PG&E's $2 Billion Power Grab
We've been gulled by our greedy utility 
Ken Garcia
Thursday,?September 14, 2000 
,2000 San Francisco Chronicle 
URL: 
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2000/09/14/T
Z110687.DTL 
SAN FRANCISC -- The executives at Pacific Gas and Electric Co. sure try hard 
to live up to their name, because I can't think of any company that has been 
more adept at giving consumers a jolt. 
The doyens of greed that rule over the California utility giant recently 
revealed that they hope to pass on to customers more than $2 billion in 
expenses -- ``unforeseen costs'' in the euphemistic view of the power 
company, but unjustifiable rate increases to those of us residing in real 
world. 
The consumer-soaking surge is apparently based on PG&E's inability to predict 
a rise in wholesale electricity prices, which is costing the company about 
$700 million a month. Yet, as usual, the utility giant wants us to forget all 
past promises and obligations, a favorite technique of energy merchants who 
see rate increases as something that can be turned on with the flick of a 
switch. 
Lest anyone forget, a utility rate increase is exactly what California's 
customers were told they would not get as a result of a deregulated power 
market, which was supposed to lower -- not raise -- energy bills because of 
an expected increase in competition. 
It shouldn't come as a surprise that our friends at PG&E were among the prime 
architects of the state's deregulation policy, which they now want to bend in 
their financial favor. This is known as having your cake and (billing) Edith 
too, because certainly she and her fellow customers wouldn't want the utility 
company's stock to fall. 
Now, I realize PG&E has been prone to blackouts over the years, but just 
because it doesn't like the deal it forged and signed a few years back, 
doesn't mean that its customers should be forced to pay for its lapses in 
judgment. If you want to dance, you have to pay the fiddler -- even if it 
turns out to be Nero and the electrical lines are burning. 
``It should be PG&E that eats the costs because they made the initial promise 
that rates would go down,'' Dan Jacobson of the California Public Interest 
Research Group told The Chronicle the other day. And he's right, even if the 
state Public Utilities Commission once again buckles under and decides to 
give PG&E a break it doesn't deserve. 
While PG&E CEO Robert Glynn was trying to assuage analysts on Wall Street 
this week that the soaring electricity rates would indeed be passed on to 
customers, The Chronicle revealed that the state Board of Equalization has 
quietly been granting utilities and giant corporations billions of dollars in 
tax breaks. Despite a booming economy, the state agency has inexplicably 
reduced the property tax assessments of PG&E, Pacific Bell and others to the 
tune of $5.3 billion in the past year alone. 
That's a lot of lost kilowatts and phone calls that could be used by 
California residents. But in the world of utilities, it's always best to 
leave the consumer in the dark. 
In effect, the equalization board is improperly granting huge tax breaks to 
companies worth billions, at the same time its assessments on homes and small 
commercial properties are skyrocketing. And if you think something smells a 
little rotten here -- well, it may just be the smoke rising from a lot of 
consumers' ears. 
You don't have to look far to see why officials at PG&E are feeling a little 
desperate in their attempts to pass along their rising costs to consumers as 
quickly as possible. Because the faster they can do it, the faster customers 
might forget that PG&E had asked the PUC for an $800 million rate increase 
earlier this year to help keep the lights in the corporate tower burning. 
The utility was granted a $450 million increase, even though an 
administrative law judge found that the company needed only half that amount 
to meet its expenses. But what's a few hundred million between friends? 
Yet the funny part is, PG&E officials said that rate increase would actually 
lower our gas and electric bills, an event that happens on our shores about 
as often as a tsunami. This energy-defying trick, which I first questioned in 
February, would take place, we were told, because of cost savings within the 
utility giant's other divisions. Yet if they were making more money, why did 
PG&E need the PUC to give it close to a half billion in bill increases? 
Well, the answer is that it would appear there are quite a few dim bulbs 
making decisions about California's energy market, and Gov. Gray Davis hasn't 
seen fit to replace them. 
So don't be shocked if PG&E again gets its way, and once again customers are 
``serviced'' by state regulators to the tune of hundreds of millions in rate 
increases, no matter how unfair or undeserved. PG&E said it would foot the 
bill when it pushed for deregulation, and now that it's taking a huge hit for 
past decisions, it wants to pass the buck. 
It takes time to build up a reputation for Power, Greed & Excess. Energy 
companies, after all, are anything but utilitarian. 
You can reach Ken Garcia at (415) 777-7152, fax him at (415) 896-1107, or 
send him an e-mail note at kgarcia@sfchronicle.com. 
,2000 San Francisco Chronicle ? Page?A17