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Connell: Power cost twice Davis' figure

July 6, 2001

By JOHN HOWARD The Orange County Register

SACRAMENTO -- The average cost of electricity purchased under $43 billion of worth of state contracts is actually more than double the amount reported by Gov. Gray Davis' administration, state Controller Kathleen Connell said Thursday.

Connell said her staff's analysis put the per-megawatt average at $170, compared with $69 to $79 estimated by Davis.

Connell stopped short of suggesting that the higher cost could drive another increase in rates, although consumer groups said the higher amount likely would require some future increase.

The controller, who writes the state's checks, said her figures assume fixed prices for natural gas over the duration of the contracts, which range from a few months to 20 years.

The administration, noting that nearly half its contracts are pegged to the fluctuating market price of natural gas, said costs on many of the contracts would decline over time.

Consumer groups were skeptical of the administration's numbers.

"You could cut these numbers in various ways and make different averages, long-range or short-range contracts, peak power or nonpeak, and probably either average could be defended mathematically," said Nettie Hoge of The Utility Reform Network. "We can't tell you whether it's $69 or $170 - the contracts are very convoluted and complex."

-- Martin Thompson (, July 07, 2001


This is an outrage. Davis should be tarred, feathered, and run out of Sacramento on a rail.

Half the contracts are tied to the price of natural gas--"costs of many of the contracts would decline over time."

Pure wishful thinking. Nothing more than despicable hogwash.

-- JackW (, July 07, 2001.

I note the above story appeared in the conservative Orange County Register. This is a big, big story. I'm curious to see how much longer the predominent liberal media will ignore, or minimize, it.

I live in California, and am totally disgusted with Davis' attempt to get the state directly involved in the energy market. He has made such a mess of this that he should go down in history as one of the worst governors of all time, and I mean of any state.

We all would have been better off if he had just let all of the three major utilities go bust. That's what bankruptcy courts are for. The free market would have had a far better chance of righting the situation, with minimal damage. Now we are stuck with a possible state government collapse of gigantic proportions - a shot that would be heard around the world.

Time for bed. How can I sleep? I shall carefully refrain from looking into my bathroom mirror tonight. I hate to see a grown man cry.

-- Big Cheese (, July 07, 2001.

I'm not sure just how big an influence a California state default would have on the economy as a whole. I guess that's what's keeping a lot of people in suspense.

-- RogerT (, July 07, 2001.

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