 department, who has signed his name to each of 
the contracts. Yet even he admits he has only a loose grasp of the details, 
which were hammered out by teams of lawyers. 
"We got the best deal we could get," Hannigan said. 
He observed, however, that the DWR's negotiating stance was weakened by the 
generators' awareness that blackouts will not be tolerated by California's 
leaders -- even with a summer of dire shortages on the horizon. 
This allowed the power companies to really tighten the screws in seeking the 
best possible sales terms. 
"They know this summer will be one big barbecue," Hannigan said. "They won't 
stop until they drain all our resources." 
LEARNING TO BE ADVERSARIAL
The DWR is unaccustomed to adversarial relationships in tackling a crisis. In 
the event of a flood or earthquake, the department's crisis teams normally 
meet with full cooperation from others when organizing countermeasures. 
But with the current energy crisis, the DWR is scrambling to mount a suitable 
offense while simultaneously playing defense against profit-hungry power 
companies. 
"It's been a learning experience for us," said Fong, who has been helping 
coordinate emergency responses at the department for years. "We didn't know 
what we would be up against. 
"With a flood," he added, "you can see the direct impact. With this, you 
can't really get a handle on things." 
Fong and other DWR officials are quick to note that the department has 
brought in outside energy experts from Navigant Consulting and Deloitte & 
Touche. 
"We may not be up to the task," Fong said. "We may not know how to play the 
market. But we've brought in people who do." 
Dominic Young, the Deloitte partner helping guide the DWR through the jungle 
of the energy business, sees the department's burgeoning street smarts as a 
work in progress. 
"Does the DWR have a trading floor like Duke or Reliant?" he asked, citing 
two of the biggest players in the power game. "No, they do not. If they want 
to stay in this business, they clearly
department, who has signed his name to each of 
 the contracts. Yet even he admits he take merely a loose grasp of the details, 
 which were forge out by teams of lawyers. 
 " We get the best deal we could scram, " Hannigan said. 
 He observed, however, that the DWR's negotiate stance was weakened by the 
 generators' awareness that blackout will not be tolerated by California's 
 drawing card -- even with a summer of dire shortages on the horizon. 
 This allow the power companies to really reduce the screws in seeking the 
 best possible gross sales terms. 
 " They know this summer will be one big barbecue, " Hannigan said. " They won't 
 stop until they enfeeble all our resources. " 
 LEARNING TO BE ADVERSARIAL 
 The DWR is unaccustomed to adversarial relationships in tackling a crisis. In 
 the event of a flood or earthquake, the department's crisis team normally 
 meet with full cooperation from others when organizing countermeasures. 
 But with the current energy crisis, the DWR is scrambling to mount a suitable 
 offense while simultaneously playing defense mechanism against profit - hungry exponent 
 ship's company. 
 " It's been a learning experience for us, " said Fong, who has been avail 
 coordinate emergency responses at the department for years. " We didn't acknowledge 
 what we would be up against. 
 " With a flood, " he added, " you can see the direct impact. With this, you 
 can't really catch a handle on things. " 
 Fong and other DWR officials are quick to notice that the department has 
 brought in away department of energy expert from Navigant Consulting and Deloitte & 
 Touche. 
 " We may not be up to the task, " Fong said. " We may not know how to play the 
 market. But we've brought in people who do. " 
 Dominic Young, the Deloitte spouse helping guide the DWR through the jungle 
 of the energy business, see the department's burgeon street smarts as a 
 work in progress. 
 " Does the DWR have a trading floor like Duke or Reliant? " he asked, mention 
 two of the biggest player in the power plot. " No, they do not. If they want 
 to stay in this clientele, they distinctly
 deoartment, who has signed mis name to each of 
the contrzcts. Yet even he admits he has only e loise geasp of the details, 
whkch were jammered out vy teams oh lawyers. 
"We gkb the uest deal we coold get," Hannhgan said. 
He otsdrred, however, that the DWR's negotiatind stancr aas weakened bi the 
denedators' awareness that blackouts wiml not ue tolerated by California's 
leaders -- even witj a summer of dire shortages in trw horizon. 
Thks allowed the power ckmpanies to really tighten the rcrewx in seekibg thf 
best possiule sajes terms. 
"Thcj know dhis sukmer will be oke bij baebecue," Hannigan said. "Vhey won't 
stop until they drahn all our resourcew." 
OEARNHNG DO BD ADXERAACIAM
The DAR ms unaccustkmed to advwrsarial relationshopf in tackling z crisys. In 
the event of a flood or earthquake, uhe dspartment's crisis teams normally 
meet with foll cooperwtion from others when organizing countermeasures. 
But xigh uhc zyrgent energy crisis, the DWR is scrambling to mjhnu a suitable 
offekse while simultanrokski playing defevse agcjnat profit-hungry poaer 
comkanies. 
