California Expected to Keep Power On
S A C R A M E N T O, Calif., Jan. 20, 2001 -- The lights were expected to stay on inCalifornia through the weekend as lawmakers attempted to fashion aplan to put the state's electricity system on track and keep itsutilities from going broke.
Problems from the power crisis continued to ripple across thestate Friday, with independent gas stations along the coast runningout of fuel because power shortages kept California's main gasolinepipeline in operation only part of the day.
"I have just confirmed that there are independent stations thathave run out of fuel. It's not a very good situation," JimMcCaslin, president of the California Independent Oil MarketersAssociation, told The Associated Press on Friday night.
The California Independent System Operator shut off power tohundreds of thousands of homes and businesses on Wednesday andThursday. The agency said blackouts weren't expected over theweekend, but it called on people to conserve energy wheneverpossible.
Emergency Measure
In a stopgap effort to keep electricity flowing, Gov. Gray Davissigned emergency legislation Friday allocating $400 million instate funds to buy power and provide it to cash-strapped utilities.
However, lawmakers acknowledged it that was only a "Band-Aid"solution expected to provide the state with adequate supplies for aweek or two while they try to work out a long-term solution to thecrisis. They were meeting Saturday to discuss a rescue plan.
It's a crisis that has driven the state's two largest utilities,Southern California Edison and the Pacific Gas & Electric Co., tothe verge of bankruptcy. But the state Public Utilities Commission,ruling insolvency is no excuse, barred both from cutting off powerto their 25 million customers, at least until a Jan. 29 hearing onthe matter.
Many businesses across the state had to shut down for hours at atime Friday because they had signed contracts agreeing to turn offpower voluntarily in exchange for much lower utility rates.
That forced the gas pipeline to run part-time and caused dairyfarmers to dump fresh milk into wastewater ponds because industrialcreameries that had turned off power could not process it. SiliconValley companies complained that the week's rolling blackouts hadcost them millions of dollars in lost production.
In Southern California, Miller Brewing Co. halted production atits brewery in Irwindale on Friday and California Steel IndustriesInc. in Fontana closed its plant and idled most of its 1,000workers for the day. Textron Aerospace Fasteners in Santa Ana sent400 employees home for the day with half-pay.
"What am I supposed to do? How am I going to take care of myhusband if I don't work and I lose my health insurance," askedLucia Fraijo as she stood outside the Miller brewery, tears in hereyes. The 52-year-old bottler said her husband has cancer.
Bonds on Credit Watch
As the economic crisis was unfolding Friday, Standard & Poorsput the state's bonds on credit watch, reflecting a lack ofinvestor confidence in California's ability to dig its way out ofthe mess.
The crisis, months in the making, peaked this week when soaringnatural gas prices and a shortage of hydroelectric power drove upthe wholesale price of energy. PG&E and SoCal Edison couldn'tincrease prices to cover those rising costs because of a flawedderegulation effort. The companies are an estimated $11 billion indebt and unable to buy any more power on credit.
Southern California, with most of the state's population, wasspared the rolling blackouts because of the layout of the state'spower grid and because Los Angeles, with its own power sources, hadan adequate supply to serve its nearly 4 million residents.