Power Loans to Calif. Utilities Nearing an End

ByABC News
February 5, 2001, 8:27 PM

W A S H I N G T O N, Feb. 5 -- Standing by his word, the president willallow a federal order to expire Tuesday that required wholesaleelectricity companies to sell to California's cash-strappedutilities, Bush's spokesman said.

The agency that manages California's troubled power grid wassurveying major suppliers to see what power they will haveavailable on the wholesale market when the order ends, aspokeswoman for the agency said.

Asked about the emergency directive that the Bush administrationextended on Jan. 23, White House press secretary AriFleischer said today: "It shall expire tomorrow."

California lawmakers last week approved a $10 billion long-termplan to ease the state's power crunch. The state will sell bonds tobuy electricity giving time for the state's two near-bankruptprivate utilities to come up with their own recovery plan.

But even as Gov. Gray Davis and state lawmakers celebrated theagreement, the state remained under a power emergency withelectricity supply margins so small during the weekend and intotoday that sporadic blackouts were possible.

Questions Over Power Alternatives

Officials at the California Independent System Operator, theagency that manages the state's electricity market, were uncertainwhether they would have enough power after the federal directiveexpires Tuesday.

"We're not sure what the impact will be. We're talking tosuppliers to see what their plans are," said Stephanie McCorkle, aspokeswoman for California ISO.

In mid-December, the Clinton administration declared an energyemergency in California and directed that suppliers continue tosell to the state's nearly broke utilities Southern CaliforniaEdison and Pacific Gas & Electric even though for some time theyhad been unable to pay for their purchases, amassing debts that nowhave reached $12.8 billion.

Two weeks ago, President Bush extended the order, but made clear throughspokesmen and his energy secretary, Spencer Abraham, that the powerorder would not be prolonged further.