California electric rates jump to second highest in country
SAN FRANCISCO (AP) – Beginning next month, residential customers of California’s two largest utilities will pay the second-highest electric rates in the country to help the state recoup some $6 billion it has spent to keep the lights on.
Under the plan approved Tuesday by the state Public Utilities Commission, many households won’t see a rate hike at all. However, the heaviest residential users of Pacific Gas and Electric Co. and Southern California Edison Co. will see their overall monthly bills increase by 37 percent, to about $85 or $71 more a month respectively, the PUC said.
After a 3-2 vote over how to spread the pain of the largest rate increase in California history, commissioners warned there could be more rate hikes by summer’s end.
”We have not solved the problem today,” said PUC commissioner Richard Bilas who voted against the allocation. ”When you look down the road we’re going to have to go through this exercise again sometime in the next three months.”
Juan Ungo, one of dozens of low-income ratepayers protesting outside a PG&E bankruptcy hearing in San Francisco Wednesday, said the allocations will worsen his family’s power bill. Soaring natural gas prices and an earlier rate hike already made it jump from $50 a month to $120 a month.
”Somebody has to fight for the plight of the poor people,” Ungo said.
Businesses say somebody needs to fight for them as well, before higher power costs drive them to layoff workers, go bankrupt or leave the state.
Without all residential customers getting socked in the wallet, businesses fear there won’t be enough incentive to conserve.
”Are we going to have a double whammy here? Are we going to have no blackouts and higher rates?” asked Michelle Mortague-Bruno, spokeswoman for the 190-member Silicon Valley Manufacturers Association.
The plan, a revised rate design from PUC President Loretta Lynch, allocates a 3-cent rate increase the PUC approved March 27.
The increase raises residential rates to an average of 15.6 cents per kilowatt, just behind the nation’s highest rate of 16.4 cents in Hawaii. On monthly bills, that translates to an average of $4 to $85 more per month, depending on usage amount.
The 3 cents, plus a 1-cent rate increase from January, was spread over the 9 million customers of PG&E and Southern California Edison Co. in dramatically different ways.
Industrial rates rise by no more than 49 percent, and agricultural rates are also capped at either 15 or 20 percent depending on when the power is used each day. Commercial rates aren’t capped, and amount to roughly 38 percent more on average, the PUC said.
The increase is for any energy use above 130 percent of ”baseline.” That baseline amount, which is designed to provide for much of the needs of a typical household, varies according to climate and seasonal temperatures.
The PUC said about half of all residential households won’t go above that 130 percent line, meaning they will not see a rate increase.
To encourage conservation, a tiered system makes above-baseline energy use progressively more costly. Residential customers using more than 300 percent above their baseline will pay up to 80 percent more for that additional electricity.
Nonresidential customers must pay more for every kilowatt, and computer chip makers to hospitals to fruit growers say it’s unfair.
”This is probably the worst economic calamity the state has ever seen,” said David Marshall, chief financial officer at Gregg Industries’ iron foundry in El Monte.
Marshall expects Tuesday’s increases to cost Gregg at least $1 million this year.
The rate hikes are retroactive to March 27, though those retroactive charges will be spread over a 12-month period.
Low-income customers who sign up for the California Alternate Rates for Electricity program are exempt, as are customers who need electricity to run life-sustaining medical equipment.
The increases will not affect San Diego Gas and Electric Co. or Californians who buy electricity directly from energy wholesalers.
On the Net:
California Public Utilities Commission: http://www.cpuc.ca.gov
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