Utilities seek 30% hike

ENERGY: Facing bankruptcy, Edison and PG&E also want to raise rates 5% each time they must borrow money to buy power.

December 20, 2000

From Register news services

Southern California Edison and Pacific Gas & Electric are urging state officials to allow the utilities to increase their retail electricity rates by as much as 30 percent, with additional increases of 5 percent if the companies are forced to continue borrowing money to pay for wholesale electricity, a source involved in the discussions told Dow Jones Newswires on Tuesday.

The state seeks to increase the utilities' rates by about 9.9 percent over several years as long as the utilities agree to absorb half their debt, which would total a combined $3.5 billion in excess wholesale power costs.

But PG&E and SoCal Edison executives have said that such a rate increase would not be enough to offset the remaining debt.

The utilities are seeking a 25 percent to 30 percent rate increase that would include a trigger mechanism to raise rates an additional 5 percent each time the companies have to borrow money to pay for wholesale electricity, said one state official involved in the talks.

Another source involved in the discussions said that if a rate increase deal is not struck soon, PG&E, whose debt has reached $4.6 billion, would file for bankruptcy within a few weeks. SoCal Edison, with $3.5 billion in debt, would reportedly file for bankruptcy this week if talks continue to break down, the source said.

In other developments Tuesday:

California Independent System Operator for the first time invoked a federal order for emergency power because of lack of power resources in Northern California and scant supplies in the Northwest. Under the order, about 40 power providers in the Northwest will be directed to sell to California to meet today's power demand.

Energy Secretary Bill Richardson said at an energy summit that the crisis "requires immediate action." Western governors are to meet today to discuss the situation.

-- Cave Man (caves@are.us), December 20, 2000

Answers

http://www. ocregister.com/business/power20cci.shtml

-- Cave Man (caves@are.us), December 20, 2000.