Developments in California’s power crisis

Published on

The Associated Press

Here is a look at developments in California’s electricity crisis:


– State regulators declare a Stage 2 power alert as downed transmission lines hinders imports from the Pacific Northwest, reducing California’s electricity reserves to around 5 percent.

– An Imperial County judge delays action on power wholesaler CalEnergy’s case against Southern California Edison over $140 million in bills the utility has failed to pay. Judge Donal Donnelly plans a hearing April 16.

– The Foundation for Taxpayer and Consumer Rights releases a countdown to “Judgment Day,” saying there are 582 days until its anti-rate hike initiative goes to voters on Election Day in November 2002.

– Houston-based Dynegy Inc. says its wholesale power business in California and elsewhere will help it beat earnings forecasts for the first quarter.

– The state’s two largest utilities, financially strapped Southern California Edison and Pacific Gas and Electric Co., tell the U.S. Securities and Exchange Commission they will not file their annual reports on time.

– An Assembly committee advanced six power-related bills, including two that provide incentives for building new power plants. Also approved was a bill that would cap the rates of large business customers of San Diego Gas and Electric Co. Those companies were the only ones in the state paying the full market rates for power.

– Another Assembly committee approved a resolution that would designate price stability as the first priority when state officials set rates for power. It would make ensuring the reliability of the state’s power grid as second priority. Establishing the lowest possible prices would be the third priority. That is currently the highest priority, as stated in the state’s 1996 deregulation law. Assemblyman Rod Wright called that policy “risky and expensive” and said it was “threatening the economic well-being of the state.”

– An Assembly subcommittee on natural gas costs is recommending that the PUC encourage large natural gas customers, such as industries and utilities, to store natural gas in preparation for summer when demand is high and pipelines are filled. It also called for speeding new gas pipelines and storage facilities by removing duplicative reviews by the PUC.

– The stock of PG&E‘s parent, PG&E Corp., drops a dime a share to close at $11.75. Edison‘s parent, Edison International, sees its stock fall 9 cents a share to close at $12.55.


– The Davis administration continues negotiations with Edison, PG&E and San Diego Gas & Electric Co. over state acquisition of their transmission lines.

– FERC holds a conference April 10 in Boise, Idaho, on Western energy issues.

– The House Government Reform Committee plans energy hearings in three California cities, including April 10 in Sacramento, April 11 in San Jose and April 12 in San Diego.


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.

Edison and PG&E say they’ve lost nearly $14 billion since June to high wholesale prices that the state’s electricity deregulation law bars them from passing onto ratepayers, and are close to bankruptcy.

Electricity and natural gas suppliers, scared off by the two 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.

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