Breaking News : California Stakeholders Agree to Key Objectives 
posted 10:18 AM (CST) Jan 10, 2001
 
Signs of compromise and cooperation emerged from a marathon seven-hour 
meeting last night between California government officials, power industry 
executives and the Clinton administration on California's continuing energy 
crisis. A set of key principles were hammered out by the two dozen 
participants, according to a statement issued following the meeting.

The stakeholders agreed on the need for cooperation to "maintain stability 
and avoid bankruptcy of California utilities and assure the long-term 
regularity of market conditions." The utilities have amassed $12 billion in 
unrecovered wholesale power costs, and despite the recent approval of new 
rate surcharges the utilities remain on the brink of financial insolvency.

The meeting participants agreed on a few crucial elements of a solution to 
California's power woes, including the following: development of approaches 
to promote long-term purchases of power, possibly by the state, from 
generators at an "attractive fixed rate;" the willingness of generators and 
qualifying facilities and marketers to provide on a short-term basis 
"forebearance of amounts owed by Pacific Gas & Electric and Edison" in the 
context of a comprehensive solution; the need to find "satisfactory 
approaches" to the utilities' obligations to purchase power; cooperation to 
"better match supply and demand;" and review of the existing qualifying 
facilities payment structures.

Working groups are meeting today in Washington, D.C. to address additional 
technical details and the senior policy makers will reconvene this weekend to 
complete an agreement.

FERC Chairman James Hoecker, said it was "to early to declare victory," but 
it was "an important first step to try to find ways to maintain stability and 
avoid bankruptcy." Hoecker, who also announced today that he will be leaving 
the Federal Energy Regulatory Commission on Jan. 18, said the atmosphere at 
the meeting was highly cooperative. "They appear to be headed in the 
direction that would seem to be consistent with FERC's Dec. 15 order," he 
said.