Californias energy problems received some much-needed assistance from Federal regulators, as Gov. Gray Davis concluded talks in Washington, D.C. An agreement was drafted to allow the states utilities to buy electricity in fixed price, long-term contracts, as well as give the companies extra time to pay outstanding debts.
The specifics of the agreement were not released and it was unclear if these measures will be sufficient to reverse the damage of Californias deregulation. To help mitigate the states energy shortage, at least nine new power plants have been granted licenses by the California Regulatory commission and plans to build more are underway.
Texas energy officials have been keeping a close eye on the California energy crisis, mostly as an example of what not to do. Texas will begin a deregulation pilot program this June, followed by full deregulation in January 2002. The Texas deregulation, signed into law by then-Governor George W. Bush, has several advantages that the California process did not. The primary difference lies in the abundance of energy that Texas will be able to place on the market. Californias energy shortage has been attributed to the lack of new power plants, a result of the strong environmental contingency there. In addition, Texas utilities will not be forced to buy energy from the wholesale market in short-term, and disadvantageous, contracts.
Compiled in part from reports in The Washington Post and The Los Angeles Times
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