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Rebates Planned in Power Crunch

By Jennifer Coleman, Associated Press Writer

Tuesday, March 13, 2001; 3:43 PM

SACRAMENTO, Calif. Customers of three major California utilities will get rebates from the state if they cut their power use by 20 percent this summer, Gov. Gray Davis said Tuesday.

Davis said the conservation incentives for Southern California Edison, Pacific Gas and Electric Co. and San Diego Gas and Electric customers are needed to avoid rolling blackouts this summer, when the electricity supply is expected to be even tighter than it has been this winter.

The program's cost was not immediately announced. Davis said it could save up to 2,200 megawatts enough to power roughly 2.2 million households and save the state $1.3 billion.

"Instead of paying exorbitant rates to out-of-state generators, I'd rather pay California consumers to conserve," Davis said.

Since January, the state has committed $3.7 billion in taxpayer money to buy power for customers of PG&E and Edison. The utilities say they are nearly $14 billion in debt because of high wholesale electricity costs and have been denied credit by wholesalers.

The state also plans to spend upward of $10 billion on electricity over the next decade, with customers paying off revenue bonds to cover the costs.

Under the plan announced Tuesday, customers who cut electricity use between June and September by one-fifth of the amount they used last year will receive rebates on their summer bills, Davis said.

Residential and small-business rebates will be based on a cut in overall consumption; large business customers must cut electricity use by one-fifth during peak periods.

Under one example, a customer who cuts a $100 bill to $80 would receive a rebate of $16, or 20 percent of the final bill. The rebates will be issued this fall.

Lawmakers and Davis are considering several plans to help the two utilities regain their financial footing, including purchasing their transmission systems to give them much-needed cash.

Davis announced a tentative deal with Edison last month to buy the utility's transmission system for $2.7 billion.

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2001 The Associated Press

-- Swissrose (, March 14, 2001

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