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CPUC plans hearing on PG&E power play on June ballot

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POSTED March 10, 2010 2:54 a.m.
PG&E’s bid to convince voters in June to amend the California constitution to protect the for-profit utility by making it tougher for public agencies to enter the retail power business is a subject of a March 17 California Public Utilities Commission hearing in San Francisco.

Among those scheduled to speak against Proposition 16 is South San Joaquin Irrigation District General Manager Jeff Shields. SSJID is in the middle of a formal bid to gain permission from the San Joaquin County Local Agency Formation Commission to enter retail power service in a bid to lower rates by at least 15 percent across the board in Ripon, Manteca, and Escalon. If Proposition 16 passes June 8, it would take a two thirds vote of the electorate to allow any public agency to enter the retail power business.

PG&E authored the measure and then spent $9 million to collect signatures to qualify it for the ballot. In a statement to stockholders, PG&E has indicated they will divert as much as $35 million in dividend revenue from stockholders to undertake a campaign blitz to get Proposition 16 passed.

Senior PG&E representatives will appear in support of Proposition 16. Those speaking against the measure besides Shields will be a former PG&E vice president and consumer advocacy groups. San Diego Gas and Electric as well as Southern California Edison – who along with PG&E make up the Big Three power players in California – declined invitations from the CPUC to participate.

Both are distancing themsleves from the PG&E backed initiative. They also have significantly lower rates and much better customer service reliability than PG&E based on CPUC studies.
The hearing takes place Wednesday, March 17. from 1 to 5 p.m. at the CPUC auditorium, 505 Van Ness Ave., San Francisco.

It will also be available in real time and video webcast at: www.californiaadmin.com/cgi-bin/cpuc.cgi.

As PG&E moves forward with its Proposition 16 campaign it is also pushing for a general rate increase of $1.101 billion on Jan., 1, 2011 – the largest in the company’s history.

If you’re a typical PG&E customer using 850 kilowatts hours per month the Jan. 1, 2011 rate hike means a $17.44 jump in your monthly power bill.

And, if you use 40 therms of natural gas each month, the rate hike proposal will add $3.15 a month or 5.7 percent more to your natural gas bill. That means if PG&E is granted everything they want, you will be sending PG&E and additional $20.59 more a month in 2011 on top of what you’re paying now.

But that’s not all. You could still see more rate increases before 2011 as the request only covers the cost of delivering electricity to customers and the cost of operating PG&E power plants. It does not include the cost of electricity that PG&E purchases to resell to customers as such costs are recovered in separate rate proceedings.

State law that PG&E and other utilities lobbied to obtain, would mean $127 million of the $1.101 billion rate increase will go to PG&E’s shareholders and other “profit” related items such as multi-million dollar bonuses for its top executives at the same time the company continues to shed front-line employees and close PG&E service offices in communities.

By statute, PG&E is allowed to take 11.35 percent of their revenue and pocket it in some form whether it is dividends or bonuses. The “profit” doesn’t go to capital outlay as rate increases granted by the CPUC take care of that as well as help cover costs when PG&E losses wrongful death claims such as a year ago Christmas Eve when they were found negligent in the natural gas explosion that killed a Rancho Cardona man and severely injured two of his family members.
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