By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
We can add energy deregulation to abortion as topics Republican gubernatorial nominee Bill Simon Jr. doesn’t want to talk about.
Appearing at a Republican unity event last week in the capital, Simon and Republican national chairman Marc Racicot, a former Montana governor, began by complaining about the attention being paid to Simon‘s anti-choice stance on abortion. ”I’m the candidate of ideas,“ declared Simon. ”We need to focus on the big issues facing the state.“
The Weekly invited Simon to do just that, choosing one of the biggest issues and most prominent ideas he has pushed, energy deregulation. ”Mr. Simon, you‘re campaigning this week with a lobbyist for Enron, Governor Racicot, and you have championed deregulation. Will deregulation continue to be a centerpiece of your campaign?“
”I have a three-part approach on that,“ replied the novice candidate, who proceeded to unspool two parts -- an attack on Democratic Governor Gray Davis’ controversial long-term power contracts and support for building new power plants -- without ever answering the question about deregulation.
”Next question,“ he said, pointing to someone else.
The Weekly returned to the matter at hand. ”Mr. Simon, what about deregulation? Where is it in your campaign?“ Reluctantly answering, Simon again dodged. ”Well, my short-term focus must be on the contracts.“
Racicot took the microphone a few minutes later. ”For the record,“ the Republican national chairman intoned. ”I want to clear up a major inaccuracy. I was not a lobbyist for Enron. I certainly worked for a law firm that provided legal representation for them.“ The press conference ended soon after. The Weekly caught up with Racicot as he made his way through the lobby of the Senator Hotel to a private Simon fund-raiser.
In what way were you not an Enron lobbyist, governor, since you were registered as one? ”Well, yes,“ replied Racicot, smiling hesitantly. ”Under federal law I was a lobbyist. I just wanted to clarify.“ Clarify what? ”I mean, I wasn‘t their top lobbyist.“
Davis shook his head in amusement when asked to comment on Simon’s deregulation dance. ”I‘m working to re-regulate the market. We successfully pushed for price caps and created the Power Authority to help keep the market honest. Whether he wants to talk about it or not, Simon is against price caps and wants to kill the Power Authority.“
Simon’s deregulation dodge was just an early skirmish in the re-emergence of energy in the campaign. The round-the-clock crisis of last year appears to be over, but problems remain, in many forms. On balance, the news has definitely improved for the embattled Davis, with the massive bond issue needed to repay the state‘s general fund for the emergency power-buying of last year seemingly set to move forward later this year.
But the Weekly has learned that efforts by state officials to rework the state’s much-criticized $44 billion portfolio of long-term power contracts -- touted by the governor in an interview earlier this month -- have hit a new snag.
The supposedly stellar Calpine Corp., pride of the California-based merchant power business and a onetime exemplar on Wall Street that the Davis administration praised last year as a ”white hat“ power generator, has told state officials seeking to rework its rich contracts that it will go bankrupt unless the state increases its payments for power-contracts purchases over the next two years by up to $300 million. Calpine officials claim that, once the supposed bankruptcy is staved off by state funds, contract payments can be reduced in future years. This secret attempt at a backdoor bailout could greatly complicate an effort that Davis spoke of proudly earlier in the month.
”We are close to reworking a multi-billion-dollar reduction in several contracts,“ he told the Weekly. ”We‘ve been doing a lot of negotiating with the companies. Twenty-five percent of what we’re getting is serious, 25 percent is in-between, 50 percent is take a flying you-know-what.“
”FERC [the Federal Energy Regulatory Commission] should help with investigations,“ bringing more pressure to bear on the companies to accept prices more in line with the market, Davis said. The contracts have been widely criticized for having been made under duress, in a state of panic near the peak of the market last year.
In addition to bringing down the costs, Davis said he wants to reverse the Green Blackout inherent in the power contracts, in which almost all the new electric power is to be generated by natural gas--fired plants to the exclusion of power generated by renewable sources such as wind, solar, geothermal and biomass. But he disputes estimates that the contracts have left the state with an oversupply of power, which would make new renewable power unnecessary.
”One of the effects of the collapse of Enron is the drying up of capital for some new central station power plant projects,“ the governor notes. ”We‘re already seeing projects that we had anticipated being in the mix evaporating away. So there will be room for a major increase in renewable energy use in California.“
So much so that Davis is backing a bill by Senator Byron Sher (D--Palo Alto), a Renewable Portfolio Standard that would require that 20 percent of California’s electric power be generated by renewable sources by 2010, which would roughly double the state‘s use of renewables and put California well ahead of any other state in shifting to green energy.