Top federal and state officials in California will try this week to find a way out of the state’s tangled electricity crisis, which could reassure nervous U.S. financial markets.
Democratic Gov. Gray Davis is expected Monday to outline how far he is willing to go to return’s California deregulated power market to a regulated one when he addresses lawmakers in Sacramento.
Southern California Edison, a subsidiary of Edison International, and Pacific Gas and Electric, a unit of PG&E Corp., say they may soon go bankrupt because of billions owed after paying soaring wholesale electricity prices.
The California utilities, two of the nation’s largest, blame lopsided deregulation, which allowed wholesale prices to climb amid a shortage of supply but prevented the utilities from recovering costs from their customers.
Davis and utility executives are scheduled to meet with Clinton administration officials Tuesday in Washington.
The California legislature in a special session will consider a proposal for increased public ownership.
