press SACRAMENTO California's scramble to insulate consumers from the soaring price of electricity may add to the state's power problems this summer Wall Street analysts said Tuesday. Gov. Gray Davis' emphasis on buying utilities' transmission lines and negotiating long-term power contracts to help ease their debts skirts the deep imbalance between wholesale and market rates that led to the state's power problems in the first place they said. In the long run it doesn't solve anything said Michael Worms an industry analyst for Gerard Klauer Mattison & Co. In the long run you need to send the right price signals to consumers which will create its own conservation signals. Unfortunately customers were shielded from that in California. Davis said Monday that the state's first contracts to buy electricity for two financially struggling utilities will provide only about two-thirds of the power needed on a typical summer day forcing Californians to cut power use at least 10 percent to avoid blackouts. Since early January the state has been buying one- third of the power Southern California Edison and Pacific Gas and Electric Co. customers need. The two utilities denied credit by suppliers say they have lost nearly $14 billion due to soaring wholesale electricity prices that the state's industry-deregulation law says they cannot pass on to consumers. The keepers of the state power grid had enough electricity Tuesday to avoid declaring an electricity alert but have faced an almost-daily scramble for weeks due to a tight supply and high wholesale prices. Several wholesale and retail rate proposals are circulating. Among them: Free-market advocates such as Worms want an immediate end to the deregulation-imposed retail rate freeze on Edison and PG&E that will expire next year. Davis wants a Western price cap of $100 per megawatt hour on power generators he says have been prof iteering from California's short energy supply. The Bush administration and Federal Energy Regulatory Commission are cool to that idea. In December FERC imposed a soft cap of $150 per megawatt hour on wholesale rates in the state and required suppliers to justify any higher prices they charge. Consumer groups such as The Utility Reform Network or TURN want regulated rates for residential and small-business customers but free-market rates for large industrial customers which sought deregulation in the first place. TURN also advocates a tiered rate structure with higher rates for consumers who use more than a reasonable amount of electricity each month. Assembly Republicans say electricity and natural-gas prices will fall naturally if the state increases supply mainly by making it easier to build plants and pipelines. Right now you're sort of sitting partially with regulation and part with the free market said Paul Fremont an analyst with Jefferies & Co. Both these systems work. It's sort of that in-between system that you have in Califor nia that doesn't appear to be working. The system discourages generators from building new power plants because they aren't guaranteed a profit and it doesn't do enough to discourage power use by consumers because the price they pay doesn't reflect the true cost of power Fremont said. I don't think people here have much faith in the market and why should they? countered TURN's Mindy Spatt. I think there are probably better ways of encouraging consumers to conserve than by gouging them. Davis insists the crisis can be resolved without raising rates for Edison and PG&E customers beyond the existing rate structure. In January state regulators imposed temporary rate hikes of 7 to 15 percent on Edison and PG&E customers. The Legislature and Davis extended the increases for up to a decade to help pay back the estimated $10 billion in power buying the state expects to do for Edison and PG&E over the next several years and finance its purchase of the power lines owned by the two companies and San Diego Gas & Electric. Rates were already scheduled to increase next year for Edison and PG&E customers. Under the 1996 deregulation law the pair's ratepayers saw a 10 percent rate reduction but only until early 2002. That rate cut will likely expire as planned Davis spokesman Steve Maviglio has said. Davis wants those rates to cover not only the traditional cost of generating transporting and distributing power but the added cost of paying off the two utilities' massive debt and buying their transmission lines said Assemblyman Fred Keeley D-Boulder Creek the Assembly's chief power negotiator. Yet Davis has indirectly addressed the rate imbalance by signing legislation that will let regulators raise consumer rates if necessary Keeley said. The governor and lawmakers are in effect spreading out rate increases over a decade by using long-term revenue bonds to buy power for the nearly bankrupt utilities said Severin Borenstein director of the University of California Energy Institute. At some point we have to deal with the reality that all of the power that we buy has to be paid for by somebody - it's either going to come from taxpayers or it's going to come from ratepayers Bor enstein said. Raising rates now would get us a lot of conservation. Davis also wants financial incentives for conservation and power-plant construction in time to make a difference this summer. Our mouths were agape at the rapid timetable Keeley said. Legislators are rushing to pass those incentives by month's end he said allowing three months for consumers and suppliers to act before the heat of summer. Among bills considered Tuesday the Senate Energy Committee approved legislation to accelerate the siting of power plants. It also was considering a proposal to restructure rates for generators that use renewable energy to provide about 30 percent of the state's electricity. ---- Bill to Cut Some Power Prices Stalls Energy: Democrats balk at varying payment levels for alternative generators. By DAN MORAIN JULIE TAMAKI Times Staff Writers SACRAMENTO--Legislation aimed at cutting prices for more than a fourth of the power consumed in California stalled Tuesday as Democrats questioned why a few alternative energy generators--some of them campaign donors--stood to receive higher payments than others. Lawmakers working to unravel California's energy mess have been negotiating for weeks in an effort to cut the price paid to more than 600 generators of alternative power by more than half to below 8 cents a kilowatt-hour. Those alternative generators' contracts with utilities have shot up in recent months because of a rise in the price of natural gas. The cash-strapped corporations have suspended or made partial payments to the generators over the last few months causing many to shut down or reduce their outputs. But even as the lawmakers reached agreement that pushed the average price to near the 8-cent level per kilowatt-hour some generators would have received higher prices under the bill by state Sen. Jim Battin (R-La Quinta). Some of the generators that stood to benefit had donated to Battin's campaigns. One--Windtec Inc.--gave Battin a $20000 campaign donation in 1999. Others contributed from $3000 and $5000 last year. Battin acknowledged that he has received campaign contributions from some wind power generators but said there is no connection between the donations and the bill's provisions. It is illegal it is unethical and it's not how I do business he said. Battin noted that 25% of the state's alternative energy producers are in his district. As Democrats on the Senate Energy Committee blocked the bill Battin warned that some alternative energy producers might react to the delay by trying to force Southern California Edison and Pacific Gas & Electric into bankruptcy. We will be the cause of bankruptcy Battin said. That prompted Energy Committee Chairwoman Debra Bowen (D-Marina del Rey) to retort: I'm really tired of being threatened with bankruptcy. Alternative energy producers including those that use wind solar power biomass and other means produce 27% of the energy used in California. They sell the electricity to the utilities which in turn transmit it to retail consumers. But with the utilities facing multibillion-dollar debts the alternative energy producers under contract with Edison have not been paid since November. Scores of alternative energy producers supported the measure. Edison International and the San Francisco-based consumer group the Utility Reform Network opposed it. Michael Florio of the Utility Reform group said the deal could result in higher consumer prices an Edison representative said the same thing. Battin and Assemblyman Fred Keeley (D-Boulder Creek) worked out an arrangement with many of the generators. Keeley took the lead in the early negotiations and then turned to Battin to introduce the legislation SB 47X. Rather convoluted language would have allowed higher payments to