3/27/01

LC010327

VAL>> ON LIFE AND TIMES TONIGHT --

JESS>> IT MAY BE HARD TO BELIEVE, BUT NOT EVERY SOURCE OF ENERGY IS BEING TAPPED TO AVOID BLACKOUTS.

JIM HILL>> A PERFECTLY GOOD ELECTRICAL PLANT OWNED BY DELTA POWER SITS IDLE AS CALIFORNIANS SIT THROUGH THE THREAT OF MORE ROLLING BLACKOUTS.

KEN ROSS>> IT'S A SHAME BECAUSE THIS IS ONE OF THE LOWER-COST SOURCES OF POWER FOR CALIFORNIA.

VAL>> IF YOU'RE AN EDISON CUSTOMER, GET READY FOR A STIFF RATE HIKE. IN TONIGHT'S THINKERS AND NEWSMAKERS, WE'LL TALK WITH L.A.'S POWER CHIEF ABOUT WHAT'S IN STORE.

JESS>> ALSO, PATT MORRISON WONDERS WHETHER THIS MIGHT BE A GOOD TIME TO STOP CURSING THE DARKNESS.

PATT>> LET THERE BE LIGHT, IF THE PRICE IS RIGHT, ON TONIGHT'S INFINITELY MORRISON.

VAL>> DO YOU THINK HOLLYWOOD IS HOME TO THE MOVIES? WELL, THINK AGAIN. SOME OF THE EARLIEST FILMMAKING TOOK PLACE RIGHT IN DOWNTOWN LOS ANGELES. WE'LL TAKE A LOOK AT THE CITY'S FIRST MOVIE STUDIO.

JESS>> THOSE STORIES COMING UP NEXT ON LIFE AND TIMES TONIGHT.

LIFE AND TIMES TONIGHT IS MADE POSSIBLE BY THE FOLLOWING FOUNDATIONS:

THE JAMES IRVINE FOUNDATION
WHICH IS DEDICATED TO THE DEVELOPMENT OF AN INFORMED CALIFORNIA CITIZENRY.

THE L.K. WHITTIER FOUNDATION
DEDICATED TO IMPROVING THE QUALITY OF LIFE BY SUPPORTING INNOVATIVE ENDEAVORS IN THE FIELDS OF MEDICINE, HEALTH, SCIENCE AND EDUCATION.

AND THE CALIFORNIA COMMUNITY FOUNDATION
UNDERWRITING THE SPANISH LANGUAGE TRANSLATION OF LIFE AND TIMES TONIGHT.

VAL>> GOOD EVENING, I'M VAL ZAVALA.

JESS>> AND I'M JESS MARLOW. OUR TOP STORY TONIGHT, THE BIGGEST ELECTRICITY RATE HIKE IN STATE HISTORY. IT CAME AS NO SURPRISE TODAY WHEN CALIFORNIA'S PUBLIC UTILITIES COMMISSION UNANIMOUSLY OKAYED AN INCREASE IN THE PRICE MILLIONS OF PEOPLE WILL HAVE TO PAY FOR ELECTRICITY. THE SHOCK MAY COME WHEN THE RATE HIKE, AS MUCH AS 46 PERCENT, SHOWS UP ON THEIR BILLS.

VAL>> BUT THE RATE HIKE WASN'T THE ONLY THING ON THE COMMISSION'S AGENDA TODAY. IT ALSO TRIED TO FIND A WAY TO BRING HUNDREDS OF SMALL ALTERNATIVE ENERGY PRODUCERS BACK ON LINE. MANY OF THEM HAVE SHUT DOWN BECAUSE THEY HAVEN'T BEEN PAID SINCE NOVEMBER. JIM HILL TELLS US WHY THESE SMALL PRODUCERS SEEM TO BE CAUGHT IN A WEIRD WEB OF ECONOMICS.

JIM>> LISTEN CLOSELY TO THE SOUND OF CALIFORNIA'S ENERGY CRISIS. SILENCE. NOT A PEEP FROM THIS POWERFUL GAS TURBINE. GAUGES THAT MEASURE ITS WATTS, VOLTS AND AMPERES REGISTER ZERO. A PERFECTLY GOOD ELECTRICAL PLANT OWNED BY DELTA POWER SITS IDLE AS CALIFORNIANS SIT THROUGH THE THREAT OF MORE ROLLING BLACKOUTS.

KEN ROSS>> IT'S A SHAME BECAUSE THIS IS ONE OF THE LOWER-COST SOURCES OF POWER FOR CALIFORNIA.

JIM>> IN THE WEIRD WORLD OF ENERGY ECONOMICS, THIS PLANT NEAR CAMARILLO AND SOME OF THE 700 SIMILAR POWER PLANTS HAVE BEEN OFF LINE AT THE TIME THEY'RE NEEDED MOST. THEY'RE SMALL OPERATIONS THAT USE WINDMILLS, SOLAR CELLS AND GEOTHERMAL PLANTS TO FEED THE ENERGY GRID. MORE THAN HALF ARE CO-GENERATORS LIKE THIS ONE. THEY MAKE ELECTRICITY WITH NATURAL GAS-FIRED TURBINES AND THEN USE THE HOT EXHAUST TO RUN A STEAM TURBINE WHICH PRODUCES EVEN MORE ELECTRICITY. AS A GROUP, THEY'RE CALLED "QUALIFYING FACILITIES", OR QF'S FOR SHORT.

