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Nov 30, 2000

CONTACT: Doug Heller - 310-392-0522 x309

On the Electric Chair:

Davis to Announce Who Gets Stuck With $Billion Utility Bill
When Governor Davis announces his plan to address California's utility crisis tomorrow, he will make the most important decision of his career in public office:

Will California's three utility companies -- Edison, PG&E and SDG&E -- pay for the higher costs of electricity caused by deregulation, as the law (which the utilities themselves wrote) requires?

Or will Governor Davis try to "split the difference," forcing residential and small business ratepayers to pay billions of dollars in extra surcharges, perhaps through a complicated "credit card" scheme in which the extra charges are spread out over a period of years, to be repaid with interest?

At stake is a tab for higher power costs, a product of the disastrously conceived 1996 legislation, that now stands at $6 billion, but could rise to $20 billion within two years, if the deregulation experiment is not ended.

The state's utility companies -- some of the Governor's most lavish campaign contributors -- have mounted a massive lobbying campaign to convince him to stick at least part of the bill on residential ratepayers, who have already paid an unjustified $17 billion in subsidies to "help the utility companies become competitive" under the failed 1996 deregulation law.

"California consumers will find out tomorrow whether we can look to the Governor to defy the powerful utility interests and protect the public interest, or whether he will be forever known as 'Giveaway Gray' for forcing families to give away as much as $1,000 each so that the executives of three utility companies can celebrate Christmas early," said Harvey Rosenfield, President of the Foundation for Taxpayer and Consumer Rights (FTCR), a non-profit, non-partisan organization.

In an announcement on Tuesday, FTCR said it will oppose any effort to back-bill residential ratepayers, and sponsor a ballot measure, if necessary, to prevent that from happening.

FTCR will provide an analysis of the Governor's proposal as soon as it is made available tomorrow.

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