Legislators bracing for summer blackouts

The Associated Press
Tuesday June 05, 2001

MONTEREY — Despite months of seeking solutions to the energy crisis, state officials are still preparing for blackouts this summer, Assembly Speaker Robert Hertzberg said Friday. 

The state Office of Emergency Services will closely watch for any problems, and improved early notification programs are in the works so communities can prepare for when the lights go out, the San Fernando Valley Democrat said. 

Most importantly, the crisis is not a time for politics as usual and finger-pointing, he said. 

“This is war. This is so critically important,” he told a meeting of the California Society of Newspaper Editors and The Associated Press News Executives Council.  

“You can’t screw around with the small stuff. ... We’re trying to be problem-solvers.” 

Hertzberg pointed to how the crisis forced the Legislature to look beyond polls and focus groups for solutions. 

“We came up with a new paradigm of how we solve problems,” he said. 

When the scope of the problem became known in December, lawmakers were ill prepared, he said. Many members had been in office less than two weeks. 

The remainder feared repercussions from the deregulation law passed in earlier sessions. 

When Gov. Gray Davis called a special session, Hertzberg formed only one committee so that lawmakers could remain focused on finding solutions. 

The number of laws introduced also were limited in the first month of the special session. Joint caucuses of Democrats and Republicans worked together, he said. 

Hertzberg said lawmakers also sought the “biggest and best” experts, including lawyers and executives familiar with past cases of utility bankruptcies. 

“Away from the politics – no focus groups, no polling, none of that garbage – they told us the nature of the problem and how to solve it” he said.  

“Our job was to translate that.” 

In response to questions, Hertzberg defended the secrecy surrounding negotiations for long-term contracts.  

Enough information was disclosed to reassure the investment community, he said, adding that any more details could have affected the bidding process. 


Despite efforts to resolve the problem, it’s not clear whether the lights will stay on in California as summer nears, he said. 

The end of May and early June will be a critical time because many power stations are being shut down for maintenance and the state’s new long-term contracts have not taken effect. 

“I suspect we will have blackouts,” he said. “It’s not going to be good. None of this is good.” 



• The state Assembly could consider a bill Monday that would authorize $12.5 billion in bonds for power buys. Republican members have balked at financing that much money, suggesting that the state instead use some of its surplus to buy electricity for customers of three cash-strapped utilities. 

• Also Monday, a bill that would impose a windfall profits tax on electricity generators will be heard in a Legislative committee. 

• The governor meets Wednesday with the CEOs of several major energy suppliers to discuss the money they’re owed by the state’s two largest utilities, the state’s creditworthiness and how wholesalers can help the state during the energy crisis. Davis says he won’t be discussing any of the investigations into price manipulation in the wholesale market. 

• Davis’ representatives continue negotiating with Sempra, the parent company of San Diego Gas and Electric Co., to buy the utility’s transmission lines. 

The problem: 

High demand, high wholesale energy costs, transmission glitches and a tight supply worsened by scarce hydroelectric power in the Northwest and maintenance at aging California power plants are all factors in California’s electricity crisis. 

Edison and PG&E say they’ve lost nearly $14 billion since June to high wholesale prices the state’s electricity deregulation law bars them from passing on to consumers. PG&E, saying it hasn’t received the help it needs from regulators or state lawmakers, filed for federal bankruptcy protection April 6. 

Electricity and natural gas suppliers, scared off by the two companies’ poor credit ratings, are refusing to sell to them, leading the state in January to start buying power for the utilities’ nearly 9 million residential and business customers. The state is also buying power for a third investor-owned utility, San Diego Gas & Electric, which is in better financial shape than much larger Edison and PG&E but also struggling with high wholesale power costs. 

The Public Utilities Commission has raised rates as much as 46 percent to help finance the state’s multibillion-dollar power buys.