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I have adjusted deals 436187 and 413538. D Susan Hadix@ENRON 10/30/2000 01:32 PM To: Daren J Farmer/HOU/ECT@ECT cc: Subject: October deals Daren, I have 2 allocation exceptions that require a deal to be extended. Meter 98-1488 Tenaska is showing small volumes flowed on days there was no deal. Can you extend the deal throughout the month so that the volumes will have a deal to link to. I have the same situation on meter 98-1601. If you have any questions, please let me know. Thanks, Susan

---------------------- Forwarded by John Arnold/HOU/ECT on 09/06/2000 06:59 PM --------------------------- "Zerilli, Frank" <[email protected]> on 09/06/2000 06:46:47 AM To: "'[email protected]'" <[email protected]> cc: Subject: concord Crash concord - concord.jpg

Southern Union for May 2100 83 st 2100 Port Arthur These are my estimates. The volumes for April at T-ville and Colorado RS are either spot or April only. Janet does not know about next month yet. So, 5000 total is a safe assumption.

---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 11/08/2000 05:13 PM --------------------------- Shirley Crenshaw 11/08/2000 03:53 PM To: Vince J Kaminski/HOU/ECT@ECT, Stinson Gibner/HOU/ECT@ECT, Pinnamaneni Krishnarao/HOU/ECT@ECT, Vasant Shanbhogue/HOU/ECT@ECT, Mike A Roberts/HOU/ECT@ECT, Joseph Hrgovcic/HOU/ECT@ECT, Tanya Tamarchenko/HOU/ECT@ECT, Zimin Lu/HOU/ECT@ECT, Martin Lin/HOU/ECT@ECT, Maureen Raymond/HOU/ECT@ECT, Osman Sezgen/HOU/EES@EES, Paulo Issler/HOU/ECT@ECT, Amitava Dhar/Corp/Enron@ENRON, Alex Huang/Corp/Enron@ENRON, Kevin Kindall/Corp/Enron@ENRON, Kevin G Moore/HOU/ECT@ECT, Clayton Vernon/Corp/Enron@ENRON, William Smith/Corp/Enron@ENRON, Jose Marquez/Corp/Enron@ENRON, Chonawee Supatgiat/Corp/Enron@Enron, Shalesh Ganjoo/HOU/ECT@ECT, Tom Halliburton/Corp/Enron@Enron, Elena Chilkina/Corp/Enron@Enron, Sevil Yaman/Corp/Enron@Enron, Sofya Tamarchenko/NA/Enron@Enron, Bob Lee/NA/Enron@Enron, Gwyn Koepke/NA/Enron@Enron, Hector Campos/HOU/ECT@ECT, Anita DuPont/NA/Enron@ENRON, Youyi Feng/NA/Enron@Enron, V Charles Weldon/HOU/ECT@ECT, Yana Kristal/Corp/Enron@ENRON, Praveen Mellacheruvu/HOU/EES@EES, Li Sun/NA/Enron@Enron, Stephen Bennett/NA/Enron@ENRON, Roman Zadorozhny/HOU/EES@EES, Lance Cunningham/NA/Enron@ENRON, Leann Walton/NA/Enron@ENRON, Shane Green/HOU/EES@EES cc: Subject: Wallet Cards Hello everyone: Attached is a draft of the new wallet cards for the Research Group. Please look at your information and make any corrections necessary and return to me. If I have left anyone off, I apologize and please add your information. If the information is correct as typed, please let me know. Thanks! Shirley

See minor comment and then circulate to the larger group. -----Original Message----- From: jpekarsky [mailto:[email protected]] Sent: Tuesday, November 20, 2001 2:32 PM To: Kean, Steven J.; Palmer, Mark A. (PR) Cc: lrand Subject: Floor Meeting Talking Points Here is a first cut at a script. Please call me with any comments and/or let me know if you want us to circulate this to the broader working group. Thanks Josh <<businessunit_remarks.doc>>

Susan, Did Greg say that the cash is still in ERMT or was it "swept" back up into ENA or Enron Corp.? -----Original Message----- From: Musch, Susan Sent: Wednesday, January 09, 2002 5:02 PM To: Zisman, Stuart; Laborde, John; Shackleton, Sara Subject: RE: RMT Trial Balance Information Importance: High I just confirmed with Greg Whiting in Accounting that RMT made $ 250 MM contribution to ERMT. (RMT obtained such funds through a capital contribution from ENA, which in turn received a $250 MM contribution from Enron Corp.) Best regards, Susan -----Original Message----- From: Musch, Susan Sent: Wednesday, January 09, 2002 3:34 PM To: Zisman, Stuart Cc: Laborde, John; Shackleton, Sara Subject: RMT Trial Balance Information Importance: High Stuart, Would you please send me your fax number so I can fax you the November 30th Trial Balance for RMT? Thanks, Susan -----Original Message----- From: Shackleton, Sara Sent: Wednesday, January 09, 2002 2:53 PM To: Laborde, John; Musch, Susan; Zisman, Stuart Subject: RMT memo << File: RMT risk memo.dot >> Sara Shackleton Enron Wholesale Services 1400 Smith Street, EB3801a Houston, TX 77002 Ph: (713) 853-5620 Fax: (713) 646-3490

stop the bad joke respnses and the fag 'miss you much' , 'love you much' messages please.

We are pleased to present you with a 2001 Special Stock Option Grant Award. As a participant in this grant you have the opportunity to share in the ownership of Enron and the potential profit from increases in the value of Enron's common stock. The 2001 Special Stock Option Grant was made to let you know how valuable you are and to recognize your contributions in making Enron the great company it is today. Although there are no guarantees as to Enron's future stock performance, we believe that an Enron stock option has tremendous future growth potential. The value you ultimately receive from your options will depend on the price of Enron stock at the time you exercise your options. You can access your 2001 Special Stock Option Grant Agreement and the Stock Plan document governing the grant via your eHRonline account on the intranet website at http://ehronline.enron.com. Unlike stock options granted in the past a copy of your grant agreement will not be mailed to your home address. Additionally, the following information regarding the 2001 Special Stock Option Grant can be found on the HR website http://hrweb.enron.com. ? 2001 Special Stock Option Grant Highlights ? 2001 Special Stock Option Grant Frequently Asked Questions (FAQs) ? A "How to Exercise Options" document that contains contact information and PaineWebber forms applicable to your stock options Please take time to review this material. It is important to us and to you. If you have any questions, please contact your Human Resources representative.

FYi ---------------------- Forwarded by Susan Scott/ET&S/Enron on 03/22/2000 04:44 PM --------------------------- Colleen Raker 03/22/2000 04:44 PM To: Susan Scott/ET&S/Enron@ENRON cc: Subject: Calpine O&M Section 5.4 The attached electronic version of Section 5.4 integrates the changes noted by underline on the hard copy I left in your office the other day. I took this opportunity to also divide Section 5.4 into 2 subparagraphs for clarity's sake. I also inserted a new sentence at the end of subparagraph A which was suggested by Enron Risk Management at a meeting I had with them yesterday. I will be adding this insert in the standard Limitation of Liabilitysection in the GPG O&M forms of agreement. Please replace the currect section 5.4 in the Calpine O&M with the attached.

This one is pretty impressive as well... stayton -----Original Message----- From: Mike Mancivalano Sent: Monday, December 04, 2000 7:44 AM To: Stayton PettyJohn Subject: FW: Wow, what a Deer! -----Original Message----- From: Jim Scanlon [mailto:[email protected]] Sent: Friday, December 01, 2000 7:15 AM To: Jerry Roth; Mike Mancivalano Subject: Fw: Wow, what a Deer! ----- Original Message ----- From: "Dennis Money" <[email protected]> To: "CFAB" <[email protected]>; "Deuel Road Deer Stalkers" <[email protected]>; "Outdoor Writers" <[email protected]>; "Seneca White Deer" <[email protected]>; <[email protected]>; <[email protected]> Sent: Thursday, November 30, 2000 9:49 AM Subject: Wow, what a Deer! > > > This was sent to me by Dave Tackley of the Buffalo DOT. What a monster! Mike > Beatty arrowed this monster (39 points) on November 8 in Greene County, Ohio. > Could be a new world record. Enjoy > $ > (See attached file: World record buck.jpg) > - World record buck.jpg

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---------------------- Forwarded by Mark Taylor/HOU/ECT on 04/26/2000 01:31 PM --------------------------- From: Nedre Strambler 04/24/2000 02:43 PM To: Mark Taylor/HOU/ECT@ECT cc: Subject: Resume from Kathy Bauer for Job ID 0000103079 ---------------------- Forwarded by Nedre Strambler/HOU/ECT on 04/24/2000 03:42 PM --------------------------- [email protected] on 04/24/2000 02:14:17 PM To: [email protected] cc: Subject: Resume from Kathy Bauer for Job ID 0000103079 Dear N. Strambler: Attached please find my resume for consideration for the Senior Legal Specialist, job 0000103079. My legal work experience combined with my previous property tax experience will prove invaluable to the Enron team. As my resume shows, I possess excellent communication, organizational, and analytical skills. I look forward to meeting you and discussing my abilities to assist Enron in furthering its corporate goals. Sincerely, Kathy Bauer - Bauer Resume.doc

request_number: PG-BPA: 132 firstname: Sarah lastname: Westenberg e-mail: [email protected] exhibit_wp-02-e-: BPA-77 page_numbers: 9 request_text: Please provide a short description of each line in the two tables (lines 4-24) including (a) a comparison of the differences between the two tables (either the reasons for any differences in amounts for a line description that is the same in both tables, or the reason for any differences in the logic of the calculations), and (b) a
&crosswalk
8 showing how each line in each table corresponds to a variable or equation (or both) in section f of the GRSPs beginning on p. 15 of Attachment A to this testimony. response_text: The following two tables are excerpted out of WP-02-E-BPA-77, page 9, lines 4-26. Table Illustrating JCG Method Table Illustrating BPA Method Before beginning the comparison of the two tables, it should be pointed out that the tables calculate gross augmentation costs. We left out the step that calculates the net augmentation costs. As a result, the
&Total
8 line dollar amounts ($6M and $6.2M in the JCG table, and $6M and $6M in the BPA table) should all be reduced by the amount of augmentation resale revenue. However, since this modification will not affect the comparison requested in the data request, let us continue as if the
&Total
8 line dollar amounts are already net of the augmentation revenue. See the attachment to the data response. Another item that may be confusing is the item labeled
&Pre-purchase
) 0 day rule
8. This is the incremental cost associated with purchases made between the 120-day cut-off and the 0-day cut-off. Also, a crosswalk of each table showing how it corresponds to a variable or equation in section f is not possible since section f reflects the BPA method, not the JCG method. Perhaps an overview of BPA
,s perspective on the difference between the JCG method and the BPA method will be helpful. JCG calculated the augmentation costs using two different cost pools, one cost pool for the Slice product (using the 120 day rule), and a second cost pool for all other products (using the 0 day rule). The products then collected a portion of the augmentation costs associated with a specific rule. When these two cost pools yield different net augmentation costs (which they usually will unless all of the augmentation is purchased under the 120-day rule), the JCG method doesn
,t collect the actual amount of either of those pools from Slice or non-Slice. Rather it collects a proportion of each of the cost pools. In contrast to the JCG method, the BPA method distributes the costs using the 120-day rule proportionally between the Slice and non-Slice products, and then assesses all the incremental cost from using the 0-day rule rather than the 120-day rule to the non-Slice products. In contrast to JCG method, this assures that all the actual incremental net augmentation costs calculated by replacing the
&120-day
8 rule with the
&0-day
8 rule are recovered from purchasers of non-Slice power products. In addition, this also assures that purchasers of the Slice product do not bear any nearer term market prices fluctuations. Now for a short description of each line in the two tables, and a comparison of the differences. The example assumes that we don
,t actually purchase all of our augmentation, that some of it is served from BPA
,s secondary, or is bought in the spot market.
&Pre-purchase
) 120 day rule
8 is the total cost of augmentation purchases made at least 120 days prior to the month of delivery. This amount is $2M in both tables in both columns. This amount represents the sum of DIURNALACA for the six-month period. This would have represented DIURNALACA(S) in the GRSPs proposed by the JCG in their Direct Case.
&Pre-purchase
) 0 day rule
8 is the additional cost of pre-purchases made less than 120 days prior to the month of delivery. This amount is $1M in both tables in the non-Slice column. The 0-day rule pre-purchases are not applicable to the Slice product, thus the N/A in the Slice column in both tables. If
&Pre-purchase
) 120 day rule
8 and
&Pre-purchase
) 0 day rule
8 were summed the sum would represent DIURNALACA(NS) in the GRSPs proposed by the customers. Note that the Pre-purchase
) 0 day rule appears in a different row in the BPA table since BPA has proposed that these incremental cost enter the calculations at a different point. Short position is the cost of the amount of AAMTA that is not pre-purchased. This is the amount that is valued at PRICE in the GRSPs. In the JCG, the short position is different between the Slice and non-Slice columns. This is because the example has BPA purchasing some additional augmentation ($1M worth) under the 0-day rule, and there is a corresponding reduction in the value of BPA
,s short position. The change also reflects that the short position is valued using different PRICEs for the 120 day rule and the 0 day rule. In the BPA example, Short position is $3M for both Slice and non-Slice products, and the difference (-$0.8M) is found in the row
&Short position 0 day rule
8
&Buydown
8 is the cost of all buydowns. It is the same in both tables, for both Slice and non-Slice products. In the examples BPA spent $1M buying down load.
&Total
8 is the gross cost of augmentation. As stated above, it should be reduced by the augmentation resale revenue. To continue on, let us assume that
&Total
8 has been reduced by augmentation resale revenue, and represents the net augmentation costs. In the JCG example,
&Total
8 is $6M for Slice and $6.2M for non-Slice. These would represent NACA(S) and NACA(NS) in the GRSPs proposed by the JCG in their Direct Case.. In the BPA example, Total is $6M for both Slice and non-Slice. This represents NACA in the BPA GRSPs.
&Percent of CRACable revenue
8 is the same in both tables. The example shows that the Slice revenue is 30% of the total CRACable revenue, and the non-Slice revenue is 70% of the total CRACable revenue.
&LB CRAC Costs
8 only appears in the BPA example. It is the NACA distributed between Slice and non-Slice products in proportion to actual revenue.
&Pre-purchase 0 day rule
8 and
&Short position 0 day rule
8 are the changes in the valuation of pre-purchases ($1M) and Short position (-$0.8M) between the 120 day rule and the 0 day rule. The net difference of $0.2M is equivalent to the difference that is seen in
&Total
8 in the JCG example (the difference between $6M and $6.2M). This difference is also equivalent to NACDIFF in the BPA GRSPs.
&Total LB CRAC Cost(s)
8 is the cost that the Slice and non-Slice groups true up to. In the JCG example, the Slice product trues up to 30% of $6M, or $1.8M while the non-Slice products true up to 70% of $6.2M for a total from both groups of $6.14M. In BPA
,s example, the Slice product pays 30% of $6M or $1.8M (the same as in the JCG example) while the non-Slice products pay 70% of $6M plus the net difference between valuation of net augmentation costs using the 120 day rule and valuation using the 0 day rule. The non-Slice amount is $4.2M plus $0.2M or $4.4M. The following information is from the web server: 1. Logon: IUSR_GRANITE 2. Remote Host: 53.180.74.220 3. Remote IP Address: 53.180.74.220 4. Form URL: http://www.bpa.gov/power/secure/psp/ratecase/discovery/wp_02_response.html 5. Browser Client: Mozilla/4.0 (compatible; MSIE 5.01; Windows NT; BPA 4.01 SP2; BPA 5.01 SP1)

Legal, Per the request of John Malowney, please prepare an ISDA between Enron North America and West Linn Paper Company. Kortney Brown or myself are you credit contacts. Please note that all deals done with this counterparty need to be fully secured. Thanks, Susan

Dan, This includes some additional comments and explanation of the lost data around the time of the manual counter re-sets. Regards, Hollis ---------------------- Forwarded by Hollis Kimbrough/EWC/Enron on 04/09/2002 03:00 PM --------------------------- Mark Fisher 04/09/2002 02:03 PM To: Hollis Kimbrough/EWC/Enron@ENRON cc: Subject: WR585 Mill Run Production Data Hollis, I have updated the report, adding some additional detail. Mark Fisher

Kay I'm looking forward to working with you on this. I wonder who opposing inhouse counsel is at TECO? KSC > -----Original Message----- > From: Keffer, John > Sent: Tuesday, May 22, 2001 5:17 PM > To: C. Kay Mann (E-mail) > Cc: Culotta, Kenneth > Subject: Tampa Electric > > Kay-we have no conflict with Tampa Electric. Gracias Confidentiality Notice This message is being sent by or on behalf of a lawyer. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged or confidential or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate this message or any part of it. If you have received this message in error, please notify the sender immediately by e-mail and delete all copies of the message.

Waiting on response from your people about : Meeting with adjuster about going after SWPC. Hiring engineering expert to hopefully refute underwriter's surveyor's opinion. Have written letter to ship owner to extend time for filing suit (this protects the subrogation interests of the underwriter). Seeking clarification as to policy requirement of filing "suit" against underwriter within one year of occurrence. Broker feels that this is not necessary as the claim was filed and is currently pending, but will get written clarification from underwriter/adjuster. Carlos Sole to contact New Orleans attorney who represents SWPC underwriter about joining in their suit against ship owner. If any one above has anything else to add, or corrections to what I have listed above, please add at this time so we are all on the same wave length.

No I mean are you awake or are you just sleeping at your desk. By the way, thanks for taking the movie back last night. Gabriel Monroy 12/15/2000 09:08 AM To: Robin Rodrigue/HOU/ECT@ECT cc: Subject: Re: Do you mean am I here??

Andy: Sorry...I was on vacation last week and fell behind my email. Anytime you want to talk is fine. I'll be around today if it works for you. john Andy Zipper@ENRON 06/16/2000 11:48 AM To: John Arnold/HOU/ECT@ECT cc: Subject: options and other stuff john, I'd like the chance to review some assumptions re: options manager ( yes, we are still on schedule) with you as well as discuss some other issues related to putting Enron's prices on other platforms. some time on monday would work best for me. Let me know. andy

Norma, It seems that there is a bug in the system. I made an error mixing equity and merit raises in one column. The system does not allow me to correct the mistake by moving the entries from one column to another. I can enter the changes, but after I save them the system reverts to original designations. As a result, the columns contain mixed entries related to merit and equity raises. The column totals are misleading. I am taking a CSV version home to continue making adjustments. I shall work at home Monday (281 367 5377). Vince

http://www.har.com/search/condo/indexdetail.cfm?mlnum=536712 http://www.har.com/search/condo/indexdetail.cfm?mlnum=526724 http://www.har.com/search/condo/indexdetail.cfm?mlnum=389305 this is the one that my friend at work recommended

Please print memo and attachment. thanks. Df ---------------------- Forwarded by Drew Fossum/ET&S/Enron on 01/11/2000 08:48 AM --------------------------- From: Louis Geiler 01/10/2000 04:19 PM To: Rod Hayslett/FGT/Enron@ENRON, Sheila Knudsen/OTS/Enron@ENRON, Jenny Rub/GPGFIN/Enron@Enron, John Dushinske/ET&S/Enron@ENRON, George Fastuca/ET&S/Enron@ENRON, Drew Fossum/ET&S/Enron@ENRON, Steven Harris/ET&S/Enron@ENRON, Kent Miller/ET&S/Enron@ENRON, Mary Kay Miller/ET&S/Enron@Enron, Rockey Storie/ET&S/Enron@ENRON, Julia White/ET&S/Enron@ENRON, Dave Neubauer/ET&S/Enron@ENRON, Michel Nelson/ET&S/Enron@ENRON cc: Bill Cordes/ET&S/Enron@ENRON, Mike McGowan/ET&S/Enron@ENRON, Virginia O'Neill/ET&S/Enron@Enron, Kathy Campos/GPGFIN/Enron@ENRON, Marilyn Lee/HR/Corp/Enron@ENRON, Rita Houser/GPGFIN/Enron@ENRON, Rosemary Gracey/ET&S/Enron@ENRON, Lisa Costello/ET&S/Enron@ENRON, Martha Benner/ET&S/Enron@ENRON, Audrey Robertson/ET&S/Enron@ENRON, Julie McCoy/ET&S/Enron@ENRON, Sharon Solon/ET&S/Enron@ENRON, Linda Wehring/ET&S/Enron@ENRON, Ricki Winters/ET&S/Enron@Enron, Deb Cappiello/ET&S/Enron@ENRON, Judy Kudym/ET&S/Enron@ENRON Subject: Strategy/Business Plan Meeting You have received an e-mail from Virginia O
,Neill scheduling the Stategy/Business Planning Meeting for next Tuesday. Mike McGowan and I will be facilitating the meeting with Bill Cordes. As most of you are aware, ET&S maintained a high-level Business Plan in 1999 which summarized the major areas of focus for Company activities and enumerated many of the underlying specific initiatives. It was intended and understood that individual task force, team, or project activities would be undertaken in support of the key focus items included in the plan. The intent has been to review and update the plan and the support activities on a quarterly basis. The most recent version of the plan is attached. It is ET&S
, goal to update the plan at the same level of detail in the first quarter of 2000 and to again use it as a focal point for quarterly planning discussions. The meeting next Tuesday is intended to provide the discussion base and general consensus on the key business issues to incorporate into the next update. Bill Cordes has asked that each of the participants provide input to the meeting by determining, prior to the discussion, a list of the 3 areas of ET&S focus which they believe are the most critical to the shaping of the Company direction in the years 2000 and 2001. The individual lists will be consolidated and utilized as a basis for the Tuesday meeting. In order for that consolidation to take place, please provide me with your individual lists of the 3 critical areas by e-mail no later than noon on Monday, January 17th. Thank you for your participation, and I will look forward to meeting with you on Tuesday. Lou G.

What time is call and what is #? From: Rebecca W Cantrell @ ECT 12/12/2000 06:45 PM To: Steve Montovano/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Paul Kaufman/PDX/ECT@ECT, Leslie Lawner/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Steven J Kean/NA/Enron@Enron cc: Subject: Gas Issues paper For discussion during the conference call tomorrow, attached is a revision of Leslie's paper with an attachment illustrating the type of tariff information we are capturing for the interstates. If you think we need to capture any additional information, please advise. ---------------------- Forwarded by Rebecca W Cantrell/HOU/ECT on 12/12/2000 06:37 PM --------------------------- From: Leslie Lawner@ENRON on 12/12/2000 02:06 PM To: Rebecca W Cantrell/HOU/ECT@ECT cc: Subject: Gas Issues paper ----- Forwarded by Leslie Lawner/NA/Enron on 12/12/2000 02:05 PM ----- Leslie Lawner 12/12/2000 02:05 PM To: Steve Montovano/NA/Enron@Enron, Jeff Dasovich/NA/Enron@Enron, Paul Kaufman/PDX/ECT@ECT, Leslie Lawner/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Steven J Kean/NA/Enron@Enron cc: Subject: Gas Issues paper Here is a working draft of the gas issues/diversion/penalties, etc. paper. Becky is working on the interstate pipeline tariffs and we will insert them, and Jeff Hidge will be sending something out about ENA legal issues, which I will add in. I am also going to work on this tonite, to make the individual LDC diucssions follow a common template. However, I wanted you to have something to look at before the meeting tomorrow morning. I still have a couple of LDCs to add. Thanks.

Larry, go get 'em. Whatever you can get you can keep and reduce the fee. You could make this easy for both of us. Regards Delainey ---------------------- Forwarded by David W Delainey/HOU/ECT on 08/09/2000 03:59 PM --------------------------- Larry L Izzo@ENRON_DEVELOPMENT 08/09/2000 02:03 PM To: Joseph W Sutton/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, David W Delainey@ECT cc: Subject: SIEMENS/WESTINGHOUSE DISPUTES Currently, Enron has several contractual disputes with Siemens/Westinghouse. These include: $5-10MM lingering from Marmara; about $4-5MM on Puerto Rico; and maybe $1-3MM on the Gleason and Indiana Peakers. In my meeting with Randy Zwirn yesterday, Randy suggested that I meet with him in an attempt to come to a global settlement on all the Enron disputes. I propose to do this. I understand the strength of the contractual issues on each of these projects and I think I can close out the issues by optimizing the Enron leverage in one global settlement. The process will take from 30-60 days as both sides collect all contractual arguments. I'll keep ENA informed. Let me know if either of you object to this global type approach. LI35700

We will never negotiate with toaster terrorists! We will eat raw bread forever rather than turn over a single sheet of paper - or even a single chad - to those who would resort to such extortion. If we give in now, we will only encourage such acts in the future. First our microwaves, then our filtered water dispenser, then our refrigerators will become targets of these evil doers. Rather, we will hunt down those responsible for this dastardly act, and bring them to justice or justice to them. We will also go after any department supporting the evil doers as well as anyone who partakes of bread (or Eggos or pop tarts) toasted in the purloined appliance! EPLF -- you're TOAST!!!!! Small Appliance Defenders In Support of Toasters (SADIST)

Dear Robert: Craig Chaney asked me to review the proposed NDA that you forwarded to him in anticipation of a meeting between Credit 2B and EnronCredit.com early next week. The NDA that you forwarded to Craig protects only Credit 2B as a disclosing party. After discussing this matter with Craig, I understand that this relationship might rapidly evolve and require EnronCredit.com to disclose confidential information to Credit 2B as well. Accordingly, I propose that in the interests of efficiency, we negotiate and finalize a bilateral NDA up front. I have thus prepared the attached bilateral NDA for your review and comment. I have taken Enron's standard form of NDA and incorporated those provisions of Credit2B's NDA to which I can agree. I look forward to discussing any comments or concerns that you may have. Craig would like to finalize this NDA by Friday. Regards, Leslie M. Hansen, Senior Counsel (713) 853-6121

Each Data Protection Supervisory Authority can be contacted; some may review. We are not aware of one supervisory authority that can bind all authorities in all states with its approval of a contract. But if you are not required by law to pre-submit your contract, I question whether you want to do so. You may get multiple interpretations. We believe that you should develop your best judgment about whether your documents conform to the legal requirements and submit the contract where you are required to do so, not seek advice from the regulatory authorities about the specifics of your contracts. After all, as we indicated this area of the law is still in flux, and we would hate to see you lock into a position with an authority--unless you absolutely had to do so.

This request has been pending your approval for 16 days. Please click http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000008162&Page= Approval to review and act upon this request. Request ID : 000000000008162 Request Create Date : 11/22/00 2:04:02 PM Requested For : [email protected] Resource Name : Unlisted Application/Software Resource Type : Applications

Jeff, Did you get my mail regarding materials costs? Please let me know. Thanks, Best Wishes, Jim D.

Dear Zooey Wharton, Thank you for shopping at Sony's ImageStation.com! This email confirms we received your order on January 31, 2001 5:20PM PT for the following item: ----------------------------------------------------------- Prints 18 x $0.49 (total 18 prints; $8.82) Subtotal: $8.82 Shipping & Handling: $1.99 Sales Tax: $0.00 -------------------- -------- Total for the order: $10.81 was charged to your credit card ending in 4854 ----------------------------------------------------------- Your order has been assigned confirmation number 41983. It will be custom produced to your specification with the image(s) you included, and will be shipped via Standard Ground shipping to: Zooey Wharton 2218 Bellefontaine #B Houston, TX 77030 United States An additional email will be sent to notify you when your order has shipped. To check the status of your order in the meantime, go to https://shop.zing.com/shop/sony/secure/account/ and sign-in with your ImageStation.com account. For questions regarding your order, please contact us at: ImageStation.com, Inc. 2565 3rd St., Suite 312 San Francisco, CA 94107 (877) 488-2880 [email protected] ImageStation has a great selection of personalized gifts - from coffee mugs to photo cookies to jewelry. All you provide is the picture (including logos, kid's artwork, images from your scanner, or photos) and we'll provide the technology to make your gift idea a reality. There are plenty of items that can be personalized for a birthday, holidays, or just to say "I love you." We're open 24 hours a day with delivery options that get your gift there on time. To ensure your privacy over the Internet we always use secure commerce. All of us at ImageStation sincerely appreciate your business. Please visit us again soon at http://www.imagestation.com/

I am free at 3:30 on Thursday at my desk.