ALTOGETHER, PLANTS LIKE THIS CAN GENERATE 20 TO 30 PERCENT OF CALIFORNIA'S ELECTRICITY, BUT ONE THING THEY SAY THEY'VE NOT BEEN ABLE TO GENERATE IN THE PAST FEW MONTHS IS A PROFIT. THAT'S BECAUSE THEY SELL THEIR POWER TO SOUTHERN CALIFORNIA EDISON AND PG&E. THOSE UTILITIES SAY THEY'VE LOST $13 BILLION DOLLARS SINCE LAST SUMMER AND HAVEN'T BEEN ABLE TO PAY MANY OF THE QF'S FOR THE PAST FIVE MONTHS. SO HUNDREDS OF SMALL ENERGY PROVIDERS SHUT DOWN AND PROVIDED NOTHING.

KEN ROSS>> INSTEAD, THE CALIFORNIA DEPARTMENT OF WATER RESOURCES IS GOING OUT AND PURCHASING POWER AT CONSIDERABLY HIGHER THAN WHAT WE WOULD BE PAID UNDER OUR CONTRACTS.

JIM>> SO MONEY IS GOING OUTSIDE OF CALIFORNIA TO BUY POWER AT A HIGHER PRICE AND BRING THAT POWER BACK IN?

KEN ROSS>> THAT'S CORRECT. IT SEEMS RIDICULOUS TO THOSE OF US THAT ARE IN THE BUSINESS IN THE CALIFORNIA.

JIM>> PG&E HAS AGREED TO MAKE PARTIAL PAYMENTS TO THE QF'S AND EDISON ANNOUNCED IT HOPES TO BEGIN PAYING QF'S FOR DELIVERIES STARTING IN APRIL. "WHILE SOUTHERN CALIFORNIA EDISON CONTINUES TO OPERATE UNDER CONDITIONS OF FINANCIAL DISTRESS", THE UTILITIES SAID, "WE WANT TO DO WHAT WE CAN TO ENABLE QF'S TO CONTINUE PROVIDING ELECTRIC POWER FOR OUR CUSTOMERS."

TODAY THE CALIFORNIA PUBLIC UTILITIES COMMISSION ORDERED THE UTILITIES TO START PAYING QF'S WITHIN 15 DAYS OF RECEIVING POWER FROM THEM AND SET THE RATE TO BE PAID. THAT MAY HELP SOME OPERATIONS LIKE WINDFARMS OR SOLAR FACILITIES, BUT CO-GENERATORS HAVE TO BUY NATURAL GAS FIRST. THEY SAY THE RATES SET BY THE COMMISSION ARE TOO LOW FOR THEM TO BUY THE FUEL AND STILL MAKE A PROFIT. LAST WEEK, ANOTHER PLAN TO PAY THE QF'S WAS DEBATED IN THE STATE ASSEMBLY.

HANNA-BETH JACKSON>> WE WANT TO MAKE SURE THAT THOSE THAT ARE ON THE BRINK OF GOING OUT OF BUSINESS BECAUSE THEY HAVEN'T BEEN PAID BY THE UTILITIES WILL, IN FACT, BE PAID AND BE PAID QUICKLY SO THAT WE CAN KEEP THEM UP AND RUNNING.

JIM>> BUT THAT PLAN DIED IN PART BECAUSE CO-GENERATORS SAID THEY COULDN'T BUY THE GAS THEY NEED AND MAKE A PROFIT. NOW MANY OF THEM SAY, UNLESS THEY CAN FIND A WAY TO MAKE MONEY IN CALIFORNIA, THEY MIGHT SELL THEIR POWER ELSEWHERE, TOUCHING OFF ANOTHER ROUND OF WEIRD ECONOMICS.

KEN ROSS>> WE ARE NOW HAVING TO EXPLORE THE OPTION OF CAN WE SELL OUR POWER TO SOMEBODY OTHER THAN THE UTILITIES?

JIM>> OUTSIDE CALIFORNIA?

KEN ROSS>> OUTSIDE OF CALIFORNIA, BUT MORE THAN LIKELY, THE POWER WOULD COME RIGHT BACK TO CALIFORNIA.

JIM>> BUT AT A HIGHER PRICE?

KEN ROSS>> AT A MUCH HIGHER PRICE.

JESS> TO WHAT EXTENT IS THE PRICE OF NATURAL GAS THE REAL PROBLEM FOR THESE CO-GENERATORS?

JIM>> IT'S THE ONLY PROBLEM THAT THEY SEE RIGHT NOW. THE REASON IS, BELIEVE IT OR NOT, THERE ARE ONLY TWO ROUTES FOR NATURAL GAS COMING IN TO CALIFORNIA. ONE IS A HUB BETWEEN THE OREGON BORDER AND CALIFORNIA IN THE NORTH. THE OTHER IS DOWN HERE IN THE SOUTH BETWEEN THE BORDER OF ARIZONA AND CALIFORNIA.

JESS>> WELL, THERE WERE PLANS TO BUILD AN ADDITIONAL PIPELINE FROM THE NORTH.

JIM>> WHICH WOULD BE VERY HELPFUL RIGHT NOW. THE PROBLEM IS, THERE'S A DIFFERENCE OF UP TO 50 PERCENT IN THE COST OF GAS IN THE SOUTH COMING ACROSS THE BORDER AND COMING ACROSS AT OREGON. THE PUC PEGS ITS RATE AT A LOWER COST OF THE OREGON PIPELINE. THE QF'S DOWN HERE HAVE TO PAY A HIGHER PRICE, 50 PERCENT HIGHER, FOR NATURAL GAS COMING ACROSS THE BORDER, SO THEY'RE SAYING THEY STILL CAN'T MAKE A PROFIT. THEY'RE STILL GOING TO GO OUTSIDE CALIFORNIA AND SELL THEIR POWER.

JESS>> AND THE COURTS HAVE ALLOWED THEM TO BREAK THEIR CONTRACTS WITH SOUTHERN CALIFORNIA EDISON AND PG&E AND THOSE?

