High profit potential will attract new power plants, forcing prices down and stranding the state's long-term electricity purchases.
Let's consider three questions crucial to California's energy crisis and its plans for solution.
San Diego Gas & Electric
For the utility, wresting its assets from PUC control is the real point.
Gas & Electric Co.'s 17-month-old proposal to divest its hydro assets via auction likely is dead, a casualty of California's ongoing energy market turmoil. Despite this reality, the utility's auction proposal remained active at the California Public Utilities Commission (PUC) as of press time in mid-January, even as the governor and state legislature held emergency meetings amid rolling blackouts.
The problems stem from a lack of incentives for long-term, fixed-price contracts.
The end of summer found energy regulators working overtime in California to appease an angry public that had seen electric bills double and triple in some parts of the state.
Restructuring Plans. The Ohio PUC denied rehearing of its restructuring order for FirstEnergy issued two months earlier, rejecting arguments by all petitioners-utility, marketers, and consumer watchdog groups.