Developments in California’s energy crisis

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The Associated Press


– Pacific Gas and Electric Co. tells state power regulators the amount of electricity each household can buy at the cheapest rate should be adjusted upward. However, the utility says the so-called baseline ought not be changed before March 2002, when a rate freeze ordered by state law officially ends.

Baseline levels determine how much gas and electricity residential users get at a reduced price, and vary depending on geography and climate. The Public Utilities Commission is examining this issue and plans to decide what to do in November. Recent record rate increases charge progressively more for power use beyond the baseline amount. Consumer advocates agree baselines must be updated to reflect more personal computers and other electronics in California homes.

– Gov. Gray Davis ceremonially flips the switch on a peaker power plant in the Palm Springs-area. Davis also tours the 135-megawatt, gas turbine-fired Indigo Energy Facility, one of two plants that make up the Wildflower Energy Project. The two plants were among the first plants to be licensed under the California Energy Commission’s 21-day streamlined review process. The plant, a project of Boston-based InterGen, began operating July 26.

Public Utilities Commission President Loretta Lynch and Consumers Union say the future resignation of the nation’s top energy regulator is good news for California. Patrick Wood III, a member of the Federal Energy Regulatory Commission and former PUC chairman in Texas, is FERC Chairman Curtis Hebert’s likely replacement.

Lynch and representatives from Consumers Union say he likely will be more responsive to California’s needs. But Harvey Rosenfield of the Foundation for Taxpayer and Consumer Rights says Hebert’s resignation could lead to leadership that will push harder for deregulation of electricity nationwide. That could result in even higher profits for energy companies at the expense of consumers, Rosenfield says.

– Shares of PG&E slip 13 cents to close at $15.70. Shares of Sempra Energy, parent company of San Diego Gas and Electric Co., fall 38 cents to $26.39. Shares of Edison International slip 21 cents to close at $13.99.

– No power alerts Tuesday as electricity reserves stay above 7 percent.


– The deadline for the Legislature to approve Davis’ rescue deal for Southern California Edison is Aug. 15.


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 is also 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 is also 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.

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