SACRAMENTO (AP) _ California will borrow up to $5 billion from Wall Street to keep its lights on in coming months, state treasurer Phil Angelides said Tuesday.
Angelides called the loan a short-term strategy to buy power until the state sells up to $13.4 billion in bonds this fall. Those bonds will pay off both the short-term loan announced Tuesday and about $8 billion the state has spent for power since January.
Customers of the state’s three major embattled utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas and Electric, will pay off this fall’s loan by charging more for electricity.
``This interim financing takes the pressure off the general fund and hopefully will avert a cash crisis here at the state,″ Angelides said.
The state’s government has watched its one-time budget surplus, propelled by a booming late 1990s economy, evaporate all through 2001 to buy electricity at up to $70 million a day. The money would otherwise be spent on schools, law enforcement and highways.
Gov. Gray Davis authorized the short-term borrowing plan with an executive order late Monday.