Main Menu

Committee Staff

Chief Consultant
Consultant
Assistant

Committee Information

Senate Energy, Utilities and Communications Committee
1021 O Street, Suite 3350
Sacramento, CA 95814
Phone: (916) 651-4107
Fax: (916) 642-8979

Testimony of Bill Kissinger

SUMMARY OF CONTRACT RENEGOTIATION EFFORTS

As of February 11, 2003

 


Status

  • To date, 22 energy contracts have been renegotiated (out of a total of 56). Renegotiations to date have reduced the State’s obligations by more than $5.1 billion (on $23.2 billion worth of contracts, or roughly 22%). Renegotiation efforts are on-going.
     

Reduced Energy Prices and Contract Terms

  • Shortened contract terms.
    Examples: GWF, Calpine, High Desert.
     
  • Reduced prices.
    Examples: Calpine, GWF, Sunrise, PGE Trading, Soledad.

Improved Products

  • Conversion of must-take energy to dispatchable energy products.
    Examples: Williams, High Desert.
     
  • Improved dispatch rights for dispatchable products.
    Examples: Sunrise, CalPeak.

More Reliable Energy Products

  • Improved availability provisions with penalties for failure to deliver energy.
    Examples: Williams, Calpine, High Desert.
     
  • Limitations on substitute energy; greater transparency.
    Examples: Calpine, Williams.
     
  • Anti-gaming provisions and termination rights.
    Examples: Williams, High Desert, GWF.

Guarantees that New Generation Will Be Built

  • Liquidated damages and/or termination rights for failure to construct new power plants.
    Examples: High Desert, CalPeak, Calpine.

Improved Contract Administration Terms

  • Limitation of provisions permitting costs to be passed through to DWR.
    Examples: GWF, Williams.
     
  • Improved inspection rights.
    Examples: Williams, High Desert.
     
  • Improved assignment and novation terms.
    Examples: all renegotiated contracts.

 

ESTIMATE OF RENEGOTIATED CONTRACT SAVINGS
AS OF FEBRUARY 11, 2003
 Original Cost ($M)All-In Contract Savings ($M) 
Total Original Cost (56 contracts, 26 parties)  $43,500
Renegotiated Contracts Savings (22 Contracts, 15 parties)  $5,155
Calpine$ 11523$ 2486 
HDPP$ 3282$ 1167 
Williams$ 4327$ 1003 
GWF$ 991$ 215 
CalPeak$ 403$ 71 
Whitewater$ 100$ 17 
Cabazon$ 66$ 11 
Alliance$ 180$ 15 
PG & E ET$ 84$ 3 
Capital Power (*)$ 53$ 6 
Soledad$ 44$ 2 
Clearwood$ 140$ 28 
Wellhead$ 141$ 8 
Santa Cruz County$ 9$ 2 
Sunrise$ 1874$ 121 
    
Cost after Renegotiation  $38,345

(*) Capitol has been terminated, saving a total of $46M