Consumer groups are prodding the governor to make good on his campaign pledge to renegotiate what he called overpriced Department of Water Resources power contracts. The advocates are specifically demanding that San Diego Gas & Electric?s Palomar project?pending approval before the California Public Utilities Commission?hinge on reworking Sempra?s controversial long-term contract. Sempra?s agreement is ?perhaps the most costly deal in the entire state portfolio and is practically a poster child for the errors the state made? when it signed the contracts at the height of the energy crisis, asserted The Utility Reform Network, the Utility Consumers? Action Network, the California Public Interest Research Group, and the Foundation for Taxpayer and Consumer Rights. In a May 24 letter to Governor Arnold Schwarzenegger, the groups urged the governor to endorse commissioner Carl Wood?s alternate decision that would make SDG&E?s purchase of the Palomar plant from a sister subsidiary contingent on a reworked DWR contract. The Palomar deal is part of a package of SDG&E power proposals, which also includes the controversial Otay Mesa contract with Calpine. A settlement being hashed out between Sempra and the state over energy crisis claims and the long-contested DWR contract does not appear to have advanced much in the last several months (see <i>Circuit<\/i>, May 14, 2004). According to Schwarzenegger spokesperson Ashley Snee, the governor has assembled a team and negotiations are under way. Snee deflected the question of whether Schwarzenegger endorses the Wood alternate plan linking approval of Palomar with a reworked contract. ?Rather than attempt to micromanage the CPUC, the governor asks that the CPUC adhere to principles of AB 57, including a transparent competitive procurement process,? she said.