White House won't bend on power supplies for California

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Posted at 12:21 p.m. PST Monday, Feb. 5, 2001

White House won't bend on power supplies for California BY TOM DOGGETT

WASHINGTON (Reuters) - The Bush administration reiterated Monday that it would allow to expire this week a federal order requiring power suppliers to sell electricity to the California market, dashing any hopes from the state's utilities of a last-minute reprieve from the White House.

President Bush has already said he would not again extend the electricity supply order issued by the Energy Department after it expires at midnight Tuesday California time (0800 GMT Wednesday).

``The president was pleased to extend that order for two weeks. It expires tomorrow and it shall expire tomorrow,'' White House spokesman Air Fleischer told reporters.

A separate federal order requiring natural gas suppliers to keep doing business with California's utilities will also be allowed to expire, he said.

Fleischer said forcing firms to sell power to California has impacted the energy supplies in neighboring states, whose governors fear there will not be enough power to meet the demand of their consumers.

``It affects their ability to have energy for their needs within those states,'' Fleischer said. ``It's not as if you can just flip on a Western switch and power California. It has implications for the region as a whole.''

Without an extension, California could face a cutoff in power supplies from out-of-state energy firms that are be reluctant to sell electricity to the state's biggest utilities that are close to bankruptcy.

The utilities have incurred billions of dollars in debt from soaring wholesale electricity costs that they are unable to recover from consumers under California's deregulation law.

Fleischer also said the administration would not support imposing a cap on wholesale electricity prices in the West, even though a majority of governors in the region support price caps.

``The president does not believe that price controls will work,'' Fleischer said. ``He does not see that as option that will be helpful to anybody in either the short run or the long run.''

The administration is worried price caps would discourage new power suppliers from entering the market.


-- Martin Thompson (mthom1927@aol.com), February 05, 2001

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