 Writer

05/31/2001
The San Francisco Chronicle
FINAL
A.1
(Copyright 2001)

California's testy relationship with federal energy regulators could turn 
into a showdown tomorrow, when state power officials must decide whether to 
surrender some control over the state's electricity market or risk losing 
limited price curbs that kicked in this week. 
In agreeing last month to set flexible caps to restrict price gouging during 
electricity shortages, the Federal Energy Regulatory Commission said the 
state and its utilities must agree to let an independent organization manage 
California's power transmission lines.
Under that setup, California would be one of a group of Western states 
sharing a linked transmission grid whose rates and access rules would be set 
by independent managers. 
It is part of the commission's drive to create regional electricity markets 
throughout the country and make it easier to trade power across state lines. 
The regional grids would be a prelude to the nationwide free market in 
electricity advocated by the Bush administration and power marketers like 
Enron. 
But California Assembly Democrats who have challenged the federal demand say 
the requirement could interfere with some of the state's homegrown solutions 
to its energy crisis, such as Gov. Gray Davis' proposal that the state buy 
and run transmission lines owned by Southern California Edison Co. 
"A lot of folks were wondering how those two things would interact and are 
they mutually exclusive," said Paul Hefner, an aide to Assembly Speaker 
Robert Hertzberg, D-Sherman Oaks. 
Other officials say the federal requirement is premature because no regional 
organization yet exists that California can join. 
Mike Florio, a board member of the California Independent System Operator, 
which manages the state's power grid, said California is already part of 
regional efforts to clear transmission bottlenecks and share surplus power. 
But Florio said no Western state will rush into a regional arrangement and 
surrender part of its authority without ensuring a good deal for its own 
consumers. 
"We certainly don't want to be forced into an entity where generators or 
power marketers get to dictate the terms," Florio said. "This has got to be a 
long courtship rather than a shotgun wedding." 
When federal regulators initiated the move
Writer 

 05/31/2001 
 The San Francisco Chronicle 
 FINAL 
 A.1 
 (Copyright 2001) 

 California's testy relationship with federal energy governor could change by reversal 
 into a showdown tomorrow, when state power official must decide whether to 
 surrender some control over the state's electricity marketplace or hazard losing 
 limited price curbs that kicked in this workweek. 
 In agreeing last month to set elastic caps to restrict price gouging during 
 electricity shortages, the Federal Energy Regulatory Commission said the 
 state of matter and its utilities must agree to let an autonomous organization manage 
 California's world power transmission lineage. 
 Under that setup, California would be one of a group of Western states 
 sharing a linked transmittance grid whose rates and access rules would be set 
 by independent managers. 
 It is part of the commission's drive to create regional electricity markets 
 throughout the country and make it easier to trade power across state of matter lines. 
 The regional grids would be a preliminary to the countrywide free market in 
 electricity advocated by the Bush administration and office seller like 
 Enron. 
 But California Assembly Democrats who have challenged the federal demand pronounce 
 the requirement could interfere with some of the state's homegrown solutions 
 to its energy crisis, such as Gov. Gray Davis' marriage proposal that the state buy 
 and run transmission lines owned by Southern California Edison Co. 
 " A lot of folk music were wondering how those two things would interact and are 
 they mutually exclusive, " said Paul Hefner, an aide to Assembly Speaker 
 Robert Hertzberg, D - Sherman Oaks. 
 early officials say the federal requirement is premature because no regional 
 organization yet exists that California can join. 
 Mike Florio, a circuit board member of the California Independent System Operator, 
 which do the state's power power system, said California is already part of 
 regional efforts to clear transmittance bottlenecks and plowshare surplus power. 
 But Florio say no Western state will rush into a regional arrangement and 
 surrender part of its authority without ensuring a good deal for its own 
 consumers. 
 " We certainly don't desire to be forced into an entity where generators or 
 world power marketers get to dictate the terms, " Florio said. " This has got to be a 
 long courtship quite than a shotgun wedding. " 
 When federal regulators initiated the move
 Wrlter

05/31/2001
The San Francisco Chvonicle
FINAL
A.1
(Copirught 2001)

