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National Public Radio MORNING EDITION


California lawmakers have given Governor Gray Davis the authority he needs to use state funds to buy electricity to keep power flowing into California. The Legislature’s action follows two consecutive days of rolling blackouts and the threat from power suppliers to call in their debts and force California’s largest utilities into bankruptcy. Ellen Ciurczak of member station KQED reports from Sacramento.


California is getting into the power business sooner and at a higher price than anyone had expected. Late last night, the Legislature passed an emergency bill authorizing the state to spend $ 400 million to buy electricity at the same high prices the utilities have been paying. Democrat Fred Keeley, who carried the bill in the Assembly, called it the only alternative for stopping the blackouts.

Assemblyman FRED KEELEY: Members, I cannot believe there’s a member on this floor or in the other body who is pleased to have to be in this position or pleased to cast this vote tonight. It is, in fact, the best of a range of absolutely terrible options facing this body.

CIURCZAK: Legislative leaders and Governor Davis have been trying to finalize long-term contracts with power generators so the state could buy electricity at costs much lower than what utilities have been paying. But this week, generators threatened to call in the debts owed by the utilities and force them into bankruptcy unless the state immediately stepped in as a creditworthy buyer. Governor Davis said he had no choice but to sign the check.

Governor GRAY DAVIS (California): Previous generations fought wars. They survived depressions. They rescued the survivors of the Holocaust. They built roads. They laid the infrastructure for the digital economy. We’re being asked to keep the lights on. Clearly we can do that. If it requires some money, then money we’ll have to appropriate.

CIURCZAK: That response upset consumer groups. Doug Heller with the Foundation for Taxpayer and Consumer Rights says the governor allowed himself to be blackmailed.

Mr. DOUG HELLER (Foundation for Taxpayer and Consumer Rights): We cannot be negotiating with economic terrorists who are withholding power and telling us that if we don’t give them all the money they want right now, they’re going to cut off power again today and tomorrow. And then if we give them money today and tomorrow, they’re going to tell us the same thing the next day.

CIURCZAK: While leaders of the state’s Republican minority have stood by Davis and the Democrats as they try to keep the power crisis from getting farther out of hand, newer members of the Legislature have been less circumspect. First-year Assemblyman Keith Richman criticized the governor for not heeding a Republican call to take action when electricity rates first began to go up last spring.

Assemblyman KEITH RICHMAN: Here we are today with lights going out in the state of California, two major utilities on the brink of bankruptcy, the state economy teetering and now the state has entered the business of purchasing power on the spot energy market and is using the surplus that we could potentially spend on other things like roads, highways and school facilities.

CIURCZAK: But even Richman voted for the spending bill. More legislative scrambling is expected next week. Lawmakers estimate $ 400 million will only buy enough power to supply the state for a few days, so the next step is a $ 2.5 billion appropriation from the state’s reserve fund. That withdrawal should give lawmakers and the governor the breathing room they need to iron out the details of longer-term, lower-cost contracts that could finally ease the state’s electricity shortage.

Consumer Watchdog
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