In 1st Hearing, PUC Urged to Lift Rate Hike

The lights were out to save energy in a Santa Monica hearing room, but the heat was on as consumers and business representatives urged the California Public Utilities Commission on Monday to spread the pain of rate increases fairly--but differed substantially on how that could be accomplished.

Many of the more than 30 speakers who appeared at the PUC’s first public hearing on how to design new electricity rates spent their time trying to persuade the commission to undo the increase of 3 cents a kilowatt-hour, which was approved March 27 and is expected to begin appearing on bills in June.

Although Commissioner Henry Duque and Administrative Law Judge Victor Ryerson listened politely and court reporters took down every word, those fervent pleas were largely wasted.

Ryerson admonished the audience of about 75 people that the hearing would not determine whether rate increases are necessary to pay for soaring electricity costs. That already has been decided by the PUC, he said.

Rather, the series of hearings this week throughout the state, each attended by one of the five PUC commissioners, will focus on “who pays and how much,” Ryerson said.

That wasn’t what consumer advocate Douglas Heller wanted to hear.

“The PUC is asking the wrong questions,” said Heller of the Foundation for Taxpayer and Consumer Rights in Santa Monica. “The question that the PUC should be asking is: How do we get our state back?”

“Small consumers never asked for deregulation and never benefited from it,” Heller said. “The innocent victims of this public policy nightmare should not bear the burden of the energy industry’s greed and the governor’s failure to confront it.”

About 20 different rate plans have been submitted to the PUC, which is expected to adopt a rate design at its meeting next Monday. PUC officials said that rates will rise by an average of 30% but that some customers will see no increases while some will see much larger increases.

The commission is under tremendous pressure to devise a new rate structure that encourages conservation but doesn’t damage businesses--and to do it in six weeks rather than the usual six months or longer.

Some who testified Monday in Santa Monica feared that the new rates will cause families to subsidize single users and will penalize those that are already conserving electricity.

David Marshall, chief financial officer of El Monte-based Gregg Industries, asked that the PUC retain lower rates for the hours when electricity use is lower.

Gregg, which employs 400 people to make heavy iron parts for industry, has shifted all its production to between midnight and noon, he said. That is the only way Gregg can continue to compete, Marshall said.

His company does business in the United States, Mexico, Europe and Asia, “and in every one of those markets we have direct competitors anxious to take business away from us,” Marshall said. “California is not an island.”

Encino resident Donald Tollefson argued that consumers should be spared the brunt of the rate increases because they will be forced to pay twice: for their own higher electricity rates and in the form of price increases as businesses pass along their higher energy costs.

“Whatever you do,” he said, “you should be fair and compassionate.”

About 200 people attended a similar hearing in a dimly lit high school auditorium in Rosemead.

Bob Wellemin, an air-conditioner mechanic from Temple City, said the commission should take the blame for not pushing to build more power plants.

“How on Earth have you been representing the consumers?” he said, evoking applause. “And what I don’t understand is that we have three or four meetings like this ahead. And we got a May 14 deadline to make a decision. I don’t want to sound skeptical. But how can I not be skeptical when you’ve got one representative here and a week to decide.”

Wellemin also criticized the commission’s proposed rate increases, saying that it would hurt people who already conserve energy. As a resident with low-energy appliances and no central air-conditioning, he said he would be penalized because it would be difficult to reduce his power from one month to the next.

Others warned the commission to take a methodical approach in deciding the rate plan.

“If I have to act businesslike, I would expect state representatives to act the same,” said Don Osborn, a small business owner from the San Gabriel Valley. “I haven’t seen that.”

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Times staff writer Joe Mozingo contributed to this story.