California buys more power Taxpayer costs since January reach $3 billiongreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
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Saturday, March 3, 2001 State buys more power Taxpayer costs since January reach $3 billion. Talks to buy transmission lines founder.
The Associated Press SACRAMENTO
As Gov. Davis continued debt-relief negotiations with the state's two huge cash-strapped utilities Friday, his Finance Department announced the state will need an additional $500 million to buy electricity for their customers.
That brings the state's power-buying costs to some $3 billion since early January.
Davis' effort to buy transmission lines is going slowly.
The governor's energy advisers continued negotiations Friday with Southern California Edison, Pacific Gas Electric Co. and the state's third investor-owned San Diego Gas Electric. Davis' plan centers on buying their 26,000 miles of transmission lines, getting 10-year contracts from Edison and PGE to buy power from their remaining plants at cost, and convincing Edison's and PGE's parent companies to help cover their debts.
Davis spokesman Steve Maviglio said a deal might be complete early next week to buy the San Diego utility's transmission lines. Davis told Wall Street analysts the purchase price will probably be $700 million.
A week ago, Davis announced a tentative agreement to buy Edison's lines for an estimated $2.7 billion.
It has not been as easy to persuade PGE to part with its lines and an agreement could be several weeks away, Davis told the analysts.
Davis also said that he can't raise electricity rates to solve California's power crisis because voters would approve an initiative blocking them "in a heartbeat."
Davis told 25 investment officials at a private meeting in New York on Wednesday that he believes he can persuade out-of-state suppliers who have made "more money than God" selling power to California to accept less than the full amount utilities owe them.
-- Martin Thompson (firstname.lastname@example.org), March 03, 2001