California braced for weekend of power scrounging

Water flows down the South Fork of the American River after going through the Chili Bar hydroelectric dam near Placerville, California, on Friday     WEB EXCLUSIVE Charles Feldman: The California Power Crisis

In this story: Details being ironed out State bonds to cover utility debts Some critical of bidding process Mexican offer falters RELATED STORIES, SITES

From staff and wire reports

SACRAMENTO, California -- Plans to watch Sunday's Super Bowl are being challenged by officials trying to manage California's electricity crisis.

The Independent System Operator, which manages the state's power grid, has suggested TV-pooling for viewing the Baltimore Ravens-New York Giants National Football League championship football game, hoping fans will watch in groups to keep power demand down.

IN-DEPTH SPECIAL Online coverage of the energy crunch in California

The ISO is preparing for a weekend of power scrounging, though rolling blackouts like those that hit Northern California twice last week are not expected.

In Southern California, power was cut Friday to 1,200 businesses which had agreed to emergency outages in return for lower rates.

California has been under an almost-continuous Stage 3 alert for nearly two weeks, its power grid stressed by high demand, uncertain imports, transmission problems and power plants idled for maintenance.

Details being ironed out

Gov. Gray Davis and legislative leaders agreed Friday on a plan to resolve California's electricity crisis that includes public ownership of two huge utilities and years of power-buying by the state.

"The state will be in the power business for a long time to come," Davis said.

He said details are still being worked out, but will include state ownership of utilities and long-term electricity purchases for the cash-starved companies.

Lawmakers said they planned to work on the proposal through the weekend. Some demanded an investigation to learn how much taxpayer money -- if any -- would be at risk under the plan.

Southern California Edison Co. and Pacific Gas & Electric Co., the state's two largest utilities, say they have lost $12 billion since June because rate caps prevent them from passing on to their 10 million customers the full cost of wholesale electricity.

The caps are part of California's deregulation of the electricity industry five years ago, a decision that Davis has called a failure.

State bonds to cover utility debts

Under the plan described by lawmakers, the state would issue bonds to cover utility debts and make customers pay the money back over 10 years through recently approved rate increases of 9 percent for residential customers and 7 to 15 percent for businesses.

Gov. Gray Davis announces the proposal on Friday with state Sen. Debra Bowen, D-Marina del Rey, and Sen. Minority Leader Jim Brulte, R-Rancho Cucamonga

In exchange, California would be granted long-term options to buy low-priced stock in the utilities. The state could sell the stock and use any profits to help pay off the bonds.

The utilities have declined to comment on the proposal.

Some critical of bidding process

Several Republicans said Davis, a Democrat, has released too little information about the secret bidding process the state is using to find long-term contracts to buy power for SoCal Edison and PG&E customers.

Assemblyman Tony Strickland, the GOP minority whip, said withholding information could cloak how much the state pays for electricity.

"This is equivalent to Governor Davis saying that he had a seven-course gourmet meal for only $20, but the price didn't include food or drink," Strickland said.

The governor's office declined to release details on the bidding.

Mexican offer falters

Offers by Mexico to help ease California's chronic energy crisis are severely limited by a lack of lines connecting the two countries' power grids.

Mexican officials said this week they were in talks to provide up to 150 megawatts of badly needed electricity to its neighbor to the Golden State.

But only the northwest corner of Mexico's Baja California, including the city of Tijuana, shares high-voltage lines with the rest of North America.

The reason for Mexico's isolation boils down to a lack of stable voltage.

California has been purchasing power from Canada during the crisis. Canada and the U.S. share a vast transmission system, made up of a 200,000 web of lines over which electric utilities on both sides of the border swap power.

Arizona fears problems

Arizona Gov. Jane Hull met with Bush Administration officials in Washington on Friday, saying California's energy problems are starting to affect Arizona. One utility, the San Carlos Irrigation District, said its 13,300 customers will see a 300 percent increase in next month's bills.

And Federal Reserve Chairman Alan Greenspan told a congressional committee on Thursday that the California crisis threatens to undermine the country's economic expansion.

"It's scarcely credible that you can have a major economic problem in California which does not feed to the rest of the 49 states," Greenspan said in congressional testimony, adding that the crisis could reduce investment in the West, which in turn could shake consumer confidence.

The Associated Press and Reuters contributed to this report.

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