California Utilities Plead for Rate Increase

With a solution to California’s deregulation nightmare nowhere in sight, Pacific Gas and Electric Co. and Southern California Edison Co., are asking for permission to ignore deregulation constraints and raise their rates to keep themselves from bankruptcy.

After meeting with President Clinton this week, California Governor Gray Davis announced it would take at least two years before California could catch up with the consumer demand for electricity.

The two utilities want the state Public Utilities Commission to lift a rate cap that is set to expire in 2002. The cap has kept electricity bills in check for 10 million homes and businesses over the last three years.

Pacific Gas and Electric and Southern California Edison also want 26 percent and 30 percent rate increases approved respectively. If approved, a $60 electric bill could jump to $75 to $78 per month.

Both utilities claim that without help, in the form of federal funding or approved rate increases, they face a grim future. The utilities say the deregulation fiasco has already left them $9 billion in debt.

Southern California Edison has asked a federal appeals court to force the Federal Energy Regulatory Commission to immediately curb wholesale prices. An answer is expected from the commission by Jan. 2.

The Public Utilities Commission has decided to allow a rate increase, but has yet to determine the amount of the increase.

U.S. Energy Secretary Bill Richardson has also extended his order requiring electricity producers to send power to California to ease shortages for another week.