JIM>> THAT'S RIGHT. LAST WEEK, THERE WAS A RULING IN IMPERIAL COUNTY. THE FIRST ONE OF THESE ALTERNATE GENERATORS SUED FOR THE RIGHT TO BREAK A CONTRACT AND SELL TO SOMEONE OTHER THAN EDISON. THE JUDGE GRANTED THAT. THEY SAID EDISON HAS NOT PAID FOR FIVE MONTHS. THAT IS BREACH OF CONTRACT. THAT ALTERNATE PROVIDER IS NOW FREE TO SELL OUTSIDE CALIFORNIA AND THAT DOES SET A PRECEDENT FOR OTHERS TO FOLLOW.

VAL>> WOW. IT IS A WEIRD WORLD. JIM HILL, THANK YOU SO MUCH.

OUR TOP STORY TOMORROW, ATTENTION, PARENTS. HERE'S SOMETHING YOU MAY NOT KNOW. YOUR KIDS WILL HAVE TO PASS A TEST BEFORE THEY CAN GET A HIGH SCHOOL DIPLOMA.

LEAH SANDERS>> ALREADY, TOO FEW HIGH SCHOOL STUDENTS MAKE IT TO GRADUATION DAY. BUT NOW IT'S GOING TO BE EVEN TOUGHER TO GRADUATE.

>> IT'S CERTAINLY NOT A BAD THING FOR THE INDIVIDUAL TO HAVE AN INSURANCE THAT HE KNOWS THAT, WHEN HE LEFT HIGH SCHOOL, HE KNEW SOMETHING.

VAL>> THE HIGH SCHOOL EXIT EXAM. THAT'S TOMORROW ON LIFE AND TIMES TONIGHT AT 7:00 P.M.

JESS>> IN TONIGHT'S THINKERS, SHAKERS & NEWSMAKERS, WE CONTINUE OUR DISCUSSION OF THE CALIFORNIA POWER CRISIS. ONE REASON THE PUC GRANTED A RATE HIKE TODAY WAS THE CONVICTION THAT IT WOULD ENCOURAGE PEOPLE TO CONSERVE ELECTRICITY.

VAL>> BUT WILL CONSERVATION GET THE STATE THROUGH THE SUMMER WITHOUT MORE BLACKOUTS? JOINING US NOW IS THE MAN GOVERNOR DAVIS CHOSE TO NEGOTIATE CALIFORNIA'S LONG-TERM POWER CONTRACTS WITH THE HOPE OF GETTING US OUT OF THIS MESS, LOS ANGELES DEPARTMENT OF WATER AND POWER CHAIRMAN, DAVID FREEMAN. WELCOME TO LIFE AND TIMES TONIGHT.

S. DAVID FREEMAN>> GOOD TO BE HERE, IN LOS ANGELES WHERE THE LIGHTS SHINE BRIGHTLY AND THE RATES ARE STABLE. (LAUGHTER)

VAL>> THAT'S RIGHT. WE NEED TO POINT OUT LOS ANGELES IS NOT PART OF THIS DEREGULATION MESS, VERY FORTUNATELY.

S. DAVID FREEMAN>> WE DIDN'T GO THERE AND DO THAT AND YOU'RE WELL LIT HERE.

JESS>> INDEED, THE SUCCESS OF THE DEPARTMENT OF WATER AND POWER IN BEING ABLE TO DEAL WITH THIS CRISIS WITHOUT ANY INCONVENIENCE OR RATE INCREASE TO THEIR CUSTOMERS SEEMS, TO SOME PEOPLE, TO SPEAK VOLUMES ABOUT THE NEED FOR THE STATE TO CONTROL AND TAKE THE GRID AND THE SOURCES OF POWER.

S. DAVID FREEMAN>> AND TO CREATE A CALIFORNIA POWER AUTHORITY SO THAT, IF THESE PEOPLE FROM OUT OF STATE WON'T BUILD POWER PLANTS, WE CAN BUILD THEM OURSELVES. AND IF INVESTMENTS IN CONSERVATION ARE NOT MADE, WE CAN MAKE THOSE INVESTMENTS. IF THE TRANSMISSION SYSTEM IS NOT EXPANDED, WE CAN MAKE THOSE INVESTMENTS. IT'S GETTING CONTROL OF OUR OWN DESTINY BECAUSE THE PRESIDENT OF THE UNITED STATES HAS TOLD US TO TAKE A FLYING LEAP AT A ROLLING DOUGHNUT. (LAUGHTER) HE HAS SAID THAT CALIFORNIA, YOU KNOW, YOU JUST STEW IN YOUR OWN MESS, AND HIS FEDERAL ENERGY REGULATORY COMMISSION IS ON A SIT-DOWN STRIKE. THEY'RE NOT DOING THEIR JOB. THEY'RE NOT REGULATING THE WHOLESALE PRICE AND THAT'S THE HEART OF THE PROBLEM. THESE WHOLESALE PRICES ARE KILLING THESE CO-GENERATORS. THEY'RE KILLING THE UTILITIES AND THEY'RE NOW GOING TO REALLY HURT THE ULTIMATE CONSUMER BECAUSE WE'RE HAVING TO PASS THOSE PRICES ON.

VAL>> I WANT TO GET TO TODAY'S BIG NEWS. THE PUC GRANTED A MAJOR RATE HIKE, AS MUCH AS 46 PERCENT, TO THE BIG USERS, THE COMMERCIAL USERS, LESS FOR RESIDENTIAL USERS, TO EDISON AND PG&E. DO YOU AGREE WITH THEIR DECISION?