Dear Board Task Force: Attached please find meeting notes for the industry meetings held on April 17 and 26. Rae - status report 4-17 to 4-26-00.pdf

----- Forwarded by Steven J Kean/NA/Enron on 02/02/2001 06:01 PM ----- Expense Server@Enron_Development 01/31/2001 03:03 PM To: Steven J Kean/NA/Enron@Enron cc: Subject: <<Concur Expense Document>> - RS012201 The following expense report is ready for approval: Employee Name: Richard Shapiro Status last changed by: Automated Administrator Expense Report Name: RS012201 Report Total: $8,299.73 Amount Due Employee: $8,299.73 To approve this expense report, click on the following link for Concur Expense. http://nahou-wwxms01p

----- Forwarded by Elizabeth Sager/HOU/ECT on 06/05/2001 11:53 AM ----- ARSystem <[email protected]> 06/04/2001 07:15 PM To: "[email protected]" <[email protected]> cc: Subject: Your Approval is Overdue: Access Request for [email protected] This request has been pending your approval for 35 days. Please click http://itcapps.corp.enron.com/srrs/auth/emailLink.asp?ID=000000000029730&Page=Approval to review and act upon this request. Request ID : 000000000029730 Request Create Date : 4/17/01 5:44:32 PM Requested For : [email protected] Resource Name : VPN/IPASS Resource Type : Applications

Dr. Kaminski: ? Here is my resume and cover letter. ? Thanks, ? Richard Iles - Enron Cover and Resume.doc

Rolo and I worked together in BA. Rolo did a great job for us, focusing mostly on gas but he did do some work on power as well. He is very bright and has a great work ethic. He has gained a fair amount of commercial experience (including "trading" natural gas) in Argentina. I would recommend him highly.

----- Forwarded by Tana Jones/HOU/ECT on 11/16/2000 09:12 AM ----- Jon Chapman 11/16/2000 03:16 AM To: Peter Keohane/CAL/ECT@ECT, Tana Jones/HOU/ECT@ECT cc: Subject: Positively the last word ..... Peter , You'll enjoy this more than Tana !!! Jon ---------------------- Forwarded by Jon Chapman/LON/ECT on 16/11/2000 09:16 --------------------------- Annette Patrick 16/11/2000 08:37 To: Jon Chapman/LON/ECT@ECT, Michael Slade/LON/ECT@ECT, Tracy Foy/LON/ECT@ECT cc: Subject: FW: Notice of Revocation of Independence ---------------------- Forwarded by Annette Patrick/LON/ECT on 16/11/2000 08:41 --------------------------- Sarah Gregory 15/11/2000 19:24 To: [email protected], Annette Patrick/LON/ECT@ECT, Christopher Wood/Legal/LON/ECT@ECT cc: Subject: FW: Notice of Revocation of Independence NOTICE OF REVOCATION OF INDEPENDENCE To the citizens of the United States of America, In the light of your failure to elect a President of the USA and thus to govern yourselves, we hereby give notice of the revocation of your independence,effective today. Her Sovereign Majesty Queen Elizabeth II will resume monarchial duties over all states, commonwealths and other territories. Except Utah, which she does not fancy. Your new prime minister (The rt. hon. Tony Blair, MP for the 97.85% of you who have until now been unaware that there is a world outside your borders) will appoint a minister for America without the need for further elections.Congress and the Senate will be disbanded. A questionnaire will be circulated next year to determine whether any of you noticed. To aid in the transition to a British Crown Dependency, the following rules are introduced with immediate effect: 1. You should look up "revocation" in the Oxford English Dictionary. Then look up "aluminium". Check the pronunciation guide. You will be amazed at just how wrongly you have been pronouncing it. Generally, you should raise your vocabulary to acceptable levels. Look up "vocabulary". Using the same twenty seven words interspersed with filler noises such as "like" and "you know" is an unacceptable and inefficient form of communication. Look up "interspersed". 2. There is no such thing as "US English". We will let Microsoft know on your behalf. 3. You should learn to distinguish the English and Australian accents. It really isn't that hard. 4. Hollywood will be required occasionally to cast English actors as the good guys. 5. You should relearn your original national anthem, "God Save The Queen",but only after fully carrying out task 1. We would not want you to get confused and give up half way through. 6. You should stop playing American "football". There is only one kind of football. What you refer to as American "football" is not a very good game. The 2.15% of you who are aware that there is a world outside your borders may have noticed that no one else plays "American" football. You will no longer be allowed to play it, and should instead play proper football. Initially, it would be best if you played with the girls. It is a difficult game. Those of you brave enough will, in time, be allowed to play rugby (which is similar to American "football", but does not involve stopping for a rest every twenty seconds or wearing full kevlar body armour like nancies).We are hoping to get together at least a US rugby sevens side by 2005. 7. You should declare war on Quebec and France, using nuclear weapons if they give you any merde. The 98.85% of you who were not aware that there is a world outside your borders should count yourselves lucky. The Russians have never been the bad guys."Merde" is French for "sh*t". 8. July 4th is no longer a public holiday. November 8th will be a new national holiday, but only in England. It will be called "Indecisive Day". 9. All American cars are hereby banned. They are crap and it is for your own good. When we show you German cars, you will understand what we mean. 10. Please tell us who killed JFK. It's been driving us crazy. Thank you for your cooperation.

Attached are the inserts to Schedules 3.1(d), (n) and (q) that we discussed. Please let me know if you have any questions regarding the attached. Regards, Rob Taylor Andrews & Kurth L.L.P. Chase Tower 600 Travis Street Suite 4200 Houston, Texas 77002 Tel: (713) 220-4436 Fax: (713) 238-7273 [email protected] This e-mail (and any attachment(s) hereto) is intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this e-mail, you are hereby notified that any dissemination, distribution or copying of this e-mail (and any attachment(s) hereto) is strictly prohibited. If you have received this e-mail in error, please immediately notify me at (713) 220-4436 and permanently delete the original and any copy of such e-mail and destroy any printout of such e-mail. - Ridersto.DOC

Greetings from Amazon.com. We thought you'd like to know that we shipped your items today, and that this completes your order. Thanks for shopping at Amazon.com, and we hope to see you again soon. You can track the status of this order, and all your orders, online by visiting "Your Account" page at http://www.amazon.com/your-account. There you can: * Track order and shipment status * Review estimated delivery dates * Cancel unshipped items * Return items * And do much more The following items were included in this shipment: --------------------------------------------------------------------- Qty Item Price Shipped Subtotal --------------------------------------------------------------------- 1 Bud, Sweat and Tees : A Walk o $19.20 1 $19.20 --------------------------------------------------------------------- Item Subtotal: $19.20 Shipping & Handling: $8.98 Total: $28.18 -------------------------------------------------------------------- This shipment was sent to: Errol McLaughlin Enron North America 1400 Smith St. EBE 3248C Houston TX 77002 via UPS Second Day (2 business days). For your reference, the number you can use to track your package is 1Z410E7W0274152747. You can refer to our Web site's Help page or: http://www.amazon.com/exec/obidos/subst/tracking.html to retrieve current tracking information. Please note that tracking information may not be available immediately. If you've explored the links on "Your Account" page but still need to get in touch with us about your order, e-mail us at [email protected]. On your next visit to our Web site, come see what's New for You by clicking the link on the right-hand side of our home page, or by visiting this URL: http://www.amazon.com/exec/obidos/subst/recs/new-for-you/new-for-you.html/ref= cs_ae_nfy We've selected an assortment of new releases, recommendations, and informative articles that we think would appeal to you. Thank you for shopping at Amazon.com. --------------------------------------------------------------------- Amazon.com Earth's Biggest Selection [email protected] http://www.amazon.com/ ---------------------------------------------------------------------

Harry -- I think that we need to talk with EWS Tariff risk to make sure that we are on the same page. I am concerned that some of Gloria's statements may not end up happening with the final tariffs. Please advise. Jim -----Original Message----- From: Ogenyi, Gloria Sent: Monday, November 19, 2001 3:27 PM To: Anderson, Bob; Collins, Patricia Cc: Rathvon, Richard; Sparling, Jay; Keene, Patrick; Kingerski, Harry; Steffes, James D.; Ryall, Jean Subject: RE: Rock Tenn CoGen Facility Bob, Per Section 25.345 (c) of the Electric rules, if the Cogen facility has a rated capacity of 10MW or less, it qualifies as "eligible generation" under Section 25.345(c)(B). In Section 25.345(i), an end-user whose actual load is lawfully served by eligible generation and who does not receive any electrical service that requires the delivery of power through the facilities of a T & D utility is not responsible for payment of any stranded cost charges. Also a retail customer whose actual load is lawfully served by eligible generation who also receives electrical service that require the delivery of power through the facilities of a T & D utility, shall be responsible for payment of stranded costs charges based solely on the services that are actually provided by the T & D utility. The short answers to your questions are: 1. Rock Tenn will not be required to pay CTC charges if its rated output is less than 10MW, and it does not take any T&D services from TXU. 2. If Rock Tenn uses T&D facilities occasionally, it will pay CTC only for the actual services it receives from the T& D utility. 3. If Rock Tenn completely disconnects from the utilities T&D services, it will be in the same position as in 1 above. It will not be required to pay the CTC. 4. At this time, TXU does not have a financing bond issued by the Commission. In an earlier order, the Commission approved $363 MM for TXU, but that order was appealed, and the Supreme Court remanded the case to the Commission for rehearing. With information that is available to it at this time, the Commission does not think that TXU has stranded costs. I believe TXU will disagree. It will be interesting to see how this plays out. Please call with any questions, Gloria -----Original Message----- From: Anderson, Bob Sent: Friday, November 16, 2001 3:47 PM To: Ogenyi, Gloria; Collins, Patricia Cc: Rathvon, Richard; Sparling, Jay Subject: RE: Rock Tenn CoGen Facility Gloria, Per the information you provided Trish (below) concerning CTC in TX, the cogen design is less than 10MW. Therefore, what are the "DG rules" and how do these rules impact Rock Tenn's requirement to pay CTC? What if they only use the utility's T&D facilities occasionally when the cogen is not running? What if they completely disconnect from the utility's T&D facilities, as if they are no longer in business? Is TXU expected to have significant stranded costs? Thanks, Bob -----Original Message----- From: Sparling, Jay Sent: Wednesday, November 07, 2001 12:49 PM To: Anderson, Bob Cc: Rathvon, Richard Subject: Rock Tenn - Will pay CTC charges FW: CoGen Facility ---------------------- Forwarded by Jay Sparling/HOU/EES on 11/07/2001 12:47 PM --------------------------- From: Patricia Collins/ENRON@enronxgate on 11/07/2001 10:34 AM To: Jay Sparling/HOU/EES@EES cc: Subject: FW: CoGen Facility Here is the information for Rock Tenn. Thanks, Trish -----Original Message----- From: Ogenyi, Gloria Sent: Wednesday, November 07, 2001 10:09 AM To: Collins, Patricia Subject: FW: CoGen Facility -----Original Message----- From: Ogenyi, Gloria Sent: Wednesday, November 07, 2001 8:43 AM To: Collins, Patricia Subject: FW: CoGen Facility -----Original Message----- From: Ogenyi, Gloria Sent: Wednesday, November 07, 2001 8:38 AM To: COLLINS, PATRICIA Subject: FW: CoGen Facility Trish, I sent this to you yesterday, but apparently, it went to the wrong address. -----Original Message----- From: Ogenyi, Gloria Sent: Tuesday, November 06, 2001 5:16 PM To: COLLINS, PATRICIA Cc: Hamb, Edward; Kingerski, Harry; Ryall, Jean Subject: CoGen Facility Trish, Per Chapter 39.252(b)(1) of the Texas Utilities Code, recovery of stranded costs by an electric utility shall be from all existing or future retail customers within the utility's certificated territory as it existed on May 1, 1999. A retail customer may not avoid CTC's by switching to a new on-site generation. New on-site generation is defined as an electric generator generating more than 10 MW, capable of being lawfully delivered to the site without use of the utility T & D facilities, and which was not fully operational prior to 12/31/99. (If the self-gen facility's output is 10 MW or less, it will be governed by the DG rules.) If a customer commences taking energy from a new on-site generation (with output of more than10 MW ) which materially reduces or eliminates the customer's use of energy delivered through the utility's facilities, the customer shall pay an amount each month computed by multiplying the output of the on-site generation by the CTC which is in effect during the month. Any CTC assessed on such a self -gen facility after it becomes fully operational, shall be included only in those tariffs or charges associated with services actually provided by the T & D utility to the customer after the facility has become fully operational. So if no services actually provided, there should be no payment. Please call with any questions, Gloria

Please add Angela Davis of Enron to all e-mails regarding Project Tahiti. Her e-mail address is [email protected]. Thank you, Kaye Ellis Assistant to Sara Shackleton

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Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. MsgId: msg-24161-2000-11-02_17-50-02-6420248_1_Plain_MessageAddress.msg-18:13:23(11-0 2-2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: [email protected]

after "Payment Date(s)": Payments: For each Determination Period, on the applicable Payment Date with respect to this Transaction, a net amount owed for each of Part 1 and Part 2 hereinbelow will be determined pursuant to Section 2(a) of Annex A attached hereto, and those two payments shall be payable on the applicable Payment Date Sara Shackleton Enron North America Corp. 1400 Smith Street, EB 3801a Houston, Texas 77002 713-853-5620 (phone) 713-646-3490 (fax) [email protected]

Start Date: 4/5/01; HourAhead hour: 24; No ancillary schedules awarded. Variances detected. Variances detected in Load schedule. LOG MESSAGES: PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2001040524.txt ---- Load Schedule ---- $$$ Variance found in table tblLoads. Details: (Hour: 24 / Preferred: 2.01 / Final: 1.99) TRANS_TYPE: FINAL LOAD_ID: PGE4 MKT_TYPE: 2 TRANS_DATE: 4/5/01 SC_ID: EPMI

Re: New Regulatory Framework Proposed for Derivatives by Staff of the Commodity Futures Trading Commission Attached is a memorandum from Sullivan & Cromwell concerning the above subject. A summary is also included at the end of the text of this e-mail message. The attached file is in Adobe Acrobat format. We believe most PCs will already have an Acrobat viewer loaded; we can provide free copies if Acrobat is not already loaded, and free copies can also be downloaded from the Adobe Acrobat web site at www.adobe.com. To view or print the memo use your e-mail system's function for opening attachments in their native format. Hard copies can be obtained from Ivy Moreno at S&C in New York, telephone 212-558-3448, e-mail: [email protected]. SUMMARY A task force of staff members from the Commodity Futures Trading Commission (the "CFTC") issued a report in late February that recommends ways to modernize the regulation of exchange and electronic trading of derivatives. The report, entitled A New Regulatory Framework (the "Report"), proposes a significant restructuring of the CFTC's regulatory responsibilities in an effort to provide markets with flexibility to respond to technological and competitive challenges. In particular, the task force recommends the adoption of a three-tiered regulatory framework for derivatives exchanges and other trading facilities that are or may be within the CFTC's jurisdiction. This framework would establish differing levels of oversight depending on the nature of the commodities traded and the sophistication of the market participants. The Report also proposes that the CFTC regulate the markets and entities that it oversees based on flexible "core regulatory principles" rather than prescriptive, technical rules. ---------------------------------- This e-mail is sent by a law firm and contains information that may be privileged and confidential. If you are not the intended recipient, please delete the e-mail and notify us immediately. - CMS10763.pdf

East Ohio I created deal 348393 (sale to EES). This deal should get matched with the purchase from Power Gas Marketing, deal 264613 for July and August. The deal volume is 10,000 for the month. We have the Power Gas deal thru October. We still need to sell Sep and Oct to someone. I noticed the volume for July in Power Gas Marketing is 0, so I entered an expected volume of 0 on the EES deal. I didn't want to mess anything up so close to nom time. Please put 10,000 for the month on both deals for July. Thanks. Peoples I changed the volume on deal 264595 to 3500 for the month. This volume fluctuates each month and John Singer will tell us the actual volume. This deal also goes through October. We are buying local production from Phillips Production Company. I did not see a deal in the system for August so I created 348434, the price needs to be corrected. This deal goes through November. The estimated volume for August is 300 per day, this volume also fluctuates each month.. We are selling all gas behind Peoples to Clinton, deal 348443. The price on this deal is CNG IF per mcf. Clinton will pay us based on actuals. Let me know if anyone has questions.

No - that is wierd. Let's try again. Dan J Hyvl 03/14/2001 02:08 PM To: Kim Ward/HOU/ECT@ECT cc: Subject: Re: palo alto RFP response Kim, Is the attached what you intended for me to review? Kim Ward 03/14/2001 03:18 PM To: Dan Hyvl cc: Subject: palo alto RFP response ROUGH Draft!! Thanks for your review and help!! kim

Start Date: 1/13/02; HourAhead hour: 3; No ancillary schedules awarded. No variances detected. LOG MESSAGES: PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2002011303.txt

IntercontinentalExchange Firm Power Price Bulletin For Power Delivered on Friday, December 14, 2001 (Trade Date of Thursday, December 13, 2001) Click here to access index history <http://www.intcx.com/SubscriberServlet/subscriberservlet.class?operation=powerIndexForm&hub=All>. * volume represents sell-side only * Hub High Low Wtd Avg Index Change ($) Vol (Mwh) Cinergy $19.00 $15.75 $17.39 - .54 88,000 Comed $18.00 $15.50 $17.09 - 1.29 7,200 Entergy $20.00 $18.50 $19.21 - 1.17 30,400 Nepool $27.25 $26.50 $26.91 - .74 6,400 Palo Verde $35.10 $33.25 $34.27 - 1.63 16,800 PJM-West $22.20 $21.80 $22.01 - .60 82,400 SP-15 $35.00 $31.50 $33.77 - 3.58 17,600 TVA $18.50 $16.75 $17.26 - 1.20 7,200 Includes all trades done from 6 AM to 11 AM Central Prevailing Time on the trade date specified for financially firm power delivered during the on-peak hours (6 AM - 10 PM CPT for Eastern hubs / 6 AM - 10 PM Pacific Prevailing Time for Western hubs) on the delivery date(s) specified. IntercontinentalExchange is the world's most liquid trading platform for over-the-counter energy and metals. Active markets include North American power and natural gas, global crude and refined oil products, and precious metals. Traded instruments include forwards, swaps, and options. In order to receive the proprietary information contained in this email, you acknowledge and agree that you shall not further disseminate the IntercontinentalExchange Market Data contained herein to any person or entity without the express written consent of IntercontinentalExchange. Furthermore, you acknowledge that (1) IntercontinentalExchange has exclusive and valuable property rights in this data; (2) IntercontinentalExchange's data is being made available to you only for your own business or personal activities; and (3) you cannot communicate the data, in any form, to any other person or entity without the express written consent of IntercontinentalExchange. This data is provided to you free of charge. IntercontinentalExchange reserves the right to cancel this service at any time for any reason or no reason at all. You agree that IntercontinentalExchange does not make any representations or warranties, express or implied, with respect to the data. To become an Exchange Participant or inquire about the indices, please contact [email protected] <mailto:[email protected]>. To unsubscribe from this service, click here unsubscribe <http://www.intcx.com/subscribe.html>. ?Copyright IntercontinentalExchange, Inc. 2001, All Rights Reserved.

