Your Money : Coalition Demands Lower Electricity Bills : Energy: Consumer and business groups present study showing that California rates are unfairly high. Utilities, analysts question methodology.

Demanding deep rate cuts over the next five years, an unprecedented coalition of consumer and business groups issued a report Wednesday contending that Californians pay more than a third too much to the state’s three big investor-owned electric utilities.

The study estimates that Californians paid an extra $6.4 billion in 1992--out of $18 billion in bills that year--to Southern California Edison Co., San Diego Gas & Electric Co. and Pacific Gas & Electric Co.

Both utility executives and independent analysts expressed skepticism about the methodology of the study, conducted by Economic Sciences Corp., a Berkeley-based consulting firm. The study aimed to factor out circumstances such as weather and other local conditions to compare the operating efficiency of utilities nationwide.

“I don’t think they have developed the level playing field that they assert they have in the report,” said Tom Bottorff, manager of rates for San Francisco-based PG&E.; Bottorff said PG&E;’s rates have risen at less than the rate of inflation over the past three years.

The coalition--which includes the California Manufacturers Assn. and California Farm Bureau Federation, as well as groups representing small businesses and homeowners--called on the utilities to slash their rates by 25% over the next five years.

According to the report, the operating expenses of California’s electric utilities are among the nation’s most costly. It also says the utilities’ rates have increased three to four times faster in recent years than have others in the country.

“I don’t think the results of the study are particularly surprising for anybody who has been following the electric industry in California for any time,” said Audrie Krause, executive director of Toward Utility Rate Normalization, a consumer group based in San Francisco. “Things have really gotten out of hand here.”

It has long been known that California’s electricity rates are relatively high--about 50% above the national average. But Edison, for one, blames such factors as the high cost of long-term contracts for renewable energy and other requirements imposed by state regulators over the years.

“We’re buying energy today as if it were being manufactured by $100-a-barrel oil,” said Robert H. Bridenbecker, an Edison vice president. These independent contracts, mandated by the state Public Utilities Commission, cost a premium of $1.2 billion annually, Edison estimates.

Krause and others in the consumer coalition plan to use the study’s findings as they assess the PUC’s proposal for deregulating the state’s investor-owned electric utilities.

That plan, announced last month, would ultimately allow all California customers to choose their electricity suppliers, beginning in 1996 with large industrial users. In setting rates for customers who want to continue relying on their local utility--and the rates for transmitting and distributing power from all sources--the PUC has proposed a system that would reward utilities for efficient operations.

Although the commission expects rates to decline through the competitive forces of the marketplace, consumer groups have expressed concern that the PUC proposals do not specifically require lower electricity rates.