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PRESS RELEASE
| For Immediate Release January 3, 2001 |
Contact: Gino DiCaro 916-498-3347 |
After CPUC Orders Temporary Rate Increase, CMTA Says Manufacturers Might Find More Hospitable Places to Do Business
Decision sends a signal that manufacturers may bear the largest share of the burden
Sacramento, CA - Today, CMTA President, Jack M. Stewart, announced concern for the state's economy after the CPUC's proposed decision on requests by Pacific Gas & Electric and Southern California Edison for immediate rate increases.
"The CPUC decision to temporarily raise electricity rates on an equal cents per kilowatt hour basis has a disproportionate impact on California's manufacturers and, if applied to future rate increases, could be the genesis for industry departures from the state," said Stewart.
The order applied a 90-day, one cent per kilowatt hour increase, which, according to the CPUC, will result in approximate increases of 9% for residential customers, 7% for small business customers, 12% for medium commercial customers, and 15% for large commercial and industrial users. Moreover, the CPUC hinted this increase could double in the future for large customers in order to promote conservation.
"Soaring natural gas prices have already caused some manufacturers to temporarily close their California facilities. Targeting large industrial users for the largest electric price increases could lead to additional closures. The CPUC's action is particularly puzzling given that traditionally high energy prices in California have already inspired large users to become the state's most efficient energy users."
Fontana based California Steel Industries President and CEO, Lourenco Goncalves, said, "Our company sees increasing supply as the key to bringing down electric prices and increasing reliability. In the short term we may need to absorb rate increases, but we feel that the CPUC proposed decision is overly burdensome on large interruptible customers such as California Steel. By interrupting our production when called on, we have helped keep the power grid afloat when the system was low on supply and high on demand. Now we are being penalized with the largest percentage increase of any rate class."
"The CPUC proposed only a temporary increase. However, if the CPUC applies the same logic for permanent, larger rate increases, the impact on large industrial users could provide an impetus for a statewide economic downturn," concluded Stewart.
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