‘Opt-Out’ for Power Program Pushed Back

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About 1,200 big power customers who were asked repeatedly this summer to live up to agreements to cut electricity use when supplies were tight must stay in the hot seat for a few more months, the California Public Utilities Commission decided Thursday.

At the same meeting and public forum, held in downtown Los Angeles, the PUC got an earful from Southern California consumers worried about looming high electricity prices like those paid this summer by retail customers in San Diego and south Orange County. They also complained that the five San Francisco-based commissioners hold only one business meeting in Southern California each year.

East Los Angeles architect Frank Villalobos told the commissioners that many of that community’s residents are harmed in two ways by high energy prices: Their meager incomes can’t stretch to cover rate increases, and their refrigerators and air conditioners tend to be old energy wasters.


“We will pay an even higher price for using these inefficient items,” Villalobos said.

Electricity shortages this summer brought not only high prices but also a record 17 Stage 2 power emergencies, when the state was within 5% of running out of available power. That led to 14 interruptions of big electricity users that get a discount of about 15% off their rates for participating in programs run by Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric.

Fearing widespread flight from these interruptible-power programs, the commission voted to temporarily suspend until March 31 the ability of companies to opt out or reduce the amount of power they are willing to cut under the arrangements.

The ability of these customers to reduce electricity use sharply saved the state from rolling blackouts this summer, and the near-certain loss of many participants would imperil supplies for the rest of the state’s electricity users, PUC President Loretta Lynch said. The postponement of the opt-out period gives the PUC time to design new programs that would be more attractive to participants, Lynch said.

Participants who choose not to interrupt power use when called get zapped with big fines. Many of the customers--including manufacturers, hospitals, hotels, schools, retailers and amusement parks--are unhappy with the program because they were called upon to interrupt more than they ever expected.

These customers should not be harmed by the PUC’s decision, Lynch said, because they face little risk of interruption during the fall and winter and will continue to receive discount rates.

Customers normally would have been allowed to opt out of the contract next month. However, those that signed up after April 1998, when the PUC ordered one-year interruptible contracts instead of five-year contracts, will still be allowed to switch to another rate contract next month.


Harvey Hansen, vice president of Redlands Community Hospital, testified that the 172-bed nonprofit center is losing money and budgeted for the fiscal year that began on Oct. 1 on the assumption that it would no longer be on the interruptible program, thereby avoiding potential fines when it could not reduce power. Hansen said after the meeting that he was pleased the contract extension is temporary, adding: “The PUC obviously needs to address these issues.”