a select few generators that produce electricity from wind and biomass. Most of California's wind suppliers for instance would have received about 6 cents per kilowatt-hour. But a handful of them about half a dozen wind farms--mostly in the Palm Springs area represented by Battin--would have received 7.8 cents. Battin contends that other wind producers receive additional payments that boost them to the same level as Windtec and others that would get the higher payments. They get the same deal Battin said of the handful of generators that would benefit from the provisions he added to the bill. In California's overall energy market the amount of money that would have flowed to the favored generators is minor. But the added prices that would have been paid to the generators would have translated to at least $19 million in the next five years to be absorbed by Southern California Edison customers according to one analysis. Also Tuesday more details were disclosed about another leg of the state's effort to escape from the energy crunch--the deals with large power generators to supply electricity to California for as long as 10 years. Those arrangements were announced by Gov. Gray Davis Monday as the bedrock of California's energy policy. But some consumer advocates warned that the deals could lock the state into excessively high-priced contracts. S. David Freeman the general manager of the Los Angeles Department of Water and Power and Davis' negotiator said that the state guarded against that by varying the time spans of its deals. About 6000 megawatts are expected to be available this summer about one-third of the energy needed by the state Freeman said. The amount of power under contract swells until more than 9000 megawatts are contracted in 2004 half of the needed amount before dipping to 8000 megawatts in 2010. What we're doing here is what everybody said had to be done Freeman said. We deliberately bought 50% so we'd have a good mix between long-term contracts which may turn out to be somewhat higher or somewhat lower than the spot market and purchases on the spot market. ---- PG&E could face mutiny on outages: SMUD others may balk if utility orders summer blackouts By Carrie Peyton Bee Staff Writer (Published March 7 2001) Sacramento's electric utility wants out of a deal that imposes rolling blackouts locally on PG&E's command. So do a lot of other utilities. They've been writing letters lobbying lawmakers and launching informal talks with Pacific Gas and Electric Co. to get off the hook before summer. Who dodges the blackout bullet is going to play out as a political hot button around the state said George Fraser head of the Northern California Power Agency a coalition of municipal utilities. In Sacramento the next volley is expected soon with the Sacramento Municipal Utility District reportedly poised to notify PG&E that it will no longer black out homes and businesses on the larger utility's command. We are absolutely trying to fight off the requirement for rolling blackouts for the Sacramento area said Linda Davis one of seven elected members of the SMUD board of directors. Saying they don't want to be dragged down by somebody else's problems two Southern California utilities have written grid operators asking to be exempted from any blackouts caused by PG&E's or Southern California Edison's financial woes. But in PG&E's view California is in an energy crisis (and) ... we're all in this together said spokesman John Nelson. The maneuvering comes amid bleak forecasts for power supplies this summer. Although Gov. Gray Davis has said conservation new power plants and moderate weather could avert blackouts officials at the Independent System Operator which runs much of California's grid expect frequent rotating outages. One consulting firm Cambridge Energy Research Associates predicts 20 hours of rolling blackouts during July and August and about 200 hours of especially intense calls for voluntary cutbacks. Before blackouts hit the jockeying over just whose lights air conditioners and assembly lines will be shut down is growing. The outcome could affect millions of people statewide. The state Public Utilities Commission is probing rolling blackout programs run by the for-profit utilities it regulates including PG&E and Edison. A PUC analysis has suggested that PG&E's program which currently exempts about 40 percent of its customers should spread the burden more broadly. For example it said 1.9 million homes and businesses are spared just because they share a circuit with a customer deemed essential. But not-for-profit utilities such as SMUD which answer to their own elected boards or city councils have other worries. Many have already lined up their power supplies for summer. Some have raised rates or are considering raising rates. Some have taken extra conservation steps. They think those preparations ought to give them leverage to ease blackout clauses in their contracts with PG&E. SMUD general manager Jan Schori is going to use every avenue ... any avenue to put pressure on including lobbying the ISO the governor and others said utility director Davis. The Northern California Power Agency a joint-powers authority that owns and operates power plants for municipal utilities has begun informal negotiations with PG&E to change blackout rules according to Fraser its top executive. It is preparing to write PG&E asking that its members be exempted from outages altogether. Failing that it wants them to face fewer outages or to be compensated for cutting off power he said. At SMUD the utility board has met in closed session to discuss exactly what it is required to do during electric emergencies under terms of the interconnection contract that links SMUD's lines to PG&E's. The contracts are being inspected with a fine-tooth comb said SMUD director Howard Posner. Schori declined to comment on any specifics. Sources indicated that the main option being considered is notifying PG&E that because of changed circumstances SMUD believes it no longer is required to routinely comply with outage requests. Other options being explored include re-negotiating existing agreements with PG&E. Posner said that ever since two days of rolling blackouts in January constituents have been asking him 'Why are we participating when we're not the problem?' And I don't have a good answer to that. Several directors said SMUD has already spent a lot of money -- and is considering 16 percent rate increases -- to ensure that it has enough electricity under contract to meet its customers' summer demands. They believe PG&E should do the same. We're almost like a David against Goliath here said board vice president Genevieve Shiroma. The huge investor-owned utilities next door have severe problems that they need to get under control. In addition SMUD plans to argue that because it can cut usage through its Peak Corps program which remotely turns off air conditioners at volunteer households it has already done its part without rotating outages director Davis said. PG&E believes the interconnection agreements that govern smaller utilities' ties to its transmission lines have benefits and burdens to both sides said Nelson. It wouldn't be fair or good policy for just one provision to be altered without taking a look at how that affects the entire contract he said. Interconnection contracts generally have clauses that require utilities to help each other out to avert greater emergencies. Sometimes reducing demand -- called load shedding -- can be the only way to stabilize the electric grid in the seconds after a major power plant or transmission line fails. It's been around in the electrical fabric forever said Jim Pope head of Silicon Valley Power Santa Clara's city-run utility. In addition to legal requirements you have a moral obligation so you don't bring the system to collapse. Like other city-run utilities Silicon Valley Power has a contract with PG&E that requires it to shed load during an electric emergency. But its contract allows it to work with big users to reduce their demand so no one has to be completely shut off. Such agreements formed long before deregulation when PG&E ran the north state's grid now are complicated by the 1997 creation of the state Independent System Operator. The ISO today runs pieces of the grid owned by PG&E Edison and San Diego Gas & Electric Co. If it believes power use is about to surge past supply potentially triggering a grid collapse across the western United States the ISO notifies the three utilities that they have to shed a certain number of megawatts. The big utilities meet that requirement two ways. They cut circuits to some of their own customers and they tell smaller connected utilities to cut a proportionate share. In Northern California about 80 percent of the outages are borne by PG&E customers and the rest by customers of SMUD and other