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California Lawmakers Approve Short-Term Solution to Power CrisisAired February 1, 2001 - 5:18 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JUDY WOODRUFF, CNN ANCHOR: California state lawmakers voted just a little while ago to approve at least a short-term solution to that state's power shortage.
For the very latest all that, let's go to CNN's Casey Wian in Sacramento -- Casey.
CASEY WIAN, CNN CORRESPONDENT: Judy, it was a significant political victory for California Governor Gray Davis. Less than 12 hours ago, the bill that he's been pushing to deal with at least part of California's electricity crisis was narrowly defeated by state lawmakers by three votes.
But after some significant arm-twisting, the governor and legislative leaders convinced two Republicans, who are in the minority, and one Democrat to switch their votes. The bill now passes as it was originally introduced yesterday. It puts the state into the electricity business. It gives the state the authority to enter into long-term power contracts at reduced rates and to distribute that power to the state's investor-owned utilities, who, of course, are in dire financial straits.
The state is going to float revenue bonds, up to $10 billion worth of them. And the money will be paid back by the consumers of the utilities. Republicans were concerned that this could mean rate hikes for business and residential customers. And they wanted the governor and Democratic leaders to earmark $2 billion of the state's approximately $7 billion or $8 billion budget surplus to ease those possible consumer rate increases. Ultimately, they did not get their way.
Governor Davis is expected to sign the bill at any time -- Judy.
WOODRUFF: Casey, how crucial was it that this legislation be passed today?
WIAN: It was very crucial that it was passed today, from the governor's point of view and from the Democratic leadership's point of view. The state of California is spending -- has been spending between $40 million and $50 million a day buying high-priced electricity in the spot market to keep the lights on throughout the state. This will speed up the process of getting weaned off of that market. At least, it is hoped that is what's going to happen -- Judy. WOODRUFF: All right, Casey Wian, reporting from Sacramento. Thanks very much. We appreciate it.
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