San Diego Utility rates skyrocket : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

sted at 5:32 p.m. PDT Thursday, July 27, 2000

San Diego Utility rates skyrocket BY KIMBERLY LAMKE Associated Press Writer

SAN DIEGO (AP) -- Deregulating utilities and creating competition in the power market was supposed to be a boon for California consumers.

Nora Whitcotton, one of about 1.2 million customers of San Diego Gas & Electric, the first utility in the state to deregulate, said it's meant just the opposite. She's among the utility's customers whose monthly bills have skyrocketed this summer.

While a power-supply crunch coupled with increased demand are partly to blame for rising bills, customers and critics of the utility said their plight should serve as a warning to other states wrestling with deregulation.

Whitcotton, who lives on a fixed monthly income of $712, saw her July energy bill jump from $46 a year ago to $117.

``I'd like to see it go back to being regulated,'' she said. ``I don't mind conserving energy and using less, but I really believe we were sold a bill of goods with deregulation.''

A 1996 state law ordered restructuring of the electric services market to break utilities' monopoly power and introduce competition, a scenario that is playing out nationwide.

Under deregulation, power generators are supposed to compete to offer energy to distributors, who then compete to deliver that energy to consumers. Competition was supposed to lower bills by 20 percent.

In the San Diego area, however, competition among distributors is largely nonexistent because there are too few companies, and rates have soared since San Diego Gas deregulated a year ago.

``San Diego should charge tuition for this class, 'Botched Deregulation 101,''' said Michael Shames, executive director of the Utility Consumers Action Network. ``Other states would be stupid to not look at us and then let this situation repeat itself.''

Utility officials acknowledge that deregulation isn't working.

``Some things need to be fixed both on the supply side and the buy side of the process,'' said Gary Cotton, a senior vice president at the company.

A lack of new power plants and the absence of a policy to manage distribution when power lines are congested are major barriers to successful deregulation, he added.

As a short-term solution, San Diego-area consumer groups have called for a rate freeze, and government disaster assistance. A long-term fix, some advocates said, would be re-regulating the industry.

In California, deregulation is expected to expand in 2002, after a rate freeze for customers is lifted for a number of publicly owned utilities.

-- Martin Thompson (, July 27, 2000

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