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.

Outlining plans he had talked about earlier in the month, thegovernor left the capital for the neighboring University ofCalifornia campus to unveil his self-proclaimed “most ambitiousrenewable energy program in the nation,” emphasizing distributedgeneration and cogeneration projects.

In the meantime, the gas supply side increasingly is gainingattention because prices and supply availability will determine howrealistic many of distributed or cogeneration projects turn out tobe. The California Public Utilities Commission will consideremergency supply requests from Pacific Gas and Electric Co. todayand Friday as part of business meetings and hearings scheduledearlier.

The CPUC at today’s business session will consider an emergencyrequest from PG&E’s utility to extend its recently implementedsupply securitization program beyond its 90-day limits to a fullyear’s time (365 days). The regulators also have on their agendaPG&E’s request for emergency supplies from Southern CaliforniaGas Co. to serve some of the northern California’s utility’s coregas customers. SoCalGas strongly opposes the request.

It is likely that the CPUC will not rule on the latter requesttoday, according to a PG&E spokeswoman, because regulators setaside hearings on Friday and asked the utility to provide witnessesregarding the request for emergency supplies. Regulators havequestions about how the neighboring utilities share equipment andworkers in the face of natural disasters and other emergencies.

PG&E’s gas utility operations run the risk of using upsupplies by the end of this month, the spokeswoman said. Elevensuppliers signed on to the new securitization deals, accounting forabout 40% of the utility’s average daily demand, and all but two ofits other 30 to 40 suppliers are continuing to provide gas, shesaid. The company is down to about 6 Bcf in storage.

Meanwhile, the governor’s package will offer various incentivesto additional gas-fired and renewable technologies:

Davis used the University of California Medical Center’scogeneration plant as an example of the kind of self-sufficient,environmentally clean power plants he wants to promote as a way outof the state’s nagging energy crisis.

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