Calif governor says 2 utilities running out of cash

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Calif governor says 2 utilities running out of cash Wednesday December 13, 4:38 PM EST WASHINGTON, Dec 13 (Reuters) - California Gov. Gray Davis on Wednesday praised emergency federal action to prevent what he said would have meant rolling blackouts throughout the state after out-of-state generators refused to sell more power to California utilities.

Davis, who called the situation in his state "incredibly bizarre," said he was informed by his staff that at 4 p.m. EST (2100 GMT), the California power system would be roughly 1,000 megawatts short and would have to start allocating blackouts throughout the state.

Davis, a Democrat, speaking after a meeting with Energy Secretary Bill Richardson and others, said the federal government's decision to invoke emergency powers would help California utilities continue operating.

"Our objective is to keep the lights on at affordable rates," Davis said, commenting on Richardson's announcement that the government would require out-of-state power generators to ship electricity to California at government-mandated rates.

Davis, a frequent critic of the Federal Energy Regulatory Commission, blamed that agency's move last Friday to raise wholesale price caps on electricity as the reason for the current crisis. He said prices in the U.S. spot market have moved to well above $1,000 per megawatt hour, draining the cash reserves of the state's two major utilities, Edison International's SoCal Edison (EIX) and PG&E's Pacific Gas and Electric (PCG).

http://money.iwon.com/jsp/nw/nwdt_rt.jsp?section=news&news_id=reu-wbt022795&feed=reu&date=20001213&cat=INDUSTRY

-- Martin Thompson (mthom1927@aol.com), December 13, 2000


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