Re-deregulation

The LA Times has a complicated and interesting article on the energy utilities and deregulation.

The Supreme Court is set to hear a case this week on whether the contracts signed during the crisis 7 years ago can hold up.

If you're wondering why these things matter, check your utility bill. Customers of Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric are still paying for the energy mess circa 2000-01.

A sample bill from Edison lists the ways.

There's the "DWR bond charge" to repay bonds the state Department of Water Resources issued so it could buy power during the crisis. And there's the cost of the electricity the agency bought -- and is still buying -- under long-term contracts. Edison's bill lists that as "DWR generation."

Then there's the "trust transfer amount," earmarked for repaying 10-year bonds that funded rate reductions for the first four years of the deregulation plan. The utilities' customers are paying an estimated $3.4 billion more than they will have gotten from the rate rollback.

Finally, there's the competition transition charge, which Edison calls "ongoing CTC." That reimburses the utilities for expensive energy contracts and power plant investments that weren't fully recovered when the companies sold them as part of deregulation.

The CTC is getting smaller but will be on Edison bills until 2028. There's little chance of relief on the bond charges. But the cost of DWR's power contracts is another matter. The state believes it is due between $1.45 billion and $3.08 billion on four contracts that were never renegotiated -- money that could go back to electric customers in some form, possibly by reducing or eliminating future charges.

That's what the Supreme Court fight is about.

And on top of that, the Public Utilities Commission is considering re-deregulating the utilities. Isn't that what got us in trouble in the first place?