Because power producers throughout the West turned thumbs down on shipping electricity to California’s cash-strapped utilities, US Energy Secretary Bill Richardson threatened federal intervention to avoid blackouts across the state after days of touch-and-go power shutdowns.
Producers from the Northwest and elsewhere said they were concerned Southern California Edison and Pacific Gas & Electricity Co., biggest buyers of electricity, would not pay them. Since June, the utilities paid $7 billion more for electricity than they can legally pass on to consumers. The producers have gained enormous leverage following deregulation of the industry in 1998, and because Southern California Edison’s financial burdens have become so heavy the utility called an end to deregulation.
Energy Secretary Richardson learned of the crisis during a meeting with Gov. Gray Davis and US Sen. Dianne Feinstein to discuss having electricity prices capped by the Federal Energy Regulatory Commission (FERC). The commission is expected to issue an order shortly. When an announcement is made, FMLink will report on it. Also, see past stories in FMLink on the energy crisis in California (Regulations & Government / Energy).
Based on a report from Los Angeles Times
