California governor: Bonds would produce power and cash for consumers

Gov. Gray Davis says California's proposal to issue bonds to help utilities buy electricity is not a bailout

From staff and wire reports

SACRAMENTO, California -- California lawmakers are considering a series of proposals, including issuing state bonds to help the state's two largest utilities as they face bankruptcy in a power crisis that has kept residents under the threat of blackouts for 10 days.

Under the proposal discussed Thursday, the state would issue revenue bonds that Southern California Edison and Pacific Gas and Electric Co. customers would pay back over several years, said Assemblyman Bill Campbell, the Republican minority leader.

VIDEO CNN's Charles Feldman interviews Gov. Gray Davis on California's power crisis (January 25) Play video (QuickTime, Real or Windows Media)   GALLERY Lights out in San Francisco     IN-DEPTH SPECIAL Online coverage of the energy crunch in California   ALSO Power-starved California looking for help   MESSAGE BOARD Power crisis

In exchange, the state would get long-term options that would let the state buy SoCal Edison and PG&E stock at a low price. If the price goes up, the state could sell the stock and use the profits to pay off the bonds.

Critics call that proposal a bailout, but Gov. Gray Davis disagrees.

"It's not a bailout," Davis, who supports the proposal, told CNN on Thursday afternoon. "It accomplishes two purposes: It provides the funding to revitalize the utilities, but it lets ratepayers know they will gain as the utilities gain."

Other proposals range from taking over transmission lines or hydroelectric plants to creating a state power authority to purchase electricity and provide it directly to consumers or use the utilities as intermediaries.

No vote is expected until Monday, but Davis said officials "will move heaven and Earth to get everything we have to get done in the next two weeks." President George W. Bush has said he will not extend an emergency federal order, which forces electricity generators to sell excess power to California, past that deadline.

To hear more of what the governor had to say, watch the complete interview.

The Associated Press contributed to this report.

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