BURBANK, GLENDALE UTILITIES SQUEEZED; DEREGULATION PREPARATION MAY BOOST RATES.Byline: Eric Wahlgren Daily News Staff Writer So utility deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. is the path to lower electricity rates, right? Not necessarily for Glendale and Burbank residents, at least not in the short run. Feeling the pressure to join the open market, the city-owned utilities are racing to pay off their long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to be able to compete with other electric companies once they come prowling prowl v. prowled, prowl·ing, prowls v.tr. To roam through stealthily, as in search of prey or plunder: prowled the alleys of the city after dark. v.intr. for new customers. To lessen this debt, Glendale has approved a deregulation plan that calls for slightly higher electric bills for the next seven years. The rate picture isn't so clear in Burbank, where the City Council has yet to vote on whether to push its utility into the marketplace. But once the power providers clear up these debts, city officials say they will offer even lower than existing rates. The apparent paradox - the need to raise rates to lower them - has not been an easy sell for city officials who must approve any increases. ``The good news is that you ultimately bring competition that can lead to lower prices,'' said Glendale Mayor Larry Zarian Larry Zarian (b.1937) was the first Armenian-American to serve on the city council in the City of Glendale, California. He also served as Glendale Mayor. He currently serves on the California Transportation Commission. . ``The bad news is that in the interim, your rates are going to go up.'' The hard choices for utilities in Burbank and Glendale come as the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. municipal utility, the Department of Water and Power, faces massive cutbacks to prepare for deregulation. Glendale has lost about 10 percent of its electrical staff and Burbank about 20 percent, mainly through attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: . Paying for past In many regards, the utilities of Burbank, Glendale and Los Angeles are all in a financial pickle pickle, general term for fruits or vegetables preserved in vinegar or brine, usually with spices or sugar or both. Vegetables commonly pickled include the beet, cabbage, cauliflower, cucumber, olive, onion, pepper, and tomato. for the same reason. All three invested heavily in out-of-state power-generating facilities that are no longer the most efficient sources of electricity. As a result, the city utilities have been spending a premium on power, even though they could buy it cheaper elsewhere. So over the years, Glendale has racked up $167 million in debt and Burbank an estimated $235 million. City officials say they won't be able to compete with new companies hawking electrical power in the open market if they don't pare down Verb 1. pare down - decrease gradually or bit by bit pare minify, decrease, lessen - make smaller; "He decreased his staff" this burden. Although a state mandate requires that private utilities deregulate deregulate To reduce or eliminate control. One of the major forces in the financial markets in the 1970s and 1980s was the federal government's decision to deregulate interest rates. by Jan. 1, municipal-owned utilities, such as Burbank's, Glendale's and the DWP DWP Department of Work and Pensions (UK) DWP Drinking Water Program DWP Dynamic Weapon Pricing (gamin, Counter-Strike: Source) DWP Department of Water & Power DWP Drinking Water Protection , have until Jan. 1, 2000, to decide whether to open up their markets. There is no requirement that they do so. No alternatives In fact, the Burbank and Glendale utilities could remain the sole suppliers of electrical power in the two cities, forcing customers to continue buying from them. But Bill Hall, Glendale's electrical services Electrical service, in building wiring, refers to the wiring that connects the electric utility's cables in the street to the building. Specifically, electrical service is the wiring from the street, through the meter and up to the panelboard, but no farther. administrator, said many cities will move toward deregulation because customers simply will begin demanding lower rates. ``(City-owned utilities) just don't think they could hold out against the political pressure,'' Hall said. Hall likens the deregulation-spurred push to become more competitive to trying to pay off a 30-year mortgage on a home in five years. Beginning in January, the average Glendale customer will be asked to pay about $1.50 more a month for electricity as part of a City Council-approved rate hike linked to the deregulation effort. Unlike its neighbor to the southeast, Burbank has not yet decided whether to go the deregulation route. But the utility has prepared a deregulation package for the City Council to review in January, just in case. If the Burbank council does eventually vote to deregulate, part of the effort might include raising electricity rates by up to 10 percent, said Ron Stassi, the Public Service Department's general manager. Instead of a rate hike, the city could also decide to collect a state-approved competition transition charge from customers who switch from the city utility to another one, Stassi said. ``I think the City Council would have a hard time approving large rate increases to get ready for the future,'' Burbank Mayor Bob Kramer said of deregulation. Customer billing Even if these two cities increase utility rates, the bills for residential users still would remain among the lowest in the area. Burbank and Glendale historically have charged residential users less than commercial customers, who in essence have been subsidizing the other consumers. In a deregulated market, utility officials say the price of electricity could drop by more than half, from 6 to 8 cents down to 3 cents per kilowatt hour Kil´o`watt` hour 1. (Elec.) A unit of work or energy equal to that done by one kilowatt acting for one hour; - approximately equal to 1.34 horse-power hour. Noun 1. . But in the short run, deregulation could be bad for residential users, said Nicolette Toussaint of The Utility Reform Network in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . ``At the moment, most of the residential users are paying much less with a municipal utility than they would be with an investor-owned utility, and they are not likely to get anything better,'' Toussaint said. But Toussaint said municipal utilities may face stiffer competition if they wait to deregulate when other power companies have already reduced their debt and streamlined their operations. RISING RATES To pay off debt and become more competitive, Glendale's municipal utility will raise electricity rates by $1.50 a month. Burbank is stil studying its rates. Power Provider Avg. monthly bill Burbank Public Service Department $38.40 Glendale Public Service Department $42.04 Department of Water and Power (city of Los Angeles
Southern California Edison Southern California Edison (or SCE Corp), the largest subsidiary of Edison International (NYSE: EIX), is the primary electricity supply company for much of Southern California. It provides 11 million people with electricity. Co. (L.A. county) $48.19 CAPTION(S): chart CHART: RISING RATES (see text) |
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