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THE CALIFORNIA ENERGY CRISIS

Power Points

February 08, 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.

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Daily Developments

* Southern California Edison indicated it might give up its massive transmission grid to the state, but the asking price could be $6 billion.

* Partisan arguing erupted in the Capitol as legislators blamed the governor and the Public Utilities Commission for the energy crisis.

* Gov. Gray Davis defended his secrecy about how the state has spent $800 million on electricity and whether it is getting a good deal.

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Verbatim

"I would say that California's problems have put a very, very definite slowdown or halt on every state's deregulation effort--if they're not so far into it that they can't turn back."

--David Hoyle, a state senator in North Carolina.

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

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