PG&E Considers Rate Hike For Energy-Saving Customers

[The Straight Story]

PG&E Considers Rate Hike For Energy-Saving Customers


Pacific Gas & Electric, the utility serving Northern California, is looking to boost rates next year. No big news there, except that PG&E is targeting customers who save the most energy, writes San Francisco's Mission Local newspaper.

The new student-produced news operation in San Francisco explains that the utility wants state regulators to approve a 5% rate hike for energy-conscious customers - usually smaller households - so it can give energy hogs a break of between 2.7% and 5% . Those residential customers use 131% to 300% more than the monthly baseline average.

Facing a Dec. 17 deadline, PG&E wants to limit public comment so state regulators can quickly approve the increase.

The utility says it's a matter of fairness.

"It's necessary to avoid the continued shifting of costs associated with utility services to a limited set of residential customers," said PG&E spokesperson Joe Molica.

http://www.news10.net/sports/story.aspx?storyid=70049&catid=91

[w4rma]

1. Evil. I want state laws like this made illegal by a federal law. (nt)

[aquart]

2. Of course.

[Capn Sunshine]

3. In LA in the 80s, the same thing happened

we did such a good job saving water that their usage projections were way off and they had to raise prices to cover the payments on the bonds.

[Autumn]

4. "The utility says it's a matter of fairness."

To who? Maybe in an alternate universe it might be fair for the one who uses less to pay more than the large user, but I can't wrap my brain around that logic.

[bobbolink]

5. Fairness only applies to the rich.

We poor folk know that.

The rest of you are beginning to get it.

[Autumn]

6. There is a lot of things that only apply to the rich

and I got that a long time ago.

[kristopher]

7. You don't share PG&E's perspective nor goals perhaps...

If you think about it a moment, you'll realize you approve of their strategy when the circumstances are slightly different. If you buy one of a given item you sometimes pay a higher price than if you buy the same item in bulk, right?

The goal of that pricing structure is to encourage volume sales of the product.

While bulk discounts are common, they represent an incentive structure that we want to get rid of. Like me, I suspect you feel energy conservation is an important responsibility at all levels. The bulk sales approach incentivizes exactly the opposite behavior.

PG&E has led the way in managing carbon, and I'm surprised they are making this proposal. At the very least the proposal should be evaluated against whatever harm it will do (in terms of $$) to the carbon goals that California is aiming for.

Since generating capacity is what electricity *rates* are largely based on, PG&E is faced with a different situation in that they have X amount of capacity that must be paid for. Judging strictly by the OP, PG&E's sales volume in actual electricity delivered would seem to be dropping, and they are faced with not having the cash flow they used to have.

If they raise rates on the large consumers it would further reduce demand for their electricity, leaving them in the same situation they are now in. If they raise rates on those who are already pushing the lower limits of consumption, they will have a more stable revenue stream.

That is an approach that is perfectly in line with traditional management of a public utility in the past. In fact, I get an increasingly large discount on my rate the more electricity I use, and I have had that rate program for 15 years.

[Autumn]

11. I guess I must be out of touch,

since the Carter days I have always conserved on my energy usage. The discount you get,is that for a business or a large house?

[kristopher]

12. It's a small home (1200 sqft)

The tiered rate is part of a package tied to my use of electricity for heat, cooking and hot water. We are much like you - conservation is a part of life and frugality is a virtue, so in our case it isn't an ongoing incentive; however, it did work to get us to commit to the appliances so it set us on a direction that funneled our energy dollars into electricity for decades. We might cross the threshold into the second tier on the two coldest months of the year.

[Autumn]

13. I might look into that,

we have a co-op for both of our properties. The only thing that has kept me from putting electricity in our barn was because I didn't want to pay higher rates.

[RB TexLa]

8. When I changed energy providers they asked me how many square feet my house is

I told them it is 40,000 square feet. I got a very good rate.

[EFerrari]

9. This is what they've done since I can remember.

Resources, low, they charge more.

