Calif. Power Rates Go Up 80 Percent

ByKaren Gaudette

S A N   F R A N C I S C O, May 15, 2001 -- State power regulators decided today howto divvy up the biggest electric rate hike in California history,boosting rates by as much as 80 percent for residential customerswho use the most power.

More than half of the residential ratepayers served by thestate's two largest utilities will see no increase at all in theirrates. But for those who consume the most, the new rates translateinto an average increase of $85 per month for electricity.

The plan, approved 3-2 by the state Public Utilities Commission,affects about 9 million customers of the state's two largestutilities, Pacific Gas and Electric Co. and Southern CaliforniaEdison Co.

The new rates, which will appear on June bills, were approvedseven weeks after the PUC mandated a $5 billion rate hike. Theplan's passage came after a week of intense lobbying by industrial,commercial, agricultural and residential groups — all trying toinfluence how the PUC would allocate the rate hikes.

Big Loss for Big Users

The average rate increase for all residential customers of thetwo utilities is 19 percent. But low-income ratepayers and thosewho use the least electricity will face no rate hike at all.

The biggest losers are the biggest users.

Residential ratepayers are divided into five tiers, and those inPG&E's top tier — about 9 percent of that utility's residentialcustomers — will see electric rates jump from 14.3 cents to 25.8cents per kilowatt hour. That's an 80 percent increase.

That translates into an average increase of $85 — from $232 to$317 — on monthly bills.

For Edison's heaviest residential users, the rate hike is 71percent or an average increase from $194 to $265 on monthlybills.

Industrial customers of PG&E and Edison face rate hikes of about50 percent, while commercial and agricultural ratepayers will seeless significant increases.

Hike Fuels Protesters

The increases will be retroactive to March 27 — the day therecord rate hikes were approved.

"This is probably the worst economic calamity the state hasever seen," said David Marshall, chief financial officer at GreggIndustries, a 400-person iron foundry in El Monte. "It has gotramifications well beyond anything that we can begin tounderstand."

Today's vote took place amid the jeers of protesters, who woretombstone-shaped placards that read: "R.I.P. Affordable Energy."

PUC Commissioner Jeff Brown bellowed back.

"We cannot walk away from it. We cannot pretend that this issome sort of problem that we can walk away from," Brown said.

The final plan was a revised version of the plan released by PUCPresident Loretta Lynch last week. Lynch reworked her plan after anoutcry from businesses proclaiming the proposed rate hikes woulddoom California's economy and a critical statement from Gov. GrayDavis.

Since it unanimously the approved rate hikes in March, the PUChas crammed a year's worth of work into six weeks, struggling tofashion rates that simultaneously recoup the $5.2 billion the statehas spent buying power for the customers of the state's two largestutilities and trigger enough conservation to help fend off some ofthis summer's expected rolling blackouts.

Customers of San Diego Gas and Electric Co. and those who buyelectricity directly from energy wholesalers, such as theCalifornia university system, are shielded from rate hikes.

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