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California Capsule: Sacramento Wasn't Paying Attention

LCG, Feb. 28, 2001—Browsing through EnergyOnline Daily News files – a form of journalistic narcissism – we found a now-expired solution to at least part of California's electrical dilemma.

In a news story datelined Aug. 1, 2000 – seven months ago – we reported that Duke Energy North America said it had told Gov. Gray Davis how to solve the state's power problems, which were then about three months old and soon would get a lot worse.

Noting that there was a shortage of power plants in the state, the Duke unit suggested Davis speed up the permitting process to facilitate the rapid construction of new generation. If he did, Duke said at the time, it would build 500 megawatts worth of portable power plants on top of expanding the capacity of the power plants it purchased from Pacific Gas & Electric Co.

But the big part of Duke's recommendation was its offer to provide up to 2,000 megawatts of electricity to the state's three utilities at $50 per megawatt-hour for a five-year period beginning Sept. 1, 2000. Had the governor used his clout to make such a deal possible, it is probable that other independent power producers would have made similar offers..

Yesterday, Duke spokesman Tom Williams said the company never heard back from the governor.

But that doesn't mean Davis has been silent. That, and other news:

Speaking to a luncheon of the California State Society in Washington yesterday, Davis said he ought to have all his "legislative fixes" accomplished by the end of the month. On the state's takeover of transmission assets from its three investor-owned utilities, the governor noted that Southern California Edison Co. was already in agreement, but said "PG&E is taking a little longer." He added, "two, three, four weeks at the outside and we'll have PG&E worked out."

The transmission takeover would require approval by the Federal Energy Regulatory Commission, so Davis had some advice for President Bush on how to fill two vacancies on the panel. "It is my hope," he said, "that whoever the president chooses is a practical businessman or woman who lives in the real world…." Davis' own appointees to California regulatory bodies do not reflect that approach.

With or without friendly commissioners, Davis is likely to have trouble with FERC. Curt Hebert Jr., FERC's chairman, has said a state takeover of transmission facilities would be tantamount to "nationalization" and might not be in the public interest.

Davis met yesterday with Energy Secretary Spencer Abraham in an effort to get support for the transmission takeover. Though a spokeswoman said the meeting was "very productive," it failed to produce support for Davis' plan.

-- Martin Thompson (, February 28, 2001


Davis is hard to figure. He seems to be a split personality. He goes for academia in a big way, when filling spots on his regulatory boards, then seems to criticize their decisions as impractical. This makes no sense. Then, why does he appoint these eggheads in the first place?

-- Chance (, February 28, 2001.

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