municipal utilities and irrigation districts. In one sense we are all in this together. If SMUD were in danger of going down we would hope others would help us out said SMUD's Posner. But that's if we're in danger from circumstances beyond our control not from mismanagement or lack of financial wherewithal. It is unclear what penalties if any a utility would face for violating an interconnection agreement. In the long run the issue would be fought either in the courts or before the Federal Energy Regulatory Commission grid officials said. As a practical matter in the seconds when the risk to the grid is greatest if one utility refused to shed load the ISO would probably solve to problem by calling on PG&E Edison or others who are willing to make deeper cutbacks they said. ---- PUC to Decide Fate Of Utility Workers PG&E Edison want to trim costs by laying off thousands cutting service Bernadette Tansey Chronicle Staff Writer Wednesday March 7 2001 2001 San Francisco Chronicle State regulators are set to decide today whether debt-ridden Pacific Gas and Electric Co. and Southern California Edison can conserve cash by laying off thousands of workers and letting service standards slip. Union officials who protested the layoffs before the California Public Utilities Commission warn that if the cuts go through neighborhoods hit by power outages could stay dark for hours and more customers could face busy signals when they call about their bills. An administrative law judge agreed advising the commission in February to order the utilities to restore 725 positions already cut and block the elimination of an additional 2125 jobs. Judge John Wong said PG&E and Edison have acknowledged the layoffs will not substantially improve their shaky financial condition which arose from skyrocketing wholesale electricity costs the utilities could not pass on to consumers under a rate cap. The savings would barely make a dent Wong said in his draft decision. The two companies together claim that their debt from power purchases amounts to more than $13 billion. PG&E says it has saved $18 million from the first wave of 325 layoffs. Wong's recommendation is already running into resistance on the PUC. Commissioner Richard Bilas said the five-member panel should not be micromanaging the utilities in a time of crisis. Bilas has proposed an alternate ruling that would allow the utilities to make the cuts but provide for PUC monitoring of service in case the commission wants to step in later. We're in a situation where the utilities are not collecting the revenues they need to operate and yet we may be guilty of not letting them cut expenses where they can cut expenses Bilas said. PG&E spokesman Jon Tremayne said savings from the layoffs are helping to keep electricity running and gas flowing. It keeps cash in our accounts so we can keep doing day-to-day business Tremayne said. In addition to the 325 positions dropped so far PG&E is proposing to cut an additional 675 during the next three to six months. The cuts affect temporary and contract workers who read meters handle new service hookups and replace equipment. PG&E has no plans to eliminate permanent positions. The company is struggling to keep up with a higher workload at its call center as customers deluge the lines with inquiries about their rising bills and the effects of deregulation. Calls to PG&E ballooned from 1.3 million in January 2000 to 2.3 million in January 2001. Bilas advocates granting PG&E's request to temporarily relax standards requiring the utility to respond swiftly to customer calls and to read customers' meters once a month. PG&E wants to read meters bimonthly and send bills based on the estimated use between readings. Discrepancies could be corrected later. Wong called those measures unacceptable. He said customers need to know immediately if their efforts to conserve power are working. Wong also said the utilities' own experts have said the workforce reductions will lengthen the time required to restore power after nonemergency equipment failure. Eric Wolfe communications director for the International Brotherhood of Electrical Workers Local 1245 said some customers have already been left without power overnight because PG&E is trying to avoid the use of overtime on nonemergency power outages. It hurts a lineman to walk away from the job leaving a customer without power Wolfe said. Tremayne said PG&E is trying to minimize overtime costs but denied the company has allowed customers to go without power out of financial concerns. He said crews were pulled out when darkness and falling trees made the work too dangerous. ---- Power prices could soar during the summer Posted at 10:35 p.m. PST Tuesday March 6 2001 BY STEVE JOHNSON Mercury News Unless Gov. Gray Davis arranges significantly more long-term electricity contracts or persuades people to turn off a lot more lights California's unpredictable spot market for power could wreak havoc this summer. Even with the 40 long-term deals announced by Davis on Monday experts interviewed Tuesday said up to 43 percent of the state's daily needs may have to come from this highly volatile market in which power is bought within a day of need. That could could prove hugely expensive because some spot market energy has cost five to six times what it would under the long-term contracts. It's widely expected that consumers ultimately would have to pay that tab which could amount to billions of dollars. And because that power won't be locked up in contracts there is no guarantee it will be available when it's needed which could lead to blackouts according to a recent report to the California Independent System Operator which oversees three-fourths of the state's power grid. ``The situation in California could reach catastrophic proportions'' the report concluded adding that unless things change dramatically ``it is a virtual certainty that peak demand will go unmet during many hot summer days.'' Steven Maviglio Davis' press secretary conceded Tuesday that the spot market could be troublesome. ``It's a major concern'' he said which is why the state is trying to line up more power contracts speed up power plant construction and promote conservation. During the normally hot month of August peak daily demand for power in the Independent System Operator's territory is expected to hit about 47700 megawatts -- enough for nearly 48 million homes. The state's three main utility firms generate about 8200 megawatts and have long-term contracts from wind solar and other energy sources for about 11700 megawatts more. That totals about 20000 megawatts. Add in the 7000 megawatts of long-term power that Davis has announced for this summer and the state is still nearly 21000 megawatts short. Costly proposition If all that power has to be obtained on the spot market the price could be high. On Friday last-minute purchases on the market averaged $411 per megawatt-hour compared to about $150 per megawatt-hour for all power obtained by the Independent System Operator and $69 per megawatt-hour on average under Davis' long-term contracts. It's possible that not all 21000 megawatts would have to be purchased on the market. Assuming Davis is successful in getting people to save 10 percent -- which could prove difficult -- conservation could reduce peak demand by nearly 5000 megawatts. California also might be able to trade for another 5000 megawatts with the federal government's Bonneville Power Administration and a hydroelectric operator in British Columbia said Arthur O'Donnell editor of California Energy Markets a trade publication. Under such deals those two outfits often send that much power to California when they don't need it and California returns the same amount or more when its demand is low. But O'Donnell said it wasn't clear whether 5000 megawatts would be available this summer because ``they still haven't gotten the snowpack they need in the Pacific Northwest'' which could limit that region's generating capacity. Still falling short Even if those hydropower imports are available and conservation works as Davis hopes it's likely California would still require the spot market for 11000 megawatts to meet the August demand. That's more than 20 percent of the state's overall power needs. ``All of the surrounding states are buying probably less than 5 percent at most of their energy on the spot market'' said Frank Wolak a Stanford economist who monitors electricity prices for the Independent System Operator. He worries about how much that power could cost and is disturbed that state officials haven't adequately addressed the issue. ``No one has any idea what they are going to do and that is part of the problem'' he said. Officials at Pacific Gas & Electric Co. are particularly concerned. They fear that their company -- which is nearing bankruptcy -- could get stuck for much of the spot market