STATE WILL BUY POWER, PASS IT ON

The Daily News of Los Angeles

Gov. Gray Davis and the state Legislature moved Thursday to increase their commitment to nearly $ 1 billion in taxpayer money to buy electricity without any clear plan to get paid back by private utilities teetering on the brink of bankruptcy.

As Northern California suffered through a second day of rolling blackouts that darkened 1 million homes and businesses, the Legislature in an emergency night session Thursday approved spending $ 400 million to try to keep the state lighted for the next 12 days.

Davis declared a state of emergency late Wednesday, directing the state Department of Water Resources to use up to $ 450 million of its operating funds to buy out-of-state power from generating companies that have refused to sell to Southern California Edison and Pacific Gas & Electric because of doubts about their ability to pay.

The state previously spent $ 45 million to buy electricity and plans today to consider adding another $ 1 billion to the fund.

Consumer advocates sharply criticized the use of state funds as a bailout of failing companies.

”This is $ 900 million straight out of the public treasury to bail out the utilities and energy companies who in the last 24 hours brought California to its knees,” Harvey Rosenfield, president of the Foundation for Taxpayer and Consumer Rights, said from Sacramento on Thursday during a break in the proceedings.

”When’s it going to stop? It’s like protection money for the mob.”

State Sen. Tom McClintock, R-Granada Hills, condemned the deal, saying the state is buying power at 30 cents per kilowatt and selling it for 7 cents, meaning taxpayers throughout the state will be paying the difference.

”Whether the high rate is on your electric bill or your tax bill, you’re still paying through the nose,” he said.

”This crisis was staring us in the face last summer and we did nothing. I am afraid that in the next few days, we will be pressed to vote for another appropriation and then another and then another.”

Other legislators defended their actions as necessary to avoid blackouts, but conceded they were concerned about the reimbursement of taxpayer funds.

”There is no absolute guarantee that we will be repaid,” said state Sen. Richard Alarcon, D-Van Nuys, who sits on the Energy, Utilities and Communications Committee, which unanimously passed the $ 400 million emergency energy bill.

”The only guarantee is that if we don’t take these steps, there will be more brownouts.”

Similar concerns were expressed by other lawmakers.

”There is no guarantee we’ll get the money back. We are in a terrible situation,” Sen. Debra Bowen, D-Marina del Rey, chairwoman of the energy committee, told The Associated Press.

The Governor’s Office acknowledged the uncertainty of collecting from the utilities, but proceeded in good faith. ”We’re selling it (power) to the utilities,” said Steve Maviglio, spokesman for Davis. ”Like everyone else, we expect our money back.”

The blackouts began at roughly 10 a.m., shutting off power in scattered communities from the Oregon border to Bakersfield during a two-hour period before more energy could be found out of state.

Outages predicted for private utility customers in Southern California, however, failed to climb the Grapevine. With supplies short, more blackouts could occur today but officials were hopeful that supplies could be adequate.

Thursday’s blackouts and the near bankruptcy of the state’s two largest private utilities sent legislators scrambling for short- and long-term fixes for the energy crunch.

The Legislature was abuzz with energy bills and other legislative actions Thursday.

Davis signed two bills that would reform the power grid-controlling Independent System Operator board to free it of conflict from interest from energy stakeholders and guarantee state generators would not be sold to out-of-state purveyors.