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THE CALIFORNIA ENERGY CRISIS

Power Points

February 03, 2001

Background

The state Legislature approved electricity deregulation with a unanimous vote in 1996. The move was expected to lower power bills in California by opening up the energy market to competition. Relatively few companies, however, entered that market to sell electricity, giving each that did considerable influence over the price. Meanwhile, demand has increased in recent years while no major power plants have been built. These factors combined last year to push up the wholesale cost of electricity. But the state's biggest utilities--Pacific Gas & Electric and Southern California Edison--are barred from increasing consumer rates. So the utilities have accumulated billions of dollars in debt and, despite help from the state, have struggled to buy enough electricity.

Daily Developments

The U.S. energy secretary rejected calls for caps on wholesale electricity prices, angering several Western governors.

State Senate leader John Burton said he will seek state control of the electricity transmission system in exchange for helping the utilities avoid bankruptcy.

Utility operators and nearby states pressured California to go beyond the PUC-approved 9% rate hike, to encourage conservation.

Verbatim

"My office is so dark you can almost develop film in it."

--Gov. Gray Davis

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Complete package and updates at www.latimes.com/power

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