Tiffany, you really should reconsider your life choices if you are concerned about people being comfortable when around you, especially in professional contexts," she wrote in the May 6 memo, obtained by The Times under the California Public Records Act. A call to Turley's home number was answered by an automatic message system. Deal's spokesman, Dan Bartlett, said the administration wasn't worried about Turley's views. "His comments were made in his personal capacity as an academic, not in his capacity as a member of the [deregulation] committee," Bartlett said. But Turley's memo reflects the same concerns raised by private consultants and Republican legislators about the power crisis. They complain that the deal will make matters worse by paying less for over-priced electricity and that the state is rushing to give money away before its residents are ready for the consequences. An edited version of the memo was sent to Lawrence Makovich, senior director for long-term supply forecasting at the governor's Energy Commission. In the memo, which was addressed to top staffers and appeared on a Power Exchange long-term forecasting Web page, Turley wrote that the state has already spent nearly $5 billion on power and could spend "perhaps as much as $50 billion over the coming decades." He added, "It is not at all clear that this huge expenditure will turn out to have been worth it. On the other hand, having spent so much on electricity, California may find that the costs cannot be met, that people do not accept that they are priced into darkness, and that the experiment will fail. "Californians can only hope that the situation is not so dire. If regulators do not act soon, then the lights will go off in many homes and companies at the flip of a switch," he wrote. The Senate will take up the bill at a special session today at 3 p.m. Gov. Gray Davis is expected to sign it. It was uncertain which private companies would benefit from the bill's provisions that authorize billions of dollars in bonds to pay for past energy purchases. Senate President Pro Tem John Burton, D-San Francisco, said officials from the power exchange--the agency that buys electricity on behalf of utilities-- will be allowed to sign contracts and pick beneficiaries before July. After July, the contracts would be awarded through competitive auctions. The measure's passage came as a bitter disappointment for business representatives who supported the governor's plan. Davis' proposal for the state to purchase the transmission lines of two utilities--Southern California Edison and Pacific Gas & Electric--has run into stiff opposition from lawmakers, consumer advocates and utility executives. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ---- GOP stalls Davis' rescue plan in committee By Kate Berry Bee Capitol Bureau (Published May 10, 2001) A rescue plan for SoCal Edison crumbled in a legislative committee Monday, but not for lack of trying by Democrats or Republicans. Assembly Republicans refused to approve Gov. Gray Davis' plan for a state energy reserve and opposed his latest version of a bill that would allow SoCal's two troubled utilities to sell their transmission lines to the state for more than their book value. With their rejection of both measures, Republicans delayed action on the pair. The bills go to the Assembly Appropriations Committee today. If adopted by the panel, they would go to the Assembly floor. But Republicans said they would not vote for Davis' bill. "We don't see the need for the state to take over transmission," said Assembly Minority Leader Dave Cox, R-Fair Oaks. "There are no national security issues here. The governor knows a whole lot more about the power grid than I do, and I think he's a little confused about it." On the other bill, the Republicans supported it but demanded changes. They did not want SoCal Edison to be given $1.5 billion in exchange for the transmission lines, which is less than half their book value. They also did not like a provision that would raise rates, as much as 47 percent, on residents who use more than 130 percent of their baseline electricity use. Instead, the Republicans suggested a trust fund be created so the money eventually could be returned to customers. They also questioned whether returning the transmission lines to the utilities was the best way to keep them healthy. "If we are going to transfer facilities to a utility, why not just give them the cash?" asked Assemblyman Keith Richman, R-Northridge. Republicans also took issue with Davis' estimate that the state would save as much as $8 billion by purchasing the lines. The state would have to spend billions just to take over the facilities and may have to pay more to upgrade the lines to handle more electricity, Richman said. The Democrats' bill, AB8x, will be taken up today by the Assembly Appropriations Committee. Lawmakers plan to send it to the Assembly floor next week. It provides the framework for negotiations that must take place before a three-day energy auction begins July 1. Davis announced the framework of a deal in April, saying that the Legislature's Democratic leaders agreed to support a plan to buy Edison's power lines if a new rate structure is approved for consumers. The plan proposed by Davis would charge a fixed price of $78 per thousand square feet for the transmission system. In response, Assembly Democrats changed the bill so that Edison could keep up to 10 percent of the state's purchases if they occur between July 1 and Sept. 1. That would raise as much as $2.5 billion for the Edison parent company. In addition, Democrats increased the amount that SoCal would have to pay to $1.7 billion from $1.2 billion. The governor struck a similar deal with San Diego Gas & Electric for its power lines. That bill has not yet been voted on by the committee, said Ray Sullivan, chief of staff to Assembly Speaker Bob Hertzberg, D-Sherman Oaks. The energy crisis will put a strain on the state's budget reserves, said Doug Heller, a spokesman for Assembly Republican leader Bill Campbell. Campbell and lawmakers of both parties agree that SoCal and Edison need to sell their transmission lines to give them a chance to become viable. But they disagree over how the proceeds of any sale should be divided among ratepayers, taxpayers and investors who backed the utilities. GOP lawmakers said the Edison deal, which has been called bailout, should not be used to pay off debt that is solely the responsibility of shareholders. Instead, Edison shareholders should be paid off, so the state's budget officials would not have to borrow to pay the debt, Campbell said. Edison and SoCal say they lack the cash and credit to survive the energy crisis. Without the transmission lines, both companies could be forced into bankruptcy within two weeks. A transmission line acquisition bill by Sen. Byron Sher, D-Palo Alto, remains stalled because Senate Republicans will not allow a vote on it. Sher's plan, SB47X, has languished in the Senate for months because it lacked support from key lawmakers. Senate Democrats added $3.3 billion in borrowing to win Republican support for a companion bill, SB28X, which the Senate passed last week. It authorizes the Department of Water Resources to sell as much as $13.4 billion in bonds to buy power. The $13.4 billion in state bonds would be added to the more than $12 billion in bonds the agency has already signed. Edison and SoCal say they are close to bankruptcy because they have been overcharged by power generators, which have received premium prices for months. The Bee's Kate Berry can be reached at (916) 326-5540 or kberry@sacbee.com. ------------------------------------------------------------------------------ ------------------------------------------------------------------------------ ----------- Lockyer challengesGenerators' 'bluff' Another lawsuit may be on the way: The governor says power wholesalers are lining up behind the generators in the antitrust lawsuit. By Kevin Yamamura Bee Capitol Bureau (Published May 10, 2001) Faced with a growing chorus of critics and uncertainty about its long-term-contract strategy, the Davis administration issued a dire warning Friday to California's major power generators: Shape up or face another lawsuit. While attorneys for Gov. Gray Davis will continue negotiations for long-term contracts with the companies, the warning was apparently a warning shot: Line up behind the state and fight for the best deal you can get, or face an antitrust lawsuit similar to the one