S. DAVID FREEMAN>> WELL, I DON'T KNOW THE NUMBERS, SO I CAN'T SAY THE EXACT PERCENTAGE, BUT THE SHAPE OF THE INCREASE IS EXCELLENT. YOU KNOW, WHO ARE THE PEOPLE THAT ASKED FOR THIS DEREGULATION? IT WAS THE BIG USERS WHO PERSUADED THE GOVERNOR AND EVERYONE AND THE FREE MARKET ECONOMISTS CAME IN AND THEY SOLD US ON THIS, SO THERE IS JUSTICE IN THIS WORLD. THE PEOPLE THAT WANTED DEREGULATION ARE GOING TO HAVE TO PAY FOR THE INCREASES. THEY PROMISED US REDUCTIONS. INSTEAD, THERE'S INCREASES. THE SMALLER USERS WHO CAN'T AFFORD A BIG INCREASE ARE NOT GETTING IT. SO THIS WILL NOT ONLY ENCOURAGE CONSERVATION, IT IS FAIR, IT IS JUST.

VAL>> ANOTHER ISSUE THAT'S COME UP ARE THESE LONG-TERM CONTRACTS. THE GOVERNOR HAS ENTRUSTED YOU TO BE, I BELIEVE, THE LEAD NEGOTIATOR --

S. DAVID FREEMAN>> -- RIGHT.

VAL>> -- TO NEGOTIATE THESE LONG-TERM CONTRACTS IDEALLY AT A LOWER PRICE FOR ELECTRICITY AND THAT, IN THE LONG RUN, WE WILL GET OUT OF THIS TUNNEL THAT WE'RE IN. HAS IT WORKED? YOU'VE BEEN VERY SECRETIVE ABOUT THESE CONTRACTS.

S. DAVID FREEMAN>> NO, WE HAVEN'T BEEN SECRETIVE ABOUT THEM AT ALL. THE AVERAGE PRICE OVER TEN YEARS OF ALL THESE CONTRACTS, AND IT'S $42 BILLION DOLLARS WORTH OF ELECTRICITY THAT WE BOUGHT, IS 6.9 CENTS. IN THE LAST FIVE YEARS, THE AVERAGE PRICE WAS 6.1 CENTS. THE PRICES TODAY ARE 30, 40, 50 CENTS, SO WE NEGOTIATED THE CONTRACTS THAT ARE MUCH LOWER AND THEY SET THE MARKET. QUITE FRANKLY, THESE CO-GENERATORS ARE UNHAPPY BECAUSE THEY WON'T ACCEPT THE PRICE THAT WE NEGOTIATED. THEY WANT MORE MONEY.

VAL>> SO YOU NEGOTIATED A VERY LOW LEVEL. SIX POINT WHAT?

S. DAVID FREEMAN>> 6.1 FOR THE LAST FIVE YEARS, 6.9 AVERAGE, SO I FEEL LIKE WE DID A GOOD JOB AND WE ARE REVEALING THE AVERAGES. NOW WE'RE STILL BUYING POWER. YOU REALLY DON'T THINK THAT WE OUGHT TO REVEAL ALL THE DETAILS OF THE CONTRACTS. WE'D NEVER GET A BETTER DEAL FROM ANYBODY IF WE DID.

JESS>> THAT'S THE ELEMENT THAT CAUSED THE ACCUSATION OF SECRECY.

S. DAVID FREEMAN>> WELL, WE'RE IN -- THE GOVERNMENT'S IN A BUSINESS AND THEY HAVE TO OPERATE IN A BUSINESSLIKE MANNER WHEN THEY'RE IN A BUSINESS.

JESS>> BUT THEY HAVE SOME RULES THAT REGULATE THAT IT HAS TO BE PUBLIC BUSINESS. (LAUGHTER)

S. DAVID FREEMAN>> WELL, IT IS PUBLIC BUSINESS. WE'RE TRYING TO STABILIZE THE PRICE. WE ALSO HAVE LEFT THE MARKET OPEN FOR ABOUT HALF THE POWER SO THAT IF WE EVER, PRAY THE LORD, GET REAL COMPETITION, MAYBE THE PRICES COULD BE A BIT LOWER AND WE LEFT OPEN THAT POSSIBILITY. WE'RE JUST NOT SMART ENOUGH TO KNOW FOR SURE WHAT THE PRICE WILL BE IN THE FUTURE.

JESS>> YOU SAID EARLIER THIS MONTH, "DON'T FEEL SORRY FOR CALIFORNIA. WE'RE GOING TO COME OUT OF THIS STRONGER THAN EVER." STILL THINK SO?

S. DAVID FREEMAN>> I THINK SO. I REALLY DO BECAUSE WHAT WE'RE GOING TO HAVE HERE, WE'RE GOING TO BE THE HOME OF THE FUEL CELL, THE MICRO-TURBINE AND THE SOLAR MODULES, AND THEY'RE COMING. WE JUST BOUGHT A BUNCH OF THEM. WE'RE GOING TO BE SPRINKLING THEM ALL OVER L.A. WE'VE GOT POWER PLANTS THAT ARE THE SIZE OF A REFRIGERATOR TURNED SIDEWAYS THAT DON'T BURN FUEL. THEY CONVERT IT CHEMICALLY AND THEY DON'T CAUSE MUCH POLLUTION. YOU KNOW, THIS GIANT POWER AND ALL THESE GRIDS, THEY'RE FINE, BUT IF THEY'RE GOING TO KEEP SPUTTERING, CUSTOMERS ARE GOING TO BUY THEIR OWN POWER PLANTS. AND THEN WE'RE HARNESSING THE SUN. THIS IS A NEW REVOLUTIONARY AGE OF SMALL POWER PLANTS THAT ARE USHERING IN AND I THINK IT WILL BE BETTER AND CLEANER THAN WHAT WE'VE HAD IN THE PAST.