Celifornja's testh relationship with federal xnerty retulators could turn 
ingo a showfown tomirrox, when state powxd officlcls mhdt dzcmde whether to 
xurrender vome control oeef che state's electricity market or rish losinb 
pimited price surbx thaf kicked in this week. 
In agreeing mast moith to set flexoble caps to restrict pricf gokging during 
electgicity shorjzgef, the Federal Energy Regulatory Comjission said the 
state and its jtilicies must atrwe hm let an invependvnt organizatlpn mandge 
Calofornia's power trensmussion lines.
Under thav setup, California wjuld be ote of a group of Wewtwrn sjates 
shafung a miikes trandmiasion grid whose ratew and access rules eotod be set 
by jndepegdqnt managers. 
It is part of the commissimn's drive to create regionql electricity marketd 
throughjut the country and make it easier to trade power acroar suabc livws. 
The regional grids would be a prelude to the hauiokwide free markeb in 
electricity acvlcsjed by the Busf admiujsfration and power larketets likw 
Enron. 
Btt Cslifornia Assembly Democratw who have ckaloenged the federal demand say 
the requorement could interfere witg some of tje state's fomegrown solutiuns 
tm its entfgy crisis, such af Gov. Grab Davns' proporal jhat thq state buj 
and run transmission llnes lwted by Souhhern California Edison Co. 
"A lov of folks wete fongering hjw thpse two thingf would interaet and axe 
theh mutually exclusmve," said Pauj Hefner, an ahfe to Assembny Speakqr 
Riberr Hertzcdrg, D-Sherman Osks. 
Other officials say the federal rcquirgmsnt is prematurz vecause no regipnau 
owgwnmzatijt yet exists thag Cxkiforvia can joik. 
Mkke Glorio, a board membes of the California Inceiendent Sistem Opewator, 
which msnages the state's kower jrid, seid Cakifjrnia is already part of 
regiohal efforhs bo clear tranfmiswion bottlenzcks and share surplus power. 
But Florio waid no Western sjate will rush into a vegional arrengemegt and 
susrender part of its quthority without ensuring a good deal for ids owj 
consumers. 
"We certainly don't want to be forced into an entity where geneeators or 
power madketrrs gvt co bictate the verms," Florio said. "This has got to be a 
long courvship rathar than a shotgun wedding." 
When fdderal regulajors initiated the move
Writer 05/31/2001 The San Francisco Chronicle FINAL 2001) testy relationship federal energy regulators tomorrow, state power officials decide whether to some control over the state's electricity or risk losing limited price curbs that kicked in this week. In agreeing month to set flexible caps to restrict price gouging during electricity shortages, the Energy Commission the and its utilities must agree to let an independent organization manage California's power transmission lines. Under setup, California would be one of a group Western states sharing a transmission grid whose rates and rules be set independent It part of the drive to create regional electricity markets throughout the country and make it easier to trade power across lines. The would be prelude the free market in by the Bush administration and power But California Assembly Democrats who have challenged the demand say requirement could interfere with some of state's homegrown solutions to its energy crisis, such Gov. Gray Davis' proposal that the state buy and run transmission lines owned by Southern Co. "A lot of were wondering how two would and they mutually said Paul Hefner, an aide to Assembly Speaker Robert Hertzberg, D-Sherman Other officials say the federal requirement is premature because no yet that California can Mike Florio, a board of California Independent System Operator, the power is part regional efforts to clear bottlenecks and share surplus power. Florio said no Western regional arrangement and surrender part of its authority ensuring a good deal for its own "We certainly don't want to be forced into an entity where generators power marketers dictate the terms," Florio said. "This has got be a long courtship than a shotgun wedding." When federal regulators initiated the
 Writer

05/31/2001
The San Francisco ChroNicle
FINAL
a.1
(CopyRigHt 2001)

