Alternative SDG&E debt plan to get hearings 
Approval of the governor's plan for paying the $747 million debt SDG&E says it is owed by its customers appeared less certain yesterday, as the president of the state utilities commission said she planned to hold public hearings for an alternative proposal. 
Loretta Lynch, president of the California Public Utilities Commission, said in a local radio interview that regulators will hold hearings in San Diego regarding a plan from consumer groups that purports to save customers about $185 million more than the governor's proposal. 
The groups said the earlier plan negotiated between the governor and the utility would be costly for consumers and a windfall for San Diego Gas & Electric. 
At stake is how much SDG&E contributes and how much customers pay toward the debt, which accumulated in a so-called balancing account when SDG&E paid more for electricity than it was able to collect from customers during the power crisis. 
Despite the plan for hearings, Lynch told KPBS-FM radio that the commission would make a final decision about how to resolve the controversial $747 million debt by November. 
The governor and SDG&E announced their plan in June, saying it required the utility to contribute $319 million toward the debt and eliminated the balancing account without lengthy litigation or raising rates. 
Consumer groups, led by the San Diego-based Utility Consumers' Action Network, say the governor's plan does not go far enough, particularly because SDG&E earned an estimated $400 million in profits from the sale of electricity during the power crisis. 
Under the governor's plan, those profits are awarded to the company's shareholders, though SDG&E would use $219 million from the profits as part of its $319 million contribution toward the debt. 
Under the consumer groups' plan, SDG&E would be allowed to keep some of the profits, but it would contribute $72 million more than it would under the governor's plan. The alternative plan also would require the utility to make other monetary concessions. 
In a formal decision earlier this year, the California utilities commission said SDG&E's profits do belong to customers. SDG&E has sued to overturn the decision in court, but it has put the litigation on hold pending the utilities commission's resolution of the plan to pay the debt. 
Michael Shames, executive director of UCAN, said yesterday that he was encouraged by Lynch's call for hearings on the consumer plan. 
"There is $400 million at stake here," Shames said. 
SDG&E said yesterday that it had not received formal notification about the hearings, nor had it yet seen the alternative plan for paying the debt. 
A spokesman for the utility, however, repeated earlier comments that the company saw the alternative plan as an attempt to derail the PUC's process of considering the governor's plan. 
Lynch also said yesterday that the utilities commission would continue to challenge the more than $40 billion in long-term electricity contracts signed by the state during the crisis. 
Lynch said the agreements bind the state to overpriced power and are in violation of federal law requiring electricity rates to be "just and reasonable." 
The utilities commission president said the contracts may be even more expensive than earlier thought because at least some of the power they bind California to purchase is not needed. The extra costs would damage businesses and family budgets, she said. 
"If you have to pay three to four times more for energy, you don't have the money to grow your business or meet other needs of your family," Lynch said. 
She also defended action by the commission last week that effectively delayed the sale of $12.5 billion in state bonds needed to pay power costs. Lynch said the commission supported a legislative proposal for floating the bonds, which would separate them Sfrom the long-term power contracts.