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California and the West

Treasurer Urges Disclosure of Power Cost

Energy: Angelides warns that $10-billion bond issue to finance purchases can't be sold otherwise. Davis, who has resisted such a move, sees a chance of more blackouts.

April 05, 2001|MIGUEL BUSTILLO and DAN MORAIN | TIMES STAFF WRITERS

SACRAMENTO — State Treasurer Phil Angelides warned Wednesday that he cannot sell a record $10 billion in bonds to finance purchases of electricity unless the state reveals the price it is paying for power--something Gov. Gray Davis has refused to do.

The warning came as Davis acknowledged that his efforts to secure enough electricity to meet demand could fall short, raising the possibility of more blackouts.

"The real crunch," Davis said Wednesday, "will be in May and June and late April"--much earlier than the usual peak in August, September and early October. Angelides said he cannot secure the largest municipal bond offering in American history until Wall Street can see what California is spending on power and what it expects to spend in the future.

"You can't go to the marketplace to sell $10 billion in bonds and say, 'We don't have a public plan,' " Angelides said.

Angelides announced that he has secured $4.1 billion in short-term "bridge" financing to repay the state for power purchases until the bonds are issued. That deal remains clouded, in part by the utilities' resistance to using customer payments to repay the bonds promptly.

The governor is scheduled to give a five-minute televised address on energy at 6:05 tonight, expected to be carried by all Los Angeles television stations.

In addition to discussing the potential for more blackouts, Davis is expected to outline his efforts to expand power production, renew his call for Californians to cut electricity use and address the question of rate hikes.

"I'm certainly going to share with [Californians] the progress we've made and what we have to do together over the near term to get through this challenge," Davis told reporters. " . . . We have to accept responsibility for solving the problem. I'm going to lay out exactly how to do that."

Sensing the urgency, the Legislature spent much of Wednesday pushing forward a $1.2-billion package of conservation bills crucial to helping California escape widespread power outages during the hot season.

And in another move to boost summer supplies, the California Energy Commission approved two "peaking plants" under a new fast-track, 21-day permit process ordered by Davis.

Designed to produce power to meet sudden demand, such plants are a major part of the governor's plan to help avert blackouts this summer, and commissioners approved them unanimously. But they expressed qualms about the vague standards in place for the plants--one to be built near San Diego, the other in Palm Springs--in part because the facilities have been exempted from the usual environmental reviews.

Most experts assume that peaking plants are pressed into service only when demand for electricity is highest. But the facilities approved Wednesday are capable of operating for as much as 85% of the time.

The partnership that owns the plants--a venture between Shell Oil and an arm of engineering giant Bechtel Enterprises--is in talks to sell electricity to the state for 10 years or more. But current contracts call for the sale of 500 hours of electricity for the next three years, said John Jones, a representative of the partnership.

The company would sell the rest of its electricity on the open market, presumably at higher prices--and not necessarily in California.

Suggesting that the facilities may not fit the definition of peaking plants, outgoing Commissioner Robert Laurie called for more public disclosure about the implications of Davis' emergency order.

"They may be large; they may be small," Laurie said. "They may operate 300 hours; they may operate 8,000 hours."

Measures Focus on Cutting Consumption

The conservation bills that lawmakers addressed Wednesday--supported by environmentalists and the business community alike--represent the largest such investment in history and are designed to get Californians to cut energy consumption this summer.

The measures would provide everything from rebates for buyers of new, efficient refrigerators to free power-saving lightbulbs for poor people. All told, the measures are expected to save California roughly the amount of electricity produced by eight power plants.

Legislators had hoped to get the bills to the governor's desk by the end of this week, but some turbulence slowed the progress.

The trouble began Tuesday, when Assembly Democrats and Republicans from agricultural areas said they would not vote for the Senate bill, SB 5X, until it was amended to include programs to help agriculture. Concluding that opposition might stall the bill in the lower house, Assembly leaders agreed to the amendments, including one that protects agribusiness from blackouts.

That move infuriated the bill's author, Sen. Byron Sher (D-Stanford), and started a war of words between the houses.

"What they did and the way they did it I found a little untoward," said Senate Leader John Burton (D-San Francisco), calling the agricultural interests "greedy."

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