Governor Kills $150-Million Measure to Forestall Higher Electricity Bills

SACRAMENTO â€”  Gov. Gray Davis on Friday vetoed $150 million in taxpayers’ aid for San Diego Gas & Electric Co., despite warnings by Republicans that electricity customers might end up paying higher bills after a rate cap expires.

The $150 million would have been tapped if, by 2003, the San Diego utility’s losses were so great that to cover them would mean an additional 10% increase in the average customer’s annual bill.

Davis, concerned that the state’s other major utilities might need similar help, said in a statement that the bill “is premature, sets a troubling precedent and encourages merchant generators and energy traders to continue to act unreasonably.�

“That’s a pretty stupid thing to do,� said Ann Shanahan-Walsh, a San Diego resident whose bill doubled. The utility rate increase “has hurt San Diego’s economy very badly. The governor is insensitive to San Diegans’ needs.�

But Hoyt Minkoff of the Consumer Federation of California lauded the veto. “Giving money to the power generators is like putting more fuel on the fire,� Minkoff said. “We think this will help the . . . very same people who are causing the problem.�

Monthly electricity bills, which doubled and tripled this summer for the 1.2 million customers of San Diego Gas & Electric, have begun dropping, thanks to a rate reduction imposed by the Public Utilities Commission.

By next week, the PUC order will be replaced by a new law, signed by Davis on Sept. 6. That measure caps the price of electricity in San Diego. The bill that Davis vetoed, AB 1156 by Assemblywoman Denise Ducheny (D-San Diego) and Assemblyman Jim Battin (R-La Quinta), would have allowed as much as $150 million in taxpayers’ money to be used to offset the losses SDG&E; might suffer because it cannot pass on its full costs for electricity to consumers.