Sen Perata scolds Davis re energy

Return-Path: <Don.Perata [at] sen.ca.gov>
Date: Wed, 07 Mar 2001 18:06:30 -0800
From: "Perata, Don" <Don.Perata [at] sen.ca.gov>
Subject: Energy Update


Yesterday I sent the letter below to Governor Gray Davis. I am angry over
the municipally owned Los Angeles Department of Water and Power (LADWP)
charging outrageous prices to sell needed electrons to the state. It
amounts to extortion of one public agency by another!

We have come to expect such behavior from Texas and Georgia-based power
generators. But not from a publicly-owned utility located in LA! In my
mind, LADWP should refund any profit gained from the energy crisis. If you
agree, please write to the Governor.



March 6, 2001

Governor Gray Davis

State Capitol

Sacramento, CA 95814

Dear Governor Davis:

I write to urge you to include the Los Angeles Department of Water
and Power in your very timely investigation about potentially egregious
over-charges of power generators.

While media attention has understandably centered on the enormous
profits booked by out-of-state generators like Duke, Enron and Reliant, it
is widely known in the capitol that the municipally-owned LADWP has also
reaped huge profits by selling high-priced electricity to the state on the
spot market during these past months of crisis.

Reported estimates peg the cost at over $400 million. Frankly,
that's taxpayer money that my constituents are paying to subsidize Los
Angeles consumers. There is no way DWP can justify profiting from another
public agency during a time of crisis, regardless of what the law or market
may allow.

At a time when the legislature is considering your proposal to spend
a billion dollars for long term conservation, it is an insult for DWP
effectively to pocket 40% of that amount in inflated sales to the state.
Wouldn't a court of fairness rule that DWP should sell the state its excess
energy at production/distribution cost? Would my constituents be upheld if
they demanded compensation from DWP for tax benefits and government
subsidies derived from its non-profit, public agency status?

I am certain that the ISO can readily determine precisely what DWP
has sold to the state, and at what cost. Compare that to DWP's cost of
generation and distribution and we will know the amount of money DWP should
rightfully rebate to the state.

Only such a response by the public utility can prevent further
exacerbation of the kind of historical north-south sectional conflicts that
needlessly threaten the unity of purpose you seek in leading this state to
energy solvency.

Thank you for your consideration in this regard.

Sincerely,

DON PERATA