California's largest power utilities is on the verge of bankruptcy and that is having a direct effect on B.C. The state utility buys millions of dollars worth of electricity from BC Hydro, something it may not be able to pay for now.

As a result, B.C.'s NDP government says energy rebates for consumers are now on hold.

"In light of new information...I've asked the Ministry of Finance to use due diligence before we go ahead with the rebates," announced B.C. Premier Ujjal Dosanjh.

Southern California Edison announced yesterday it won't be paying some of its creditors, which includes BC Hydro.

California's energy crisis has been building over the past 10 years.

Root of crisis began in 1996

No new power plants have been built in California for a decade and hydropower supplies have been depleted because of a lack of snow and rainfall.

A population boom sent power demands through the roof during the nineties, so utilities started importing energy from Canada.

The root of the crisis began in 1996 when the state decided to deregulate electricity. Price caps were taken off the cost of selling wholesale electricity but utilities were not allowed to pass those charges on to customers.

Both Pacific Gas & Electric in Northern California and Edison, which services the south, are billions of dollars in debt.

Starting Wednesday, authorities ordered rolling blackouts to conserve energy.

The California legislature is considering emergency laws that would allow the state to buy and sell electricity.

"I can't see the California government letting Cal-Edison go under, the question is how is it going to be paid, who is it going to be paid to and when is it going to be paid," said Dick Gathercole of the BC public interest advocacy centre.

Officials with BC Hydro say the California utilities have been so good to them, they're willing to wait awhile for their payment.