Developments in California’s Energy Crisis

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The Associated Press

MONDAY: Senate Leader John Burton and a consumer group question the need for the another extraordinary legislative session to deal with Southern California’s financial woes. Burton, D-San Francisco, says he’ll immediately adjourn the Senate if Gov. Gray Davis calls the legislature back. Consumer advocates with the Foundation for Taxpayer and Consumer Rights say Edison doesn’t need to be saved from bankruptcy.

– The federal government is ordering increased security for America’s energy systems, concerned that nuclear plants, power lines, hydroelectric dams and nearly 400,000 miles of oil and gas pipeline could be vulnerable. Regulators stand ready to approve rate increases to cover the costs, if necessary. While there have been no specific threats against these facilities, the terrorist attacks in New York and at the Pentagon prompted energy companies across the country to scramble to increase protection.

– State power regulators launch an investigation into Southern California Edison‘s safety record, citing 4,721 safety violations between 1998 and 2000, five of which have resulted in deaths.

– Shares of Edison International closed at $12.58, down $1.44. PG&E Corp. dropped $1.25 to close at $15.35. Sempra Energy, the parent company of San Diego Gas and Electric Co., stock closed at $26.31, down 60 cents.

– No power alerts Friday as electricity reserves remain above seven percent.


– The Public Utilities Commission meets Thursday at 10 a.m. to vote on a rate agreement that will allow the state Department of Water Resources to pass on wholesale costs to customers without PUC approval.

– Gov. Gray Davis says he’ll call a third extraordinary session, bringing legislators back to work on a rescue plan for Southern California Edison.


High demand, high wholesale energy costs, transmission glitches and a tight supply worsened by scarce hydroelectric power in the Northwest and maintenance at aging California power plants are all factors in California’s electricity crisis.

Southern California Edison and Pacific Gas and Electric say they’ve lost nearly $14 billion since June 2000 to high wholesale prices the state’s electricity deregulation law bars them from passing on to consumers. PG&E, saying it hasn’t received the help it needs from regulators or state lawmakers, filed for federal bankruptcy protection April 6.

Electricity and natural gas suppliers, scared off by the companies’ poor credit ratings, are refusing to sell to them, leading the state in January to start buying power for the utilities’ nearly 9 million residential and business customers. The state also is buying power for a third investor-owned utility, San Diego Gas & Electric, which is in better financial shape than much larger Edison and PG&E but also is struggling with high wholesale power costs.

The Public Utilities Commission has approved average rate increases of 37 percent for the heaviest residential customers and 38 percent for commercial customers, and hikes of up to 49 percent for industrial customers and 15 percent or 20 percent for agricultural customers to help finance the state’s multibillion-dollar power buys.

Consumer Watchdog
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