By THE ASSOCIATED PRESS
Filed at 5:25 a.m. ET
SACRAMENTO, Calif. (AP) -- Vowing to solve California's energy
crisis without outside help, Gov. Gray Davis used emergency powers to
seize the assets of a second debt-ridden utility ahead of circling creditors.
The government on Monday claimed ownership of $150 million worth of
power-buying agreements from Pacific Gas and Electric Co. before they
could be sold by the financially troubled utility's creditors. Davis did the
same thing Friday with $300 million worth of Southern California Edison
contracts.
The long-term PG&E contracts offered electricity at prices ranging from
6 cents to 13 cents per kilowatt hour, far less than the 25 cents or more
the state has been paying on the spot market.
``By acting today we have preserved attractive prices for California
consumers. If I had not acted today, these prices would have been lost
forever,'' Davis said Monday.
Even with better prices, however, California still faces the question of
how to get its hands on enough energy to avoid the mandatory blackouts
that hit central and northern California on two days last month.
The Independent System Operator, keeper of the state's power grid,
said it was keeping California under a Stage 3 alert until at least midnight
Tuesday, for a record fourth consecutive week.
``The risk of rotating blackouts cannot be ruled out,'' the ISO said in
announcing the alert, which means power reserves are at about 1.5
percent.
Gray promised to reveal Tuesday the results of bargaining with electricity
wholesalers and efforts to provide California with a long-term, affordable
power supply. California established a $10 billion fund last week to pay
for the electricity.
The White House has announced it would allow a federal order requiring
electricity wholesalers to sell power to California's cash-strapped utilities
to expire at 12:01 a.m. Wednesday.
``We are moving at warp speed to find every additional megawatt we
can,'' Davis said.
California is also considering issuing revenue bonds to help the two
utilities pay off their debts, but the utilities have vowed to fight giving up
any stake in their companies.
Edison and PG&E say they have lost $12.7 billion in six months, but
believe their debts will be erased by the rate increases they expect a
federal judge will grant them, perhaps as early as next Monday when the
issue is the subject of a hearing in Los Angeles.
The utilities blame their money woes on the state's 1996 energy
deregulation law, which forced them to sell their power-generating plants
and buy electricity on the open market. But the law didn't allow them to
raise rates when energy costs began spiraling upward a year ago.
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