Last December, the stocks of these banks fell nearly 40 percent out of concern by Wall Street over these non-performing loans. The banking industry now refuses to grant additional loans to the utilities. The state government's bailout of the utilities, which is being paid for by consumers, is also aimed at shoring up the major banks. The human toll of deregulation was first felt last summer when electric bills in San Diego, where utility rates were not frozen, shot up by 240 percent before a public outcry forced them back down. During those hot summer weeks, elderly citizens living on fixed incomes were forced to do without air conditioning, resulting in a major health threat to a vulnerable section of the population.
Most residential customers have yet to see draconian rate increases.
The utilities obtained state approval for a 19 percent price increase. This is now seen as just the beginning. Residential rates could increase by more than 40 percent, putting California way ahead of all the other states in the cost of electricity. An article in the March 16 issue of the San Jose Mercury News begins to paint a picture of what California consumers will face. Very high gas bills have doubled the rate of utility shutoffs.