The energy crisis in California could hit the B.C. government. It sells millions of dollars of power to a utility company in that state but the company is on the brink of bankruptcy.

California deregulated its power industry in 1996, allowing companies to sell power on the open market. Some of them initially made profits, but now several are almost broke.

B.C. Hydro enters the crisis because it sells power to Southern California Edison, a utility company that has announced it can't pay $596 million US to various creditors.

It's unclear how much the California company owes B.C. Hydro.

B.C. Premier Ujjal Dosanjh says a planned rebate to make up for high natural gas prices can't happen until he knows how the California crisis affects B.C. Hydro.

B.C. Hydro has boasted of huge profits from selling electricity through its subsidiary, PowerEx.

The company's Web site says export sales came in at more than $1.1 billion in 2000, up from $740 million the year before.

Much of its profit comes from California, where dry weather has reduced the capacity to generate hydro-electric power and a rising economy has created high demand.