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 Billion in Back Payments" SF Chron, 3/20: "As Davis Seeks Money, Lawmakers Want Answers 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 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 Wednesday" San Diego Union, Tues., 3/20: "State power regulators working on energy rescue" San Diego Union, Tues., 3/20: "Federal regulators scored for not ordering more California refunds" LA Times, Wed., 3/21: "Second Day of Blackouts Disrupts 500,000 Home and 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 Utilities' Grid" LA Times, Wed., 3/21: "L.A., Long Beach File Suits Over Gas Companies' 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 NEGOTIATIONS HIT SNAG: PG&E, Edison want end to price freeze if they sell transmission lines to state" SF Chron, Wed., 3/21: "Utilities' Demand Blocks Bailout BLACKOUTS ROLL ON: Weather, increased consumption blamed" SF Chron, Wed., 3/21: "Manners Go Out the Window Pedestrians in peril as drivers turn darkened S.F. streets into free-for-all" SF Chron, Tues., 3/20: "Historic Blackouts in State Bay Area learns to cope" SF Chron., Tues., 3/20: "Second day of rolling blackouts in power-starved California" Mercury News., Wed., 3/21: "Bay Area Residents Learning to roll with Blackouts" Orange County, Wed., 3/21: "Powerless, Again" Orange County, Wed., 3/21: "The iceman shunneth effects of hourlong blackout" Orange County, Wed., 3/21: "Traffic officials are seeing red over blackouts" Orange County, Wed., 3/21: "Alternative power producers cut back or shut 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 Generators Up Front-Gov" Dow Jones Energy News., Wed., 3/21: "PG&E Says It Is Negotiating With Qualifying Facilities" Energy Insight, Wed., 3/21: "New York at the Crossroads" ------------------------------------------------------------------------------ -------------------------------------------------------------- Calif. Officials Order Blackouts By PAUL CHAVEZ, Associated Press Writer LOS ANGELES (AP) - State power managers ordered rolling blackouts across California for a second straight day Tuesday as demand for electricity again exceeded supply. The same factors that collided to strap California's power supply on Monday hit again, officials with the Independent System Operator said. Those include reduced electricity imports from the Pacific Northwest, numerous power plants offline for repairs and higher-than-expected demand because of warm temperatures. A two-unit Southern California plant that the ISO hoped would be working Tuesday had not been fixed. One of its units might go online at noon to help the situation, the ISO's Jim Detmers said. In addition, hydroelectric power imports from the Northwest were 800 megawatts lower than Monday, he said. The ISO oversees most of the state's power grid. ------------------------------------------------------------------------------ --------------------------------------------------------------------------- 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 LOS ANGELES -- The California Public Utilities Commission will order Edison International's Southern California Edison and PG&E Corp.'s Pacific Gas & Electric unit to pay small power generators that are qualified utilities about $1 billion in past-due payments in order to keep the plant owners from dragging the utilities into an involuntary bankruptcy proceedings, and to also ensure the generation units keep pumping out electricity, people familiar with the matter told Dow Jones Newswires late Monday. Gov. Gray Davis, state Sen. Debra Bowen, and Assemblymembers Fred Keeley and Robert Hertzberg, all Democrats, spent most of the day y trying to hammer out an agreement with the so-called qualifying facilities, alternative power producers that use the wind, sun, steam and biomass to generate electricity for the state, on supply contracts and past payments the utilities failed to make. The qualifying facilities, which represent about one-third of the state's total power supply and signed contracts to sell power directly to the utilities under a government mandate, would then agree to sign power-supply contracts with the utilities for a period of five to 10 years for about $79 a megawatt hour for the first five years and about $61 a megawatt hour thereafter, two sources involved in the negotiations said. The PUC is expected to issue a draft resolution on the issue sometime this week, one source said. The lawmakers wouldn't comment on the details of their talks Monday. Representatives with SoCal Ed (EIX) and PG&E (PCG) said they were unaware Gov. Davis and his administration were meeting on the issue. The utilities are more than $13 billion in debt and have failed to make payments on their qualifying-facilities contracts since November. PG&E has paid some of its qualified facilities just a fraction of what they are owed. Legislation To Restructure QF Rates Stalls In Senate Energy Committee Mr. Keeley had recently drafted legislation, along with state Sen. Jim Battin, a Republican from Palm Desert, that would have restructured the rates the qualified facilities charge the utilities, from $170 a megawatt hour to $80 a megawatt hour for five years. The bill, SB47X, stalled in the Senate Energy Committee, of which Ms. Bowen chairs. SoCal Ed opposed the legislation, saying the rates were still too high. A utility spokesman said the qualified-facilities rates should be reduced to under $50 a megawatt hour. But the lawmakers and the governor is trying to avoid the need for legislation, largely because there isn't much support in both houses for such a bill and the chance that it won't be passed in time to keep the qualified facilities from dragging the utilities into involuntary bankruptcy proceedings, the legislative source said. The PUC will take over the issue from the Legislature, the source said. Monday, about 3,000 megawatts of qualified-facilities generation went offline because the companies that operate the power plants can no longer afford to buy natural gas used to fuel the plants due to the utilities' failure to pay money owed to the companies, said Jim Detmers, vice president of operations for the state's Independent System Operator. The outages triggered a major shortfall in the state which resulted in nearly eight hours of statewide rolling blackouts Monday. Many owners of the qualified-facilities said without immediate relief, they would likely force SoCal Ed, and possibly PG&E, into involuntary bankruptcy, perhaps as soon as Thursday. One such facility, CalEnergyOperating Co., wants to be freed temporarily from its contract with the utility and be allowed to sell its electricity to third parties until the utility is able to pay its bills. CalEnergy is an affiliate of MidAmerican Energy Holdings Co., which is majority owned by Warren Buffet's Berkshire Hathaway Inc. (BRKA). The company sued SoCal Ed last month, and the case is scheduled to be heard Thursday in Imperial County Superior Court. If a judge delivers an unfavorable ruling, CalEnergy and other unsecured creditors would drag SoCal Ed into involuntary bankruptcy, three executives with the companies involved said. CalEnergy is said to be organizing a bankruptcy petition now circulating among six of Southern California Edison's independent power suppliers and could file the petition very quickly if it fails in its suit Thursday, said executives with three of the six companies. Write to Jason Leopold at [email protected] Copyright (c) 2001 Dow Jones & Company, Inc. All Rights Reserved ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------------------- As Davis Seeks Money, Lawmakers Want Answers Members of both parties angry at lack of dialogue Lynda Gledhill, Greg Lucas, Chronicle Sacramento Bureau Tuesday, March 20, 2001 ,2001 San Francisco Chronicle Sacramento -- The Legislature has warned it may block further state purchases of electricity as lawmakers' frustration with Gov. Gray Davis' handling of the energy crisis increases. A test may come soon because Davis asked yesterday for another $500 million to continue buying power. Sen. Steve Peace, D-El Cajon, chairman of the Joint Legislative Budget Committee, wrote to Davis' Finance Department on Friday that the committee might deny further spending requests "in the absence any discernable progress" from the Public Utilities Commission to ensure that the state would get its money back. Members of the committee, both Republican and Democratic, said they supported Peace's call for more oversight of the spending, given the lack of information from Davis on details of the state's power purchases. "He's been holding things close to the chest, and that bothers me," said Sen. John Vasconcellos, D-Santa Clara. "I want to know a lot more." Sen. Dick Ackerman, R-Fullerton, said the administration "has been stonewalling us about how much is being spent, and how much power we're getting for it. When the state is spending that kind of money, at a minimum, legislators should know for what." The state had spent $2.6 billion on electricity through March 11. Davis' request for more money would put the state at the $3 billion mark by the middle of April. The state is spending an average of $49 million a day. The money is supposed to be paid back through the rates collected from utilities' customers. It is up to the PUC to decide how to divide that money among the state, the utilities and the utilities' debtors. The commission is scheduled to take up the issue at its March 27 meeting. The problem is that there appear to be more demands on the money than there is money to go around. The utilities have said they need the money to pay off some of their creditors. Among those looking for cash are alternative-power generators that were selling electricity to Pacific Gas and Electric Co. and Southern California Edison. Half of them have shut down because they have not been paid. Earlier this month, the PUC granted the Department of Water Resources, which has been purchasing electricity for the state, the power to recoup its full costs through rates. It's unclear whether that can be accomplished without raising electricity prices, though Davis has insisted he can solve the crisis without boosting rates. Lawmakers said they approved the bill that allowed the state to buy power in the belief such purchases would be a stopgap until the Davis administration could sign long-term contracts with power suppliers. However, only about 19 contracts have been signed to date, out of 42 agreements. If all the contracts are signed, they will account for about 70 percent of the power California is expected to need. "It was our expectation some of these contracts would kick in," said Assemblywoman Carole Migden, D-San Francisco. "This was designed to only be bridge money to avert a power disaster. We should hold firm and come up with a plan. "I recall about three weeks ago when we first asked about one of these $500 million letters," Migden said. "We said maybe this one is necessary, but there won't be carte blanche approval of any future requests. I'm pleased Sen. Peace is taking that approach." To Assemblyman George Runner, R-Lancaster, Peace's letter was "another way for the Legislature to send a message we need to be in this loop. We're just getting a small little dribble of information, which just creates more questions." A spokesman for the Department of Finance said officials hoped to work with the committee members about their concerns. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------- Jones rips state on energy crisis Secretary of state hints that he'll take on Davis in 2002. By John Ellis The Fresno Bee (Published March 20, 2001) Officially, he's Bill Jones, secretary of state for California. Unofficially, he's Bill Jones, 2002 gubernatorial candidate. The evidence is right there between the lines -- in the subtleties of his speeches, their subject matter, and the way Jones carries himself when he's in public. Monday was no different, as Jones addressed a Rotary Club luncheon in Fresno full of people who are assuming -- though nothing is official -- that the Fresno native will soon announce his intention to challenge Gov. Davis next year. "Bill, they call me governor," Chas Looney, a former Rotary Club district governor, quipped to Jones. "I look forward to the day we all can call you governor." Jones then proceeded to deliver a speech to a packed house in the DoubleTree Hotel that touched on his accomplishments as secretary of state, but quickly moved to his main topic: California's crumbling infrastructure and how the energy crisis is affecting the state. Always in the background but never mentioned by name was Davis. Jones was careful to hew to the Rotary rule that speeches steer clear of partisan politics. Still, Jones looked, sounded and acted like a candidate for governor, and near the end of his speech he promised his decision would come soon. The Fresno Republican's speech began by highlighting his work in passing the "Three Strikes and You're Out" initiative in 1994. Jones also talked of his efforts to remove 2 million inactive California voters from the rolls. But it was clearly the energy crisis and its ramifications -- an issue Republicans feel they can pin on Davis and the Democratic-controlled Legislature -- that was the centerpiece of the speech. Today, the energy crisis is being driven, he said, by a lack of power plant construction. And while billions go to solve the crisis, he said, the state faces $100 billion in unmet infrastructure needs -- everything from school repair to road repair. "Doesn't that scare you?" Jones asked. He then recounted the warning signs -- ignored by the state, he said -- of the looming energy crisis. He cited the initial warnings that the deregulation bill was flawed, last summer's request by Edison and Pacific Gas & Electric to allow forward contracting and the Republican request for a special session to deal with the energy crisis. All ignored, Jones said. Now, Edison and PG&E are near bankruptcy and the state finds itself stepping up as a creditor. "And the solution now becomes California getting into the energy business," he said. "Or, even carrying it to a greater degree, not just in the short term to buy power to keep the lights on. I'm talking about basically socializing the energy business." Jones said he prefers low-interest loans to Edison and PG&E, taking the electric grid as collateral. "I just do not believe in California getting into something it does not know how to do -- has never done before -- on top of all of our other obligations," he said. "It really worries me that California will not be able to endure that type of obligation." Jones said polls now show increasing numbers of residents saying the state is headed in the wrong direction. "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) Blackouts rolled across California for a second straight day Tuesday, snarling traffic, darkening businesses and sending state officials scrambling to craft a payment plan to revive the wind farms and other critically needed small energy producers that have shut down because of financial woes. On a day when another 570,000 customers lost power, Gov. Gray Davis said the Public Utilities Commission and the Legislature would move promptly to order Pacific Gas and Electric Co. and Southern California Edison to start paying those small energy producers for their electricity. Davis said the two utilities will face "considerable fines" if they don't pay up. But several of the producers, known as "qualifying facilities," said they doubted Davis' plan would go far enough to get them back in operation. And it wasn't clear whether the plan would keep the increasingly impatient alternative producers from hauling one or both of the big utilities into bankruptcy court, as some have threatened. The shortage of power from the qualifying facilities -- plus a near-record heat wave (downtown Sacramento topped off at 83 degrees, one degree short of the 84 degree record set in 1960), a lack of hydropower and other problems -- prompted the state's Independent System Operator to order a second day of blackouts starting mid-morning. But the blackouts hit only about half as many Californians as Monday's, with late afternoon conservation efforts helping balance supply with demand. The blackouts, usually about an hour long, hit about 7,600 Sacramento Municipal Utility District customers in Elk Grove and south Sacramento County. PG&E customers in suburban counties were affected as well. The order darkened shops in San Francisco's Chinatown and was blamed for a crash that left two motorists seriously injured in the Los Angeles suburb of South El Monte. A Sun Microsystems Inc. factory in Newark had to close for several hours. Most Californians took the blackouts in stride, though. Elk Grove High School students filed outside to play hacky sack. Coffee shop patrons in Davis milled outdoors, enjoying the unseasonably warm weather. Yet the blackout order was met with outright defiance by one municipal utility. The city of Lodi refused to cut power to its residents Monday or Tuesday, saying it shouldn't have to suffer because of the financial crisis afflicting PG&E and Edison. The outlook for today and the near future was brighter, as several big power plants came back on line after repairs. ISO officials also praised Californians' conservation efforts, which had faltered in the morning but came on strong in the afternoon, helping to prevent further blackouts. By evening the grid was in a relatively mild Stage 2 power alert. But the second day of blackouts -- plus an increasing threat of utility bankruptcy -- pushed Davis to the brink. The governor cobbled together a payment plan to rescue the qualifying facilities -- some 600 wind farms, geothermal plants and other alternative-energy generators whose production has become increasingly vital in recent days. Under Davis' plan, the Legislature and the PUC would order PG&E and Edison to pay the qualifying facilities for power delivered after April 1. The utilities are required to buy power from the qualifying facilities under a 1978 federal law designed to bring cheaper and cleaner forms of electricity to market. Davis said the PUC would release a proposed order late Tuesday that would require the utilities to pay the qualifying facilities $79 a megawatt hour for five-year contracts or $69 for 10-year contracts. The Legislature also would have to pass a law authorizing the PUC to issue such an order. But the situation was far from resolved late Tuesday, and PG&E and Edison were likely to oppose at least portions of Davis' plan. Edison is willing only to make "some kind of partial payments going forward," said Thomas Higgins, a senior vice president with parent company Edison International. "We have a limited amount of resources available to us in rates, ... and that's the constraining factor." PG&E, which has been making partial payments to the qualifying facilities, said it could pay them in advance, in full, for future power deliveries. But PG&E said such payments would eat up half the $400 million it has available each month to buy power -- and unless it gets a rate hike, there wouldn't be enough to pay the qualifying facilities and cover other expenses, including the cost of reimbursing the state Department of Water Resources for the power the agency is buying on behalf of the troubled utility. PG&E's proposal could represent a challenge of sorts to state officials: Accept less money for the water department, or raise rates. State officials "need to resolve who they want to see paid," PG&E spokesman John Nelson said. "There is a limited pool of money." For his part, Davis insisted that the water department would be first in line to be paid, and he said the PUC will issue a proposed order to that effect. "We are getting paid before anybody else," Davis said. Hundreds of qualifying facilities are out of commission because PG&E and Edison haven't paid them. The situation has robbed the state of several thousand badly needed megawatts and is a key reason blackouts have been ordered. In normal times the facilities produce more than 20 percent of California's electricity. Some of the qualifying facilities have been threatening to haul one or both of California's beleaguered utilities into bankruptcy court unless they get paid soon, saying a bankruptcy filing might be the only way they can save their businesses. "You've got to take care of the QF problem or the whole thing blacks out," said Jerry Bloom, a lawyer representing one group of qualifying facilities. "(State officials) are starting to understand." One thing that was fairly certain about Davis' still-sketchy payment plan: It wouldn't cover PG&E and Edison's existing debt to the qualifying facilities, estimated at more than $1.48 billion. In their current financial state, the utilities say they can't afford to pay the existing debt. In addition, paying the debt would create a major complication: Other creditors, including the big power generators, would surely haul Edison and PG&E into bankruptcy court on the grounds that they weren't being treated fairly. "You can't give preferential payment treatment to one class of creditors over another," PG&E's Nelson said. "You virtually assure that (the other creditors) have to file an involuntary bankruptcy proceeding against you." But without full payment, it wasn't clear how many of the qualifying facilities would be able to restart. Executives at several plants -- the ones that run on natural gas -- said they're not sure their gas suppliers will deliver unless the existing debts are cleared up. "We need to convince a gas company to supply us," said Ed Tomeo of UAE Energy Operations Corp., which had to shut off its 40-megawatt Kern County plant Tuesday. "We're a company that already owes millions of dollars for gas supplies. How do you coax them to sell you millions more?" "It's wishful thinking ... that the gas suppliers are going to sell us gas," Robert Swanson of Ridgewood Power said. I>Bee Capitol Bureau Chief Amy Chance and staff writers Stuart Leavenworth, Bill Lindelof, Pamela Martineau and the Associated Press contributed to this report. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------------------- Lodi still won't pull the plug By Carrie Peyton Bee Staff Writer (Published March 21, 2001) In a growing rebellion against blackouts, the city of Lodi has twice refused to cut power to its residents despite an order from Pacific Gas and Electric Co. The small city-run electric system is among many disgruntled utilities, including the Sacramento Municipal Utility District, that believe their contractual pledges to cut back during emergencies were never meant for times like this. "It's been a philosophical debate up to this point. Now I guess we've drawn a line in the sand," said Lodi utility director Alan Vallow. PG&E said it is reviewing its interconnection contract, the agreement that links Lodi to the grid through PG&E-owned high-voltage lines, to determine what action it will take next. "It's unfortunate that while the city of Lodi has received the benefit of this agreement for years, they are unwilling to bear the burden of this statewide energy shortage," said PG&E's Jon Tremayne. One utility coalition, the Northern California Power Agency, believes that PG&E has already violated that agreement by not lining up enough power for customers. The agency wrote PG&E on Friday saying that its members -- municipal utilities and irrigation districts -- believe they aren't required to participate in blackouts prompted by financial disputes. And SMUD, which has been considering dropping out of future blackouts, will be watching the response to Lodi, said SMUD board President Larry Carr. Some SMUD directors say they're ready to go to court to force the issue. So is Lodi, population 58,000, said Vallow. "I've heard an Edison executive describe this as a natural disaster akin to an earthquake. That's crap. This is a man-made event," he said. Lodi said it will still help in genuine emergencies, such as fires or toppled transmission lines. But it decided that on Monday and Tuesday that wasn't the case. "You have 3,000 megawatts of QFs (qualifying facilities) offline because their bills haven't been paid. Well, guess what? Somebody ought to pay those ... bills," Vallow said. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------- Blackouts hit for second day; break seen Wednesday By Audrey Cooper ASSOCIATED PRESS March 20, 2001 SACRAMENTO
) Rolling blackouts hit California for a second straight day Tuesday, closing souvenir shops in San Francisco's Chinatown, snarling traffic and plunging schools and offices around the state into darkness. Roughly a half-million homes and businesses from San Diego to the Oregon border faced outages, blamed on the same factors that collided to force blackouts Monday
) unseasonably warm weather, reduced electricity imports from the Pacific Northwest, numerous power plants offline for repairs and less power provided by cash-strapped alternative-energy plants. Five rounds of outages in San Diego affected about 74,000 customers. State power grid officials expected to have enough electricity to avoid further outages through at least Wednesday, although the supply remained tight. State power regulators working on energy rescue Federal regulators scored for not ordering more California refunds ? Gov. Gray Davis blamed the blackouts in part on the failure of Southern California Edison and Pacific Gas and Electric Co. to pay millions of dollars they owe "qualifying facilities," power suppliers that use cogeneration
) steam from manufacturing plus natural gas
) or solar, wind and other renewable energy to generate electricity. State power grid officials say California this week has lost about half the electricity QFs normally provide. Several cogeneration plants say they haven't been paid by Edison and PG&E for weeks and can't afford to buy natural gas to fuel their plants. Davis said the utilities are taking in money from customers but still failing to pay the QFs. The state has been spending about $45 million a day since January to buy power for customers of Edison and PG&E, which are so credit-poor that suppliers refuse to sell to them. "It's wrong and irresponsible of the utilities to pocket this money and not pay the generators," Davis said at a Capitol news conference Tuesday evening. "They've acted irresponsibly and immorally and it has to stop." Southern California Edison officials said in a written statement that the utility is intent on paying creditors and working with the PUC to pay QFs for future power sales. PG&E representatives were out of the office late Tuesday night and didn't immediately return calls from The Associated Press seeking comment. John Harrison of the Northwest Power Planning Council, a consortium that monitors power use in several Western states, said blackouts on the first day of spring are an ominous sign of what lies ahead this summer. "We're in trouble," he said. "We will likely be able to meet our needs this summer, but there won't be much to send to California." Tuesday's outages began at 9:30 a.m. PST and continued in 90-minute waves until about 2 p.m., when the Independent System Operator lifted its blackout order. Grid officials credited an influx of power from the Glen Canyon hydroelectric plant on the Utah-Arizona border. The blackouts were blamed for at least one serious traffic accident. Two cars collided at an intersection without traffic lights in the Los Angeles suburb of South El Monte, leaving two people with serious injuries, California Highway Patrol Officer Nick Vite said. Ventura Foods in Industry sent its employees out for an early lunch after blackouts shut down its phones and computers. "This is mild weather for this time of year. I don't know what's going to happen in the summer," manager Frank Hynes said. "This is going to have a serious impact on the state's economy. They can't just keep shutting people down." Statewide, demand was higher than expected because of warm spring weather. Temperatures reached record highs across California on Monday, including the 80s and low 90s in Southern California. They were expected to be somewhat lower Tuesday but still in the 70s and 80s. The ISO hoped demand would start to subside and conservation would kick in, but that did not happen Tuesday morning. "We have not seen the kind of conservation we saw back in January," when the first blackouts hit, ISO spokesman Patrick Dorinson said. "If we don't have conservation efforts, that just means that's more power we have to take off the grid." In San Francisco's Chinatown, souvenir shops normally bustling with visitors were forced to shut down. Nearby, irritated customers waited for a bank to reopen. "It's no good for anybody
) stores or businesses or people," said Yin Sun Chan, among those in line. PG&E, the state's largest utility, accounted for most of the customers affected. At least 438,000 PG&E residential and business customers were affected as of early afternoon, spokesman Ron Low said. Edison cut power to about 50,000 customers. Edison was ordered to cut less power than PG&E and saved some due to conservation programs, including one that lets the utility shut off air conditioning for 118,500 residential and business customers when the power supply is tight. About 73,400 San Diego Gas & Electric customers were hit by the blackouts. Los Angeles, whose municipal utility is not on the grid that serves most of California, wasn't included in the blackout order. More than 1 million homes and businesses statewide experienced outages Monday. California's power crisis is expected to get even worse this summer, when temperatures soar and residents crank their air conditioning. Natural gas supplies are tight, water supplies are down and the state is spending tens of millions of dollars each day to buy electricity for Edison and PG&E, who say they are nearly bankrupt due to high wholesale power costs. Edison and PG&E say they have lost more than $13 billion since last June to climbing wholesale electricity prices the state's 1996 deregulation law prevents them from recouping from ratepayers. Adding to the problems, the state this week lost about 3,100 megawatts from QFs. One megawatt is enough power to serve about 750 households. The plants say they are owed about $1 billion for past sales to PG&E and Edison. PG&E said it is offering to prepay the QFs starting next month to get them back in operation. Negotiations were expected to continue Wednesday. California Co-Generation Council attorney Jerry Bloom said he supports proposals that will get the Qfs paid, but the promise of future payments may not be enough. PG&E and Bloom said the utility's prepayments hinge on an upcoming Public Utilities Commission decision on whether the utility's rates are sufficient to pay its bills and cover the state's power purchases on its behalf, which amount to $4.2 billion since early January. Davis said the PUC planned to issue a draft order late Tuesday directing the utilities to pay their future QF bills. It plans to take action on that order next Tuesday, Davis said. The Legislature plans to approve a bill in the meantime giving the PUC the authority to issue such an order and fine the utilities if they fail to comply, he said. Davis said he is confident the utilities and the state can pay their bills without further rate increases for Edison and PG&E customers. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------- State power regulators working on energy rescue By Karen Gaudette ASSOCIATED PRESS March 20, 2001 SAN FRANCISCO
) State power regulators continue to delay the release of guidelines that will determine a portion of the money the Department of Water Resources can recoup from financially troubled utilities for electricity it has bought on their customers' behalf. These guidelines will help the water department determine whether it must raise consumer power rates to reimburse the state for the more than $3 billion it has committed to buying electricity. Assemblyman Fred Keeley, D-Boulder Creek, said Tuesday that the Public Utilities Commission would likely have to raise rates by 15 percent to cover the state's costs and the utilities' bills. The PUC guidelines were most recently delayed by a letter from DWR Director Thomas Hannigan asking that the water department receive a percentage of ratepayer money collected by the utilities equal to the percentage of electricity it provides to utilities. The DWR currently buys around 40 percent of the power used by Pacific Gas and Electric Co., Southern California Edison Co. and San Diego Gas and Electric. Under the DWR's proposal the utilities would have to hand over 40 percent of the money they continue to collect from ratepayers. The DWR would then also receive whatever money remains after the utilities subtract their own generation and long-term contract costs, the letter said. That amount would become the "California Procurement Adjustment"
) an amount that will help the state retrieve money spent on power purchases and help establish the size of state revenue bonds that are currently estimated to total $10 billion. The state plans to issue the bonds in May to help pay off the more than $3 billion Gov. Gray Davis' administration has committed to power purchases since January to help the utilities climb out of debt. Ron Low, a spokesman with PG&E, said the utility objects to paying the DWR such a large sum, claiming it would interfere with efforts to pay its "qualifying facilities"
) power plants that use the sun, wind, biomass or natural gas to generate about one third of the state's electricity. The nearly bankrupt utilities owe the QFs more than $1 billion for electricity they have produced since November, said Jan Smutney-Jones, executive director of the Independent Energy Producers. Hannigan also said in the letter the DWR intends to use its authority to raise consumer electricity rates to recoup any money not reimbursed through the CPA and other means. The Public Utilities Commission expected to release the guidelines last week, but was delayed by debates over legislation that would slash the rates of environmentally friendly power plants under contract to provide electricity to the investor-owned utilities. Without knowing how much ratepayer money the utilities need to pay these "qualifying facilities" for future electricity, it's unknown how much money they'll have on hand to pay the DWR. In a written statement, PUC Administrative Law Judge Joseph DeUlloa said that he would issue a temporary decision on the CPA "as soon as is practical." Pacific Gas and Electric Co. and Southern California Edison Co. say they have lost more than $13 billion since last June to climbing wholesale electricity prices that the state's 1996 deregulation law prevents them from recouping from ratepayers. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------- Federal regulators scored for not ordering more California refunds By H. Josef Hebert ASSOCIATED PRESS March 20, 2001 WASHINGTON
) House Democrats asked federal energy regulators Tuesday why they are not going more aggressively after alleged overcharges for wholesale electricity in California and ordering more refunds. The Federal Energy Regulatory Commission has asked suppliers to justify $124 million in sales during the first two months of the year or refund the money, but critics charge that thousands of additional questionable sales are not being challenged. The three commissioners testifying at a hearing of the House Commerce subcommittee on energy, were asked why they limited their refund demands to only power sales that occurred during so-called Stage 3 alerts of acute power shortages in California. "It appears to me a price is unreasonable when it is unreasonable," and not just during a power alert, said Rep. Rick Boucher of Virginia, the panels' ranking Democrat. The commission last week ordered six power generators to justify some 1,000 transactions during February in the California market whenever the price was above $430 per megawatt hour and occurred during a Stage 3 emergency alert. But the lawmakers were told Tuesday that 56 percent of another 14,168 transactions, occurring outside a Stage 3 emergency, also exceeded the $430 trigger, but are not being questioned. "The line was drawn to limit the scope of the refund," said agency commissioner William Massey, a Democrat, who strongly opposed the refund actions because he said they were too limited. Chairman Curtis Hebert, a Republican, defended the way the commission decide on what transactions to challenge saying that it sought to replicate market conditions as they existed at the time of the sales. "We deserve a better explanation," retorted Boucher. Massey said that agency's investigation of overcharges for January also failed to consider thousands of transactions that exceeded the refund trigger because they did not occur during Stage 3 supply emergencies. Managers of California's electricity grid, state regulators and utilities have accused the agency of refusing to aggressively investigate price gouging by wholesalers who have charged from $150 to $565 per megawatt hour, as much as 20 times what prices were in 1999. While Hebert and commissioner Linda Breathitt defended the commissioners attempt to investigate whole electricity prices, Massey has been highly critical. What message does the agency's scrutiny of prices send to the power companies? he was asked. "It makes clear FERC is going to be looking for the wallet under the lamp post with the lights shining
) and nowhere else," replied Massey. Meanwhile, Massey and his two fellow commissioners, also disagreed sharply on whether the energy agency should impose temporary price controls on the wholesale power market in the West to dampen further expected price increases this summer. Massey said he fears "a disasters in the making" if some price restraints are not imposed by FERC, which regulates wholesale electricity sales. "We need a temporary time out," he said. But Massey is in the minority on the commission. Both Hebert and Breathitt are against price caps, arguing they will have long-term detrimental impact on power supply. The Bush administration has made its opposition to interfering in the wholesale markets well known for weeks. Vice President Dick Cheney's task force is to unveil an energy plan in about a month that is expected to lean heavily on energy production. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------- Second Day of Blackouts Disrupts 500,000 Homes and Businesses Power: Grid operators say the shortage should ease in the next few days, but officials see a grim summer. By MITCHELL LANDSBERG and ERIC BAILEY, Times Staff Writers A traffic signal that stopped working during Tuesday's rolling blackouts led to this collision be tween a car and a truck at an intersection in El Monte. The outages ran from 9:30 a.m. to 2 p.m. AP ?????Electricity blackouts rolled through California for a second straight day Tuesday, disrupting business in one of the world's most technologically advanced economies and leaving schoolchildren groping in the dark. ?????Jinxed by a combination of bad luck and bad decisions, utilities were forced to cut off power to more than half a million homes and businesses from San Diego to the Oregon border. ?????By day's end, there was some good news from the operators of the statewide power grid, who said the situation had eased and appeared likely to improve for the next few days. And Gov. Gray Davis announced a proposed solution to one vexing problem: the utilities' failure to pay the state's small, alternative power generators, many of whom have stopped producing power as a result. ?????Davis called the utilities "shameful" for failing to pay, and praised the alternative power generators, which include solar, wind and geothermal energy producers, as "good corporate citizens" who produced power although they weren't being paid. ?????"We are anxious to pay the [small producers], who are dropping like flies," Davis said. ?????Despite the progress, it was hard for some people to look on the bright side after enduring outages that took place when the state's hunger for power was almost 50% less than at its summer peak. ?????"This is a taste, almost like an appetizer, of a really unpalatable meal that's going to be served up this summer," said Michael Shames of the Utility Consumers' Action Network in San Diego, himself a victim of a rolling blackout that hit his office in San Diego early Tuesday. ?????Power officials have warned that this could be a grim summer in California, since demand for electricity sharply rises when people turn on air conditioners. The state has been struggling to meet its power needs in recent months because of rising prices and a flawed deregulation plan that has left the two biggest private utilities on the brink of bankruptcy. State leaders have so far failed to agree on a comprehensive plan to solve the problems. Wally Quirk teaches a business class in a borrowed classroom Tuesday at Sonoma State after the state's rolling blackouts cut the power to his usual 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 California Independent System Operator, which runs the statewide grid, determined that the demand for electricity was 500 megawatts more than the supply--an imbalance that meant the state was short on the power needed to supply electricity to about 375,000 homes. ?????Grid operators blamed a confluence of events, including warmer weather; outages at several major power plants, including one unit of the San Onofre nuclear power station; a reduction in imports from the Pacific Northwest, and the shutdown of many alternative energy producers. Similar blackouts Monday were the first since January. ?????The situation improved somewhat by late Tuesday morning, with some supplies restored and Californians conserving energy, and Cal-ISO was able to halt the rolling blackouts at 2 p.m. ?????Once again, customers of the Los Angeles Department of Water and Power were spared, although the municipally owned utility said its electrical surplus was smaller than usual. The DWP, like Southern California Edison, was affected by an outage at the huge Mohave power plant in Nevada, as well as by planned outages at several of its facilities. ?????As in the past, by far the biggest impact was felt by customers served by Pacific Gas & Electric, the state's largest utility, which cut power to 438,000 homes and businesses. ?????Edison cut power to 47,462 customers in about 40 cities, but eventually was able to avoid blackouts by shutting off the air conditioners of some of the 118,500 customers who participate in a voluntary cutoff program. ?????San Diego Gas & Electric cut power to 73,400 customers. ?????Innovative Ways of Coping ?????As on Monday, most people took the outages in stride, as an annoying but ultimately unavoidable inconvenience. ?????In Palmdale, four schools lost power during one of the hourlong blackouts, but teachers and students pressed on in the sunlight pouring through windows and skylights. At Barrel Springs Elementary, Principal Cruz Earls said the biggest problem came when students had to go to the bathroom: Hand in hand, they made their way through darkened hallways with flashlights. ?????All in all, it wasn't a terrible experience. Then again, the weather wasn't that hot Tuesday, with a high of 79 in Palmdale, so the shutdown of air conditioners wasn't much of a hardship. "I don't want to think about the conditions this could create in May or June," Earls said. ?????Businesses of all kinds complained about the lack of warning for the outages--and sometimes found innovative ways to get around the problem. ?????Rattled by news reports of Monday's rolling blackouts, El Burrito Mexican Food Products in the city of Industry started its Tuesday shift at 2 a.m. to beat the clock in the event of an outage. That hunch paid off. Workers had just finished cooking and packaging the last batches of salsa and masa when the lights went out at 10:20 a.m. ?????Company owner Mark Roth said the firm will continue working odd hours to avoid further outages. But he isn't buying the line from the utilities that they can't provide advance warning because of concerns about looting and rioting. ?????"We're ready to do whatever it takes to get through this thing," he said. "But they've got to give us some notification." ?????At Big O Tires in Elk Grove, just south of Sacramento, owner Daniel Crum had his 14 workers take an early lunch break or head to the warehouse to reorganize the goods. Without electricity, they couldn't repair brakes or 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 unseasonably warm weather. Supplies were tighter than usual, in part because of several outages, including that at the Mohave plant, half of which was brought back on line by the end of the day. ?????The San Onofre Nuclear Generating Station was still limping along without power from one of its two 1,100-megawatt units, which was shut down Feb. 3 after a half-hour fire in a nonnuclear part of the plant. Edison, which operates San Onofre, initially estimated the unit would be out for several weeks but recently said "extensive damage" to parts of the turbine will keep the unit out of commission until mid-June. ?????Shipments from the drought-stricken Pacific Northwest, which generates most of its electricity from large dams, were also down. ?????"Each time we take a measurement, we're closer to the all-time record for the driest year," said Dulcy Mahar, spokeswoman for the Bonneville Power Administration, the network of federal dams that provides the region with much of its electricity. "We've been doing what we can, but we simply don't have power to sell." ?????Finally, there was the problem of the small and alternative energy producers, which have shut down plants because they haven't been paid by the private utilities since November. Those outages have cost the state about 3,000 megawatts of electricity, enough for about 2.3 million homes. ?????"You're seeing the system freeze up," said David Sokol, chairman and CEO of MidAmerican Energy Holdings Co., which runs eight geothermal plants in the Imperial Valley through its subsidiary, CalEnergy. His company hasn't shut down yet, but Sokol said smaller companies couldn't continue to sell their 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 to get the producers running again. He said utilities have had no right to collect money from ratepayers and then not use the funds to repay the small producers. The state has spent billions to buy power from large conventional producers on behalf of the utilities but has refused to pick up the tab for alternative energy. ?????"The utilities acted in a shameful manner by putting money in their pockets that was designed to pay the [small producers]," Davis said. ?????The plan outlined by Davis would allow the generators to choose between two rate plans. They could decide to be paid 7.9 cents per kilowatt-hour over five years or 6.9 cents a kilowatt-hour over 10 years. ?????The utilities must begin paying the generators the new rates beginning April 1 or face fines, Davis said. ?????The question of how the companies will get paid the about $1.5 billion they are owed remains unresolved. That issue will be decided in coming weeks as Davis' negotiators continue to work on rescue plans for the state's financially hobbled private utilities. ?????PG&E spokesman Ron Low said the state's largest utility did not take kindly to Davis' criticism, and noted that the governor's plan is similar to a proposal that PG&E made last week to producers. ?????Jan Smutny-Jones, executive director of a trade group that includes some 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 producers to continue to generate and not be paid," Smutny-Jones said. "But we'll need to see what the order says; the devil will truly be in the details." ?????Grid operators said the state's overall energy situation eased by midday Tuesday because of repairs at the Mohave plant and another large plant at Ormond Beach, and because the Western Area Power Administration came up with 300 megawatts of electricity from Glen Canyon Dam. ?????Also, grid spokesman Patrick Dorinson said conservation savings spiked upward after earlier complaints that Californians weren't conserving. ?????"We saw the people of California probably conserve 900 megawatts today," he said. "That was probably the difference." --- ?????Times staff writers Andrew Blankstein, Jose Cardenas, Marla Dickerson, Noaki Schwartz, Nicholas Riccardi, Doug Smith, Rebecca Trounson and Richard Winton in Los Angeles, Miguel Bustillo and Julie Tamaki in Sacramento, Maria La Ganga in San Francisco, Stanley Allison, Matt Ebnet, Scott Martelle, Dennis McLellan, Monte Morin, Jason Song, Mai Tran and Nancy Wride in Orange County, and Richard Simon in Washington contributed to this story. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------- Fragile Supply Network Apt to Fail By JENIFER WARREN and ERIC BAILEY, Times Staff Writers ?????A lot of people were caught off guard by the blackouts that swept over California this week. Debra Bowen wasn't one of them. ?????As chairwoman of the state Senate Energy Committee, she is intimately--and painfully--familiar with the state's energy supply. And she is willing to share a secret: It's a fragile system, capable of collapse at any time. ?????That knowledge keeps Bowen awake at night, particularly with the approach of summer, when power demand surges as Californians get reacquainted with their air conditioners. ?????"I sound a bit less like Chicken Little today, don't I?" Bowen said Tuesday, as chunks of the state once again were forcibly darkened. "I know a lot of people don't feel we have a problem. But we have a very, very big problem." ?????With the recent slowdown in Stage 3 emergencies, a sense of calm had settled over the energy debate, and even some legislators were speaking with guarded optimism about the hot months ahead. ?????On Tuesday, however, a creeping sense of doom was almost palpable among energy watchers, and previous supply forecasts--which predict that the state may yet escape summer blackouts--were being given a second look. ?????"The outages of the last two days are something that Californians are going to have to get used to for July and August," said Michael Zenker, California director of Cambridge Energy Research Associates. The Massachusetts consulting firm is predicting about 20 hours of blackouts this summer. ?????At the California Independent System Operator, which manages 75% of the statewide power grid, officials said the energy cushion the state had in 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 into a false state of comfort: "Maybe there is a tendency to think things have improved," he said. In fact, they haven't. ?????More than anything, this week's events illustrate the delicate balance of factors that keep California illuminated, from the multitude of supply sources to the weather. ?????Temperatures were higher than usual. Alternative-energy suppliers--who haven't been paid in months by the cash-strapped utilities--cut their output. Suppliers in the Northwest--which faces a drought--slashed exports. Equipment breakdowns and maintenance at power plants--much of it unanticipated--took 13,000 megawatts offline. A utility-run program that gives businesses discounts in exchange for cutting power during emergencies is all but dead. ?????"The fragility of the system is such that a small perturbation can turn everything upside down very easily," said Gary Ackerman, executive director of the Western Power Trading Forum, a group of electricity generators and traders. ?????One factor receiving particular attention is the dip in supply caused by unscheduled maintenance. To help officials predict available supply, generators provide an annual maintenance plan that is updated regularly. ?????In addition, however, facilities sometimes shut down for unexpected reasons: leaking tubes, burnt-out transformers, cracked turbines and faulty feed pumps. At one point Tuesday, about 8,200 megawatts were unavailable because of unscheduled shutdowns. That's enough to supply about 6 million households, and up from 5,700 megawatts a week ago. ?????The huge 1,400-megawatt Mohave power plant near Laughlin, Nev., which supplies Southern California Edison and the Los Angeles Department of Water and Power, was felled Monday by a transformer problem. That was enough to push the state into blackouts. ?????A growing number of skeptics, however, question whether those reasons are always valid, accusing generators of withholding power to shrink supply and drive up prices. ?????"There's no way to verify it, so you've got to take their word for it," said Frank Wolak, a Stanford University economist who studies California's electricity market. "And given that it's very profitable for these things to occur, you start to wonder if they're creating an artificial scarcity." ?????Tom Williams of Duke Energy said the Houston-based company is working hard to keep its California power plants, which are capable of producing 3,351 megawatts of electricity, in operation after months of near-continuous operation. ?????"It's like riding a moped across the country," he said. "They're just not meant to run this hard." ?????Last week, the state Senate formed a committee to investigate charges of market manipulation by power suppliers. The chairman, state Sen. Joe Dunn (D-Santa Ana), says the issue of unscheduled plant shutdowns is on his agenda. ?????"The problem is: How does one prove that a particular outage was part of a deliberate strategy to deprive the state of kilowatts, rather than a result of normal business operations?" Dunn said. --- ?????Times staff writer Nancy Rivera Brooks contributed to this story. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------- Elevator Anxiety Is Riding High Emergencies: Workers in skyscrapers worry about blackouts trapping them in their buildings. Some take the risk in stride; others make plans to take the stairs. By JOHN M. GLIONNA and JOE MOZINGO, Times Staff Writers ?????SAN FRANCISCO--In Susan Clifton's highly placed opinion, sunny Tuesday would have been a picture-perfect day to work atop one of the tallest buildings in San Francisco, a scenic city littered with soaring skyscrapers. ?????But Clifton--like many other high-rise office dwellers in blackout-prone parts of California--couldn't help but feel some high anxiety at the prospect of being stranded by electrical outages that were sweeping across the state for a second day. ?????"I think about it all the time," said Clifton, a 21-year-old receptionist at Deutsche Bank's offices on the 48th floor of a tower in the city's financial district who recently moved from rural Virginia. "The way I see it, Californians take a lot of things on faith, working atop tall buildings with all these earthquakes and power outages." ?????For Long Beach office worker Dave Suhada, the anxiety has taken the form of elevator phobia: a fear of getting stuck on an 80-degree day crammed in a 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 can if the power goes out," he said. ?????For 20-year-old Lisa Riley, it means entering the elevator each day in her Long Beach office building with a prayer. "I just could not get stuck for an hour and a half," she said, nodding nervously. Often she now opts for the stairs. ?????In San Francisco, emergency services officials say that most of the city's office buildings are equipped with backup generators to run elevators and security equipment in the event of a blackout. ?????Fire Department spokesman Pete House said the city has 19 trucks with experts trained to extricate people trapped in elevators. Firefighters handling blackout-related emergencies rescued a person trapped in a downtown building Tuesday and handled five elevator mishaps Monday. ?????Christopher Stafford didn't get caught inside an elevator Monday, but suffered the next-worst thing: being stranded in his 15th-floor apartment after the power failed when he went home for lunch. ?????So the 41-year-old real estate worker trooped down the stairs to the lobby and even made some new friends along the way, helping a few elderly women who were struggling down the stairs. ?????"It was a pain," he acknowledged. "But I have to tell you: I really like my panoramic view, so it's worth the hassle." ?????Nowadays, Sherrie Tellier makes sure her cellular phone is in hand when she gets in the elevator. She got trapped once before, and the emergency phone didn't work. It's amazing, she said, how small an elevator seems when you can't get out. "It's like a broom closet.Now there's a sigh of relief every time the door opens." ?????Some high-rise office workers said Tuesday that they preferred not to think about the perils of going without power and being vulnerable and isolated so high up. ?????But on the 42nd floor of San Francisco's Transamerica Tower, Sasha Monpere wasn't fazed by the chance that during a blackout, her building's backup generators wouldn't kick in. ?????"Hey, I'm young and I'm healthy. I can always walk down the stairs," said the 29-year-old receptionist. "I've done the Statue of Liberty. It can't be any worse than that. And walking down 42 flights is a lot easier than walking up all those stairs." ?????Likewise with Phil Ip, who works on the 52nd--and top--floor of San Francisco's tallest skyscraper. The 25-year restaurant veteran says he has the utmost faith in modern technology. ?????"We're safe, even up here," said Ip, assistant general manager of the Carnelian Room, a restaurant atop the Bank of America building. "You should see the engineer's room in this building. It's like a big steamship. They're equipped for anything that could happen." ?????One floor below, Cheryl Martin hears every day about people's fear of heights. In the year since she began answering phones in a law office, she has often escorted clients afraid of express elevators that shudder and rise so fast that passengers' ears pop from the altitude gain. ?????"Everybody, and I mean everybody, asks, 'So, what happens during a power outage?' " she said. ?????Rory Thompson said he believes in karma and is sure that if the rolling blackouts come calling, his office will be spared. In July 1993, Thompson's building was the site of an incident known as the 101 California St. massacre, in which gunman Gian Luigi Ferri killed eight people and wounded six before killing himself. ?????"This building has already had its bad day," he said. "They say that the day after a crash is the safest day to ride an airline. So I'll take my chances with the rolling blackouts." ------------------------------------------------------------------------------ -------------------------------------------------------------------------- State Says It's Accelerating Plan to Buy Power Utilities' Grid Government: Talks with Edison are reported near completion, but agreement with heavily indebted PG&E has a way to go. By RONE TEMPEST and DAN MORAIN, Times Staff Writers ?????SACRAMENTO--As blackouts hit California for a second day Tuesday, a key consultant to Gov. Gray Davis said negotiations to buy the power grid owned by the state's largest utilities "are proceeding at an accelerated pace." ?????Wall Street consultant Joseph Fichera said talks with Southern California Edison could be wrapped up within days, although those with PG&E are much less advanced. ?????The administration and PG&E have not reached even an agreement in principle, he said. PG&E, which has more debt than Edison, says its transmission lines are more extensive than those of its Southern California counterpart. ?????The state wants to buy the utilities' transmission lines and other assets for about $7 billion to provide cash to the utilities, help stabilize the electricity supply and ease the power crunch that has plagued California for months. To research the grid purchase, Fichera said, the state has had to pore over 80,000 documents just to assess the utilities' liabilities. ?????"We are working at a good pace," said Fichera, chief executive of the New York firm Saber Partners. " . . . If we get to a deal-breaker, it might be longer." ?????By making Fichera, who is also a consultant to the Texas Public Utilities Commission, available to reporters Tuesday, the Davis administration was clearly trying to reassure the public that progress is 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 stopped selling to them, the state has spent nearly $3 billion buying electricity from a handful of large suppliers in Texas, Oklahoma, Georgia and North Carolina. Not a cent has gone to the hundreds of alternative energy suppliers in California who provide about a quarter of the state's electricity. ?????The Monday and Tuesday blackouts occurred partly because many of the cash-strapped alternative suppliers, including solar, biomass and wind power units, cut their normal supply to the system in half. They say Edison and PG&E have not paid them since November; the utilities say they are out of cash. ?????Assemblyman Fred Keeley (D-Boulder Creek) said the plight of the alternative suppliers has dragged on because of the complexity of dealing with "almost 700 individual contractors." ?????Another delaying factor, said Keeley, who with state Sen. Jim Battin (R-La Quinta) worked for almost three months to come up with a legislative plan to lower the small producers' prices, was "the huge enmity . . . manifested between the utilities and the qualifying facilities. These people just don't like each other." ?????This week's blackouts provided two painful lessons for the Davis administration: ?????* When it comes to electricity, size doesn't matter--every kilowatt counts. During peak use, a small wind power facility in Riverside County can make the difference between full power and blackouts. ?????* There is no such thing as a partial solution. Unless the whole energy equation is balanced, the parts don't work. ?????For the Davis plan to work, several key elements need to come together or utility customers will almost certainly face rate increases above the 19% already set in motion: ?????* The cost of power purchased by the state must be reduced through long-term contracts with the big out-of-state producers. ?????These contracts, the details of which the Davis administration has kept confidential, are still being negotiated by Davis consultant Vikram Budhraja of the Pasadena firm Electric Power Group. The administration says it has concluded 40 contracts with generators, about half of which have been signed. ?????According to the most recent statistics released by the Department of Water Resources, which buys power for the state, current prices are still well above the rate state Treasurer Phil Angelides says is necessary for a planned $10-billion bond offering to succeed. ?????The bonds, set for sale in May, will be used to reimburse the state for the money it will have spent by that time to buy electricity. The state is currently spending at a rate of $58 million a day to buy power. If prices stay high, the $10 billion in bonds will not cover the state's power purchases by the end of the summer. ?????Angelides says he cannot proceed with bridge financing for the bonds until the Public Utilities Commission devises a formula to guarantee that a portion of utility bills will be dedicated to bond repayment. Angelides has estimated that, under the January law that put the state in the power buying business, the state must be reimbursed $2.5 billion annually, and that $1.3 billion is needed to service the debt. ?????PUC Administrative Law Judge Joseph R. DeUlloa is expected to announce his ruling on the reimbursement rate later this week, leading to a PUC vote on the matter as early as next week. ?????* The rates charged for electricity by the alternative producers, known as qualifying facilities, must be cut at least in half, down from an average of more than 17 cents per kilowatt-hour. In his news conference Tuesday, Davis said he will ask the PUC to set QF rates at 6.9 cents for 10-year contracts and 7.5 cents for five-year contracts. ?????Meanwhile, PUC Chairman Loretta Lynch, a Davis appointee, said Tuesday that the commission will vote next week on a proposed order requiring Southern California Edison and Pacific Gas & Electric to pay the QFs for electricity in the future. Lynch said a recent PUC assessment showed that the utilities have enough cash on hand for that. ?????"We are trying to make sure the folks providing the power get paid," Lynch said. "The qualified facilities have demonstrated that they haven't been paid and that it is impairing their ability to provide power." ?????The utilities contend that if they pay the small providers what they owe 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 [alternative producers], pay the [Department of Water Resources] and pay the utilities for their generation," said John Nelson, a spokesman for PG&E. ?????* The utilities must sell to the state the power they produce themselves, mainly from hydro and nuclear sources, at a rate only slightly above the cost of producing it. This is tied to the ongoing negotiations between the Davis administration and the utilities to restore the near-bankrupt utilities to solvency. --- ?????Times staff writers Julie Tamaki, Miguel Bustillo and Tim Reiterman contributed to this report. ------------------------------------------------------------------------------ -------------------------------------------------------------------------- L.A., Long Beach File Suits Over Gas Companies' Prices Energy: Separate actions allege a conspiracy and gouging. Suppliers blame rising demand and a fluctuating market. By TINA DAUNT and DAN WEIKEL, Times Staff Writers ?????Seeking damages that could reach "into the billions of dollars," the cities of Los Angeles and Long Beach on Tuesday filed separate lawsuits alleging that a coalition of gas companies illegally conspired to eliminate competition, drive up natural gas prices and discourage the construction of electricity generating plants in California. ?????Officials from the two cities alleged that Southern California Gas Co., San Diego Gas & Electric and El Paso Natural Gas Co. violated the state's antitrust law and engaged in unfair and fraudulent business practices that caused gas prices to skyrocket. ?????The cities are the first California municipalities to take action against the gas companies. A number of similar lawsuits filed by antitrust attorneys, state regulators and private citizens are pending elsewhere. ?????The energy companies deny any impropriety. They contend that California is the victim of its own soaring electricity demand and overreliance on fluctuating spot markets for natural gas. ?????"The conspiracy theories that have been promoted have no basis in reality," said Denise King, spokeswoman for Southern California Gas' parent company, Sempra Energy, which also was named in the suits. "Southern California Gas continues to look out for the best interest of its customers." ?????The lawsuits filed in Los Angeles County Superior Court accuse the companies of conspiring to manipulate the price of natural gas by agreeing to kill pipeline projects that would have brought ample supplies of cheaper natural gas to Southern California. ?????They allege that executives for the energy companies made the pact during a meeting in a Phoenix hotel room five years ago to discuss "opportunities" arising from the state's newly deregulated electricity market. ?????"The fulfillment of the illicit plan has had devastating effects on Southern California gas consumers," according to Los Angeles' suit. "Gas prices in the Southern California market have skyrocketed, and the Southern California gas consumers are paying the highest prices in the nation." ?????In recent months, natural gas prices have tripled across the nation for a number of reasons, including a shortage of supplies to meet demands for home heating. Prices have increased far more in California, where natural gas is a central factor in the state's energy crisis. The state relies on the clean-burning fuel to generate half its electrical power. ?????"This not only led to price-gouging of all natural gas consumers, from homeowners to government to industry, but it contributed to the current electrical power crisis in California," said City Atty. James K. Hahn, a mayoral candidate who urged the City Council to pursue the case. ?????Chris Garner, Long Beach's utility director, said that since November, the average residential bill for gas in Long Beach has more than doubled, to $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 are artificially manipulating the supply of natural gas and reaping excess 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 Tuesday to file the suit. ?????"If the allegations are true, they are extremely serious," said Councilman Mike Feuer, who is a candidate to succeed Hahn as city attorney. "And there appears to be some important evidence that substantiates the allegations in the complaint, which means that this lawsuit is, I think, more than a viable lawsuit." ?????Councilman Mark Ridley-Thomas added: "We cannot tolerate this and we 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 natural gas suppliers. El Paso Corp., which owns the main pipeline transporting out-of-state gas to Southern California, has been targeted repeatedly by utility companies, state regulators and antitrust attorneys. ?????Some of the first antitrust lawsuits were filed against Sempra Energy in December. They were brought by Continental Forge Co., a Compton-based aluminum forging business, and Andrew and Andrea Berg, who own a business in San Diego. ?????The cities' lawsuits request that the defendant companies be barred from such conduct in the future, and they seek civil penalties and damages. ?????Shannon estimates that Long Beach could collect more than $100 million in damages, including triple penalties for antitrust violations. ?????"We are filing this for our citizens," Shannon said. "They include the poor, the elderly, people living on fixed incomes and small business owners." ?????The Los Angeles suit was filed on behalf of all Californians. Officials place damage estimates "in the billions." ?????Hahn, however, warned council members that it could take the city a year or more to resolve the suit. ?????"Lawsuits take time," Hahn said. "We are hopeful we can enter into meaningful discovery to disclose what's been going on." ------------------------------------------------------------------------------ -------------------------------------------------------------------------- Davis OKs Subsidy of Pollution Fees Smog: As part of secret deal to get long-term energy contracts, state would pay for some of the credits that allow excess power plant emissions. Critics renew call for full disclosure. By DAN MORAIN , Times Staff Writer ?????SACRAMENTO--As part of his closed-door negotiations to buy electricity, Gov. Gray Davis has agreed to relieve some generators from having to pay potentially millions of dollars in fees for emitting pollutants into the air, Davis said Tuesday. ?????Davis announced two weeks ago that his negotiators had reached deals with 20 generators to supply $43 billion worth of power during the next 10 years. ?????However, the Democratic governor has refused to release any of the contracts or detail various terms, contending that release of such information would hamper the state's ability to negotiate deals with other generators and therefore ultimately would raise prices Californians pay for electricity. ?????Sources familiar with the negotiations, speaking on condition of anonymity, said the agreement reached with Dynegy Inc., a power company based in Houston, is one that includes language requiring that the state pay the cost of credits that allow emissions. Dynegy spokesman Steve Stengel declined to discuss the company's deal with the state. ?????"We couldn't get them to sign contracts; it was a sticking point," Davis said of the decision to pay the fees of some generators. "We had to lock down 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 RECLAIM. Under the system, companies are allotted a certain amount of allowable pollution. If their operations pollute more, companies are required to purchase credits on an open market. Currently the credits cost about $45 per pound of pollution--an amount that can lead to a bill of well over $10 million a year for a power plant. ?????The South Coast Air Quality Management District, which regulates pollution in the Los Angeles Basin, is considering steps to significantly lower the cost of the system--a step that could considerably cut the state's potential cost, Davis said. ?????Senate Energy Committee Chairwoman Debra Bowen (D-Marina del Rey) defended the decision to cover the power company's costs. ?????"It is a question of whether it brings down the price of power," she 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 pollution fees caused some critics of Davis' policy to renew calls for Davis to reconsider the secrecy surrounding the power negotiations. The payment provision underscores the fact that the contracts involve more than merely the prices the state will pay for its megawatts, the critics note. ?????"The Legislature should have known about it," said Senate President Pro Tem John Burton (D-San Francisco). "It is going to cost taxpayers money. It makes you wonder. . . . This was a policy issue that was never discussed with the Legislature." ?????V. John White, a lobbyist for the Sierra Club, who also represents alternative energy producers, called the contract proposal "a horrible precedent." ?????"Until we know exactly what the state has agreed to and how much of a subsidy this represents, we can't determine how serious the breach of principle this is," White said. ?????Another critic of the secrecy of the negotiations, Terry Francke, general counsel for the California First Amendment Coalition, said the provision in question "raises the possibility that there are other [concessions]" that have not yet come to light. ?????In the summer, when demand for power is highest, some generators probably will exceed pollution limits set by regional air quality management districts. ?????To avert blackouts, state officials might ask the companies to keep plants running. In such cases, some sources familiar with aspects of the contracts said, the contract language could be interpreted to suggest that the state would cover any fines--although Davis said Tuesday the state will not cover the cost of fines. ?????A recent Dynegy filing with the Securities and Exchange Commission underscores the rising cost of pollution-related measures. The company, which is partners with NRG Energy in three California plants in El Segundo, Long Beach and Carlsbad in San Diego County, said its "aggregate expenditures for compliance with laws related to the regulation of discharge of materials into 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 facilities appear to be fairly clean--although Sierra Club lobbyist White said Dynegy has been seeking a permit at one of its plants to burn fuel oil, which is dirtier than natural gas. ?????Davis said he intends to "make this information public," but he added that "we do not want to put the public's interest in jeopardy by asking them to pay higher prices." ?????"Nobody likes the notion that [the administration is] not being fully forthcoming," Davis said. "But I also have a corollary responsibility that I don't stick these generators with a higher rate." ------------------------------------------------------------------------------ -------------------------------------------------------------------------- As Losses Mount, Companies Work Around Outages By MARLA DICKERSON,JERRY HIRSCH and NANCY CLEELAND, Times Staff Writers ?????As blackouts moved from theory to reality, many Southern California businesses spent Day 2 assessing their losses and digging in for what they expect to be a long, hot summer. ?????An hour without electricity may be an inconvenience for most residents. But for manufacturers and many other businesses, even a brief loss of power can generate tens of thousands in losses. ?????Whether shaping metal or making salsa, businesses of all kinds complained Tuesday about the lack of warning of impending outages, even as they sought sometimes creative ways to work around the loss of power. ?????Rattled by news reports of Monday's rolling blackouts, Industry-based El Burrito Mexican Food Products started its Tuesday shift at 2 a.m. Workers had just finished cooking and packaging the last batches of salsa and masa when the lights went out at 10:20 a.m. ?????"We dodged a bullet," said El Burrito founder Mark Roth. "Losing a day's production of salsa would have cost me $15,000 to $20,000." ?????But other companies weren't so fortunate. ?????Long Beach-based Delco Machine & Gear was still totaling up its losses from Monday's blackout, which amounted to at least $30,000 in lost wages and production, said Nick Campanelli, vice president of manufacturing. The company, a division of Florida-based B/E Aerospace Inc., makes parts for the aerospace industry. The sudden loss of power caused its sophisticated metal cutting and grinding machines to crash, ruining precision parts in production. ?????But the losses don't end there. He said employees will need to spend hours resetting the equipment. Campanelli is particularly irked that the company received no warning. ?????"Five minutes' notice," he fumed. "That's all I needed." ?????Although businesses such as Campanelli's typically receive no warning that they are about to lose power, insurance companies count the rolling blackouts as "planned events," a determination that in most cases disqualifies a business from making a claim. ?????"I know it must be frustrating for businesses who have the power go off suddenly, but these outages are planned by the grid operators," said Pete Moraga of the Insurance Information Network of California. "That means it would not be a covered peril in a traditional business insurance policy." ?????Typically, business insurance covers loss of profit and damage from unforeseen events such as fires or windstorms. The component of the policy that covers interruptions in business kicks in after a given amount of time elapses, usually 24 to 48 hours. ?????Business polices can be written to include unusual coverages, Moraga said, but he has never heard of a policy that covers losses from a rolling blackout. ?????Some companies are taking measures not to get caught in a situation where a blackout can hurt them. ?????The region's largest steel supplier shut down for two hours Monday after Southern California Edison called to warn of tight supplies. ?????"We just can't take a chance," said Lourenco Goncalvez, president of California Steel Industries Inc. in San Bernardino County. "We have a lot of safety issues. People could get hurt." ?????Goncalvez said the plant has multiple 20-ton and 25-ton overhead cranes that operate with electromagnetic devices, which would fail if they lost power suddenly. Falling materials could injure workers below, he said. "We 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 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 happen almost every day. If it will be like this all summer, you can be sure it will have dramatic consequences for the entire economy. . . . We're going to have a shortage of steel products in California. Maybe the government does not consider this is serious. We'll see." ?????At Sport Chalet, a La Canada Flintridge-based chain of 22 sporting goods stores in Southern California, an administrative assistant monitors the state power situation, hoping to warn any stores that are in danger of losing power, said Craig Levra, the company's chief executive. ?????Levra said the assistant was assigned the monitoring duties last year, when rolling blackouts were still only a threat. ?????The chain put in place an emergency plan--similar to what it would do in a major earthquake. Backup power will kick on emergency lights and allow the cash registers to complete transactions. Employees are instructed to escort customers from the building safely, Levra said. ?????Other businesses, however, have plans to remain open during the 60- to 90-minute blackouts. ?????When power went out at two Cheesecake Factory restaurants in Orange County on Monday afternoon, the eateries switched to serving cold dishes such as sandwiches and salads, said Howard Gordon, senior vice president of the Calabasas Hills-based chain. ?????The restaurants had enough backup power to operate emergency lights and 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 the blackouts. But with nearly 100 stores in California, company President Eric Schiffer believes it is only a matter of time before the lights go out at one of its outlets. ?????Though the stores have some backup power, the chain has systems in place to operate without it. Its cash registers can open mechanically, Schiffer said. Because an item sells for a multiple of 99 cents, sales clerks are equipped with "blackout sheets" that calculate a customer's tab, including tax. All the clerk has to do is count the number of items in the shopping cart and check the tables on the sheet. ?????This week's power crunch has been exacerbated by the fact that so-called interruptible electricity customers no longer face large penalties if they decline to shut down their operations when supplies get critically low. ?????The Public Utilities Commission suspended the fines in January to ease the burden on about 1,400 businesses that found themselves bearing the brunt of the crisis to prevent rolling blackouts in the rest of the state. ?????According to Edison, about 10% of its interruptible customers are complying with requests to curtail electricity usage during crunch time. But Scott Keller isn't among them. ?????The owner of Chino-based STC Plastics Inc. said he was forced to shut down more than 20 times since September, costing him as much as $10,000 in lost production per day. He ignored requests Monday and Tuesday to curtail 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 guilty about that." ?????But this is one area where insurance eventually might help. Moraga said some carriers are developing plans that would cover penalties for continuing to use power after they have been asked by a utility to cut back. ------------------------------------------------------------------------------ -------------------------------------------------------------------------- Wednesday, March 21, 2001 A Blackout on Answers Davis needs to do a better job in communicating to Californians about the electricity crisis. In the absence of that, cynicism grows. ?????The oil shocks of the 1970s, from the Arab oil embargo to the Iran-Iraq war, were dead simple compared with the California power shortage. Then, the problem was a lack of imported oil and the chief symptom was long lines and high prices at gas stations. Politicians urged conservation: Turn down the heat, drive fewer miles, buy more efficient cars. People understood the cause of the crisis and the benefit of their actions. Today it's a different story and a damnably complicated one that gives consumers no place--or actually, too many places--to focus their anger. ?????The last two days of rolling blackouts, including previously exempt Southern California, have not reduced power demand, or at least not enough. Consumers are suspicious: Are out-of-state power companies holding back production? Did utilities really not have enough money to pay alternative energy producers--the little guys who, combined, could produce enough power to prevent the blackouts? And what happened to long-term power contracts, the state-bargained deal that was supposed to stabilize the crisis? ?????The frustrations are vast, and there are too many gaps in the story. If it's just a pack of thieves creating an artificial shortage, as even some consumer organizations charge, why should anyone sacrifice to conserve? That, in a nutshell, is the problem that Gov. Gray Davis, the state Legislature and the Public Utilities Commission face. ?????Davis, for one, has to level with the public and stop acting as if he can fix the crisis. He has proved he can't, at least not without reductions in usage and, most likely, rate increases. If Davis, who is notoriously averse to delivering bad news, had leveled with the public about the fragility of the current system, the last two days of blackouts statewide (except in places with full municipal power, like Los Angeles) might not have come as such a shock. ?????The Legislature tried and failed earlier to solve the alternative energy producers' nonpayment problems with a very complicated bill. Tuesday night, Davis and legislators announced a simpler plan that would set lower, more flexible rates for alternative power but also force the utilities to pay for future purchases. ?????Which leads to the utilities themselves. With the state shelling out billions for power from the major generators, how could Southern California Edison and Pacific Gas & Electric still not have the cash flow to pay the alternative producers? That motley collection of biomass, solar, wind and cogeneration companies has been shutting down for nonpayment--some of them because natural gas suppliers have cut them off. PG&E has made some payments, but SCE has paid zilch, though a spokesman says it hopes to strike a deal to start paying this week. ?????Without enough honest information, conspiracy scenarios fill the holes. Bad news is better than no news, something Davis seems not to quite realize. By today or Thursday, the weather will cool and some plants taken down for repair will come back online. The blackouts may cease but the crisis will be just as deep as it was Monday and Tuesday. It is up to Davis to do a better job of persuasively explaining why. Otherwise, the cynicism grows. ------------------------------------------------------------------------------ -------------------------------------------------------------------------- Wednesday, March 21, 2001 Rolling Blackouts: Blatant Extortion ?????* Re "Rolling Blackouts Hit Southland for First Time as Production Falls," March 20: ?????So here we are, 22 years after the notorious gas shortage, having another gun held to our head by an opportunistic energy consortium. Back in 1979, we all had to wait in long lines just to pay more for gasoline. Now, we have to face food in our freezers thawing and simmering in our homes during hot summer days, just to earn the honor of paying more for electricity. ?????Of course, as soon as the rates are up and the environmental concerns are shoved aside, watch how plentiful power will be. When is somebody in government going to stand up for the consumer and stop this blatant form of extortion? ?????JOHN JOHNSON ?????Agoura Hills * * * ?????So customers of PG&E and Edison are "shielded from soaring wholesale prices"? Some shield: turning off all our power without so much as a moment's notice, endangering lives and disrupting businesses just to keep our electricity prices unreasonably low. Let's lift the rate caps to get the lights back on. And if I need to be shielded from soaring prices, I'll turn my own lights off. ?????ANDREW LOWD ?????Claremont * * * ?????This state needs adequate, reliable electricity to run a diverse economy. Both political parties and business interests are at fault. This crisis demands top priority, aimed at lasting solutions. ?????The most immediate solution is fast-tracking of added generating capacity. Freeway bridges were rebuilt in record time after the Northridge quake, so we know it can be done. That is the type of effort that is needed, immediately. ?????Since Democrats hold the governorship and control both state legislative houses, they are in the driver's seat. If the lights go out, the Democrats go out. If this state government can't solve the problem, we need a new government that can. ?????STEVE ANDERSON ?????Huntington Beach * * * ?????The alleged energy crisis in California is entirely contrived to relax environmental pollution standards and to raise energy rates. It's curious that the L.A. Department of Water and Power, which was not deregulated, is not currently experiencing an energy crisis. PG&E and Edison are both part of national and multinational corporations. Why should utility customers have to pay for their economic problems or gross mismanagement? ?????Several power plants were taken off-line for "routine maintenance," which may not have been so routine. Energy is a vital necessity; if these companies can't provide it at a reasonable, affordable rate then they should be replaced by companies that can, be taken over by the government, or de-deregulated. There is an abundance of solar energy in California, of which only a small fraction is being utilized. There is no shortage of energy in California, only a shortage of intelligence, will and honest politicians. ?????CHARLES B. EDELMAN ?????Los Angeles ------------------------------------------------------------------------------ -------------------------------------------------------------------------- Utilities' Demand Blocks Bailout NEGOTIATIONS HIT SNAG: PG&E, Edison want end to price freeze if they sell transmission lines to state David Lazarus, Chronicle Staff Writer Wednesday, March 21, 2001 ,2001 San Francisco Chronicle URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/21/M N114450.DTL California's near-bankrupt utilities are demanding that higher electric rates be a part of any deal to sell the state their power lines, The Chronicle has learned. A rate increase -- perhaps of more than 50 percent, according to earlier industry estimates -- would certainly draw a firestorm of protest from consumer groups and force Gov. Gray Davis to backtrack from earlier pledges that rates would remain unchanged. Nevertheless, sources close to negotiations on the deal said Pacific Gas and Electric Co. and Southern California Edison are attempting to make higher rates a condition for agreeing to a bailout scheme in which they would sell the state their transmission systems and some land. The sources said the talks hit a new snag this week when state officials realized that fine print sought by the companies could require the Public Utilities Commission to pass along all of the utilities' costs to ratepayers. The sources said this would end a rate freeze that shields consumers from runaway wholesale electricity prices. The inclusion of potential rate increases in the talks reflects the growing complexity of a deal originally intended by Davis to stabilize the finances of PG&E and Edison so banks would resume loans to the cash-strapped utilities. The negotiations subsequently have expanded to involve a state purchase of the utilities' transmission networks and acquisition of utility-owned land, including spectacular coastal property near PG&E's Diablo Canyon nuclear power plant. Now they also have embraced further deregulation of California's dysfunctional electricity market. "Clearly, one of the terms being discussed is the regulatory environment," said Joseph Fichera, head of Saber Partners, a New York investment bank that is advising Davis in the talks. "The past situation has not worked well," he added. "The utilities want some certainty about their future." TENTATIVE DEAL WITH EDISON To date, the governor has announced a tentative agreement with Edison for the state to buy the utility's power lines for almost $3 billion. Discussions with PG&E for a similar accord have dragged on for weeks. An Edison official, asking that his name be withheld, acknowledged yesterday that an end to the rate freeze is an expected result of the power- line sale. "Once the details of the pact are complete, dominoes will fall," the official said. "One of the dominoes is the rate freeze." A PG&E spokesman declined to comment. In fact, both Edison and PG&E have been aggressively seeking an end to the rate freeze for months. The two utilities have a lawsuit pending in federal court demanding that the PUC immediately raise rates so the utilities can recover almost $13 billion in debt accrued as a result of the freeze. "They have been trying a lot of things to get the rate freeze ended in various forms," said Carl Wood, who sits on the PUC. "Adding it to the present talks is consistent with past behavior." Wall Street has taken note that the negotiations no longer appear to be making progress. Paul Patterson, an energy industry analyst at Credit Suisse First Boston, told clients on Monday that the discussions "may have lost some momentum in recent days." He did not give a reason. For his part, the governor sounded unusually cautious about the course of the talks when asked late last week if a breakthrough was imminent. SECRET STICKING POINTS "We are going to take the transmission systems and the land that's deeded, and we will work out an agreement," Davis said at an appearance in San Jose. "But there are a number of sticking points in the talks with PG&E that I'm not going to reveal." One of those sticking points apparently is an insistence that the sale of utility assets include a long-sought lifting of the rate freeze. Sources said lawyers from both PG&E and Edison had inserted the related terms into draft accords affecting each utility, and that the full impact of the additions was not realized by state officials until this week. One source said the language was just convoluted enough to slip beneath the radar screen of state negotiators. But the upshot, once the words had been parsed, was that the PUC effectively would lose control over power rates. CREDITWORTHINESS ON THE TABLE In Edison's case, the terms of the tentative deal include the governor asking the PUC "to support the creditworthiness" of the utility. "This would ensure that future investments in both utility distribution and utility generation plants are provided fair returns of and on capital, consistent with current authorized returns and capital structure provisions," it says. Sources said the provision could be interpreted as a guarantee from the state that Edison would be permitted to recoup all outstanding costs from ratepayers. "There may be some assumptions about this language that the rate freeze ends if it is adopted," the Edison official said, adding that he saw no reason to disagree with such assumptions. But Fichera, Davis' adviser in the talks, insisted that nothing is set in stone, and that the negotiations are proceeding without a hitch. "This is a very complex transaction," he said. "God and the devil are in the details." E-mail David Lazarus at [email protected]. ,2001 San Francisco Chronicle ? Page?A - 1 ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------- Utilities' Demand Blocks Bailout BLACKOUTS ROLL ON: Weather, increased consumption blamed David Lazarus, Chronicle Staff Writer Wednesday, March 21, 2001 ,2001 San Francisco Chronicle URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/21/M N156508.DTL Hundreds of thousands of Californians went without electricity for a second day yesterday as unusually warm weather and a high number of idle power plants prompted blackouts throughout the state. State officials said electricity usage rose yesterday even though conditions were largely unchanged from a day before. They surmised that fewer Californians were conserving power. "We need people to really focus on that," implored Patrick Dorinson, a spokesman for the Independent System Operator, manager of the state's power grid. "The more people can do, the better it will be." Rolling blackouts were ordered by the ISO about 9:30 a.m. and were suspended at 2 p.m. after several plants that had been down for repairs returned to service. Additional power also was obtained from a plant in Arizona. Utilities estimated that about 560,000 customers were affected yesterday, compared with more than 1 million a day earlier. This week's blackouts marked the first time that people in Los Angeles shared the pain with those in San Francisco. Blackouts in January were confined to the northern part of the state. FEWER AFFECTED IN SOUTH However, Southern California Edison's burden was considerably lighter yesterday than that of Pacific Gas and Electric Co. Karen Shepard-Grimes, a spokeswoman for the Southern California utility, said only about 50,000 customers went without power, compared with nearly 440, 000 for PG&E. Affected areas in the south included Palm Springs, Santa Monica, Long Beach and Pomona. "We're not in the business of turning customers' lights off," Shepard- Grimes said. "We're in the business of keeping lights on." In PG&E's case, things were tougher because low rainfall means that less power is currently available from dams throughout the Pacific Northwest. Ron Low, a spokesman for the utility, said blackouts were experienced by PG&E customers from Eureka to Bakersfield. "Our goal was to carry out the ISO's order with minimal impact on customers, " he said. For its part, San Diego Gas & Electric said about 75,000 customers were darkened. Yesterday's blackouts began with PG&E customers in Block 12 and halted midway through Block 14. Customers in each block -- defined by power circuits rather than geography -- typically will lose power for about 90 minutes before the service interruption "rolls" elsewhere. Some cutoffs can last more than two hours, however, because of technical problems switching individual blocks on and off. NEXT UP: BLOCK 14 If additional blackouts are ordered today, they will commence with the remaining portion of Block 14 customers. (PG&E customers can determine their block by looking at the bottom left-hand corner of their monthly bill.) The ISO's Dorinson said it is hoped that cooler weather and increased generation will help avert further cutoffs this week. "Units are coming back into service that have been out," he said. "That will help a great deal." Roughly 15,000 megawatts of generating capacity was offline yesterday, including half of the alternative-energy plants, which are unable to afford natural gas to run their turbines. Many of the plant owners say they have not been paid by PG&E and Edison since November. They are asking federal regulators for permission to sell their electricity elsewhere. At the same time, one of two units at the Mohave Generating Station in Nevada damaged in a fire Monday returned to service yesterday, easing the load on California's grid. The plant, partly owned by Edison, is not expected to return to full output until tomorrow. PROBING SHUTDOWNS Nearly a third of California's generating capacity is currently down for scheduled or unexpected maintenance. State regulators are investigating whether some plant owners might be deliberately shutting down to drive prices higher or reduce operating costs. Loretta Lynch, president of the Public Utilities Commission, on Monday called the number of idle plants "highly suspicious." Dorinson at the ISO said that about 12,000 megawatts of mainstream capacity was offline yesterday, compared with roughly 10,000 megawatts last year at this time. -- Tell Us What You Think Can you save 20 percent on your energy usage? Gov. Gray Davis is offering rebates for Californians who save on power starting in June, and if you've got a strategy for conserving, The Chronicle wants to hear it. We'll be writing about the hardest-working energy savers in a future story. To get involved, Write to the Energy Desk, San Francisco Chronicle, 901 Mission St., San Francisco, 94103; or e-mail [email protected]. -- THE ENERGY CRUNCH -- Blackouts: About 560,000 Californians, including 440,000 in Northern California, lost electricity yesterday for 90 minutes at a time. -- Areas affected: Blackouts hit parts of blocks 12 and 14 and all of block 13 yesterday. In the event of further blackouts, the remainer of block 14 would be next, followed by block 1. -- Outlook: Officials say blackouts are less likely today as temperatures are expected to cool and power plants that have been offline for maintenance resume generating electricity. E-mail David Lazarus at [email protected]. ,2001 San Francisco Chronicle ? Page?A - 1 ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------- Manners Go Out the Window Pedestrians in peril as drivers turn darkened S.F. streets into free-for-all Steve Rubenstein, Chronicle Staff Writer Wednesday, March 21, 2001 ,2001 San Francisco Chronicle URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/21/M N173178.DTL Nobody got plowed into yesterday at Fifth and Howard streets in San Francisco. Many came close. The power outage that darkened the traffic lights at the frenetic South of Market intersection for more than an hour also darkened the souls of untold numbers of drivers, sending motoring manners into the toilet. The law says motorists are supposed to treat an intersection with nonfunctioning traffic lights as a four-way stop. That means everyone stops, then takes turns -- one by one -- creeping through the intersection. Tell that to the two people in motorized wheelchairs who were nearly creamed by two eastbound SUVs. Or to the young Swedish couple who had traveled halfway around the globe, only to scamper through the intersection barely ahead of an office supply truck. Or to the New Jersey tourist, who proclaimed that California drivers during power outages were proof positive that the Chaos Theory lives and breathes. Some motorists stopped and took turns, but many didn't. Some sped into the intersection immediately behind the vehicle in front, without themselves stopping at the white line. Some sailed through with a rolling stop and a warning honk. Some blasted through without stopping or honking. "I'm scared to death," said Brian Walters of Dorchester, N.J., after making it across Howard Street. "This is organized madness. I subscribe to the Chaos Theory, and this is what it looks like." Sydney Freedman, a tourist from Sydney, walked briskly across the darkened crossroads, smiling grimly. "I'll chance it," he said. He looked back and saw a woman in a motorized wheelchair nearly get squished by a westbound Chevy. "You have to be authoritative in this town when you cross the street," he said. "Especially that lady." Therese Anderson and Andreas Sandstrom, from Sweden, raced across as quickly as their backpacks would allow. "In this country, everyone is in such a hurry," said Anderson. "Everybody drives like a madman," added Sandstrom. "They say, 'I want to be home right now, and I don't care what happens to anyone else.' " The couple paused to gaze in wonder at the intersection, learning more about America in five minutes than a pile of guidebooks could tell them. "This intersection," said Sandstrom, "reminds you not to take life for granted." A few minutes later, Parking Control Officer Tom Butz arrived in his meter minder wagon and pulled his orange vest and whistle from the saddlebag. He strode brave and true into the center of the bullring, planted himself between the whizzing cars and began waving his arms as if conducting "The Rite of Spring." "I'm all by myself," he said. "I know it's a little risky. I'd better keep my angels with me." At that moment, the angels were on duty in Menlo Park, where a blacked-out intersection at El Camino Real and Santa Cruz Avenue backed up traffic so far that it stretched into neighboring Atherton. "It's a large intersection and traffic is slow anyway, but now it is severely impacted," said Police Sgt. Terri Molakides. "We don't get any warning either. When the power is out, the power is out. It's not like we can make any plans." In general, motorists seemed more likely to obey the four-way-stop rule on the Peninsula and in the East Bay than in San Francisco. In San Mateo County, some police departments have stopped trying to make advance plans to cover darkened intersections. San Mateo Police Sgt. Kevin Rafaelli said putting up signs and posting officers sometimes caused problems rather than solving them. "If people just follow the law (and) stop at the intersection, they can handle it better than we do if we're out there," he said. "People are sort of getting used to it and are dealing with it." In Berkeley and Emeryville, motorists stopped one at a time at temporary stop signs, with no apparent problems. At University Avenue and Sacramento Street in Berkeley, Officer Matt Meredith said motorists were behaving themselves. That wasn't the case a while back, when a driver who didn't stop at an intersection during a blackout was broadsided by someone who did, Meredith said. "The thing to remember is to stop and look," he said. TRAFFIC TIPS To avoid a collisions during blackouts, the California Highway Patrol offers this advice to motorists: -- Treat any intersection with inoperative