purchases by the Independent System Operator which has threatened to bill the utilities for the cost. Fearing the annual bill for that power could hit $2.4 billion this year PG&E wants the tab sent to the Department of Water Resources which also is buying power on the spot market for the state. But the Department of Water Resources has objected to that idea and the matter is expected to be heard today by the California Public Utilities Commission. ``We're looking for clarity on a number of issues'' regarding how the spot market will work ``and certainly that's one of them'' said Thomas Hannigan the water agency's director. ``I don't think anybody knows the answer of who's going to pay for it'' added PG&E spokesman John Nelson. But Nettie Hoge executive director of the Utility Reform Network in San Francisco said she suspects consumers ultimately will foot the bill. The unfortunate likelihood about spot market purchases is that ``ratepayers are responsible for all of it eventually'' Hoge said. ``It's a very big problem.'' ---- Power Plant Plans Cause Conflicts East county residents blast supervisors Jason B. Johnson Chronicle Staff Writer Wednesday March 7 2001 Industry dreams of building new power plants in east Contra Costa's hills are prompting an angry reaction among residents and elected officials who say they don't want more plants. The conflict was sparked by a vote by county supervisors yesterday to aggressively explore possible sites for new power plants throughout the county. The measure by Supervisors Mark DeSaulnier and Federal Glover which passed on a 4-to-0 vote directs the county administrator and Department of Community Development to compile a report on possible sites within 45 days. Supervisor Donna Gerber abstained after criticizing the plan for potentially repeating the same mistakes that plagued the state's energy deregulation effort by not considering how much energy the state region and county will need in future years and how much power is slated to come online. Gerber said alternative power sources such as solar should also be examined. A site drawing much attention is on top of a deposit of natural gas near the Concord Naval Weapons Station off Highway 4. The owners of 70 acres of land near the station recently formed a company Golden State Power Co. to pursue construction of at least one small peaker plant and a much larger facility capable of producing 600 megawatts. The site could hold up to three small 50-megawatt peaker plants and a larger 15-acre natural gas plant said Steve Thomas managing partner with Golden State. No land use applications have been filed. Thomas said 30 acres could be kept as open space to form a buffer around the project. Both (facilities) are state of the art said Thomas. We believe that the site is ideal. But east county residents at yesterday's meeting blasted the supervisorial measure and the power plant proposal complaining that more plants could put people's health at risk. The region already is home to six power plants. We're going to get a good dose of poor air quality and (negative) health conditions from this said Concord resident Evelyn Frietas. I think we need to stop and think about what we're doing to our quality of life. Dan Torres said the home he bought in 1995 at a new Bay Point development would be alarmingly close to the proposed Golden State site. It will be dragging emissions over our home said Torres. I didn't buy a home on that hill to be surrounded by power plants. There are six power plants in operation in east Contra Costa. Pittsburg already has two power plants and two more under construction. City Council members Frank Aiello and Yvonne Beals said the Antioch-Pittsburg area has done more than its share of energy production. Aiello said Pittsburg will soon produce enough energy to power three million homes in California. When is enough enough? asked Aiello. Pittsburg has shouldered responsibility for a land-fill and two more power plants. At some point you have to say enough. Beals said that while power plants have added millions to the city's general fund the negatives of additional plants could outweigh the benefits. I don't think that Pittsburg or east county should be the dumping ground for energy for California said Beals. ---- Supervisors set search for power plant sites The board also heard from the potential developers of a 650-megawatt plant between Bay Point and Concord By Thomas Peele TIMES STAFF WRITER MARTINEZ -- Contra Costa County supervisors took tentative steps Tuesday toward allowing the construction of at least one small power plant before summer ordering that its staff identify potential sites in unincorporated areas within seven weeks. The board voted 4-0 to search for locations. Third District Supervisor Donna Gerber abstained saying her colleagues lacked a comprehensive context'' to identify sites. I think the board knows just enough to be dangerous'' she said. Gerber said the county should examine the potential for additional power plants within its borders but not investigate individual sites yet. But Fourth District Supervisor Mark DeSaulnier said the action was necessary because of the energy crisis and because of Gov. Gray Davis' call for local governments to help speed the construction of so-called peaker plants before July and August. I wouldn't do this except under an emergency DeSaulnier said after the vote. There are unusual circumstances. We're not talking about putting this in a residential area. Fifth District Supervisor Federal Glover backed DeSaulnier but said he hoped for a location outside his heavily industrialized East County district. There's a lot of concern in East County as to the number of plants he said. DeSaulnier said though that the only logical place for a small plant remains the industrial belt'' stretching along the waterfront from West County to Antioch. He declined to provide specifics but said the only other potential site outside the industrial areas was the Concord Naval Weapons Station property. But he quickly added that he believes the U.S. Department of Defense would never go for it. Also DeSaulnier said he could not rule out the county building the plant itself and entering the electricity-selling market during peak demand times. Board Chairwoman Gayle Uilkema called that idea extremely premature and unlikely. That's a very powerful decision. I do not think we are ready'' she said. The California Energy Commission listed the Equilon refinery in Martinez as one of 32 potential peaker plant sites in the state last week. Peaker plants kick in during peak usage times. Davis called for their quick construction before the height of summer and its energy demand for air conditioning. Plants that generate as much as 50000 megawatts don't need Energy Commission approval. DeSaulnier said he believed a peaker plant could be built about a month after final approval. Supervisors also heard from the potential developers of a 650-megawatt plant between Bay Point and Concord. Walnut Creek commercial real estate developer Steve Thomas announced his intentions for the site north of Highway 4 last week. Construction could take two years. Eric Hasseltine a consultant representing Thomas and what he described as a brand new company for the site the Golden State Power Co. told supervisors that if they intended to speed peaker plant construction they should do what they can to expedite the larger plant. The Thomas site could house a peaker plant until the proposed larger one goes online. A large natural gas line passes under the site. DeSaulnier seemed cautious about the larger proposal which he had described last week as a good site. Uilkema too said she knew too little about it to comment. A resident who lives near the Thomas property asked the board to build it (the larger plant) closer to where you have industrial areas. You have to carefully consider the people who live nearby said Dan Torres 39. Evelyn Freitas of Concord said she lives downwind of the proposed site. Our air quality is going to be worse then it is now she said. Gerber played on the environmental issues saying the county already ranks second statewide to Los Angeles in volume of hazardous materials and amount of electrical generation. ---- Peter Schrag: California's $90 billion infrastructure gap (Published March 7 2001) By now California's surreal energy mess has grown from a crisis to a condition. It may not be quite as permanent as say death and taxes but it's still something that could get a whole lot worse before it gets better. Until there's more realistic pricing no gubernatorial pea-under-the-shell buyout scheme will solve it. Beyond the energy crisis however and in many ways similar to it California faces a whole range of other infrastructure problems -- in transportation in water resources and sewer systems in school and university buildings -- that seem