The California Chamber of Commerce and the state’s BusinessRoundtable have urged the California Public Utilities Commission(CPUC) to “allow retail rates to at least moderately reflectwholesale rates,” in order to keep the state’s utilities inbusiness and assure “the lights will stay on.”

“A reliable supply of electricity is the lifeblood of Californiabusinesses, California jobs and our state’s economy. Businessescannot function in a climate where there is a constant threat ofelectric service interruptions and the potential for rollingblackouts,” the leaders of the two organizations said. Withoutswift action by the CPUC to allow the pass-through of power costs,”the ability of the state’s major utilities to purchase electricityon behalf of their consumers and provide reliable electric servicewill be severely restricted or eliminated altogether. Bankruptcyof the state’s major privately-owned utilities would result inchaos, crippling California jobs and our entire state’s economy.”

The CPUC is scheduled to vote Jan. 4 on lifting the freeze onretail rates for Southern California Edison and Pacific Gas &Electric. With the consumer rate freeze in place and the spot marketcosts of power skyrocketing, the two utilities have piled up $8billion in debt. Credit rating agencies have threatened to drop theirratings to junk bond status, which would make it virtually impossiblefor the utilities to continue borrowing to finance powerpurchases. SoCal Edison has warned it could be forced intobankruptcy. On Friday its parent, Edison International, eliminated itsfourth quarter dividend and cut operations by $100 million, affecting400 jobs (see Daily GPI, Dec. 26).

The business groups commended Gov. Gray Davis for his efforts inthe power crisis. Davis met late Tuesday in Washington with FederalReserve Chairman Alan Greenspan and U.S. Treasury SecretaryLawrence Summers to discuss the state’s energy problems. At presstime there was no report on the results of that meeting.

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