Race Is On To Provide Help On Electric Woes

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Sacramento Bee

With their final adjournment scheduled for midnight tonight, state legislators are in a frantic, last-minute struggle to ease the sky-high electric bills enraging San Diego-area residents and head off possible rate increases for millions of other Californians.

But some lawmakers and consumer advocates were skeptical Wednesday that a full solution to the state’s myriad power problems could be implemented without a fall special session of the Legislature, a more comprehensive attack next year or even a new ballot initiative.

“Right now, we have an attempt to appease both the public and the utility companies, which is an impossible formula,” said Jamie Court of the Foundation for Taxpayer and Consumer Rights.

A tentative Capitol deal to tackle at least some of the power problems emerged Wednesday. The package includes a bill to at least temporarily cut in half rates for San Diego-area residents by basically deferring the cost to the future, another measure to provide as much as $150 million in state funds to help cover those future San Diego bills if necessary and a third measure — expected to be fully unveiled today — aimed at speeding construction of power plants and encouraging conservation.

Supporters praised those measures as a chance to provide immediate relief to the San Diego area as well as to head off future power shortages and price spikes across California.

But critics called the $150 million in potential state spending on electric bills a terrible precedent that could simply bail out utilities or open the door for similar future claims on the state treasury.

Some legislators also have openly worried that the late rush to solutions in the Capitol could end up compounding problems for consumers and utilities or lead to lax environmental oversight of proposed new power plants.

“The only thing that I can think of worse than the present fiasco would be to let certain energy interests exploit the panic to build more polluting power plants with less environmental controls,” Sen. Tom Hayden, D-Los Angeles, said earlier this week.

Four years ago, the Legislature and former Gov. Pete Wilson approved a complex plan to deregulate the electricity industry, an idea that was widely supported at the time by lawmakers for its promise to modernize the electricity market and reduce business and residential bills.

But today, San Diego-area residents have seen their monthly bills more than double after they became the first to feel the full effects of deregulation. Worried about voter backlash, legislators are scrambling to fix the mess, which some say has been aggravated by a general shortage of electricity in the West.

Lawmakers have been looking at several plans, including the measure — apparently supported by Gov. Gray Davis — to at least temporarily cut San Diego-area rates by about half.

“It would mean that the average residential bill in San Diego would be approximately $68 instead of more than $130,” said Sen. Deirdre Alpert, a Coronado Democrat who supports the bill.

The measure passed the Senate earlier this week after the Democratic governor opposed a rate-cut bill that many supporters believed would be better for consumers. The Assembly approved the measure Wednesday night.

Some Republicans initially opposed the rate-cap measure, saying it could eventually force consumers to pay back much of their rate savings. At issue is who would eventually be liable for a so-called “balancing account” that would record the difference between what San Diego Gas & Electric Co. pays for electricity and what consumers would pay under the rate-reduction legislation.

“The ‘save now, pay later’ plan is a deception. It is reduce your rates now, pretend the problem is solved and then get stuck with a big balloon payment in a year and a half or two years from now,” said Assembly Republican leader Scott Baugh of Huntington Beach.

Baugh had been promoting a plan to use as much as $300 million in state general fund money to help San Diego-area ratepayers. But he appeared satisfied with the combination of the $150 million and the power-generation bill and strongly denied that he was trying to bail out utilities.

Baugh also has said that he believes a special session of the Legislature is needed to “get all the facts on the table and explore longer-term solutions.”

Legislators, both Republicans and Democrats, have been working on an additional bill that could help speed construction of new power plants. The first hearing on that measure was expected today.

Meanwhile, some legislators complained that too much was being rushed through at the very end of the Legislature’s 1999-2000 session. For example, the new rate-cut bill was created by gutting and amending a bill regarding medical licensing.

“The real problem with the last-minute scramble is that the costs are going back to the public either through higher taxes or higher rates in the future,” said Court, who argued that the bills being considered by the Legislature won’t solve the state’s electricity woes in the long term.

Meanwhile, San Diego-area residents continued to suffer.

“Why should we have to pay for this disaster? We didn’t create it,” said Poway resident Larry Nichols, who added Wednesday that his home power bill soared from a monthly average of $170 last year to $494.70 in July and $350 in August after he took major conservation steps.

“People in the north don’t understand how bad it is down here,” he added. “Deregulation means you have a choice, but there is no choice down here.”

Other energy legislation could also emerge today.

“We want to work with the Legislature to take the preventative steps now to protect our customers from the price spikes that have occurred in San Diego,” said Pacific Gas & Electric spokesman Ron Low.

Consumer Watchdog
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