traffic lights as a four-way stop. Each vehicle must stop when arriving at the white limit line, then proceed only when safe, taking turns. -- If two vehicles arrive at the intersection at the same time, the motorist on the left must yield to the motorist on the right. -- Never insist on taking the right of way, even if you are entitled to it. -- Follow the directions of a police officer or traffic control officer, whose directions take precedence over lights or signs. Chronicle staff writers Henry K. Lee and Matthew B. Stannard contributed to this report. / E-mail Steve Rubenstein at [email protected]. ,2001 San Francisco Chronicle ? Page?A - 8 ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------- Historic Blackouts in State Bay Area learns to cope Jonathan Curiel, George Raine, Justino Aguila, and Matthew B. St Tuesday, March 20, 2001 ,2001 San Francisco Chronicle URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/20/M N219412.DTL Today's rolling blackouts caused concern throughout the Bay Area, including Colma, where the sudden lack of power apparently caused a fire. A light fixture at the Home Depot store in Colma caught fire around 10:45 a. m., 15 minutes after Pacific Gas and Electric Co. ordered blackouts for the area. No one was hurt. "I was in the back of the store when the power outage started," said Dave Cole, a consultant from Pacifica who was shopping for bolts and screws. "We lost maybe 90 percent of the lights, then maybe 10 percent of the lights came up. Then I heard a guy saying, 'Get a ladder, get a ladder!' "One of the lights on the ceiling had caught on fire, and a couple of people were getting ladders and fire extinguishers." Store managers whisked everyone out of the store, and Colma firefighters arrived to make sure the blaze was extinguished. At 11 a.m., Cole was waiting to get back into the store, which was still closed. "I need my bolts," he said. Elsewhere, the San Francisco Fire Department had to rescue people stuck in an elevator at 2001 Embarcadero North, said fire department spokesman Pete Howes. Scores of residents and businesses near the Embarcadero, including the Levi Strauss & Co. headquarters, were affected by the blackout. At Levi Strauss this morning, Phil Marineau, the president and chief executive officer, led his 1,300 employees by example, using only minimal lighting for a meeting in his office at 10 a.m. Employees were sent e-mails minutes after PG&E's 9:30 a.m. notification that a blackout was possible. The e-mails said workers should frequently save work on their computers, and that they should remain in the building and stand by for further instructions. Emergency lighting in hallways and stairwells were operated by generators. All elevators descended to the ground floor but one remained operating, through a generator. "Worked nicely," said Jeff Beckman, a company spokesman. Yesterday -- the first day that rolling blackouts returned -- Shannon Cashman's home in Walnut Creek was a difficult place to be. Cashman's 4-year-old daughter, Madison, suffers from a brain defect that stops her from breathing during sleep. The girl depends on a ventilator that runs on electricity. Recently hospitalized and with a weakened immune system, Madison badly needed a nap yesterday afternoon. But when the Cashmans' power went out about noon, it meant reading and coloring instead of rest for the girl and a little more anxiety than normal for her mother. "If this was a major earthquake or something like that and we couldn't use the ventilator, we'd take her to the hospital," said the 33-year-old Cashman. "Otherwise, we'll just wait for the power to come back on." In a stroke of irony yesterday, the lights went out and computer screens went dark at the San Francisco offices of the state Public Utilities Commission, the agency some people blame for the energy crisis and others look to for the solution. At a Petco animal store in Redwood City, nocturnal leopard geckos that weren't familiar with the state's power woes thought it was night and awoke from their routine daytime slumber. The geckos clung to the glass of their cages as manager Sally Daine and her employees misted lizards and watched frozen mealworms melt. "The worst thing is some of the reptiles need heat, but it's so hot, I don't think it will matter," she said. At Auto Pride Car Wash a few blocks away, Dan Giudici watched as the team of employees he supervised washed cars the old-fashioned way -- with buckets and hoses. The company's big mechanical car wash went unused. Customers didn't seem to mind the manual wash, said Giudici, who was charging half-price. But he was running out of towels. Even those who hoped they were immune to power problems were affected. Palo Alto runs its own utility, but the electricity began winking out about 12:30 p.m. The city depends on a distribution line of the state grid, so it is vulnerable to blackouts, said Linda Clerkson, public relations manager for Palo Alto Utilities. In addition, the city relies on PG&E for some of its power, she said. Businesses were caught by surprise. "Well, at least it happened in a better time than the morning," said Nick Badiee, owner of the Lytton Roasting Co. coffee house. "My toaster went out and the coffee began getting cold, so I lost three or four people who walked out the door. I'm not angry, yet, but I would say I am concerned." For one Milwaukee woman visiting San Francisco, the blackout was an unexpected lesson in the problems of electricity deregulation. Cindy Wilburth, a financial consultant who advises Wisconsin utilities, came to the Bay Area for vacation but left yesterday with important research for her job. "This has been a huge learning lesson for Wisconsin," Wilburth said as she waited for a bus outside the powerless Comfort Inn by the Bay in Cow Hollow. Wilburth said her state and others that once eyed deregulation are now backing off. "It just makes me realize how we've gotten ourselves in a pinch in a free economy," she said. As she mused about the predicament in which the state has found itself, her friend was just thankful to get out of here. "I love the cold, compared to this," said Cindy Stuckey of Milwaukee. "At least I know I can stay in my home, secure and warm." Across the street, at the Travelodge By the Bay, Rolando Gutierrez had already lost three guests just an hour into the blackout. "This is the richest state and this is a rich city -- plenty of people want to come here," he said. "We shouldn't be suffering these blackouts." Chronicle staff writers Jaxon Van Derbeken, Mark Martin, Henry K. Lee, Michael McCabe, Bernadette Tansey and Marshall Wilson contributed to this report. ,2001 San Francisco Chronicle ? Page?A - 1 ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------- Bay Area residents learning to roll with blackouts Posted at 9:58 p.m. PST Tuesday, March 20, 2001 JOHN WOOLFOLK AND STEVE JOHNSON Mercury News As rolling blackouts swept the state for a second straight day Tuesday, Californians already seasoned by droughts and earthquakes were learning to live with yet another upheaval: periodic power outages. Blackouts are still a novelty in Southern California -- hit for the second time Tuesday -- but they're almost routine for Bay Area residents who have seen four days of outages this year and now expect many more as temperatures rise. Toting flashlights, avoiding certain roads and even shutting off their coveted hot tubs, they're adjusting to life in California's new Dark Age. ? ? Karen T. Borchers--Mercury News When the lights went out at Grant Elementary School in San Jose on Tuesday morning, teacher Renee Johnson took her second-grade students out to the lawn to read to them. Marjorie Meagher now looks at her clock before taking the elevator she needs to get around her two-story San Jose home, fearing she'll get stuck during rolling blackouts. ``They tend to happen on the hour or half-hour, so I try not to use it then,'' said Meagher, 74, who is disabled. ``I'm very careful. My own personal fear is getting stranded in the elevator.'' From 750,000 to about 1 million customers lost power for an hour or so in stages Tuesday as a rash of power plant outages and record temperatures in San Jose and elsewhere triggered a critical shortage. As was the case Monday, when 1.2 million to 1.8 million customers were affected, Tuesday's outages were split between the northern and southern parts of the state. Blackouts began at 9:30 a.m. and lasted until 2 p.m. when authorities obtained extra power from other Western states. Outages were considered less likely today. But people are preparing anyway. Like low-flow toilets and earthquake kits, flashlights and generators may be emerging as another fact of life in the Golden State. In San Francisco's Inner Sunset district, Han Yong Park had the satisfied smile of a well-prepared man having bought a portage generator for his Park's Farmers Market five months ago. Tuesday morning, the generator churned loudly on the sidewalk, positioned between the tomatoes and green beans. Inside, clerks tallied purchases on electric cash registers. Park motioned down the street, where neon signs were dark and some restaurants closed. ``No one else in the area has a generator,'' he said. Energy officials say such equipment will come in handy this summer. Power supplies are expected to be so strained that Californians should expect many more rolling blackouts. ``I don't want to kid anybody,'' said Patrick Dorinson, spokesman for the California Independent System Operator, which manages the power grid for most of the state. ``Supplies are very, very tight. When you look at such a big state and such a large shortfall, I think we have to prepare ourselves. It's very possible that going into this spring and summer we're going to see some very difficult days.'' Combination of factors The multiple causes that conspired to darken California on Tuesday underscored the difficulty officials face in keeping the lights on. The thermometer shot to record-breaking levels at some locations in the Bay Area, driving up power demand. San Jose hit 83, compared with an average 66 degrees for March 20, and breaking the record high of 80 set in 1960. What's more, 12,000 megawatts of power were unavailable because plants had shut down for maintenance or because cash-strapped utilities haven't paid them. And consumer conservation has been spotty. While state energy officials say conservation rose from 5 percent in January to 8 percent in February, grid managers said this week Californians weren't saving enough energy. They even revised their estimate of how much homes a megawatt can power, down from 1,000 homes to 750 to reflect greater consumption. Improved conservation later in the day helped stave off a second wave of outages, they said. Many shrug off the threat of rolling blackouts. ``I think I've gotten used to it,'' said Mary Carlson, 58, of San Jose, who took her granddaughter for a walk and read the paper during blackouts in January. ``I just go with the flow. I'm not going to get too excited about it. If they turn the power off, it's no big thing.'' Erica Finn, secretary at Acacia Glass in San Francisco, said she wasn't too upset when blackouts shut down the credit card machines, electric sanders and phones. She bought coffee, pulled a chair into the sun and popped Madonna into her portable CD player. ``I have to brush up on my tan, and get paid for it,'' she said. But for others, the consequences are potentially serious. At a Palo Alto dental office, the blackouts interrupted root canals for three patients. Dentists Darrell Dang, Robert McWilliams and Kurtis Finley inserted temporary fillings by hand, rescheduled the procedures, and went to lunch. The receptionist used a cell phone to cancel the afternoon's appointments, frustrated that there's no way to prevent a repeat of Tuesday's fiasco if the blackouts continue. A new routine Others have taken everyday steps to cope with the threat of losing power. Stephen O'Reilly, a 34-year-old San Jose engineer who often drives to see clients, said he avoids side streets because blackouts could darken signal lights and tie up intersections. ``I used to take back roads to avoid traffic, but I'm trying to use the freeways more because there are no lights,'' said O'Reilly, adding that he's shut down his electric hot tub to help conserve power. At Pasta Primavera in San Mateo, manager Chris Harris has stocked up on candles and has plans to buy a generator for his restaurant. When blackouts arrived just before the lunch crowd Tuesday and cut power to ventilation fans, he even considered revising his menu, replacing smoke-producing chicken and shrimp with simple marinaras and alfredos. ``I don't know if you'd want to dine with the smell of smoke,'' Harris said as customers trickled into his darkened restaurant on Fourth Avenue. ``If this is going to continue through the summer, it's going to affect our pockets.'' San Francisco International Airport, which agreed months ago to shut down its massive air conditioners to save power during shortages, is now routinely stuffy. On Tuesday the temperature reached a steamy 85 degrees inside the airport's North Terminal, which serves most of United Airlines' flights. ``It's become uncomfortable if not intolerable,'' said Ron Wilson, airport spokesman. ``It's like getting in a car that's been left in the sun all day. It's much hotter inside. .?.?. We've turned on the fans but they're just moving the hot air.'' Hospitals cut off Several hospitals complained they lost power Tuesday, saying they thought they were exempt. PG&E said hospitals with sufficient backup generation to power themselves can be turned off. But state regulators said they could not confirm that statement, and hospital officials scoffed at the suggestion. ``Every hospital has backup power generation, but it only covers 30 to 40 percent of the hospital,'' said Roger Richter, a senior vice president with the Hospital Council. Nonetheless, hospitals are coping with the situation. ``Our patients are concerned, for sure,'' said Jackie Floyd, head nurse at the Satellite Dialysis Center South in San Jose, which lost power. ``But while it's a pain, we can handle the blackouts. We're kind of getting the idea here that this a problem and we have to adjust.'' But while Californians may be adjusting, they're not at all pleased. ``I'm frustrated with this power thing,'' said Ana Rivera, who manages the Wash Club in San Francisco, where washers and dryers had stopped mid-cycle. ``Who do you blame? No one wants to accept blame.'' Sara Neufeld, Ann Marimow, Kim Vo, Frank Sweeney, Barbara Feder, Aaron Davis, Gil Duran, and Dave Beck contributed to this report. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------------------------- Powerless, again Outages were lighter after generators came back online and conservation efforts kicked in. Blackouts may be averted today. March 21, 2001 By TONY SAAVEDRA, JOHN HOWARD, CHRIS KNAP and JEFF COLLINS The Orange County Register The Ridgewood Power methane-burning plant at the Olinda Alpha landfill in Brea is producing 3.3 megawatts, down from five, because Edison owes it $1.5 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 Tuesday on the streets of Orange County and in Sacramento, as consumers demanded solutions from politicians unable to give them. There was a bit of good news, though: Blackouts may be averted for the rest of the week after temperatures moderated, two stalled generators came back online and conservation efforts kicked into gear. ? Some Orange County residents took the blackouts in stride. In Mission Viejo, above, the West Coast Football Club's under-16 boys team scrimmages under gas-powered lights Tuesday. The club has been running to conserve energy Photo: Kevin Sullivan / The Register ? ? Consumers were able to save 900 megawatts - enough to light about 675,000 homes - by cutting power usage, said Patrick Dorinson, spokesman for the Independent System Operator, which oversees 75 percent of the state's electricity grid. That helped the ISO halt the blackouts Tuesday afternoon. "Californians are back on the conservation trail, and we appreciate it," Dorinson said. Power regulators Tuesday morning predicted there would be twice as many outages as Monday, when more than 1 million consumers statewide lost power in one-hour to 90-minute increments. Luis Pagan, an assistant at the Santa Ana Animal Shelter, waits out the 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 Mesa, forced Huntington Beach students to study by flashlight and stilled cash registers in Santa Ana. About a half-million homes and businesses were unplugged statewide before 2 p.m. Power was restored to most of Southern California by 11:30 a.m. Outages affected more than 9,200 consumers in Orange County. The ISO had expected more severe outages to hit at the peak hour of 7 p.m., but was able to keep the lights on as downed power plants came back online and imports from other states increased. While outages were lighter than Monday, the blackouts aggravated consumers who doubted that Gov. Gray Davis, lawmakers and electricity officials are doing enough to keep the power flowing in California. ? Zulema Avarez, left, and Erica Ramirez said they were caught off-guard when the power went out, so they closed the fashion store in Santa Ana where they work Photo: Paul E. Rodriguez / The Register ? ? "I think this is insane," said Charlee Lang, 63, of Costa Mesa. "Gray Davis didn't do his job for a long time; he didn't get serious until November. We need to demand immediate action be taken." Bill Brannick, 65, of Costa Mesa, added: "There's a lot of complicity here and we're just innocent victims." Davis, in a Sacramento news conference, said he inherited California's failed experiment with electricity deregulation, enacted in 1996 under former Gov. Pete Wilson. "I think a fair assessment of this situation is that we were dealt a pretty bad hand here," Davis said. "No (new power) plant was approved in the 12 years prior to my being governor." With summer peak demand expected to be 16,000 megawatts higher than Monday and Tuesday, more days of blackouts are forecast for coming months. Though Davis has signed long-term contracts to provide California with reliable energy, the deals haven't yet taken effect. Some suppliers won't start providing electricity until the state reaches a so-far elusive agreement to help the utilities pay off billions in debt by buying their transmission lines. Assembly Republican Leader Bill Campbell, R-Villa Park, said that the effort to resolve the "state's energy crisis was floundering in the midst of unpaid bills, stalled negotiations and rolling blackouts." Tuesday began with 29 percent of California's power supply off line, mostly from generating plants suddenly down for unscheduled maintenance. About 3,000 megawatts was missing from so-called qualifying facilities, or small power producers who have not been paid $1.8 billion by cash-strapped utilities and say they can't afford to operate. Davis said he would ask the PUC to order utilities to begin paying the qualifying facilities for any energy supplied beginning April 1, but the payments would not apply to the outstanding debt. Some smaller producers threatened to force Edison into involuntary bankruptcy if they are not paid soon. Blackouts began Tuesday two hours earlier than on Monday, as the ISO called on utilities to dump 500 megawatts. It was only the second day of blackouts for Southern California, but the fourth for Northern California since January. The Disney Resort, which includes Disneyland and the new California Adventure, voluntarily cut back one megawatt of electricity on Monday and again Tuesday, said Anaheim Public Utilities. All of the reductions were in backstage areas not seen by guests, said Disney spokeswoman Chela Castano-Lenahan. In other workplaces, people tried to make do. Flashlight beams bobbed in aisles at a Target in Santa Ana, where the power stopped at 10:30 a.m. Workers escorted customers, who continued shopping and made their purchases at battery-powered cash registers. Customers were eventually asked to leave when the batteries ran low. "Oh well; no soda, no sunglasses," said one woman as she headed back to her car. The Metro Pointe shopping center in Costa Mesa also went dark. "I was in the middle of making a reservation when everything went out," said Peggy Thomas, a sales executive for Travel of America, along South Coast Drive. "All of us here went, 'Oh no, it's happened to us.' " Said one Costa Mesa police officer, as he headed for his motorcycle and a blackout-related fender bender: "You can thank the governor for that one." At Hawes Elementary School in Huntington Beach, Principal Marie Smith was demonstrating to her third-grade class what would happen in a blackout. But before she could flip off the light switch, the power died. The kids thought she was joking. Register staff writers Tiffany Montgomery, Sarah Tully Tapia, Nancy Luna, Jim Radcliffe, Binh Ha Hong, Theresa Salinas, Eric Johnson and Danielle Herubin and the Associated Press contributed to this report. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ --------------------------------------------------------------------- The iceman shunneth effects of hourlong blackout March 21, 2001 By JIM RADCLIFFE The Orange County Register Ken Ackerman, owner of ABC Ice House in Laguna Niguel, checks on his frozen inventory during Tuesday morning's rolling blackout. The ice managed to endure the hourlong power outage Photo: Jebb Harris / The Register ? ? Ken Ackerman didn't sweat much when a blackout struck his Laguna Niguel ice business at 10:30 a.m. Tuesday. The walk-in freezer at ABC Ice House held 8 tons of ice. And for an hour, the temperature in there rose from 20 degrees to 45 degrees. But very little melted. Ackerman said most refrigerators can handle blackouts as long as outages are less than two hours. "I think people are going to get used to one-hour blackouts and realize it's not a problem,'' Ackerman said. The blackouts actually were profitable for Ackerman. An Irvine laboratory struck by a power outage bought 100 pounds of dry ice to preserve human tissue. More blackouts through the summer could be a boon for the ice business - or a bust. It could mean more ice sales -- or that his supplier has trouble filling his orders. "It's going to be an interesting summer,'' Ackerman said. "I have no idea if we'll make more or less.'' Traffic will be the biggest problem if blackouts continue, Ackerman said. On Monday, a nearby Costco that had lost power ordered 200 pounds of ice to keep its refrigerated goods cold. But dead traffic lights and congested roads made it impossible to deliver the ice before the outage ended. Costco canceled the sale. "We pride ourselves on getting our deliveries made in an hour," Ackerman said. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------------------------------------- Traffic officials are seeing red over blackouts Battery backups are planned by several cities to aid confused drivers. March 21, 2001 By HEATHER LOURIE The Orange County Register Traffic backs up Tuesday at Crown Valley Parkway at Forbes Road in Laguna 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. Ahead of him, the traffic signal was dark, a casualty of the rolling blackouts that struck Orange County on Monday and Tuesday. So Tran kept driving, smacking into an oncoming car at the corner of Aliso Creek and Enterprise. "It just happened," a shaken Tran, 29, said from his Aliso Viejo home. "I tried to stop and I couldn't. There was no light. Nothing." Tran's accident Monday afternoon, and several others like it, underscore one of the most significant dangers looming in the threat of future blackouts. Traffic signals that fade to black when the power goes out, instead of converting to flashing red, make wrecks far more likely because drivers become confused and frustrated, traffic engineers and experts said Tuesday. "I didn't know what to do," said Tran, who was on his way to a high school jogging track. "Luckily I'm alive, but I'm very scared." On Day 2 of Southern California's power outages, worried city officials across Orange County hunted for ways to respond to paralyzed intersections when state regulators pull the plug. "We need to be ready," said Hamid Bahadori, traffic engineer in the city of Orange. "This thing is only going to get worse in July and August." One popular idea: installing emergency battery-backup units at traffic signals to keep lights flashing red during blackouts. Several Orange County cities, including Irvine, Laguna Niguel and Orange, are already moving to install the devices as early as this summer. "In our minds, (a flashing light) is a vast improvement over a blacked-out signal," said Dave Rogers, Laguna Niguel traffic engineer. On Tuesday night, his city was expected to approve the purchase of the battery packs for all 74 of its traffic signals. "Timing, in this case, seems to be everything," Rogers said. "A lot of cities had contemplated it. We just took it that extra step." John Thai, an Anaheim traffic engineer, cautioned that cities need to do adequate research and testing before they launch into such projects. "There is nothing that is foolproof," Thai said. "All this is new territory." Some cities are also considering rolling out temporary stop signs and sending police officers to more intersections. Although the state's vehicle code requires motorists to treat dead traffic signals like a four-way stop, motorists often blow through the intersections, police said. "It's dangerous," said Tustin police Lt. Mike Shanahan, after several near-wrecks in his city during Monday's outages. "People are not very good at reacting to changes in their conditions. "Flashing red is something that catches your eye. It's a warning that something is amiss, but the absence of all lights is worse." RELATED STORIES
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 Blackout readiness on agenda ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ------------------------------------------------------------ Alternative power producers cut back or shut down as payments from big utilities lag That is a factor in blackouts March 21, 2001 By HANH KIM QUACH The Orange County Register Every megawatt of electricity counts in this deregulated energy market - including the five megawatts generated from the Olinda Alpha landfill in Brea. The methane-burning plant is producing only 3.3 megawatts now because Southern California Edison owes it $1.5 million and cranking up to full power is no longer a priority, said Martin Quinn, executive vice president of Ridgewood Power, which runs the plant. "We're doing maintenance now when we ordinarily wouldn't do it. Because we're not being paid, it was a good time to cut back,'' Quinn said. That scenario has been playing out across the state in the past two weeks and was a major factor in Monday's and Tuesday's blackouts. Those who provide electricity through alternative means - burning methane or wood chips, or using cleaner-burning technology with traditional fossil fuels - are not being paid for what they sell to the big utilities. So they either can't afford to produce energy or see little incentive to do so. On Monday, their absence from the statewide electricity grid created a 1,300-megawatt shortfall -- enough to power 1.3 million homes. Taking that much power offline meant that any burp in the system would put the state under the minimum amount of electricity needed to avoid blackouts. When one conventional Southern California plant went down because of a transformer fire Monday, the blackouts began. "If all of California's (alternative) generators were operating yesterday and today, rolling blackouts would have been avoided,'' Quinn said Tuesday. Within the next couple of weeks, as the weather warms and alternative energy producers continue to try and operate without money, California could see twice as many of those producers go offline, further increasing the potential for blackouts, said Jan Smutny-Jones, executive director of Independent Energy Producers. The alternative energy producers, which provide about a third of the state's energy, are deemed so crucial that Gov. Gray Davis wants the Public Utilities Commission to order the utilities to pay them. As drafted, though, the order would only include payment on future sales; it doesn't address existing debt. The Legislature has been working since January to halve the rates that alternative producers charge utilities and to require utilities to pay for November's energy by April 1. But that bill is still moving through the Legislature. Small plants threaten Edison with bankruptcy Smutny-Jones said that if the small generators are not paid promptly, several will attempt to force Edison into bankruptcy, probably within a week. Unlike the large natural-gas generators that have been paid by the state Department of Water Resources, alternative energy producers are locked into contracts with utilities. Collectively, Pacific Gas & Electric and Edison owe alternative energy producers about $1 billion. PG&E has paid about 15 cents for each dollar it owes. "Obviously, they're a source of generation, and looking at how much load our customers need, they're a source that has provided energy,'' said Jon Tremayne, Pacific Gas & Electric spokesman. "We've been trying, in good faith, to make payments on energy.'' But Edison has not paid any money. Edison's alternative energy director, Lars Bergmann, said the company will not pay until larger reforms are made in how the producers' rates are calculated. But the company recognizes that its nonpayment is causing problems. "To the extent that there are hundreds of megawatts that are idled here, it just exacerbates the (energy) problem. ... They're facing similar problems to what we faced - they don't have sufficient (income) coming in the door,'' Bergmann said. Plants go into mothball mode Millenium Energy in Kern County is owed $40 million total by PG&E and Edison. On March 1, the company shut down both of its coal and petroleum coke-burning plants and doesn't plan to bring them back up until it is paid. Millenium's plants, which use a special technology to reduce emissions, generate 150 megawatts of energy. "We've gone into mothball mode; our machinery just sits there on cold standby,'' said President Mike Hawkins. "We've been delivering free electrons to the system in the hope that the system would resolve itself. But we can't do that anymore." One biomass plant in Lassen County has scaled back from 31 megawatts to eight. Burney Forest Power burns wood chips to produce energy and has only a couple weeks' supply of chips left. "When you don't even know what you'll get paid, it's hard to say, 'Let's go out and get a bunch of fuel,''' said Milt Schultz, the plant's general manager. "The sad thing is, (the state) really can't afford to lose us.'' ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ -------------------------------------------------------- O.C. saves its energy -- for blaming others March 21, 2001 By RICHARD CHANG The Orange County Register Darkened stores were forced to turn away customers, as stock manager Bridgette Kelly, left, does here at a Linens 'n Things in Costa Mesa. The 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 electricity as they face rolling blackouts and surging energy bills. Reactions to the early spring crisis - with blackouts throughout the state Monday and Tuesday - are ranging from confusion to rage. Many residents have taken practical steps, such as turning off lights they're not using, waiting until off-peak hours to do their laundry and opening windows instead of using air conditioning. "My house is full of Philips energy-saving light bulbs," said Ray Rutledge, 48, of Buena Park. "Our light bill has dropped 7 1/2 percent. We use low-voltage outdoor lighting. We've got an energy-saving thermostat. It's set back to 65 (degrees) in the wintertime." Kim Wilson, who lives in an unincorporated area of Orange County near Santa Ana and Tustin, said he has cut down on lighting in his house and has reduced by half the time his pool cleaner runs. Still, his energy bill remains about $400 a month. "I don't know what ... to do," Wilson, 57, said. "We've cut back." Wilson added that he is not pleased with the way government or the energy companies have handled the crisis. "I think it's disgusting. It's such political garbage. Who was it that made these decisions? Who got us into it?" 'TRYING TO CONSERVE' Jenny Hann, 60, of Costa Mesa said her workplace has devised an emergency plan for conservation and future blackouts. "We're definitely trying to conserve as much as we can," the bank administrator said. Hann expressed frustration with the energy companies. "When you see these executives that have been running the show and the money they're making, it's bothersome," she said. Jennifer Souto, 27, of Tustin said even though she's a stay-at-home mother, she keeps the lights off all day. She doesn't use her air conditioning, either. Souto said she was locked out of her house for 90 minutes Monday because a blackout cut power to her garage door. She says she's not sure who to blame. Paul Finch, 38, of Westminster blames Edison and Gov. Gray Davis. "I don't believe info I get from Edison or from our illustrious governor," Finch said. "There's more to it than how they've represented it." ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ --------------------------------------------------- Blackout readiness on agenda O.C. companies braced for outages Tuesday in different ways. Not all were struck, but they felt the effects. March 21, 2001 By TAMARA CHUANG The Orange County Register In case of a power failure Tuesday, the Fluor Corp. in Aliso Viejo stocked elevators with homemade blackout kits, filled with cookies, flashlights and bottles of water. "They're in the elevators, although we've been told not to use the elevators," said Lori Serrato, a company spokeswoman. "We're using the stairwells, waiting for our time of darkness." Tales of anxious preparation were more common than actual blackouts for Orange County businesses Tuesday. Edison told some companies, as special power users who've agreed to cut back when asked, to expect to do so. Conexant Systems Inc. got a warning from Edison and immediately shut down air conditioning and equipment not in use, and stopped production. The blackout never came. Kingston Technology Co., when notified by Edison on Tuesday morning, broadcast the warning on the company intercom. The company also e-mailed employees a guide explaining the blackout. "It's already affected productivity. We've been busy getting all our e-mails out before it happens," said Heather Jardin, a spokeswoman for the Fountain Valley computer memory maker. Kingston still had power by day's end, but in an emergency, the company's manufacturing plants revert to Kingston's own power generators, Jardin said. Heart valve maker Edwards Lifesciences turned on its backup generators Tuesday morning, "because of the potential for there to be a blackout in our area," said company spokesman Scott Nelson. But (as of 3:30 p.m.) the blackout didn't materialize, Nelson said. At the regional office in Irvine, Verizon Wireless implemented conservation efforts, such as motion sensors that shut off lights after 30 minutes of inactivity, and separate heating and air conditioning units on all floors. Some of the company's cell sites in Orange County and Los Angeles did lose power Monday and Tuesday, but they automatically switched to backup battery sources. Other companies - PacifiCare, ICN Pharmaceuticals, Beckman Coulter and Allergan - said they took precautions, turning out some hallway lights and communicating safety procedures to employees. Disneyland, Ingram Micro in Santa Ana and Western Digital Corp. in Lake Forest all were prepared. But none reported blackouts by day's end. Some county businesses did get hit. Businesses along the 900 block of South Coast Drive - including 14 stores at the Metro Point shopping center in Costa Mesa - went dark about 10:20 a.m. "All of a sudden it was dark," said Henry Gonzalez, manager of Boudin Bakery. "We ran out of coffee. We couldn't bake anything. We tried to accommodate as best as we can." Other stores simply closed during the blackout, frustrating shoppers. "We walked over to (Marshalls) and it was dark and there was a sign on the door that said 'Due to the blackout, we're closed,'" said shopper Roberta Allison, a West Virginia tourist. "Don't they warn people here? Do they just whack the power off?" Marshalls employees escorted customers out of the store when the power went out. Other stores, including Nordstrom Rack and Best Buy, were not affected. Across the street from the center, employees spilled out of office buildings cheering and waving their hands in victory as power outages forced them to halt work. "Lots of people just walked out of the office to run errands," said Amy Bateman, a loan officer at Capital Funding Group in Costa Mesa. She said her office building, at 940 South Coast Drive, went dark for about 70 minutes. Like dozens of others in the building, she was working at her desk when the computers and lights went dark. "We've just been sitting around. We can't do anything," said Bateman. The blackout hit other businesses on Monday. Buy.com employees spent their hour without power using their wireless Blackberry pagers to answer and send e-mail. The Crazy Horse Steakhouse in Irvine lost power after the lunch rush, said Donna Mulkey, the restaurant's manager. Since the broilers remained hot, the cooks kept cooking and the customers kept eating. When they finished, waiters calculated the bills by hand. At Broadcom Corp. in Irvine, the power went out just before Rep. Christopher Cox was to tour the facility. "It struck me as particularly ironic," Cox told members of the House subcommittee on energy and air quality Tuesday, that Broadcom's co-founder, Henry Samueli, "spent the hour before the meeting using a letter opener to open his paper mail and sitting by the window so he could get some sunlight to read." Cox, R-Newport Beach, told the panel, which was holding a hearing on California's electricity crisis, that "the entire company could not function during this period of time and the same was true for more than a million people," he said. "It's a Third World experience in California." Register reporters Chris Farnsworth, Dena Bunis, Bernard Wolfson, Nancy Luna, Eric Johnson, Elizabeth Aguilera and Jennifer Hieger contributed to this story. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------------------- Calif To Order Utils To Pay Small Generators Up Front-Gov 03/21/2001 Dow Jones Energy Service (Copyright (c) 2001, Dow Jones & Company, Inc.) SACRAMENTO, Calif. (AP)-- California regulators will order the state's two largest utilities to pay small, independent power generators in advance, a move Gov. Gray Davis hopes will bring a quick end to the blackouts that darkened California this week. Davis accused PG&E Corp. (PCG) unit Pacific Gas & Electric Co. and Edison International (EIX) unit Southern California Edison of taking in money from customers while failing to pay the generators, known as qualifying facilities, which produce up to one-third of the state's power. As a result, he said, the utilities are partly responsible for this week's blackouts. "It's wrong and irresponsible of the utilities to pocket this money and not pay the generators," the governor said at a Capitol news conference Tuesday evening. "They've acted irresponsibly and immorally and it has to stop." The state lost about 3,100 megawatts, or enough electricity to power 3.1 million homes, on Tuesday from alternative energy plants that say they can't afford to keep operating because the utilities haven't paid their bills in weeks. The utilities, which are near bankruptcy, owe the QFs about $1 billion. Pacific Gas & Electric has made partial payments. As reported by Dow Jones Newswires, Southern California Edison met with representatives of the governor Tuesday to discuss plans to begin making partial payments to the QFs. Pacific Gas & Electric , which called Davis' statements "inappropriate and unjustified," said it has informed the QFs and the governor's office that it plans to begin paying the QFs in full going forward. Davis said the PUC planned to issue an order next week directing the utilities to prepay future bills to the QFs. Edison and PG&E say they have lost more than $13 billion since last June to climbing wholesale electricity prices, which the state's 1996 deregulation law prevents them from passing on to ratepayers. California has been spending about $45 million a day since January to buy power for the utilities' customers, but hasn't included QF-generated power in its purchases. Keepers of the state's power grid were cautiously optimistic that California might get through Wednesday without another day of rolling blackouts after two idle plants were returned to service. A Stage 1 power alert, the mildest of three forms of alerts, was called around 6 a.m. Wednesday as power reserves fell to around 7 percent. About a half-million customers were hit by Tuesday's blackouts, which snarled traffic and plunged schools and businesses into darkness from San Diego to the Oregon border. Tuesday's outages began at 9:30 a.m. and continued in 90-minute waves until about 2 p.m., when the ISO lifted its blackout order. They were blamed for at least one serious traffic accident. The blackouts were caused by a combination of problems, including unseasonably warm weather, reduced electricity imports from the Pacific Northwest, numerous power plants being shut down for repairs and the loss of power from QFs. Meanwhile, a leading lawmaker on energy issues said the PUC may soon have to raise rates by about 15% to cover the state's costs and its utilities' bills. "My sense is that people will appreciate having some certainty and being able to plan for it," said Assemblyman Fred Keeley. "They don't have to like it, but I think they'll appreciate it." Davis has said he is confident the utilities and the state can pay their bills without further rate increases. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------------------------------------------- PG&E Says It Is Negotiating With Qualifying Facilities 03/21/2001 Dow Jones Energy Service (Copyright (c) 2001, Dow Jones & Company, Inc.) (This article was originally published Tuesday) LOS ANGELES -(Dow Jones)- PG&E Corp. (PCG) unit Pacific Gas and Electric Co. said Tuesday it is offering small generators, or "qualifying facilities", prepayment of $200 million per month so they will have the funds to return to the state power grid. But high level sources at the qualifying facilities who are involved in the negotiations said PG&E's proposal is incomplete and doesn't address the issue of past due payments. The sources said PG&E had discussions with some qualifying facility operators last week regarding the plan and it wasn't accepted at that time. About 3,000 megawatts of power from qualifying facilities, or QFs, have been off the state's grid since Monday because the generators weren't being paid by utilities and couldn't afford to continue operating. The QFs unavailable power was partly responsible for Monday and Tuesday's statewide rolling blackouts. Also Tuesday, California Gov. Gray Davis will hold a press conference to discuss progress made in negotiations with the QFs to revise their contracts with the state's two nearly-bankrupt utilities so that the utilities pay less for power. Edison International (EIX) unit Southern California Edison also said Tuesday it intends to make partial payments on an ongoing basis to some QFs. Edison executives met with Gov. Gray Davis' negotiating team Tuesday to discuss how and when SoCal Ed can begin to make payments, and a spokesman said they hope to have a plan in a matter of days. Pacific Gas & Electric Co. has made partial payments of about $51 million to the QFs it contracts with, but owes much more. Edison owes the QFs hundreds of millions of dollars and hasn't paid the QFs since November. Together, the two utilities owe QFs about $1 billion. PG&E said it has been collecting about $400 million per month from ratepayers to pay QFs and other generators with which it has bilateral contracts, the state grid operator for spot power purchases, and costs of its own generation. The average combined bill for those costs exceeds $1.4 billion per month, PG&E said. "This mismatch between revenues and costs requires tough choices. Since there isn't enough money in rates to cover all these costs, the Public Utilities Commission decision on how this $400 million will be allocated going forward will determine our ability to make advance payments to QFs," said Gordon R. Smith, the utility's president and CEO. The PUC is responsible for implementing the legislation which allows the state to buy power and will decide how much of utilities' ratepayer revenue will go to the state for power purchases and how much will go to the utilities. For several weeks, a number of QFs have taken their generating units offline because they can no longer afford to buy fuel needed to run their units. QFs supply California with one-third of its total power supply. PG&E and SoCal Ed have almost $13 billion in purchased power undercollections because they cannot collect full costs from customers protected by a state-mandated rate freeze. -By Jessica Berthold, Dow Jones Newswires; 323-658-3872; [email protected] -(Jason Leopold contributed to this article.) ------------------------------------------------------------------------------ -------------------- Wednesday, March 21, 2001 By Dave Todd [email protected] U.S. Energy Secretary Spencer Abraham declared this week that the Big Apple 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 energy summit in Washington Monday, Abraham said, "California is not the only state facing a mismatch between supply and demand," what with "electricity shortages predicted for New York City and Long Island this summer" and low capacity margins threatening electricity reliability elsewhere across the country. But how likely is it that New Yorkers will face blackouts of the sort confronting Californians? Not very, says energy trade specialist Edward Krapels, managing director of Boston-based METIS Trading Advisors. Krapels, a consultant helping major Northeastern utilities, such as Consolidated Edison, design market-hedging programs, adamantly decried what he said are facile comparisons between conditions in New York and California, there being "more differences than there are similarities" between those two industrial cornerstones of the country's economy in respect to energy security management. "First of all, New York has a more varied portfolio of energy generation sources than California," he said. California has hydro, nuclear and gas, but when it lost a lot of hydro, the state needed gas to pick up the slack, and the "capacity just wasn't there." In New York's case, the state has oil and coal still in the mix and its overall dependence on gas is much lower than California's, Krapels added. New York avoids making same mistakes Portfolio diversity is one pillar of any effective plan to help New York avoid the same errors made in redesigning California's marketplace. New York's Independent System Operator (ISO), in a new report warning that the state is at an "energy crossroads" in terms of its capacity adequacy in the immediate future, argues that a concerted effort is required to arrest declining in-state generation capacity reserve margins, and a strategy must be put in place, whether or not new generation comes on-line, in accordance with current anticipated scenarios. A measure of New York's essential difficulty is that, between 1995 and 2000, statewide demand for electricity grew 2,700 MW, while generating capacity expanded by only 1,060 MW. With no major new generating plants in downstate New York fully approved, the gap is expected to continue to widen. To avoid "a replication of California's market meltdown" the New York ISO calculates the state's daily generating capacity needs to grow by 8,600 MW by 2005, with more than half of that located in New York City and on Long Island. Expressing concern this may be too big a burden for the current bureaucratic process to bear, the ISO wants to see a state-appointed ombudsman named to help would-be merchant power plant investors plow through red tape. "Increasing New York's generating capacity will also lessen the state's escalating and risky reliance on out-of-state sources of electricity," the ISO added. "Since 1999, New York State has been unable to cover its reserve requirements from in-state sources." Not everyone agrees with that analysis, insofar as it argues for circling the wagons inward. Some analysts believe the ultimate solution lies not in tying in more inwardly dedicated power, but in expanding the marketplace by breaking down inter-jurisdictional barriers. In any case, New York energy regulatory authorities and those responsible elsewhere in the U.S. Northeast, such as PJM (Pennsylvania-New Jersey-Maryland) Interconnection and the New England Power Pool, are in vastly better shape in terms of "cross-border" cooperation than California and its neighbors in that efforts are being made among various authorities toward developing an integrated regional electricity market. In California, by contrast, the state's focus
*for example, in the case of new gas-fired power plant development
*has been to ensure dedicated supply to the California market alone, rather than on a regional marketplace. The New York ISO's new broad-based analysis of market-restructuring needs argues that the relatively stronger health of its reformed environment is "due in large part to the ability of New York's utilities to enter into long-term power contracts." What needs to be done most, it says, is to move aggressively to build some of the more than 29,000 MW of "proposed new generation in the siting pipeline." In the meantime, the 30,200 MW of electricity New Yorkers used on a peak day last summer shouldn't be eclipsed on too many days this coming summer (given early long-range weather forecasts). Demand, however, is expected to increase at an annual average rate of up to 1.4%. So while New York City, the rest of the state and adjacent parts might breathe easy this year, it could be a brief rest from the fray. Meanwhile, a 4% shortfall is still being planned for this summer that is not yet provided for, as authorities hurriedly seek to arrange new generation plants around Manhattan, on Long Island and even on barges offshore. One way or another, whether it is the weather or the politics of siting new energy facilities, it's going to be a hot time in the city. Long-term solutions hit brick wall Meanwhile, attempts at longer-term solutions continue to run into trouble. Last week, Connecticut state regulators came out against a proposal to run a new underwater cable under Long Island Sound that Hydro-Quebec subsidiary TransEnergie U.S. Ltd. wants to build to pump more juice into Long Island Power Authority's load pocket. Despite strong promises from TransEnergie to be diligent in avoiding damage to oyster beds in Long Island Sound, the proposal failed to convince authorities, who were persuaded the pipeline project could lead to diversion of electricity from Connecticut. In similar fashion, private companies wanting to build 10 small independent power plants and temporary generators offshore New York City are running into intense opposition from environmental groups and citizen organizations
*some of whom have taken their cases to the state assembly in Albany. The David vs. Goliath nature of such controversies has further alerted energy companies to the difficulties of addressing complex energy supply issues that may ultimately devolve to people not wanting things in their backyard, regardless of what the alternative might mean to their fellow citizens or the greater public good. But suddenly, in New York, California's troubles
*while still distant in their intensity
* may not be so far away. By some estimates, this summer's bills for Consolidated Edison customers could be up as much as one third or more over last year's charges. Letting the time slip when it comes to building new infrastructure isn't going to make the pain go away.

