California Electricity Rates May Rise For Some

The California Public Utilities Commission on Friday approved changes that will radically revamp the way electricity rates work in the state by narrowing the gap between prices paid by poor and rich consumers.

The CPUC will decide on the two proposals on Friday.

Small and moderate consumers of electricity will bear a greater share of costs as California does away with consumer protections approved in response to the 2000-2001 energy crisis.

Utilities have long complained that the steeply-tiered system means higher-use households have unfairly subsidized low-use households for years. “The people who use the most, should pay the most, as far as I’m concerned, just like water usage”, said Tim Wilcox, a San Francisco resident. Several public commenters at Friday’s meeting asked commissioners to go with Florio’s proposal, stressing the fact that flattened tiers would increase power costs for lower-tier users relative to bigger electricity users, and could reduce the value of conservation and installing solar.

However, the impact that the changes will have will not be known till the time the vote is casted by PUC. Workshops and reports on utility rate reform progress will be conducted by the CPUC. In that same time, prices have risen considerably for many customers who use more electricity.

Critics, though, weren’t convinced that the surcharge would make much difference.

The new plan would see steep rate hikes in excess of 20% for lower-use consumers, while those consuming large amounts of energy would see their rates drop as the most expensive rate tiers are eliminated, with a “super-user electric surcharge” applying only to those who use 400% or more of their baseline allowance. So hitting customers with significant bill increases all of the sudden, we thought that was inappropriate. Specific rates will be adopted as the utilities incorporate any changes to total rates that may occur as a result of other CPUC decisions, such as future rate cases.

Plus, the judges’ proposal leaves open the possibility of a fixed charge that all customers would pay regardless of their usage.

The original proposed decision, based on a recommendation from the utilities, would have instituted a $10 fixed monthly customer charge, which would reduce how much could be saved on your bill from investing in energy efficiency or rooftop solar.

One of the nation’s leading experts on the power industry, Severin Borenstein, public policy research associate with the Energy Institute at UC Berkeley’s Haas School of Business, estimated that the monthly bill changes could range from almost $6 increases per month for people in the lowest income levels to reductions of almost $6 in the highest income levels.

The utilities must institute a special outreach program to educate lower tier customers on no-cost and low-cost conservation measures. “Some people will see their bills go down, but many more will see them go up”.

“Today’s decision represents a compromise between the two earlier proposals that all five Commissioners can live with”.

Picker said the commission didn’t approve new rates Friday.

The decision affects electricity customers of Pacific Gas and Electric Co., Southern California Edison and San Diego Gas & Electric Co. This will ensure that the very highest users continue to see a signal to conserve, but it misses most high users. Once you use the amount allotted for tier 1, you then move on to the next tier, where the price per killowatt of power is higher.

The new plans are an attempt to end subsidies and bring rates more in line with the actual cost of providing and distributing power.