PUC plans show how energy users will pay

The Associated Press
Thursday September 26, 2002

SAN FRANCISCO — Businesses and institutions who bypassed their local utilities to buy cheaper electricity from power sellers would have to pay a surcharge to help the state repay its energy debts, under a plan put forward by the state’s energy regulators Wednesday. 

The Public Utilities Commission released several draft proposals Wednesday that detail how consumers’ electric rates will pay for the state’s energy debts. 

The commission will vote on the plans at their Oct. 24 meeting. The proposals are necessary to get the state’s three investor-owned utilities back into the power-buying business, said PUC spokeswoman Terrie Prosper. 

One of the proposals would charge direct access customers an additional 2.7 cents per kilowatt hour so they pay a share of the state’s power debts. Consumer groups said that surcharge is too low. 

Utility customers pay about 14 cents per kilowatt hour, but the rates vary by utility, customer class and the amount of energy used. 

Direct access, one of the cornerstones of the state’s failed deregulation plan, allowed customers to buy electricity from sources other than their utilities. During the energy crisis of 2001, wholesale rates soared above the capped retail rates, causing the utilities to amass billions of dollars in debts and forcing the state to step in to buy energy for utility customers.