With the weather heating up and power alerts being declared, Monday marked another day of heavy duty political rallies and advertising blitzes in California even though this is an off year for elections as Gov. Gray Davis and Southern California Edison Co. sought to inject a grass root’s element to their separate conservation and state legislative campaigns.

Seeking to save 5,000 MW of peak-demand this summer, Davis orchestrated an energy conservation rally at a downtown Los Angeles high-rise office building, announcing a public-private partnership among commercial real estate building operators, landlords and janitors, a service employees union and a plan for the state to reduce commercial office buildings’ energy conservation up to 20% this summer during peak-demand times.

While the governor was making another photo-op appearance, his spokespeople in Sacramento put out a statement by the governor questioning the news reports last week quoting Vice President Dick Cheney’s adamant opposition to wholesale price caps, regardless of the current situation’s impact on the state and national economies.

“I found it difficult to believe that he was adamantly opposed to any caps on runaway electricity prices even if that opposition threatens California’s economy and our nation’s economy,” Gov. Davis’s prepared statement said. “I hope that’s not what he meant, but I challenge the media to ask him about this and whether his statements represent President Bush’s position as well. It would be a grave mistake for the Bush Administration to allow rigid ideology to stand in the way of doing what’s best for our country.”

The governor then went on to blast Republican state legislators, who make up a minority of both houses, for so far blocking legislation needed to fund the state’s energy buying and allow the state to move forward with an initial $4.5 billion “bridge financing” package of state bonds, previously scheduled to begin today (Tuesday). “Their decision to play partisan politics with the energy crisis seriously complicates the budget process and could ultimately threaten our economy,” Davis said in a prepared statement.

Edison began a $3 million advertising campaign last weekend with 60-second TV-radio spot announcements running the next two weeks statewide, promoting the need for the legislature to validate the memorandum of understanding (MOU) between the utility and Davis leading to the sale of Edison transmission assets to the state in return for a way out of its financial quagmire that will end in bankruptcy otherwise. Edison has gathered various consumer, community and labor union activists supporting its information campaign. Edison shareholders and the sponsoring groups are paying for the ads.

Elsewhere, other state officials were carrying out the less glamorous aspects of the state’s stubborn electricity crisis with the start of a whirlwind series of public comment sessions on the pending 30-40% electric rate increase large residential and business users of Edison and Pacific Gas and Electric Co.

In addition, the first signs of summer-like temperatures around the southwest and the inland parts of the state caused California’s transmission grid operator, Cal-ISO, Monday to scramble for supplies and issue a Stage One and Two power alerts early in the day. Among the reasons for the reserves dipping below 7% today, Cal-ISO said were decreased imports due to the increase in air-conditioning loads out-of-state, 12,500 MW of capacity idled for planned or unplanned maintenance; four nuclear plants in the western U.S. out of serve for refueling and “an additional 3,000 MW of qualifying facility (QF) supplies unavailable due to continuing financial concerns.”

Last week California’s two major electric utilities, Edison and PG&E, disputed the figures for the QFs out of service, claiming the number was much lower — under 800 MW. Cal-ISO continued to stress the need for stepped up conservation, and expected demand yesterday to peak at more than 33,000 MW by 3 p.m. (PST). Similar circumstances are expected today (Tuesday), which will be “tight, but manageable,” according to Jim McIntosh, Cal-ISO operations director.

California lost 1,000 MW from BC Hydro suddenly Monday morning, prompting power alerts, but slightly before noon, the state transmission grid operator, Cal-ISO, regained the supplies and a larger-than-expected conservation effort, said McIntosh, who thought in mid-afternoon that rolling blackouts and a Stage Three alert could be avoided, although he said early in the afternoon the state “came within five minutes” of calling a three-level alert, the most serious. More than 1,000 MW coming back from Canadian sources saved the day.

Part of Monday’s problem was not weather-related but linked to a Southern California Gas Co. planned transmission pipeline outage in Ventura County 60 miles northwest of Los Angeles that knocked out about 1,900 MW of capacity Sunday, and kept at least 750 MW offline early on Monday.

“The repair work has been completed,” McIntosh said. “It was a 24-hour job that involved shutting down the plant (two 750-MW units and four smaller ones), purging the gas line, putting in a 60-foot length of crossover pipe in an area where they are going to do construction, and then, weld, purge and re-gas the pipe. They had hoped to have both of the larger units on for this morning’s peak, but only one of them made it.”

Together with the already announced meetings Davis has with small and large power producers Wednesday and Thursday, the latest “media event” by the governor reinforced his now months-old efforts to get a deal with Edison nailed down and to get extraordinary conservation efforts kick-started in an $850 million that includes sizable potential rebates for businesses and households that cut their consumption this summer.

Gov. Davis called the latest effort “an unprecedented public-private partnership,” involving the commercial building owner/operators in the state, several major realtor/developers and the Service Employees International Union in the state that represents many of the janitors in major office structures. He estimated that the partnership is expected to save 23 mmkWh each month.

“The electricity crisis in California has already forced one major utility into bankruptcy,” said Pat Lavin, business manager for the Electrical Workers Local 47 on one of the Edison-sponsored TV spots. “While bankruptcy courts tend to favor creditors, utility customers could suffer.

“Gov. Davis has a plan to strengthen utilities. This would ensure proper maintenance, protect jobs and help secure the state’s economy. Positive action will get the state out of the business of buying electricity and again enable utilities to provide the level of service that customers have a right to expect.”

Edison’s campaign is designed to underscore its contention that another utility bankruptcy in the state is the “worst possible solution” and would threaten the state’s already-reeling economy.

Edison utility CEO Stephen Frank said the governor and the utility are “running out of time” and only rapid passage of needed state laws will implement the MOU and allow Edison to restore its creditworthiness and financial health. “In turn, it will help stabilize the economy and ensure system and service reliability for our customers,” Frank said.

A similar deal between the state and San Diego Gas and Electric Co. also is waiting in the wings, and could come to fruition later this week, but in the meantime the Davis Administration is promoting its latest long-term power contract a 10-year, $7 billion deal with SDG&E’s affiliate Sempra Energy Resources for up to 1,900 MW over the long haul, and 250 MW beginning June 1 at prices “one-third to one-half” the average spot prices now being paid by the state water resources department (DWR).

“This transaction provides DWR the combination of establishing known, fixed costs to meet part of our summer 2001 energy needs, displacing spot market purchases and providing favorably priced output from a fleet of efficient new plants in the future,” said Raymond Hart, DWR’s deputy director in charge of the state’s power purchasing.

Sempra Energy’s Donald Felsinger, group president of global enterprises, said the deal is a “substantial commitment” to invest in California’s energy infrastructure, and that in the next three years Sempra should bring on line more than 3,000 MW of additional power in the West, most of which would be targeted at the California market. Sempra has existing or proposed plants in Nevada, Arizona and northern Baja in Mexico, in addition to a new plant in California’s central valley around Bakersfield.

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