VAL>> BUT WE'VE JUST SEEN -- THE TOP STORY THAT WE JUST SAW FROM JIM HILL TALKS ABOUT HOW THE ALTERNATIVE ENERGY SOURCES, THE KIND OF BUSINESSES YOU WERE JUST TALKING ABOUT, ARE STUCK IN THIS STRANGE SPOT. THEY'RE NOT PRODUCING BECAUSE THEY'RE NOT GETTING PAID.

S. DAVID FREEMAN>> WELL, THIS WAS BECAUSE OF THE HIGH PRICES THAT EDISON AND PG&E PAID AT WHOLESALE AND THEY RAN OUT OF MONEY. THAT'S GOING TO BE CURED BY THIS MASSIVE RATE INCREASE. WITH ALL DUE RESPECT, THE MONEY WILL START FLOWING AND THESE PEOPLE WHO ARE CRYING, YOU KNOW, THEY'RE BUSINESS PEOPLE TOO, OH, WE'RE CO-GENERATORS, WE'RE POOR, THEY CAN BUY GAS IN THE LONG-TERM MARKET JUST LIKE THE PEOPLE I NEGOTIATED WITH. I MEAN, THE FOLKS THAT AGREED TO CONTRACT A LOWER PRICE THAN WHAT WE'RE OFFERING THEM ARE BUSINESSES THAT WENT OUT IN THE MARKET AND THEY BOUGHT LONG-TERM GAS WHICH IS A WHOLE LOT CHEAPER. YOU KNOW, THEY'RE LOBBYING FOR MORE MONEY. I DON'T BLAME THEM. THEY'RE JUST LIKE OTHER BUSINESS PEOPLE. THEY WANT TO GET AS MUCH AS THEY CAN.

JESS>> SO THE ISO'S ARGUMENT THAT WE'RE BEING GOUGED, THAT PEOPLE WERE PROFITEERING BEYOND WHAT THEY SHOULD HAVE BEEN, THAT WE WERE ALL BEING OVERCHARGED BY, WHAT, $6 OR $8 BILLION DOLLARS, THAT'S FALSE THEN?

S. DAVID FREEMAN>> NO, NO, IT'S TRUE, BUT IT'S LEGAL. IT'S LEGAL ROBBERY.

VAL>> (LAUGHTER) LEGAL ROBBERY?

S. DAVID FREEMAN>> I MEAN, THE TRUTH OF THE MATTER IS THAT WE DEREGULATED. WE SAID THAT WE DON'T HAVE PRICE CONTROLS ANYMORE. YOU CAN SELL YOUR POWER PLANT. AND THEN THE FEDERAL GOVERNMENT DEREGULATED. YOU KNOW, IF SOMEBODY TELLS YOU THAT YOU CAN CHARGE MORE MONEY, THE INSTINCT OF A BUSINESS PERSON IS TO CHARGE MORE MONEY. I'M NOT SAYING THEY'RE NOT ROBBING US. I'M JUST SAYING IT'S LEGAL.

VAL>> (LAUGHTER)

S. DAVID FREEMAN>> AND WE HAVE OURSELVES TO BLAME, IN PART, FOR GOING DOWN DEREGULATION ROAD. THANK GOODNESS, WE DIDN'T, AND THE LESSON TO BE LEARNED IS A COMPLETE FREE MARKET IN ELECTRICITY IS VERY EXPENSIVE FOR THE CONSUMER. VERY EXPENSIVE. IT AIN'T FREE.

VAL>> SO YOU'RE LOOKING FORWARD TO A CALIFORNIA POWER AUTHORITY. DAVID FREEMAN, THANK YOU SO MUCH FOR YOUR TIME IN APPEARING WITH US TONIGHT.

S. DAVID FREEMAN>> ALWAYS A PLEASURE.

VAL>> SO WHAT DO YOU THINK? GOUGING? NOT GOUGING? SOLAR? ALTERNATIVE? WHAT ON EARTH DO YOU THINK OUR FUTURE WILL BE? WE'D LOVE TO HEAR FROM YOU. HERE IS HOW YOU CAN REACH US:

LIFEANDTIMES@KCET.ORG
WWW.KCET.ORG.
LIFE AND TIMES TONIGHT
4401 SUNSET BLVD.
LOS ANGELES, CA 90027
(323) 953-5555

JESS>> PATT MORRISON WEIGHS IN WITH HER PREFERRED SOLUTION TO THE POWER CRISIS, IN TONIGHT'S INFINITELY MORRISON.

PATT>> IT ISN'T RATIONED. NOT YET. BUT IN CALIFORNIA, THE POWERS THAT BE -- NOW THERE'S AN OLD PHRASE WITH A NEW MEANING -- THE POWERS THAT BE WILL BE RE-PRICING LIGHT. THE PUBLIC UTILITIES COMMISSION VOTED TODAY TO HIKE UTILITY RATES. NOW A BIGGER CARROT AND A BETTER STICK REALLY IS CONSERVATION. IT WORKED IN LOS ANGELES IN THE DROUGHTS OF THE 1980'S AND EARLY 90'S. IT BECAME ILLEGAL TO HOSE DOWN DRIVEWAYS AND SIDEWALKS. PEOPLE PUT BRICKS IN THEIR TOILET TANKS TO SAVE WATER BY DISPLACING IT.

THIS IS THE RIGHT STATE FOR IT. CALIFORNIA'S MOTTO IS "EUREKA", MEANING, "I HAVE FOUND IT", AND IT'S A QUOTE FROM THE GREEK MATHEMATICIAN, ARCHIMEDES, WHO CLIMBED INTO HIS OWN BATHTUB AND DISCOVERED THE NOTION OF DISPLACEMENT. EUREKA!

