Regulators end consumer choice, raise San Diego power rates
SAN FRANCISCO (AP) – California electricity customers no longer can buy power from anyone other than their local utility, after state power regulators voted Thursday to indefinitely suspend a key aspect of the state’s deregulation effort.
The state Public Utilities Commission also abruptly delayed deciding whether to grant the state’s power-buying agency the authority to raise electric rates for millions of Californians without the commission reviewing those hikes to ensure they are necessary and prudent.
The rubber stamp agreement is key to encouraging Wall Street to buy $12.5 billion in bonds the state is issuing to recoup the $9.5 billion and counting it has spent buying power for three financially ailing utilities, Gov. Gray Davis has said.
Critics, including the utilities, consumer advocates, businesses and even PUC members, say following the Legislature’s orders to surrender the commission’s rate-setting authority only will hurt consumers – since the PUC’s traditional role has been to ensure energy providers act in the best interest of consumers.
Commissioner Jeff Brown interrupted PUC President Loretta Lynch to ask that the vote on the rate agreement be held up, just before she brought it up for a vote. Brown and the remaining three commissioners voted to hold the issue for two more weeks.
After the meeting, Lynch told reporters she had called state Treasurer Phil Angelides and Davis to relay her concerns about the rate agreement and let them know she intended to pass it through the PUC quickly at their request.
Lynch, Brown and Commissioner Carl Wood all are Democratic appointees. Commissioners Richard Bilas and Henry Duque were appointed by Republicans, and are expected to oppose the agreement.
Brown said he knew of Lynch’s misgivings and held the vote to avoid possibly rejecting the agreement and placing the bonds – and the repayment of the general fund – in jeopardy.
Both said they thought all groups involved would benefit from the extra time to review legal concerns.
”We can’t let a negative vote affect the rate agreement,” Brown said.
The PUC voted 3-2 to keep ratepayers from switching from their utilities to other power providers as of Thursday, dropping previous efforts to suspend consumer choice retroactive to July or earlier.
Current direct access customers can remain with their energy providers through the end of their contracts.
After the Legislature enlisted the water department to buy power for the customers of financially ailing Pacific Gas and Electric, Southern California Edison and SDG&E, it ordered the PUC to suspend so-called direct access to prevent customers from leaving the utilities.
To get its billions back, the state plans to issue $12.5 billion in bonds, and has been told by Wall Street it can expect better rates if it shows it has a guaranteed and expandable incoming flow of money.
The more customers who remain, the bigger the pool of customers who can share the cost of paying back the state through their utility rates.
Consumer advocates and residential customers say a suspension also will keep thousands of big businesses from switching providers for cheaper prices and leaving smaller residential customers stuck with the state’s power bill.
”What direct access really means is direct access to the pocketbooks of small consumers,” Paul Perkovic of San Mateo told the commission.
The commission had called for a retroactive suspension to force businesses to return to utilities and pay their share of the state’s mammoth power bill.
The businesses left after learning power contracts the state had cut in the spring likely would have California ratepayers paying more than if they bought power elsewhere.
The commission also approved a request from the state Department of Water Resources to raise electric rates for customers of San Diego Gas and Electric Co. as follows:
– Residential customers who exceed baseline by more than 30 percent will pay 12 percent more on average. Baseline is an amount of low-cost power allotted to each customer based on climate and other factors.
– Small businesses will pay 13.7 percent more.
– Medium and large businesses will pay 18.5 percent more
– Industrial customers will pay 19 percent more
– Agricultural customers will pay 14.4 percent more
”Oh beautiful. Just what we need. I think it’s going to hurt. It’s excessive,” said Paula Davila, who works in athletic department at San Diego State University.
The SDG&E rate hike will bring in $246 million over one year beginning Sept. 30.
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