No one is satisfied much by the California legislature’s11th-hour move late Wednesday to pass two new laws aimed atproviding relief for San Diego electric consumers and their utilitydistribution company, San Diego Gas & Electric. Nevertheless,the governor was expected to sign the measures.

SDG&E called the legislative action “well-intended, butbadly flawed” because both bills are “vague” on who is going to payfor the difference between capped, below-market rates and theswollen wholesale power costs paid by the utility company. “Asignificant under-collection issue still remains,” said anSDG&E spokesperson.

In a related move expected before the state lawmakers adjournedat midnight Thursday, a third bill to speed-up the siting of newpower plants and expand conservation efforts was promised bylegislative leaders.

One bill would cut electrical rates for all except the largestSDG&E customers in half, retroactive to June 1, and anotherbill would set aside $150 million to protect ratepayers when therates are uncapped in two or three years.

In news reports, the governor’s spokesperson, Steve Maviglio,said the governor is still keeping his “options open,” regardingwhether to sign all or only some of the legislation. Gov. GrayDavis’ aides have expressed some reservations about creating amulti-million-dollar reserve fund to protect SDG&E if it wouldcut into the amounts of money available for schools and otherprograms. The governor’s spokesperson also said that the governorbelieves there will not be a big debt to pay off when rates areuncapped.

As written by two San Diego lawmakers, the rate relief billwould cap SDG&E rates at 6.5 cents/kwh for all residences andmost businesses, applying to 95% of SDG&E’s customers,according to the legislation’s sponsors.

“I think we’ve got to put a firm price ceiling on the retailprice of electricity in this state and make it stick,” said S.David Freeman, head of the Los Angeles Department of Water andPower, who noted late Wednesday that his utility’s load was thelowest summer day demand since 1991, indicating just how much theweather had reverted to cooler-than-normal this week.

“That just has to be done. Period. I don’t think the consumersare going to stand for it. It is just that simple. They need to puta tourniquet on the bleeding. Never in the U.S. history has anyonedoubled the cost of electricity overnight. It is too fundamental tothe overall economy.”

Eventually, Freeman said the state has to deal with the issue ofbuilding new power plants and transmission to ultimately make theelectricity market function properly. Beyond the current actions,more will have to be done because “fundamentally transmission alsohas to be dealt with and they (legislators and regulators) are notdealing with that at all.”

One of the state energy system operators expressed concernsabout the proposed relief for SDG&E being insufficient to coverthe estimated bill the utility will be facing following thissummer’s price spikes.

“They are going to start off about $75 million in the hole,” thestate energy official said. “I still think there are a lot of statefiscal questions that haven’t been answered.”

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