DAVIS SEEKING REDUCTION IN EDISON BILLS.

Byline: Staff and Wire Services

SACRAMENTO - Gov. Gray Davis asked electricity regulators Tuesday to grant a $1 billion rate reduction for customers of Southern California Edison, whose service region includes the Santa Clarita Valley, and other major privately owned power companies in California.

More than 9 million customers of Edison, Pacific Gas and Electric Co. and San Diego Gas and Electric would see lower rates by the end of the year, according to a senior administration official.

But $1 billion spread across 9 million customers likely wouldn't do much for businesses hurt by the power crisis of late 2000, according to officials at Remo Inc., a Valencia drum manufacturer whose electric bill has about doubled since 2000.

``The reality is that $1 billion isn't that much when you spread it across the state,'' said Brock Kaericher, president of Remo.

The company pays up to $60,000 in peak months for power, and a rebate amounting to a few thousands dollars a year wouldn't mean much, added Doug Sink, the company's chief financial adviser.

Nevertheless, Davis will ask the Public Utilities Commission to expedite the reduction so customers could see savings by the end of the year, the official said.

An average residential customer paying $840 a year for electricity could see a savings of $30 annually. Santa Clarita's hot summers and heavy use of air conditioning drive bills higher than average.

Small-business customers paying $1,200 to $3,200 a year could save $60 to $120.

The state temporarily stepped in to buy power for the utility companies in January 2001, when record wholesale prices had driven the utilities to the brink of bankruptcy.

But California stopped buying power for those utilities at the end of last year and no longer has to arrange for large reserves of electricity, said a Davis administration official who spoke to The Associated Press on condition of anonymity.

``Revenue requirements for this year had to assume the utilities would not be back in business this year,'' the official said.

The utilities now have the responsibility to arrange for enough electricity and don't have to maintain reserves as large as the state did.

That means the state's estimate of how much it needs from ratepayers can be lowered from $5.5 billion to $4.5 billion, the official said.

Davis has previously said utility customers would see lower rates by the end of the year because the state left the power business.