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Date: Fri, 16 Mar 2001 09:06:49 -0600
From: "Tracey Bradley" <tbradley@bracepatt.com>
To: "Paul Fox" <pfox@bracepatt.com>
Cc: "Ronald Carroll" <rcarroll@bracepatt.com>
Subject: Calif. regulators postpone key ruling on power spending
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Thursday March 15, 4:48 pm Eastern Time

Calif. regulators postpone key ruling on power spending

SAN FRANCISCO, March 15 (Reuters) - California regulators postponed a 
decision on Thursday on how much money the state will tap from monthly 
utility bills to finance badly needed long-term power purchases -- projected 
at $43 billion.

The state Public Utilities Commission (PUC) postponed the issue to its March 
27 meeting.

An estimated $10 billion state bond issue to help finance the power purchases 
is a key part of the rescue plan.

State Treasurer Philip Angelides hopes to close the initial bond issuance by 
the end of May but needs the PUC to decide how much electricity bill revenues 
will go to the state.

Long-term deals to buy cheaper power from independent energy companies are a 
key part of California's emergency rescue plan to stabilize its chaotic power 
market and keep its two big investor-owned utilities from bankruptcy.

To help pay for that power, the PUC, which sets gas and electric rates, must 
decide an amount to take from the bills paid to PG&E Corp.'s (NYSE:PCG - 
news) Pacific Gas and Electric unit and Edison International's (NYSE:EIX - 
news) Southern California Edison subsidiary.

The two companies supply electricity to about 24 million Californians.

The money is to go to the state's Department of Water Resources, the agency 
charged by Gov. Gray Davis with negotiating and signing contracts to buy 
power at locked-in prices well below the prices paid in the volatile 
wholesale spot market.

PG&E and SoCal Edison want all of their generating costs covered before any 
dollars are tapped for state purchases.

So far, Davis has announced 40 separate agreements and contracts with 20 
energy companies which add up to $43 billion in supplies to be delivered over 
a few months to 10 years. The supplies total almost 9,000 megawatts -- enough 
electricity for about 9 million homes.

Under California's flawed scheme to deregulate its power industry, PG&E and 
SoCal Edison were forced to buy power in the costly spot market but were 
barred from collecting that price from customers because of a rate freeze 
that runs to March 31, 2002.