NOW THE STATE MAY REWARD ENERGY SAVERS AND MAKE THOSE WHOM THE HEAD OF THE PUC CALL ELECTRICITY HOGS PAY FOR THEIR WASTEFUL WAYS. BUT THE TRICK, AS IT WAS DURING THE DROUGHTS, IS HOW TO GET PEOPLE TO CUT ENERGY WASTE WITHOUT STICKING IT TO THOSE WHO ARE ALREADY BEING POWER-FRUGAL. THE REGULATORS SHOULDN'T BE LIKE THOSE PARENTS WHO IGNORE THEIR WELL-BEHAVED STRAIGHT "A" KID BY USING TOYS AND TREATS TO BRIBE THEIR BAD KID INTO BEHAVING.

IT'S A VERY DICEY UNDERTAKING CHANGING THE WAY WE REGARD A COMMODITY THAT'S BEEN PITCHED AS BEING AS BASIC TO LIFE AS SLEEP AND AIR. FOR YEARS, THE PRACTICE HAS BEEN THE MORE YOU USE, THE LESS YOU PAY FOR IT. REVERSING THAT WILL BE AS HARD AS DISCOURAGING POPULATION GROWTH BY CUTTING THE DEPENDENT DEDUCTION FOR ANY CHILD BEYOND THE LIMIT OF, SAY, THREE. DISCOURAGING CALIFORNIANS FROM BURNING THE MIDNIGHT OIL BY PRICING EVERY EXTRA KILOWATT HOUR HIGHER THAN THE KILOWATT HOUR BEFORE IT? I CAN SEE THE FALLOUT NOW. "KILOWATT COURT, JUDGE READY KILOWATT PRESIDING".

NOW WE MAY BE NEGOTIATING A HAIRPIN TURN ON THE ELECTRICITY HIGHWAY. FOR 50-PLUS YEARS, BOTH GOVERNMENT AND BUSINESS HAVE PERSUADED US TO "LIVE BETTER ELECTRICALLY". NOW TRYING TO REVERSE THAT MODE OF THINKING IS LIKE THE WARRING MESSAGES INSISTING THAT AMERICANS BE X-RAY THIN WHILE ALSO DEMANDING THAT THEY EAT, DRINK AND SNACK ALL IN SUPER-SIZE.

VAL>> IN TONIGHT'S PEOPLE, PLACES & THINGS, ANOTHER IN OUR OCCASIONAL SERIES ON LOST L.A. WE ALWAYS THINK OF HOLLYWOOD AS HOME OF THE MOVIES, BUT DOWNTOWN LOS ANGELES WAS THE BIRTHPLACE OF FILMMAKING IN THE REGION.

JESS>> THE SELIG POLYSCOPE COMPANY OF CHICAGO CAME TO TOWN IN 1907 TO SHOOT A FILM. THEY ENDED UP STAYING, EVENTUALLY SETTING UP SHOP AT TWO DIFFERENT LOCATIONS DOWNTOWN. THAT AREA WAS THE CENTER OF ACTIVITY IN THE EARLY 20TH CENTURY. IT WAS ONLY A FEW YEARS LATER THAT THE FILM INDUSTRY STARTED MOVING WEST TOWARD HOLLYWOOD.

VAL>> AND JOINING US NOW IS OUR LOCAL HISTORIAN ON HOLLYWOOD, MARC WANAMAKER. WELCOME BACK TO LIFE AND TIMES TONIGHT.

MARC WANAMAKER>> THANK YOU.

JESS>> SO DOWNTOWN LOS ANGELES WAS REALLY WHERE FILMMAKING BEGAN?

MARC WANAMAKER>> YES, AND 1907 WAS QUITE AN EARLY TIME. THEY CAME OUT FROM CHICAGO TO FILM SCENES FROM "THE COUNT OF MONTE CRISTO" DOWN NEAR LA JOLLA, YOU KNOW, THE BEACH SCENES.

VAL>> ARE YOU SAYING THEY STARTED THE FILM IN CHICAGO?

MARC WANAMAKER>> YES, THEY STARTED THE FILM IN CHICAGO AND THEY NEEDED THE OUTDOOR BEACH SCENE --

JESS>> -- THEY NEEDED THE CLIMATE TOO.

MARC WANAMAKER>> CAN YOU IMAGINE CHICAGO, THE LAKE, CAN YOU IMAGINE THAT? THEY CAME OUT HERE WHERE THEY COULD ACTUALLY FILM. TOM SANCHEE WAS THE FIRST ACTOR, THE FIRST STAR YOU MIGHT SAY, THAT STARRED IN A FILM IN CALIFORNIA, PERIOD. WE'RE TALKING DRAMATIC, BECAUSE EDISON WAS ALREADY HERE IN 1898 FILMING SPRING STREET SCENES.

VAL>> YOU KNOW, YOU BROUGHT SOME GREAT STUFF ALONG TO SHOW US, SO LET'S TAKE A LOOK AT WHAT YOU BROUGHT AND YOU CAN TELL US A LITTLE BIT ABOUT IT.

JESS>> THIS IS LONG BEFORE THE BIG SOUNDSTAGE.

MARC WANAMAKER>> ABSOLUTELY.

VAL>> WHO IS THIS GENTLEMAN?

MARC WANAMAKER>> THIS IS COLONEL WILLIAM SELIG HIMSELF IN CHICAGO. MR. SELIG, I MEAN, HE WAS QUITE AN ENTREPRENEUR. HE IS THE ONE THAT BUILT OUR FIRST L.A. ZOO WITH HIS SELIG STUDIO ZOO, WHICH IS ANOTHER SUBJECT WHICH WE'LL COVER ANOTHER TIME. OF COURSE, MR. SELIG WAS QUITE A GUY.

