Governor’s Giveaway Invites Public Backlash, Say Consumer Advocates

Governor Davis’s two year, $23 billion plan will cost each ratepayer in the state an average of $87 per month, or $1045.00 for each of the next two years. The estimated 145% rate increase proposed by the Governor does not include additional rate hikes that will be needed if lawmakers accept the Governor’s plans to overpay for the state’s transmission grid, nor does it include a proposed $13 billion bailout of PG&E and Edison.

“Governor Davis’s plan is a giveaway to the energy industry,” said Doug Heller, consumer advocate with the Foundation for Taxpayer and Consumer Rights (FTCR). “The people and businesses of California cannot afford to pay these outrageous and unjustified prices for electricity.”

According to reports, Governor Davis’s staff is developing a plan to pay $23 billion for electricity purchases over the next two years. Legislation signed by the Governor (AB 1X) authorizes the California Department of Water Resources (DWR) to purchase wholesale power in lieu of the utilities, which asserted earlier this year that they were unwilling to buy sufficient power for their customers. The DWR will pass the entire amount of these purchases on to ratepayers.

“With reams of evidence showing that the energy industry is attempting to blackmail California, the Governor and lawmakers must find a better solution than blaming the victim,” said Heller. “The consumers have been cheated twice under deregulation: first the utilities got a $20 billion bailout, and now the energy companies have overcharged us by at least $6.3 billion. Rather than making the consumers pay again, public officials must go after the power companies that have cheated us. If the Governor capitulates to the energy industry and fails to keep rates down, there will be a ratepayer revolt at the ballot box in 2002.”

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