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Armando Rendón |
January 3, 2001 |
CPUC: 002 | |
415-703-1366 |
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CPUC GRANTS PG&E AND EDISON ELECTRICITY
RATE INCREASE ON REFUNDABLE BASIS
The California Public Utilities Commission (CPUC) today proposed an order that would grant Pacific Gas and Electric (PG&E) and Southern California Edison (Edison) an emergency 90-day electricity rate increase of one cent per kilowatt-hour. The Commission believes this interim increase is necessary to assure the utilities' continued ability to serve California customers.
The Commission's proposed order would grant the increases pending a further, more detailed investigation of the utilities' finances and market conditions, which could result in customer refunds. The Commission intends to vote on the order, or some alternative, at tomorrow's public meeting after hearing comments from parties at an oral argument today at 1 p.m. The meeting will be held in the CPUC auditorium at 505 Van Ness Avenue, San Francisco.
The rate change in the proposed order would increase residential electricity bills by about 9 percent. For the average residential electricity customer the monthly bill would rise from $60.00 a month to $65.40. Small commercial customers' electricity bills would increase by about 7 percent; medium sized commercial customers' bills would increase by about 12 percent, and large commercial and industrial customers' electricity bills would increase by about 15 percent. Low-income customers who are eligible for the California Alternate Rates for Energy or CARE program would be exempt from any rate increase.
The proposed order finds that the increases are required on an emergency basis in response to conditions in wholesale electricity markets. Commission President Loretta Lynch said, "These conditions were created by orders of the Federal Energy Regulatory Commission (FERC) that defy common sense, logic and law." The proposed decision also states that without an emergency rate increase the utilities "may not be able to provide adequate service for their customers without some intervening action on our part."
The Commission's proposal follows five days of emergency hearings, at which representatives of utilities, consumers, power sellers and government testified on the financial situation of PG&E and Edison. Together the investor-owned utilities claim to have incurred more than $8 billion in wholesale electricity costs above the income they receive from their customers. The Commission has hired independent auditors to verify the veracity of these and other claims related to the utilities' financial health.
The costs have occurred because of extraordinary prices in deregulated electricity markets over which FERC has authority. The FERC eliminated any effective pricing controls in California markets on December 8, 2000. Since then, electricity prices have skyrocketed.
The Commission has stated its intent to continue its investigation and would limit the rate increase to 90 days, pending further hearings.
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