Electricity Bills Pack Nasty Jolt

For Carol Vanderwende and her husband, who live on a budget as they try to pay for the care of their 24-year-old mentally disabled son, electric bills already run high.

The Vanderwendes installed air conditioning two years ago in their Laguna Hills home to make their son, who is deaf and has a heart disorder, more comfortable. Last month, the electric bill was $220.

This month, the bill jumped to a whopping $466.

“I’m literally cooking on the outdoor grill tonight,” Vanderwende said. “I’m terrified. It’s not a good way to live, scared . . . about light switches. My whole house is electric. I have to watch all this. The clocks. The air conditioner.”

From San Ysidro in San Diego County to portions of south Orange County, the 1.2 million customers of SDG&E; are feeling sticker shock as their bills are driven up by the pitiless forces of supply and demand unleashed by the deregulation of the energy business.

From May to July, the seasonally adjusted average residential bill jumped from $49.50 to $100.30, with further increases expected through October.

Businesses and public buildings have seen similar increases in their monthly bills: The average small-business bill jumped to $344, up from $166 during a similar period last year; the average hospital to $173,072, up from $79,072, and the average school to $8,891, up from $4,441, all with more increases on the way.

On Thursday, the Public Utilities Commission, meeting in San Francisco, will hear a plea from the Utility Consumers Action Network, a San Diego-based watchdog group, to adopt what it calls a “stop-the-bleeding” measure to impose a rate freeze in San Diego.

Michael Shames, the group’s executive director, will argue that what is happening in SDG&E;’s service area will someday affect Los Angeles, Sacramento and San Francisco when consumers there fully enter the unprotected world of deregulation.

San Diego County and south Orange County, where about 100,000 customers are affected, are the first regions to encounter the full force of deregulation because SDG&E; finished off paying its major debts and divested itself of its generating plants faster than other utilities.

“We are the ghost of summers future,” Shames said.

The PUC will also consider a competing proposal from SDG&E; to rebate $100 million in recent debt savings to consumers, which could mean an average $17 reduction in their bills for two months.

SDG&E; executives insist that they have been trying to warn consumers that the world of deregulation is not risk-free, that the opportunity to hunt for the cheapest energy also brings the risk of being stuck with higher prices when demand increases and supply cannot keep pace.

“This is a complicated industry,” said SDG&E; President Edwin A. Guiles. “Most people’s lives are complicated already. Prices are going to go up and down, but the community is not used to fluctuations in the market.”

The short-term answer is that bills will drop when demand, particularly in Northern California, drops this fall. The long-term answer to fluctuating bills is more power plants and transmission lines, SDG&E; says.

This is not the first time consumers have been vexed at their home-grown utility company. In the late 1970s and early 1980s the region had some of the highest rates in the country.

Protesters distributed bumper stickers reading “Welcome to San Diego: Owned and Operated by SDG&E.;” SDG&E; removed its logo from company vehicles to prevent retaliation from angry consumers.

By the late 1980s, SDG&E;’s bills had decreased as the company found a more stable source of energy to retail to its customers.

Despite several years of amiable relations between the utility and its customers, hard feelings flared up again with the summer bills. Business customers complained that the increase could mean the difference between making a profit and going into the red.

SDG&E; has been receiving 12,000 calls a day from customers. In the Laundromats, the talk-radio shows and the lunch counters, the talk is about SDG&E; bills, and the talk is angry.

“It’s been wild,” said Shames of the consumer group.

State Sen. Steve Peace (D-El Cajon), an architect of the deregulation bill that sailed through the Legislature in 1996, suggested that consumers engage in “economic disobedience” by paying only half of their bill. A poll done for a television station found that more than half of the public plans to follow his suggestion.

San Diego Mayor Susan Golding has scheduled a public meeting Thursday night to let the public sound off. Rep. Brian Bilbray (R-San Diego), who says Congress should study San Diego before it pushes energy deregulation nationwide, has vowed to hold a congressional hearing.

SDG&E; has done its best to cool public discontent. A “summit” was called Wednesday with energy producers and distributors to discuss energy production levels, costs and profits; reporters learned of the meeting and requested entry.

Even before Peace’s pronouncement, SDG&E; had announced it would work with customers who need extra time to pay their bills, allowing them to defer up to 50% of their July bills. Other plans are available for the low-income elderly and those dependent on air-conditioning, such as Carol Vanderwende.

“If this doesn’t feel like a monopoly, I don’t know what does,” she said. “The government is coming down on Microsoft. Look at this! I’m flipping out. This affects me on a daily basis so much more than some computer software. I have not turned my air conditioner on once today. I don’t know when I will again.”