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Energy Novice to Be Paid $240,000

Power: Hefty annual salary goes to consultant with one year's experience in the field. State officials say she is doing a good job.

By JEFFREY L. RABIN, DARYL KELLEY, Times Staff Writers

The Davis administration is paying a young business consultant with barely a year's experience in the energy industry $240,000 annually to head a team of traders who secure California's daily electricity supply.

State officials hired Susan T. Lee, 30, in April without competitive bidding under an emergency declaration by Gov. Gray Davis. Lee's contract is equal to the $20,000 a month that Davis pays his chief energy advisor, S. David Freeman, a top utility executive for decades. The two-year contract will pay Lee up to $480,000 to oversee the state's day-to-day energy purchases, totaling billions of dollars a year.

Lee's contract reflects the pressure and difficulties the state says it faces to fill key jobs in its new role as one of the nation's largest power buyers, a role that it took on in January as California's utilities faltered. Lee's contract was one of about a dozen released Monday, and among the largest. Reached at her Sacramento office, Lee would not discuss her contract. She said only that she heads a 15-person team of traders and schedulers that works long hours to keep California's power flowing. Pete Garris, a contracts manager for the state Department of Water Resources who recruited Lee, said he met her at industry meetings and had been impressed by her savvy.

He said he gave her a pay raise to lure her to state service in April after Ron Shimizu, her boss at Mieco Inc., a trading firm in Long Beach, recommended her. Shimizu refused comment Tuesday. The state, according to Garris, must compete for employees against an aggressive energy industry and pay good salaries to stay in the game. "You can consider this situation to be very extraordinary," Garris said. "Unless we can get permanent and full-time positions approved, these are the rules we have to follow to be able to hire [consultants]." Garris insisted that it is unfair to compare Lee's contract with the six-month, $120,000 deal that Freeman--the former boss at several major utilities--struck with the governor.

"I don't want to compare Susan Lee to David Freeman," Garris said. "David comes from the Los Angeles Department of Water and Power and Susan came from a [private] power marketer. With Susan, we just followed the standard formula." In her new job, Lee will direct an immensely complicated, around-the-clock operation responsible for "procuring energy, scheduling power and associated transmission, and reconciling deviations between contracts and deliveries," according to her contract.

Lee's resume, attached to the contract, shows that she had no experience in the energy field until March 2000, when she joined Mieco. There, she was a trader and power scheduler, not a manager. "She was only here for a year or so," said Dina Alvarez, an administrative manager for the company. A 1994 graduate of UCLA with a degree in economics, she worked as a pension and benefits manager in Los Angeles and New York before joining Mieco. Lee's contract stands out compared to others disclosed this week, not only for its size but for her relative inexperience in the energy field. She is being paid $120 an hour and can earn a maximum of $480,000, including expenses, by April 2003.

Another new consultant, William L. Green, has almost a quarter of a century of experience working for the Bonneville Power Administration, Pacific Gas & Electric and the California Independent System Operator. He is being paid $85 an hour to supervise workers who reconcile the state's accounting of energy purchases. His two-year deal is worth up to $340,000.

They are not alone in cutting lucrative deals. Richard Ferreira, the former assistant general manager at the Sacramento Municipal Utilities District, has a $500,000 contract and is being paid $200 an hour to assist the state in negotiating power purchase contracts. He worked for the Department of Water Resources for 23 years before joining the Sacramento agency in 1987.

Hardy Energy Consulting also has a $150,000, six-month contract that calls for Randy Harvey to be paid $300 an hour. Harvey has a quarter of a century of energy experience, particularly at the Bonneville Power Administration, where he was chief executive officer from 1991 to 1997. Lee's recruiter, Garris, said her lack of experience is not a concern. "So far she's done an excellent job," he said. "She has the skills, and she has the ability. She was doing a similar job." Dozens of consultants, including Lee, have been hired since January, when Davis declared an energy emergency and set up a special arm of government to buy power. The state filled a vacuum when generators refused to sell to PG&E, Southern California Edison and San Diego Gas & Electric because they were no longer considered credit-worthy, said Oscar Hidalgo, spokesman for the Department of Water Resources.

Hidalgo said that about 60% of the 95 people now working for the division are consultants. The rest are state employees. As part of the process, Lee's unit oversees the purchase of power a day ahead of when it is needed. Hidalgo said Lee is involved in contracts that extend no more than three months.

http://www.latimes.com/news/state/20010704/t000055118.html

-- Martin Thompson (mthom1927@aol.com), July 04, 2001

Answers

My cousin has a twenty four year old son who has two years experience working as a lineman for So.Cal.Ed. I wonder, if his father sent him to Sacramento, Ca., would Davis pay him $120,000 a year? He speaks fluent English, communicates well, and has energy field experience. Why can't he contribute, too, as a consultant?

-- Uncle Fred (dogboy45@bigfoot.com), July 04, 2001.