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quote.bloomberg.com
"01/08 21:47
California Governor Blames Power Crisis on `Outside' Generators
By Daniel Taub and Christopher Martin
Sacramento, California, Jan. 8 (Bloomberg) -- California Governor Gray Davis called California's electricity deregulation plan a ``colossal and dangerous failure'' and called for tighter regulation of ``out-of-state generators'' he blamed for soaring state power prices.
Davis, while making no specific proposals for bailing out the state's two biggest utilities, said in the annual State of the State address that he rejected the ``irresponsible notion that we can afford to allow our major utilities to go bankrupt.''
Pacific Gas & Electric, owned by PG&E Corp., and Southern California Edison, owned by Edison International, have warned they may declare bankruptcy if the state doesn't help relieve them of more than $11.9 billion in debt accumulated buying power this summer and winter that state regulators won't allow them to pass on to consumers. Davis said he will work with the Legislature to develop a plan to address the debt.
``Bankruptcy would mean that millions of Californians would be subject to electricity blackouts,'' Davis said. ``Investment would flee the state. And our economy would suffer a devastating blow.''
Absent from his proposals was a specific plan for a state- backed bond issue to refinance the debt. Legislators, who will meet in special session on the energy crisis later this week, say a sale of state or state-backed bonds is one possibility for bailing out the two utilities.
Davis called for a conservation program that would cut state power consumption by 8 percent, urging consumers and businesses to shut off lights and business equipment when not in use. He promised state offices would cut electricity usage by that much each day and by 20 percent during shortages.
To make sure that more power plants are built, Davis called for low-interest loans for plant construction, commitment of state- owned land for plant sites, and creation of either a joint powers authority or a California public power authority that can buy and build new power plants.
``I will work with the Legislature to determine which option will work best for California consumers,'' he said.
Davis made eight proposals aimed at independent generators who he says engaged in ``price gouging'' that was equivalent to consumers paying ``$25 for a $3 gallon of milk.'' The proposals are similar to four bills legislators said today they will introduce during the session.
The governor asked the Legislature to overhaul the ``crazy bidding process'' for electricity on the California Power Exchange that guarantees generators will be paid the highest bid for electricity rather than their own bid. He also asked the utilities be allowed to enter into long-term power contracts to lock in low prices, a measure already approved for the California market by the Federal Energy Regulatory Commission.
Davis said he supports a bill that would replace the boards of California's Power Exchange and Independent System Operator, where the state's three biggest utilities buy nearly all their power, to make the boards more independent.
Davis also wants legislation to expand the governor's emergency authority during shortages and to hire 50 inspectors to ``stand guard if necessary'' to ensure that generators are turning on their power plants during shortages and not holding back until prices rise. He said he would set aside $4 million in the state budget this year to investigate power plant owners' practices and called for criminal penalties if generators are found to have withheld power.
``Never again can we allow out-of-state profiteers to hold California hostage,'' Davis said.
Legislators plan to begin hearings on Thursday to consider proposals by Davis and state lawmakers.
Shares of San Francisco-based PG&E rose 1 3/8 to 14 and Rosemead, California-based Edison rose 1 11/16 to 12. "
This fellow seems to have been drinking from the water downstream from Al Gore's zinc mine. California's energy needs would soon be a matter of history if they can subsidize the development of PGBEC technology (Political GasBag to Energy Conversion).
Regards, Don |
