Decisions that could affect the continued supply of power toCalifornia consumers and the price of that power could be renderedthis week in separate cases in federal courts in Los Angeles andSacramento.

The State of California was preparing to intervene today in afederal district court in Los Angeles, which has been asked toraise utility rates to cover the unpaid costs of wholesale power.

Meanwhile, a federal judge in Sacramento is expected to rule byFriday, Feb. 16 on a petition by the Cal-ISO to require powersuppliers to continue doing just that. The judge issued a temporaryinjunction last week requiring suppliers, Reliant Energy, AES,Dynegy and Williams to maintain deliveries until that date.

At the same time negotiations on a settlement with the utilitiesinvolved in the state’s power crisis will continue and statelegislative hearings on the utilities’ financial condition will beheld early this week in Sacramento with the hope of a “conceptual”solution by the end of next week, according to the governor’s chiefpress spokesperson.

State policymakers on Friday were seemingly unconcerned aboutthe possibility of the federal judge ordering state regulators toraise utility rates. “Everyone knows whatever the decision is, itwill be appealed,” said spokesman Steve Mavigilio, who noted noanticipated settlement would be forthcoming over the weekend.

Negotiations between Gov. Gray Davis’ team headed by a formerutility executive and the two utilities last week were centered onwhat the two energy companies would give to the state in return forstate-backed financing to cover some part of their mounting debts,estimated around $12 billion and rising.

“So far most of the so-called negotiations are mostly ‘talk’about the talks,” said a PG&E utility spokesperson in SanFrancisco, who was not optimistic last Friday that any resolutionswere close at hand.

Late Friday three of the largest power producers currently beingstiffed by the Cal-ISO and the utilities, Reliant Energy, Dynegyand Mirant, said they are forming a creditors committee to exploreoptions for receiving payment. The group’s move is in response towhat they characterized as slow progress toward the implementationof a comprehensive long-term solution to California’s electricitycrisis.

“Our goal for many months has been to keep electricity flowingto Californians, and we remain committed to that objective.” But,”we are troubled over the pace of progress toward a comprehensivesolution, As publicly held companies, we have a responsibility toour respective shareholders and must now examine our alternatives.”

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