Features

Power regulators must decide whose energy bill will go up

The Associated Press
Saturday March 31, 2001

SAN FRANCISCO — California power regulators already have approved the biggest electricity rate hikes in state history. Now they must decide which customers get hit hardest. 

Under a proposed plan, between 30 percent and 40 percent of customers of two major utilities – Southern California Edison Co. and Pacific Gas and Electric Co. – may see no increase in their rates, said PG&E spokesman Ron Low. 

On Tuesday, the state Public Utilities Commission approved rate increases of as much as 42 percent for Edison customers and 46 percent for PG&E customers. 

It also released a plan by commission president Loretta Lynch to implement the hikes via a tiered-rate system that would have customers pay based on how much energy they use in relation to a baseline amount. 

Lynch said tiered rates are just a proposal. She is open to adjusting the structure before it hits customers’ bills in May. “It is a starting point to get people to think about it,” Lynch said  

At the moment, Lynch’s plan exempts utilities’ customers who use less than 130 percent of their baseline. The baseline is about 50-60 percent of the average amount of electricity used in residential areas that are similar in geography and seasonal climate. 

Those in more extreme climates, more dependent on heat and air conditioning, typically have a higher baseline than those in temperate zones. For example, in San Francisco, the summer baseline is 7.7 cents per kwh per month, Low said. In most of the Central Valley, the summer baseline is 16.6 cents per kwh per month. 

When Lynch announced her plan Tuesday, she said that more than 40 percent of customers would see no change to their bills. However, nearly 70 percent of PG&E customers exceeded 130 percent of their baseline amount last year, Low said. 

More than half of Edison customers used over 130 percent of baseline amounts last year, said Gil Alexander, an Edison spokesman. Since the increase is an average of 3 cents per kilowatt hour, that means customers with large homes or large families will be those who exceed the PUC limits and end up carrying the higher rates for everyone else. 

Baselines consider an area’s use but don’t account for home size or its number of residents. So, someone living alone in a studio apartment could have the same baseline as a family of six living in a nearby house. 

But of the almost 70 percent of ratepayers who exceed the 130 percent of baseline, 13 percent are within a few kilowatt hours of that figure, Low said. So that means if they conserved a little more, they could become exempt under the proposed plan. 

Lynch’s plan also provides help for the poor by changing the eligibility requirements for participation in the California Alternate Rates for Energy program, or CARE. 

 

 

Now, customers in the program must be within 10 percent of the national poverty standards to receive a 15 percent cut in the electric bills. 

Lynch’s plan would allow those whose income is 175 percent of the poverty level to participate. For example, a one- or two-resident home is now eligible with an income of $18,200 or less. That would rise to $21,233 or less under Lynch’s plan. 

On Monday, the PUC will meet to determine how best to hear from as many different groups as possible before implementing the increase. 

“My goal is to hear from all parties and frankly, most importantly, to hear from (the Department of Water Resources),” Lynch said. 

Since January, the DWR has spent nearly $50 million a day buying electricity on behalf of the customers of PG&E, Edison and San Diego Gas and Electric. The PUC on Tuesday also ordered Edison and PG&E, who say they are nearly $14 billion in debt, to begin paying the state back for its power purchases. 

The state has been less than forthcoming about how much long-term electricity contracts will cost utility customers in the future, which left the PUC without exact numbers to use for ratemaking purposes. 

Nettie Hoge, director of The Utility Reform Network in San Francisco, said that rate increases will only show out-of-state power companies that California’s pocketbook is open, and will do little to curb energy prices. 

“Its not a solution to the core problem if we don’t discipline the wholesale market,” Hoge said earlier this week. “It’s not a supply problem, it’s a market power problem.” 

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On the Net: 

California Public Utilities Commission: http://www.cpuc.ca.gov 

Pacific Gas and Electric Co.: http://www.pge.com 

Southern California Edison Co.: http://www.sce.com