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DAN RATHER, anchor:

More stormy weather coming in the Pacific Northwest could make it harder to keep the lights on in California. California is already struggling to beg, borrow or buy power from neighboring grids. CBS’ Sandra Hughes has been digging into this politically charged power shortage and what or who is to blame..

SANDRA HUGHES reporting:

California came dangerously close to turning off the lights, threatening blackouts, because electricity reserves dipped to nearly nothing.

Mr. HARVEY ROSENFIELD (Foundation For Taxpayer & Consumer Rights): If there are blackouts in this state, there are–there’s going to be more crime, there’ll be more car accidents.

HUGHES: The crisis, compounded by a booming population and unforeseen energy demands, is now so bad that the Feds stepped in with a temporary fix.

Secretary BILL RICHARDSON (Department of Energy): (From yesterday) If I find that an emergency exists, I can order a power plant to send power where it is needed.

Mr. JOHN BRYSON (CEO, Edison International): Deregulation has to be scrapped in California. The way it’s been done here is a mess.

HUGHES: Southern California Edison says it’s practically broke because of deregulation, a plan they say was forced on them by the state.

Mr. ROSENFIELD: Is that what they’re telling you guys? Oh, it’s a total lie..

HUGHES: Consumer watchdog Rosenfield says the utilities had hoped to make money from deregulation, but the gamble didn’t work. The real winners are the power plants, now in private hands and selling power to the utilities at exorbitant rates, as much as 3,900 percent higher than last year. And the utilities, under law, can’t pass on the cost, but they’re still looking for a way to make customers pay.

Mr. ROSENFIELD: I think what the utility companies are doing here is they’re playing a giant game of chicken. They’re threatening to go out of business in order to get somebody to f–force the rate-payers to pick up the tab.

HUGHES: More than 40 other states are considering energy deregulation, but California may prove to be a hard lesson for them. The state’s only real hope now is that federal regulators, meeting tomorrow, will step in and order power plants to drop rates before some utilities go bankrupt. Sandra Hughes, CBS News, Los Angeles.

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