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NEWS RELEASE
Sep 26, 2000


CONTACT: Doug Heller - 310-392-0522 x309

Politicians Challenged to Protect Consumers From the Failures of Electricity Deregulation

Pledge Mailed to Every California Incumbent and Candidates

Consumer advocates in San Diego and San Francisco are asking candidates for California and Congressional office to pledge to protect consumers from unfair and unreasonable electric rates. The Ratepayer Protection Pledge will be sent to all candidates for the state Legislature and the California Congressional delegation. By signing the Pledge, candidates, if elected, agree to:
  • vote against any measure that would retroactively end the electricity rate freeze or require consumers to pay anything more for electricity costs allegedly incurred by either PG&E or Edison during the rate freeze period;

  • oppose any legislative attempts by San Diego Gas & Electric to charge additional or increased rates in the future to make up for current reductions guaranteed by the San Diego rate cap, which was passed by the California legislature this summer;

  • work to address all the problems created by subjecting electricity to a market system, and make consumers' right to reliable and reasonably priced electricity their first priority.

"Its time for our elected representatives to say no to these companies," said TURN executive director, Nettie Hoge. "Utility-style deregulation has obviously failed, and lawmakers must act now to prevent the entire state from being thrown into a financial crisis."

The pledge, which was mailed to all candidates today, is sponsored by TURN (The Utility Reform Network) and The Foundation for Taxpayer and Consumer Rights (FTCR). The groups, along with Consumers Union and the Public Media Center, sponsored Proposition 9, the 1998 ballot measure to reform utility deregulation, which was defeated by a $40 million utility financed campaign. Most California politicians also opposed Proposition 9. TURN and FTCR will keep a list of all candidates and their position on the Pledge on their websites -- www.turn.org and www.consumerwatchdog.org .

"A candidate's commitment to protect ratepayers from further price gouging will be important information for voters this November," said Harvey Rosenfield, President of FTCR. "The politicians and utilities got us into this mess by promising lower rates with a plan that has failed miserably. Californians do not want any more lip service about consumer protection and lower rates, this time we want it in writing."
Under the deregulation law passed unanimously in 1996 (AB 1890), the utility companies supported a freeze on retail rates during a four-year "transition period." During this period, the companies were permitted to collect billions of dollars in so-called "transition costs" from customers. When SDG&E finished collecting its transition costs, San Diego customers were forced to pay deregulated electric rates that were double, triple and quadruple what bills had been under regulation.

With high wholesale prices threatening the other two utilities' ability to collect as much as they had hoped, PG&E and SoCal Edison want customers to pay an additional charge. After pocketing almost $14 billion in extra "transition costs," PG&E and SoCal Edison are lobbying politicians to permit them to end the rate freeze sooner than anticipated and to begin charging consumers unregulated power prices, in addition to back-billing customers for this summers' high wholesale prices.

"What PG&E is proposing is a flagrant violation of the law," said Hoge. "The utilities cannot legally carry costs incurred during the rate freeze into the post-freeze period, and additional surcharges are prohibited. They grabbed billions by charging customers above market prices during the "transition period" they wanted. Now they are coming back to the politicians for more, but the public is watching and will not stand for it."

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Click here to view the Ratepayer Protection Pledge on-line.

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