State, Regulators Resume Energy Talks
Gov. Gray Davis’ staff and state regulators began talks to break a deadlock over renegotiating power contracts that has stalled a $12.5-billion bond sale to cover energy costs.
The California Public Utilities Commission this month rejected a plan favored by Davis, which requires the commission to raise utility rates as needed to let the state repay the bonds and cover other power costs. Several commissioners balked at that plan, saying they fear it locks the state into above-market prices for $43 billion of multiyear energy contracts.
“The commissioners have made it clear that their desire is to unlink the power-purchase program, including the contracts, from the bond issuance,” said Gary M. Cohen, general counsel of the PUC.
The California Department of Water Resources has committed $11.3 billion to buying power on behalf of utilities since January. The state’s two largest utilities, units of PG&E; Corp. and Edison International, are insolvent after buying energy for more than they were allowed to charge customers under state law.
PUC President Loretta Lynch and Commissioner Geoffrey Brown met Monday with Barry Goode, Davis’ legal affairs secretary, to explore options for opening talks with generators.
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