The cure and the illness in California’s electricity crisisshared the spotlight Wednesday as the state finished its whirlwind27-hour, sealed-bid power auction and the state’s third majorinvestor-owned utility appealed to state regulators for a five-yearsurcharge and a $100 million cash-conservation program to avoid thefinancial torpor of its two larger fellows private-sectorutilities.

Scrambling in the wake of the noon PST deadline Wednesday, Gov.Gray Davis hurriedly announced tried to put an initial context onthe unique state auction. It was assumed that many of the existingmajor national power suppliers doing business in Californiaparticipated, particularly four that had discussion with thegovernor in recent weeks-Duke, Dynegy, Reliant and Southern.

A California-based spokesperson for Duke, Tom Williams,confirmed that his company participated and that its bids are “allcontingent on coming to agreeable credit terms.” Reliant alsoreportedly participated in the auction.

“The balls in the state’s court now,” Williams said.

Saying both the federal and state government’s have failed tostop the bleeding, Sempra Energy’s San Diego Gas and Electricutility unit, which first surfaced California’s deepening energycrisis with its retail electric sticker shock last summer, filedWednesday with the California Public Utilities Commission for afive-year, 2.3 cents/kWh rateÿincrease and a $100 million”cash-conservation” program toÿaddress its growingunder-collections to avoid the financial crisis now plaguing thestate’s other two major investor-owned utilities.

Noting that its uncovered power costs exceeded $450 million atthe end of last year, SDG&E also asked the California PublicUtilities Commission to allow it to resume its normal billcollection activities, which have been suspended since last July toease the burden on retail customers faced with skyrocketing summerelectricity bills.

Under a special state law passed last year, SDG&E re-frozeits retail rates at 6.5 cents/kWh, retroactive to June 1, but theutility said over the past 30 days the wholesale power prices inthe state have averaged a record 25 cents/kWh, which SDG&E saidis seven times what they were a year ago.

SDG&E asked the CPUC to make the rate surcharge effectiveMarch 1, 2001, adding what it estimates is an increase of $11.50 amonth for the typical residential customer, whose current averagebill is $72 monthly.

“Despite the charge of seasons, the serious problems inCalifornia’s dysfunctional wholesale power market continue —problems that FERC has refused to address,” said Debra Reed,SDG&E president. “Additionally the state government’s actionsare not keeping pace with the sharp rise in wholesale electricityprices, which remain out of control and have far surpassed therecord prices of last summer.

“Our customers have been paying only a small fraction of thesepower costs, the majority of which is being deferred into a growingbalancing account.”

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