energynewslive.com
SHOW: ENERGY NEWS LIVE
11:00 AM Eastern Standard Time
January 14, 2002

BYLINE: Kym McNicholas
GUEST: Joseph Fichera

JAY RICKERTS: Some other headlines now, this morning. California continuing on the road to recovery, but is it on the right track to solving the state's energy crunch? Our Kym McNicholas, live in the west coast bureau - she's got a guest there to talk a little bit more about that. Kym?

KYM MCNICHOLAS: Good morning Jay, well, Joseph Fichera, he is the CEO of Saber Partners, he's also California Governor Gray Davis's former financial advisor, in regards to energy issues. Thanks so much for joining us, Joe.

JOSEPH FICHERA: Thank you for inviting me.


MCNICHOLAS: Well, how would you describe the state's current energy situation?


FICHERA: I think we're in very good shape, the state, in terms of the supply demand imbalances that had occurred last year but we have put together a plan, the Governor put together a plan that actually helped stabilize the market by both conservation, contracts and construction of new projects. But great risks still remain and need to be managed and there's a lot of controversy and debate within the state right now about that and some of the things I think are being missed.

MCNICHOLAS: So do you think the state is actually on the right track or do you think there are some things that do need to be changed in its approach?


FICHERA: Well, I think we need to re-establish the trust between ratepayers, shareholders, the utilities and the regulators and government, who had a great deal of political dissension and trying to assess blame for the crisis rather than trying to get behind a plan that has been put forth, a comprehensive plan by the Governor, actually, that would be able to help solve the problem, and manage it for the future.


MCNICHOLAS: And what do you think so far about the progress the state is making in re-negotiating the long-term power contracts?


FICHERA: Well, I think those contracts, as you know, they might be above market now, they could be below market later. We shouldn't be near sighted about them. There are opportunities to be able to re-negotiate contracts, but they are firm contracts, and you have to- in order to get something from a generator who signed a contract with you in good faith you have to give them something in return. What could be given would be certainty and a once-and-for-all aspect of a settlement of all outstanding issues. I don't know whether that's really on the table becauseæ some people tend to want to just constantly second-guess decisions that have been made. And we have to stop that and sort of put the plan in place and follow it and make sure that the construction of the plants that we want, that the Governor has agreed to, get on line.


MCNICHOLAS: Now you were also involved in advising the Governor on the utilities re-organization plans, are you pleased with the results so far?


FICHERA: Well I think we, the Governor wanted to avoid a bankruptcy for both of the utilities. Unfortunately PG&E jumped the gun in the middle of the negotiations and couldn't deal withæ and couldn't deal with the fact of how tough the negotiations were proceeding for them. I understand what they were doing but they need to come to the table now to work still work something out and not still pursuing a plan that basically would get them out of regulation. Edison has continued to work and negotiate - they got a settlement with the PUC and I think that's healthy. One is out of bankruptcy - the other one needs to be, needs a plan and the only plan is that they stop calling names to each other and we actually sit down and work something out.


MCNICHOLAS: I just have one more question for you, really quickly, what do you think of the push by some law-makers and business groups to get rid of several of the state's agencies and actually consolidate their duties?


FICHERA: I think that'd be a great step forward. One of the problems we had as advisors to the Governor was that no one within the state would be willing to agree on a set of numbers. Everyone had their own numbers, everyone had their own perspective. And there was not a structure within the government on energy to deal with this. The Governor sort of had to be forced into the process. A consolidation of the various disparate elements and trying to bring them all together, agreeing on some of the technical aspects would probably be very helpful. But that's only a first step.


MCNICHOLAS: Thank you so much, Joseph Fichera, CEO of Saber Partners. Jay, back to you.

JAY RICKERTS: All right, Kym, Joseph Fichera, thanks for your time, sir.