California PUC to decide on repayment for emergency power purchases during crisis

By Sylvie Dale, Online Editor

SAN FRANCISCO, Calif., Feb. 21, 2002 — The California Public Utilities Commission planned to tackle decisions today on an agreement to repay the state for its emergency power purchases during the energy crisis.

Two measures will be voted on today, including the rate agreement between the CPUC and the California Department of Water Resources (DWR) and the establishment of a cutoff date for energy users to hold new power purchase contracts with independent energy suppliers, Reuters News Service reported.

The rate agreement would allow California to sell $10.85 billion in bonds to start paying back the state’s general fund over the next 19 to 21 years. If the measure passes, the state would repay the bonds using revenue from utility bills.

In the second vote, the California PUC will decide if July 1, 2001 will be recorded as the cutoff date for energy customers to hold new direct access power purchase contracts with independent energy suppliers.

That cutoff date currently is Sept. 20, 2001, but if the date change is approved, ratepayers might get out of an additional $1.98 billion in costs.

If the measures are approved, the commission still must get through administrative and public reviews and the inevitable lawsuits which could delay any actions.

The votes are a result of the state’s problems with deregulating its electricity markets, when power prices skyrocketed, consumers dealt with blackouts and power shortages, and two major power-buying utilities ran into financial trouble because of rate freezes.

Pacific Gas & Electric Co. was forced to file for bankruptcy protection in April 2001, stunning the industry. Southern California Edison, also headed for bankruptcy, has been working with the CPUC to avoid a similar fate.

As the utilities became unable to pay for more power for their consumers, the DWR took over the role of buying power for most of the state in early 2001, causing the agency to rack up billions in debt.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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