Uncertainty over California's energy future heats up

SAN FRANCISCO -- - Simmering disagreements about how best to lower electricity costs and avert future power shortages boiled over recently during an all-day gathering convened by the California Public Utilities Commission.

Utilities, power plant owners, consumer advocates, economists and organizations with big appetites for power wrangled over how to fund construction of new power plants. The PUC wants to "ensure that we have adequate generation in the future," said Michael Peevey, the panel's president.

Forecasters have warned that without new generation, economic and population growth and power plant shutdowns are likely to push California into a power crunch in anywhere from two to six years. System failures and hot weather could cause blackouts as early as this summer.

Also hovering over the recent session were memories of the 2000- 01 energy crisis. Michael Florio, a lawyer for the Utility Reform Network, a consumer group, noted that exactly 10 years ago the PUC issued a "blue book" that committed California to reduce regulation and open its power industry to competition. "Your predecessors launched the greatest man-made disaster in economic history," he told the PUC members.

TURN and the utilities seek a return to a long-standing system in which utilities line up power for customers and regulators set retail rates to insure utility profits.