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Aug 13, 1998
Independent Study Finds Prop 9 Will Slash Electric Rates By Up To 37%
Poll Shows 57% Of Voters Support Prop 9A preliminary analysis of Proposition 9 by the California Energy Commission indicates that the measure's passage will dramatically cut electric rates for California consumers. The report states that the passage of Prop 9 will result in "residential prices in 1999 fall[ing] from 24 to 37 percent from 1997 levels." The study also shows that Prop 9 will infuse the California economy with billions of dollars because every dollar that does not go towards the bailout of the utilities goes into the pockets of California consumers as "increased discretionary income," according to the analysis.
The dramatic savings, which occur because consumers will not pay a new bailout tax after Prop 9 passes, have fueled support for the initiative. An Examiner poll conducted by Mason Dixon Political/Media Research Inc. indicates 57% of California voters will vote Yes on Prop 9 with only 19% inclined to oppose the initiative. "This proposition will keep billions of dollars in the hands of California's consumers, rather than sending it to out-of-state utility company shareholders," said Nettie Hoge, executive director of The Utility Reform Network. "The rate reductions predicted in this analysis will result in substantial savings to state and local governments as well. It's no surprise that polls show the majority of voters support Prop 9."
The coalition of consumer groups that put Prop 9 on the ballot recognize the study as a vindication of their effort to this point. "Every time consumers read their electric bill they can see that the arrogant utilities are taxing us to pay for their mistakes. As the Commission analysis shows, Prop 9 blocks the unjustified bailout, stops the rip-off, and saves every Californian hundreds of dollars each year," said Prop 9 co-author Harvey Rosenfield. "The legislature made consumers pay billions to bail the utilities out of their bad investments and mismanagement. Through Prop 9, citizens are responding," Rosenfield said.
The Proposition also prohibits collection of the TTA (Trust Transfer Amount) through which ratepayers are currently financing a phony 10% reduction. For every $1.00 in savings, consumers pay $3.00 for repayment of principal and interest, so the TTA is always higher than the "Legislated 10% Reduction." Proposition 9 guarantees consumers a real rate reduction; the study shows that Edison customers will see rates drop by 37%, PG&E customers' bills will go down by 34% and SDG&E rates will drop by 24%.
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