MISCONDUCT PAYS OFF CONSUMERS PICK UP BILL FOR STUPIDITY OF UTILITIES AND POLITICIANS.

Byline: Thomas D. Elias

AT long last, we now know who will pay for years to come for the greed and stupidity of utility companies and politicians who put California into the energy crunch of 2001-2002: us. We the consumers.

We also now know there will be no penalties either for utility executives who persuaded legislators to vote unanimously for an obviously flawed deregulation plan or for the legislators who cast those misguided votes.

That's the ultimate upshot of the Pacific Gas & Electric Co. bankruptcy settlement approved by the state Public Utilities Commission and a federal judge in San Francisco during the waning days of last year.

Together with the rates now charged by both the Southern California Edison Co. and the San Diego Gas & Electric Co. - the state's two other large electricity providers - the settlement assures that consumers will pay upward of $15 billion more for power over the next nine years than they would have without deregulation.

There might be some hope for rate payers - both residential customers and businesses of all kinds - if any likelihood remained for rebates of more than $9 billion that state analysts estimate consumers were overcharged by power producers during the market manipulations that caused the energy crisis.

But in case after case, the Federal Energy Regulatory Commission has demanded settlements from the worst energy culprits that amount to only a fraction of what California authorities calculate was stolen.

Before fall's recall election, ex-Gov. Gray Davis avidly pursued much larger refunds, in part because the more money came back, the more he hoped to evade being blamed for all the power shortfalls. But new Gov. Arnold Schwarzenegger shows signs of developing a cozier relationship with FERC, to the likely advantage of power producers over the consumers they bilked.

For sure, Schwarzenegger has yet to utter a word in defense of California consumer interests. Nor has he exercised an iota of his alleged clout with the Bush administration to get refunds for Californians. Ironically, Schwarzenegger consistently trumpets that he is out to help businesses, but he's been mute in this area that's driven more California companies out of business than any other over the last three years. If he's to be judged an aggressive advocate for the state's people and business folk, he's got to speak up before FERC makes all the final decisions in these cases.

But even if he suddenly becomes active, Schwarzenegger can't affect the settlements under which consumers are essentially providing money to lift PG&E out of the bankruptcy created by its own errors, just as other consumers have paid steadily for more than two years to keep Edison afloat and reward SDG&E for its role in promoting deregulation.

PG&E officials try to put this in a positive light, noting that consumers in its vast Northern California and Central California territory will pay $670 million less every year than they would have paid under the company's own plan to exit bankruptcy. Of course, PG&E officials don't mention that not even the most utility-friendly members of the state PUC could countenance the company plan.

Democratic state Sen. Debra Bowen of Marina del Rey, who chairs the state Senate committee overseeing energy issues and has wanted tougher treatment of the utilities, understated facts when she observed to a reporter, ``Rates will be lower, but they could be lower still.''

The only reason rates in PG&E country will drop at all is because they've been utterly outrageous ever since the PUC decided in 2002 that it won't let utilities go out of business no matter how ineptly they're managed.

In a way, the PG&E settlement is like a blow to consumers delivered by Davis from deep inside his political grave. The deciding PUC votes for this grossly unfair plan were cast by commissioners he appointed in full knowledge that they would favor the big utilities. The best example is PUC President Michael Peevey, a former Edison head and later a high-priced consultant to Edison and other utilities.

``This decision is the beginning of the end of a very difficult period of time for California and PG&E,'' Peevey observed. For sure, it marks the end of difficult times for PG&E, but the same can't be said for other Californians, who will be stuck with high electric bills for many years.

Said PUC member Loretta Lynch, who voted against the plan, ``We just gave PG&E 10 Christmas presents - all financed on the ratepayers' credit cards.''

Legal challenges are in the offing, primarily from San Francisco City Attorney Dennis Herrera, who believes the PG&E plan gives the company too much while taking too much from customers.

But this settlement makes clear there is no hope for altering arrangements already in place for Edison and SDG&E, whose customers will also spend many years paying for company mismanagement.

These huge corporations and their shareholders have been made well. The same corporate bosses who put California into the energy mess remain in place. No state legislator lost his or her job for approving deregulation. All of which means consumers are left holding the bag as the only ones who ever will pay for all the bad choices and losing gambles of the utility companies and their political friends.