Electricity Rate Hikes Loom

Electricity Rate Hikes Loom By JOHN HOWARD Associated Press Writer SAN FRANCISCO (AP) â€” Regulators have voted for rate increases that would affect millions of customers across the

Friday, December 22nd 2000, 12:00 am

By: News On 6

Electricity Rate Hikes Loom

By JOHN HOWARD
Associated Press Writer

SAN FRANCISCO (AP) â€” Regulators have voted for rate increases that would affect millions of customers across the state starting next month in an effort meant to rescue two shaky electric companies tangled in a deepening power crisis.

The unanimous action by the Public Utilities Commission on Thursday means that hikes likely would take effect beginning Jan. 4, affecting 10 million customers of Pacific Gas and Electric Co. and Southern California Edison Co. The level of increase has yet to be determined.

``Retail rates in California must begin to rise,'' the Public Utilities Commission ordered Thursday. ``This is crucial in light of the extraordinarily serious financial difficulties the dysfunctional wholesale markets have imposed on the utilities.''

However, the commission promised an independent audit of the utilities' books before ratifying its decision on Jan. 4.

The two privately held utilities have said they were squeezed by deregulation in the state. PG&E and SoCal Edison blame $8 billion in losses since May on soaring wholesale costs and frozen customer rates.

Commission President Loretta Lynch said wholesale electricity costs had increased five-fold over three weeks.

``We are operating on an emergency basis,'' she said.

Consumer groups balked at the commission's decision, saying it paved the way for a bailout to appease investors.

``This is regulation by Wall Street. The commission has prejudged the case and decided, before any evidence has been presented, that the utilities will be granted a rate increase,'' said Nettie Hoge, head of the utility watchdog group TURN.

But Dan Richard, of PG&E, said Wall Street's approval was vital to fiscal health and that the losses had wrecked the utilities' credit.

Richard said PG&E would set up a rate-stabilization plan to spread the spikes over time. The company earlier proposed a 17 percent hike, which would have raised the average $54 monthly bill to about $63.

Both PG&E and SoCal Edison complained about the commission's delay in responding to the crisis.

``The good part is, they're doing something. The bad part is, they didn't act in October,'' Richard said.

Meanwhile, with electricity imports slowing to a trickle, managers of the state's power grid declared another Stage 2 alert Thursday, meaning that power reserves fell below 5 percent.

Consumers were asked to cut back and some commercial customers were warned they might have to cut power in places. There have been nearly three dozen power alerts since June.

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