SB 1x hearing today ,
 As you may know, SB 1x (Soto/Scott) passed the  Senate Appropriations 
Committee by an initial vote of 7-3 (the bare  minimum).
Senator Soto said that the Legislature must make a  "bold proposition" with 
this bill.? She said that this experience is "like  no consumer has been 
gouged before."? The Legislature must cap rates.?  This bill guarantees a 
generous profit to generators.
Senator Scott said that these generator profits  have been gained off of 
consumers.? According to FERC, over $500 million in  excess profits have been 
reaped.? Californians have been "royally  mistreated" by generators.? This 
"money has left the state (to Texas and  other places)."? This bill is the 
only solution.? The PUC can change  the $80 rate.? Based upon the January 
Field Poll, Californians support this  concept.? We have to "stand up to the 
generators and say no  more."
Supporters were:? TURN and CTRA (Lenny  Goldberg).? Lenny said that the FERC 
will not give any relief to CA  ratepayers, so the Legislature has to.? This 
bill needs to be combined with  the power authority by Senator Burton to hold 
prices down.
Other supporters of the bill included:?  Congress of CA Seniors; CalPIRG; CA 
Consumer Federation; CA Labor Federation;  SEIU; Public Power Now.? SEIU 
(public employee union) said that this bill  is "the only way to put caps on 
rates."
Opponents were CMTA ("this is the wrong medicine  for solving the problem"); 
WSPA (does nothing to resolve the shortage of energy;  we should be doing 
bills to stimulate greater investment in supply); Intergen  said that they 
are looking at California market, but will not build with this  bill out 
there.? CA Wind Energy Assn (QFs oppose this bill because the rate  is too 
low); and IEP (most productive answer to our problem is the build power  
plants).
Senator Battin said that the price cap is lower  than some of the Governor's 
long-term contracts at $86 per hour.? Senator  Scott said that the munis are, 
indeed, covered by the bill.? He also said  that the PUC can change the rates 
contained in this bill.? Scott also said  that the PUC can exempt renewables 
under the bill.
Senator Bowen stated that the $80 figure should be  removed from the bill 
("this price may be inappropriate").? She suggested  using the "FERC proxy 
price."? She suggested that they look at an exemption  for contracts with the 
state.? She saw no reason to exempt the renewables  because they would make a 
bundle with an $80 cap.
Senator Poochigian said he was concerned about the  majority vote issue 
(because this bill is allegedly revenue neutral).?  Scott said all of the 
money raised by the bill will go to ratepayers.? He  said that Legislative 
Counsel gave him an opinion (I don't know if it is written  or verbal) that 
this scheme was permitted.? Poochigian said it was ironic  that the PUC was 
being given the authority to set rates under this  bill.
Senator Scott stated that they would take as an  author's amendment to 
exclude all long-term contracts from the provisions of  this bill.
Next stop for the bill is the Senate  Floor.
?

Chris Micheli, Esq.
Carpenter Snodgrass  & Associates
1201 K Street, Suite 710
Sacramento, CA?  95814
(916) 447-2251
FAX: (916) 445-5624
EMAIL: cmicheli@carpentersnodgrass.com
smccabe@mccabeandcompany.net, smara@enron.com, steven@iepa.com, 