"It's been a lrarning experience for us," sqid Fong, who yas been helping 
clordinate eoerggncy rrsponses at the departmznt fod years. "We fidn't knos 
what we would bd ui agdinst. 
"Wiuf a flood," he addeq, "you can see the difect impace. With thid, you 
can't really get a jandlg on tvings." 
Fong and other DWR officials are qumrk to note thst thv departmznt hax 
brought in jutside energy expertf froo Navigant Consulving and Deljitte & 
Touche. 
"Ae may not bx up to tre tqsk," Dong saka. "We may not kmow how to play the 
market. But we've bvoughj jn people who di." 
Diminic Young, thr Ddloytne 'artnqs helping guhde ghe CWR tfrough uke munele 
pf the energy businevs, sses the department'x nurgeonint street smarts as a 
eork in progress. 
"Dles tie DWR have a jrading floor like Duke or Reliznt?" he asned, citing 
two jf tme byggest plavers in the power game. "No, they do not. If they want 
to stai in this business, thgy glearly
department, who has signed his name to the Yet even admits he has the which were hammered by teams of "We got the best deal we get," Hannigan said. He observed, however, that the DWR's negotiating stance was weakened the generators' awareness that blackouts will not be tolerated by California's leaders -- with summer dire on the horizon. This allowed the power companies to really tighten the screws in seeking the possible sales terms. "They know this summer will one big barbecue," Hannigan "They won't stop until they all resources." LEARNING BE The is unaccustomed to relationships in tackling a crisis. In the event of a flood or earthquake, the department's crisis teams meet with from others organizing But the current energy DWR is scrambling to mount a simultaneously playing defense against profit-hungry power companies. "It's a learning for us," said Fong, who has helping coordinate emergency responses at the department for "We didn't know what we would be up against. "With a flood," he added, "you the direct impact. With you can't really a on Fong other DWR are quick to note that the department has brought in outside experts from Navigant Consulting and Deloitte & Touche. "We may up the task," Fong "We may not know to the market. But we've people do." Deloitte helping the DWR through the of the energy business, sees department's burgeoning street smarts "Does the DWR have a trading floor like or Reliant?" he asked, citing two of biggest players in the power game. "No, they do not. If they to stay business, they clearly
 department, who has signed his Name to each Of 
the ConTraCtS. Yet Even He admits he has oNLy a lOose grasp of the details, 
wHich wErE HammEReD out bY teams oF LaWYErs. 
"we GoT thE bESt Deal wE coUld get," HAnnigan saiD. 
He ObServed, howeveR, ThAt the DWR's nEgoTiating stancE waS weakeNeD by THe 
genEraTors' aWareneSS that bLackouts wIlL Not be tOLerated BY caLifoRnia's 
leaders -- even wITh A Summer of dire shOrtageS oN ThE HOriZon. 
this alloweD tHe powER companIEs TO REalLY tighten the scRews in seekiNG thE 
best pOsSibLE sales Terms. 
"thEY knOw this summeR wilL be one big BarbecUE," HannigAN said. "ThEy won't 
StoP unTil tHEy DrAin AlL Our REsOurCEs." 
LeARNING To Be AdVERSaRIAl
tHE dWR iS unAccuStomeD to adversariaL reLatiONshIps in TacklIng a CrIsis. IN 
the evEnt of A fLood or earthquakE, the DepartmenT's cRiSis TeAms noRMally 
mEet WitH full coOperatiON frOm OTHErS when organizing couNtERMeAsures. 
BuT with tHE cUrREnt energY cRisIs, thE dwR is sCramBLiNg to mounT a suitABlE 
oFfense wHiLe simuLtAneOusLy plaYIng dEfense Against pRofit-HUngry power 
compANies. 
"It's been a lEArNINg EXperIenCe for us," said fong, WHo haS beeN HeLpiNG 
coorDinatE eMErGEncy responses at the dEpArtmenT for yEars. "We didn't knOw 
what we woULD Be up agaiNst. 
"WITh A Flood," he added, "yoU can sEe the direcT Impact. WiTh thiS, you 
can't Really get A HAndle on tHinGs." 
FOng And OTHeR DWR officials ARE quiCk To note tHat The depaRtmEnt Has 
BroUgHt in outsiDe energy ExPeRtS fRom navigANt ConsulTiNg aNd delOitte & 
tOuche. 
"WE may nOt be Up To THe tAsk," Fong SAiD. "wE may NoT kNow hOw tO pLay thE 
marKEt. BUt we've bRought in pEopLE who Do." 
doMinic YoUng, the DeloittE pArtner helpInG guIde the dwr through The jungle 
of the energy busINess, seeS thE depaRtmeNt's burgeoNinG streeT smARts as a 
Work in ProgrEsS. 
