California utilities commission delays decision on power costs

The San Diego Union-Tribune --Oct. 8

Oct. 8--The California Public Utilities Commission has again delayed a decision that could shift $1 billion in crisis-related power costs to San Diego Gas & Electric customers and cause a major rate increase.

At its meeting yesterday, the PUC voted to wait until its Nov. 19 meeting to decide which of several possible formulas should be used in allocating the energy costs among the state's three largest electric utilities over the next eight years.

The costs were incurred when the California Department of Water Resources signed $20 billion worth of high-priced, long-term power contracts at the height of the power crisis.

The contracts were signed by the state as a way to tame runaway spot-market prices for electricity.

Each year since the crisis, the PUC has allocated the costs from those agreements among the state's three large utilities. What the commission has been postponing for months now is the permanent allocation method that will stand for the duration of the contracts, eliminating yearly wrangling.

Pacific Gas and Electric Co. and Southern California Edison want SDG&E to pay more because its customers consume more of the power bought under the contracts.

This would require SDG&E's customers to pay more than they do now. However, SDG&E argues that the contracts were signed to address a statewide crisis and therefore some of the expenses should be borne equally by customers of all three utilities.

The rate dispute has prompted labor, business and consumers groups from around the state to inundate the PUC with letters, reports and petitions supporting the formula that would be cheapest to them.

Groups from San Diego have repeatedly traveled to the commission meetings in San Francisco, where Northern California groups are also present to pitch their views.

The Utility Reform Network, which is a Bay Area consumer group, and the Office of Ratepayer Advocates are among the groups supporting formulas requiring the utilities to pay based on the amount of power used.

SDG&E, the San Diego Regional Chamber of Commerce and the San Diego-Imperial County Labor Council are among the groups supporting the formulas that would have the three utilities share the costs evenly.

Because of protections in place for small residential customers, SDG&E's business and commercial customers would feel most of the effects of a big rate increase. Jerry Butkiewicz, secretary-treasurer of the Labor Council, has said that would cause new business to be driven away and give disastrous bills to existing ones.

One formula being considered by the PUC, which would be the most expensive for SDG&E customers, would move $930 million of the cost of the power contracts to SDG&E customers.

SDG&E favors an alternative formula proposed by PUC President Michael Peevey that would split the costs more evenly among the companies. It would cost SDG&E customers $425 million over eight years.

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