|
|
Enron Mail |
Mime-Version: 1.0
Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Mara, Susan </O=ENRON/OU=NA/CN=RECIPIENTS/CN=SMARA< X-To: Denne, Karen </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Kdenne<, Steffes, James D. </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Jsteffe<, Kingerski, Harry </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Hkingers<, Dasovich, Jeff </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Jdasovic<, Shapiro, Richard </O=ENRON/OU=NA/CN=RECIPIENTS/CN=Rshapiro< X-cc: X-bcc: X-Folder: \JDASOVIC (Non-Privileged)\Dasovich, Jeff\Deleted Items X-Origin: Dasovich-J X-FileName: JDASOVIC (Non-Privileged).pst -----Original Message----- From: Manuel, Erica [mailto:Erica.Manuel@edelman.com] Sent: Wednesday, September 12, 2001 9:47 AM To: Allen, Stevan; AReM; Douglas Oglesby (E-mail) (E-mail); Fairchild, Tracy; Frank; Joseph Alamo (E-mail) (E-mail); Manuel, Erica; Megan Beiser; Norm Plotkin; Warner, Jami Subject: San Diego Union-Tribune: Rush to beat direct-access purchase ban spurs fear This article specifically mentions the threatened lawsuit by AREM as having caused the PUC to drop its proposed order to ban direct access retroactively. Rush to beat direct-access purchase ban spurs fear By Ed Mendel STAFF WRITER September 12, 2001 SACRAMENTO -- Some utility customers, mainly businesses, are rushing to sign contracts with generators for cheaper power before regulators enact a long-delayed ban, raising concern that costs may go up for the remaining customers. The state plans to ban "direct access" contracts with generators to keep customers with utilities in order to help pay for power bought by the state since January. Those state purchases will be covered in part by a $12.5 billion bond paid off by ratepayers over 15 years. But many businesses, which say they need cheaper power now to remain competitive, are signing contracts to bypass the utilities before the Public Utilities Commission bans direct-access pacts, an action that could come as soon as tomorrow. "We have seen a significant increase in the last month," said Ed Van Herik, a spokesman for San Diego Gas & Electric Co. He said the amount of the annual SDG&E power load shifted to direct-access contracts with generators increased from 10 percent at the end of July to 17.4 percent at the end of last month. Allowing customers to shop around for cheaper power was the main promise of the state's failed attempt to deregulate electricity. But when the utilities ran up huge debts and could no longer borrow, the state began buying power for utility customers in January. To avoid harming the economy with a massive rate increase, the state decided to spread out payment of the soaring cost of wholesale power by obtaining decade-long power contracts and issuing the $12.5 billion ratepayer bond. Now the state wants customers to remain with the utilities for two reasons: paying their fair share of the state-subsidized power received earlier this year and preserving a ratepayer base large enough to pay off the long-term contracts and the bond. The power provided by the state to utility customers looked like a bargain earlier this year, when prices on the wholesale market skyrocketed while the state raised rates for the customers of Pacific Gas and Electric Co. and Southern California Edison by about one-third. The state has not raised rates for SDG&E customers. But an increase averaging 12 percent for SDG&E residential customers is on the PUC agenda tomorrow, along with several other actions that may be taken to pave the way for issuing the $12.5 billion ratepayer bond. PUC President Loretta Lynch said that before wholesale power prices began soaring last year, about 16 percent of the power provided by the three investor-owned utilities was being bought through direct-access contracts. By last March, she said, the amount dropped to 1 percent. "Certainly, the direct access tanked because the marketers dumped their customers back on the utilities when the price rose last year," Lynch said. But as wholesale power prices dropped in June, direct-access contracts began to look like a better deal, and a number of customers have left the utilities to get cheaper power. At Southern California Edison, the number of customers with direct-access contracts grew from 32,547 on June 21 to 37,718 by the end of last month -- an increase of 5,171, said Steve Hansen, an Edison spokesman. "Now that the market has turned, everyone is bailing as fast as they can," said Mike Florio of The Utility Reform Network, a San Francisco-based consumer group. Most of the electricity obtained through direct-access contracts in recent months apparently has been bought by businesses that use large amounts of electricity. "Most of the providers which serve small customers have simply stopped doing business in the state," said PUC Commissioner Carl Wood, who with Lynch outlined the PUC's proposed actions at a Capitol news conference late last month. The PUC delayed action to ban direct-access contracts, waiting for the Legislature to act on proposals that would have allowed businesses to bypass the utilities if they paid an "exit fee" to cover their share of state-subsidized power. The ban on direct-access contracts originally proposed by the PUC would have been retroactive to July 1. But the retroactive provision was reportedly dropped after a lawsuit was threatened by the Alliance for Retail Energy Markets, a group of power marketers. In the Legislature, a provision allowing utility customers to obtain direct-access contracts beginning in 2003, if they pay exit fees, was added to the Assembly version of a plan passed last week to keep Edison from joining PG&E in bankruptcy. The addition of the direct-access provision is one reason that the Assembly version of the Edison plan is supported by the California Chamber of Commerce. But the Assembly plan pushed by Gov. Gray Davis faces opposition in the Senate. Senate President Pro Tempore John Burton, D-San Francisco, said the Senate would send an Edison bill back to the Assembly after making it a "less-egregious giveaway" to the utility. The main provision in the Assembly plan would allow Edison to eliminate most of its debt by issuing $2.9 billion in bonds that would be paid off by ratepayers. The Foundation for Consumer and Taxpayer Rights, a consumer group in Santa Monica, calls the Edison plan a "bailout" and is threatening to place a measure on the ballot that would ask voters to overturn the plan should it be approved by the Legislature and governor. And TURN, the San Francisco consumer group, says the Assembly version of the Edison rescue plan is more generous to the utility than a tougher plan approved by the Senate in July and giving Edison an additional $1.8 billion. The consumer group also says the direct-access provision in the Assembly's Edison plan has "major loopholes" that would allow large customers to leave the utilities without paying their fair share of state power costs. "TURN opposes the reintroduction of direct access, because any 'savings' that are claimed to occur are really nothing more than the result of cost shifting to those who do not or cannot abandon utility service," the consumer group said in a statement. Copyright 2001 Union-Tribune Publishing Co. Erica Manuel Edelman Worldwide / Sacramento 916/442-2331 phone 916/447-8509 fax erica.manuel@edelman.com
|