If Energy is make the top priority list for president-elect George Bush and the incoming Congress, it is likely to be because of the electricity crisis in California (FPN00-65). Deregulation of the electric utility industry there has resulted in failure to build new capacity and skyrocketing rate increases to consumers. The state's major utilities sold their existing plants to out-of-state corporations and are buying it back at ever increasing rates. Suppliers blame increasing natural gas prices.

San Diego Gas and Electric raised consumer rates by factors of 2-3. Southern California Edison and Pacific Gas and Electric had their consumer rates frozen by state law and have said they were facing bankruptcy as a result.

On January 3, the state Public Utilities Commission, after five days of public hearings, granted emergency rate increases for 90 days to Southern California Edison and PG&E that would increase consumer rates by about 9 percent, small business rates by 7 percent and industrial rates by 15 percent. The utilities had requested rate increases of 26-30 percent. The Commission said that utilities would not have access to the increased revenue until an an independent audit was completed. If the audit determined that the utilities did not need the money, the Commission said, the money would be returned to the consumers. No one expects that to happen.