Consumers and utilities continued to butt heads in Californialast week over how to deal with almost $5 billion in uncollectedrevenues by the state’s three major investor-owned utilities in thewake of this summer’s wholesale electricity price spikes. Withretail rates frozen the utilities have only collected a portion ofthe added cost of power since May. Consumer activists in SanFrancisco and San Diego last week launched a campaign against theutilities seeking pledges from political candidates throughout thestate to oppose attempts to raise consumer rates to recoverutilities’ costs.

On Friday, with only one left day in which to act, CaliforniaGov. Gray Davis was expected to drop a state legislative measureproviding up to $150 million in taxpayer funds to help make wholeSan Diego Gas and Electric over the next three years. The governorhad until the end of the day Saturday to sign or veto the measure;otherwise it dies through inaction.

A spokesperson in the governor’s office noted Friday morningthat Gov. Davis had not acted on the measure and there were noplans at this point for him to act, although he was still wadingthrough several hundred unsigned bills.

“It is time for our elected representatives to say ‘no’ to thesecompanies,” said Nettie Hoge, head of The Utility Reform Network(TURN), a San Francisco-based utility consumer watchdog group, whoargues that California’s three major utilities have collected morethan $14 billion in revenues to cover their stranded costs, morethan enough to offset the under-collections this summer. Theutilities contend that is mixing apples and oranges.

In appealing to elected officials and prospective officeholders,TURN and several allied consumer groups are asking the officials toprevent any utility rate increase while the state-mandated retailrate freeze is still in effect and to oppose attempts to “end therate freeze retroactively, “and/or require consumers to payanything more for electricity costs allegedly incurred” by theutilities.

In earlier filings with the Securities & Exchange Commissionand in upcoming state regulatory requests, California’s two largestutilities, Pacific Gas and Electric and Southern California Edison,are seeking assurances the monies will be eventually recoverable inutility rates and not left to be absorbed by shareholders. Bothutilities are suggesting that under the state’s 1996 electricityindustry reform law they could now pay off their so-called strandedcosts so a four-year-old retail rate freeze could be lifted. Thatwould allow them to recover the full cost of power supplies in retailrates that would vary with the market as SDG&E was doing prior tothis summer’s corrective legislation re-capping San Diego retail rates(see Daily GPI, Sept. 27).

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