Seeking solutions to California’s critical energy problems, Governor Gray Davis asked the Federal Energy Regulatory Commission (FERC) to give retroactive refunds to consumers when wholesale prices skyrocketed last summer and their electric bills got out of hand. Southern California was on the brink of a breakdown in its electricity supply when a heat wave almost caused the state to run out of power and brownouts were frequent. Electricity bills in San Diego almost tripled and consumers protested.
The governor also asked the commission to lower its proposed ceilings on wholesale prices for the next three years. He added that he would consider requiring utility companies to keep their power plants, rather than have the option of selling them in a deregulated industry. The purpose is to ensure a steady supply of affordable energy for the state. California’s trouble stems from the 1966 deregulation of the state’s utility industry.
California officials and federal regulators considered how best to aid not only consumers but also utility companies. The utilities say they lost $6 billion this summer because of the spike in wholesale utility prices. That $6 billion is the difference between the price utility companies paid for electricity and the price they were allowed to charge consumers.
Consumer advocates feel that the governor’s proposals are inadequate.
Based on a report from The New York Times
