S-1903

TO THE HONORABLE GRAY DAVIS, GOVERNOR OF CALIFORNIA, LORETTA LYNCH, PRESIDENT OF THE CALIFORNIA PUBLIC UTILITIES COMMISSION, JOHN BURTON, PRESIDENT PRO TEM OF THE CALIFORNIA STATE SENATE, ROBERT HERTZBERG, SPEAKER OF THE CALIFORNIA STATE ASSEMBLY, MEMBERS OF THE CALIFORNIA STATE SENATE COMMITTEE ON ENERGY, UTILITIES, & COMMUNICATIONS, AND TO MEMBERS OF THE CALIFORNIA STATE ASSEMBLY COMMITTEE ON ENERGY COSTS AND AVAILABILITY:

We, your Memorialists, the Senate and House of Representatives of the State of Washington, in legislative session assembled, respectfully represent and petition as follows:

WHEREAS, The states of Washington and California have a long history of cooperative and mutually beneficial relations with respect to power supplies and operations; and

WHEREAS, The state of Washington desires to continue this cooperative and mutually beneficial relationship; and

WHEREAS, The California energy crisis, brought on in significant part by the restructuring of the California retail electricity market, has caused wholesale power prices throughout the western United States to increase dramatically; and

WHEREAS, Unprecedented increases in wholesale power costs have put tremendous financial strain on Washington utilities that rely, to varying degrees, on the wholesale market to serve Washington consumers; and

WHEREAS, Several Washington electric and gas utilities have responded to this situation by adopting significant rate increases, ranging on average from thirty to sixty percent for residential customers and even higher increases for commercial and industrial customers, in an effort to maintain their financial stability; and

WHEREAS, The federal Department of Energy has issued emergency orders requiring certain Washington utilities to sell surplus power to California without providing any assurance of repayment, through either federal or state guarantees on the purchases made by financially unstable California utilities; and

WHEREAS, The California Power Exchange is seeking to recover up to eight hundred seventy-five million dollars in missed payments by Pacific Gas & Electric Company and Southern California Edison from other market participants, including Washington utilities and energy marketers; and

WHEREAS, The California Public Utilities Commission has approved temporary rate increases of one cent per kilowatt hour for customers of Pacific Gas & Electric Company and Southern California Edison Company; and

WHEREAS, These temporary increases equate to approximately nine percent for California residential customers, seven percent for small business customers, twelve percent for medium business customers, and fifteen percent for large commercial and industrial customers; and

WHEREAS, It is just and reasonable to require additional rate increases for the customers of Pacific Gas & Electric Company and Southern California Edison Company in order to increase the likelihood of their ability to repay Washington utilities and energy marketers; and

WHEREAS, It is fair and equitable for the state of California to provide a payment guarantee on behalf of Pacific Gas & Electric Company and Southern California Edison Company for any purchases made by them from Washington utilities and energy marketers as a result of the Department of Energy emergency orders; and

WHEREAS, It is unfair and inequitable to require wholesale market participants from outside the state of California to pay the California Power Exchange for Pacific Gas & Electric Company's and Southern California Edison's missed payments, essentially causing Washington utilities and energy marketers to pay the Exchange for power that Washington utilities and energy marketers, and others, were required to sell;

NOW, THEREFORE, Your Memorialists respectfully pray that the state of California require rate increases for California utility customers to guarantee payment for the power it receives from Washington state.

BE IT RESOLVED, That copies of this Memorial be immediately transmitted to the Honorable Gray Davis, Governor of California, Loretta Lynch, President of the California Public Utilities Commission, John Burton, President Pro Tem of the California State Senate, Robert Hertzberg, Speaker of the California State Assembly, Members of the California State Senate Committee on Energy, Utilities, & Communications, and Members of the California State Assembly Committee on Energy Costs and Availability.