At least one Enron lawyer was a quotidian presence at the California Public Utilities Commission leading up to deregulation. Enron saw vast potential for profits by pushing regulators to open the electricity market. You already know this, but it's useful background to remember in the context of what's going on today. Enron was a big part of sweetening deregulation. The company took every opportunity to convince regulators that deregulation was a win-win situation for consumers, large and small, and would boost efficient generation. Enron, sadly, became the "jump the shark" point of souring the electricity market. (For those of you who don't know what a "jump the shark" moment is - the instant of irrevocable decline - it's worth a trip to www.jumptheshark.com so you can add it to your lexicon.) The state's bitter deregulation experience, in part, led to bankruptcies and near bankruptcies. Many companies railed at the rude inequities of the spot market and rudely attacked a couple of CPUC members. There was no end of single malt scotch for industry executives drowning their shareholders' sorrows. The California electricity market became a tainted place to do business. So why in the world, in 2006, is there a new crop of companies that want to generate electricity for the state? These are companies that will not have the benefit of renewables subsidies or the state-mandated contracts with investor-owned utilities - for the most part. These are companies that are looking to gentrify while watching others flee the metaphorical boarded-up storefronts. These are companies that know they can't do business without contracts for their facilities' output with utilities, and know those contacts are dear. Some of these companies even want to provide electricity on the spot market, knowing that the California Independent System Operator's prices are capped. Apparently, hope springs eternal. One of these companies, Houston-based Complete Energy, must have a heavy dose of "optimism" in its business plan. Managing director Hugh Tarpley and senior vice-president, commercial strategy, Peter Tellegan were both at Dynegy when that company was attempting to acquire the tatters of Enron for $9 billion in 2001. Despite that "hairy" scenario - as Tarpley put it - they both decided to get back into the energy business. Complete Energy bought the 1,121 MW La Paloma power plant last year. One half of La Paloma is contracted to Southern California Edison. One-fourth is under contract with Morgan Stanley. And the last quarter of its output is dedicated to the spot market. Complete Energy plans to acquire up to 10,000 MW of power plants in the next three years. In that acquisition vein, Complete wanted to buy up the power plants that Duke put up for sale - Moss Landing, Morro Bay, and a few others. But it was beaten out by its competitor, LS Power. LS Power was able to sign the agreement on a Sunday, while Complete couldn't sign it until Tuesday, according to the two. (LS Power did not return repeated requests for comment.) Why would they want to buy gas-fired power plants when gas prices are volatile and California is a pariah for the energy business? Complete has a tolling arrangement on the gas fuel, so volatility is not a problem. Tarpley says the company is "comfortable" with where the California Independent System Operator and the market are going. I read this as forecasting that California's appetite for energy will never be sated and that we will pay pretty much anything to keep that last air conditioner on in August. I also interpret this as a sign that while some companies flee, that vacuum allows for moderate profits on a continuing basis - not the skyrocketing sales prices accrued by those generators that were early into the deregulated market. They are also benefiting from the post-deregulation reality check. While new generators need contracts and cannot depend on the spot market for sales, they are well aware that the state needs a capacity market. Edison Mission, an affiliate of Southern California Edison, the utility, is also hot on the old-fashioned gas-fired generator business in California, as well as a new deal for a hydrogen plant. Like Complete, Mission sees the grid operator's rules and state regulation promoting new generation, according to Charley Parnell, regional vice-president, government and regulatory affairs. Mission has two huge - 500 MW each - peaking plants proposed, one in the City of Industry and the other in Romoland (Circuit, Dec. 16, 2005). Mission turned its attention to California after it sold its international assets last year. Last week, Mission, along with BP (another optimistic newcomer to the state's wholesale energy business), announced that it is pursuing yet another power plant. The plant would be adjacent to BP's Carson refinery south of Los Angeles. It is planned to produce 500 MW using hydrogen cracked from the petroleum coke at the refinery. Carbon dioxide emissions from the process would be sent to nearby coastal waters and injected underground.This project is still in the engineering phase, and no application is expected until 2008, according to Parnell. It's not expected to be considered "renewable" energy under current subsidy programs or the renewables portfolio standard. Still, Mission is not about to embark on building any of these without a contract for their output - either with Edison or with the Los Angeles Department of Water & Power. And, according to Parnell, the company is not in negotiations with any buyer at this time. As the unregulated affiliate of Edison, Mission has another problem. State regulators are leery of having one arm of a utility corporation sell to another arm. It can all be just too cozy. Perhaps Mission is betting on a public utilities commission that will be so desperate for new supplies that the problems of affiliate transaction rules will be minimized. Another newcomer to the business, but one with a renewables slant, is Babcock & Brown. Until recently, the Aussie firm has been known for its plans to build a transmission line from Pittsburg to San Francisco underneath the Bay Bridge. But it recently ventured into California wind energy too. At the very end of last year, a 50 MW project with GE Financial went on line. Late last month, B&B announced that it had acquired G3 Energy, owner of a small number of wind turbines in the Altamont Pass. The former project has a contract with San Diego Gas & Electric for its 25 turbines. The latter, however, is a more interesting acquisition, as wind projects in the Altamont Pass have recently undergone a stricter licensing process from Alameda County. That includes curtailed working hours in order to spare migrating birds from being chopped up by turbine blades (Circuit, Nov. 4, 2005). Why a company new to the California wind market would try to finesse the avian obstacles is a question. B&B deferred comment. However, in general, Hunter Armistead, vice-president of Babcock & Brown Power Operating Partners, stated in a press release, "Our strategy [is] working with investment partners to expand in the rapidly growing wind energy sector, particularly in the United States." Despite all the moaning over local requirements for bird safety, the grid operator's redesign, all the interminable workshops trying to work out a capacity market, and resource-adequacy requirements for generator contracts, there are entities that think California just might be a good place to settle down after all.