Newspaper reports PG&E generating revenue despite high wholesale energy costsgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Newspaper reports PG&E generating revenue despite high wholesale energy costs SAN FRANCISCO (AP) -- Although Pacific Gas and Electric Co. is racking up an enormous debt from skyrocketing wholesale energy costs, the picture isn't all bleak for the utility company. It's actually generating some unforeseen revenue from its divisions, the San Francisco Examiner reported Saturday.
For example, the company's Diablo Canyon nuclear power plant near San Luis Obispo had been dismissed by PG&E and regulators as inefficient. But now, high wholesale prices set by the market have allowed it to fetch the same rates that other generators receive, and that has provided the company with hundreds of millions of dollars in revenue, the paper reported.
Dan Richard, a senior vice president of governmental relations for PG&E said last week that the revenue from old power facilities it still operates is around $150 million a month.
But the company says that's not enough to cover its debt. PG&E says it is losing about $1 million an hour because of high wholesale energy costs.
PG&E, which serves 4.5 million customers from Bakersfield to the Oregon border, asked state regulators Wednesday if it could eventually pass $2.2 billion in debt from deregulation on to customers.
An administrative law judge asked PG&E last week for specific revenue information before considering its emergency request to pass the burden.
PG&E's utility reported second-quarter earnings of $216 million on $2.3 billion in revenue, a 26 percent increase over the same quarter last year. PG&E spokesman Greg Pruett said the company's profits come not from ratepayers but from other measures, such as reducing losses.
A ratepayer advocacy group, the Utility Reform Network, claims the utilities are trying to profit from high rates while trying to get the public to bear the burden of the liabilities.
Deregulation of the energy market began in 1998 and let customers choose a power supplier with the most competitive price. But competition turned out to be somewhat less than expected.
-- Martin Thompson (firstname.lastname@example.org), October 08, 2000