Sticker Shock Hits Customers of San Diego Utility

SAN DIEGO —  The utility war has begun, and Micae Martinet is at battle stations.

Faced with rising bills from the company San Diegans love to hate, San Diego Gas & Electric, the 33-year-old sign-language interpreter has ordered the company to disconnect her hookup.

She’d rather use batteries and propane in her La Jolla home than feel victimized by a deregulated energy market.

“It’s not that I can’t afford the bills; it’s the principle,” said Martinet. “I just don’t think this is right. A lot of us were for deregulation, but we never thought this would happen.”

From San Ysidro to parts 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 $334, up from $166 during a similar period last year; the average hospital bill hit $173,048, up from $79,072, and the average school bill rose to $8,691, up from $4,441, all with more increases on the way.

On Thursday, the state 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 the utility’s service area will someday affect Los Angeles, Sacramento and San Francisco when consumers there fully enter the unprotected world of deregulation.

San Diego is the first region to encounter the full force of deregulation because SDG&E; finished 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.

Marjorie Vanderveer, 69, a retiree living in Laguna Hills, said she was stunned when she opened her bill.

“I was blindsided,” she said. “I feel like this is price-gouging.”

San Diego Gas & Electric 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 company 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 angry at their home-grown utility company. As a teenager, Martinet participated in a protest against high rates that included homeowners engaging in a mass turnoff of their breaker boxes.

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.;” Company vehicles removed their corporate logos to prevent retaliation from angry consumers.

By the latter part of the 1980s, bills had decreased because 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 from customers a day. At 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 plan to follow his suggestion.

San Diego Mayor Susan Golding has scheduled a public meeting for Thursday night to let people sound off. Rep. Brian Bilbray (R-San Diego) has vowed to hold a congressional hearing.

Bilbray says Congress should study San Diego before it pushes energy deregulation nationwide.

“Residents of San Diego stand alone in the United States as the first in the nation to pay true market prices for power,” he said.

SDG&E;, watching a mini-era of good feelings slipping away, 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 found out about it and demanded entry.

Even before Peace’s pronouncement, SDG&E; had announced that 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 the air-conditioning dependent.

For her protest, Martinet is ready with lanterns, a camping stove, flashlights and a wind-up alarm clock. She has asked her cable television company to discontinue service and will have to stop using her computer.

“I’ll go down to Kinko’s to check my e-mails,” she said.

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Times staff writer Matthew Ebnet contributed to this story.

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Bigger Bills

More than 1.2 million customers of San Diego Gas & Electric Co. are watching their bills skyrocket because of deregulation. Here are some monthly bills for average customers.

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July July 1999 2000 Residential $49.50* $100.30 Small business $166 $334 School $4,441 $8,691 Supermarket $19,204 $41,868 Hospital $79,072 $173,048

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* Figure is for May 2000

Source: San Diego Gas & Electric Co.