Cool July weather throughout the West has created an abundance of electricity in California, prompting the state to sell power for much less than it paid.
In some cases, traders say, energy bought at an average of $138 per megawatt is being sold for as little as $1 per megawatt.
State officials acknowledged selling excess power over the past week, but disputed the price. They also said that the sales are a blip during a long, hot summer and that blackouts are still possible if the mercury soars.
However, the sales could prompt criticism that the state bought too much power at too high a price in its haste to fend off blackouts.
"If the price is $138 on average for a month and you have to turn around and sell a chunk of it for a dollar, you're not going to look real good to a number of people," said Gary Ackerman, executive director of the Western Power Trading Forum in San Jose.
California Energy Markets, a trade weekly, said the state sold power last week at $25 per megawatt _ a price that Steve Maviglio, a spokesman for Gov. Gray Davis, said was "much closer to reality" than the purported $1 quoted by Ackerman.
Unlike natural gas, extra electricity cannot be stored for later use. Since Californians haven't been running their air conditioners as often as expected during the past week, the state hasn't needed all 38,000 megawatts it had figured it would need. A megawatt is enough electricity to power roughly 750 homes.
The state Department of Water Resources, which buys power for three financially ailing utilities, has spent the past few months arming the state with long-term energy contracts while weaning itself from buying the highest-priced power on the last-minute electricity market.
Those contracts, conservation efforts and milder weather have added to California's power surplus.