Electric Utility Restructuring
Briefing Book
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California Chronology

Compiled by Margaret Isler

March 20: Reduced electricity imports from the Pacific Northwest, power plants offline for repairs and higher-than-expected demand because of warm temperatures caused state power managers to order rolling blackouts across California for a second straight day today as demand for electricity again exceeded supply.

March 16: The state budget committee will deny further requests for funds to buy electricity, unless state regulators immediately devise a means by which the Department of Water Resources can recover the money. A letter state Sen. Steve Peace sent to state Department of Finance Director Tim Gage, went on to say the committee is "concerned about the prospect of continuing to approve deficiency requests for electricity purchases...in the absence of any discernible progress by the California Public Utilities Commission to provide for the recovery of these funds."

March 15: Today, the Bush administration warned that electricity blackouts in California this summer, "appear to be inevitable." Testifying before a Senate hearing on price control legislation, Energy Secretary Spencer Abraham said, "Any action we take must either help increase supply or reduce demand. Price caps will neither
increase supply nor reduce demand."

March 13: Gov. Gray Davis unveils the "20/20 program," a $90-million conservation program that will give customers of the state's three private utilities 20% rebates on their summer electricity bills if they reduce consumption by 20%.

March 9: Federal regulators say that prices charged by electricity wholesalers during the month of January appear to be "unjust and unreasonable." After reviewing power transactions for the month, FERC gave 11 firms and 2 exchanges until March 23 to provide documents justifying their prices or to refund $69 million.

March 7: California's Public Utilities Commission voted today to grant the state Department of Water Resources authority to seek rate hikes. The DWR has been spending approximately $45 million per day to purchase electricity, after suppliers refused to sell to nearly bankrupt PG&E and So Cal Edison. Today's vote opens the door to potential rate increases above 19%.

March 5: California's Department of Water Resources has agreed to purchase approximately $ 4 billion worth of electricity over a 9 year period from Duke Energy of Charlotte, NC. Duke, joins Calpine of San Jose, CA and Williams of Tulsa, OK as independent suppliers of electricity through long - term contracts signed with the DWR.

Feb. 26: Gov. Davis announced an agreement in principle with Southern California Edison to buy its transmission lines for $2.7 billion. The plan would require the parent company, Edison International, to pay SoCal Edison $420 million. Edison would also be required to sell electricity produced by its power plants to the state at near cost for the next 10 years.

Feb. 21: FERC upheld a January 12th order allowing PG&E Corp. to restructure its holdings to insulate its competitive business from the difficulties facing its regulated utility unit, Pacific Gas and Electric Co.

Feb. 19: The Stage 3 alert was downgraded to Stage 2 over the weekend.

Feb. 13: California extends the Stage 3 alert for the 30th consecutive day and a three bill package by the Senate's Energy, Utilities and Communications Committee, passes its first test before lawmakers. The legislation would authorize negotiations for a state takeover of electricity transmission lines, create a state power authority, and spend more than $1 billion on energy generation and conservation incentives.

Feb. 12: U. S. District Judge Ronald S.W. Lew denied Southern California Edison's request for a federal court injunction that would have immediately allowed it to begin recovering billions of dollars spent for wholesale power since last summer. If granted, Edison could have raised electricity rates 15% over three years, and could have recovered $2.5 billion in costs.

Feb. 9: U.S. District Judge Frank C. Damrell extended a temporary restraining order he issued Tuesday ensures the suppliers will not pull about 4,000 megawatts off the state's power grid.

Feb. 8: Gov. Gray Davis issues an emergency order to create an abridged permitting process for power plant builders that will dramatically increase the amount of available energy in the state. Davis announced that the new plants will provide enough electricity to ward off blackouts this summer.

Feb. 6: U.S. District Judge Frank C. Damrell Jr. granted a temporary restraining order telling Reliant Energy Services Inc. to keep selling electricity to California. The federal emergency order expired at midnight.

Feb. 1: Gov. Davis signed Assembly Bill 1X giving the state authority to sign long-term contracts for electricity and float about $10 billion of revenue bonds to cover expected losses in initial years of such purchases. Gov. Davis announced $320 million of incentives to increase conservation by homeowners and businesses.

Jan. 28: California had its 13th consecutive day of Stage 3 alert.

Jan. 25: Federal Reserve Chairman Alan Greenspan testifies before Congress that California's electricity crisis threatens to undermine the country's economic expansion and says the problem must be addressed "rather quickly." The San Francisco judge temporarily blocks the California Power Exchange from seizing millions of dollars of PG&E's assets. PG&E asked a federal judge in Oakland to issue an emergency order that would let the utility raise rates beyond increases approved by the State Public Utility Commission.

Jan. 23: Energy Secretary Abraham extends the emergency order requiring certain electricity suppliers to ship excess power to California. Bush Administration officials, including Vice President Cheney and Secretary of Energy Abraham, have stated that there will be no further extension, a position that Members briefed by the White House have attributed also to President Bush.

