California Fails To Solve Energy Dispute

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Calif. Fails To Solve Energy Dispute

Thursday, December 28, 2000

By KAREN GAUDETTE

Associated Press Writer

SAN FRANCISCO (AP) - Gov. Gray Davis failed to broker a compromise Thursday between utility executives and consumer advocates over looming increases in electricity rates for 10 million Californians.

In a sometimes heated, closed-door meeting, the Democratic governor, on a speakerphone, urged consumer groups to agree to at least some of the rate increases utilities say they must have within days to avoid bankruptcy.

Some consumer advocates said bankruptcy isn't such a bad idea.

``They created this mess and they need to solve it themselves,'' Harvey Rosenfield of the Foundation for Taxpayer and Consumer Rights said after the meeting.

Separately, the state Public Utilities Commission held emergency hearings for a second day on the rate request and on the power crunch that has brought California perilously close to blackouts over the past few weeks.

``The overriding public interest is to keep the lights on,'' Southern California Edison attorney Henry Weissman told the PUC in asking for a rate increase.

The financial crisis and the power crunch are blamed, in part, on the effects of California's deregulation of the power industry.

Deregulation was supposed to lower prices for customers by increasing competition.

But Pacific Gas and Electric Co. and SoCal Edison have lost more than $9 billion because of a combination of soaring wholesale electricity prices and a rate freeze, enacted as part of deregulation, that prevents the utilities from passing the cost on to their customers.

They want the PUC to approve sharp rate increase - 26 percent for PG&E and 30 percent for SoCal Edison - to stave off financial ruin and assure Wall Street of their creditworthiness.

The proposed increases are more than double what Davis, negotiating privately with the utilities for the past two weeks, has said he is willing to accept.

The proposed increases would raise average $55 electric bills to $68 and $71.50 per month.

This spring, wholesale electricity prices zoomed upward, driven in part by rising natural gas prices, a shortage of generating capacity and canny power sellers who took advantage of the situation in California.

The rate freeze allows the utilities to charge no more than 6.5 cents per kilowatt hour. At one time, that was considered more than sufficient. In recent days, however, the price of power purchased during peak periods climbed briefly to $1.50 per kilowatt hour.

The PUC hearings are designed to give the public a chance to voice their opinions before the commission votes on Jan. 4 on rate increases.

Utility customers came out to protest, saying they cannot afford to bail the companies out.

``I really don't want to see the rates go up 26 percent,'' said Dorothy Diez of San Francisco, a retired receptionist. ``I have a very low income and I will be hurt.''

The two sides remained far apart Thursday during the closed-door meeting with the governor. But they did agree on one point - that the Federal Energy Regulatory Commission must cap wholesale energy prices before California has any hope of solving the crisis.

``The governor had a chance to hear both sides for the first time,'' said Michael Kahn, chairman of the state Electricity Oversight Board, which monitors California's electricity system. ``Everybody agreed that wholesale prices have to be brought under control and that the FERC should be responsible for helping to solve the problem.''

FERC has until Jan. 2 to respond to SoCal Edison's federal lawsuit seeking to force FERC to immediately curb wholesale prices.

Copyright ©2000 Associated Press. All rights reserved.

-- (in@energy.news), December 28, 2000

Answers

As long as the public can flip a switch and the lights come on, the power companys aren't even going to get their attention. They have so far managed to squeak by day after day with no black outs. Turn the damn lights out and then go and negotitate. Its a complex problem and probably caused by greed. But if PG&E and Edison go bankrupt, the lights go out... they, and all of the rest of us, are going to be up the proverbial creek. I may live in Florida, but the results would be felt around the world in all of our economic dealings such as 401ks, pensions, bonds, etc. The general economy could be sent on its fatal plunge due to energy crises in this country going on right now. Link electricity with natural gas, propane and heating oil, diesel and gasoline and you have massive crunch. The ice storms in the plains states are bad enough, but what happens when the entire eastern seaboard goes down from lack of natural gas and heating oil. Lotta cold people will be having a really tough time if this "winter of discontent" keeps on.

