California lawmakers and its Public Utilities Commission are close to approving two plans designed to roll back and freeze electricity rates in the San Diego region. The initiative is more extreme than the one previously announced by Gov. Gray Davis. According to the Wall Street Journal, regulators were under pressure to quickly reverse a politically sensitive price increase affecting over a million customers in San Diego and southern Orange County. The region was the first in the nation to undergo complete deregulation in its power market.
Market participants object to the measures, partly because none addresses the central question of who will pay for the rate rollback, one of which will be to 1988 levels. Deregulation supporters contend that the increase in the region’s electricity prices is largely due to higher than expected demand, as well as failure to approve construction of a sufficient number of new power generation units.
Based on a report from ElectricNet
