Power Firm Chief Lists Solutions for Crisis

By KURT STREETER

May 27, 2001 12 AM PT

TIMES STAFF WRITER

A Texas business executive whose company has profited enormously from California’s energy crisis says California needs more deregulation, not less.

Kenneth Lay, the head of Houston-based Enron Corp., handed out a four-page plan detailing his solution to California’s energy crisis at a meeting with Los Angeles Mayor Richard Riordan and other state business and political leaders at a Beverly Hills hotel May 17.

The report details several ways to solve California’s energy crisis.

“Get deregulation right in California,” it reads. “California never deregulated. . . . There is more regulation than ever.”

Among the document’s other points are calls for consumers to pay the billions of dollars in debt the state’s public utilities have incurred, and an assertion that federal investigations into price gouging by private firms such as Enron are contributing to the problems.

Lay also suggests increasing conservation efforts, partly through pricing that would cost consumers more for using electricity during peak times.

Reached for comment, Steve Maviglio, a spokesman for Gov. Gray Davis, called the paper a “generator’s wish list,” saying it goes against the governor’s policy on the energy crisis.

“The governor is not calling off the dogs,” Maviglio said Saturday. “To suggest that ratepayers should shoulder the entire burden of deregulation is totally the opposite of what the governor is calling for.”

Lay, one of President Bush’s biggest campaign contributors and a key advisor on the Bush energy plan, has built a powerful energy company by buying electricity from generators and then selling it. Enron reported first-quarter revenue of $50.1 billion, nearly a 281% increase over the same quarter last year.

Lay met with Riordan and luminaries including actor Arnold Schwarzenegger and financier Michael Milken--plus about a dozen others--at the Peninsula Hotel.

Enron spokesman Mark Palmer said: “Our position is simple.” California needs to “increase the supply of energy and decrease the demand.”

Associated Press contributed to this story.