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Judge Extends Calif. Emergency Power Sale Order

SACRAMENTO, Calif. (Reuters) - A federal judge has once again extended a critical emergency order requiring four merchant energy suppliers to continue to selling power to California, a decision affecting nearly 10 million homes in the energy-starved state, a court official said Wednesday.

U.S. District Court Judge Frank Damrell issued the extension late Tuesday requiring Reliant, Williams Cos., AES and Dynegy to continue through Feb. 23 their power sales to the California Independent System Operator (news - web sites) (ISO), the agency that manages the state power grid.

``The temporary restraining order previously issued Feb. 8 and extended Feb. 16, is further extended to Feb. 23 at 5 p.m. (8 p.m. EST), `` the court's order said.

The extension comes as Gov. Gray Davis (news - web sites), state legislators and utility executives negotiate strategies for stabilizing California's power crisis, which has been caused by spiraling wholesale power prices, surging demand, and fallout from the state's own 1996 power deregulation scheme.

A key element of the rescue plan, which involves a state bid to buy most of California's vast power transmission grid from three cash-strapped utilities, remains up in the air as the utilities and Davis seek to agree on terms.

Damrell's original temporary restraining order, issued on Feb. 6, applied only to Reliant, but the other suppliers have agreed to abide by its terms.

The new extension gives the parties involved a chance to work out a solution among themselves before Damrell issues his final ruling.

The four companies have balked at selling power to the ISO, whose credit ratings have been hurt by the near bankruptcy of Pacific Gas and Electric Co. (news - web sites), a unit of PG&E Corp. and Edison International's Southern California Edison (news - web sites) -- two of its biggest customers.

Reliant controls about 3,800 megawatts (MW) of generating capacity in California, and Dynegy has about 2,000 MW. AES's 4,083 MW of in-state generation is marketed by Williams.

The order again backed state lawyers' arguments that the supplies are needed to protect Californians from rolling blackouts as the state struggles with its worst-ever energy shortage, the result of soaring demand and 10 years without new power plant construction.

-- pho (owennos@bigfoot.com), February 21, 2001