Cheney: White House Mtg Mon On Calif. Pwr Problems

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"Daniel Douglass" <Douglass@ArterHadden.com<
01/28/2001 04:07 PM

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Dow Jones story

Cheney: White House Mtg Mon On Calif. Pwr Problems
01/28 10:13 (DJ)
Story 0076 (EIX, PCG, SRE)

NEW YORK (Dow Jones)--U.S. Vice President Dick Cheney said on Fox News
Sunday that the Bush Administration will hold a cabinet-level meeting Monday
on California's power problems.

Cheney also said that it wouldn't be his choice to have California take
control of the electrical industry within its borders.

"That wouldn't be my choice. I'm a believer in markets, and I think the
notion of deregulation is basically sound. What happened in California was
it was poorly executed," Cheney said.

He added that the state's regulatory scheme has undermined the financial
stability of utilities, which have run up several billion dollars in debt
without being able to recapture it.

Cheney also said California's problems are partly a result of supply,
because no new power plants have been built in the state in 10 years,
despite the fact that there has been a rapid run-up in demand.

"It's really up to California to change those laws, both to restore
financially solvency to the utilities as well as to make it possible to
start building new capacity."

Cheney said a big part of the problem is the process for siting plants,
which involves an endless appeals process. While it's relatively easy to
stop a project from going forward in the state, it's very hard to get final
approval for a project, he said.

"California is probably the toughest state in the country...in which to
build a power plant, and when you add to that the pricing scheme that is in
place, there is no incentive for anybody to go invest in additional capacity
in California. And investing in new capacity is what is ultimately going to
solve the problem."

-By Richard C. Black, Dow Jones Newswires; 201 -938 -4370;
rich.black@dowjones.com

(END) DOW JONES NEWS 01 -28 -01

10:13 AM