California Program Offers Rebates for Cutting Summer Power Consumption

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San Jose Mercury News

SACRAMENTO, Calif.–Calling it a “patriotic duty” to save energy during the state’s ongoing power crunch, Gov. Gray Davis unveiled plans Tuesday to offer a financial reward to Californians who slash their summer electricity use by one-fifth.

The executive order, part of the governor’s drive to avoid rolling blackouts this summer, will give Californians who cut their electricity use by 20 percent or more between June and September a 20 percent rebate on their bills for those months.

In unveiling the initiative, Davis touted the plan as a way for the average Californian to take a stand against power companies that have made huge profits. “This program puts money in the hands of California consumers as opposed to the out-of-state generators,” said Davis, who announced the plan while standing in the warm afternoon sun in front of a Sacramento Municipal Utility District power plant.

The rebates will be offered to about 10 million homes and businesses that get their electricity from Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric Co., the three troubled utilities that have turned to the state for financial salvation.

The move was praised by energy experts, utilities and average Californians. But some predicted it would be hard for consumers to cut back enough to earn the rebate.

“I’m not sure we could cut by 20 percent because we really have to have the air conditioning on when it’s very hot,” said Lois Maggio, a 75-year-old San Jose retiree. Maggio said she and her husband already do everything they can to conserve — turning off lights and washing clothes in cold water.

Energy analysts believe the state could fall 5,000 megawatts to 7,000 megawatts short of power this summer. And on Tuesday, Legislative Analyst Elizabeth Hill said the state might have less energy available this summer than the California Energy Commission has projected. While Davis has sought to get more power plants on line for this summer, Hill said the state should not count on much more energy for use in the next few months.

Davis has been cobbling together a variety of approaches to address the shortage. The governor said his latest conservation effort, which he is calling the “20/20” plan, could save 2,200 megawatts this summer if 1 million customers take part. (One megawatt supplies about 1,000 homes.)

How much customers can save depends on how much electricity they use between June and September. An average home in the Bay Area pays about $ 236 for electricity during those months. If the home cuts use by 20 percent, the bill would drop to $ 189. The 20 percent credit — $ 38 — would show up on the bill in the fall. Consumers who save less than 20 percent — and those who get their energy from municipal power companies — will not be eligible for a rebate.

If 1 million customers take part, the plan would cost the state about $ 90 million. At the same time, Davis said it would save the state $ 400 million to $ 1.3 billion by cutting back on the electricity the state would have to buy on the expensive spot market.

For months, Davis has been urging Californians to save more energy. In his State of the State address in January, the Democratic governor urged residents to save 7 percent. He upped that to 10 percent last month as part of a multimillion-dollar “Flex Your Power” media campaign, and he has now doubled that figure.

Davis has also agreed to ease environmental regulations to help get more power plants online this summer and signed a series of contracts with energy companies to lock in a steady flow of electricity.

But Davis has increasingly turned to the average Californian for help in resolving the crisis.

Joining Davis in announcing the conservation plan was state Sen. Don Perata, D-Oakland, who has been pushing a similar proposal in the Legislature.

Perata called the current crisis a “holy war” between California consumers and Wall Street stockholders getting rich off the state’s troubles.

“This is a great equalizer,” Perata said. “We’re giving people a chance to fight back.

“The most important thing is that you can fight back against Wall Street and Enron and the rest of these bandits that are just screwing us to the wall,” Perata said.

Officials for some of the power companies chafed at such talk.

“It’s political rhetoric,” said Karen Denne, a spokeswoman for Enron Corp., the Houston-based power broker. “Pointing fingers and blame fixing don’t generate one single megawatt.”

Jim Bushnell, research director at the UC Energy Institute, praised Davis for his latest proposal but said, “Twenty percent is a pretty big target for most residential consumers.”

Bushnell has been pushing an alternate plan to charge large businesses using real-time metering designed to curb energy use during hours of high demand.

“I’m concerned that the bar is too high, particularly since there are far better options for large customers,” he said.

Bob Nijjar, manager of the Warm Springs Ace Hardware store in Fremont, said he would do his best to cut his energy use even more.

“A rebate is certainly something I would try to get,” said Nijjar. “But when we turn out more lights we find that it is pretty dark in the store, and then it becomes difficult to service the customers.”

The Davis plan was greeted with skepticism by some consumer activists who have criticized the governor for crafting plans to bail out the financially troubled utilities with agreements that could lead to rate increases for their customers.

“Today’s conservation plan is just a veil covering the future rate hikes he’s going to force us to pay,” said Doug Heller, a consumer advocate with the Foundation for Taxpayer and Consumer Rights. “We should encourage conservation for many reasons, but not to provide political cover for Gov. Davis’ plan to bail out the utilities.”

Other consumer groups backed the plan as a way to help the environment, battle blackouts and save a little money.

“There is nothing like the carrot of a dollar bill,” said David Roe, senior attorney at the West Coast office of Environmental Defense. “Maybe that means you perspire a little bit more on those warm summer days. But the fact that it is going to turn into cash is the purest incentive our economy knows.”

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