Developments in the California Power Crisis

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Developments in the Power Crisis

WEDNESDAY:

--No power alerts Wednesday as reserves stay above 7 percent.

--The Assembly, by a 42-7 vote, approves a resolution asking the Federal Energy Regulatory Commission to "impose interim price caps until the California power market has stabilized."

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--Officials at the Del Mar Fair say they will keep midway rides going without pulling power from the grid by operating on generators during the fair run from June 15 to July 4.

--Shares of Edison International close at $9.98, down 7 cents. PG&E Corp. closes at $11.07, down 18 cents. Sempra Energy, the parent company of San Diego Gas & Electric, closes at $26.71, down 20 cents.

WHAT'S NEXT:

--Davis' representatives continue negotiating with Sempra, the parent company of San Diego Gas and Electric Co., to buy the utility's transmission lines.

THE PROBLEM:

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 the state's electricity deregulation law bars them from passing on to consumers. PG&E, saying it hasn't received the help it needs from regulators or state lawmakers, filed for federal bankruptcy protection April 6.

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. The state is also buying power for a third investor-owned utility, San Diego Gas & Electric, which is in better financial shape than much larger Edison and PG&E but also struggling with high wholesale power costs.

The Public Utilities Commission has approved average rate increases of 37 percent for the heaviest residential customers and 38 percent for commercial customers, and hikes of up to 49 percent for industrial customers and 15 percent or 20 percent for agricultural customers to help finance the state's multibillion-dollar power buys.

Source: KTVU/Fox2 and Asscociated Press

http://www.bayinsider.com/partners/ktvu/news/2001/06/06/power.html

-- Martin Thompson (mthom1927@aol.com), June 07, 2001


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