PUC Approves Revised Rate Hike

State utility regulators voted Thursday to increase rates for Southern California Edison Co. customers by $200 million over the next 10 years to lessen the burden of energy-crisis power contracts on San Diego Gas & Electric Co. ratepayers.

Edison executives said the rate increase could cost large industrial users, such as steel mills, more than $85,000 a month. A typical hospital would pay an additional $3,000 a month, schools $60 and residential users about $2.

Rates would increase by a similar amount for customers of Pacific Gas & Electric Co. in Central and Northern California.

The vote by the California Public Utilities Commission alters a formula approved in December to divide the costs of the electricity contracts among the state’s three large investor-owned utilities. SDG&E;, a subsidiary of San Diego-based Sempra Energy, had complained that its customers were being saddled with at least $368 million in extra costs needed to pay some of the $7.4 billion in above-market costs for contracts signed by state negotiators during the energy crisis of 2000 and 2001.

PUC President Michael Peevey, who was on the losing end of the December vote, prevailed Thursday on a 3-1 tally; two commissioners who supported the old payment formula have since left. Peevey termed the vote “a fair outcome” that would prove less burdensome for the 90% of ratepayers who live in the Edison and PG&E; service areas than for the 10% of customers served by SDG&E.;

SDG&E; President Edwin A. Guiles agreed, and credited a local coalition of businesses and unions for successfully lobbying the PUC to change its stance.

But Rosemead-based Southern California Edison, a subsidiary of Edison International, objected to the decision.

“It’s inequitable to have San Diego ratepayers subsidized by the Edison and PG&E; customers,” Edison Vice President John Fielder said.

Some of Edison’s largest industrial users, who pay some of the highest electricity rates in the nation, bridled at being hit with new charges by the PUC.

“We’re already paying more than our fair share,” said Brett Guge, vice president of California Steel Industries Inc. in Fontana, which consumes 28 million kilowatt-hours per month.

The PUC ordered the change without receiving any new facts about how to apportion the contract costs, said Carolyn Follis, an attorney for Newport Beach chip maker Jazz Semiconductor, a big Edison customer using more than 22 million kilowatt-hours a month. “It makes it very difficult to operate in a regulatory system that is not consistent or stable,” she said.