Jan. 19: The California Public Utilities Commission files a restraining order directing PG&E and SCE to provide service to all their customers, even if they are forced into bankruptcy. Gov. Davis signs an emergency bill granting the state authority to make large-scale purchases of electricity. $400 million are allocated for power purchases, enough for approximately one week's purchases. State Attorney General Bill Lockyer files a petition with FERC seeking to block PG&E from shifting assets away from control of a Bankruptcy Court if it is forced into such a filing.

Jan. 16: The ISO declares a Stage 3 alert as several plants report a shortage of natural gas. Edison tells federal regulators it doesn't have the money to pay $596 million it owes this week, including $215 million to the California Power Exchange for wholesale-power purchases. The exchange considers whether to make the utility buy its power elsewhere. Standard & Poor's downgrades the credit ratings of SoCal Edison and PG&E to junk-bond status. The Assembly considers a rescue plan to have the state buy electricity from wholesalers and sell it to utilities at a reduced rate.

Jan. 15: Power supplier Dynegy Inc. threatens to take SoCal Edison and PG&E to bankruptcy court if they fail to make payments due this week.

Jan. 13: State and federal officials resume talks with representatives of power companies. Under the proposal that emerges, the Legislature would let the state buy electricity from wholesalers and sell it to utilities at a reduced rate under long-term contracts.

Jan. 12: The Assembly approves the two bills. Davis meets with the Oregon and Washington governors. Other Western governors say California needs to build more power plants. FERC approves PG&E's request for permission to restructure to insulate assets in the event of bankruptcy.

Jan. 11: The ISO declares a Stage 3 power alert, but stops short of ordering scattered blackouts. U.S. Energy Secretary Bill Richardson extends an emergency order keeping power flowing to the state after Davis submits a conservation plan. An Assembly committee approves bills to shake up two power boards and require utilities to get state permission to sell power plants. PG&E lays off 325 employees and says it will let another 675 go if its finances do not improve.

Jan. 9: State and federal officials meet for seven hours in Washington but find no solutions.

Jan. 8: Davis, in his State of the State speech, proposes a public agency to build power plants, threatens to seize the plants of wholesalers who gouge consumers and utilities and pledges at least $1 billion in state funds to resolve the crisis.

Jan. 5: A federal court in Washington rejects Edison's bid to force federal regulators to cap prices on wholesale electricity. Edison announces it will cut 1,450 jobs over the next several months.

Jan. 4: The PUC approves emergency rate hikes of 9 percent for residential customers and 7 percent to 15 percent for businesses for Edison and PG&E.

Jan. 2: Davis joins Edison's suit with a friend-of-the-court brief. He says the commission "has failed in its responsibility to protect California from what the agency itself describes as a dysfunctional market for electricity."

Dec. 26:
Southern California Edison sues FERC, alleging the government body failed to ensure that wholesale electricity is sold at "just and reasonable" rates.

Dec. 15: The Federal Energy Regulatory Commission approves a "soft" rate cap of $150 per megawatt hour, but suppliers can charge utilities more if they can prove a higher price is warranted. Davis had asked for a firm cap of $100 per megawatt hour. Wholesale prices on this day ranged from $429 MWh to $565 MWh. As a comparison, on December 15, 1998, wholesale prices ranged from $12 MWh to $29 MWh.

Dec. 7: For the first time, the ISO declares a Stage 3 emergency when power reserves fall below 1.5 percent. Officials say conservation efforts averted rolling blackouts throughout the state.

Sept. 7: The state Public Utilities Commission approves the rate-averaging plan for San Diego customers, which caps their rates for three years.

Sept. 6: Davis signs two bills stemming from power crisis in San Diego. One would spread energy price increases for San Diego customers over several years, the other speeds up the approval process for new power plants.

Aug. 2: High wholesale prices prompt Gov. Gray Davis to call for an investigation into "possible manipulation in the wholesale electricity marketplace."

June 15: Rolling blackouts in San Francisco affect hundreds of thousands. The blackouts are caused by slim power supplies due to several Northern California power plants shut down for maintenance.

May 22: The California Independent System Operator declares the first of many Stage Two alerts, when power reserves drop below 5 percent.

May: SDG&E customers' bills double from an average residential bill of $49 to about $100 as the utility passes on high wholesale costs to consumers. By mid-summer, those customers' bills have tripled.

San Diego Gas & Electric is the first California utility to deregulate, allowing it to lift the retail price cap.

Deregulation bills approved by state lawmakers take effect. Utilities begin taking steps to divest themselves of their generation plants. Rates they can charge consumers are capped until the utilities complete that task.

Gov. Pete Wilson signs legislation to open up California's electricity market to competition. The bill was approved by the Legislature with unanimous support.

Page last updated March 20, 2001.

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