once again to be all but forgotten. The Business Roundtable has estimated the need at roughly $90 billion though no number can possibly be exact. What's certain is that after a burst of high-level investment in public facilities during the 1950s and 1960s California's annual capital investment has sunk precipitously -- from an annual $150 per capita in the 1960s according to a set of recent studies for PPIC the Public Policy Institute of California to about $30 in the 1990s. But you probably don't need to tell anyone driving Bay Area or Los Angeles freeways or looking at the ubiquitous portable classrooms those dreary brown boxes that house a fourth of our public school students. Ever since passage of Proposition 13 in 1978 we have been flying the flag of deferred maintenance. As in the state's electricity crisis however there's no way California can effectively address those problems merely by building or bonding itself out of them. In highway construction in developing water resources in finding enough university space to accommodate the Tidal Wave II of students managing demand is likely to be as crucial to any solution as new construction. In the energy market -- and in electricity particularly -- it's been a familiar principle ever since David Roe of the Environmental Defense Fund first persuaded Pacific Gas and Electric that a dollar invested in conservation may be worth as much as the same investment in new generation. But in most other sectors of California's infrastructure state and local it's a lesson still to be learned. There have been scattered attempts to encourage conservation and reduce demand -- significant reduction in water use for example through the installation of low-flow faucets and low-flush toilets some reduction in traffic by using rush-hour diamond lanes or by adjusting highway or (as in New York) bridge tolls to levels of congestion. But as pointed out by David Dowall an urban economist at Berkeley state policy-makers have not really begun to consider how demand management strategies can be applied to infrastructure service areas or how the more efficient use of facilities and more realistic pricing -- highway tolls say or parking fees -- can reduce demand for scarce infrastructure resources. In any case says Dowall in one of the PPIC reports we should pick which major projects we will build not just according to per capita estimates of how much we need but according to how much consumers are willing to pay for them. To avoid hurting the poor congestion-related highway tolls and other tariffs can be rebated on the basis of income. University fees can be means-tested. In California they also could be adjusted to encourage summer school classes and other off-peak uses rather than (as in the past) making UC summer courses more expensive. Given the political and economic uncertainties there's no way to know how far such demand management can be taken. But there's not much doubt that as Dowall and others point out the state's infrastructure planning is a jumble of uncoordinated agency agendas and wish lists. The Legislature last year passed a bill AB 1473 by Assembly Speaker Robert Hertzberg that requires the governor beginning next year to submit an annual five-year infrastructure plan for state agencies and public schools along with recommendations on how to fund it. In addition Gov. Gray Davis' infrastructure commission is expected to recommend better coordination of infrastructure and land-use planning when it issues its report this spring. That would be a start. As California State Treasurer Phil Angelides has pointed out the state desperately needs to start joint planning -- regional planning -- for housing roads and other resources to reduce the need for long commutes to preserve open space and to bring jobs to where people live and housing to where the jobs are. That would itself reduce demand for more freeway lanes and equally important improve the quality of life. At present most planning for housing roads water systems and other facilities rarely recognizes the regional impact of local decisions. In the East Bay slow-growth forces push well-intended initiatives that would force more development into Tracy or Modesto and further tax the transportation systems to Silicon Valley. In city after city there are beggar-thy-neighbor efforts to grab yet another shopping mall that produces a little extra sales tax revenue for the city that gets it and that often compounds traffic and revenue problems in adjacent communities. In higher education we divide bond proceeds evenly among UC the California State University and the community colleges even though the community colleges serve eight times as many students as UC. We plan road projects according to county not regional priorities. It is all done according to antiquated political and fiscal formulas that often no longer make sense. We don't just need better capital planning we need a whole new planning system. ---- PG&E power plan debated at hearing A PUC meeting on the utility's capacity expansion project for the Tri-Valley follows weeks of protest from officials residents Power upgrade in valley debated By Megan Long TIMES STAFF WRITER SAN FRANCISCO -- Dublin officials and the developer of a Livermore subdivision faced questions Tuesday about their opposition to alternative routes of PG&E's controversial Tri-Valley power upgrade plan -- and answered by restating their long-standing objections. Tuesday's cross-examination came during the third and likely final week of the California Public Utility Commission's evidentiary hearings on the utility's $91 million Tri-Valley 2002 Capacity Increase Project. It has followed weeks of protests of PG&E's upgrade plans by officials and residents of Livermore Pleasanton Dublin and San Ramon. And before the questioning started Dublin Vice Mayor Janet Lockhart reiterated concerns about an alternative route deemed environmentally superior that would place a substation just 1000 feet north of Interstate 580 between Tassajara and Fallon roads. She said that would undermine the results of a 15-year process to plan the eastern development of the city. It's extremely important to the residents of our community to follow a plan we worked hard to produce she said. Dublin officials favor PG&E's proposed placement of the station three miles north of the freeway away from new high-tech company offices and housing developments. Besides the Dublin substation the project calls for construction of a substation in North Livermore expansion of the Pleasanton substation and installation of 23.5 miles of new lines. In response to questions from PUC Administrative Law Judge Michelle Cooke Dublin's public works director Lee Thompson confirmed that the Lin family the owner of the property where the alternative substation would go wasn't interested in selling the land to PG&E. Cooke also asked Thompson to define a discretionary permit which is how city officials said they might treat a permit for a substation. Lee said that type of permit is one the city has the right to approve or not depending on the project's impact. Eddie Peabody Dublin's community development director testified that the zoning for the Lin property accommodates uses such as commercial business research and development and light manufacturing. It would not he said be appropriate for a power substation. He said parcels within the East Dublin area that could host a station would include those zoned for public and semi-public uses including land recently bought by Oracle and Sun Microsystems for new campuses. While Dublin officials testified that one buyer of land in that area paid $86 per square foot others suggested land prices would be inflated to help make a PG&E land buy look prohibitively expensive. An executive of Centex Homes the developer of new houses near Isabel Avenue and Concannon Boulevard objected to an alternative route that would place high-voltage transmission lines overhead along Isabel and Stanley Boulevard. David Barclay president of Centex's Northern California division said that the 80-foot to 150-foot towers would have a severe visual impact on residents of the Prima tract. Ed O'Neill a lawyer for the Kottinger Ranch Homeowners Association pointed out that existing distribution lines on 50-foot poles on Isabel already mar the view for residents. The Foley family has been ranching on land south of Pleasanton city limits for years said their attorney Kennedy Richardson. The utility's project would place overhead lines and a transmission station on rolling hills that the family envisions as one day being public open space with limited development Richardson said. Lawyers for Pleasanton Livermore Kottinger Ranch and Centex are scheduled to cross-examine a PG&E engineer today about the project's routing. That testimony should be the most controversial of the hearings. Judge