By Kent Gray
Triplicate staff writer
Ratepayers may be looking at a 14 percent rate increase in the near future if a recommendation to the California Public Utilities Commission is accepted.
The increase was recommended by the administrative law judge of the PUC after Del Norte County's power utility, PacifiCorp, requested a one-cent increase per kilowatt hour to its customers.
Officials on the Nor-Cal Electric Authority said the rate increase, which is recommended to go from 7.2 cents to 8.2 cents per kilowatt hour, may make it easier for the PUC to approve the sale of PacifiCorp's assets to Nor-Cal.
"The whole deal still gets scrutinized by the PUC, by the bond companies, the insurers they will all want to see if it's a good deal," said Nor-Cal Commissioner Glenn Gary during a Nor-Cal teleconference yesterday between Yreka and Crescent City.
Gary has indicated in the past that if Nor-Cal, a joint powers authority seeking to provide electricity in northern California, cannot offer better rates to its customers, the PUC most likely would not approve the sale.
It was also announced at the teleconference that PacifiCorp stated it will not renegotiate its sale price to Nor-Cal, according to Nor-Cal attorney Bob Black.
Black and Nor-Cal Commissioner Jack Reese said PacifiCorp has reduced the asking price by more than $15 million since last year, to a total of $152,231,349. Black also asserted it is important for people to realize this figure is always in a state of flux because of new equipment purchases and upgrades, but the base price is fixed.
"They are not willing to reduce the purchase price any further," Black said yesterday. "Beyond this they are willing to hold onto the system and take the rate increase."
Currently, PacifiCorp is asking for 14 percent above the estimated value of the power infrastructure it has on the auction block in northern California.
"They (PacifiCorp) essentially said this is as good a deal as we are going to get through them," Black said. "They are not going to sell the system at the blue-book price when they can hang onto the system and get a 10.58 percent return."
Black also said PacifiCorp was not willing to consider many of the contract suggestions offered by Siskiyou County counsel, Frank DeMarco, at the previous commission meeting. One suggestion was that PacifiCorp give a warranty on the assets purchased.
"PacifiCorp said they have never warranteed anything except as is/where is' for anything," said Black. "They said they consider this to be a central feature of the transaction, in their judgment, and are not willing to put this back on the table at this date."
Although PacifiCorp appeared to stand firm on any renegotiation, they were willing to consider some minor contract changes to better clarify the responsibilities of each party.
Bill Taylor, an attorney from Sacramento with PUC experience who was hired by DeMarco to keep tabs on the transaction, suggested several contract alterations yesterday at the conference.
At one point, as Taylor focused on extremely minor points in the contract, Reese, who was also on the telephone conference, said, "Why don't you shut up." Officials in Crescent City weren't sure if Reese could be heard on the intercom in Yreka, where Taylor was.
But when Reese later asked if his Yreka counterparts would like to know his opinion, they replied they had already heard it.