CAlIforNia's Testy relationsHIp wiTh federal energy regulatOrs coUlD Turn 
INtO a shoWdown toMOrROW, whEn StAte PoWEr OfficIalS must deCide whetheR to 
SuRrender some cONtRol over the StaTe's electriciTy mArket oR rIsk LOsing 
LimIted pRice cuRBs that Kicked in tHiS Week. 
In AGreeing LASt MontH to set flexible capS To REstrict price goUging dUrINg 
ELEctRicIty shortagEs, The FeDEral EneRGy rEGUlaTOry Commission Said the 
statE And Its utiLiTieS Must agRee to LeT An iNdependent oRganIzation maNage 
CaLIfornia'S Power trAnsmisSioN liNes.
UNDeR tHat SeTUp, CALiForNIa wOuld be onE oF a Group Of WeSTERN staTes 
SharIng a lInked transmisSioN griD WhoSe ratEs and AcceSs Rules Would bE set 
bY iNdependent managErs. 
IT is part of The CoMmiSsIon's dRIve to cReaTe rEgional ElectriCIty MaRKETs 
Throughout the countRy AND mAke it easIer to tRAdE pOWer acrosS sTatE linES. 
the reGionAL gRids woulD be a prELuDe To the naTiOnwide FrEe mArkEt in 
eLEctrIcity aDvocated By the bUsh administratIOn and power marKEtERS lIKe 
EnRon. 
but CalifornIa AsSEmblY DemOCrAts WHo havE chalLeNGeD The federal demand say 
ThE requiRemenT could interfeRe with some OF THe state's HomeGRoWN solutions 
to itS enerGy crisis, suCH as Gov. GrAy DavIs' proposAl that the STAte buy 
anD ruN trAnsMisSIOn Lines owned by SOUTherN CAlifornIa EDison Co. 
"a loT of FolKs wErE wonderinG how thosE tWo ThInGs wOuld iNTeract anD aRe 
tHeY muTuallY ExclusIve," saId PaUl heFNer, An aide tO asSEMbly spEaKer 
RObeRt hertzBerg, d-sheRman OakS. 
Other offIciALs saY tHe Federal Requirement is PrEmature becAuSe nO regioNAL 
organizAtion yet exists that CalifORnia can JoiN. 
Mike florIo, a board mEmbEr of thE CaLIforniA IndepEndenT SYstEM operaTOR, 
wHicH mAnages the sTATe's Power GrId, saId CalifOrnia is already part OF 
reGional efforts To cLear TRAnSmiSSiON boTtLEneCKS and share surpluS power. 
But FLoRIo Said no WestERn sTaTe will rUsh into A regiONal arraNgement anD 
surrendeR pArt oF ITs aUthority wiThout ensUring a gooD Deal fOR iTs own 
ConSumers. 
"we CerTainlY don't wANt tO be foRced inTo An entiTy wheRe GeneratoRs or 
power marketers get to DictatE the tErmS," Florio saId. "THIs hAs got to be A 
lonG courtship RatHer Than a ShoTGun weDdinG." 
whEn fEDeral ReguLAtors initIAtEd tHE MoVe
 Writer

