Published Friday, May 11, 2001, in the San Jose Mercury News

EDITORIAL

--------------------------------------------------------------------------------

The opinion of the Mercury News

Households must share power costs Proposed industrial increase -- 52% -- is too big FEAR of raising rates for household use of electricity has hindered the resolution of California's energy crisis since it exploded in December. A rate increase that could have saved the utilities from financial catastrophe, had it been approved in January, eventually was enacted March 27. In the meantime, the state had to jump into the business of buying power when Pacific Gas & Electric and Southern California Edison ran out of money.

Now, the California Public Utilities Commission looks set to stumble again for fear of consumer wrath. A proposal from Loretta Lynch, PUC president, on which electricity users will carry the burden of the March rate increase, goes too light on residents.

Low-income residents should be protected, and they will be. But raising bills for the rest of us an average of only $6 for using twice the baseline amount isn't sending residents the necessary conservation message. (Baselines establish minimal levels -- about two-thirds of average usage.) Many households can afford an increase of more than $6 a month.

Since residents aren't paying, businesses will have to. The average residential rate, including those who would get no increase at all, is 17 percent. The average industrial increase is 52 percent.

The full PUC should adjust the proportions, not to let business off the hook, but to dial its share back as the residential share gets dialed up.

``Let business pay'' goes only so far in protecting residential customers. Residents are, after all, employees too. If the companies they work for are burdened too heavily, jobs start evaporating in the summer heat.

Lynch's proposal does point in some positive directions. It sets prices in five tiers, meaning the price per kilowatt steps up as usage increases for residents.

For large customers, the proposal makes some progress toward real-time pricing -- that is, charging more for power at times of peak demand to reflect the greater cost of buying it then.

But the state should have initiated a more aggressive conservation, metering and real-time pricing program months ago. And it should be hastening to get residents involved in it too

http://www0.mercurycenter.com/premium/opinion/edit/ELECRATES.htm

-- Martin Thompson (mthom1927@aol.com), May 11, 2001

Answers

I see the return of the night shift to many manufactring comapanies in Californa this summer.

-- RogerT (rogerT@c-zone.net), May 11, 2001.

The first step towards "real time" pricing is continuously informing Californians, in real time, what the price of electricity is at all times --- or at least the grid reserve (margin of safety) situation. It's very distressing to have to fire up an energy guzzling computer (that takes much time to start up AND shut down) to get even basic current grid status information. If people knew (at least) grid status information at all times, load shifting and conservation would increase, because most people do know that when "the State" pays, it means we all will Pay in the end. Also, "flash" alerts when grid margins approach zero, or sudden supply reductions occur; could induce enough people to "shed load" enough to avert (or at least reduce extent of) "rolling" blackouts. For the same reason, this also reduces the very significant risk of a major disastrous uncontrolled Cascading Blackout. The probability of such a disaster increases sharply as grid margin decreases. With grid margin almost continuously "Living On The Edge", the total risk of a Cascading Blackout over the cours of the summer is quite high.

-- Robert Riggs (rxr.999@worldnet.att.net), May 12, 2001.