California ready to release electricity contract terms

By the OGJ Online Staff

HOUSTON, June 13 -- The California Department of Water Resources said it is prepared to release most details of 38 long-term contracts between the state and electric generators, ending a protracted struggle over whether the contracts should be kept confidential.

Oral arguments are scheduled Wednesday afternoon in a Sacramento state court on a lawsuit filed by Republican lawmakers to force Gov. Gray Davis to release the contracts. In a letter to generators, deputy director Ray Hart said the DWR will ask the court for a delay to allow generators to respond to its decision to release the documents.

A spokeswoman for Williams, which has signed contracts with the DWR and opposed public disclosure of the terms, said the company will "monitor" the situation for now. She said the Tulsa company's position will depend on specific conditions proposed by the DWR.

Up to now, DWR has resisted efforts to release the contract fearing public disclosure would hurt the state's ability to put sufficient energy under contract and drive up prices. In filings with the Superior Court last month, the DWR said premature disclosure would put the state at a competitive disadvantage in then on-going negotiations.

DWR said the state has since reached critical mass in its energy contracting effort and now believes the potential harm from releasing the documents will be limited.

"In light of the changed circumstances described above, the balance now tips in favor of disclosure," Hart said. "Consequently, the state no longer believes it should withhold the long-term contracts from public disclosure, and it is prepared to release them with only minor redactions. Those redactions will be pared to the minimum and seek protection of only the most sensitive information."

The DWR said it would withhold specific gas indices and generator heat rates used for power pricing purposes, terms and conditions on specific transmission-related costs, and associated risk allocation and energy delivery points.

The state began buying power on behalf on Southern California Edison Co., Rosemead, Calif., and Pacific Gas & Electric Co., San Francisco, after the utilities wholesale power purchases exceeded their ability to recoup them from customers. Under California's restructuring law, utilities were required to buy power on the spot market and retail rates were frozen. DWR contracts now total nearly $43 billion.