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LINDA WERTHEIMER, host:
In California, the costs of power shortages keep rising. Many Californians will see a record increase in electricity rates when they open their June utility bills. The shock is just beginning to register with customers of the state’s biggest utilities, Pacific Gas and Electric and Southern California Edison. From member station KPCC, Rachael Myrow reports.
RACHEL MYROW reporting:
Back on March 27th, the California Public Utilities Commission approved a rate hike of more than $ 5 million to help get the state’s two biggest private utilities back on their feet financially. In the weeks that followed, commissioners were beset by lobbyists for just about every interest group in the state, each one pushing to reduce its share of the burden. In the end, no one came away happy with the plan that was finally adopted yesterday. Doug Heller is with the Foundation for Taxpayer and Consumer Rights in Santa Monica.
Mr. DOUG HELLER (Foundation for Taxpayer and Consumer Rights): How is it that the small consumers who never asked for deregulation will be paying 75 percent more than the industrial users of electricity who demanded it five years ago?
MYROW: But business groups say the commission didn’t shift enough of the burden to residential customers. They’re roughly divided into two camps, those who can stay below 130 percent of what’s called the baseline level, and those who can’t. Conserve, and you may not see any increase at all. If you use power liberally, or happen to live in the desert, your bill could soar. Low-income customers and people with special medical needs were the only groups exempt from the rate hike.
Mr. JACK STEWART (California Manufacturers Association): The fact is we find ourselves in a situation that requires a rate hike.
MYROW: Jack Stewart, head of the California Manufacturers Association, says residents have it relatively easy. There’s no baseline for business users. Every kilowatt goes up in price for them. And industrial and large commercial users are looking at an average spike of roughly 49 percent. Farmers got a last-minute break from the commission, but they’ll still pay 15 to 20 percent more. Again, Jack Stewart.
Mr. STEWART: The blackouts alone are going to have a fairly significant–if they materialize as projected, will have about a $ 21 billion impact on the California economy. That does not include what the impact will be on the entire electricity rate.
MYROW: Loretta Lynch, the Democratic president of the commission, acknowledged citizens’ outrage, but blamed federal regulators for refusing to slam a lid on the wholesale power producers who’ve been capitalizing on the failings of California’s deregulated market. In recent months, PG&E has declared bankruptcy, Southern California Edison has been teetering on the brink of it, and the state’s surplus, as a result, is being sucked dry paying for power on behalf of both. While state politicians and regulators try to hew a middle path through the power crisis, consumer advocates like Doug Heller are calling for more extreme measures.
Mr. HELLER: Governor Davis must issue an ultimatum to these energy companies. Either you charge reasonable rates or we will claw back the money you’ve taken from us through a windfall profits tax. And if you refuse to put power into our grid, we will take over your plants and run them for the public interest.
MYROW: Federal regulators argue California needs to fix deregulation, not trash it. In the meantime, all Californians, not just customers of PG&E and Edison, face rising prices for natural gas and gasoline. For NPR News, I’m Rachael Myrow in Los Angeles.