Cooke is expected to recommend an alignment by July to the PUC which will make the final decision. ---- NEWS State OKs 'Peaker' Power Plant at SFO / Temporary generator could be sending electricity to 50000 homes by August Marshall Wilson 03/08/2001 The San Francisco Chronicle FINAL Page A.20 (Copyright 2001) State energy officials yesterday approved plans to build a temporary electrical plant at San Francisco International Airport that should generate enough juice to power 50000 homes by August. Meeting in Sacramento the Energy Commission voted 4-0 to give the green light to the gas-fired plant. It will operate during peak summer and winter demand to help the state avoid Stage 3 power alerts and rolling blackouts. Texas-based El Paso Merchant Energy Co. won approval under a new state law mandating speedy four-month reviews of so-called peaker plants. It was the only one of seven applications statewide to win approval. The other proposals were withdrawn for various reasons. The 51-megawatt plant formally called the United Golden Gate Power Project is scheduled to be built at the northwest corner of the airport near the United Airlines maintenance center. Within the next few weeks El Paso plans to apply to build a 571- megawatt $400 million plant in the same area company spokesman Jesse Frederick said. It would undergo a separate review by state energy officials. The small peaker plant approved yesterday is to generate electricity beginning around Aug. 1 for up to three years. After the end of three years the plant would be closed or converted to a cleaner-burning system. Under state law a temporary peaker plant is permitted to spew more air pollution than a permanent plant. El Paso's temporary plant is to be built next to a co-generation plant operated by United Airlines. It would use existing connections for natural gas and water supplies and tap into existing power transmission lines. Electricity generated by the plant would be pumped into the state's electrical grid Energy Commission spokesman Gary Fay said. It would also serve as a backup for San Francisco Airport in case of a blackout. No one spoke against the proposed plant at yesterday's commission meeting. The proposal however has been criticized by area residents and environmentalists worried about air pollution. Scott Buschman a professional photographer and San Bruno resident said yesterday it was unjust that state officials 100 miles away in Sacramento approved a Texas company's proposal to put a power plant on land owned by San Francisco. The fact that they approved it without considering the public's concerns foremost air quality is very disturbing he said. Fay said the plant complies with clean-air standards. Answering the criticism about the location of yesterday's deliberation he said three hearings and several workshops were held in communities near the airport. Copyright 2000 Dow Jones & Company Inc. All Rights Reserved. ---- Crossed Wires: Major Kinks Emerge In Gov. Davis's Plan To Power California --- State's Outlays for Electricity May Be Hard to Recover Without Rate Increases --- Betting on Long-Term Deals By Wall Street Journal staff reporters Rebecca Smith Mitchel Benson and John R. Emshwiller 03/08/2001 The Wall Street Journal A1 (Copyright (c) 2001 Dow Jones & Company Inc.) SACRAMENTO Calif. -- Earlier this year Gov. Gray Davis made what may be the biggest bet in the history of the nation's biggest state: that he could tame an out-of-control electricity market and avoid devastating blackouts without busting the state's budget antagonizing its consumers or derailing his own political career. His wager is still on the table but the assumptions that underlie it are looking increasingly shaky these days. The governor has already spent around $2 billion of public money buying hugely expensive wholesale power taking over the role formerly played by the state's near-bankrupt electric utilities. And California will probably be obliged to spend billions more before its electricity market stabilizes and those utilities are restored to some semblance of financial health. Under the governor's plan California aims to recoup the money it is using to buy electricity by issuing $10 billion in bonds. That way it would still have a healthy budget surplus to finance new spending on roads schools and other public services. But there's a potentially big obstacle to this plan. The state Legislature worried about racking up billions in new debt has put limits on the size of any bond offering. In broad terms the Legislature's action would allow the state to borrow only four times as much as it can recover annually from utility customers. Right now that doesn't appear to be much. Under the current rate structure essentially set in place by California's flawed 1996 electricity-deregulation plan consumers pay far less for power than the cost of acquiring it on the wholesale market. Preliminary estimates submitted by utilities last month to the California Public Utilities Commission show the state's share of the proceeds from electricity sales this year could be as little as $241 million -- not enough to support even $1 billion in bond sales under the Legislature's formula. That would leave the state on the hook for much of the money it has already paid for power -- not to mention the billions more Gov. Davis will need to spend. That in turn raises the prospect that California's economy and its credit rating both could deteriorate significantly. But state finance officials say that based on their own projections they will be able to extract enough money to support a $10 billion bond issue. Walking a careful line between fiscal prudence and political survival Mr. Davis and others in his administration are scrambling to come up with ways to get around the legislative restrictions without raising rates for consumers. If I wanted to raise rates I could solve this problem in 20 minutes Mr. Davis says. The governor says he believes that the state can obtain enough affordable power through long-term power-supply contracts to avoid the need for a big rate increase. The billions of dollars the state hopes to borrow would be used to help pay for power until electricity prices drop as they are expected to do when new power plants come online over the next few years. The Davis administration fears that what may be its only other option -- a big increase in retail electric rates -- could prompt angry consumer groups to seek new electricity laws through a statewide ballot initiative during next year's election. That's when Mr. Davis is expected to run for a second term as governor. But trying to save California without rate increases is forcing Mr. Davis to make some colossal gambles with the state's money. State officials estimate that in the next several months California will need to spend as much as $6 billion on power purchases -- equivalent to the state's entire fiscal surplus. Mr. Davis is also looking to spend several billion more to buy the transmission assets of three investor-owned utilities in order to restore two of them to credit-worthiness. He also has announced plans to spend several hundred million dollars more on conservation programs designed to reduce demand while new power plants are being built in the state. In order to limit the state's financial exposure in the meantime the governor and his aides have in some cases ignored state law. They have threatened appointed officials who have stood in the way. And they have sharply restricted the flow of information to the public. None of those steps is expected to do much to reduce state spending on power in the coming months. In a few weeks power usage is expected to begin a sharp seasonal rise as Californians switch on their air conditioners with the coming of warmer weather. By various estimates demand during peak periods this summer could outstrip supply by 10% or several thousand megawatts. That could produce more rolling blackouts like the ones that hit Northern California earlier this year. It is also likely to put strong upward pressure on wholesale electricity prices. Steven Zimmerman managing director of Standard & Poor's Corp. says Mr. Davis and his aides don't have a lot of time to put a cap on the state's financial exposure to the crisis. The credit-rating agency has put the state on credit watch for a possible downgrade which would affect the value of all of California's outstanding public debt. Moody's Investor Service Inc. is also concerned. It said in a recent report that the power crisis could soon seriously threaten the health of the state's economy. Mr. Davis a Democrat and career politician was dealt a bad hand when he took office in 1999. The deregulation plan that sparked the state's electricity crisis was enacted under his predecessor Republican Pete Wilson. But Mr. Davis was slow to react to early signs of trouble this past