USA TODAY
LOS ANGELES — California stumbled through its 15th straight day
of critical power shortages Tuesday as Gov. Gray Davis reopened
state coffers to keep spending nearly $ 40 million a day to keep
the lights on.
The move came as legislators tried to solve an energy crisis that
and Pacific Gas & Electric, say has pushed them $ 12 billion
into the red. On Tuesday, PG&E said it was ready to default
on its own electricity bill, a debt of $ 583 million due Thursday
to power wholesalers.
With both utilities unable to buy electricity on credit, the state
stepped in Jan. 17. It established an emergency fund of $ 438.5
the money was gone.
Tuesday, Davis tapped the budget of the state Department of Water Resources — which runs California’s vast reservoir and aqueduct system and holds its own contracts with power plants — to pay for electricity. The agency’s healthy credit rating can help keep the state afloat, though department spokesman Mike Sicilia declined to say for how long.
California’s crisis has spilled over to other Western states.
Davis and other governors from the region meet in Portland, Ore.,
on Friday to weigh strategy with Energy Secretary Spence Abraham.
Controversy intensified Tuesday after a state audit portrayed
SoCal Edison as deep in debt but recently generating billions
in dividends.
The audit, released by the California Public Utilities Commission,
found that SoCal Edison transferred $ 4.8 billion in dividends
to its parent company, Edison International, from Jan. 1, 1996,
to Nov. 30, 2000. That would have been enough to cover the massive bill PG&E has run up since May, when wholesale prices began soaring. Now, however, the utility lacks the resources to pull
itself out of the financial morass, the audit said.
Critics of the utilities say the audit is proof that the power
companies siphoned profits and plan to saddle their utility customers with the debt.
“These companies aren’t broke; they’re just leaving their billion-dollar bills for the taxpayers to foot,” said Harvey Rosenfield, president of the Foundation for Taxpayer & Consumer Rights. “The bottom line is that the energy crisis doesn’t have to be solved by the public bailing out Edison.”
SoCal Edison Vice President Thomas Higgins said the money transferred to the utility’s parent company repaid investments that its shareholders made in power plants.
Critics “don’t understand the distinction between profit and recovery of your investment,” he said. “When you sell the house,
you have to pay off the mortgage.”
Release of an audit of PG&E is expected sometime this week.
Lawmakers huddled Tuesday to devise a long-term solution to the
energy crisis, which is rooted in California’s 1996 experiment
with market deregulation. While deregulation freed wholesale energy prices, it kept strict caps on the prices utilities could charge
consumers. It proved lucrative for the utilities for the first
few years, but recent supply shortages sent wholesale prices skyward.
Among the legislative proposals are consumer rate increases, long-term contracts with wholesalers and the use of public money to pay down the utilities’ debts in return for an equity stake for ratepayers.
Meanwhile, the state power grid tried to scrape by without ordering
rolling blackouts.
