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State OKs Power Price Plan

by Marc Lifsher, Times Staff Writer
Los Angeles Times, January 28, 2005

Higher electricity rates would apply to some bigger businesses at times of heavy use.

Hoping to head off power shortages this summer, state utility regulators Thursday approved a framework to charge some large business and industrial users higher rates.

The California Public Utilities Commission directed the state's three investor-owned utilities, including Edison International's Southern California Edison Co., to install special meters and draw up "critical peak pricing" tariffs that would make electricity more expensive at times of heavy use. The higher rates could spur some commercial users to shut operations on the 15 or so days when the state might be faced with blackouts.

The pricing plan, along with beefed-up energy efficiency and conservation programs also approved by the commission Thursday, could be crucial in avoiding a crisis in Southern California this year. The recently released state Energy Action Plan predicted that the Southland could run short of power in August and September if temperatures are exceptionally high.

The new pricing plan is aimed at about 25,000 large users consuming 200 kilowatts of power at peak periods. Such large users range from office buildings and big retailers that use about 200 kilowatts to steel and cement plants that need more than 500 kilowatts when operating at full tilt, said Marcel Hawiger, an attorney with the Utility Reform Network, a San Francisco-based ratepayers advocate.

Large manufacturing plants and big-box retailers opposed the program because it's difficult for them to quickly reduce operations. Some fear that the rates, which are voluntary, could become mandatory.

"The tariffs are going to be punitive and ultimately could hurt the state's economy," said Joseph Lyons, an energy lobbyist with the California Manufacturers & Technology Assn.

However, consumer groups applauded the commission's emphasis on curbing customer demand while encouraging energy conservation and efficiency.

The surcharges, which would be triggered when power reserves are expected to be tight, should be in place by June. The higher prices, combined with other programs to reduce power demand, should be able to cut total summer peak usage by 600 megawatts, the equivalent of one large gas-fired power plant, said PUC President Michael Peevey.

Marc Lifsher, Times Staff Writer
State OKs Power Price Plan
Los Angeles Times, January 28, 2005

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