summer and alarms sounded by members of the state Legislature. By the time Mr. Davis finally sprang into action earlier this year a troublesome power-supply squeeze had escalated into a crisis. In a Jan. 17 declaration of emergency the governor designated the state Department of Water Resources to take the utilities' place as the daily buyer of huge quantities of electricity. His hope: that by making the state the dominant player in California's power sector he would ease electricity producers' concerns about getting paid and give the state enough clout to negotiate lower long-term power prices. Earlier this week Mr. Davis announced final or tentative agreements with 20 power suppliers to furnish the state with a total of 8900 megawatts for periods of as long as 20 years. But the supply situation remains extremely uncertain for this summer when demand probably will top 45000 megawatts. If the state can secure enough power under contract and push down demand through aggressive conservation it might be able to squeak through the summer season. If not it will be forced to keep buying huge amounts of costly power in the cash market. Under deregulation retail electric rates were frozen for several years while wholesale-power costs were free to fluctuate. When the plan was conceived wholesale prices were low and expected to go lower. However a combination of unexpected growth in power demand and a lack of new generating capacity helped produce a supply squeeze. Average wholesale prices more than tripled last year from 1999. And in January those prices were up 10-fold from a year earlier. By then California's two biggest investor-owned utilities -- the Pacific Gas & Electric unit of PG&E Corp. and the Southern California Edison subsidiary of Edison International -- faced imminent financial collapse. They had racked up billions of dollars in wholesale power bills they couldn't afford to pay. As generators began shying away from selling to the two utilities the Clinton administration forced them to sell power into the California market an order left in place during the first weeks of the Bush administration. Still northern California was hit by rolling blackouts on several days in early January. Since then the DWR which does some electricity trading as an adjunct to its main mission of managing the state's giant system of aqueducts and reservoirs has had to learn the ins and outs of power markets on the run. It hasn't been easy. David Mills trading-floor manager for the federal Bonneville Power Administration says the water agency has at times offered to pay $50 to $100 per megawatt hour more than the available market price. They agree to prices that make you wonder says Mr. Mills whose organization markets electricity from federal dams in the Pacific Northwest. You'd at least think they'd check to see what the prevailing price is before throwing out their offer. Mr. Mills says that to cut California some slack he occasionally has instructed his traders to sell at prices lower than the DWR had offered to pay. Ray Hart the water agency deputy director responsible for the power purchasing says he isn't aware of any cases in which the DWR has overpaid. He says his team has been extremely successful by all measures. Ultimately the DWR's trading acumen is far less important than the overall arithmetic of power supply and demand in California. With the price of natural gas that feeds many of the region's generating plants at near record levels and some suppliers reluctant to sell into the troubled California market wholesale electric prices remain stubbornly high and in recent days have again been rising. The Legislature has advanced the DWR about $3 billion from the state's general fund for power purchases. Under emergency legislation passed by the Legislature and signed by Mr. Davis on Feb. 1 the general fund is to be reimbursed from a planned bond sale later this year. But under terms of the emergency law the water agency would have to wrest $2.5 billion a year in revenue from retail electricity rates in order to sell the $10 billion worth of bonds sought by Mr. Davis. Assembly Speaker Robert Hertzberg a Southern California Democrat says the formula was created to ensure that there would be a way to repay the bonds without draining the state's coffers. We didn't want to just open our wallets he says. According to the language of the Feb. 1 law the water agency gets what's left of revenue collected from ratepayers after the utilities pay certain of their own power-supply bills and other expenses. And in their filings with the PUC last month the utilities reckoned under their worst-case scenarios that there would be only $241 million available to the DWR this year. State officials are quietly pushing the PUC to rejigger the formula so that the water department gets more money -- even though that would clash with terms of the Feb. 1 law. Robert Miyashiro deputy director of the Department of Finance says the emergency law was drafted poorly and has led people to believe the DWR only gets the leftover money. He predicts there will be cleanup legislation. At the request of the Davis administration the PUC is considering a plan to use a different revenue-sharing formula than the one in the state law. The proposed new formula was written in close consultation with Mr. Davis's Finance Department says PUC President Loretta Lynch who supports the initiative and is hoping to rush it through. The effort has drawn some opposition. Commissioner Richard Bilas at a recent PUC meeting questioned the legality of the commission attempting to change a formula set by the Legislature. PG&E is even more emphatic since the DWR's extra money could come at the utility's expense. The formula threatens to undo the very financial protections for the utilities that [the new law] attempted to provide the utility said in a recent filing with the PUC. As politicians and regulators wrestle with that issue the Davis administration has taken a step to reduce the outflow of state cash that also seems to conflict with the Feb. 1 law. It was widely assumed that the law required the DWR to buy any electricity the state needed to keep its lights on. However on many occasions the DWR has refused to buy power on the grounds that it was too expensive citing a portion of the new law that urges the agency to hold down costs. The task of covering any remaining shortfall has passed to the California Independent System Operator which manages the state's energy grid and is charged with buying power when necessary to avert shortages. However the ISO doesn't have any power-purchasing money of its own and the major parties it would normally bill are PG&E and Edison whose inability to pay their power bills was the reason the state started buying electricity in the first place. Amid criticism of its stance from generators utilities and Wall Street the DWR says it has started covering more of the utilities' electricity costs. The water agency is now buying 95% to 99% of what California needs in a given day says the agency's Mr. Hart. But increased buying only adds to the uncertainty about the eventual tab. The state's legislative analyst Elizabeth Hill recently recommended that lawmakers hold off considering more than $2 billion in state spending on items ranging from college construction to beach cleanups because of continuing questions about the financial impact of the electricity crisis. Like others Ms. Hill complains that the governor's office and state agencies haven't been forthcoming with information. Indeed the DWR refuses to say precisely how much power it is purchasing and at what prices though it has on several occasions gone back to the Legislature for more money. State officials say that data on its purchasing activities would give suppliers an advantage in continuing electricity-supply contract talks. State Controller Kathleen Connell who is running for mayor of Los Angeles in an April election recently announced plans to post state power-spending information on her department's Web site. But within 24 hours Ms. Connell suspended that plan after discussions with senior Davis administration officials. I feel very strongly that this information should be publicly released says Ms. Connell. I just don't want to do anything that would weaken the state's effectiveness in negotiating. In an effort to more tightly control events the governor obtained legislative approval to abolish the 26-member ISO board which was made up of everyone from utility executives to representatives of consumer groups. He then appointed a new five-member board. To ensure a quick transition the California attorney general threatened the old board members with fines of as much as $5000 each if they didn't immediately relinquish their positions. All did. I was offended at the heavy-handed treatment says Karen Johanson a former ISO board