PG&E files to raise electricity rates by 16.5 pct

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PG&E files to raise electricity rates by 16.5 pct Wednesday November 22, 7:06 PM EST SAN FRANCISCO, Nov 22 (Reuters) - California's largest utility, Pacific Gas and Electric, on Wednesday filed with state regulators to raise its electricity customers rates by around 16.5 percent, effective January 1, 2001.

The utility, a unit of PG&E Corp (PCG), is seeking to end a rate freeze introduced as part of the deregulation of California's power markets, and raise rates in a bid to recover soaring costs it has incurred this year buying electricity on behalf of its customers.

Pacific Gas and Electric, which filed a proposed five-year rate stabilization plan with the California Public Utilities Commission (CPUC), said that since May 2000 it has amassed about $3.4 billion in uncollected power purchase costs.

Wholesale power costs in California have skyrocketed this year, partly due to surging demand linked to a buoyant economy that is outpacing available supplies. No major power plants have been built in California during the past decade.

The average residential electricity bill would rise to $63.50 a month at the start of next year under the plan, up from $54.50 at present.

To reduce the impact on low income customers the utility plans to increase their discount to 25 percent from the 15 percent they currently receive.

The utility said there would be further increases on an annual basis if rates proved not to be high enough to cover costs. If the deficit of uncollected costs grew by $1 billion for example then rates at the start of 2002 would rise by one cent a kilowatt hour or around 15 percent to 7.5 cents.

Earlier this week Rosemead, Calif.-based Southern California Edison filed a five year rate stabilization plan with the CPUC, also calling for the current freeze to end on January 1, 2001.

SCE is a unit of Edison International (EIX).

Pacific Gas and Electric said that customers would face an immediate increase of about 100 percent once the rate freeze was lifted without the protection of a stabilization plan. 2000 Reuters Limited.

http://money.iwon.com/jsp/nw/nwdt_rt.jsp?section=news&news_id=reu-n22400297&feed=reu&date=20001122&cat=INDUSTRY

-- Martin Thompson (mthom1927@aol.com), November 22, 2000


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