Power Contracts Set Higher Prices Than Current Market Rates (KFWB) --

As Governor Gray Davis prepares to release details of the 38 long-term contracts between power suppliers and the state, government records reportedly show that the contracts have set prices higher than the current rates on the short-term spot market.

If the decline in the wholesale utility rates continue, the $43 billion worth of contracts could burden consumers with high bills.

The Los Angeles Times reports that the state committed to power purchases at prices up to $154 per megawatt-hour during peak demand. The state agreed to pay more than $95 when demand is low. Recent prices have dropped below $100 for peak demand and below $20 during the evening hours of low demand.

However, short-term prices could rise again as temperatures rise and power consumption increases this summer.

State officials say the contracts helped alter the power marketplace, and freed the state from total reliance on the volatile spot market.

Governor Gray Davis had refused to release details of the contracts, saying disclosure would put the state at a competitive disadvantage during negotiations.

-- PHO (owennos@bigfoot.com), June 13, 2001