Most consumer and business groups condemn the plan, saying it will create hardship on residents and force more businesses to leave the state. But officials from California's two largest utilities--Southern California Edison and Pacific Gas & Electric--complain that even a 40% rate-hike isn't enough to ensure that they won't eventually have to file for bankruptcy.

Loretta Lynch, president of California's rate-setting PUC, admits that the big increase will cost customers of SoCal Edison and PG&E about $4.8 billion a year. But the dramatic increase is needed, Lynch says, to help the utilities stave-off bankruptcy and force residential and commercial users alike to conserve more power.

Despite recent evidence that California's electricity users are taking steps to conserve power, Lynch justified the huge increase by saying today that the rate hike will force "Electricity hogs … to pay more for the electricity they use."