California Lawmaker, media decry secrecy of power contracts : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Davis pressed for energy details: Lawmaker, media decry secrecy of power contracts By John Hill Bee Capitol Bureau (Published March 13, 2001) Pressure mounted Monday on Gov. Gray Davis to disclose details of the state's dealings in the electricity market as a Republican assemblyman threatened to sue and several newspapers sent a letter asking the state to lay out its reasons for denying public records requests.

"This is critical information," Assemblyman Tony Strickland, R-Thousand Oaks, said at a news conference.

But despite mounting calls from the media, consumer groups and some legislators for an end to the secrecy, the Governor's Office held firm to its plan to not release details for six months.

The administration argues that electricity generators that knew what the state was willing to pay for power would demand at least that much.

"The more information we divulge, the higher the rates will be for California consumers," said Steve Maviglio, a spokesman for Davis. "It's like showing your hand in the middle of a card game."

Strickland said he's not buying that argument.

"As a legislator, six months simply will not do," Strickland said. "We're asked to vote on a budget every year, and how can we vote on a budget when we don't know exactly what the governor's been spending of the people's money?"

Here's what the Governor's Office has disclosed: The state has signed, or is close to signing, 40 long-term contracts for purchasing power. The state took over responsibility for electricity purchases when beleaguered investor-owned utilities could no longer do it. The state hopes long-term contracts will rein in runaway spot market prices.

The contracts are for an average price of $69 per megawatt-hour for about 9,000 megawatts. The contracts are for as long as 20 years, but many of them are for shorter terms -- three, five or 10 years, Maviglio confirmed Monday.

The Governor's Office has not disclosed how much the state is paying under individual contracts, the identities of the suppliers, how long each contract lasts and the circumstances under which contracts could be changed. Davis also initially did not announce the total amount of state funds committed under the contract agreements; aides now confirm the figure tops $40 billion.

The Governor's Office believes its position is supported by the state Public Records Act -- specifically, a provision of the law that allows documents to be withheld if the public interest in keeping them secret would outweigh the public interest in disclosing them.

In denying a request for records from The Bee, the state Department of Water Resources, the agency buying the power, also cited attorney-client privilege and exemptions to the Public Records Act for correspondence to the governor and anything that reflects the "deliberative process" of officials.

The state plans to follow the example of New York, which also is in the power business, in keeping the details of contracts secret for six months.

Allison Hayward, an attorney for Strickland, said Monday that Davis will have the burden of showing how disclosing contract details would harm the public interest.

"Speculative harm is simply not enough," she said. "The state has to come up with facts, with something tangible to demonstrate there's a public interest in non-disclosure, because the default rule is that you disclose."

Hayward rejected the idea that the state's bargaining position would be weakened.

"There are all sorts of bargaining positions that the state holds on any given day," she said.

But withholding information to prevent a competitive disadvantage "is not how we do public contracts and the public's business in the state of California."

In response to Strickland's first request for records on March 1, the Department of Finance responded that it didn't have the information.

Strickland said he found that surprising.

"Apparently in the Gray Davis administration, not only does the right hand not know what the left hand is doing, but even the left hand doesn't know what the left hand is doing," Strickland said.

Strickland said he is making a new request to three other state agencies. If he hasn't received the information in 10 days, Strickland said, "if it has to go to court, I'm prepared to do that."

But Maviglio dismissed Strickland's threat.

"Our legal department and the attorney general believe we'd be victorious against any frivolous lawsuit brought by Mr. Strickland," he said.

State Sen. Steve Peace, D-El Cajon, chairman of the Senate Budget and Fiscal Review Committee, said he supported Davis' position despite his distaste for secrecy.

Davis has been forced into secrecy by a market gone awry when the Federal Energy Regulatory Commission failed to cap wholesale electricity prices, Peace said.

"I hate this more than anybody," he said. "I don't like being in the dark. But it's because FERC has required it to be this way."

Davis on Monday made a revised pitch to federal regulators on behalf of price controls on wholesale electricity generators.

Joining Govs. John Kitzhaber of Oregon and Gary Locke of Washington state, Davis asked the FERC to impose a temporary "cost-based" cap on generators selling electricity in the Western states in the higher-priced spot market. Under the proposal, generators would be allowed to collect their costs, plus a profit of approximately $25 per megawatt-hour.

The three governors said electricity shortages are likely to worsen in the summer, allowing generators to receive "unjust and unreasonable" charges for power. The commission has rejected previous requests to adopt price caps.

Several newspapers, including The Bee, sent a letter Monday to Davis asking for a fuller explanation of why requests for public records have been denied. The letter cites several cases in which courts ruled that the public's need to be informed outweighed business privacy interests or other reasons for withholding information.

-- Martin Thompson (, March 13, 2001

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