Both private and public sector energy titans were singled out for criticism and scrutiny by California state officials Tuesday, adding to the legal and political moves that have become increasing intertwined as summer approaches, patience wears thin and easy solutions seem more distant.

Following an assault on some of the state’s municipal utilities by Gov. Gray Davis, the state senate rules committee chairman indicated Monday he is going to subpoena eight major merchant generators along with the nation’s largest municipal utility, the Los Angeles Department of Water and Power (LADWP), and the state power-buying entity, the water resources department (DWR).

A check with three of the private sector generators — Duke, Reliant and AES — indicated they had not received subpoenas on Tuesday, and were unsure how they would react when they get them.

“I have heard that the subpoenas are on pricing and bidding information, and if they are, they will get next to zero from us, because Williams does all that for us,” said Aaron Thomas, AES’s San Francisco-based California operations manager. “Treating those materials as confidential already has been heavily treated legally at the CPUC and Cal-ISO.”

The Sacramento-based California Municipal Utilities Association (CMUA), which represents the state’s 31 munis, including LADWP, reacted angrily earlier this week to Gov. Davis’ intimation that he might seize public sector power plants if the public power utilities did not provide all of their excess capacity to the state at cost-based prices.

Criticizing the governor’s threats as making “no sense,” CMUA executive director Jerry Jordan said the state in times of power emergency alerts is confiscating public-sector utility customers’ power.

“Every time there is a rolling blackout in California, power is taken from publicly-owned consumers, who paid for reliability, and given to investor-owned utilities that have failed to provide that same security to their customers,” Jordan said. “You’re taking power from some Californians and giving it to others. I’m not sure how you respond to that other than doing all we can in conservation and everything we can to build new power plants, because we do have several new plants in the offing.”

Like the merchant power generators, some of the municipals — mostly LADWP ($180 million) — are owed more than $300 million in past-due power bills, however, unlike the private sector generators, Jordan said the munis have not been asked by the governor to take “haircuts,” or partial payments for what they are owed.

“I think that would be somewhat difficult for public agencies to agree to,” Jordan said. “With the exception of Los Angeles, almost everyone else is sometimes selling into the market, but more frequently buying out. If they agree to take less than what they are owed when they sell, do they pay less when they buy?”

The state senate listed the usual private sector suspects: Dynegy, Williams, Enron, NRG Energy, Reliant, Mirant, Duke and AES. The inclusion of LADWP and the state DWR was at the request of the ranking Republican member of the rules committee. The legislature and other state entities for some time have been asking why the DWR does not make clear how much and how it is spending state surplus funds to buy what is estimated to be more than $7 billion of bulk electricity supplies. Because of concerns expressed by the top state senate leader, John Burton, subpoenas to the two public sector entities reportedly will be held up a week.

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