SAN FRANCISCO: California power regulators voted to enable themselves to use some of the money generated from record rate hikes last year to settle the lingering debts of the state and two major utilities.
The state is hustling to get Pacific Gas and Electric Co. and Southern California Edison Co. back in the black. California has its own financial woes and wants to stop helping PG&E and Edison buy electricity, but isn’t off the hook until the pair win positive credit ratings from Wall Street.
But Consumer advocates fumed over the decision Thursday, saying it goes against the intent of California lawmakers. Groups including The Utility Reform Network and the Foundation for Taxpayer and Consumer Rights long have held that rates are artificially high and that the extra money should be returned to utility customers. They also noted the state is ignoring its commitment to spend that money only on future power costs.
“Despite previous commitments not to permit emergency surcharges to be used to pay the utilities past power costs, the Commission voted to do just that,” said TURN spokeswoman Mindy Spatt in a statement. “The decision means that despite sharp decreases in wholesale prices, consumers will continue to be overcharged for electricity.”
Aside from utility operating costs, portions of customers’ rates now are helping to pay off $11.95 billion worth of bonds issued by the state to recoup money borrowed from the general fund to buy electricity and also are helping Edison pay more than $3 billion of debt, among other charges. Regulators hope to use another chunk of that money to settle part of PG&E‘s debts to lift it from Chapter 11 protection.
Also Thursday, the PUC voted 3-2 to charge large companies and institutions that left their utilities to buy cheaper power elsewhere 2.7 cents per kilowatt hour to cover their share of the state’s power buying costs.
The commission will review the charge after six months to determine whether it is sufficient.
Hundreds of companies, including Kaiser Permanente, McDonald’s, the University of California, tomato processors and bucket makers, chose to buy power from utility competitors at cheaper rates, avoiding spikes in natural gas costs and electric rate hikes.
On the Net: http://www.cpuc.ca.gov