Calif. consumers face $8 bln energy bill - treasurer Friday October 19, 7:22 PM EDT

SACRAMENTO, Calif., Oct 19 (Reuters) - California consumers could be burdened with more than $8 billion in energy costs if state regulators fail to move back a cut-off date blocking big businesses from making their own power deals, state Treasurer Phil Angelides warned on Friday.

In a letter to Public Utilities Commission (CPUC) President Loretta Loretta Lynch, Angelides said the decision that delayed blocking so-called direct access could end up costing Californians $800 million in extra energy costs by the end of 2002.

He called on the CPUC to move the date back to July 1 from Sept. 20, warning energy costs topping $8 billion by 2010 could be shifted from big businesses to residential consumers and small businesses.

"Any direct access plan must ensure that all utility users pay their fair share of the subsidy they received from the state and that consumers are protected from unfair cost shifts," Angelides said in the letter.

At issue is a Sept. 20 vote by the CPUC to suspend consumers' direct access to independent power retailers, effective on that date.

Eliminating the purchase option was needed to allow Angelides to move ahead with a $12.5 billion bond issue to recover California's spending on power supplies.

Angelides said the CPUC should have acted by July 1 to cut off the access option because it offered consumers -- typically big industrial companies -- a way to dodge paying for the emergency power already purchased by the state's Department of Water Resources (DWR).

The water agency took over buying power for most of the state's residents in January as a financial crisis linked to a flawed power deregulation law meant its two largest utilities were no longer credit worthy.

Since January, the state has spent about $11.3 billion for power to keep the lights on in California.

Edison International (EIX) unit Southern California Edison saw its credit ratings fall to junk status while PG&E Corp. (PCG) unit Pacific Gas & Electric filed for Chapter 11 bankruptcy protection in April.

Angelides told Lynch CPUC action was needed to make sure all utility users "paid their fair share of the energy purchased by the state on their behalf in a time of crisis."

Angelides said that the amount of megawatts in direct access deals climbed from about 2 percent of total state power demand on July 1 to more than 13 percent by Sept. 20, the day regulators eliminated the option.

He urged the CPUC to modify the cut-off date to suspend direct access as of July 1.

CPUC officials were not immediately available for comment on the letter.

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-- Martin Thompson (mthom1927@aol.com), October 19, 2001

Answers

California politics and energy are such a hopeless muddle that only a divine stroke of wisdome will solve.

-- JackW (jpayne@webtv.net), October 20, 2001.

Yeah, the divine stroke of wisdom is to get rid of the bungling bureaucrats. Everytime they get involved it costs the ratepayers and taxpayers more money and naturally the taxpayers and ratepayers have to pay top dollar for the bureaucrats "vision".

-- Guy Daley (guydaley1@netzero.net), October 20, 2001.

It was higher. I heard on the TV news this a.m. that we "saved" $4 bil because the summer was cool and we didn't use so much fuel. (after May, that is)

So, then, we can take the "savings" and spend it on something else, like unemployment benefits! Woohoo!

(been watching gov't accounting a little too long)

-- Margaret J (mjans01@yahoo.com), October 20, 2001.