How California Gray Davis Created a Crisis

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February 08, 2001 How Democrat Gray Davis Helped Create A Crisis

“Davis may have contributed to the meltdown of the state's two largest electric utilities by neglecting a repeatedly suggested strategy for stabilizing wholesale prices.”

San Francisco Chronicle, February 4, 2001

Aug. 3: The PUC allows PG&E and Edison to sign long-term contracts, subject to review of reasonableness. Both companies soon file proposed contracts, which they say the PUC has not acted on to date." [inaction esponsibility of staff that reports directly to Davis appointed President Loretta Lynch]”

San Francisco Chronicle, February 4, 2001

"In frustration, Les Gugliasi, PG&E's director of regulatory relations, wrote Lynch on Oct. 16 complaining that after nine weeks PUC staff had not produced guidelines. The same day, PG&E told federal regulators that it had cash flow shortfalls of "astounding" dimensions.”

San Francisco Chronicle, February 4, 2001

Why is California having a Multi-BILLION dollar Energy Nightmare?

The Bottom-line is INACTION by Governor Gray Davis:

Mid-June 2000: Utility Executives warned Governor Davis about the impending crisis and urged the governor to allow the utilities to “negotiate longer-term contracts with generators to guarantee supplies at fixed prices.”

August 2, 2000: PUC warned Governor Davis about crisis and unanimously approved a resolution allowing utilities to enter into long-term contracts. Staff of Davis appointed President fails to do proper reviews for months.

August 22, 2000: All Assembly Republicans urge Governor Davis to call a special session of the Legislature to put in place a long-term plan to deal with the impending crisis.

August 31, 2000: The Legislature passed a resolution saying that the energy nightmare now threatened "the financial viability of the electrical corporations." The resolution directed the PUC to issue a report by September 21, 2000 about "the most effective mechanisms to protect consumers from price volatility."

Mid September 2000: Major investor services like Fitch and Moody’s issue strong warnings about the financial viability of California utilities.

February 1, 2001: “Legislature authorizes the state to enter long-term contracts to buy power and opens the door for future rate hikes.”

San Francisco Chronicle, February 4, 2001

-- noenergy (noenergy@pooped.poop), February 08, 2001


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