THIS IS FRANCIS BOGGS, WHO WAS THE FIRST DIRECTOR HERE IN LOS ANGELES. HE'S THE ONE THAT BROUGHT THAT COMPANY OUT HERE TO FILM THOSE SCENES. THE FIRST FULL-LENGTH FILM, YOU MIGHT SAY, A DRAMATIC FILM, EVER SHOT WAS IN "THE HEART OF A RACE HORSE TOUT" SHOT AT SANTA ANITA RACETRACK --

VAL>> -- I'M SORRY, THAT WAS THE NAME OF THE FILM?

MARC WANAMAKER>> THAT'S THE NAME OF THE FILM. A RACE TOUT IS A PERSON WHO PREDICTS THE RACES AND DOES BETS AND THINGS LIKE THAT.

EARLY FILMMAKING CAME TO DOWNTOWN. THIS IS THE BRADBURY MANSION UP ON COURT STREET, UP ON BUNKER HILL WHICH NO LONGER EXISTS, AND MANY FILMMAKERS IN THE EARLY DAYS USED THESE AS BACKDROPS EXCEPT THIS BUILDING BECAME A MOVIE STUDIO IN 1913. MARY PICKFORD WORKED IN THIS BUILDING AND IN BACK THEY OPENED UP SORT OF LIKE A STAGE IN THE BACK OF THE HOUSE.

VAL>> BEAUTIFUL.

MARC WANAMAKER>> IT'S A GORGEOUS BUILDING. IT'S, OF COURSE, RELATED TO THE BRADBURY BUILDING IN --

JESS>> -- STILL EXISTS?

MARC WANAMAKER>> YES, AND MR. BRADBURY COULD JUST WALK DOWN FROM THE HOUSE DOWN A COURT FLIGHT RIGHT DOWN TO THE BUILDING.

VAL>> DOES THIS HOUSE STILL EXIST?

MARC WANAMAKER>> NO, ALL DEMOLISHED IN 1932.

JESS>> THIS IS THE L.A. TIMES, ISN'T IT?

MARC WANAMAKER>> THIS IS AN EARLY SHOT OF THE L.A. TIMES BUILDING. ALL THESE SHOTS WERE TAKEN BETWEEN ABOUT 1908 AND ABOUT 1914, SO THIS IS THE BUILDING WHICH BLEW UP. AN ARSONIST BLEW IT UP AND BURNED IT OUT AND THAT'S WHEN THE --

VAL>> -- DURING THE LABOR STRIKE.

MARC WANAMAKER>> YES. AND THIS WAS THE BACKDROP OF THE SELIG COMPANY WHEN THEY CAME TO L.A. OF COURSE, THE STREETS WERE BUSTLING. IT WAS A MAJOR CITY AT THE TIME. PEOPLE DON'T REALIZE THAT DOWNTOWN L.A. WAS A MAJOR CITY. THEY THINK IT WAS A QUIET PLACE.

THIS IS PERSHING SQUARE. THAT BIG BUILDING YOU SEE RIGHT IN THE MIDDLE THERE IS THE AUDITORIUM KNOWN AS THE PHILHARMONIC AUDITORIUM WHERE WILLIAM H. KLUNE PREMIERED THE D.W. GRIFFITH "THE BIRTH OF A NATION" IN 1915.

VAL>> I'M SORRY, YOU SAID AUDITORIUM. DO YOU MEAN MOVIE THEATER?

MARC WANAMAKER>> IT WAS FIRST AN AUDITORIUM FOR PHILHARMONIC AND THEN, YES, MR. KLUNE MADE IT INTO A MOVIE HOUSE, BUT A MAJOR ONE.

JESS>> AND IT MORE RECENTLY BECAME A CHURCH?

MARC WANAMAKER>> YES, MANY THINGS. OF COURSE, IT'S NO LONGER WITH US.

HERE WE ARE AT THE BILTMORE HOTEL AND YOU SEE PERSHING SQUARE TODAY. IT'S QUITE A FAR CRY. THERE USED TO BE A LOT OF TREES IN THE MIDDLE THERE, OF COURSE. IT WAS LIKE A PARK ATMOSPHERE. NOW IT'S QUITE DIFFERENT AND THE SKYLINE, OF COURSE, IS QUITE DIFFERENT THAN WHAT IT WAS IN 1908.

HERE'S A GOOD SHOT AROUND 1911 AND THIS IS BROADWAY. YOU CAN SEE A BUNCH OF MOSTLY WAGONS, IF YOU NOTICE. YOU DIDN'T SEE ANY CARS AT THAT TIME, EVEN THOUGH CARS WERE AROUND, BUT YOU DON'T SEE IT. OF COURSE, THE DIFFERENCE TODAY IS QUITE --

JESS>> -- QUITE PROFOUND.

MARC WANAMAKER>> QUITE PROFOUND, BUT MANY OF THE ORIGINAL BUILDINGS THAT WERE BUILT IN THE 1800'S ARE STILL THERE. WHEN THE SELIG COMPANY CAME HERE, THE FIRST PLACE THEY WENT WAS TO A ROOFTOP WHICH IS NOW DEARDON'S DEPARTMENT STORE. THEY WENT TO THAT ROOFTOP AND THEY FILMED ON THE TOP OF THAT ROOF THEIR FIRST FILMS ON TOP OF SKYLIGHTS, MIND YOU.

VAL>> WAS THAT THE "RACING TOUT" FILM?

