Mexico Sells Electricity to Power-Starved California January 29, 2001 11:22 pm EST

MEXICO CITY (Reuters) - Mexico is selling 50 megawatts a day of electricity to energy-starved California to help the state weather a shortage that left millions affected by rolling blackouts, officials said on Monday. Mexico's state-run Federal Electricity Commission said it began providing the power to the California Department of Water Resources on Sunday at a price of $230 per megawatt hour.

Mexico had earlier offered to help California, where tight energy supplies are blamed on the failure to build new generators and on a botched experiment with deregulation. The nation's most populous state has been hit with controlled, or rolling, blackouts as a result of the crisis.

"The quantity of energy sold could be increased...by up to 150 MW at non-peak hours," the commission said in a communique.

Mexico has little spare capacity or access to interconnections with the United States, hampering its ability to provide ample relief to its northern neighbor. Fifty megawatts can meet the energy needs of about 50,000 homes.

Mexico is also facing a potential power crunch of its own, and experts say it must come up with additional generating capacity in the next three years or face blackouts.

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-- Martin Thompson (mthom1927@aol.com), January 29, 2001