Rate hikes set to hit businesses

The Associated Press
Saturday May 12, 2001

SAN FRANCISCO — Like prisoners before a judge, lawyers representing farmers, manufacturers and small businesses appealed for leniency Friday as California’s top power regulators mulled who will suffer most under the largest electricity rate hike in state history. 

The higher rates are set to appear on bills June 1, but the California Public Utilities Commission will announce Monday just what kinds of users – homeowners, manufacturers, retailers – will bear the brunt of the increase. 

“We defined a bigger pie, and this is a pie that nobody wants to eat,” PUC President Loretta Lynch said in an interview. “All the groups that are here today are saying why they don’t want to eat a piece.” 

The commission is struggling to collect enough money to keep the lights on, return the state’s largest utilities to solvency and reimburse state coffers for the $5.2 billion-and-counting it has spent buying power directly from energy companies. 

On March 27, commissioners voted unanimously to raise the rates. Since then, they have grappled with how much more each kind of customer should pay. This week, Lynch proposed rate increases that would boost residential bills on average 35-40 percent. The hikes affect customers of Pacific Gas and Electric Co. and Southern California Edison Co., but not San Diego Gas and Electric Co. 

But under Lynch’s plan, as many as half of the 9 million customers of PG&E and SoCal Edison would not see their bills rise at all. And the heaviest commercial users could pay rates more than 50 percent higher than present. 

Saying they will bear a disproportionate burden, business groups trooped before the PUC on Friday, asking regulators to foist more of the rate hikes onto residential users. 

Each industry also explained why it should be spared. Mobile home parks will have difficulty implementing the proposed rate structure, which would create five tiers to encourage conservation; food processors will suffer because they only use power during the summer harvest, when rates will be jacked up; representatives of small businesses and emergency service providers told similar stories.