Alexa
  • Directory of Taiwan

California governor signs US$10 billion energy bill

California governor signs US$10 billion energy bill

The governor has signed a US$10 billion plan aimed at keeping California's lights on while lawmakers try to fix the state's spiraling energy crisis.The law, which took effect yesterday, allows the state to sign long-term power contracts for up to a decade and sell electricity to customers of cash-strapped Southern California Edison and Pacific Gas and Electric Co.
The bill was approved after legislative leaders and Gov. Gray Davis won over a Democratic holdout and two Republicans in the Assembly.
Several lawmakers criticized a provision that allows the Public Utilities Commission to raise rates to repay the state for power purchases. Residential customers who use 30 percent more energy than a baseline specified by regional energy use would face higher rates.
SoCal Edison and PG&E, California's largest utilities, together serve nearly 9 million residential and business customers.
The utilities say they've been pushed more than US$12.7 billion into debt by the state's 1996 deregulation law. The law required utilities to sell off power plants and blocks them from recovering higher wholesale electricity costs from customers.
The state has already spent more than US$400 million since mid-January buying power for the utilities, which cannot secure credit and are defaulting on hundreds of millions of dollars in bills.
The legislation lets the state spend up to US$500 million buying more electricity on the expensive spot market while reaching cheaper long-term deals with power wholesalers.
Another proposal still in the works would let the state issue revenue bonds to help utilities pay off their debts. It would be paid back by customers and through utility stock options the state could sell if their value rebounded. Lawmakers also want speedier power plant construction and more conservation.
California's energy problems - driven not just by deregulation but high wholesale prices, high demand and a tight supply - are expected to persist through the summer. Power reserves have hovered around 1.5 percent and shortages caused rolling blackouts in northern and central California over two days last month.


Updated : 2021-10-19 23:49 GMT+08:00