PG&E Hits Us With Hot Prod / Huge bid for higher rates sneaked in like burglar

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PG&E Hits Us With Hot Prod / Huge bid for higher rates sneaked in like burglar

Source: The San Francisco Chronicle Publication date: 2000-11-28

Few companies can shock consumers like Pacific Gas and Electric Co., a utility giant that has become overly reliant on a bunch of dim bulbs. Lost amid the shopping ads and the presidential campaign without end this holiday season was the news that PG&E is once again trying to stuff the power-buying public.

The company's latest consumer-soaking surge is a stunner even by PG&E's own lofty standards of greed and manipulation. It is trying to pass along more than $3.4 billion in "unforeseen" costs the utility giant incurred this year.

Perhaps unforeseen is the wrong word. We see this kind of corporate chicanery from PG&E every year -- although in the new millennium it appears to have become particularly energized.

What's really amazing about the latest invoice the company is trying to palm off on its customers is that the bill seems to be rising exponentially. In September, PG&E's corporate titans announced their intention to jolt Northern California users for about $2 billion and change. But apparently the figure was off by just a billion dollars or so, the accounting department turning up a few more zeros since the start of football season.

I guess the extra billion is needed to make sure Christmas and Hanukkah aren't blacked out this year. My only question is whether the tab will be $5 billion by February.

"This is a very deceptive proposal," Michael Shames, a member of a consumer watchdog group in San Diego, said of the latest PG&E rate proposal. And he wasn't even talking about the timing of it, coming as it did the day before Thanksgiving, when half the world is leaving town and the other half is trying to get to the supermarket by 7 p.m.

Coincidence? Only if you believe that PG&E is trying to protect customers rather than punish them. And given that PG&E receives more consumer complaints than any other power company in California, as The Chronicle reported last week, it's unlikely that the utility's service department will be mistaken for Nordstrom's anytime soon.

Rarely has a public company tried to gull consumers so often, which is why PG&E has developed a solid reputation for Power, Greed & Excess. Perhaps the scariest part is that only the state Public Utilities Commission and Gov. Gray Davis stand between PG&E's "consumer protection plan" and the real world. That's not the most solid defense against another corporate gouging.

But as Messrs. Gore and Bush have proved rather emphatically, where there are votes there is hope. So perhaps the governor will look kindly on the little people who have been "serviced" so judiciously by PG&E over the years.

For starters, let's point out that PG&E was among the prime architects of the state's energy deregulation policy -- the one in which California customers were told that their energy bills would be reduced, not raised, as a result of an expected increase in competition.

Our friends at PG&E apparently are prone to blackouts, forgetting as they do past promises with the flick of a switch. They don't see so well into the future, either -- witness their inability to predict a rise in wholesale electricity prices, which at one point was costing the company about $700 million a month.

In other words, the company's leaders forged a deal a few years back and now they don't want to have to pay for their own lapses in judgment. Instead, they want consumers to foot their bill -- kind of like oil companies raising the price of gas because they can't stop their refineries from blowing up.

"We're not pulling a fast one," PG&E spokesman Ron Low told The Chronicle, denial being a major part of the corporate strategy. Yet in one way he's right: The company is trying to grab its undeserving billions over five long years, as part of a "rate stabilization plan." That way, PG&E just adds huge increases to your electricity bill now and keeps them there through 2006, or until the corporation is feeling a little more stable.

It might be helpful to remember that earlier this year PG&E asked for an $800 million rate increase to keep the lights in the corporate tower burning -- a raise that the company's executives said would actually lower our gas and electric bills because of cost savings within the utility's other divisions.

Well, so much for that plan. Somehow, I don't think ending up with a $3.4 billion bill falls under the category of cost savings -- although PG&E's very creative accountants could probably find a way.

Already the company is spinning its latest boondoggle as a boon to its 4.6 million customers. "Our rate stabilization plan offers reasonable rates now and protection from dramatic price increases in the future," Gordon Smith, PG&E's CEO, said in a statement. But just in case this ruse doesn't work, the company also said it would take the matter to court if state regulators do the right thing and reject the outrageous rate hike proposal.

But since PG&E told us that utility rate increases are just the thing we would not get as a result of its drive to deregulation -- and so far that's all we've seen -- I'm a little confused. Did customers agree to bail out the company because it made promises and obligations that it can't keep and has run up billions in "unforeseen" expenses due to a policy it helped write?

Somehow I overlooked the fine print on that deal. Chances are, so did many of the 17,000 customers who have filed complaints about PG&E with the PUC in the past few years, more than three times the number of gripes per customer as San Diego Gas and Electric, PG&E's much- unloved corporate cousin to the south.

Nettie Hoge, head of a San Francisco consumer watchdog group, said of PG&E: "They have shown themselves to have a high disregard for service and safety and reliability." And their public relations aren't so swell, either.

But when it comes to euphemisms for slamming its customers, PG&E has few peers. It wants us to pay off $3.4 billion in corporate expenses under the guise of consumer protection.

We definitely do need protection. From PG&E.

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=16110202&ID=cnniw&scategory=Utilities%3AElectricity

-- Martin Thompson (mthom1927@aol.com), November 29, 2000

Answers

As a PG & E customer I am flaffergasted at these figures. How on earth could they show a $275 million profit on their last financial filing if they are in such dire straights? "Creative accounting"? What else?

-- JackW (jpayne@webtv.net), November 29, 2000.

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