member. One of the first acts of the ISO's new board was to close a meeting about the electricity crisis. The former ISO board routinely held such meetings in public. ISO attorneys say the meeting was largely designed as a private briefing for new board members and that the organization is committed to keeping its deliberations as open as possible. The Wall Street Journal and other news organizations have unsuccessfully challenged the closure in Sacramento state court. Copyright 2000 Dow Jones & Company Inc. All Rights Reserved. What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Confidential - Don Black Body:: I'm fine with it. m What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Confidential - Lavos Trading Program Body:: You missed logistics as a rotaion. Also - Let's leave out where they graduate to. This might be an issue with the AA program if we say that they are going to re-enter the program. What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: The "Dark" Side of Popular Culture Body:: Jeff I thought you might find this of interest. Who would have guessed that the California power crisis and Gray Davis could be so funny. Kevin Los Angeles Daily News Friday June 22 2001 'Tonight Show' pokes fun at power crisis By Fred Shuster Staff Writer BURBANK -- Jay Leno pulled the plug on his late-night chat show Thursday doing his part for the state's energy crisis but viewers weren't left in the dark. Flashlights mining helmets and multicolor glow sticks helped to illuminate the set for the show dubbed a one-time-only The Tonight Show Unplugged which Leno said saved enough electricity to light a house for a month. [IMAGE] The unplugged edition of The Tonight Show with Jay Leno pokes fun at the California power crisis(Reed Saxon / A.P.) Call it NBC's Can't See TV. This is not some cheap rating ploy. ... If this works they're gonna make us do this every night Leno joked as part of his opening monologue. The nationally broadcast show featuring a comic interlude with California Gov. Gray Davis utilized just a small amount of electricity to run the cameras Leno said before the show began. Actually in Burbank where the taping took place at NBC Studios the city owns the power company and residents and businesses have not been hit by rolling blackouts as in other areas. The city made $5 million in profit in May after racking up $60 million in excess power sales. But Leno said not using studio lights TV monitors amplifiers and other power sources Thursday saved enough electricity to light a four-bedroom house for a month. Members of the house band wore miner's helmets with group leader Kevin Eubanks strumming an acoustic guitar rather than his regular electric instrument. The stage was lit by candles torches and flashlight beams trained on Leno. Members of the studio audience used the gear to help brighten the set. This is real goofy Leno said before taping got under way. We'll see what happens. Guests included Arsenio Hall Gilbert Gottfried a trainer of nocturnal animals and a Hawaiian fire dancer -- and a brief visit from the governor. Exuding whatever is the direct opposite of charisma Davis had a brief exchange with Leno drawing laughs with the line This is the first time Gray Davis and (the word) electricity have ever appeared in the same sentence. Leno's staff wore glasses with small lights attached and audience prompter Bob Perlow held a hand-scrawled applause sign aloft throughout the show instead of switching on the usual electric model. While there was little energy in play there was no shortage of laughs. Leno joked that President George W. Bush told Davis not to worry because I've been operating in the dark for years. Those in the studio said Leno's nocturnal transmission added excitement to the program. It was cool said Lillie Harrell 17 a tourist from Hammond La. The crowd got really involved. I guess it shows you don't really need all those lights. Added Jose Tano 21 a Burbank resident and student at the University of California Los Angeles It was a good idea and a great way to make a point. The local power company might not have made out very well but the studio audience didn't end up empty-handed. Each received a fluorescent lantern and pack of batteries as they left the studio. Contact Information E-mail kevinscott@onlinemailbox.net Phone (213) 926-2626 Fax (707) 516-0019 Traditional Mail PO Box 21074 ?Los Angeles CA 90021 - image001.jpg - image001.jpg What should this email be categorized as? [/INST] Purely Personal <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: RE: PG&E PX Credit Calculation -- CONFIDENTIAL ATTY CLIENT WORK PRODUCT Body:: Alan -- The only way to collect the overpayment is to artificially reduce the PX Credit going forward to thereby allow for more CTC. Jim What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Emissions Strategy Meeting Body:: calendar - fyi ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Additions to Working Groups Body:: yes -- just make sure the working group leaders know. Maureen McVicker 12/30/99 02:56 PM To: Steven J Kean/HOU/EES@EES cc: Subject: Additions to Working Groups SK - STILL OK TO KEEP ADDING PEOPLE? mm ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Confidential --CFTC Chair Body:: what do you think? What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Question For All-Employee Meeting Body:: I don't know. Can we get someone in IT to respond? Mary Clark 09/26/2000 05:42 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: Re: Question For All-Employee Meeting Steve I believe the answer is that we don't mandate a specific format for dates for all locations but rather use what is done locally -- just like this employee's recollection. Do you agree? Mary ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Purchased TWA ticket for flight Des Moines/DC. Didnt use United ticket for this leg. Body:: In DC to do Lou Pai's speech. You speak between 10:30 and 12:00. 3:00 House staff briefing by John Runyon of International Paper What should this email be categorized as? [/INST] Logistic Arrangements <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Enron Mentions Body:: See first item below What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Management Conference - Save the Date Body:: looks fine From: Terrie James/ENRON@enronXgate on 07/19/2001 04:31 PM To: Steven J Kean/NA/Enron@Enron Cindy Olson/ENRON@enronXgate cc: Sherri Sera/ENRON@enronXgate Marge Nadasky/ENRON@enronXgate Subject: Management Conference - Save the Date Steve and Cindy Attached is the electronic Save the Date memo for the Management Conference. We are preparing to send it out next week. Please let me know if you have any comments or concerns on the e-mail. As for distribution we've worked with HR on the distribution list for VPs but will circle back with David Oxley's team to ensure we have the most up-to-date list. Since some VPs in redeployment will most likely find positions within Enron by November I don't plan to exclude them from the distribution ... unlike United Way where we are not soliciting employees in redeployment for a contribution. I look forward to any feedback. Terrie James Senior Director Public Relations Enron Broadband Services (ph) 713.853.7727 (fax) 713.646.3248 terrie.james@enron.com What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: FINAL Body:: Attached is the final letter. Please note - there was a small change at the top of page 2. What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: White House To Support FERC Action Today Body:: Fyi - price cap events of the week. ----------------- What should this email be categorized as? [/INST] Company Business/Strategy <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: Re: Letter to Bob Houck Body:: The letter looks fine. Set it up as your letter to Ken Lay was forwarded to me for response and have Jeff B sign. Thanks Marcia A Linton 09/20/2000 04:04 PM To: Steven J Kean/NA/Enron@Enron Maureen McVicker/NA/Enron@Enron cc: Subject: Letter to Bob Houck Here is the draft letter to Bob Houck from Ken Lay that Jeff Brown asked me to forward to you. What should this email be categorized as? [/INST] Document editing/checking/collaboration <s>

<s>[INST] <<SYS>> You are reviewing an email using its subject and body. Based on the text in its subject and body, please categorize this email into one of the following categories: 1. 'Company Business/Strategy' 2. 'Purely Personal' 3. 'Personal but in a professional context' 4. 'Logistic Arrangements' 5. 'Employment arrangements' 6. 'Document editing/checking/collaboration' 7. 'Empty message (due to missing attachment)' 8. 'Empty message' Please provide only one category (e.g., 'Purely Personal'). <</SYS>> Subject:: FYI Body:: Let's add this to our daily distribution. ----------------- What should this email be categorized as? [/INST] Logistic Arrangements <s>