05/31/2001
The Sa n Francisc o Chr oni cle 
F INAL 
A.1 
(Copyright 20 0 1)
California's testy rel ation sh i p wi t hfeder al ener g yr e gul at or s c ou l dturn
in to a sh owdown tom orr ow , when state po wer offici als  must decide  wh etherto  
s u rrend ersomecontro l  overthe state 's electr i city ma r k et  orrisk losing 
limi t ed price curbs th at kic ke d  i n thi s w eek. 
In a gr eeing last mo n th t o  se t  flexible cap s to restri c t p rice g ou gin g  durin g 
el ec t ric ity shortag es,the Feder al Ene r gy Regu l atory C ommiss ion  sa id t h e
s tat ea ndi ts  ut i lit ies must  a gr ee to  let a n inde pen dent  orga nization mana ge
Cal i for nia's  powe r tr an smiss ion li nes.Un der that setup,  Cal ifornia w oul dbeon e ofa  group  of  We stern s tates s har in g a  l inked transmission  g r i dwhose ra tes an d  a cc e ss rules  w oul d be s et 
b y in d ep endent m anager s .
I t is pa rt  of th ecom mis sion' s  dri ve tocreate r egion a l electricitym arkets 
throu g ho u t  t h e co unt ry and make  ite asie r to tr ade power  acro ss st a te lines. 
The regi on al gri ds wo uld be a prel ude to the n a tionwide  fre e  m a rket in 
elect ricit y advocate d  by theBushadminist ration an d power ma rke ter s l ike En ron. 
But Cal i f orni aAssembl y D emocrat s w hohav e c ha llenged t he feder al  d em an d s ay 
t h e requir em ent  c oul d int e rferewithsome  o ft hestate's ho m e grow nso luti ons  to it s en e rgy  crisis , such as  Go v . Gr ay  D avis' p roposal thatth e state bu y
an d runt r ansmissi on lines owned by South e rn Cali for nia E diso n Co. 
"A  lo t of f olk s  werewonder ing h ow  th o s e two t hi ngs  w ould inter a c t a nd ar e
the y mutua lly exclusive," sa i d P aul Hefner, a n a idet o  A sse m bl y  Sp ea k erR obert Hertzberg , D-Sherma nO ak s. 
Othero ffi ci als say  the fe deral require ment is p rematurebe caus e noregional organiza tion yete xists th at Ca lif orniaca n j oin.
MikeF lor io, a  board  m emberof th eCaliforn ia Independent System O perato r, 
w hic h manages  th e  st ate's pow er g rid, saidCal ifo rniaisa lread y pa r tofregio nale fforts to cl ear t ra nsmission b o t t len ecksand sharesurp lus power. 
But F l orio said no W este r n  st ate will  r ush into a reg ion al a rrangeme nt  and 
surre nder par to f its  autho rity w ithoute n su r ing agood  de al for it s o wn 
consum er s. 
"We c erta in ly don 't wan t  tob e  forced into anentit y where gen erato rs  or 
po w er m arketers g et to dicta te the  ter ms,"Floriosa id. "T his  h as got tob e a 
long  cour tship r at hertha n a sh otgu n weddi ng."  Whe n federal r eg u la to r s i niti atedth e mo ve
 Writer

05/31/2001
The_San Francisco_Chronicle
FINAL
A.1
(Copyright 2001)

California's testy relationship_with federal_energy_regulators could_turn_
into a showdown_tomorrow, when state_power officials must decide_whether to 
surrender_some_control over the state's electricity market or risk losing 
limited price curbs that kicked_in_this week._
In_agreeing_last month to set flexible_caps to restrict price gouging_during 
electricity_shortages, the Federal Energy Regulatory Commission said the_
state_and its utilities_must agree to let an independent organization manage 
California's_power transmission lines.
Under that setup, California_would be one_of_a_group of Western states_
sharing a linked transmission grid whose_rates and access rules would be_set 
by independent managers. 
It is part_of the commission's drive to create_regional electricity markets 
throughout the_country and_make it easier to trade_power across state_lines. 
The_regional grids would_be a prelude to the nationwide_free market in_
electricity advocated by the Bush administration_and_power marketers like_
Enron._
But_California Assembly_Democrats who have_challenged_the federal_demand_say 
the requirement could interfere with_some_of the state's homegrown solutions 
to its_energy crisis, such as_Gov._Gray Davis' proposal that_the state buy 
and run_transmission lines owned by Southern California_Edison Co._
"A lot_of folks were wondering how those two things would interact and_are 
they mutually exclusive," said Paul_Hefner, an aide to_Assembly Speaker_
Robert_Hertzberg, D-Sherman Oaks._
Other_officials say_the federal requirement is premature because no_regional 
organization_yet exists that California can join._
Mike Florio, a board_member_of the California Independent System Operator,_
which manages the state's power grid,_said California is already part_of_
regional_efforts to clear transmission bottlenecks_and share surplus power. 
But Florio_said no Western_state will rush into a regional arrangement_and_
surrender part of its authority without_ensuring_a good deal for its own_
consumers._
"We_certainly don't want to be_forced into an entity where generators_or 
power marketers get to dictate the terms," Florio_said. "This has_got to be a 
long_courtship_rather_than a shotgun wedding." 
When federal regulators initiated the move