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Calif. unsure what utilities must pay

By The Associated Press Last Update: 8:21 PM ET Mar 13, 2001 SAN FRANCISCO (AP) - California officials still don't know if two nearly bankrupt utilities - or their customers - will be responsible for paying back the $3.7 billion in taxpayer money committed to buying electricity on their behalf.

At least one state power regulator and a spokesman for Gov. Gray Davis said guidelines expected Wednesday from the Public Utilities Commission likely will be delayed.

State power regulators have been working with the Department of Water Resources and the utilities to determine how much money Pacific Gas and Electric Co. and Southern California Edison Co. have left after they pay their own bills.

PG&E (PCG: news, msgs, alerts) and SoCal Edison (EIX: news, msgs, alerts) still collect ratepayer dollars for the power bought by the state. The utilities owe the state a portion of that money under the same emergency rule that tapped the water department to buy power for the state.

But this week, a state Senate committee again postponed action on a bill that would lower the rates the utilities pay environmentally friendly plants called qualifying facilities.

Until those rates are set, the utilities won't know how much money they have left over, which leaves the state not knowing how much to collect.

FRONT PAGE NEWS Nasdaq vaults; Dow also advances Techs claw higher from depths Delta warns of big Q1 loss "The governor said it could happen any day or it could happen in a couple of weeks," said Steve Maviglio, a Davis spokesman. "This is one of the many pieces of the puzzle that we're talking about and they will fall into place, but it's going to take some time."

Maviglio said state officials took action because "the state is owed millions of dollars and it's important to establish that revenue stream."

Maviglio agreed that the stalled QF bill pushed by Assemblyman Fred Keeley, D-Boulder Creek, is a complicating component.

QFs are power plants that use the sun, wind, biomass or natural gas to generate electricity. They supply about one third of the electricity for PG&E and SoCal Edison's customers under a contracted rate.

QF owners, many of whom also are going into debt because the utilities have not been able to pay them, want a state guarantee they eventually will be paid.

PG&E says it has no money left to give the state after it pays its bills, and agreed with last week's PUC decision that allows the water department to raise customer rates if it can't get the money it's owed from the utilities themselves.

Even if the PUC guidelines are issued Wednesday, it could be too late to act on them at Thursday's PUC public meeting.

Since January, the state has bought electricity for the two utilities to help ease their debt.

The utilities say they are nearly $14 billion in debt because of high wholesale electricity costs. A rate freeze under California's 1996 deregulation law prevented the utilities from passing along the bulk of those costs to their customers.

Both PG&E and SoCal Edison have been denied credit by power wholesalers. Since January, the state Department of Water Resources has bought about a third of the power the utilities need to keep the lights on for their customers.

-- Martin Thompson (, March 13, 2001

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