California guaranteed power for another week Talks are underway to keep power woes in California and elsewhere from worsening Order issued as talks on pricing continue December 20, 2000 Web posted at: 5:28 p.m. EST (2228 GMT)

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Long-term contracts sought

Emergency declared in California

DENVER, Colorado -- Western electricity producers have been ordered to continue supplying power to California's utilities for another week.

The order came Wednesday from U.S. Energy Secretary Bill Richardson as talks on how to keep the West Coast power crisis from worsening and spreading continued on both sides of the country.

Electricity suppliers from other states have been reluctant to export electricity to California because of fear they would not be paid by the state's two biggest utilities, both of which are in dire financial straits.

MESSAGE BOARD Winter power crunch Pacific Gas and Electric and Southern California Edison are a combined $8 billion in debt from paying market prices for electricity while being forced to charge regulated prices to customers.

"Under deregulation, these utilities aren't allowed to pass on their costs to consumers until 2002, or until they've paid off billions of dollars in past debt," said CNN Correspondent Greg LaMotte, who is covering the story in California. "So, for the most part, they are still under a price cap.

"The utilities say that unless they can pass the costs on to the consumer in some way or get a bailout from the state, then they're going to go belly up. They're threatening tens of thousands of jobs would be lost," LaMotte said.

Wholesale electricity prices have gone as high as $1400 per megawatt hour, compared to $35 per megawatt hour last year.

In a Denver, Colorado, meeting Wednesday with Western governors and power company officials, Richardson pushed for a regional cap on wholesale electricity prices.

Some governors were skeptical of the plan, and said they would need more information before they decide whether to support a price cap.

Jim Hoecker, chairman of the Federal Energy Regulatory Commission (FERC), said a regional price cap would not be of much help until the national infrastructure could be improved enough to meet the demand for electricity.

Last week, the FERC set a soft price cap for California only. That served to exacerbate California's energy shortage, as suppliers sold electricity to states willing to pay higher prices.

Long-term contracts sought In Washington, U.S. and California energy regulators held a second day of talks on Wednesday. After their first round of discussions on Tuesday, they said they were making progress toward working out long-term power contracts.

The contracts would set the price of electricity for several years at a time. That would eliminate the utilities' current practice of buying power only when they need it, which drives up prices in times of high demand or low supply.

Long-term contracts would result in higher bills for consumers but protected them from sudden price increases.

Judge Curtis Wagner of the FERC, who is mediating the talks, said he was optimistic that contracts for five to 10 years could be signed soon.

Emergency declared in California On Wednesday, California's Independent System Operator (ISO), which manages most of the state's power grid, declared a Stage One emergency, meaning residents were being urged to conserve power.

Tuesday night, the ISO for the first time invoked Richardson's order and received additional electricity from out of state suppliers. The situation was strained earlier Tuesday when a major transmission line had to be taken out of service.

The West Coast crisis has been fueled in part by high prices for natural gas. That is also a concern in other areas of the country. Consumer groups said low and moderate income households would be hit hard this winter.

"We project for all households in the Northeast, oil and heat bills will be 35 percent higher than last year and that for households in the Midwest, gas bills will be 50 percent higher," said Stephen Brobeck of the Consumer Federation of America. "Low and moderate income households will be clobbered by these oil and gas price hikes."

Richardson said Wednesday that he thought the Northeast would not face a shortage of home heating oil supplies this winter.

http://www.cnn.com/2000/US/12/20/westcoast.power.01/index.html

-- Martin Thompson (mthom1927@aol.com), December 20, 2000

Answers

Gee, I've never been to Cali, better get there before it gets to dark to go outside at night to visit! Got at least a weak of electricity.....now that’s third world talk. Money has the power to let a killer walk free (OJ). I would think that money would also pay off the tree huggers to allow more power generation to come on line. They say dereg. and the booming economy created the bottleneck and is why they are in this mess...just so happens it started JUST after the turn of the Millennium as if they waited and plugged in all that new commercial and residential structuring on Jan 1 2000 . About like ALOT of the "good timing" problems we are having. But this can no way be related to the malfunction of those little beasts we call a computer now could it? Pure coincidence right!

-- NdewTyme Past (NdewTyme@NdewTyme.com), December 21, 2000.