CBS MORNING NEWS
JULIE CHEN, anchor:
California lawmakers could consider as early as tomorrow a plan to end the power crisis that’s gripping the state. It would, in effect, make the state an electricity broker, but critics say taxpayers would pay a heavy price. Randall Pinkston reports.
RANDALL PINKSTON reporting:
After a week when California’s utilities came close to rolling blackouts, Governor Gray Davis and power company officials hammered out a bailout plan that would involve the state in the energy business.
Governor GRAY DAVIS (Democrat, California): We want to purchase the power that California needs.
PINKSTON: Under the plan, California would sign long-term contracts to buy power from producers. The state would then sell it to the big utilities, Pacific Gas and Electric and Southern California Edison, which can no longer afford these contracts because they are so deep in debt.
Gov. DAVIS: Clearly we want to avoid bankruptcy. Our fate is tied to the utilities. They know better than anyone else how to keep the lights on.
PINKSTON: The governor says the cost of keeping the lights on will not go up, but critics dispute that.
Mr. HARVEY ROSENFIELD (Foundation for Taxpayer Consumer Rights): What the power brokers have done last night behind closed doors is potentially stick the ratepayers with a hidden $ 10 billion bailout.
PINKSTON: The governor’s plan comes as several recent studies suggest that by skipping regular maintenance, and then suddenly shutting down plants for emergency maintenance, holding back power and manipulating exports, producers choked off supply and drove up prices during power crises. The industry flatly denies that it’s at fault.
Mr. CHUCK GRIFFIN (Southern Energy): We have been running everything as hard as we can during the crisis situations; nothing has been held back.
PINKSTON: Energy companies say the state’s aging generators can’t run flat out without breakdowns, and until someone figures out how to pay for new plants, California consumers can expect more power problems. Randall Pinkston, CBS News, New York.