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California and the West

State Senate Passes Electric Bill Relief

Legislature: The proposal, aimed at aiding San Diego Gas & Electric customers, faces uncertain future in Assembly.


SACRAMENTO — With two days left before lawmakers disband for the year, the state Senate on Tuesday moved to cap San Diego Gas & Electric power rates by passing a new version of a consumer relief bill.

In a separate action, the Senate approved and sent to the Assembly a bill to create a special monitor with significant authority to oversee the Los Angeles Unified School District.

The electricity measure would set SDG&E's electricity rates at less than a third of the current price of wholesale electricity, which has been determined by market forces since California deregulated its electricity industry in 1998.

It also would give the state Public Utilities Commission the authority to adjust the price cap up or down for SDG&E customers every six months. The cap would expire at the end of 2002.

The measure requires a two-thirds majority to pass each house of the Legislature, raising questions about whether the Democratic-backed bill can win sufficient Republican votes in the Assembly, its next destination.

Assemblywoman Susan Davis (D-San Diego) and Sen. Dede Alpert (D-Coronado), the measure's authors, shepherded a different rate bill through the Senate earlier this month, but reworked it after Gov. Gray Davis and Assembly Republicans made it clear they would reject it.

Their new attempt, AB 265, falls in line with a proposal by the governor. It would give San Diego and southern Orange County residents immediate relief from this summer's soaring electricity costs, passed on to them by SDG&E.

The initial cap--6.5 cents per kilowatt-hour--would apply retroactively to June 1, so consumers could expect to get credit for bills they've already paid this summer.

Recent electricity bills have been, on average, double and triple the price of last summer's bills. The new legislation would cover all homeowners, hospitals, schools and small and medium-size businesses. The average homeowner's bill would be roughly $68 a month.

Assembly minority leader Scott Baugh (R-Huntington Beach) opposed the bill, saying that if the PUC lowered the rate cap, SDG&E would suffer.

The new bill, he said, would also "send a message to Wall Street through a megaphone: Don't invest in California because we artificially lower our rates and you may not be able to recapture your investments."

Baugh has proposed using $300 million of the state's budget surplus to help consumers and SDG&E pay for this summer's extraordinary electricity costs.

"We told them not to send it over until they struck a deal [with Republicans]" Baugh said. "They didn't do that."

The legislation would create an account into which SDG&E would deposit what it collects from customers. It also would deposit whatever profits the 1.2-million-customer utility generates by selling electricity from its share of the San Onofre nuclear power plant and through its contracts with alternative energy producers.

Another bill being drafted by Assemblywoman Denise Ducheny (D-San Diego) would create a fund of $50 million or more of state money to be drawn upon to help balance the account if necessary. Such a bill had not been introduced as of Tuesday evening.

The Davis-Alpert legislation is tied to yet another unwritten bill that lawmakers say would shorten the time it takes to build new power plants in California. Both bills must pass both houses and get Davis' signature for either to take effect.

Several senators who refused Tuesday to vote for the Davis and Alpert bill complained that the bill to streamline the process of permitting power plants was not ready.

"I'm haunted by the procedures of the past that got us here," Sen. Tom Hayden (D-Los Angeles) said, referring to August 1996, when the Legislature unanimously approved a sweeping bill to move California's electricity market from a system of three monopolistic but regulated utilities to a competitive market.

Under that law, SDG&E customers have become the first in the state to bear the full price of wholesale electricity. Consumer advocates believe similar price spikes will hit other customers next year.

The day included a heavy measure of silliness. Assembly members arrived to find goody bags filled with chocolate, presumably to help keep them energized; mouthwash; Kleenex, evidently for when their bills die; and wooden back scratchers--so they could scratch one another's backs.

Members of the lower house spent the bulk of their time working on deals and giving farewell speeches to colleagues who must retire because of term limits. In the Senate, members rarely gave lengthy speeches, and when they did, President Pro Tem John Burton (D-San Francisco) cut them off.

With limited debate, the Senate swiftly approved, 27-13, the measure to create a new state monitor for the Los Angeles Unified School District. The monitor would oversee the district's progress on improving student achievement, increasing the number of credentialed teachers, adding textbooks and improving school safety and parental involvement.

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