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Aug 24, 2000

CONTACT: Doug Heller - 310-392-0522 x309

Davis Utility Plan Reminiscent of 1996 Deregulation Deal That Created Current Crisis

Advocates Worry About Flawed Deal In Last Days of Legislative Session
Governor Davis' plan to address the electricity rates crisis in San Diego, announced at a evening press conference Wednesday, will force San Diego utility ratepayers to pay back San Diego Gas and Electric (SDG&E) for any immediate rate relief the plan provides. The plan was crafted without the input of San Diego ratepayers or consumer groups that have been critical of a variety of proposals that would ensure that SDG&E be "made whole," that is, entirely repaid for any lost profits.

"It's just a credit card or balloon payment at the end," said former San Diego Mayor Maureen O'Connor.

According to consumer advocates, the Governor's process for developing this plan is similar to the backroom dealing that created the original electric deregulation bill (AB 1890) in 1996.

"In the hurried pace of the last days of session the danger is that a backroom deal will leave the ratepayers on the hook for years to come," said Douglas Heller, a consumer advocate with the Foundation for Taxpayer and Consumer Rights (FTCR). "A rollback that simply defers excessive prices to another day -- well after the coming elections, to be exact -- is not a rollback at all. It is another example of the kind of political sleight of hand that got us into this mess when the Legislature passed the deregulation law in 1996."

San Diego ratepayers have experienced an unprecedented 240% increase in the cost of electricity since the summer began, and the region's economy is being drained of $100 million per month. San Diegans and consumer groups have called for an immediate rate rollback to pre-deregulation prices, a refund of overcharges on this summer's electric bills and legislation that will ensure that ratepayers and the public are not forced to "make SdG&E whole."

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