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THE CALIFORNIA ENERGY CRISIS

Power Points

February 23, 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 weighed the options of selling its transmission system to the state at a price considered too low by its executives, or filing for bankruptcy.

* The state lifted its "electrical emergency" status for the first time since Jan. 13.

* Legislation was introduced to reduce the rates paid to alternative energy producers by the big private utilities in hopes that it would bring a $3-billion annual saving.

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Verbatim

"We're not having to search for as many megawatts at the last minute. That's an enormous improvement."

-- Stephanie McCorkle, spokeswoman for California Independent System Operator

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

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