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Crisis dims but will flare again

(Published March 20, 2001) Remember the California energy crisis? For more than two months, it dominated the consciousness of the public, the media and the Capitol, but in the last couple weeks seems to have lost its edge.

That's not because the crisis itself has been alleviated or even adequately addressed. The rolling blackouts ordered Monday as temperatures spiked are a reminder that the worst may still lie ahead as summer heat drives up the demand for electricity by 50%-plus.

Rather, everyone appears to be waiting for the next shoe to drop, for the state to once again face daily blackouts, or for Gov. Davis and the utilities to make a deal on state acquisition of the intercity transmission system, or for the Public Utilities Commission or someone to decree that power rates will rise sharply.

Meanwhile, the state is continuing to spend $50 million a day, or about $1.5 billion a month, out of its rapidly vanishing budget reserves to buy power at costs that are averaging four to five times what consumers are paying and has not pinned down the extra supplies that California will need to get through the summer.

Although the governor has announced a series of long-term power contracts, many don't go into effect until late this year, which means the state will be buying power at high spot prices through the summer -- if, in fact, it can find enough to buy. State programs aimed at persuading Californians to conserve have just begun, and the governor's oft-expressed belief that an additional 5,000 megawatts of generating capacity -- equal to 10% of summer peak demand -- will be on line is given short shrift by experts in the field, who say that perhaps 2,000 megawatts is realistic.

Davis' negotiations with utilities about purchasing their transmission system and thereby supplying cash to repay their own debts have bogged down an effort to persuade operators of windmills and other nontraditional generators to cut their power prices and have also snagged over demands for repayment of past debts. The utilities themselves remain poised on the brink of bankruptcy.

The governor has never laid out, or even outlined, how the various elements he's pursuing will, in total, avert a summer supply meltdown and/or avoid major consumer price boosts. Rather, he has continued to provide broad assurances that everything will work out if he's merely allowed to function unfettered. And so far the Legislature has gone along, giving him wide latitude to buy power on short- and long-term contracts, negotiate with utilities and implement unilateral conservation programs.

There are indications, however, that legislators are growing restive about the lack of a comprehensive crisis-management scheme or firm data on how blackouts and/or severe price spikes will be avoided.

There have been some confrontations between Davis and legislative leaders, and key legislators say they've been unable to get direction from the administration on what legislation may be needed to handle the summer peak.

The energy crisis may have faded from the public radar screen, but in the real world, it's worsening by the minute, and there's no reason to believe that it will be getting better soon.

Dan Walters writes for The Bee's Capitol bureau. E-mail:;


-- Martin Thompson (, March 20, 2001

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