This week, Governor Davis signed legislation that allows the state, through the Department of Water Resources, to purchase power on behalf of the utility companies. However, there are several unresolved questions and shortfalls to the bill as passed. The conditions of the contracts for buying power are unknown, both in terms of the length of the contracts as well as the price that the state will pay for power. There is no guarantee that this legislation will not be used to generate extra revenue to the utilities instead of giving the consumers a rate reduction, as the price at which the state buys power does not determine the rate at which the utilities can sell it to consumers. This legislation does encourage conservation, a necessary component to solving California's power crisis, but in a manner in which leaves consumers vulnerable to future rate hikes.
Baseline usage is defined as the minimum power needed by an average home.
Unfortunately, almost all consumers use more than the baseline and the rates for power usage above this amount are not guaranteed, making it very likely that Californians will continue to see their electricity bills rise.