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The Daily News of Los Angeles

The state Public Utilities Commission unanimously approved the largest electrical rate increase in California history Tuesday, hitting customers of two private utilities with 42 percent and 46 percent hikes.

The increase was voted on in a boisterous meeting in San Francisco at which consumer protesters chanted, “Hell, no, we won’t pay.”

As many as 10 million homes and businesses and 25 million people served by Southern California Edison and Pacific Gas and Electric Co. will be affected by the immediate price hike.

Electric bills will likely skyrocket more than 50 percent. Tuesday’s vote for 42 percent and 46 percent hikes comes on top of a 9 percent to 15 percent rate hike the PUC approved in January and made permanent Tuesday. An additional 10 percent increase already is scheduled for next year.

State regulators hope the higher prices will force conservation during the coming summer months to stave off blackouts and help steady the cash- starved utilities.

People served by city utilities, like those in Los Angeles, Burbank and Glendale – whose independent power plants have shielded residents for months from blackouts – are not affected by the PUC‘s ruling.

But experts said the rate hikes will roll through the state.

“The big ripple is that everything from fast food, to the movie rental, to shopping at the mall – any discretionary expenditures – are going to get cut while ratepayers sit back and take another look at their household budgets,” said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp.

Gov. Gray Davis has adamantly insisted huge rate increases will not be needed to weather the energy crisis but legislators called the increase “necessary.” Consumer watchdogs called it a “rip-off.”

The PUC ordered the nearly bankrupt utilities – who say they’ve lost more than $13 billion since last summer under California’s failed deregulation plan – to pay the state for nearly $4 billion of electricity it has used taxpayer money to buy on behalf of their customers, and to pay producers of renewable energy for future electricity deliveries.

“The PUC has done all it can,” commission President Loretta Lynch said. “We have fought back hard in every venue possible against these unjust energy prices.”

Not all PG&E and Edison customers will face higher bills. The PUC said it would create a tiered system that will protect low-income customers and penalize those customers who use the most electricity.

Residents already pay on average $65 a month for electricity – 7.2 cents per kilowatt hour to Southern California Edison and 6.5 cents per kwh to Pacific Gas and Electric Co., the state’s two largest utilities.

Lynch’s proposal would mean a 42 percent increase for Edison customers and 46 percent for PG&E customers for electricity alone. But the basic rates for electricity are bundled with transportation costs, transmission costs and conservation programs, making the average price of a kilowatt hour closer to 12.5 cents for Edison customers and 10.5 cents for PG&E customers.

Spokesmen for both utilities say it’s impossible to calculate how much Lynch’s plan would cost customers because the impact of the tiered system is not yet clear.

Jason Zeller, an analyst for the state Office of Ratepayer Advocates, said the hikes will be by far the largest in state history.

“Electricity hogs will have to pay more for the electricity they use, especially over the summer,” said Lynch, who was appointed by Davis. “The most important aspect of any tiered rate proposal is to motivate conservation.”

Davis has repeatedly said he is not in favor of electricity rate increases, but he appointed three of the five commissioners.

Tuesday’s PUC meeting was disrupted at least five times by screaming protesters. Before the meeting, a group led by former Green Party senatorial candidate Medea Benjamin stood in the PUC chambers with yellow signs reading “We Won’t Pay.”

Consumer groups said they’re fed up with rate increases.

“We are being held hostage by a handful of energy companies that, under deregulation, got control of our electricity supply,” said Harvey Rosenfield, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights in Santa Monica. “Until our elected officials start acting to protect us, we are going to be at their mercy, at the mercy of this rip-off.”

Rosenfield said Tuesday’s decision triggered a rate-reducing initiative revolt and possible lawsuit.

“When these bills get to people’s homes, Governor Davis better find another place to live,” he said.

One Antelope Valley senior called the hikes “the biggest bunch of graft.”

“The seniors are on fixed income. We’re having it tough enough and they’re going to run us clean out of our homes if they keep it up,” said Richard Johnson, 76, of Lake Los Angeles, who said he and his wife have nothing left to conserve.

“In the summertime, being out here in the desert, we open our windows to let the breeze in,” Johnson said. “The only time we run our air conditioning is when we have company.”

For Tammy Larinto and her Santa Clarita family, the increase means less air conditioning and television this summer and more time at the beach.

“For a state this big, it’s ridiculous,” she said. “It should have been foreseen sooner. I don’t want to have all these bills.”

For businesses, schools, hospitals and governments, the increase will be especially hurtful.

–At Valencia Lanes, a bowling alley in Santa Clarita, the price of one game of 10-pins will go up 15 cents to cover costs.

–For the Palmdale School District, already contending with higher natural gas and school bus gasoline costs, electricity bills are expected to rise $1 million.

“It’s going to really hurt in our budget,” Superintendent Nancy Smith said. “That money’s got to come from someplace, which means it’s probably going to impact either employees or programs next year. It’s not pleasant.”

–At Antelope Valley Hospital, higher electricity prices will raise costs more than what the facility now spends for power.

“It’s going to make everything more expensive for all of us in everything that we buy that involves energy,” said Norm Andrews, senior vice president for hospital operations.

–And the Santa Clarita’s film industry will feel the pinch and help Canada lure more production from the Southland.

“The dollar is stronger in Canada and the government gives large cash rebates to the production companies,” said Michael A. DeLorenzo, president of Santa Clarita Studios. “This is going to really, really push production out of Santa Clarita and Los Angeles.”

Consumer Watchdog
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