Utilities, consumer group file response to regulator rate plan

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The Associated Press

The state’s two largest utilities and a vocal consumer advocacy group have asked the California Public Utilities Commission to scrap a proposal that would allow the agency buying power for the state to raise electric rates without public hearings and review.

In documents filed Wednesday, Pacific Gas and Electric Co., Southern California Edison Co. and the Foundation for Taxpayer and Consumers Rights all opposed a draft rate agreement the PUC proposed in July.

The plan would give the state Department of Water Resources, which has been buying billions of dollars of electricity for three utilities since January, the authority to pass on higher energy costs to ratepayers without PUC review.

The potential loss of the PUC‘s authority to look out for ratepayer interests is especially troubling given the revelations of some state energy officials owning stock in companies they regulate or from which they buy electricity, said Doug Heller, consumer advocate with the Foundation for Taxpayer and Consumer Rights.

“We’ve got the PUC considering a total hand-over of authority to an agency embroiled in scandal,” Heller said.

“This rate agreement would allow the DWR to make very important decisions on behalf of ratepayers behind closed doors, and the lesson of the last few weeks is that secrecy leads to conflicts of interest and that leads to rate increases.”

The foundation sent a letter to PUC President Loretta Lynch asking her to put off the rate agreement “in light of these conflicts.”

PG&E‘s filing called the current proposal a massive “blank check.”

PG&E is concerned that the lack of oversight would keep the DWR from sharing ratepayer money that PG&E says it needs for its own costs, said Ron Low, the utility’s spokesman.

Southern California Edison also filed a statement with the PUC on Wednesday, saying it was concerned about the PUC possibly giving up its authority to review the reasonableness of power contracts.

DWR spokesman Oscar Hidalgo said department officials hadn’t seen the filings and didn’t have any comment. A call to the PUC was not immediately returned.

The state department released its revenue requirements last week, saying no rate increase would be necessary to cover the $9 billion it has spent buying electricity or billions it plans to spend buying power over the next two decades.

On Wednesday DWR Director Thomas Hannigan told the PUC the department would revise those figures next week.

In a letter to the PUC, DWR said officials have “become aware of additional data which warrants some adjustments to the revenue requirement.”

The state estimates that it will need to recover $68 billion from ratepayers over the next 10 years for long-term contracts for power it has entered and for power purchased on the spot market since January.

Previously, the governor’s energy advisers had estimated that figure would be $43 billion – for both long-term contracts and spot market purchases.

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