TULSA, Okla. (AP) -- Tulsa-based Williams will continue to supply power to California's struggling utilities, despite no guarantee of payment, company officials say.
California's utilities are caught between soaring wholesale power prices and rate caps that keep them from passing on those costs to consumers. Some utilities are on the brink of bankruptcy.
Williams, one of the nation's largest energy traders, markets 4,000 megawatts of power to California utilities.
Keith Bailey, Williams chairman, president and chief executive officer, said he favors an increase in consumer rates over forcing California's electric companies into bankruptcy to recoup costs.
"Do it abruptly, get the utilities on a sound financial footing and everything will correct itself," Bailey said Thursday.
Houston-based Reliant Energy, which is owed about $300 million for power sold in California, is suing the managers of the Golden State's power grid for payment.
Some power suppliers may force California utilities into bankruptcy within a week, said Thomas Mason, executive vice president of Calpine Corp., which owns power plants in several states. But he said Calpine isn't one of those companies.
"The fuse is short," he said. "The Legislature cannot let the creditors sit out and stew much longer."
Williams officials would not say how much California utilities owe the company.
"We've been working in good faith because we feel we will be paid the money that we're owed," said Williams spokeswoman, Paula Hall Collins.
The debt level of California's biggest utilities, Pacific Gas & Electric and Southern California Edison, has grown to about $12 billion combined.
California's 1996 electric deregulation law froze retail electricity rates during the transition to a competitive market.
The problems came when wholesale prices surged above the frozen retail rate.