Power Customers Are Getting Shocked as They Open Bills

After 35 years of installing carpet and tile, Tony Polito isn’t floored by much of anything. That is, until he opened his Southern California Edison bill last week.

The electricity tab at his 1,600-square-foot carpet store in Agoura Hills was $262, nearly 70% higher than what he paid a year ago. Polito was so alarmed that he phoned the sheriff’s station, convinced that someone was filching power from his line. It turns out one of the main culprits was a stiff rate increase.

“They’re gouging people,� Polito said. “It’s like putting a gun to your head. You don’t pay, and you don’t get electricity. “

The largest electricity rate hike in California history is finally zapping customers in the wallet. And for some Edison and Pacific Gas & Electric ratepayers, it’s a real jolt. Although news of the dreaded increases has garnered headlines for weeks, the complex new pricing had kept many in the dark as to what the exact toll would be.

Reality has arrived along with the latest bills, which reflect rate increases that began showing up in statements after June 1. Business and residential customers who received bills early in the month got socked with only a few days of the hikes. But statements that landed in mailboxes this week reflected almost a full month of the higher charges.

Though some ratepayers are shielded from increases, others are making new efforts to conserve. Like sweepstakes losers who just got a visit from Ed McMahon’s evil twin, some unlucky utility customers are opening those envelopes to find out they just got poorer.

“I’m, like, in shock,� said Paula Durnian, a Newport Beach homeowner whose monthly bill nearly doubled to $600. “I’m so afraid to show the bill to my husband. I had no idea the extent� of the rate hike.

In Santa Clarita, Adam Freeman said he got his bill a few days ago--and it was double that of his bill in May. He said he has stopped using his air-conditioner.

“It really makes me a little grumpy,� Freeman said. “We’re doing what we can do to keep our energy costs down--not because we’re trying to do our part, but because we can’t afford it.�

Ken Larrabee, also of Santa Clarita, agreed, saying the bill he got this week will force him and his wife to cut out going to the movies.

San Marino resident Michael Fisher said his April and May bills averaged $84. But his June bill jumped to $124.

“I can’t say I like it, but it could be worse,� Fisher said, adding that his family has cut back on air-conditioning and makes sure “the kids turn out the lights when they leave the room.�

But though Fisher and other residents said they can manage their bigger bills with small sacrifices, some business owners say they are being forced to rearrange shifts, replace equipment and shut down some operations.

At Edward’s Steak House in El Monte, owner Ken Rausch said he prepared for the higher rates by trimming business hours and pulling the plug on two refrigerators. The 150-seat family restaurant even eliminated roasted chicken from its menu to ditch a kilowatt-sucking convection oven.

All told, the restaurant reduced its electricity use by 38% over the last month compared with the same billing period last year. Even so, the Edison bill that arrived Tuesday came to $3,922--up 20.1% from the comparable period a year ago. Rausch’s only consolation is that his bill would have reached $5,300 if he hadn’t found ways to cut consumption.

The increases translate into a $5.7-billion infusion for California’s two big investor-owned utilities and the state, which needs the money to buy electricity in a market gone haywire. Landmark deregulation legislation compelled utilities to buy power on the open market. But when prices went skyward, they couldn’t recoup those costs from customers because retail rates were frozen by state law.

Politicians are busy launching investigations and complaining to federal regulators that California got swindled by out-of-state power barons. In the meantime, rank-and-file Californians are being forced to pick up much of the tab in the form of higher rates.

Approved by the state Public Utilities Commission in May, the new rate structure applies to about 9 million Edison and PG&E; customers. The PUC has yet to approve a proposed rate hike for San Diego Gas & Electric customers. Ratepayers for municipal utilities such as the Los Angeles Department of Water and Power are not affected.

Under the use-more, pay-more rate structure, residential customers will see no increase if they keep their electricity use within 130% of their baseline allotment--an allowance that covers about 50% to 60% of average household consumption.

In Inglewood, for example, Gertrud Woods, 74, said the bill she received Monday was up a few dollars--to $27.99. Woods said she conserves whenever she can and faithfully reads information on conservation ideas that Edison sends with her monthly bill. “I have one of those timers so that the lights come on at night when I’m not home,� Woods said. “I took it off the timer.�

For homeowners who use more, rates rise across three tiers of increasing electricity consumption. In Edison territory, for example, the biggest residential users can expect an average increase of about 37%, or $71, a month, according to the PUC.

But some consumers say that would be a bargain compared with what’s showing up on their statements. Newport Beach resident Michael Lawler said his latest Edison bill shot up by 90% compared with the previous month, even though his usage went down.

“I thought the bill was an error,� said Lawler, whose bill went from $50 to $95. “What can we do to conserve more? We don’t have an air-conditioner, a pool or a second refrigerator.�

In contrast, Durnian didn’t have to look far to figure out where to start cutting. She has already unplugged one of the four refrigerators in her 5,000-square-foot home and says the one cooling soft drinks in the garage “is probably history.� She vows to turn off the pool heater and do less laundry as well.

Sky-high electric bills have become the talk of her Dover Shores community near Upper Newport Bay. The suspense is killing neighbor Anne Peterson, who has yet to get her statement.

“I have a lot of anxiety about it,� she said. “I just want to see what it is.�

Business owners have even more reason to be nervous.

The PUC says small and medium-size firms face average increases of 36% while industrial users will see hikes of 49% on average. But quirks in the rate structure mean that even some modest businesses could see their bills double, said Lee Cordner, an energy consultant in San Rafael.

Denny’s franchisee Dennis Malone is busy pushing desserts, large drinks, sides of onion rings--anything to help pad a bottom line that’s being punished by higher energy costs along with recent hikes in the minimum wage and workers’ compensation.

His controller figures that the electricity tab for Malone’s four Riverside County outlets in Edison territory may double this summer. The 24-hour restaurants are already turning off kitchen equipment and closing some dining areas in the wee hours to save energy. “This is a low-margin business in the best of times,� said Malone, head of Temecula-based Highgrove Restaurants Inc., which operates nine Denny’s in Southern California. “Now we’ve really got to dig around in the couch for the nickels and dimes.�

Richard Posiviata, plant manager of Corona-based Mission Rubber Inc., wishes he could simply pass along higher energy costs to his customers. But like many Southern California manufacturers, his company serves a global market, where competition is fierce.

“If I raise my prices, I lose my customers,� said Posiviata, whose company makes pipe connectors for the construction industry. “Once I lose them, there’s no getting them back.�

The company has switched as many workers as possible to the graveyard shift to operate when power is cheapest. It has reduced lighting, improved equipment and begun closing one day a week as a conservation tool. Still the latest Edison bill was up 26% compared with the same period a year ago, an increase that reflects only a partial month under the new rate hike. Posiviata figures the company’s bills will jump as much as 50% this summer to about $17,000 a month when the full force of the increase kicks in.

Business advocates say that’s worrisome for the California economy. And some grumble that industrial users are bearing a disproportionate share of the burden. Agricultural, commercial and industrial users at Edison and PG&E; account for two-thirds of those utilities’ consumption, but will bear 81% of the cost of the rate increases.

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Times staff writers Tina Borgatta, Ofelia Casillas, Tina Dirmann, Christine Hanley, Oscar Johnson, Soraya Sarhaddi Nelson, Erin Park, Karen Robinson-Jacobs and Janet Wilson contributed to this story.