Greg, I have friends who are small business owners in San Diego area who assure me they are not going to pay their bills 100% this month. 1/4 to 1/2, let the rest ride till the mess is sorted out.
SDG&E's parent is facing revolt
ENERGY: The company is expecting many people with dramatically higher bills to pay lesser amounts.
August 19, 2000
By KATE BERRY
The Orange County Register
A revolt against high electricity bills and the resulting call for a rate rollback for customers of San Diego Gas & Electric could create financial headaches for Sempra Energy, SDG&E's parent.
SDG&E said it expects a higher number of "uncollectable'' bills because of the revolt, with some customers sending in half-payments on their electricity bills at the urging of local politicians and community leaders.
The combination of the revolt and the proposed rate rollback would hurt the company's cash flow and revenue collection, according to filings with the California Public Utilities Commission and the Securities and Exchange Commission.
"The company has indicated that they expect higher unpayables this year,'' said Michael Heim, an analyst at A.G. Edwards, a brokerage.
"They'll have to sit down with their accountants and decide what is an appropriate level of uncollectibles and how they will cover that.''
Customers of SDG&E aren't the only victims of the spike in electricity prices.
The two other California utilities, Southern California Edison and Pacific Gas & Electric, which have been paying open-market prices for electricity, are barred from passing those costs on to their customers until early 2002.
They already are absorbing millions - if not billions - in rising electricity costs.
The electricity crisis in California is a complicated one for both customers and state officials.
Several short-term solutions are being proposed to ease the burden on ratepayers in San Diego and south Orange County.
On Monday, the PUC will consider two plans to cut electricity rates and defer those costs to a so-called "balance account'' that would be paid later by ratepayers in the form of surcharges.
SDG&E has said the proposals would cost the company $350 million to $1.4 billion.
"From an earnings or cash-flow point of view, it would be a negative for Sempra,'' said Heim.
What hasn't been addressed is how such a plan would affect Edison and PG&E, which are both much larger than SDG&E.
Both those utilities support giving relief to customers who have seen their electricity bills roughly double in the past two months.
But they declined to say whether they would favor a "balance account" plan.
Gary Stern, director of market monitoring and analysis for Southern California Edison, said Edison, as a distributor of electricity, is working with state agencies to try to fix the market because it is "not workably competitive.''
"Customers need protection from high prices, and until the market is fully developed, some price protection is necessary,'' said Ron Low, a spokesman for Pacific Gas & Electric.
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It will be the pick and shovel folks who win this one. Plants will get built because they HAVE to. The producers will be hit with price caps.
D.H. |
