Letters for April 5, 2001

Gray’s flack attacks

Editor’s note: Normally we just run letters to the editor and allow the reader to have a forum for their opinion. But the governor’s press secretary has made a number of accusations regarding stories in this paper on the energy crisis and we think it calls for a response.

Geez. You’d think that with two cover stories, three cartoons and four other columns in the past three issues of SN&R, you would offer at least some semblance of truth about Gov. Gray Davis’ plan to meet our state’s energy challenge. But apparently more research goes into your restaurant reviews than your articles on the governor’s energy plan. Let’s get a few facts straight from the get-go:

Deregulation was a Republican idea, sponsored by a Republican Legislature, supported by every Republican in the state Legislature, signed by a Republican governor, and implemented by a Republican-dominated Public Utilities Commission. For you to pin this concept on a governor who never supported it in any way, shape or form is disingenuous.

Your articles also fail to focus on the main reason for the state’s energy shortfall: the lack of new generating facilities built in California. While the state’s booming economy was humming along, there was a parallel sharp increase in electricity demand. Yet for nearly 14 years, not a single major plant was licensed. The utilities and power generators blocked new siting because they didn’t want the competition.

Since April 1999, the Energy Commission has approved 13 new power plant projects with a combined generation capacity of 8,449 megawatts. (Of the 13 plants, one is the Golden Gate 51 megawatt peaker.) Six power plants, with a generation capacity of 4,308 megawatts are now under construction, with 2,368 megawatts expected to be on-line by the end of 2001. Nearly all of these plants use clean-burning natural gas. In addition, the number of renewable energy producers has increased to a level where the state gets nearly one-third of its electricity from independent power producers (the governor recently announced new initiatives to promote solar, wind and other renewables as well).

For this summer, Gov. Davis also has launched the most aggressive energy efficiency plan in the nation. It includes 20 percent rebates to homeowners who slash their electricity bills by 20 percent this summer—a conservation plan so popular that even your paper couldn’t seem to round up a critic. And, contrary to your articles, the plan to bring more power on-line this summer with “peaker” plants will result in cleaner, not dirtier, air in the long run. The governor appointed widely-respected environmentalist Winston Hickox, his Resources Agency Director, to head the permitting process to ensure that no environmental standards are disregarded. The governor also has opposed any relaxing of federal environmental standards, wanting only to cut the red tape involved in implementing the standards.

Another key part of the program is negotiating long-term contracts for California’s future energy needs. I’m not sure how to respond to your newspaper’s criticisms, as one week the governor was criticized for entering into these contracts because the price of natural gas may rise. In the next, the governor was criticized for not giving carte blanche to the utilities and allowing them to enter them last summer without a review by the PUC.

The governor has released plenty of information about the contracts. If your reporters had taken the time to go to the Department of Water Resources Web site (www.water.ca.gov), you’d see the details of each contract and a summary of the state’s buying. Up until the time that report was posted, the governor made available a wide variety of details about the contracts, including names of the companies, lengths of contracts, and average prices—all facts used in your stories. So much for being secretive.

The Department of Water Resources has rightfully held some of the information close to the vest, just as New York, the only other state involved in power buying of this magnitude, has done. While the state negotiates prices for this summer and beyond, it makes little sense to tell sellers the price and terms of the negotiations. Think about it this way: do you tell a car dealer how much you have in your wallet when you’re still negotiating for a new set of wheels? Of course not. The state needs leverage in negotiating with generators. Releasing the price the state pays today would set the floor for the price tomorrow. The price the state would pay for electricity would soar if that information was instantly revealed. It’s for this reason that when the Wall Street Journal sued the New York ISO for this information, a court said the public interest is best served if the information is not released. (And, unlike New York, which never releases its contract details, Gov. Davis will release the information in six months when it is commercially stale.)

And to set the record straight on other errors of fact in your articles:

• Gov. Davis has not been “shielded by a bureaucratic phalanx,” nor has he limited his accessibility to the news media during the past few months. In fact, there has been a rise in the number of news conferences and events the governor has held where the media is invited to question the governor. Perhaps if the SN&R writers would get out from behind their keyboards and actually cover the story, it would help increase their ability to report the facts.

• Gov. Davis has not “put a stranglehold” on information released by the ISO. ISO is not a state agency and does not report to the governor. No limits have ever been placed on any public information released by ISO by the governor.

• Gov. Davis has not “embraced the proposal for a state public authority” offered in January by Treasurer Phil Angelides and Senate President Pro Tem John Burton. The governor is more interested in streamlining state agencies, not adding to red tape.

