Energy Daily
Amid protesters’ chants of “Rate hikes go away, make the energy companies pay,” the California Public Utilities Commission unanimously but reluctantly approved a 3 cent per kilowatt-hour retail rate increase Tuesday to cover soaring power costs in the state.
In a meeting disrupted several times by outbursts from irate demonstrators, regulators put in place the rate increase proposed by CPUC President Loretta Lynch-but disavowed by her political patron, Gov. Gray Davis (D), who continued to voice his opposition to rate hikes.
The CPUC vote ended months of delay by the commission on rate hikes as the state’s major investor-owned utilities ran up huge debts due to rising wholesale power purchase costs that they were not allowed to pass through to ratepayers.
Lynch said the rate hike amounts to about a 26 percent increase and promised that a large portion of residential customers will not see higher bills under a proposed “tiered” rate design that would force consumers of above-average amounts of power to pay substantially more.
She estimated that “over 45 percent of residential customers will not experience a rate increase” under the plan, which goes into effect today, but which will not appear on customer bills until the rate structure is worked out. The rate design should take about 30 days.
Despite Lynch’s statements, consumer advocates were not mollified.
“We don’t need increases in our bills, we need increases in law enforcement,” Doug Heller of the Foundation for Taxpayer and Consumer Rights told the commission. “We need a government that will protect us from the modern robber barons….
“It’s like dealing with the mob: Once you start paying, we’re going to have to continue paying and instead of breaking our fingers they’re going to turn the lights out on us again.”
The CPUC also approved a plan Tuesday under which owners of qualifying facilities (QFs) would begin to be paid for their power within 15 days of billing, effective at the start of the month.
Regulators also moved to allot the generation portion of consumer bills for payment of past power bills incurred by the state’s Department of Water Resources (DWR). But the commission held off until next week a vote on how to go forward with the future division of revenues between utilities, the Independent System Operator and the DWR.
Lynch said she sympathized with crowd sentiment about power generators and exorbitant wholesale prices. However, she said said responsibility for those prices lies with the Federal Energy Regulatory Commission.
“The federal market cop has left the beat and Californians are the ones paying the price,” she said.