-- Taz (Taz@ruralflorida.com), December 28, 2000.

``I really don't want to see the rates go up 26 percent,'' said Dorothy Diez of San Francisco, a retired receptionist. ``I have a very low income and I will be hurt.''

1. How can she afford to live in San Francisco?

2. I wonder how many times a month she eats out?

3. She can apply for low-income discounts.

4. She can turn off her lights, radio, TV, blow-dryer, night-lights, etc.

$15.00 is the average a consumer utility bill will go up per month.

-- conserve (conserve@turnittoff.zon), December 28, 2000.


When the lights go out in California, our economy will crash big time! Us Y2Kers will be prepared for the worst. All others will be up a creek without a paddle (electricity).

Get ready for the real Y2K in January 2001!!!!!!

-- ... (...@...com), December 28, 2000.


PG&E AND SoCal Edison are the buffers between the public and the price raping by the wholesalers. The wholesalers need to be named and their profits exposed. Then the public could lobby for proper charges.

-- John Littmann (littmannj@aol.com), December 28, 2000.

This spring, wholesale electricity prices zoomed upward, driven in part by rising natural gas prices, a shortage of generating capacity and canny power sellers who took advantage of the situation in California.
Canny? That's not what they are. Price raping is the correct term!

Another problem is the spoiled californians. We seel them electricity in the summer, they have their air conditioners going 24/7. They also buy water from us and we get news clips of them watering the cement, they just have to have green grass and waste the water, while we sit here and are not allowed to water our lawns at all. People here have actually been turned in by their neighbors and fined for having green grass during a dry summer. Yet the pools in L.A. are always full of water and their fountains flowing. The hollywood/L.A. area is so full of superficial, self indulgent people that they don't care about things like conserving water or turning out some of their lights. As for their power rates, I wish ours were so low. We get a big hike in $$ per kilowatt hour from September to April, the times we need extra power for heat. And we have already had a huge increase in our power rate to pay for the outlandish greed of the wholesalers down there, yet the Californians are screaming about their small rate hike? They can just put more clothes on when it gets cold, like we do here.

Why isn't any one looking into the wholesalers ripping everyone off? When the governers got together last week, my Governer Locke and one other brought that up, but the other Governers voted against it.

So much for yelling about big government always getting into everything. Now we see the reason why they did it in the first place, to prevent this very thing from happening. Deregulating the power industry is allowing these people to gouge the public.

And now we are getting an administration that wants all industries to be self regulating. Prepare for the worse to happen. Like the oil industry in Texas, every other industry that is cut loose from government regulations and standards will be doing the same thing, regulating in their own self interest. I give us 6 months until the general public suddenly realizes they have been screwed, royally.

First it was the petrolian industry that jacked up their prices (to pay for the Bush election) for no apparent reason, now it is the unregulated electric industry, next it will be food and disposible consumer goods. Don't expect the government to step in, Bush trusts the people and especially industry to govern themselves. You get what you paid for.

-- Cherri (sams@brigadoon.com), December 29, 2000.



Powe r crunch puts spotlight on PUC chief

http://www.latimes.com/news/state/20001229/t000123759.html

Edis on seeks OK for 2 years of rate hikes (upto 76%)

http://www.latimes.com/news/state/20001229/t000123755.html

Nader , utilities clash at PUC

http://www.capitolalert.com/news/capalert02_20001229.html

California Edison gets stuck buying back $419 million in muni bonds

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Energy%20News&s1=blk&tp=ad _topright_energy&refer=topfin&T=markets_bfgcgi_content99.ht&s2=blk&bt= ad_position1_energy&middle=ad_frame2_energy&s=AOkyj1RUIQ2FsaWZv

-- Cave Man (caves@are.us), December 29, 2000.


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