Governor Kills $150-Million Measure to Forestall Higher Electricity Bills

Gov. Gray Davis on Friday vetoed $150 million in taxpayers’ aid for San Diego Gas & Electric Co., despite warnings by Republicans that electricity customers might end up paying higher bills after a rate cap expires.

The $150 million would have been tapped if, by 2003, the San Diego utility’s losses were so great that to cover them would mean an additional 10% increase in the average customer’s annual bill.

Davis, concerned that the state’s other major utilities might need similar help, said in a statement that the bill “is premature, sets a troubling precedent and encourages merchant generators and energy traders to continue to act unreasonably.”

“That’s a pretty stupid thing to do,” said Ann Shanahan-Walsh, a San Diego resident whose bill doubled. The utility rate increase “has hurt San Diego’s economy very badly. The governor is insensitive to San Diegans’ needs.”

But Hoyt Minkoff of the Consumer Federation of California lauded the veto. “Giving money to the power generators is like putting more fuel on the fire,” Minkoff said. “We think this will help the . . . very same people who are causing the problem.”

Monthly electricity bills, which doubled and tripled this summer for the 1.2 million customers of San Diego Gas & Electric, have begun dropping, thanks to a rate reduction imposed by the Public Utilities Commission.

By next week, the PUC order will be replaced by a new law, signed by Davis on Sept. 6. That measure caps the price of electricity in San Diego. The bill that Davis vetoed, AB 1156 by Assemblywoman Denise Ducheny (D-San Diego) and Assemblyman Jim Battin (R-La Quinta), would have allowed as much as $150 million in taxpayers’ money to be used to offset the losses SDG&E; might suffer because it cannot pass on its full costs for electricity to consumers.