DAVID BRANCACCIO, anchor:
California regulators today considered whether to lift rate caps on electric bills that were a condition of deregulation of the power industry in the state. Deregulation, mixed with high demand for power and insufficient supplies, has added up to huge increases in the wholesale cost of power. Utilities say they’ll go out of business if they can’t pass these higher costs on to consumers. Christy George reports from the MARKETPLACE business and environment bureau at Oregon Public Broadcasting.
CHRISTY GEORGE reporting:
California’s two biggest utilities, Southern California Edison and Pacific Gas & Electric, say they face bankruptcy unless state regulators let them raise rates, rates that were frozen to ease the pain of deregulation for consumers. Jamie Court of the Foundation for Taxpayers and Consumers Rights, says utilities are just playing chicken.
Mr. JAMIE COURT (Foundation for Taxpayers and Consumers Rights): There’s been a game of brinksmanship, and the utility companies didn’t go bankrupt; Standard & Poor’s did not downgrade the utility companies as they promised to do. It’s been basically an economic terrorist action.
GEORGE: But John Nelson of PG&E says the massive rate increases are coming from out-of-state power generators who aren’t regulated by California.
Mr. JOHN NELSON (PG&E): They are killing the goose that laid the golden egg by their rapacious greed here in California. But if they’re not careful, they will kill deregulation in California, and deregulation will then be killed across the nation.
GEORGE: PG&E‘s Nelson says what’s needed is new power plants. Today, Edison announced it will shut down its San Onofre nuclear power plant for what it called ‘routine maintenance.’ In Portland, Oregon, I’m Christy George for MARKETPLACE.