Californian's are paying for new PG&E investments, not power crisis (pt-2 text)

While the current "energy crisis" looms on for Californian's, many still question the real reason behind

the hype. Most all of the media reports focus on the superficial aspects of this serious issue, only

alternative news sources are digging deeper to reveal the true story.

Let's start with the actual people behind the smokescreen, the top executives. The CEO & Chairman

of the Board of PG&E Company (a subsidiary of PG&E Corporation) and a Senior Vice President

of PG&E Corp. is Gordon R. Smith, a career PG&E executive since he graduated from college. He

also serves as an Advisory Board member of Dreyfus Edison Electric Index Fund Industry, which

owns shares in both PG&E and Southern California Edison (both claiming financial trouble) and is on

the Finance committee of the Edison Electric Institute. It seems as though maybe Smith may not be

performing up to par in his positions with the energy powerhouses, we can pretty much assume his

neighborhood has not experienced any "rolling blackouts".

Another executive who's neighborhood most likely won't ever experience "rolling blackouts" is Chief

Executive Officer and President of PG&E Corp., Robert D. Glynn Jr. In his presentation at the

Annual Shareholders Meeting April 19, 2000 in Boston, Mass, he reaffirmed PG&E's financial

strength when just days before PG&E agreed to spend millions on a new telecommunications

company. According to an article in The Standard on April 13, 2000, "Twelve petroleum and natural

gas companies [including PG&E] announced Wednesday that they would buy a combined 30 percent

stake in a new telecommunications company, Aerie Networks. The new company plans to build a

fiber optic network with the highest capacity in the U.S. Along with the 0 million equity stake,

Aerie gets the right to piggyback its fiber on the energy firms' pipelines." This is a 3.5 billion dollar

project, and instead of making Aerie pay for the right of way to lay fiber piggybacked on the pipelines,

PG&E is paying millions to buy into the telecom company.

Back to the 1999 Shareholders meeting. Glynn reported to stockholders that "Earningsfrom

operations increased by 15 percent in 1999 on top of 12 percent growth in 1998. Total net income

from operations grew by 11 percent.The National Energy Group [parent company to PG&E]

increased its earningsfrom operations by 42 percent in 1999, following a strong year in 1998. Pacific

Gas and Electric Company increased its earnings from operations by 14 percent". The question one

might ask next is, "How can they be financially unstable if the were seeing so much growth?".The

answer may lie in their increased spending habits in early 2000.

Glynn goes on to praise the companies future endeavors, talking about some of the projects underway

with the National Energy Group. In Massachusetts, construction continued on the Millennium Power

Project, a 360-megawatt natural gas-fueled plant. In Connecticut, they broke ground on the Lake

Road Generating Plant, a 792-megawatt natural gas-fueled plant, scheduled for operation in 2001. In

New York they broke ground for the Madison Windpower Project - which will be the largest wind

generating facility in the Eastern United States and will be identified with the registered trademark of

"Pure Wind".Only one mention of growth in the California market which was in reference to a 1,048

megawatt natural gas fueled generating plant in Kern County scheduled for operation in 2001. Glynn

also announced the Corporationwas joining with 11 other energy companies to build what will be

the country's largest fiber optic telecommunications network. He also mentioned that Pacific Gas and

Electric Company and the National Energy Group have joined a consortium of 15 energy companies

to establish a new Internet-based business-to-business platform for buyers and sellers of goods and

services.

The future of the year 2000 and beyond was also painted very brightly, Glynn committed to delivering

8 to 10 percent annual earnings per share growth going forward and planned to generate 30 percent

or more of these earnings from the National Energy Group by 2002.

Now all of this doesn't sound like it's coming from a company that is facing the possibility of

bankruptcy does it? These men need to face the music, sell off some of their billion in assets and

provide the public with reasonable and reliable energy service. The public needs to take these men

and other members of the board to task and put faces and names to this dire situation. Gordon Smith

and Robert Glynn need to be held accountable for the mess they have gotten California into. They

should be prosecuted for extorting increased rates from the public under false pretenses. There isn't a

shortage of energy in California, there is a shortage of solvent reliable energy companies due to

improper financial planning and spending. Put the blame where it's most deserved, in the laps of the

men who are directly affecting the situation.

It's not difficult to read between the lines. It appears that the energy companies overspent on outside

investments last year, and are using rate hikes and a false energy crisis in hopes that the public bail

them out. When you pay your top executive over 2 million dollars a year, you would expect better

management of the fiscal interests of the company.

According to an article by Public Citizen (http://www.citizen.org) California power demands during 4

out of the past 6 months was actually lower than during the same period in 1999, indicating that

California's power producers are misrepresenting the facts about energy demands in order to justify

gouging the state's utilities. Data from the California Independent System Operator shows that July,

August, October and December of 2000, the state saw a lower peak demand than during those same

months in 1999. Since there hasn't been an increase in energy demand, the major contributor to the

crisis according to Public Citizen is that plants servicing California with 11,000 megawatts of capacity

have been taken out of service for a variety of reasons, most undisclosed. This creates a false crisis in

which power producers can convince customers to pay higher rates to encourage construction of new

power plants to meet the alleged higher demand. Power producers will then justify building new

plants, attempting to speed up the process by suspending California's environment-friendly standards

and blocking the ability of communities to oppose new plants.

Bottom line, Californian's are going to be footing the bill for poor planning and misrepresentation of a

crisis that is non-existant.

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