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CA Governor Asks State Regulators to Cut Retail Power Rates by $1B
California’s Gov. Gray Davis last week called on his state regulators to lower retail power charges statewide by about $1 billion, recognizing that reserves needed by the state Department of Water Resources (DWR) to pay off $12 billion in electricity revenue bonds have declined.
The rate reductions would impact the state’s three major electric utilities, including Southern California Edison Co., which has a pending request to lower rates before the California Public Utilities Commission (CPUC).
As some utility spokesmen pointed out, the ability of DWR to drop its revenue requirement by $1 billion is something that the utilities argued the agency could have done last year while asking to establish its overall retail rate needs at the CPUC. An Edison spokesperson said his company’s customers would get about $450 million of the $1 billion DWR reduction, and with $1.3 billion that it is estimating it can lower its rates later this year, the total results in “significant rate relief for our customers.”
While taking credit for this rate reduction as the result of his administration’s energy plan working, Davis said there could be more rate reductions for California in future years if [the Federal Regulatory Energy Commission] “gets off of its duff and does its job.” For Davis, that means returning $9 billion in wholesale electricity refunds.
The lower rates would affect Edison, San Diego Gas and Electric Co. and Pacific Gas and Electric Co. customers by this fall, assuming the CPUC acts quickly to process a DWR request to lower the amounts of revenue the former state wholesale power-buying agency needs from ongoing retail utility rates. The DWR director, Tom Hannigen, said other rate reductions could come in future years through similar revenue requirement decreases by his agency.
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