Hello, I just spoke with Lorraine @ PG&E and she informed me that there is going to be some 3rd party maintenance done which will affect meter 6040 Riverside. This will begin @ 2:00 A.M. on the 28th but PG&E will keep the noms whole for the 28th. 09/29/00 & 09/30/00 should have no noms.

The Blue Chips Here's my updated list of the top Texas football recruits. I have inserted * * * * at each position to separate the Fabulous 40 from the rest of the Elite 80. The Elite 80 Recruits Quarterback (6) Matt Nordgren, 6-5, 225, 4.7, Dallas Bishop Lynch (UT, A&M, Colo, Fla) Jason Carter, 5-11, 180, 4.5, Caldwell (A&M Commitment) * * * * Mike Pankratz, 6-3, 200, 4.8, Katy Taylor (A&M, UCLA, OU, KSU, ND) Davon Vinson, 6-3, 185, 4.5, Kilgore (A&M, Ark, OU, Bay) Tye Gunn, 6-4, 200, 4.62, La Grange (TCU Commitment) Kevin Ford, 6-0, 188, 4.5, Madisonville (Rice Commitment) Running Back (7) Cedric Benson, 5-11, 200, 4.5, Midland Lee (UT Commitment) David Underwood, 6-0, 220, 4.38, Madisonville (Michigan Commitment) Anthony Johnson, 5-11, 195, 4.4, Jefferson (KSU, UT, FSU, TCU, OU, LSU) Donta Hickson, 5-9, 180, 4.4, McKinney (FSU, Neb, A&M, OU, Mich, Tenn, TT) * * * * David Williams, 5-11, 180, 4.4, Carrollton Smith (FSU, A&M, Colo, OU, Mia) Anthony Evans, 5-9, 195, 4.5, Pearland (Bay, A&M, Az, KSU, UCLA) Cody Thibodeaux, 6-1, 200, 4.5, Winnie East Chambers (A&M, Neb, Ok St, LSU) Fullback (2) Darnell Sims, 6-2, 230, 4.7, Aldine (A&M, UH, LSU) * * * * Mark Pierce, 6-2, 215, 4.6, Weatherford (TCU Commitment) Tight End (1) James Moses, 6-3, 225, 4.7, GP North Shore (UT, A&M, Az, Mich, Colo) * * * * Wide Receiver (10) Armon Dorrough, 6-1, 168, 4.4, Lancaster (ND, Tenn, Mia, Fla, FSU, A&M) Brandon Jones, 6-3, 205, 4.4, Texark. Liberty-Eylau (Ky, Ark, A&M, FSU, UT) Bennie Brazell, 6-2, 168, 4.4, Houston Westbury (LSU, UCLA, Ark, Ky, LSU, Mia) Thomson Omboga, 6-2, 175, 4.5, Grand Prairie (UT, OU, ND, Ga, A&M, Mo) Cedric Williams, 6-0, 170, 4.4, Jefferson (KSU, FSU, LSU, Neb, A&M, OU) Keith Mills, 5-11, 175, 4.4, Garland (A&M, UT, FSU, Fla, Ark, TT, OU) * * * * Terrence Thomas, 5-9, 175, 4.4, Houston Washington (Mia, FSU, UCLa, A&M, UH) Corey Roberts, 6-4, 190, 4.4, Carthage (LSU, A&M, SMU, TCU, UT) Jesse Woods, 6-4, 190, 4.5, Katy Taylor (A&M Commitment) Kenneth Shelton, 6-1, 175, 4.4, Port Arthur Jefferson (A&M, OU, TT, UT) Offensive Line (13) Jonathan Scott, 6-7, 290, 4.9, Dallas Carter (UT Commitment) Jami Hightower, 6-4, 295, 5.2, Jacksonville (UT, A&M, FSU, OSU, TCU) Ben Wilkerson, 6-4, 265, 4.9, Hemphill (A&M, Mich, ND, Neb, Ark, LSU, OU) Abe Robinson, 6-6, 270, 4.9, Jersey Village (UT Commitment) William Winston, 6-6, 330, 5.3, Houston Madison (A&M, UT, LSU, Mia, Syr) Mike Garcia, 6-5, 280, 5.2, Galena Park (UT Commitment) * * * * Will Allen, 6-5, 300, 5.2, Cypress Falls (UT Commitment) Terrance Young, 6-6, 330, 5.5, Longview (UT Commitment) Bryan Kegans, 6-6, 305, 5.2, Stephenville (Texas Tech Commitment Shane Simms, 6-2, 300, 4.9, Tomball (TCU Commitment) Roman Reeves, 6-6, 295, 5.2, Livingston (UT Commitment) E. J. Whitley, 6-5, 290, 5.3, Texas City (Kentucky Commitment) Clint O'Neal, 6-6, 290, 5.2, Weatherford (Colorado Commitment) Defensive End (8) Kevin Everett, 6-5, 235, 4.6, Port Arthur Jefferson (UT, ND, Colo, Pur, Mia) Lawrence Hooper, 6-4, 255, 4.7, Aldine (A&M, PSU, LSU, Colo, Fla, OSU, UCLA) Simeon Jones, 6-3, 240, 4.7, Houston Jones (A&M, UH, Colo, UT, Bay) Jamie Jackson, 6-3, 225, 4.7 Andrews (TT, OU, A&M, UT) McKenzie Tilmon, 6-3, 235, 4.7, Irving MacArthur (KSU, UT, A&M, Tenn) * * * * Colin Allred, 6-3, 225, 4.7, Dallas Hillcrest (UT, Neb, TT, TCU, Mich) Bret Rayl, 6-7, 265, 4.9, Lewisville (A&M, FSU, OU, PSU, TCU) Quintene Newhouse, 6-2, 250, 4.7, Emory Rains (A&M, Ky, Mich, UT, Bay, TCU) Defensive Tackle (7) Tommie Harris, 6-3, 280, 4.8, Killeen Ellison (UT, FSU, A&M, Mia, UCLA) Thomas Derricks, 6-1, 275, 4.9, Dallas Jesuit (PSU, ND, Neb, A&M, TCU) * * * * Clayton Harmon, 6-6, 260, 5.1, Stephenville (Texas Tech Commitment) Sharod McGowan, 6-2, 250, 4.7, Waco (A&M, UT, TT, NC, OU, NC) Brandon Goodlett, 6-2, 280, 5.1, Conroe (Ky, OU, Neb, UT) Jeremy Calahan, 6-3, 260, 5.0, Pflugerville (UT, ND, A&M, OSU, Stan, TCU, Van) Fred Thwreat, 6-2, 270, 4.9, Midland Lee (TT, A&M, Az) Outside Linebacker (6) Derrick Johnson, 6-3, 205, 4.5, Waco (UT, FSU, A&M, OU, Ark, UCLA) Jonathon Jackson, 6-3, 225, 4.56, GP North Shore (UT, A&M, Mia, Colo, PSU) Lance McFarland, 6-1, 225, 4.6, Jefferson (UT, KSU, Ark, OU, FSU, LSU) * * * * Lee Foliaki, 6-2, 200, 4.5, Euless Trinity (A&M, UT, FSU, Neb, KSU, TCU) Shawn Willis 6-2, 215, 4.6, Flatonia (A&M, FSU, UT, Bay, TT) Inside Linebacker (2) Yamil Lebron, 6-2, 240, 4.7, Killeen Ellison (UT Commitment) * * * * Jeff Billings, 6-2, 232, 4.7, Pasadena Rayburn (A&M, Ky, Az, ASU, NW) Cornerback (7) Byron Jones, 5-10, 180, 4.4, Bay City (LSU, UCLA, A&M, NW, Ark, Ky) Cedric Griffin, 6-1, 180, 4.42, San Antonio Holmes (UT Commitment) Danielle Manning, 5-11, 187, 4.4, Corsicana (A&M, UT, TCU, La Tech) Moses Harris, 6-1, 170, 4.4, Dallas Carter (FSU, OU, Mia, TCU, Gramb) * * * * Dee Durham, 5-11, 174, 4.4, Mansfield (Colo, Mich, Mia, OSU, VT, UT) Warren Wilson, 6-0, 170, 4.4, Texas City (Pur, A&M, LSU, Ky, Az) Courtney Sterling, 5-7, 170, 4.4, Dallas Carter (Arizona State Commitment) Safety (5) Dewayne Brandon, 6-3, 198, 4.46, Temple (UT, Neb, FSU, A&M, Ky) Rufus Harris, 6-0, 180, 4.4, LaPorte (A&M, LSU, Az, Mia, Ky) * * * * Kendall Briles, 5-10, 175, 4.5, Wolfforth Frenship (UT Commitment) Jarvis Mayes, 6-2, 180, 4.45, Dallas Kimball (A&M Commitment) Jaxson Appel, 6-0, 190, 4.5, Friendswood (A&M Commitment) Athlete (6) Joseph Addai, 6-1, 195, 4.5, Hstn Sharpstown (KSU, UT, Neb, Kan, Mich, A&M) Quan Cosby, 5-10, 180, 4.4, Mart (UT, A&M, UCLA, FSU, Bay) Gainus Scott, 5-9, 170, 4.4, La Porte (FSU, Az, Tenn, Mia, ASU, Ky) * * * * Ryan Gilbert, 5-11, 180, 4.4, Dallas Hillcrest (Mich, Neb, Mia, Tenn, FSU) Braden Johnson, 6-2, 200, 4.5, Euless Trinity (UT Commitment) Brian Carter, 5-11, 180, 4.5, The Woodlands (UT Commitment * * * * The 25 "Difference Makers" These are Texas' top 25 players, in my opinion, and I have seen all of them play, either on tape or in person: 1. DT Tommie Harris, Killeen Ellison 2. OL Jonathan Scott, Dallas Carter (Texas) 3. OL Jami Hightower, Jacksonville 4. LB Derrick Johnson, Waco 5. RB Cedric Benson, Midland Lee (Texas) 6. S Dewayne Brandon, Temple 7. RB David Underwood, Madisonville (Michigan) 8. C Ben Wilkerson, Hemphill 9. QB Matt Nordgren, Dallas Bishop Lynch 10. OL Abe Robinson, Jersey Village (Texas) 11. LB Jonathon Jackson, Galena Park North Shore 12. DE Kevin Everett, Port Arthur Jefferson 13. WR Armon Dorrough, Lancaster 14. Ath Joseph Addai, Houston Sharpstown 15. DE Lawrence Hooper, Aldine 16. WR Brandon Jones, Texarkana Liberty Eylau 17. Ath Quan Cosby, Mart 18. WR Bennie Brazell, Houston Westbury 19. RB Anthony Johnson, Jefferson 20. TE James Moses, Galena Park North Shore 21. CB Byron Jones, Bay City 22. DT Thomas Derricks, Dallas Jesuit 23. LB Lance McFarland, Jefferson 24. OL William Winston, Houston Madison 25. RB Donta Hickson, McKinney Out-of-State Prospects Texas is recruiting several out-of-state players. Here are the ones who are still considering UT: Quarterback Bret Rawls, 6-5, 200, 4.7, Shreveport Evangel (LSU, UT, FSU, Tenn) Running Back Jabari Davis, 5-11, 224, 4.5, Tucker, Ga. (Tenn, Ga, UT, Neb, Ala) Eric Shelton, 6-3, 230, 4.45, Lexington, Ky., Bryan Station (Ky, FSU, Fla, Tenn, UT) Fullback James Buchanan, 6-2, 240, 4.7, Sarasota, Fla. Mooney (FSU, UT, Fla, BC) Tight End Marcus Spears, 6-5, 275, 4.8, Baton Rouge Southern Lab (LSU, A&M, Mich, UT) Defensive End Eric Hall, 6-3, 232, 4.5, Clarksville, Tenn., NW (UT, FSU, Tenn, Neb, LSU) Shaun Cody, 6-5, 255, 4.8, Los Altos, Cal. (USC, UCLA, UT, Az, ND) Kaelen Jakes, 6-5, 260, 4.8, Valencia, Cal. (UT, Az, USC, Neb, UCLA, Wash, ND) Defensive Tackle Marquise Hill, 6-7, 290, 4.8, N. Orleans De La Salle (FSU, LSU, Mich, A&M, UT) * * * * On the out-of-staters, UT has a 50-50 shot at Hall, and Rawls, Jakes and Buchanan also are very seriously considering the Longhorns. Cody says he definitely will visit UT, so the Horns have a fair chance with him. The odds are much longer on Davis, Shelton, Spears and Hill. Scouting Louisiana-Lafayette If the Longhorns don't break their 10-quarter scoring drought quickly in their Sept. 9 season opener against Louisiana-Lafayette in Austin, it will be a very bad sign. The Ragin' Cajuns didn't do much ragin' last season, going 2-9 with their only victories coming over 1-AA Wofford and Middle Tennessee. They also gave up an average of 219 yards per game rushing and allowed opposing backs to average 5.5 yards per rush. The Cajuns run a spread offense with four wideouts, but they didn't score a touchdown until their fifth game last season. Coach Mack Brown says you don't really know what you have until you start playing other teams. He still won't know after this day in the park. The game starts at 11:30 a.m. on Sept. 9 and will be televised by the Fox Network on a syndicated basis. Baseball Adds 1, Loses 1 The Longhorn baseball coaches have signed shortstop Shaff Elkouri, 5-11, 175, from Seward County JC in Kansas, but they lost one of their prized recruits last weekend when slugger Jason Stokes of Coppell signed with Florida for $2 million. Elkouri will be a sophomore at Texas this season. Big Basketball Recruiting Week Coming Up The season opener in football is always big news, and it's also going to be a big deal for basketball this year because both Longhorn teams have some big-time recruits taking official visits the Sept. 9 weekend. It's really big for the men, who have only one scholarship remaining. T. J. Ford, the 5-11 point guard who led Fort Bend Willowridge to the state Class 5A championship last season, will visit. Ford is the player the UT coaches want, and there is a chance he will commit on his visit. The Longhorn women have three scholarships left, and two outstanding players have scheduled visits for the Sept. 9 weekend. One of them has a name you will remember. She is Lauren Selmon, a 6-0 guard-forward from Norman, Okla. If that rings a bell, you are right. She is the daughter of Dewey Selmon, one of those three great defensive line brothers who starred at Oklahoma a quarter of a century ago. I was in Oklahoma, working as a political reporter for The Associated Press, when the Selmons played at OU. Unlike some of the later Sooner stars, who made the wrong kind of headlines off the field, the Selmons are fine people The other is Jody Bell, a 6-2 forward from Chestermere HS in Alberta, Canada. She averaged a triple double last season (14 points, 10 assists, 12 rebounds). High School Subs at 160 True Orange is going to 160 schools, thanks to several generous subscribers. Harrison Stafford of Edna, a Longhorn football star from 70 years ago, took out a new subscription for Wharton. Robert L. Parker of Tulsa renewed the subscription for Oklahoma powerhouse Jenks. Gary Hite of Ball Ground, Ga., renewed San Antonio Alamo Heights. He is a 1953 Alamo Heights graduate. Jimmy Keys of Houston resubscribed for Freer High School. He is a 1956 Freer graduate. Brad Taylor of Abilene added a new subscription for Abilene High School. Will Coates of Austin renewed the subscription for South Grand Prairie. An anonymous subscriber took out new subscriptions for Houston Sharpstown and Houston Westfield and renewed the subscription for Austin Crockett. I offer a school gift subscription for $35 for 24 issues (omitting the June and July issues when schools are closed for the summer). If you want to subscribe for a school, fill out the coupon below and send $35 instead of $45 for each school you want to sponsor. If you don't have a school in mind, I'll be happy to pick one for you. There are several schools in all areas of Texas where the libraries need a Longhorn newsletter. A True Orange Subscription Is The Gift You Can Get Every Year for Your Longhorn Friends A subscription to True Orange is the perfect gift for any occasion for a Longhorn who has everything else. It's only $45 ($35 by e-mail) and I'll send an attractive card announcing your thoughtful gift. The only thing better is a gift of True Orange and the True Orange Fax
) and you can give both for just $130 a year ($99 if they can take both by e-mail). o I am enclosing $45 for a gift subscription ($35 e-mail) o I am enclosing $130 for a gift subscription to the newsletter and the fax ($99 e-mail) Name of Recipient Address (& fax no., if applicable) City, State, Zip Your Name Any Message You Want on Card Next Issue September 11 The next issue will be e-mailed on September 11 and will report on the Sept. 9 season opener against Louisiana-Lafayette and preview the big game at defending Pac 10 champ Stanford. It will also have lots of football recruiting news, coach Mack Brown's comments on the opener and on the trip to Palo Alto, and reports on other UT athletic teams. Tell Your Friends About True Orange If you like True Orange, be sure and tell your Longhorn friends about it. I can always use more subscribers. The more subscribers I have, the more resources I have to call recruits and coaches and do all the other things that give you an inside view of Longhorn sports. I want to subscribe. I am enclosing $45 for the next year, which will include 26 issues. A two-year subscription is $85. For a one-year subscription via E-Mail, send $35. Name Street Address or Box Number or E-Mail Address City, State and Zip Code Remit to True Orange, P O Box 26530, Austin, TX 78755 Foreign Rates Available on Request. Phone 512-795-8536 E-Mail Address: [email protected] I want to give a gift subscription to True Orange. I am enclosing $45. Please send an appropriate gift card. For a gift subscription via E-Mail, send $35. Name of Person Receiving Gift Street Address or Box Number or E-Mail Address City, State and Zip Code Your Name

