Consumers Bitter as They Await Electricity Price Hikes
As California’s energy crisis threatens to boil over, Los Angeles-area consumers facing the likely prospect of higher electricity bills are steaming.
About 11 million customers in Southern California and millions more around the state could be hit with rate hikes of at least 10% next year. That would happen if the state Public Utilities Commission lifted the freeze on electricity prices to bail out utilities that are struggling to cover rising power costs.
People across the region are watching the energy emergency with resentment, anger and glum resignation, many concerned that higher bills will squeeze their finances.
A 73-year-old Arcadia retiree on a fixed income worries that he’ll have to dip into his savings. A family of five in Alhambra is bracing to cut back on groceries and entertainment. A Simi Valley woman plans to spend less on clothes for her family.
“It’s going to be very hard,” said Lorna Sanchez, 36, a single mother of three in Monrovia. “It’s bad enough as it is. I’m just going to have to figure out how to cut back somewhere.”
Underlying budget calculations is resentment: Why do we have to bail out this mess?
“It’s ridiculous,” said Patricia Verdugo, 54, as she did some last-minute holiday shopping in Alhambra. “They should have never done deregulation in the first place. Once again, we end up footing the bill.”
Verdugo said that during a recent stint on jury duty, the power crisis was the No. 1 topic among those waiting at the courthouse.
“People are angry and upset,” she said. “I don’t know anyone who isn’t.”
Amid the growing consumer frustration, the agency that operates the state’s electricity grid remained on alert Saturday. The California Independent System Operator declared a Stage 2 emergency, the 36th of the year, because of congestion on the main transmission path that delivers power from Southland plants to Northern California.
Consumer rights activists warned that though the public may not have tuned in as California’s energy problems escalated during the last year, the possibility of getting hit in their own pocketbooks will spark a “ratepayer rebellion.”
“They are correctly outraged,” said Harvey Rosenfield, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. Calling deregulation a “scheme” that has gone bad, he said the utilities unfairly want the public to pay.
Rosenfield added that his group was inundated with telephone calls and e-mail Friday after consumers began hearing that the state PUC will consider lifting the current rate freeze on Pacific Gas & Electric Co. and Southern California Edison at a meeting Jan. 4.
“The question being asked by the average Californian--especially senior citizens and low-income people--is, ‘Who’s going to bail us out?’ ” he said.
Wall Street analysts have warned that the state’s two largest power companies face bankruptcy unless they can cover the soaring costs of wholesale power. But 1996’s deregulation of the industry froze the rates the utilities can charge for electricity. The cap is supposed to remain until March 2002.
The utilities say they have been covering the rising costs of wholesale energy by borrowing money.
“Edison and PG&E; have, for months now, in effect financed the costs that customers pay for electricity,” said Tom Boyd, a spokesman for Southern California Edison. “We can only do that for so long.”
Gov. Gray Davis has indicated support for a 10% rate hike, while the utilities have lobbied for at least 17%. The rate increases would not affect customers of Los Angeles’ Department of Water of Power and other municipally owned firms that were exempted from deregulation.
John and Patty Patterson, who have waited until 7 p.m. to turn on Christmas lights at their east Ventura home, said a rate hike will strain their budget as they try to put four sons through college.
“We think everything incremental is significant,” said John Patterson, 47. “It’s $5 a month, but that’s $60 a year, on top of everything else.”
Anything extra they spend on electricity will come from another part of their budget, he added.
“Like not going out for coffee and tea on a Saturday,” his wife said.
For others, it could be more dire.
Tammie Meyers, 30, of Torrance said she’s going to have to reduce cooking in her apartment’s electric oven to keep down her family’s bill, which is about $70 a month.
“Why don’t they cut back the CEOs’ salaries?” she asked.
Deborah Fay, owner of the boutique Romance Etc. in Long Beach, said she already pays $1,000 a month for electricity in her shop--and just received a notice from Edison that her store uses so much energy that she’ll be put into a higher rate bracket.
“I’m freaking out about it,” she said. “I can’t even imagine spending more than $1,000 a month.”
Many people voiced suspicion about whether the utilities really need to increase rates.
‘I don’t believe their story that they’re losing money,” said Cassandra Mason, 38, of Huntington Beach.
“I think it’s very sad,” said Angela Owen, 46, of Newport Beach. When deregulation took effect, Owen said, she shopped around with electricity retailers, but their rates were higher than Edison’s. Now, she blames the fiasco on everyone involved, including the utilities, elected officials and consumers like her who “don’t know how to ask the right questions.”
“I think mainly it’s our fault,” she said. “We all buy into things like this. We let the politicians do what they want.”
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Conservation Tips
* Shut off lights and turn off TVs, computers and other electrical equipment when they are not in use.
* Set timers on holiday lights. Peak electricity usage is from 5 to 7 p.m., so if you wait until 8 to turn on the holiday lights, you’ll help reduce the strain on the power grid. *
* Lower the thermostat. Get used to wearing sweaters. Lower the heat dramatically at night when you’re under the covers and during the day when you’re away at work.
* Consider replacing incandescent bulbs with fluorescents. Fluorescent lighting uses a fraction of the energy of incandescent bulbs while delivering a similar amount of light.
Researched by KATHY M. KRISTOF / Los Angeles Times
LESLIE CARLSON / Los Angeles Times
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Times staff writers Mike Anton, Maggie Barnett, Ana Beatriz Cholo, Jason Song and Thuy-Doan Le and correspondent Jenifer Ragland contributed to this report.
