State Power Authority holds hearings on plan to invest in conservation and renewable energy sources

source: Rick Jurgens Contra Costa Times 2002.1.29

OAKLAND -- A plan to meet California's growing appetite for energy by funding conservation efforts and development
of solar and renewable power got a warm reception at a state Power Authority hearing here Monday.

Authority directors and staff are touring the state gathering comments on their scheme to raise $5 billion by selling
bonds and spark a total of $17 billion in public and private investment in energy efficiency, demand reduction, and
small and non-fossil fueled power plants. About 50 people turned out for Monday's hearing.

Some at the hearing want the authority to assume a higher profile. "There needs to be more inspirational talk
coming from you because I don't hear it coming from anyone else in the state," said Barbara George of Women's
Energy Matters, a Berkeley-based advocacy group.

Others worry that the authority plans to do too much. "We don't think (the authority) should be in the role of
supplanting new investment or spend state money in areas where the market is prepared to step in," said Sean
Randolph, president of the Bay Area Economic Forum, a public-private group dealing with economic and quality of
life issues.

David Freeman, chairman of the authority, said his agency's role was to complement market forces in the "hybrid
system" that has emerged in the five years since the state decided to restructure its power business.

Jill Ratner of the Rose Foundation for Communities and the Environment in Oakland, said: "Many people in the
environmental movement supported deregulation because they thought the market would bring us cleaner air and
better planning."

But it hasn't turned out that way, so consumer and environmental advocates attended in force, looking for help to
reinvigorate faltering efforts. "We need an energy bank in the state of California," said Alisa Gravitz, executive
director of Co-op America, a Washington, D.C., advocacy group.

Bill Ahern of the Consumers Union encouraged the authority to pull together "disjointed California agencies and
policies" that deal with energy but questioned whether it had enough staff and operating budget to do that. He also
criticized the portfolio of long-term power contracts that the state, under Freeman's leadership, assembled when
prices were high. Honoring those contracts while attempting to diversify fuel sources would be "schizophrenia of a
high magnitude," Ahern said.

Randolph of the Bay Area Economic Forum said he supported most of the authority's plan but disagreed with its
request for a law that would allow it to unilaterally take over private power plants or projects. The prospect of such
eminent domain proceedings "would expand (the) uncertainty faced by new investors in (generating) capacity, and
that's about the last thing we need to do," he said.

Randolph also took issue with the tone of the plan. References to "price gouging" by power producers seemed to
signal an anti-market or anti-competitive bias and that the authority favors a more state-centered electricity system,
he said. "Properly designed and properly deregulated markets (in other states) have generally succeeded," he said.
Competitive electricity markets "can work, if done well enough, in California," he added.

But Freeman saw limits in the market, which in recent years has produced a surge in new natural gas-fired power
plants but few other megawatts of new power capacity in the state. "We've got too many of our eggs in the natural
gas basket for a prudent businessman to be comfortable with," he warned.

Some came looking for money. Kevin Carunchio, a program manager in San Ramon's city government, asked the
authority to back the city's efforts to form a public load-management district and the incorporation of a renewable
energy source into a new civic center.

Marie Harrison, an activist in the Hunters Point district of San Francisco, asked for assurances that the authority
had a place on its agenda for environmental justice, a movement that opposes placement of power plants and other
noxious industries in low-income and minority communities. "Our community suffers greatly from these plants,"
Harrison said.

Rick Jurgens covers the energy industry. Reach him at 925-943-8088 or at rjurgens@cctimes.com.
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