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PUC Drafts Power-Cost Shift

Utilities: Proposal for divvying up charges would raise burden for Southland consumers.


A California Public Utilities Commission judge Tuesday proposed dividing $10 billion in charges for state-purchased electricity nearly equally among all utility customers, which, compared with earlier proposals, would shift costs away from Pacific Gas & Electric Co. and onto customers of Southern California Edison and San Diego Gas & Electric Co.

Hundreds of millions of dollars in costs would be shifted to Southern California customers, compared with a previous PUC plan, with the extra costs from the new proposal being split by Rosemead-based Edison and SDG&E.

Edison declined to comment on the proposal and what it would mean to customer rates. Ultimately, utility customers can expect to pay the energy costs either through higher rates or, in Edison's case, prolonging the current high rates that are locked in by its recent settlement with the PUC to rescue Edison from its electricity debts.

An SDG&E spokesman said the proposal was unfair to the utility's customers. PG&E said it had not fully reviewed it but that the new plan appeared more fair than the previous proposal.

The $10 billion represents costs incurred by the state Department of Water Resources to buy power on behalf of the three utilities this year and last year after the California electricity market melted down in the face of record electricity prices and a utility cash crunch.

A previous PUC proposal attempted to divvy up the tab according to an estimate of what it costs the department to serve the customers of each utility. Under that plan, which was backed by Commission President Loretta M. Lynch but provoked furious protests from San Francisco-based PG&E, more of the costs were allocated to PG&E because it costs more to serve those customers.

The water department originally proposed charging each utility about the same amount per customer, a proposal similar to the one released Tuesday by PUC Administrative Law Judge Thomas R. Pulsifer.

The latest proposal is a key step in repaying the state treasury for electricity costs. To reimburse the treasury, the state plans to sell $12.5 billion in bonds, which would be repaid by the customers of the three utilities. But first, several issues much be resolved, including how much of the bond costs should be repaid by the customers of each utility.

Pulsifer's proposal, which could be voted on by the commission as early as Feb. 7, is modeled after a plan suggested by the Utility Reform Network, a San Francisco consumer advocacy group. The five commissioners are free to make their own proposals. Under the Pulsifer proposal, PG&E customers would pay 10.047 cents per kilowatt hour, or about $4.8 billion; Edison customers would pay 10.309 cents per kilowatt hour, or nearly $3.7 billion; and SDG&E customers would pay 9.947 cents per kilowatt hour, or nearly $1.6 billion.

Pulsifer said he did not think it was fair to allocate higher costs to Northern California customers.

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