Legislators

California regulators postponed a growing backlog of pendingactions in deference to ongoing legislative efforts to develop acomprehensive solution to the state’s energy woes. Regulatorsyesterday put off action on an allocation of utility revenues tothe state water resources department, which is buying electricityfor consumers and attempting to sign long-term power contracts.

State legislators debated a “cash infusion” for the financiallytroubled private-sector utilities yesterday in exchange for statetakeover of their transmission and generation assets. AndCalifornia Gov. Gray Davis on Wednesday highlighted a package ofproposed bills to provide $120 million in cash incentives and a 50%tax break to renewable energy and distributed generation developersas a means of fulfilling his promise to add 20,000 MW over the nextthree years.

In what would be described in meteorological terms as a blizzardof proposals, California Gov. Gray Davis and his Democraticmajority state Assembly leaders Thursday announced multiple newlaws to push accelerated generation and conservation efforts thatare envisioned to unfold at a frenetic pace in the weeks and monthsahead.

California legislators Thursday passed a new law with a $10billion price tag authorizing the state to sign long-termelectricity contracts and also stabilize the financially troubledtwo largest investor-owned utilities. The governor hurried to signthe measure yesterday afternoon before departing to attend aWestern Governors’ Association energy roundtable with the top BushAdministration Friday in Portland, OR.

The good news is the lights are still on in California. But WallStreet will be watching closely this week as California legislatorson one coast and the Clinton Administration on the other attempt tostop the train wreck in the California power market and rescue thetraditional “widow and orphans” investments in PG&E Corp. andEdison International from the junk pile.

A new study by the INGAA Foundation on gas infrastructurerequirements warns that the government’s current environmentalgoals may not be reached if regulators and legislators don’t startmaking more of an effort to ensure the required gas infrastructurecan be built to serve a 30 Tcf market by 2010.

President Clinton last week ordered the Department of Energy totrade crude oil from the Strategic Petroleum Reserve for twomillion barrels of heating oil to be stored temporarily in theNortheast as protection against fuel shortages this winter.

While only 11 states can boast of legislation requiringstatewide customer choice for gas service, a group of Michiganlegislators have recently acted to boost that total. A package ofseven bills was introduced to the state legislature last week withthe goal of totally deregulating the state’s gas industry by April2005. Rep. Mary Ann Middaugh (R-MI-MIH080), one of the package’ssponsors and chair of the energy and technology committee, said thepackage will be considered when the Michigan House returns toLansing next month.

While Congress played political football with draft electricrestructuring legislation, natural gas pipelines urged legislatorsto take a page from the history of natural gas deregulation andgive FERC enough authority to effectively oversee the nationalelectric grid.