The March Through the Crisis

September 1996: Gov. Pete Wilson signs a bill to open the state electricity market to competition.

March 1998: State's wholesale electricity markets open.

July 1999: SDG&E sells its generation plants, making it exempt from consumer price caps ordered under deregulation law. As retail prices rise with wholesale prices, customers' rates triple over the next year.

May 2000: Total energy costs for the month average $61 per megawatt-hour (MWh), up from 1998 and 1999 averages of $33.

The California ISO declares the first of many Stage 2 emergencies (when energy reserves fall below 5%).

June 2000: Average monthly energy costs climb to $167/MWh. Rolling blackouts are ordered in San Francisco during a heat wave.

September 2000: The CPUC caps rates for San Diego customers for three years.

December 2000: Average monthly energy costs skyrocket to $317/MWh. The ISO declares the first of many Stage 3 emergencies (when reserves fall below 1.5%). The Federal Energy Regulatory Commission (FERC) orders a soft price cap of $150/MWh, effective through April 2001.

The Clinton administration invokes emergency orders to force generators to sell power in California after they refuse state utilities on the grounds that they're credit risks. SCE, later joined by Gov. Gray Davis, sues the FERC for failing to ensure reasonable wholesale electricity rates.

Jan. 2001: The credit ratings of PG&E and SCE are downgraded to junk status, and the CPUC approves temporary rate increases of 7% to 15% for PG&E and SCE customers. The ISO orders rolling blackouts in northern and central California.

The Bush administration extends an emergency order forcing power companies to sell to California but warns that it's the last extension.

February 2001: The California Department of Water Resources (DWR) uses state bonds to begin buying energy (effective through December 2002) for the state's three investor-owned utilities. The DWR signs more than 50 long-term power deals to build the state's reserves.

March 2001: The state approves major retail customer rate increases. The first statewide rolling blackouts are declared during a Stage 3 emergency.

The ISO asks the FERC to investigate alleged overcharges by power generators. The FERC orders wholesale power sellers to justify their rates or refund tens of millions of dollars to the utilities.

Davis announces a 20/20 plan, offering consumers 20% rebates on their electric bills if they reduce consumption by 20%.

April 2001: PG&E files for Chapter 11 bankruptcy protection. The FERC tightens wholesale price controls.

June 2001: The FERC extends California's price cap to spot market sales in California and the 10 states within the Western Systems Coordinating Council.

September 2001: PG&E files its bankruptcy reorganization plan.

October 2001: Retail market choice is suspended in California.

January 2002: California's attorney general files suit against PG&E, claiming it diverted billions from its regulated utility into unregulated affiliates. The company's utility unit counters with a claim that the state violated the deregulation law when it refused to let the utilities sell power generated by the facilities it still owned.

PG&E and the CPUC take their rival restructuring plans to bankruptcy court.

February 2002: A federal judge rejects PG&E's restructuring plan. The state asks the FERC to review some long-term power deals, saying power sellers illegally drove up prices and forced the state into lengthy, unfair contracts.

March 2002: PG&E files its second revised reorganization plan. A U.S. Bankruptcy Court judge sets a June 17 date for PG&E's creditors to review rival plans from the utility and the CPUC.

April 2002: The CPUC submits a plan to restructure PG&E to federal bankruptcy court. PG&E denounces the plan.

The Foundation for Taxpayer and Consumer Rights, which tried to block the CPUC plan by filing a petition with the state Supreme Court, says the CPUC's plan illegally proposed to maintain excessive electricity rates to bail out PG&E.

California Attorney General Bill Lockyer files suit against four energy companies, charging that they helped engineer the state's energy crisis. State officials rework eight contracts with four power companies, cutting them from $15 billion to $11.4 billion.

State energy officials warn that energy supplies could be at risk if plans to build power production plants are dropped or postponed.

May 1, 2002: The ISO submits a plan for a revised market to the FERC, calling for extended price caps. Class-action lawsuits pile up on behalf of customers who want their money back from energy companies that inflated prices.

May 6, 2002: Internal Enron Corp. documents released by the FERC reveal that Enron traders created false congestion on California's power transmission grid.

May 16, 2002: The CPUC orders public hearings on SDG&E attempts to settle a dispute with the commission over whether it must return to retail customers the $425 million in profits it made during the energy crisis.

May 21, 2002: After CMS Energy Corp., Reliant Resources Inc. and Williams Co. admit to engaging in bogus trades to drive up their revenues, causing the Securities and Exchange Commission to widen investigations into energy industry trading, the FERC orders 150 energy producers to submit affidavits stating whether they participated in "wash trades."

State Sen. Joe Dunn (D-Garden Grove), chairman of the Senate Select Committee to Investigate Price Manipulation of the Wholesale Energy Market, accuses the California ISO of asking traders to buy more power than was needed at above-market rates in November 2001. The ISO forms a special committee and hires an independent investigator to look into the charges.

May 24, 2002: CMS Chairman and CEO William McCormick resigns.

May 28, 2002: Dynegy Inc. Chairman and CEO Chuck Watson resigns.

May 29, 2002: Citing Enron's price manipulation in California, Washington Attorney General Christine Gregoire asks the FERC to reopen a fall 2001 investigation into alleged manipulation of short-term energy contracts in the Pacific Northwest.

May 30, 2002: Lockyer files lawsuits against eight more energy companies.

October 2002: FERC-ordered price caps are scheduled to end; the FERC is scheduled to decide on an ISO redesign plan.

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Copyright © 2002 IDG Communications, Inc.

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