MARC WANAMAKER>> YES, PART OF IT, PART OF IT. THIS IS, OF COURSE, PERSHING SQUARE AGAIN LOOKING REALLY EARLY, ABOUT 1912. YOU CAN SEE THERE IN THE MIDDLE IS RIGHT WHERE THE PARK IS. "IN THE HEART OF A RACE HORSE TOUT" WAS SHOT IN PART, OF COURSE, AT SANTA ANITA, BUT ALSO ON THIS ROOFTOP. THE ROOFTOP WHICH WE'RE GOING TO SEE SOON, THERE WASN'T MUCH ROOM UP THERE AND THEY HAD TO GO SOMEWHERE ELSE.

BY THE WAY, THIS IS TALLY'S THEATER, WHICH WAS MORE OR LESS, I GUESS, A NICKELODEON. THOSE ARE MUTOSCOPES AND THOSE ARE KINETOSCOPES. YOU PUT A NICKEL IN AND YOU CAN SEE A DANCER DANCE --

VAL>> -- FOR LIKE A COUPLE OF MINUTES, RIGHT? VERY SHORT.

MARC WANAMAKER>> YES, EXACTLY, AND YOU CAN EVEN HEAR. THERE ARE LADIES SITTING ON THE RIGHT. IT'S HARD TO SEE THEM, BUT THEY HAVE LITTLE EARPHONES AND THEY'RE LISTENING TO SOMEBODY SPEAK BECAUSE EDISON WAS EXPERIMENTING WITH SOUND THAT FAR BACK.

VAL>> THIS WAS IN DOWNTOWN LOS ANGELES?

MARC WANAMAKER>> YES, RIGHT ON BROADWAY. TALLY'S BROADWAY AND MR. TALLY, BY THE WAY, IS RIGHT BEHIND THERE.

NOW THIS IS THAT STAGE I WAS TELLING YOU ABOUT ON TOP OF DEARDON'S.

JESS>> RIGHT, IN THE BACKYARD?

MARC WANAMAKER>> NO, NO, THIS IS DEARDON'S ON THE ROOF. RIGHT BELOW, YOU CAN SEE THERE A BIT OF GLASS. THAT IS, OF COURSE, THE SKYLIGHT THAT THE STAGE WAS BUILT ON AND THEY'RE LOOKING AT THIS SET -- THAT'S FRANCIS BOGGS ON THE RIGHT -- AND THEY'RE LOOKING AT THIS TINY SET AND HE'S THINKING, HOW AM I SUPPOSED TO GET ACTORS OUT HERE? (LAUGHTER) SO THEY HAD TO GO SOMEWHERE AND THEY LEASED THE DRYING YARD OF THE SING KEE LAUNDRY ON OLIVE STREET BETWEEN 7TH AND 8TH.

SO, IN OTHER WORDS, "CROUCHING TIGER, HIDDEN DRAGON" WINNING THE ACADEMY AWARD, WELL, THE FIRST MOVIE STUDIO WAS IN A CHINESE LAUNDRY IN LOS ANGELES. THERE IS A VERY EXTREMELY RARE PICTURE SHOWING YOU THE SING KEE LAUNDRY DRYING YARD AND THE FIRST SET, WHICH IS A BEDROOM SET, BELIEVE IT OR NOT. IF THERE'S A NICE LITTLE WIND, YOU CAN IMAGINE THAT PEOPLE HAVE TO HAVE A GOOD IMAGINATION THAT THAT IS AN INTERIOR OF A BEDROOM.

JESS>> NOW WE KNEW THAT THE FILM INDUSTRY CAME TO CALIFORNIA IN LARGE MEASURE BECAUSE OF THE CLIMATE, BUT MOST PEOPLE DIDN'T KNOW THAT DOWNTOWN LOS ANGELES WAS THE HEART OF IT.

MARC WANAMAKER>> THAT'S RIGHT. DOWNTOWN, AND THIS IS THE OTHER SET RIGHT IN THE DRYING YARD. THEY NEEDED THE CLIMATE. THEY DID NOT NEED TO HAVE RAIN AND SNOW AND ALL. THEY NEEDED TO HAVE 24-HOUR DAYS AND MANY DIFFERENT WEEKS WITHOUT AN INTERRUPTION WITH WEATHER.

VAL>> SO WHAT CHANGED IT? WHY DID DOWNTOWN LOS ANGELES GET ABANDONED AND HOLLYWOOD EMERGE?

MARC WANAMAKER>> WELL, YOU CAN SEE IN THESE PICTURES THAT THERE'S NO ROOM TO EXPAND AND WHEN THE INDUSTRY STARTED TO BUILD BIGGER SETS. YOU CANNOT REALLY OPERATE IN A DRYING YARD OF A CHINESE LAUNDRY. YOU HAVE TO MOVE. THEY DID MOVE AND THEY MOVED TO EDENDALE, WHICH IS A LITTLE BIT NORTH OF DOWNTOWN L.A. IT'S ON GLENDALE BOULEVARD TODAY. 1845 GLENDALE BOULEVARD WAS THE SELIG STUDIO WHICH WAS A MISSION STYLE STUDIO BUILT EXACTLY LIKE THE SAN GABRIEL MISSION. IT WAS A REPLICA OF IT. THAT'S WHERE THEY STARTED AND THEY BUILT THAT IN 1909.

JESS>> ISN'T THAT, WHAT, ELYSIAN PARK?

MARC WANAMAKER>> THAT'S ECHO PARK AREA. SO THAT IS REALLY THE VERY BEGINNINGS OF THE FILM INDUSTRY IN LOS ANGELES.

VAL>> MARC WANAMAKER, THANK YOU SO MUCH. IT'S ALWAYS SUCH A PLEASURE TO HAVE YOU ON.

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