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SACRAMENTO — Boosting electricity bills for millions of homes an average of $5 a month, a plan floated Wednesday by state regulators, would give California’s strapped utilities a quick infusion of cash. 

But Wall Street is skeptical, it does nothing to preclude future rate increases and it doesn’t target the crux of California’s burgeoning electricity crisis – the spiraling cost of wholesale energy. 

Moreover, it begins to place on ratepayers the ultimate financial responsibility for protecting utilities – a responsibility likely to grow in coming months. For the first time, it spreads the reality of sharp electricity rate increases beyond San Diego and southern Orange County, where residential bills doubled and tripled earlier this year. 

And while the Public Utilities Commission’s proposed 90-day rate increase is far less than feared by consumer groups, it is dramatically smaller than the 26 percent to 30 percent boost urged by Pacific Gas and Electric Co. and Southern California Edison Co. The PUC was scheduled to vote on its plan Thursday. 

“If it were adopted as proposed, it would give us cause for concern. It would suggest that the commission is not committed to preserving the utilities’ financial viability nor the utilities’ financial integrity, when you consider that the utilities are recovering from their customers only 5.5 cents per kilowatt hour and they are spending 25 to 29 cents to buy it,” said David Bodek of Standard and Poor’s. 

That means the two utilities that serve more than three-fourths of California’s population – and who are absorbing daily losses of $40 million from their wholesale electricity purchases – likely will be back soon seeking additional increases. 

“It certainly seems to be short of what the utilities were asking for and, more importantly, what the Wall Street credit-rating agencies were looking for. It sounds like more of a short-term arrangement and puts off a day of reckoning,” said Gary Schlossberg, senior economist for Wells Capital Management. The utilities say they have lost more than $9 billion since June, caused by huge increases in wholesale power costs that they have been blocked from passing on to their customers because of a rate freeze. 

The PUC’s draft proposal would increase residential rates by about 9 percent, or roughly $5 per month for the average $55 monthly bill. Small businesses’ bills would go up 7 percent, and the largest businesses and industrial ratepayers would pay up to 15 percent more. The bills of low-income people would not be affected. 

Even if the rate increase remained in effect for a full year, not just 90 days, it would provide only $274 million for PG&E and some $234 million for SoCal Edison. The numbers were calculated on 1999 figures from the U.S. Department of Energy for total kilowatt hours sold. 

“It may be a question of too little too late,” Bodek said.  

“They (the utilities) are looking at running out of cash over the next several weeks, and they will need bank financing and access to the capital markets to continue to operate their businesses. 

“It is safe to say the capital markets are looking for evidence that they will be repaid,” he added. 

The PUC’s recommendation includes language offering refunds if the market stabilizes and the utilities can afford it – but there is little likelihood that such refunds will materialize. 

Consumer activists believe the PUC’s initial rate plan is the first of many that will be required to assure fiscal protection for the utilities, who helped write California’s 1996 deregulation law. 

And they note – not happily – that the law allowed utilities to avoid billions of dollars in liabilities from earlier programs, such as nuclear energy development. 

The “PUC will continue to give little bites out of our paychecks to utility companies, hoping we won’t notice it and spreading the cost out over time,” said Harry Snyder, West Coast director of Consumers Union. 

“The problem in California is that there is no coherent leadership. The leadership from the governor is lacking. The leadership from the Legislature is lacking, mainly because nobody in the Legislature knows their elbow from a hot rock,” Snyder said. 

Steve Maviglio, a spokesman for Gov. Gray Davis, said the governor has acted to protect ratepayers and will outline new proposals on Monday in his State of the State Address to the Legislature. 

“He joined with Senator Feinstein in getting an emergency order to keep the lights on and continue getting power, and he approved emergency relief for San Diego,” Maviglio said, declining to comment on the PUC’s plan. 

“The problem is that wholesale power rates are federally regulated and there is nothing that anybody in California can do about it,” he added. 

But Bob Glynn Jr., president and CEO of Pacific Gas and Electric Corp., said California’s electricity crisis comes down to simple numbers – numbers the Legislature can understand. 

“I’ve got a fourth-grade grandson that can do the math on this. If you’re buying at 27 cents and selling at 7, you’re going to fun out of money,” Glynn said.