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CA Electric Rates Up, Gas Price Mitigation Ongoing, CPUC Head Says

As part of an annual review and overview for state lawmakers, California's chief utility regulator, Michael Peevey, last Wednesday provided a broad energy picture that included higher rates for electricity and natural gas but increased reliability, infrastructure additions and renewable/energy efficiency programs. Peevey also pointed to streamlining of the regulatory processes last year, compared to the previous year.

Electric utility rates for the state's three major private sector utilities turned upward last year and they are all higher in 2006, Peevey said, noting that they are all above 13.76 cents/kWh. (Pacific Gas and Electric at 13.76/kWh; Southern California Edison Co. at 14.5 cents/kWh, and San Diego Gas and Electric Co. at 13.9 cents/kWh.)

"The California Public Utilities Commission continues to work to lessen the impact of rising natural gas prices on consumers," said Peevey, listing seven programs that the major gas utilities have put in place under the regulators' guidance, including expanded hedging, use of low-cost storage gas for low-income customers and expanding discount programs and customers eligible for them.

In addition, Peevey said a statewide natural gas rulemaking expected before the end of the second quarter will "address infrastructure adequacy issues for the state's natural gas transmission pipeline system."

In the area of renewables and energy efficiency, the CPUC has put in place multi-billion-dollar programs designed to have bigger portions of the state's energy demand growth filled by those two sectors, and they continue to be top priority in the state's Energy Action Plan and procurement plan "loading order" -- ahead of building new traditional natural gas-fired generation sources, Peevey told the state Senate Energy, Utilities and Communications Committee.

"In 2006, the CPUC will develop reporting requirements and evaluation, measurement and verification protocols to ensure that energy savings are achieved in a cost-effective manner," Peevey said. And among various issues tied to resource adequacy requirements for electricity providers, the CPUC will be looking at the development of capacity auctions in the state, he said.

In "modernizing" the CPUC, Peevey that the regulatory commission continues to "streamline processes and procedures,' moving to more electronic reporting and filings, pushing for more settlements to avoid long administrative law processing of cases, and as of last year some progress was recorded. He said that the average proceeding at the CPUC took 120 days to complete last year, compared to an average of 196 days in 2004.

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