Resources okay, they charge more to compensate for low usage.

:shrug:

[NYC_SKP]

10. I just happen to have the CPUC filing for that rate change request. Here it is:

NOTIFICATION OF APPLICATION FILING OF
PACIFIC GAS AND ELECTRIC COMPANY (PG&E): FOR
EXPEDITED AUTHORIZATION TO CHANGE RESIDENTIAL ELECTRIC RATES
EFFECTIVE JANUARY 1, 2010, AS PERMITTED BY NEWLY ENACTED PUBLIC
UTILITIES CODE SECTION 739.9

DETAILED INFORMATION ABOUT THIS APPLICATION

On October 14, 2009, PG&E filed an Application for expedited Commission authorization to change resi-
dential electric rates effective January 1, 2010. The requested rate change is permitted by newly enacted
Public Utilities Code Section 739.9, which allows the Commission to approve increases in rates for residen-
tial Tiers 1 and 2 (low monthly usage) in accordance with specific formulas. Specifically, PG&E proposes
to increase Tier 1 and Tier 2 rates on rate schedule E-1 by 5.0 percent and to decrease Tier 3, 4, and 5
rates commensurately. PG&E proposes no change in rates for customers in the California Alternate Rates
for Energy (CARE) program. The relief PG&E requests in this Application will not change PG&E’s author-
ized overall electric revenue requirement or the revenue assigned to the residential class. To implement
this rate change on January 1, 2010, PG&E is proposing an expedited procedural schedule.

Will rates increase?

Non-CARE residential electric rates on schedule E-1 will increase by 5.0 percent for Tiers 1 and 2 and will
decrease commensurately for Tiers 3, 4, and 5. Whether a residential customer’s bill will increase or de-
crease will depend on the customer’s electricity usage. Other rates will not be affected.

If the Commission approves the Application, rate changes are limited to the residential class. Charges for
bundled residential customers will change. The change to charges for direct access residential customers
(those who purchase their electricity from non-PG&E suppliers) is minimal.

A typical bundled residential customer (a customer who receives electric generation as well as transmission
and distribution services from PG&E) using 550 kilowatt-hours per month will see the average monthly bill
change from $74.13 to $76.63, an increase of $2.50 per month or 3.4 percent. A bundled residential cus-
tomer using 850 kilowatt-hours per month, which is about twice the baseline allowance, will see the average
monthly bill change from $164.15 to $163.46, a decrease of $0.69 per month or 0.4 percent. A bundled resi-
dential customer using 1500 kilowatt-hours per month will see the average monthly bill change from $434.98
to $419.66, a decrease of $15.32 or 3.5 percent. Individual bills may differ.

THE CPUC PROCESS

The CPUC’s Division of Ratepayer Advocates (DRA) will review this Application. DRA is an independent
arm of the CPUC, created by the Legislature to represent the interests of all utility customers throughout
the state and obtain the lowest possible rate for service consistent with reliable and safe service levels.
DRA has a multi-disciplinary staff with expertise in economics, finance, accounting and engineering. DRA’s
views do not necessarily reflect those of the CPUC. Other parties of record will also participate.

The CPUC may hold evidentiary hearings where parties of record present their proposals in testimony and
are subject to cross-examination before an Administrative Law Judge (ALJ). These hearings are open to
the public, but only those who are parties of record can present evidence or cross-examine witnesses
during evidentiary hearings. Members of the public may attend these hearings, but are not allowed to
participate.

After considering all proposals and evidence presented during the hearing process, the ALJ will issue a
draft decision. When the CPUC acts on this application, it may adopt all or part of PG&E’s request, amend
or modify it or deny the application. The CPUC’s final decision may be different from PG&E’s proposed
application filing.

FOR FURTHER INFORMATION
For more details call PG&E at 1-800-PGE-5000

http://docs.cpuc.ca.gov/efile/MISC/109496.pdf