Greenwire
California Gov. Gray Davis (D) and Calpine Corp. are close to an agreement to rework four long-term power contracts worth $11.7 billion the state signed during the height of its energy crisis last year.
The four Calpine contracts account for one-fourth of the electricity in those deals. Overall, the state signed 56 contracts worth $43 billion. Consumer activists, lawmakers and Republican gubernatorial candidate Bill Simon Jr. have criticized Davis and the contracts, which locked the state in to purchasing electricity at levels nearly three times current market prices.
In exchange for Calpine renegotiating the contracts, the state Public Utilities Commission would agree to drop its appeal to the Federal Energy Regulatory Commission to void the contracts. Critics have called the FERC appeal an attempt to create a bargaining chip to renegotiate the contracts (Nancy Vogel, Los Angeles Times, April 5).
Calpine stock has dropped in recent months due to fallout from the Enron collapse and the FERC appeal, and activists say the renegotiation should not involve any short-term cash payments to the company. “Neither California consumers nor taxpayers should be bailing out Calpine, one of the energy generators that took us to the cleaners last year,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights.
Calpine spokesman Bill Highlander said the company is not seeking a bailout. Highlander: “More money upfront is always a
good thing, but we don’t need it” (Levey/Woolfork, San Jose
Mercury News, April 5). — DHB
