Lawmakers Contending With Power Crisis Have Holdings in Electric Firms

More than a dozen of the 120 state lawmakers meeting in special session here to deal with California’s power crisis report stock holdings or business relationships with utilities or electricity suppliers, according to interviews and financial disclosure statements.

Several of the reported holdings are significant, although most are relatively modest.

Newly elected Assemblywoman Carol Liu (D-La Canada Flintridge), whose husband is the retired president of Southern California Edison, reported stock ownership totaling more than $10,000 in three important electricity suppliers: AES, Enron and Unisource.

Liu, former La Canada Flintridge mayor and City Council member, said she and her husband, Michael Peevey, sold their much larger combined stock holdings of more than $200,000 in utility giants Pacific Gas & Electric and Edison International last year.

Liu said her holdings will not affect her objectivity in assessing causes of or solutions to California’s electricity crunch and runaway wholesale prices.

“I don’t think it will affect my decision one way or another,” said Liu, one of the wealthier Assembly members. “In fact, if we find out that some of these generators have been gouging Californians, as far as I am concerned the attorney general ought to go after them.”

Another wealthy Assembly newcomer, Rebecca Cohn (D-Saratoga), reported five energy stocks, all foreign investments, in a portfolio of more than 150 stocks listed in her husband’s family trust. Cohn said the energy investments total $15,000 and that she does not consider them significant.

In his most recent economic interest statement filed with the state, new Assemblyman Phil Wyman (R-Tehachapi) reported stock holdings of more than $1,000 in each of four energy companies including Sempra, the San Diego utility.

Wyman also reported that his political lobby firm, Phil Wyman & Associates, received more than $10,000 from a subsidiary of international energy giant AES. Wyman was unavailable for comment, according to his Sacramento staff.

Sen. Steve Peace (D-El Cajon), who led the Legislature’s 1996 drive to deregulate electricity, lists no energy or utility stocks in his holdings. However, his 1999 statement filed in July 2000 listed Sempra Energy, parent company of San Diego Gas & Electric, as a client of his filmmaking company, Four Square Productions.

California law requires legislators and other public officials to disclose assets and income that may be “materially affected by their official actions.” It also states that they should sometimes be disqualified from participating in certain decisions to avoid conflicts of interest.

“No public official at any level of state or local government shall make, participate in making or in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest,” reads Gov. Code Section 87100.

In practice, determining whether a public official has a financial interest large enough to represent a conflict of interest is a subjective and prickly proposition. The Fair Political Practices Commission, the agency that administers the state’s Watergate-era Political Reform Act and levies fines on violators, is often asked to decide that question, and weighs many factors.

Among them are not only whether the decision will result in a financial windfall for the officeholder, but also whether it will benefit him or her more than it will the public.

Several legislators said in interviews that they had sold stock in the wake of electricity price jumps that broke out last summer in San Diego. Among those selling was Sen. Dede Alpert (D-Coronado), who said she sold her shares of Sempra Energy valued at more than $10,000 when utility rates skyrocketed.

“We sold all of our San Diego stock in July when I first began to deal with this issue,” said Alpert, “and I felt it wasn’t appropriate to own this stock any longer.”

In a telephone interview, Senate President Pro Tem John Burton (D-San Francisco) said he briefly held stock last year in Williams Energy Services, a Tulsa-based electricity and natural gas marketer that sells energy in California.

“I thought it was fiber optics,” said Burton, a lawyer who represented PG&E; on some hydroelectricity issues in 1993-94, “When I learned it was energy, I sold it immediately.”

Some officeholders are more conscientious than others about filling out their economic interest forms. Assemblyman Alan Lowenthal (D-Long Beach) lists a breakdown of his wife’s stock portfolio, although he said he is never personally involved in the investments.

The Lowenthal file lists stock investments in Calenergy Co. and AES, totaling more than $10,000. However, because of the long delays before filing, Lowenthal said in a telephone interview, his statement did not include his wife’s purchase of 200 shares of Enron, the Houston energy giant, last February. The stock is currently valued at more than $14,000.

More typical of lawmakers’ reported holdings were those of Assemblywoman Hannah-Beth Jackson (D-Santa Barbara). She reported owning only one energy stock, American Electric Power Co., valued at more than $1,000.

The overwhelming majority of California’s state Senate and Assembly members reported no direct investment in any utility or company related to electric energy. Those who did list such stock ownership or business dealings said they will not affect their decisions as the Legislature weighs the interests of energy company stockholders against those of electricity consumers.

Newly elected Sen. Bob Margett (R-Arcadia), a former assemblyman, said he employs a money manager to maintain a diverse portfolio for him and is not always aware of what stocks he holds.

But he said he knew he had holdings in Citizens’ Utilities, a company that provides water and power to rural areas, and Consolidated Edison, the electricity utility for New York City.

Margett’s 2000 economic interest statement, which covered 1999, also showed him with holdings between $10,000 and $100,000 in Pacificorp, an electricity producer that does business in Northern California and parts of the Pacific Northwest under the name Pacific Power. And it showed he had sold stock in PG&E; purchased earlier in the year.

He said he had not given any thought to his stock when considering the energy crisis, and does not believe it affects his judgment.

“No, there is no problem with me. I am not a blurb on [utilities’] radar screen. It’s a modest amount. We have a major crisis here in this state, and all I have thought about is what we need to do to fix it. It’s not much of a factor for me economically, and it’s certainly not much of a factor for them.”

Assemblyman Dave Cox (R-Fair Oaks) said the energy stock listed in his filing was part of an inheritance his wife received from her father. He does not believe the holdings--between $10,000 and $100,000 in Pacificorp and between $1,000 and $10,000 in Transcanada Corp.--affect his ability to make unbiased decisions on the energy crunch.

“Obviously, disclosure is the most important consideration,” said Cox, a former board member of the Sacramento Municipal Utility District who is considered one of the more knowledgeable lawmakers on energy issues.

Transcanada transports and markets natural gas, and recently has entered the electricity generating business. It owns two power plants and is building two more.

“We’re capitalizing on deregulation in the power industry,” the company’s Web site states.