Steps

Conceding that federal regulators belatedly have taken steps to offer wholesale power price relief, California Gov. Gray Davis Monday announced an agreement with Sempra Energy’s San Diego Gas and Electric Co. that wipes out a $740 million debt the utility was facing for uncovered wholesale electricity costs. The state will buy SDG&E’s transmission lines for just under $1 billion, or 2.3 times book value, and commit to provide all of its native generation to the state on a cost-based, below-market basis.

California regulators Tuesday took several steps to implement higher electricity rates and stepped up load management, assure payment to the state’s wholesale power buying program and examine whether the parent corporations for the three largest investor-owned utilities have done enough to assure their financial viability during the persistent crisis surrounding supplies and prices.

FERC yesterday took the first step towards developing a largeregional transmission organization (RTO) in the southeasternsection of the nation.

Houston-based independent KCS Energy Inc. is slowly emergingfrom bankruptcy, completing the necessary steps to reorganize,announcing it has signed a production agreement with Enron NorthAmerica Corp. to sell about 17.3% of its oil and gas reserves overthe next five years for $176 million. KCS held nearly 277 Bcfe ofreserves in 2000.

Rusty Braziel, the founder of electronic trader Altra EnergyTechnologies Inc. based in Houston, stepped down as chairmanyesterday to oversee the launch of his new e-markets consulting andsoftware company, Netrana. Although Braziel will remain on Altra’sboard of directors, CEO Paul Bourke assumes the chairman’s role andwill now set growth and operating strategies.

As Pacific Gas & Electric Co. announced Friday it wasdefaulting on payments to power generators, the state of Californiawas issuing an RFP to bankers for a plan to issue bonds to raise upto $10 billion to finance power purchases for the PG&E utilityand SoCal Edison. The banks have until Wednesday to respond.

Taking steps to ensure Nevada does not fall prey to the”financial and operational chaos” of the California energy market,Sierra Pacific Resources introduced an emergency package ofproposed long-term contracts, tiered price increases, low incomeassistance and conservation programs to stabilize energy markets inNevada.

Taking steps to ensure Nevada does not fall prey to the”financial and operational chaos” of the California energy market,Sierra Pacific Resources introduced an emergency package ofproposed long-term contracts, tiered price increases, low incomeassistance and conservation programs to stabilize energy markets inNevada.

A more comprehensive legislative proposal emerged in CaliforniaMonday designed to stabilize power prices and save the state’s twoprincipal investor-owned utilities from bankruptcy. But it camewith what would be a high price for deregulation advocates, namelythe state taking over the utilities’ hydroelectric generation andtransmission assets. In Washington DC, a Senate bill was introducedthat would give the Department of Energy (DOE) the power to setregional price caps on bulk power transactions in western states.