Tuesday, March 27, 2001 Electric rate-hike proposal sparks Inland anger

Consumers, real estate brokers voice fears about pocketbooks and business growth.

By Jeanette Steele and Leslie Berkman The Press-Enterprise

Consumers used the words "disgusting," "terrible" and "fraud" in reaction to Monday's news that the state Public Utilities Commission may allow a hefty increase in Californians' electric bills.

And economy watchers fear that Inland Empire companies will soon use a different word: "goodbye."

Firms are postponing expansion decisions until the power crisis is resolved, real estate brokers say, and out-of-state manufacturers who were considering a move to the Inland Empire now are "on the fence" or have backed down.

The problem is more basic for seniors and others on fixed incomes: how to handle larger power bills.

Dori Wild, a 39-year-old disabled Hemet resident, said her electric bill has soared in the past month or so, as Southern California Edison tacked on a 9 percent increase the state approved in January.

"It's making it very difficult for poverty-level and low-income people to survive," said Wild, a single mother who lives on Social Security checks.

"It's almost next to impossible to afford next to anything else," she said. "I'll go down to where my refrigerator is really down to the nitty-gritty before I go out to the store."

Edyphe Greene, 70, also predicted leaner times for herself. She pays the power bill for her daughter, an invalid, as well as her own. Greene barely uses air conditioning at her home, but she can't cut back on her daughter's comfort level, she said.

"I'm just going to probably not eat," said Greene, a resident of Meadowbrook near Lake Elsinore. "You know, this is ridiculous. It's totally unfair to the people."

Inland Empire economist John Husing said he believes raising electric prices is the right move as an alternative to rationing electricity in the form of forced outages -- but that doesn't mean the Inland Empire won't feel the blow.

"The fact of the matter is that energy reliability is the scariest issue I have seen since the aerospace cutbacks in the early 1990s," Husing said.

He said the proposed structure of the rate increase, which would place the greatest burden on large electricity users, "is a negative for the Inland Empire because we tend to have more heavy industry than other parts of the state."

"It is expensive for companies to leave," Husing said, "but it is easy for companies to never come."

Ron Washle, senior vice president of Grubb Ellis, said the proposed rate hike "will have a dramatic effect on tenants that are now considering the Inland Empire for a future warehousing or manufacturing operation." He said a food processing business that had planned a 250,000-square-foot facility in Ontario or Fontana was scared away by California's murky power picture. "They are now looking in other states," Washle said.

Larry Null, a senior vice president at Lee Associates, said a manufacturing client that was planning to expand in Corona "is now looking across the border" to Mexico for a site.

Brokers and manufacturers were skeptical that even sharply higher rates will protect them from rolling blackouts.

"I don't think (the proposed rate increase) guarantees we will have power -- if there really is a shortage of generation capacity," said Doug Mills, senior vice president of operations for Fender Musical Instruments in Corona.

Mills said Fender is "pretty much locked in" to staying in Corona, where it has a $20 million manufacturing plant. While utilities represent less than 10 percent of Fender's manufacturing cost, Mills said many of Fender's suppliers are also California-based and will want to pass on their higher electric costs.

State utility officials said Monday they hope the price hike prompts people to take energy conservation seriously this summer, when air conditioners typically put the biggest drain on power supplies.

But Dee Thomas, 69, doesn't know how she can conserve more. On a fixed income, she already counts her pennies, turning off light switches as she moves around her Moreno Valley home.

Like others, she said she feels there's nothing she can do about the upcoming hike.

"They are going to do what they want," Thomas said. "Let's hope and pray we can pay for it."

Jeanette Steele can be reached by e-mail at jsteele@pe.com, by phone at (909) 782-7548, or by fax at (909) 782-7572

http://www.inlandempireonline.com/news/stories/032701/preact.shtml

-- Martin Thompson (mthom1927@aol.com), March 27, 2001