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Energy Execs Call Re-Regulation Marxist

by Dow Jones
Executive officers of leading energy companies fear "discrimination" in favor of consumers, "setting a bad precedent" for deregulation elsewhere. Plus a healthy bit of Red-baiting.
Dow Jones International News Service via Dow Jones


HOUSTON (Dow Jones)--Owners of power generation plants in California
expressed serious reservations Thursday about the state's plan to inject
cash into California's ailing utilities by purchasing and taking control of
their high-voltage transmission network.


Executives at Mirant Corp. (MIR) and Duke Energy (DUK) said at an industry
conference in Houston that such a change raises immediate red flags about
generators' access to the grid and the potential loss of federal oversight
following a state buyout.


"I can see, politically, they've got to get something out of this to sell
the plan to consumers, but we need to make sure we aren't discriminated
against," said Mirant President Marce Fuller.


Since California's power crisis began, federal regulators have worked to
implement solutions within the framework of a deregulated market, while
California has been more eager to reassert state control.


As reported, California Gov. Gray Davis on Wednesday endorsed a plan to
have the state purchase the transmission assets of PG&E Corp. (PCG) unit
Pacific Gas & Electric Co. and Edison International (EIX) unit Southern
California Edison as part of a plan to help them recover nearly $13 billion
in uncollected power costs.


Fuller said she would need to learn more about the proposal, but mentioned
that if a state buyout allowed the California transmission network to leave
the jurisdiction of the Federal Energy Regulatory Commision, "that would be
of extreme concern to us."


Mirant, formerly Southern Energy Inc., owns 3,000 megawatts of generation
in northern California.


By taking over the grid, California would be "stepping back in time," said
James Rogers, president of Cinergy Corp. (CIN).


The plan, he added, "is like watching the governor morph into Karl Marx."


Although Cinergy owns no power generation in California, Rogers said the
idea of a state buyout was a bad precedent as other states struggle to
deregulate their power markets.


"California would be better advised to sell the grid to someone who would
operate it like the United Kingdom did," Rogers said.


That idea is also apparently under discussion in California, where
Trans-Elect Inc. has offered to buy the utilities' transmission systems.


California's botched deregulation effort and ongoing power problems have
been a primary topic of discussion at the Houston conference.


The state's flawed market design and its inability to recognize an
impending supply shortfall have been roundly blamed for the current
situation, with nary a mention of the transmission grid.





-By Eileen O'Grady, Dow Jones Newswires; 713-547-9213;
eileen.ogrady [at] dowjones.com


(END) DOW JONES NEWS 02-15-01
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DAM these people are sickening
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