(CA)Prices Drop; Davis Seeks More State Funds

(KFWB) -- Governor Gray Davis says the state's electricity costs are dropping. Nevertheless, the governor is asking for another half-billion dollars from state legislatures for power purchases.

With the new money request, the state will have spent a total of $8.2 billion so far on power purchases on behalf of ailing utilities.

The Davis administration says the cost of buying power is now substantially lower than the $50 million a day the state has been paying for months.

Part of the reason for the price drop, the Davis administration said, was lessening demand. Conservation cut power use by 11 percent last month and cooler temperatures have meant fewer air conditioners on.

Also, the state is buying more power through cheaper, long-term contracts negotiated with wholesale electricity suppliers.

Plus, supply is up as more power plants are back online after routine maintenance.

The average price for power is still much higher than a year ago at this time, and the Davis administration once again reiterated today the need for federal price caps on out-of-state wholesale power sales. The Bush administration has been opposed to such price controls.

-- PHO (owennos@bigfoot.com), June 05, 2001