Features

Businesses enjoy low rates, not cutting power

By Justin Pritchard Associated Press Writer
Monday February 12, 2001

SAN FRANCISCO – Power regulators report that many businesses enjoying lower electricity rates “gamed” the state by not cutting power when asked to help avert rolling blackouts. 

The Public Utilities Commission report, released Thursday, cites “serious problems” of compliance with the so-called interruptible program that regulators have relied on to ease pressure on California’s strained power grid. 

Last year, it said, only 62 percent of Southern California Edison’s interruptible customers cut power when asked. Meanwhile, 90 percent of Pacific Gas & Electric customers did so. 

“Numerous customers, including some schools and hospitals, ’gamed’ Edison’s tariffs,” the report said. “Edison’s low compliance rate has likely been caused by a number of customers who should never have signed up for Edison’s program in the first place.” 

The PUC has estimated customers signing interruptible contracts with SoCal Edison, PG&E and San Diego Gas and Electric have saved $2 billion since 1986. 

Utility officials said the slump in compliance reflected difficult times. 

“It’s a business decision they have to make,” SoCal Edison spokesman Steve Conroy said. “The compliance rate is certainly not what we’d like to see, but it has certainly been to a degree that it has prevented rolling blackouts in the Southern California area.” 

Under the program, businesses earn a roughly 15 percent discount on their power bill in exchange for curtailing use during times of peak demand. 

Until recently, such outages were rare, occurring primarily during hot summer months. But over the past three months, calls for interruptions became an almost daily routine. California’s roughly 1,700 interruptible customers could opt to leave the lights on during the voluntary outages, but had to pay 100 times normal rates for doing so. 

Indeed, last year PG&E customers were assessed $2.2 million in penalties for ignoring conservation calls, while SoCal Edison customers were assessed $92.4 million. 

But some of those fines may go unpaid. 

Companies cried foul after some were asked to kill power for six hour stretches, sometimes three times per day. 

In response, last month the PUC voted to suspend the penalties, reasoning that interruptible customers have borne a disproportionate burden during the state’s power crisis. 

Businesses now face no penalty for refusing to cut their power, but will continue to receive the rate discount for joining the program. 

PG&E spokesman Ron Low said his utility still regularly asks large customers to curtail usage during peak periods. He said responses have been generally good. 

The report also suggested a series of improvements to the program. 

Among these were a review to see which current participants might be removed from the program. 

The report also suggested a new scheme under which participants would agree to 25 hours of interruptions per month. Once they have cut power for 25 hours, they would receive a subsidy for cutting further. Participants could also identify five non interruptible days per month.