Governor Gray Davis (D) expects to reach an agreement with the Pacific Gas and Electric Company (PG&E) to buy their power lines. Davis noted, "We are making progress, and I hate to put a deadline on this, but in two to three weeks, four weeks at the outside, we'll have PG&E worked out."

Late last week Southern California Edison tentatively agreed to sell its transmission lines to the state for $2.7 billion. The purchase of transmission lines is a key component of the plan to resolve the California power crisis because the money for the transmission lines will help utilities avoid bankruptcy.

The state legislature must approve of any deal with PG&E once it is worked out. Federal regulators must also put their mark on the deal.

Assemblyman FredKeely (D), a key energy negotiator, is concerned that the state is having to spend $50 million a day, and stated, "It makes it very, very expensive and difficult as it relates to the state's general fund."

The state has memorandums of agreement with utilities for long-term contracts, but the utilities are waiting to sign until they have money from the sale of transmission assets, putting them on more stable financial footing.