Eric Erickson, CNSNews.com
Saturday, Aug. 18, 2001

Republican Assemblyman John Campbell says documents obtained from the state Department of Water Resources (DWR) show that California sold 583,987 megawatts of power between March and July of this year at a fraction of the price it had paid for the energy.

In fact, the DWR sold excess power every day in July, except on the 4th, according to Campbell. He wants the state assembly to investigate the issue through energy oversight hearings.

On March 19, Campbell says, the California Independent System Operator ordered rolling blackouts while the DWR was actually selling 2,098 megawatts of excess electricity at a loss.

"I'm flabbergasted," Campbell said in a press release. "While residents and businesses were doing everything possible to conserve energy, the state was practically throwing away power. It doesn't make any sense."

Based upon the numbers he obtained from the DWR, Campbell says the state lost approximately $73 million by selling the power.

"These losses are astounding," said Campbell. "How much more evidence is necessary to show that the state needs to immediately get out of the business of buying power?"

Davis' spokesman, Roger Salazar, reacted by accusing Campbell of political "grandstanding."

"We're too busy here in the governor's office trying to keep the lights on to play political games," Salazar said, adding "we were nowhere near a surplus of power."

A prime example of the sell-offs, according to Campbell, can be seen in numbers related to May, when the average price the state paid for power was $243.00 a MWh, while the amount it sold its surplus for was $26.72, leading to a loss of $8.1 million on 37,661 MWh.

Salazar said Campbell's information is "just plain false" and "for anyone to insinuate that we somehow had a surplus of power and were selling at a loss defies common sense."

"It would surprise me if the state did something like that ... it would surprise me if Mr. Campbell is the only one with that information and nobody else in the entire state has written about it.

"All of the information on our power purchases is made public after it is no longer market-sensitive," Salazar said. "We've released hundreds of documents, released all of the contracts under which we've been purchasing power, so all of that information is really available for anyone to scrutinize."

After scrutinizing the information himself, Campbell says California's long-term power agreements will require the state to buy much of its energy at inflated prices.

And in a study commissioned by the Los Angeles Times, it was discovered that as far in the future as 2004, contracts exist that bind California to buy 43 percent of its power at already negotiated prices, which theoretically would provide California with an energy surplus.

If California follows the precedent set in the 1980s when it was faced with a similar problem, it may ironically encourage consumers to use more power to keep from selling it at a loss. Other options may include buying out contracts or simply not honoring them, which could lead to legal scuffles.

Davis has been accused of improper activities in relation to the power crisis, including the hiring of individuals with conflicts of interests due to their employment within the power industry and their owning of energy industry stock.

"Oversight hearings will provide a forum to determine whether or not the administration's actions have been prudent. And after investigating the situation, the legislature can decide on what measures, if any, need to be taken," said Campbell.

"I have serious concerns regarding several of the administration's actions, but I intend to keep an open mind and reserve final judgment until all of the information has been presented to the legislature," he said.

CNSNews.com Managing Editor David Thibault also contributed to this article.

Copyright CNSNews.com

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