FYI>>>We were also monitoring the EOL to Sitara bridge during this time to inform our traders and other desks of the situation and status...All deals bridged over by 10:30ish. THANKS -----Original Message----- From: Truong, Dat Sent: Thursday, October 25, 2001 11:11 AM To: Moorer, Torrey; Lamadrid, Victor; Severson, Russ; Grant, George Cc: Husain, Karima; Lim, Francis S.; Saluja, Gurdip; Sweitzer, Tara Subject: Sitara EOL Bridge Problem Today The problem we faced today was due to 2 eol deal packets (2098073, 2099764) not having startdate and enddate. Missing these 2 tibco message fields caused the bridge to bounce and resulted in the queue to build up while the bridge is starting up. (The bridge takes 2 minute for startup). Each time these deals are sent/resent, it continuously cause the Sitarar EOLBridge to restart, thus magnifying the buildup of the queue. The corrective action we are taking at our end is to build a rejection logic when eol packets do not have start and/or enddate. -Dat Truong

Hi Dierdre, I got your name from Christie Patrick as a contact for the Columbia Women in Business Conference. Sally Beck will be attending in place of Christie Patrick. Can you forward me exact address of conference site so I can include on Sally's itinerary. I read in your note to Christie that you would be sending invitation w/ directions and address - can you send me a copy also? If not by e-mail, is it something that can be faxed? My fax number is 713-345-8100. Thanks for your assistance. Sally is excited about participating in your conference and looks forward to meeting you. Patti Thompson Sally Beck's Assistant 713-853-9106 [email protected]

tara, Please grant access to manage financial products to the following: Janie Tholt Frank Ermis Steve South Tory Kuykendall Matt Lenhart Randy Gay We are making markets on one day gas daily swaps. Thank you. Phillip Allen

His attempts to get path confirmation he gets this error ACCESS VIOLATION AT ADDRESS 005096E9 IN MODULE "PATH CONFIRM.EXE" READ OF ADDRESS 00000000. He needs access asap. Thanks, Cara

At the close of our very productive meeting yesterday, I promised to circulate a brief update on California's electricity demand trends; it appears below as an attachment at the close of a note I circulated within NRDC earlier today, which I thought would be of interest: Today should have been a severe test for the California grid: we had the third straight day of high temperatures throughout much of the state and the Southwest (weather forecasts earlier in the week had prompted warnings of rolling blackouts). As I write this at 4 pm on Thursday, average temperatures throughout the entire PG&E system are above 90 degrees. But peak loads for the day will not reach 40,000 Megawatts, and reserve margins are comfortable (about 15% at the peak hour). California's last rolling blackouts occurred six weeks ago (and those were very modest in scale). It is far too soon to declare victory, but these are hopeful signs, and they will help relieve pressure on the Governor to crank up dirty emergency generators. NRDC's updated assessment of recent CA electricity consumption trends (attached again just in case you've lost it) indicates that demand reductions clearly are a big part of the reason why things are looking up. There are plenty of reasons for continued caution: the entire West can get much hotter, hydropower conditions in the Northwest remain awful, and complacency could shift demand back up quickly (much of the recent load reductions represent reversible voluntary actions). You can track the daily drama in detail at http://www.caiso.com/outlook.html. - californiaconsumptiontrendsrevised.doc

if i come down to houston monday, can we get together after work monday? there are a couple of things we should talk about that would be easier outside (& w/beer).

-----Original Message----- From: Kleiner, Michael Sent: Wednesday, March 28, 2001 4:37 PM To: '[email protected]'; '[email protected]'; '[email protected]'; Houghton, Brian Subject: Assignment of transaction no. 1 Everyone; Attached is a revised assignment agreement which we hope you will find satisfactory. Our hope is to have this agreement signed Thursday. Michelle's fax and counterpart execution clause should facilitate execution. Let me know if you expect any problems with execution. Gulf Canada Resources Limited per: Michael P. Kleiner Law Department <<Enron contract assignment.doc>> - Enron contract assignment.doc

i cannot go tues night.

Don't worry this is clean. Just funny. ---------------------- Forwarded by Tom Donohoe/HOU/ECT on 12/12/2000 10:27 AM --------------------------- > > <<salmon.asf>> > <<salmon.asf>> > - salmon.asf

I did not get to go because of time. How are your dogs? My dogs need some socialization and I would like for them to meet your again sometime. -----Original Message----- From: "Cooper, Lance (LA)" <[email protected]>@ENRON [mailto:IMCEANOTES-+22Cooper+2C+20Lance+20+28LA+29+22+20+3CLACOOPER+40dow+2Ecom+3E+40ENRON@ENRON.com] Sent: Monday, July 23, 2001 4:03 PM To: Perlingiere, Debra Subject: RE: Yes. I went on Sunday morning to see the last whippet judging, watch some of the obstacle course action and shop for a collapsible dog cage. Did you go also? -----Original Message----- From: Perlingiere, Debra [mailto:[email protected]] Sent: Monday, July 23, 2001 1:59 PM To: [email protected] Subject: Did you go to the dog show? Debra Perlingiere Enron North America Legal 1400 Smith Street, EB 3885 Houston, Texas 77002 dperlin@enron 713-853-7658 713-646-3490 Fax

Attached is a draft letter setting forth Enron's damages in connection with the termination of certain commodity forward and swap positions with PG&E. In lieu of sending out multiple letters and then aggregating the exposures for set off purposes, I thought it would be more understandable if we put all the matters in one letter. For each product line, I thought we could attach all the relevant information (I'm not sure if this is making it too easy for the court but it seems like the right thing to do). Each commodity line then would assemble the following and attach as an Appendix to the letter: 1. Copy of Master Contract or applicable GTC 2. Copy of transaction confirmations 3. Copy of termination notice sent to PG&E 4. Chart summarizing key commercial terms of transaction(s) 5. Chart summarizing unpaid receivables and invoices for same 6. Chart setting forth termination payment calculation for each terminated trade 7. Paragraph describing methodology used to determine termination payment valuation (eg - 4 quotes secured, threw out high and low and averaged middle) 8 List showing quotes secured (entity, person, time and amount) and the extent available, written confirmation of such quote I will be out of the office the rest of this week but will organize a call for early next week in order to finalize the PG&E package. Thanks for all your help. Elizabeth Sager 713 853 6349

I show the same for COB, Mid C and PV - Let me know what you have for NP and SP Thanks From: Cara Semperger/ENRON@enronXgate on 06/26/2001 09:25 AM To: Neil Bresnan/HOU/EES@EES cc: Jeff Richter/ENRON@enronXgate Subject: EES AND EPMI check out for July I will send you a sheet today, around noon my time The brief overview is that we are flat at COB, and Mid C, At PV you have a postition with me 3 you owe me on HLH, 7 you owe me on LLH -----Original Message----- From: Bresnan, Neil Sent: Monday, June 25, 2001 12:58 PM To: Semperger, Cara Subject: Monthly check out Cara, Would you help me check out our positions with EMPI for July. MidC, COB, NP, SP, PV With all the moving parts we have now I want to start early Let me kow if you have any questions 713 853 3113 Thanks

---------------------- Forwarded by Darron C Giron/HOU/ECT on 04/20/2001 12:46 PM --------------------------- From: Veronica Espinoza/ENRON@enronXgate on 04/20/2001 10:13 AM To: Janie Aguayo/HOU/ECT@ECT, Diane Anderson/NA/Enron@Enron, Derek Bailey/Corp/Enron@ENRON, David Baumbach/HOU/ECT@ECT, Jean Bell/HOU/ECT@ECT, Patricia Boulanger/CAL/ECT@ECT, Bob Bowen/HOU/ECT@ECT, Julie Brewer/NA/Enron@Enron, Lesli Campbell/ENRON@enronXgate, Celeste Cisneros/NA/Enron@Enron, Sharon Crawford/CAL/ECT@ECT, Richard Deming/NA/Enron@Enron, Russell Diamond/ENRON@enronXgate, Cindy Feldman/CAL/ECT@ECT, Darron C Giron/HOU/ECT@ECT, Veronica Gonzalez/ENRON@enronXgate, Jeffrey C Gossett/HOU/ECT@ECT, Walter Guidroz/ENRON@enronXgate, Larry Joe Hunter/HOU/ECT@ECT, Kam Keiser/HOU/ECT@ECT, Phillip M Love/HOU/ECT@ECT, Errol McLaughlin/Corp/Enron@ENRON, Nidia Mendoza/ENRON@enronXgate, Tom Moran/ENRON@enronXgate, Bianca Ornelas/NA/Enron@Enron, Leslie Reeves/HOU/ECT@ECT, Tanya Rohauer/ENRON@enronXgate, Dianne Seib/CAL/ECT@ECT, Linda Sietzema/CAL/ECT@ECT, Kim S Theriot/HOU/ECT@ECT, Ellen Wallumrod/NA/Enron@ENRON, Melinda Whalen/CAL/ECT@ECT, Tiffany Williams/NA/Enron@Enron cc: Subject: Credit Report--4/20/01

I am fine with that. You may have some work to do with Victor, I am sure he will be really upset losing me as his back up. PL

The trade confirmation for your order(s) is now available online at etrade.com(sm). Use the URL(s) below to view (customer log on required). The information contained in this confirmation shall be binding upon you if you do not object, either in writing or via electronic mail, within two (2) days after the confirmation is first received by you. Document ID: 20010418023258499580080508 https://trading.etrade.com/cgi-bin/gx.cgi/applogic+accttaxbridge?page=CONFIRM& cmd=display&doctype=cnf&document_id=20010418023258499580080508 Document ID: 20010418023258499580080510 https://trading.etrade.com/cgi-bin/gx.cgi/applogic+accttaxbridge?page=CONFIRM& cmd=display&doctype=cnf&document_id=20010418023258499580080510 Document ID: 20010418023258499580080509 https://trading.etrade.com/cgi-bin/gx.cgi/applogic+accttaxbridge?page=CONFIRM& cmd=display&doctype=cnf&document_id=20010418023258499580080509

The report named Violation/Notification Memo, published as of 10/16/2001 is now available for viewing on the website. http://erv.corp.enron.com

You the man. That should agree with my spreedsheet. -----Original Message----- From: Knoblauh, Jay Sent: Friday, May 03, 2002 8:57 AM To: Parks, Joe Subject: RE: PNL There were 3 Jun-02 buys that Jeff put in bridgetrade for your strategy code that went into Jeff's book by mistake...The deals are worth $40,000...They will be moved to your book and a new pl issued once ERMS is running again -----Original Message----- From: Parks, Joe Sent: Friday, May 03, 2002 7:03 AM To: Knoblauh, Jay; Green, Michael Subject: PNL << File: POSTION05_02.xls >> The PnL Mike put together for the 5/02/02 didnt match my sheet.

Tom: please find results on a Florida study paid for by ENA. I look forward to getting your comments on this in relation to the ICF studies for Louisiana, Missouri and maybe Chicago (plus the West coast). ---------------------- Forwarded by Thomas M Suffield/Corp/Enron on 05/17/2000 07:54 AM --------------------------- Enron North America Corp. From: Greg Krause 05/16/2000 10:47 AM To: Thomas M Suffield/Corp/Enron@ENRON cc: Subject: frcc study Please see attached the electronic version of RW Beck's Florida Study Youssef Hegazy R. W. Beck, Inc. [email protected] 206/ 695-4789 (direct) 206/ 695-4700 (operator) 206/ 695-4764 (fax) - Enron_FRCC_Rpt3.pdf

--- Original Message --- From: "Danna Theriault" <[email protected]> To: Becky Starr <[email protected]>Brian Theriault <[email protected]>Dana Rodriguez <[email protected]>Chet Milligan <[email protected]>Heather & Shawn O'Neil <[email protected]>Jamie Gibson <[email protected]>Jamie Pebworth <[email protected]>Katie Block <[email protected]>Shannon Smith <[email protected]>[email protected] <[email protected]> Cc: Sent: Fri, 12 Oct 2001 09:56:06 -0500 Subject: [Fwd: Fwd: Fw: FW: Yet Another Priceless] > > -- NGFC, [email protected] on 12/10/2001 --------- Inline attachment follows --------- From: <[email protected]> To: [email protected] Date: Friday, October 12, 2001 1:37:30 GMT Subject: Delivered-To: [email protected] From: "cumminsatu" <[email protected]> To: "tom kerr" <[email protected]>, "randall" <[email protected]>, "lori troglin" <[email protected]>, "JASON OWENS" <[email protected]>, "james mynat" <[email protected]>, "james fouts" <[email protected]>, "Cris Finley" <[email protected]>, "bill parky" <[email protected]> Subject: Fw: FW: Yet Another Priceless Date: Thu, 11 Oct 2001 21:29:55 -0500 X-Mailer: Microsoft Outlook Express 5.00.2919.6600 ----- Original Message ----- From: ron lee <mailto:[email protected]> To: [email protected] <mailto:[email protected]> ; [email protected] <mailto:[email protected]> ; [email protected] <mailto:[email protected]> ; [email protected] <mailto:[email protected]> Sent: Thursday, October 11, 2001 4:23 PM Subject: Fwd: FW: Yet Another Priceless >----- Original Message ----- >Subject:FW: Yet Another Priceless > > > > > >This one is good though! > _____ Get your FREE download of MSN Explorer at <http://explorer.msn.com>

The venue details for the courses are the following: ? City:? Houston Hotel:? Hyatt Regency Houston Address:? located in the Center of Downtown Houston 1200 Louisiana Houston, TX? 77002 USA ? Telephone:? +1 713 654 1234 Fax:? +1 713 951 0934 ? We have?been offered a room rate of US$199 a night.? Your company may be able to obtain a better quote, by contacting them directly.??However, at reservations, they may not have the course name and information logged into their system yet because this is being handled directly by their catering manager.? If you would like us to make your hotel reservations, we would need your arrival date and departure date.? ? The?itinerary for each day of the course is as follows: ? 9:00??? Start 10:30 ?Coffee break 12:30? Lunch 15:30? Coffee break 17:30? Approximate finish ? Course format will consist of segments of lecture followed by computer based workshops (two a day).? If you need anything further, please contact us. ? Sincerely, Julie ?