• Gov. Davis has appointed a director of the Office of the Ratepayer Advocate at the Public Utilities Commission, Regina Birdsell.

• Consumer groups have the governor’s ear, meeting regularly with the governor’s top energy advisers. Ask Michael Florio of TURN, one of five members the governor appointed to ISO, after signing legislation that ousted a board loaded with utility and generator interests.

• Gov. Davis did not have a majority of appointees to the Public Utilities Commission until just 12 weeks ago. Even so, when the utilities asked for permission to enter into cost-saving long-term contracts for electricity nine times, the PUC granted permission each and every time—all with the urging of Gov. Davis, contrary to what was stated in your article.

• As to forward contracting by the utilities, from July 1999 through December 2000, in a series of actions, the PUC authorized and steadily expanded the right of the utilities to purchase power on forward contracts. During this period the Western Power Trading Forum (the energy marketers’ trade organization) consistently opposed granting the utilities the authority to enter into such contracts.

• Gov. Davis was not “tilting at windmills” by seeking price caps on wholesale energy costs from the federal government. In fact, the governor’s brow-beating of the ISO led it to impose caps and kept price increases to a minimum from the summer through early December. Only when the ISO, an independent board, went behind the governor’s back and got needed permission from FERC to lift the caps, did the price of electricity skyrocket—from $249 per MWh to more than $1,500 per MWh in less than three days. The FERC is the only agency that can regulate wholesale power prices—the driving force behind California’s energy crisis. And since the agency called energy prices “unjust and unreasonable,” it seemed logical it would have taken the forceful actions the governor proposed it undertake. Unfortunately, it didn’t. The FERC did not issue its list of actions (or inaction) until mid-December 2000.

• Gov. Davis has actively worked to force power generators to accept partial payment. Duke Power is listed among those your paper says “won’t take a penny less than they are owed”—an odd statement in that Duke recently issued a press release saying just the opposite.

• Gov. Davis did indeed meet with members of the California Newspaper Publishers Association (contrary to a “Bites” report that he did not) for nearly two hours to discuss energy.

This letter only scratches the surface in correcting the factual inaccuracies and misconceptions in your recent editorial content. As Californians need to pull together this summer, I hope that SN&R will provide a balanced review of the actions our state leaders are taking to meet our energy challenge.

Steven Maviglio
Press Secretary
Governor Gray Davis

The SN&R responds

Editor: Without knowing specifically which facts in which stories are being challenged, it’s difficult in many cases to offer our version of the truth, but with so many misrepresentations and false statements in Maviglio’s letter we feel obligated to try. The press secretary uses the overly broad description of “your articles” to state alleged inaccuracies; we’ll attempt to be more specific.

Maviglio takes the opportunity to trumpet the governor’s accomplishments and put a spin on the information that is favorable to a governor running for re-election (that is, after all, what he is paid to do).

The press secretary tells us what problems we didn’t focus on, such as the state’s energy shortfall. But the shortfall is not the biggest problem plaguing the state. Power generators are no longer accountable to the public, and can charge unreasonably high rates and manipulate supplies in ways that cause blackouts. For example, when wholesale rates began to rise precipitously last summer, California was actually exporting electricity at historically high rates.

Telling us that “Deregulation was a Republican idea” is unnecessary. Anyone who had read our stories would know it has been fully acknowledged on our pages as in: “Davis is not responsible for the debacle that is California’s electric power deregulation,” (see “Asleep at the Switch,” March 22). We realize press secretaries regularly skim the news, but even he should have seen the headline that stated, “Gray Davis didn’t cause California’s power crunch” at the top of the page.

Maviglio gushes that the governor’s conservation plan is so popular “that even your paper couldn’t round up a critic.” It was an odd point for Maviglio to raise, considering that even in the mainstream dailies this program has been roundly criticized by both consumer groups and legislators as a gimmick that places too big of an onus on ratepayers to apply for the rebate rather than providing the immediate reward of lower energy bills for those who conserve.

He challenges us by saying, “If your reporters had taken the time” to go to the DWR Web site to get information on energy purchases we would have had it to put in the story. But the DWR report didn’t come out until the most recent cover story was on the street on March 22. Beyond that, the report is rather general and lacking in detail (and is available only in Microsoft and Excel formats, not net standard HTML, so many Californians find it inaccessible). The fact is there has been no new burst of candor on the part of the Davis administration. Earlier this week, in an editorial titled “Taxpayers In the Dark,” the Los Angeles Times declared: “With billions of state dollars already gone, Gov. Gray Davis still won’t say how much California is spending on electricity, what price it is paying and to whom the money is being paid.” Indeed, a number of daily newspapers and the Associated Press are suing the Davis administration on this very point.

