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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (82347)	12/21/2000 2:13:28 PM
From: gamesmistress	Respond to of 95453

Sempra can pass on costs. Why? Part of deregulation. Bizarre. Gotta go, kid's Xmas party at daycare. SDG&E seals long-term contracts for electricity The San Diego Union - Tribune; San Diego, Calif.; Nov 10, 2000; Craig D. Rose; SDG&E has quietly entered into long-term purchase contracts for electricity but says it is unable to disclose terms of the agreements. The San Diego-based utility company said terms of the deals prevent it from disclosing who it has contracted with, how much it is paying for power or the duration of the agreements. The subsidiary of Sempra Energy said it entered into these agreements in the past week. The failure of San Diego Gas & Electric to provide details leaves the utility's 1.2 million customers in the dark on costs they will ultimately bear. Under terms of California's deregulation plan, SDG&E passes along to its customers the full cost of power it buys on their behalf, although some of those charges are deferred until late 2002 or later. SDG&E has been heavily criticized by some for relying exclusively on short-term electricity purchases during the summer, when prices in those markets leaped more than five fold this year and caused consumer bills to soar. The power industry has pressed long-term purchase agreements as a means of stabilizing electricity costs. Recent industry offers, however, indicate that even long-term costs would remain substantially above those seen prior to the summer. The Federal Energy Regulatory Commission recently ruled that electricity prices in California fell short of a legal mandate of being "just and reasonable," at least partly because utilities have relied excessively on buying power in short-term markets, where it said prices were controlled by power suppliers. The commission is proposing changes that would encourage more long-term power contracts. But State Sen. Steve Peace, D-El Cajon, who co-authored California's deregulation law and testified yesterday before FERC in Washington, D.C., recently wrote that prices in long-term markets will themselves also be inflated by the lack of competition in the power market. Harry Snyder, senior advocate of San Francisco-based Consumers Union, was also critical of sealed deals under deregulation, which promised consumers open competition and choice. "This is exactly what utilities wanted from deregulation -- a monopoly without oversight," Snyder said. "The utilities will rip us off more with these secret side deals." A spokeswoman for the California Public Utilities Commission said it had no knowledge of SDG&E's agreements. Kyle Devine, the CPUC spokeswoman, said such agreements would be reviewed by the commission if their costs exceeded certain levels and then only during an annual review.