Mark, During my conversations with Patrick Hansen (from the Buenos Aires office) yesterday he mentioned that in Argentina the above mentioned contracts have to be in Spanish to have legal value. Is that correct? Or we would be covered as long as we offer the contracts in Spanish in addition to English (functionality currently present at the site)? Thanks, Mario

---------------------- Forwarded by Phillip K Allen/HOU/ECT on 02/09/2000 10:27 AM --------------------------- "George Rahal" <[email protected]> on 02/07/2000 03:13:58 PM To: <[email protected]> cc: Subject: RE: W basis quotes I'll get back to them on this. I know we have sent financials to Clinton Energy...I'll check to see if this is enough. In the meantime, is it possible to show me indications on the quotes I asked for? Please advise. George George Rahal Manager, Gas Trading ACN Power, Inc. 7926 Jones Branch Drive, Suite 630 McLean, VA 22102-3303 Phone (703)893-4330 ext. 1023 Fax (703)893-4390 Cell (443)255-7699 > -----Original Message----- > From: [email protected] [mailto:[email protected]] > Sent: Monday, February 07, 2000 5:54 PM > To: [email protected] > Subject: Re: W basis quotes > > > > George, > > Can you please call my credit desk at 713-853-1803. They have not > received any financials for ACN Power. > > Thanks, > > Phillip Allen > >

All the descriptions except weather have already been emailed to Awais and I have asked him to provide them to you. I understand you have weather which was faxed.

Get ready to help the Body Shop celebrate it's 15th anniversary and kick off National Health and Fitness Week. Beginning Monday, May 14 and ending Friday, May 18, 2001 all Enron Employees are invited to work-out at the Body Shop as a complimentary guest. Just visit http://hrweb.enron.com/wellness, print and fill-out the body shop 15th anniversary guest form, and return it to the Body Shop prior to your first workout. The week long celebration includes a speech and autograph session with Clyde Drexler, Monday, May 14, 2001, 11:30 AM-12:00 noon (spaces will be limited and you must RSVP to [email protected] by Friday, May 11, 2001, 3:00 PM); an early morning workout with the Houston Rocket's Power Girls on, Thursday, May 17, 2001 starting at 6:30 AM followed by breakfast and autograph session in the Body Shop Fuel Station at 7:30am - 8:30am; a boot camp style class led by the German/American Foreign Legion and much, much more. Visit the Body Shop website for a detailed calendar of events, or for additional information, please e-mail the Body Shop at [email protected].

Yahoo! News Edit Breaking News Alerts - Yahoo! Breaking News Alert edit WASHINGTON _ Industrial production falls by 0.3 percent in April. Click here! [IMAGE] If you no longer wish to receive this alert, click here to unsubscribe. If you have questions, send us feedback. Copyright , 1994-2001 Yahoo! Inc. All rights reserved. Yahoo Privacy Policy

As we discussed in our special call last week, I asked Brian Cragg from Goodin McBride to look into the issue of what, if anything, the CPUC can do in lieu of suspending direct access. ABX 1 says the CPUC "shall suspend" DA, but does not give any time line for doing so, nor any criterita to use in making the determination to suspend it. This gives the CPUC ample ability to delay suspending DA, especially while bills affecting DA are in play in Sacramento. The President could have her own investigation or propose her own solutions -- all the while delaying the suspension. Brian also thought she could possibly put her own DA plan in place -- although he said it was a "stretch." Brian said she could, for example, argue that limiting DA to the net short position was a way of implementing ABX 1. He felt that adding an exit fee as well was , however, stretching the concept a bit too far. Nonethless, limiting DA to a net short position could be argued to be within her existing authority under the law. She could also institute an "open season" through some defined date, such as Jan 1, 2002, and suspend DA thereafter. She could take this action subject to the passage of superceding legislation -- which, of course, could either kill DA altogether or implement some combination of exit fee/DAopen season/DA limitation. Let's discuss strategy on our next call. Sue Mara Enron Corp. Tel: (415) 782-7802 Fax:(415) 782-7854

Start Date: 4/12/01; HourAhead hour: 22; No ancillary schedules awarded. No variances detected. LOG MESSAGES: PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2001041222.txt

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I don't have any language like that on hand. I suspect it will be in great demand! Have a great holiday, Kay Dale Rasmussen@ECT 12/22/2000 05:28 PM To: Kay Mann/Corp/Enron@ENRON cc: Subject: Re: Attached Files- ABB facility agreement for conference call Thanks Kay. On the GE and ABB contracts, we will be assigning the breakout contracts down to the project development entity (LVC2). LVC2 will then make a partial assignment of the guaranty/LD/warranty provisions to the EPC contractor. Have you done an assignment of this nature in connection with any other equipment? If so, do you have some language I could use? Thanks, and happy holidays!

Guys, attached you will find a final cut on the ENA 2001 expense budget. Please review and make any adjustments to your existing plan that are appropriate to hit the net ENA target. In order to stay flat year on year, I split the remaining positive variance equally across the groups. As we had discussed earlier, these costs will not be allocated to the business units and will be tracked on the ENA income statement below the line and the accountability managed by each of you. All outside variable costs, specifically related to specific deals, will be charged to the business units eg) outside legal and tax, outside technical expertise, facility costs, outside research support, incremental back and mid office support for specific asset management deals, specific entertainment, etc. I look at this cost structure as the minimum capacity charge we need to operate our business and evaluate/manage our risks. Wes, can you please finalize the one page plan (expenses and headcount) for each group with these changes. Regards Delainey

You might be right. Apologies if that's what happened.

No comments. Chris, I'll have the summary to you shortly. Jeff

thanks -----Original Message----- From: Germany, Chris Sent: Thursday, March 14, 2002 8:22 AM To: Kelly, Katherine L.; Parks, Joe Subject: FW: duke Job Title: Commercial Manager Location: Houston, TX Business Unit: Duke Energy Field Services Source Code: DRA008840 Responsibilities Include: Responsible for securing natural gas supply through long-term transportation, processing, compression, and production handling agreements. Draft, develop, and negotiate new contracts and maintain existing commercial contracts. Coordinate with various internal groups including reserves, engineering, planning and legal to develop and manage all aspects of new projects from inception to implementation. Direct daily activities of pipeline and plant operations as it relates to commercial activity. Participate and support company efforts in managing interests in partnership activities. Evaluate and pursue pipeline interconnects or pipeline/gas plant acquisition opportunities. Knowledge and understanding of commercial transactions including identifying and understanding market opportunities, risks, and deal structuring. Perform other related duties as business conditions dictate. Minimum Qualifications: Bachelors degree in Business Administration, Engineering, Accounting, Marketing or other comparable degree. Seven years industry experience including evaluating, preparing and negotiating business development opportunities. Must understand and be capable of developing and evaluating economic modeling of projects. Proficient with spreadsheet applications. Excellent communication, interpersonal, and organization skills. Desired Qualifications: Ten years experience in the natural gas or energy industry, including experience preparing, evaluating and negotiating term business development opportunities within the Midstream (gathering and processing) market. Excellent working knowledge of gas processing economics. Knowledge of the natural gas supply grid, particularly offshore, and industry participants. Interested individuals may submit either expressions of interest or resume's to Southern Division Human Resources -- 5718 Westheimer, Suite 2000, Houston, TX 77057 or Fax to 713-627-6617. Interested, qualified candidates may submit an electronic interest form <http://resumebuilder.webhire.com/resume_add.asp?company=duke> for this position. NOTE: You must enter the source code when submitting your resume. The source code for this position is DRA008840. Equal Opportunity Employeer

Eliz- can you handle? ---------------------- Forwarded by Steven J Kean/NA/Enron on 04/10/2001 10:12 AM --------------------------- From: Stephanie Segura/ENRON@enronXgate on 04/10/2001 10:10 AM To: Steven J Kean/NA/Enron@Enron cc: Subject: Data request Steve-- I am working on a presentation here in Net Works and am looking for a defendable figure for the size of the North American Natural Gas & Power market (both financial and physical transactions) and our share of the same. Do you have any such data, or know of someone that might? Thank you. Stephanie Segura Enron Net Works Tel: 713.853.7430 Fax: 713.646.8583

All's I need now is your email w/instructions. ----- Forwarded by Tana Jones/HOU/ECT on 08/04/2000 09:25 AM ----- Larry Joe Hunter 08/04/2000 09:16 AM To: Tana Jones/HOU/ECT@ECT cc: John Suttle/HOU/ECT@ECT Subject: Force Energy Tana, See attached for all Live Forcenergy deals. Thanks, Joe

http://www.theonion.com/onion3745/bandaged_bin_laden.html Regards, Stephen R. Harrington Sr. Specialist, Trader Support Group Enron Net Works, LLC work: 713-853-7619 cell: 713-444-7279 pager or email: [email protected]

Please see message from Kerry Stroup below. ---------------------- Forwarded by Ginger Dernehl/HOU/EES on 04/18/2000 11:39 AM --------------------------- Kerry Stroup 04/18/2000 11:44 AM To: Ginger Dernehl/HOU/EES@EES cc: Janine Migden/DUB/EES@EES, Barbara A Hueter/DUB/EES@EES, Becky L Merola/DUB/EES@EES Subject: Ohio regulations regarding certification, market monitoring, ADR, and electric service standards The Ohio Commission has recently adopted several sets of administrative rules required by the state's electric restructuring law. Rules have been issued specifiying certification requirements and procedures, reporting requirements for the Commission's monitoring of the retail marketplace, alternative dispute resolution, non-competitive electric service standards, and competitive retail electric service standards. A document follows, summarizing some of the major highlights of the adopted rules. As promulgated, the rules regarding certification and market monitoring are not overly burdensome. The competitive electric service standards are a mixed bag, e.g. imposing significant duties regarding contract disclosure and term, while providing for telephonic and Internet enrollment. Please direct any questions regarding the rules to me.

Yesterday in a conversation with Mike Day, he confirmed we have no basis in AB 1890 or anything else to claim entitlement to continuation of some type of market based credits. Given that interpretation, we tentatively decided the advice letter protest would be drafted to say at least these things - 1) the PE credit should include the 4 cents of surcharge (the 1 from January plus the latest 3 now subject to rate design hearings) 2) there is no restriction on the PE credit going negative. 3) the tariff should be clarified to say it excludes DWR purchases, assuming that is the case. If we are going to otherwise object to the Advice Letter, the approach could be: 1) the Commission needs to generically address the replacement of PX credits and not allow one utility to change it through an advice letter; 2) the Commission has not addressed the entitlement of DA customers to hydro assets and must make a determination on this; 3) if the Commission approves this Advice Letter, it should say SCE has no further claim to stranded costs on its generation; 4) as an interim measure until the Commission fully looks at PX credit calculations, we recommend that SCE adopt a PX proxy, such as Dow Jones. This approach allows us to argue process rather than entitlement to market based credits. Given all the time constrains, I'd suggest we capture these latter issues through a very simple 1-2 paragraphs. Bob, I know you're getting a call together; I'll call you to confirm. Robert C Williams/ENRON@enronXgate 04/24/2001 08:47 AM To: Richard Shapiro/NA/Enron@Enron, James D Steffes/NA/Enron@Enron, Harry Kingerski/NA/Enron@Enron, [email protected]@SMTP@enronXgate, Jeff Dasovich/NA/Enron@Enron cc: Wanda Curry/HOU/EES@EES, Vicki Sharp/HOU/EES@EES, Mike D Smith/HOU/EES@EES Subject: FW: DA Account Balances As you can see from below, I don't see how we can support the PE Advice Letter. We reserved our right to oppose it in the stip. I think we should clarify that SCE will acknowledge our full claim ($124 million) without any offset in exchange for our cooperation with the MOU. -----Original Message----- From: [email protected]@ENRON [mailto:[email protected]] Sent: Monday, April 23, 2001 2:52 PM To: Williams, Robert C. Cc: [email protected] Subject: DA Account Balances Attached is our record of credit balances for Enron DA accounts, as of April 20. The $84 million or so I referenced this morning is our calculation of what SCE owed through 1/18. If the PE credit methodology is approved and applied back to January 19, then Enron would be rebilled for $68 million (for transmission and distribution charges), which offset against the earlier credit and the credit calculated for 1/19 - 4/20, reduces the total credit owed to $62 million. As we discussed, Jenny is more familiar than I with the details of the credits and will call you back with someone from our Billing/Credit group who is even more familiar. (See attached file: Enron PX Credits as of 4-20-01.xls) - Enron PX Credits as of 4-20-01.xls

Please make sure that you have these calcs set up, as I am sure that we will be asked for this information in 5,000 different ways in the next few days. I want to thank all of you for your help on this. It is vital that these numbers be right, as legal and others are presenting these numbers to PG&E to state our case. Thanks Again

Does anyone have a zip drive? I have a Zip disc that I need to recover some documents from. Please call X57373 if you can help me. Thanks Taffy

So if we buy the property before the LLC is owned by ENext the entire project goes on the balance sheet since we will be committed to building a road and stormwater system. There we all must be aware that we can not close on the property until the LLC is owned by ENext. Do you agree? -----Original Message----- From: Mann, Kay Sent: Wednesday, June 06, 2001 3:58 PM To: Krause, Greg Subject: RE: Midway Interconnect Agreement Put the land on the balance sheet is a forgiveable sin. Incurring any other type of hard costs puts the entire project (whatever that may be) on the balance sheet. Kay From: Greg Krause/ENRON@enronXgate on 06/06/2001 03:53 PM To: Kay Mann/Corp/Enron@Enron cc: Subject: RE: Midway Interconnect Agreement If we buy the property before the LLC is owned by ENext, wouldn't the big concern be that we've put $1.8 million of land plus an additional $900,000 or so of obligations to build road and stormwater system on the balance rather than the rather small ongoing costs related to maintainance of the road and system? -----Original Message----- From: Mann, Kay Sent: Wednesday, June 06, 2001 3:46 PM To: Krause, Greg Subject: RE: Midway Interconnect Agreement As I understand it, if the option is exercised (and the property bought) prior to the time the LLC is owned by ENext, there is a balance sheet impact. From: Greg Krause/ENRON@enronXgate on 06/06/2001 03:01 PM To: Kay Mann/Corp/Enron@Enron, Ben Jacoby/ENRON@enronXgate cc: Subject: RE: Midway Interconnect Agreement Probable time for them to bless the agreements; however, since these documents will not be executed until after closing, the obligations created under the Property Owners Association should not have a balance sheet impact. -----Original Message----- From: Mann, Kay Sent: Wednesday, June 06, 2001 12:29 PM To: Krause, Greg; Jacoby, Ben Subject: RE: Midway Interconnect Agreement Greg and Ben, So is it about time to get Lisa, Herman and Rose involved in the PAD stuff? Kay From: Greg Krause/ENRON@enronXgate on 06/06/2001 12:07 PM To: Kay Mann/Corp/Enron@Enron cc: Subject: RE: Midway Interconnect Agreement Kay, A&K did the title committment work and is now working on the Property Association Documents (as is Greenberg Traurig in West Palm Beach). Ann Elizabeth's last email message to me before she went on vacation was that A&K was the designated hitter for the Midway Project. You have been copied on those docs which we desparately need to get to Cooney Midway Groves, the property owner. As far as I know, they have not been involved in anything else related to Midway this year. Christi left me a message saying that Lloyd Will or one of his guys needs to review the Interconnction Agreement. I do not know Lloyd. Greg PS we had a good meeting with DERM on the landfill closure issues in the Certosa Holdings deal. I'll try to reach you this afternoon to discuss. -----Original Message----- From: Mann, Kay Sent: Wednesday, June 06, 2001 7:45 AM To: Krause, Greg Subject: RE: Midway Interconnect Agreement How much involvement has A & K had on Midway? I have other counsel engaged for the sale, but this falls into a different category. Kay From: Greg Krause/ENRON@enronXgate on 06/05/2001 11:35 PM To: Ben Jacoby/ENRON@enronXgate, Kay Mann/Corp/Enron@Enron cc: Christi L Nicolay/HOU/ECT@ECT Subject: RE: Midway Interconnect Agreement Please see attachment below with Christi's comments. -----Original Message----- From: Jacoby, Ben Sent: Tuesday, June 05, 2001 12:22 PM To: Mann, Kay Cc: Krause, Greg; Nicolay, Christi Subject: Midway Interconnect Agreement Kay: Greg has Christi's comments on the FPL Construction & Connection Agreement, and he will be sending us those comments today in a marked document. Have we engaged outside counsel to review this agreement? I'd like to have a commercial / legal review fully completed, and then get accounting / finance to comment. I this something you were planning to have Carlos to work on given his recent work on ComEd and Ameren? Please let me know. Thanks. Attached is the original generic form of FPL Connection and Construction Agreement for your reference. Ben << File: FPL Construction Connection Agreement Generic.doc >>

The attached has Louise's comments to Sections 3.2 and 3.3. -----Original Message----- From: Koehler, Anne C. Sent: Friday, December 14, 2001 11:16 AM To: '[email protected]@ENRON' Cc: Schuler, Lance (Legal); Detmering, Tim; Piper, Greg; Taylor, Mark E (Legal); Kitchen, Louise; Webb, Jay Subject: RE: Revised Draft of the Assignment and License Agreement A couple of comments on the revised form of Assignment and License 1. This appears to allow the Estate to use the Software (including the EnronOnline Software) and the processes and services covered by the patents for trading gas and power within North America. Is this the new deal? For the template and the Wind deal? Also, does 3.1 (b) allow Enron to sell the processes covered by the patents without any restriction on field of use? 2. Are we now going to give Enron the right to sublicense and distribute Source Code? I thought we were going to limit it to Object Code. 3. In Section 3.1 do we need to define affiliates? 4. Are the restrictions on Asssignment and Licensing in Section 4.4 supposed cover all the Software, including the mid and back office functions, or only the EOL Software? -----Original Message----- From: [email protected]@ENRON Sent: Friday, December 14, 2001 4:18 AM To: [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; Schuler, Lance (Legal); Daniels, Eddy; Koehler, Anne C.; Hansen, Leslie; Piper, Greg; Detmering, Tim Subject: Revised Draft of the Assignment and License Agreement Here is the revised draft reflecting comments from Enron management team and Enron legal team (Houston). For some reason, I am unable to run Comparite remotely. If someone located in NYO could run a comparison between Version 3 and Version 6 and distribute to this same list it will aid people in the review. Thanks. Roger (Enron Assignment and License Agreement) (See attached file: n1bx06!.DOC) **********NOTE********** The information contained in this email message is intended only for use of the individual or entity named above. If the reader of this message is not the intended recipient, or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone (650-802-3000), and destroy the original message. Thank you. - n1bx06!.DOC << File: n1bx06!.DOC >>

Diane, My request was for the financial deals. But if you have access to the physical RMT/Intercompany -- I would like those too. Susan -----Original Message----- From: Anderson, Diane Sent: Monday, January 28, 2002 4:26 PM To: Bailey, Susan Subject: RMT Susan, Confirm for me that you want financial deals only......or not. Thanks. -----Original Message----- From: Bailey, Susan Sent: Monday, January 28, 2002 1:57 PM To: Anderson, Diane Subject: RE: Sodra Skogsagarna Ek Diane, As for the RMT matter the request is as follows: 1. Lives Deal as of November 30, 2001 2. Expired Deals since November 30, 2001 3. New Deals since November 30, 2001 Thanks for the help. Susan -----Original Message----- From: Anderson, Diane Sent: Monday, January 28, 2002 1:18 PM To: Bailey, Susan Subject: RE: Sodra Skogsagarna Ek Ok. And regarding the Risk Management deals......I forget what we decided....what "begin" date do you want on the query......deals from 12/1/01 forward or was in sometime in November? -----Original Message----- From: Bailey, Susan Sent: Monday, January 28, 2002 12:14 PM To: Anderson, Diane Subject: RE: Sodra Skogsagarna Ek Diane, Thanks for confirming that the trades were with ECTRIC and not ENA -- thats what I had thought. Yes-- please furnish copies of the confirms for the 2 deals to me. Thanks, Susan -----Original Message----- From: Anderson, Diane Sent: Monday, January 28, 2002 11:16 AM To: Bailey, Susan; Mulvany, Patrick Subject: RE: Sodra Skogsagarna Ek Susan, I only see two and there were both done with ECTINTL. Do you want to see those? -----Original Message----- From: Bailey, Susan Sent: Monday, January 28, 2002 10:35 AM To: Anderson, Diane; Mulvany, Patrick Subject: Sodra Skogsagarna Ek Diane or Patrick, Please email or provide hard copies of the Confirmation(s) ENA has with the captioned counterparty. Thanks Cordially, Susan S. Bailey Enron North America Corp. 1400 Smith Street, Suite 3803A Houston, Texas 77002 Phone: (713) 853-4737 Fax: (713) 646-3490 Email: [email protected]

The PUC's decision 1) suspending DA and 2) signaling the PUC's intent to continue to consider nullifying DA contracts signed after July 1 is full of holes. We haven't detected any downside in joining with coalitions, and trying to get other coalitions, to appeal the PUC order. Sue Mara is working with the ARM coalition to appeal yesterday's order and is taking the lead generally on the effort to reverse things. The appeals that we would join, and attempt others to persue on their own, would focus principally on two issues: 1) disabusing the PUC of the notion that it has the legal authority to nullify contracts retroactively, and 2) lifting the suspension on DA altogether (let me know if I've missed anything here, Sue). Please let us know if folks have any concerns that would cause us to reconsider pursuing these challenges. Best, Jeff

yes Robert C Williams/ENRON@enronXgate 05/17/2001 12:06 PM To: Mike D Smith/HOU/EES@EES, Vicki Sharp/HOU/EES@EES, Marty Sunde/HOU/EES@EES, Dan Leff/HOU/EES@EES, Richard B Sanders/HOU/ECT@ECT, Tom Riley/WSX/AZURIX@Exchange cc: Subject: Brief on Appeal Please let me know if you would like a copy of the brief we filed with the Ninth Circuit. Thanks. Bob

---------------------- Forwarded by Eric Bass/HOU/ECT on 12/08/2000 12:56 PM --------------------------- "Larry W. Bass" <[email protected]> on 12/08/2000 12:48:35 PM To: KATHY BASS <[email protected]>, kb <[email protected]>, jason <[email protected]>, eric preston bass <[email protected]> cc: Subject: Fw: (no subject) ----- Original Message ----- From: <[email protected]> To: <[email protected]>; <[email protected]>; <[email protected]>; <[email protected]>; <[email protected]>; <[email protected]>; <[email protected]>; <[email protected]>; <[email protected]> Sent: Thursday, December 07, 2000 12:45 PM Subject: (no subject) > In a message dated 12/7/00 9:58:03 AM Eastern Standard Time, Charnet222 > writes: > > << > << This is a simple way to a nice calm happy life! > > > > > > This is nice reading, but short. Enjoy! This is > > > > > what > > > > > > The Dalai Lama has to say on the millennium. All > > > > > it takes is a few > > > > > > seconds to read and think it over. Do not keep > > > > > this message. The mantra > > > > > > must leave our hands within 96hours. You will > > > > get > > > > > a very pleasant > > > > > > surprise. This is true even if you are not > > > > > superstitious. > > > > > > > > > > > > I N S T R U C T I O N S F O R L I F E > > > > > > > > > > > > 1. Take into account that great love and great > > > > > > achievements involve great risk. > > > > > > > > > > > > 2. When you lose, don't lose the lesson. > > > > > > > > > > > > 3. Follow the three R's: > > > > > > Respect for self > > > > > > Respect for others and > > > > > > Responsibility for all your actions. > > > > > > > > > > > > 4.Remember that not getting what you want is > > > > > > sometimes a wonderful stroke of luck. > > > > > > > > > > > > 5. Learn the rules so you know how to break them > > > > > > properly. > > > > > > > > > > > > 6. Don't let a little dispute injure a great > > > > > > friendship. > > > > > > > > > > > > 7. When you realize you've made a mistake, take > > > > > > immediate steps to correct it. > > > > > > > > > > > > 8. Spend some time alone every day. > > > > > > > > > > > > 9. Open your arms to change, but don't let go of > > > > > > your values. > > > > > > > > > > > > 10. Remember that silence is sometimes the best > > > > > > answer. > > > > > > > > > > > > 11. Live a good, honourable life. Then when you > > > > > get > > > > > > older and think back, you'll be able to enjoy it > > > > a > > > > > second time. > > > > > > > > > > > > 12. A loving atmosphere in your home is the > > > > > > foundation for your life. > > > > > > > > > > > > 13. In disagreements with loved ones, deal only > > > > > with > > > > > > the current situation. Don't bring up the past. > > > > > > > > > > > > 14. Share your knowledge. It's a way to achieve > > > > > > immortality. > > > > > > > > > > > > 15. Be gentle with the earth. > > > > > > > > > > > > 16. Once a year, go someplace you've never been > > > > > > before. > > > > > > > > > > > > 17. Remember that the best relationship is one > > > > in > > > > > > which your love for each other exceeds your need > > > > > for each other. > > > > > > > > > > > > 18. Judge your success by what you had to give > > > > up > > > > > in > > > > > > order to get it. > > > > > > > > > > > > 19. Approach love and cooking with reckless > > > > > abandon. > > > > > > > > > > > > FORWARD THIS MANTRA E-MAIL TO AT LEAST 5 PEOPLE > > > > > AND > > > > > > YOUR LIFE WILL IMPROVE. > > > > > > > > > > > > 0-4 people: Your life will improve slightly. > > > > > > > > > > > > 5-9 people: Your life will improve to your > > > > liking. > > > > > > >> >

----- Forwarded by Tana Jones/HOU/ECT on 06/01/2000 04:48 PM ----- Julie Meyers 06/01/2000 04:01 PM To: Tana Jones/HOU/ECT@ECT cc: Subject: Re: J. Aron & Company Please take me off you distribution.

On July 16th, SDG&E filed a Motion requesting certain actions from the Commission necessary to implement its Memorandum of Understanding with DWR. There are ten CPUC Implementing Decisions provided for in the MOU. The motion either requests that the action occur or references another CPUC proceeding where the matter is pending. Please let me know if Enron is interested in pursuing any matters related to the SDG&E MOU. Jeanne Bennett -----Original Message----- From: Ruiz, Annie [mailto:[email protected]] Sent: Monday, July 16, 2001 5:33 PM To: [email protected]; [email protected]; Brill, Thomas; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected].; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; Melville, Keith; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; Parrott, Jeff; [email protected]; [email protected]; [email protected]; [email protected]; Young, Judy; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected] Subject: Motion of San Diego Gas & Electric for Implementation of Memorand um of Understanding with the State of California The attached motion and companion pleadings addressing various aspects of the MOU between CDWR and SDG&E were filed today at the Commission. Several Advice Letters were filed today that will be distributed by e-mail tomorrow. The motion to implement the MOU attached hereto does not contain the numerous attachments that were sent out with the hard copy distribution that was served today. Annie Ruiz Assistant to Jeffrey M. Parrott Sempra Energy Law Department HQ-13 Tel: 619-696-4903 Fax: 619-699-5027 E-mail: [email protected] <<A.00-11-038 Implement MOU(v1).DOC>> <<93-12-025 PET TO MODIFY(v1).DOC>> <<R.94-04-031 MOU Cost Recovery(v1).DOC>> <<A.98-01-014 Motion(v1).DOC>> <<Notice of Settlement Conf.(v1).DOC>> - A.00-11-038 Implement MOU(v1).DOC - 93-12-025 PET TO MODIFY(v1).DOC - R.94-04-031 MOU Cost Recovery(v1).DOC - A.98-01-014 Motion(v1).DOC - Notice of Settlement Conf.(v1).DOC