Maviglio claims the governor hasn’t been “shielded by a bureaucratic phalanx,” but longtime political analyst and SN&R writer Bill Bradley sees it otherwise: “Gray is most definitely shielded. I’ve known him since 1980—which is to say about 20 years longer than his latest press secretary—and he was far more accessible before. He talks to very few people in the Legislature and appears before the media in only the most controlled circumstances.” Maviglio accuses SN&R reporters of not covering the story and not leaving their computers, but that is not true and he knows it. The SN&R writers have attended numerous press conferences, covered the joint legislative hearing last summer that spelled out the coming crisis in great detail, sat in the audience listening to Davis during his State of the State speech and also covered recent protests by consumer groups. The writers have also gotten regular comments on the issue from Deputy Press Secretary Roger Salazar, and, indeed, interviewed Maviglio himself a number of times.

The press secretary then makes news by telling us that Davis has not embraced the state public power authority proposal offered up originally by State Treasurer Phil Angelides and Senate President John Burton, dismissing it as “adding to red tape.” Bradley contacted Angelides, who was surprised to learn of the statements in the Maviglio letter. Angelides quickly informed Burton, who immediately called one of Maviglio’s superiors. Less than two days later, speaking before the California Democratic Party Convention in Anaheim, Gov. Davis reiterated his support for the state public power authority proposal. At a press conference following the speech, the governor expanded on his support for a state power authority, declaring it “the balance wheel of this whole equation” of crafting a long-term solution to the power crisis.

Maviglio states that the governor did appoint a director of the Office of Ratepayer Advocate at the Public Utilities Commission, Regina Birdsell. The implication was we were wrong to point out the vacancy. But what a coincidence: The person was appointed March 21 as we went to press. The administration was aware that Bradley was questioning all the governor’s energy appointments or lack of them, including this one. By the way, Birdsell has little or no background on energy or consumer advocacy, but does have extensive experience in Maviglio’s chosen field of public relations.

“No limits have ever been placed on any public information released by ISO by the governor.” Maviglio ought to communicate with the people in his own office. Deputy Press Secretary Salazar told SN&R News Editor Steven T. Jones that the governor’s office screens ISO releases, purportedly so they and the governor’s office don’t release conflicting information. Beyond that, in one area of the letter Maviglio claims the governor doesn’t control ISO, then tells us the governor hand-picked the five members of the board. Which is it?

Consumer groups don’t have the governor’s ear, at least not those most critical of his performance. Energy activist Medea Benjamin couldn’t get a single word in the governor’s ear before she was arrested outside his office, while Davis had recently been meeting behind closed doors with representatives of PG&E and Southern Cal Edison. Maviglio himself acknowledged to writer Elizabeth McCarthy that there was frustration among those outside the inner circle when they tried to get informed about what Davis was doing with tax dollars. As for Maviglio telling us to ask Michael Florio about having the governor’s ear, we did and the press secretary could have read about it in “Kept in the Dark,” (March 1). Florio says he has been “limited to letting the governor know what he likes and dislikes about the proposals he releases,” after they’ve come out.

Davis, we pointed out, had done little to stem the oncoming crisis because he hoped that the federal government would step in to put price caps in place, and we did liken it to tilting at windmills. Maviglio himself bemoaned to our reporter in “Asleep at the Switch,” that Davis pushed FERC “for months to do something about wholesale power rates,” and that “President Clinton had always delivered on every single item the governor had ever asked.” And, Mr. Quixote, how did that plan work? That critical time spent waiting for Bill Clinton to ride to the rescue was a waste.

Maviglio says Davis “met with members” of the California Newspaper Publishers Association. That’s fine. However, what appeared in Capital Bites was that Davis and the Democratic leaders of the Legislature didn’t attend a luncheon forum where they were scheduled to speak, not the more general “didn’t meet” that Maviglio implies. Besides, Bites raised Maviglio’s criticism in print the next week, and used the occasion to request an interview with the governor. Maviglio gave us the impression that proposal wasn’t going to happen due to our stories, which leaves us feeling that those who write less critically would have a better chance of getting an audience with Davis.

Now we ask the readers: Has Gray Davis risen to the occasion and have his actions matched the seriousness of the crisis? Or has the SN&R gone too far in criticizing his lack of action in handling the crisis? Let us know by writing a letter to the editor.