State Agency Raises Power Cost Estimate

The state Department of Water Resources said it slightly increased its estimate of how much revenue it will need to buy electricity for the customers of California’s three big investor-owned utilities.

The water agency, which has been the state’s primary power buyer since mid-January, said it made the adjustment after it received new information from the utilities, particularly concerning how much electricity DWR needs to buy for each utility through the end of next year. Despite the increase, DWR contends that sufficient revenue would be generated by the new, higher rates being charged customers of Southern California Edison and Pacific Gas & Electric, and by a similar expected increase for San Diego Gas & Electric of about 3 cents a kilowatt-hour.

DWR said it seeks to collect $12.6 billion from utility customers and expects to receive $477 million more, a total of $13.077 billion, by selling surplus power in spot markets through the end of 2002. In its previous estimate, DWR sought $13.072 billion in revenue.

DWR has said it needs 1.65 cents of the 3-cent increase to sell as much as $13.4 billion in bonds to pay for electricity. The California Public Utilities Commission must approve DWR’s request before the bonds can be sold.

The utilities, which all objected to DWR’s previous financing plan and have sought a public review, said they are studying the new filing.