Move could cost California hundreds of millions in borrowing fees.
Credit ratings help determine how much states and other borrowers have to pay when issuing bonds.
State revenue bonds should not be affected by the downgrade, the officials said. California's energy crisis already has driven down prices of a wide range of the state's bonds, from general obligation issues that depend on the state's ability to repay to small issues by school districts and cities that could be hurt by rising electricity prices. The downgrade most affects investors who want to sell their bonds now, before the issues mature. In addition, the two other major credit rating agencies have indicated they may downgrade California's bonds. It's just unfair, premature and inappropriate for them to do that.