Governor signs bill authorizing $13.4 in bonds to repay treasury
SACRAMENTO (AP) – Gov. Gray Davis said Thursday he will travel the state if necessary to defend his decision to spend billions of state dollars on electricity for two cash-starved utilities.
The state spent nearly $2,000 a megawatt hour Wednesday as state grid operators narrowly avoided a third consecutive day of blackouts, Davis said, reiterating his call for federal price caps.
The $1,900 is a record or near record since the state purchases began in January, said Oscar Hidalgo, a spokesman for the power-buying Department of Water Resources. The $319,200 the department paid Reliant Energy for 168 megawatt hours at that price was enough to power 168,000 homes for an hour, Hidalgo said.
Reliant spokesmen did not return telephone messages from the Associated Press Thursday.
The governor’s comments came as he signed a law letting the state borrow $13.4 billion to repay the treasury for its power costs.
Davis couldn’t guarantee the 15-year bond will be enough to cover the state’s electricity purchases. However, he said the $13.4 billion price tag represents ”the best thinking of our financial analysts,” and includes a reserve in case electricity prices remain higher than expected.
He said he hopes the state can stop buying power for Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric by the end of next year.
Davis accused Assembly Republicans of putting their political opposition above the state’s welfare by refusing to support the bond bill. That means the bonds can’t be issued for three months, which Davis said will drive up the interest ratepayers will be charged for the bond; complicate the state’s budget; and endanger worthwhile state programs that will be delayed until the bonds can replenish the state treasury.
”This measure is a lifeboat that allows us to stay afloat,” Davis said.
”By refusing to vote for this measure, Republicans are playing with fire,” Davis said. ”If I have to go into every district occupied by a member who voted against (the bond issue) and make the case why this is necessary, that is what I will do.”
Assembly GOP Leader Dave Cox, R-Fair Oaks, called the bond bill ”a dangerous gamble for California – a gamble Republicans couldn’t support without a clear endgame.”
”The governor obviously believes that history will judge that his was the right decision,” Cox said in a statement. ”He had better be right.”
Assembly Speaker Robert Hertzberg, D-Van Nuys, said he still hopes to negotiate a bond compromise with Republicans, but Cox said Republicans’ offers to negotiate had been ignored.
Republicans had proposed that $5 billion of the state’s power purchases be paid by taxpayers, lowering the amount of money that will be billed to investor-owned utilities’ customers over the next 15 years.
Meanwhile Thursday, a federal bankruptcy judge considered ordering PG&E to make millions of dollars in back payments to small power plant owners that provide nearly a third of California’s electricity.
And California power regulators continued struggling over how to divide record electric rate increases among the 9 million customers of the state’s two largest utilities, Edison and PG&E. The Public Utilities Commission is rushing to adopt the higher rates Monday.
While tempers and blood pressures rose, cooler temperatures helped the state avoid the threat of blackouts Thursday.
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