DAVID BRANCACCIO, anchor:
Yes, California spent its 11th straight day on high alert for possible rolling blackouts, but this day was different. State energy managers had actually lifted the alert overnight, and it turns out they reinstated the alert today more as a bureaucratic formality, and state officials are calling the outlook for energy good. But that’s certainly not the assessment of some consumer groups today who were close to blowing a circuit breaker over the solutions being considered by California’s politicians for the crisis. Bob Moon reports.
BOB MOON reporting:
Lawmakers here in California are prepared to work through the weekend to find a long-term solution to the crisis, and one plan in particular is occupying their attention. It calls for issuing bonds to cover the multibillion-dollar debts of California’s two biggest electric utilities and tacking the payback on to customers’ bills over 10 years. Governor Gray Davis insists it’s not a bailout since the state can sell stock options in the power companies if the price goes up to help pay off the bonds. But consumer activist Jamie Court says if this is the end game, it’s pretty clear who loses.
Mr. JAMIE COURT (Foundation for Taxpayer and Consumer Rights): Well, it’s looking like it’s almost checkmate for the ratepayer or the taxpayer. One of them’s going to be dead meat in this scenario because what we’re seeing right now is a scenario where either ratepayers or taxpayers could be on the hook for literally tens of billions of dollars.
MOON: Court is executive director of the Foundation for Taxpayer and Consumer Rights. He vows if the proposal passes, there will be a voter initiative to slap a windfall profits tax on the power generators. I’m Bob Moon for MARKETPLACE.
BRANCACCIO: And one update on the news. California’s Air Pollution Authority has decided to stick to its strict electric car goals, despite the apparent dearth of electricity in these parts.