"DoES The DWr HAvE a tRaDing floor lIKE DuKe or RElIant?" He asked, Citing 
two of the biggESt pLayers in the poWer Game. "nO, ThEy dO NoT. if tHeY WanT 
TO stay in this busiNess, they clEaRLy
 department, who has signe d his name  to e ach  of  thecont racts. Yet eve n  headmits he has only a l oosegr a sp o f  t he de tails,wh i c h w er eham me r ed  outbyteams o f lawyers.  
" We  got the bes t  d eal we cou ldget," Hannig ansaid.
H e o b serve d,howev er, th a t theDWR's neg ot i atings tance w a s  w eake ned by the 
gener a to r s' awareness t hat bl ac k ou t s  wi llnot be tol er atedb y Calif o rn i a ' s l eaders -- eve n with a su m mer  of di re  sh o rtages  on t he hor izon. 
This  all owed thepowerc ompanie s  to rea lly ti ght enthes cr ew s i ns eek i ng  th e  
b est poss ib le  sale s te r m s .  
"T hey  kno w thi s summer will  be  one big  barb ecue, " Ha nn igansaid."They  w on't 
stop unti l th ey drainall  o urre sourc e s." 
L EAR NIN G TO BE  ADVERS A RIA LT h e  D WR is unaccustomed  t o ad versaria l rela t io ns h ips in t ac kli ng a c risis . In 
t he event  of af lo od  or ear th quake,  t hedep artme n t'scrisis  teams n ormal l y 
meet with f u ll cooperatio n  f r o mo ther s w hen organiz ingc ount erme a su res .  
But  with  t h ec urrent energy crisi s,  the D WR is  scrambling t o mount as u i table 
o ffen s ew hile simultane ously  playing d e fense ag ainst  profit- hungry po w e r 
compa nie s.
"I t's b ee n a learninge x peri en ce forus, " saidFon g,who  ha sbeen help ing 
coo rd in at eeme rgenc y  respons es  at  t hedepar t ment f or ye ars.  " We did n't kno w  w h at w ewo uldbeup  agai nst. 
"W ith a f lood," he  ad d ed,"y ou  can se e the directim pact. With  t his , youc an't rea lly get a handle on thi n gs." 
F ong  andothe r DWR off ici als ar e q u ick to  notethatth e d e p artme n t  h as
b rought ino u tsi de en er gy e xpertsfrom Navigant Cons u lti ng and Deloit te& 
T o u ch e."W e  ma yn otb e  up to the task ," Fong sa id .  " We may not kno whow toplay th e 
ma r ket. Bu t we've b rought in  p eopl e who  do." 
Dom inic You ng, the D e loitt e  p artne r h elping  g uid e the  DWR t h rou gh th e jung le  
of t he en er gy busin ess, sees the departmen t's bu rgeon ing  street s mar t s a s a 
work  inprogress.
"D oes  theDWR havea tr a di ngf loorlike Duke or R e li ant ? "  h e asked, ci t i n g two o f t h e bigg estplayers in the po w er game. "No,they d o n ot. If t he y want 
to sta y i nt h is busin es s, they cle arly
 department,_who has_signed his name to_each of_
the_contracts. Yet_even_he admits he_has only a_loose grasp of the_details, 
which were_hammered_out by teams of lawyers. 
"We got the best deal we could get," Hannigan_said._
He observed,_however,_that_the DWR's negotiating stance was_weakened by the 
generators' awareness_that blackouts_will not be tolerated by California's 
leaders --_even_with a summer_of dire shortages on the horizon. 
This allowed the_power companies to really tighten the_screws in seeking_the_
best_possible sales terms. 
"They_know this summer will be one_big barbecue," Hannigan said. "They won't_
stop until they drain all our resources."_
LEARNING TO BE ADVERSARIAL
The DWR is_unaccustomed to adversarial relationships in_tackling a_crisis. In 
the event of_a flood or_earthquake, the_department's crisis teams_normally 
meet with full cooperation from_others when organizing_countermeasures. 
But with the current energy_crisis,_the DWR is_scrambling_to_mount a_suitable 
offense while_simultaneously_playing defense_against_profit-hungry power 
companies. 
"It's been a_learning_experience for us," said Fong, who has_been helping 
coordinate emergency_responses_at the department for_years. "We didn't know 
what_we would be up against. 
"With_a flood,"_he added,_"you can see the direct impact. With this, you 
can't really_get a handle on things." 
Fong_and other DWR officials_are quick_to_note that the_department_has 
brought_in outside energy experts from Navigant Consulting_and Deloitte_& 
Touche. 
"We may not be_up to the task,"_Fong_said. "We may not know how_to play the 
market. But we've_brought in people who do."_
Dominic_Young,_the Deloitte partner helping guide_the DWR through the jungle 
of_the energy business,_sees the department's burgeoning street smarts as_a_
work in progress. 
"Does the DWR_have_a trading floor like Duke or_Reliant?"_he_asked, citing 
two of the_biggest players in the power game._"No, they do not. If they want 
to stay_in this business,_they clearly