California considers to renegotiate power contracts

Nov 27, 2001 01:00 AM

After months of holding fast to a commitment to honour $ 43 bn worth of long-term electricity contracts signed during California's power crisis, state regulators now say the contracts may be renegotiated. S. David Freeman, chairman of the California's power authority, who negotiated the contracts with energy companies in January, said the energy climate in the state has changed since then and that he may support reopening the agreements.
To give companies an incentive to come to the negotiating table, the state's new public power authority could offer to help companies finance construction of power plants, he added.

Critics say the contracts force the state to buy power even when demand is low and then sell the surplus at a loss. In a symbolic example of how California's energy picture has changed since last winter, the holiday tree at the state Capitol will "beam brightly" between 7 p.m. and 10 p.m. this year. Last December, the tree's 4,000 lights were turned off for much of the time to save energy.

Source: 2001 E&E Publishing
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