News Release

SUPERVISOR DIANNE JACOB

DATE: September 12, 2000

CONTACT STEVE SCHMIDT AT 619-531-4766 or 619-206-9108

 

JACOB AND BOARD CONTINUE TO FIGHT FOR SAN DIEGO CONSUMERS
In a united front, Board unanimously supports Congressman Bob Filner's Bill to Lower Wholesale Rates

San Diego, CA - Joined by all members of the Board of Supervisors, Chairwoman Dianne Jacob today urged the Federal Energy Regulatory Commission (FERC) to impose lower caps on generators throughout the western region as soon as possible so that San Diego consumers will not be held responsible for the rate cap debt caused by recent State legislation. The Board also voted unanimously to support Congressman Bob Filner's bill, HR 5131, the Halt Electricity Price-gouging in San Diego Act, which requires the FERC to retroactively roll back the wholesale price of electricity.

"The San Diego region is a $100 billion economy ranking 37th in the world!" said Jacob. "Businesses have begun to cut back their hours, lay off workers, and add surcharges to their prices. The ripple effect has only begun."

Since May, San Diego County residents and businesses have seen their electric bills go from 3.2 cents per kilowatt hour to over 22 cents per kilowatt hour. As a result, recent State legislation capping the rates at 6 ½ cents was signed by the Governor. Under this legislation, in 2003, ratepayers could be responsible for paying the difference between the 6 ½ cent rate cap and the 22 cent market rate. The difference is estimated to be as high as $800 million with interest.

"While this recent action in Sacramento is welcomed, it is only a temporary, stopgap measure. In and of itself, this rate cap is simply an installment plan with a big balloon payment at the end of 2003! We must begin immediately to assure that San Diego consumers are held harmless for the accumulated debt in the balancing account," said Jacob. "San Diegans must not be forced to pay the big $800 million balloon payment! We cannot afford it!" she added.

Jacob and her colleagues unanimously urged the FERC to lower the wholesale rates which is consistent with the Filner legislation.

By rolling back the wholesale price of electricity sold in the Western System Coordinating Council, HR 5131 will protect San Diego consumers from any future balloon payment. The bill has been referred to the House Commerce Committee for consideration.

Also in her statement to the FERC Jacob noted some of the reasons that deregulation in San Diego has failed, including but not limited to; a lack of market competition, a CPUC that has failed to provide aggressive oversight and actions to protect consumers, a power exchange that is required to set market price based on the last highest bid, the lack of forward purchasing and the inability of an Energy Service Provider to be able to purchase electricity from any and all available sources.

On August 17th, the Board of Supervisors hosted a conference, bringing together deregulation experts to provide recommendations as to what actions need to be taken to solve this current crisis. The Board is expected to adopt an action plan next month based on those recommendations which will then be forwarded to the Governor, members of the State Legislature, members of Congress, State regulators and the FERC.