Utilities California

As some of the state's largest industries mount the year's most intense lobbying effort, the Assembly on Friday approved legislation that would transform how Californians buy electricity. A final vote in the Senate is expected to take place today. Working with many of the Capitol's highest-priced lobbyists and most-powerful interests, state Sen. Steve Peace (D-El Cajon) has put together a phone book-size bill.

On the eve of a new round of rescue negotiations with a reluctant Pacific Gas & Electric Co., Gov. Gray Davis suggested Wednesday that as a last resort the state could seize the utility's prized electrical transmission system through eminent domain. That saber-rattling cut against the grain of some rare good news in the state's continuing electricity crisis.

California officials launched a full-scale formal effort Friday to persuade the federal government to act more forcefully to push down wholesale electricity prices, saying that existing plans have "utterly failed." At the same time, Vice President Dick Cheney strongly reiterated the Bush administration's opposition to any price caps. Price controls are "a mistake," he told a Washington audience. "It's not a solution; it's adding to the problem," he said.

With California's precarious electricity system stretched to the breaking point and facing enormous risks ahead, the state's steamy summer energy crisis is far from over. A hot September could crack the power grid, as could taking down one more overworked power plant for maintenance. The declining supply of out-of-state power available also has the industry on edge, as does a looming natural gas crunch.

During the peak of California's power crisis, the Los Angeles Department of Water and Power earned far greater profits selling electricity to the rest of the state than agency officials have previously acknowledged, according to a newly completed independent audit.

The way people scrambled for a stake in California's power market three years ago, you'd have thought it was the second coming of the Gold Rush. Politicians and free marketers boasted that they were freeing millions of customers from their monopolistic utilities so they could shop for cheaper electricity. The state ordered an $87-million publicity campaign, promising a brave new energy world bustling with competition.

A jolt of partisan bickering surged through the Capitol on Wednesday as legislators sought someone to blame for California's electricity crisis, and found targets in Gov. Gray Davis and the state Public Utilities Commission. The Assembly opened a series of hearings into the energy crisis by delving into the activities and recent history of the PUC, the state's regulator of electricity.

The state's bright vision for lower power bills through electric utility deregulation is likely to be tied up in years of legal and technical wrangling, federal and industry officials said Tuesday. In their first round of written comments on the ambitious deregulation proposal sketched by the state Public Utilities Commission in April, virtually all interested parties are leveling major complaints.

Federal energy regulators have ordered four energy generating companies to refund unspecified amounts of money because their prices in July exceeded federal price limits. The Federal Energy Regulatory Commission order directs Dynegy Corp., Mirant Corp., Williams Cos. and Reliant Energy to give the refunds.

Gov. Gray Davis' administration is considering pressing into service thousands of diesel-powered generators, a move that would eke out a little more electricity but pump massive quantities of pollutants into the air. The proposal, part of an emerging strategy to avert blackouts this summer, is one of several options being advanced by Richard Sklar, whom Gov. Davis appointed last month to bring more electricity online with less red tape.