In a letter to the state Energy Commission, La Jolla Energy Development Inc. says it is withdrawing its application to build the plant in the Baldwin Hills area and that it "will not pursue the Baldwin facility in the future." Observers say it's doubtful that its partner in the project, LA-based oil company Stocker Resources, will pursue the development on its own.

La Jolla Energy's decision is a victory for environmentalists, who worried about how the trailer-sized plant would effect wildlife in the hilly area. It was also a big win for local residents, many of whom are African-American and claimed efforts to build the plant in their area smacked of racism.

But La Jolla Energy's withdrawal is another setback for Democratic Gov. Gray Davis, who has run into several roadblocks in his efforts to ease the state's energy crisis. Though Davis has established a fast-track development process for new power plants, several proposed power facilities have been stopped dead in their tracks by opposition from environmentalists and neighborhood groups.