Legislator threatens to sue for power information

The Associated Press
Tuesday March 13, 2001

SACRAMENTO — A Republican lawmaker said Monday he’s prepared to sue Gov. Gray Davis if he doesn’t release records showing how much power the state has purchased and how much it paid. 

Assemblyman Tony Strickland requested the information from the state Department of Finance earlier this month, but was told it didn’t have the documents. 

Strickland said he has sent a second request to state Controller Kathleen Connell, the Department of General Services and the Department of Water Resources, which makes the power purchases. 

“This is particularly surprising since the governor’s requests for more spending authority are all signed by Department of Finance officials,” said Strickland, R-Thousand Oaks. 

The Davis administration has committed $3.7 billion in taxpayer money to buy power for customers of Pacific Gas and Electric and Southern California Edison since early January. The utilities, who say they are nearly $14 billion in debt due to high wholesale electricity costs, have been denied credit by wholesalers. 

Davis has refused to release details of the power buys, saying it would place state negotiators at a competitive disadvantage. 

“Mr. Strickland’s proposal is similar to showing your opponent your cards in the middle of a card game,” said Davis spokesman Steve Maviglio. “It will result in higher electric rates for California consumers, which is in direct conflict with everything the governor is doing.” 

Strickland said he doesn’t believe it would drive up the prices the state will pay for power. Californians should know what they’re getting for their money, he said. 

Maviglio said details on the contracts will be released six months after they’re signed. 

Several news organizations, including The Associated Press, have filed requests for the information under the state public records act. 

The state has pledged to buy one-third of the power Edison and PG&E customers use, and plans to spend upward of $10 billion on it over the next decade. 

The Davis administration plans to issue revenue bonds in May to cover the costs; the bonds will be repaid by Edison and PG&E customers over several years. 

The state Public Utilities Commission is now reviewing whether the utilities’ rates are sufficient for the state to recoup its costs, or whether a rate increase is needed. 

In addition to Edison’s and PG&E’s financial troubles, the state has been struggling with high natural gas costs and a tight power supply, due in part to power plant maintenance and scarce hydroelectric power. 

California started the week with enough power to avoid declaring an electricity alert Monday. 

Lawmakers and Davis are considering several plans to help the utilities regain their financial footing, including purchasing their transmission systems to give them much-needed cash. 

Davis announced a tentative deal with Edison late last month to purchase the utility’s transmission system for $2.7 billion to help the company pay its bills. 

Negotiations continue between the state and executives from PG&E and the state’s third investor-owned utility, San Diego Gas & Electric, over the purchase of their power lines, Maviglio said. 

The University of California and California State University systems are seeking a preliminary injunction to prevent Enron Energy Services, Inc., from changing its contract to deliver electrical power. 

The motion for the injunction, filed late Friday, accuses Enron of seeking to change its contract a year before it expires. The university systems signed a four-year deal with Houston-based Enron in 1998 for the electricity and other services. 

Enron spokeswoman Peggy Mahoney said Monday the company will “continue to honor all terms of its agreement, including all financial terms” with the university systems. 

The motion claims Enron hopes to return UC and CSU to the electrical power distribution, scheduling and billing systems of Pacific Gas and Electric and Southern California Edison, and that such a move would allow Enron to sell power previously intended for the universities on the spot market at a higher price. 

“A move by Enron to escape the requirements of the UC-CSU contract would mean higher profits for Enron, but it has the potential for costing California students, parents, and taxpayers hundreds of millions of dollars in additional expenses,” Joe Mullinix, UC senior vice president for business and finance, said Monday. 


But Mahoney stressed that Enron officials have no plans to resell any power intended for the two university systems. 

UC’s annual electric bill is about $87 million and its natural gas bill is about $26 million. CSU annually pays about $40 million for electricity and $20 million for natural gas. 



• President Bush is considering replacing Curtis Hebert, the chairman of the Federal Energy Regulatory Commission, just two months after he appointed him, according to government sources. Bush is said to be planning to nominate Pat Wood III, chairman of the Texas Public Utility Commission, to the commission with the intention of making him chairman. 

• Baltimore-based Constellation Power Source signs a 10-year, $3.6 billion deal to provide power to California. The company’s headquarters are more than 2,700 miles from California’s state capital of Sacramento. 

• Assembly Speaker Robert Hertzberg, D-Van Nuys, appoints a subcommittee to focus on natural gas supplies and prices. 

• An Assembly committee approves a bill that would require new power plants to offer their electricity to California first. The bill’s author Assembly Speaker Robert Hertzberg says the bill will increase the state’s electricity supply. Assemblyman John Campbell calls it a protectionist measure and would encourage other states to hoard power. The bill now goes to the full Assembly. 

• The Senate Appropriations Committee passes a bill to expedite power plant approval. The measure by Sen. Byron Sher would allot $50 million for rebates for small renewable energy systems. SB28x also allows local governments to keep 100 percent of the property tax revenue from new power plants and shortens the public comment period from 90 to 45 days during the California Energy Commission approval process. The bill now goes to the Assembly. 


What’s next: 

• The Davis administration continues negotiations with Edison, PG&E and San Diego Gas & Electric over the governor’s plan to buy their transmission lines to help Edison and PG&E pay their debts. 

• The Legislature considers dozens of bills to encourage energy conservation, increase alternative power and streamline power plant siting. 

• The California Public Utility Commission meets Thursday to consider whether to prohibit PG&E and Edison from laying off about 3,000 workers. The utilities say it could help them cut costs and ease their $14 billion debt. A PUC administrative law judge says the layoffs could cause response times to customer outages to suffer. The PUC will also discuss restructuring the interruptible customer program. The program gives big electricity users a discounted rate in return for shutting down their power when the state is short of electricity. After January’s rolling blackouts, the PUC froze the program and said PG&E and Edison could no longer fine interruptible customers for not complying. 


On the Net: 

The California Independent System Operator www.caiso.com