The Daily News of Los Angeles
Gov. Gray Davis ordered a 20 percent rebate Tuesday for customers of the state’s three private utilities – residents and businesses – that cut 20 percent off their summer electricity use.
The governor’s fine print: Residents and businesses in Los Angeles, Burbank and Glendale with their own municipal utilities won’t get rebates to stimulate conservation. L.A.’s Department of Water and Power, a major supplier of power to the private utilities, plans to announce a similar program soon.
Using his executive authority, Davis offered the “20/20” conservation program incentives for customers of Southern California Edison, San Diego Gas and Electric and Pacific Gas and Electric Co. for reduced usage from June to September.
He said the move is needed to avoid rolling blackouts this summer, when the state’s electricity supply is expected to be even tighter than it has been this winter.
“I believe those who go the extra mile deserve a little something,” Davis said.
If 10 percent of those utilities’ customers reach the 20 percent goal, Davis estimates that the state would rebate about $90 million. Tax dollars will fund the program but the state general fund is supposed to be repaid by private utilities and their ratepayers through a revenue bond.
David Freeman, general manager of the Los Angeles Department of Water and Power, hailed the governor’s conservation plan and said he would broach similar rebates for DWP users next week.
The DWP proposal would allow additional surplus kilowatts to be sold to the state grid at a profit, allowing the agency to pay down its $1 billion debt.
“So it gives us an opportunity to save energy, make money and contribute to the state avoiding rolling blackouts,” said Freeman, contacted in Salt Lake City on DWP business.
“I think this is a marvelous initiative (which) treats the city of Los Angeles correctly,” he said.
Davis said his program could save up to 2,200 megawatts – enough to power roughly 2.2 million households – and save the state an estimated $1.3 billion in power costs.
“We will save money and reduce costs to consumers,” Davis said. “Instead of paying exorbitant rates to out-of-state generators, I’d rather pay California consumers to conserve.”
The Davis administration has committed $3.7 billion in taxpayer money to buy power for customers of PG&E and Edison since early January. The utilities, which say they are nearly $14 billion in debt due to high wholesale electricity costs, have been denied credit by wholesalers.
Residential and business utility customers who cut their electricity use one-fifth between June and September over the amount they used during the same period last year will receive rebates – either through their bills or by check – that would be issued this fall, Davis said.
Residential and small-business rebates will be based on a 20 percent cut in total consumption; large-business customers must cut use one-fifth during periods of peak use to receive the credit or checks.
“Nothing will get people to conserve more than if you pay ’em,” said Harvey Rosenfield, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, which has criticized any state bailout of utilities. “It could be a good deal if you put on your taxpayer’s hat.
“The problem is, as long as the same energy companies are in charge of selling our electricity, they can simply adjust prices to maintain profits, even though we’re losing less electricity,” Rosenfield said.
Secretary of State Bill Jones said Tuesday that he wants an audit of the state’s energy spending.
Jones, a Republican, said the secrecy surrounding the contracts has resulted in “no oversight and no accountability to ensure that the taxpayer’s money is being spent wisely.”
Davis could be sued for refusing to release records showing how much power the state has purchased and how much it paid for the electricity.
Assemblyman Tony Strickland, R-Camarillo, requested the information from the state Department of Finance earlier this month, but was told it didn’t have the documents.
Several news organizations, including The Associated Press, are also seeking the information under the state open records act. The news organizations sent the governor a letter Monday asking him to respond to the requests by today.
Strickland said he was considering suing for the information.