California approves major electricity rate changes

California approves major electricity rate changes

California regulators approve higher electricity rates for most residents

State officials voted unanimously to raise electricity rates for millions of Californians on Friday, over the objections of consumer advocates and environmental groups who called the plan a giveaway to the wealthy and said it would discourage people from saving energy and going solar.

The controversial changes were a long time coming. For years, Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric have wanted to raise rates for those who use the least and lower rates for those who use the most, and the California Public Utilities Commission made it happen in a 5-0 vote.

Edison and other electricity providers have argued that current rates unfairly penalize high-usage customers, and that low-usage customers aren’t paying their fair share. Utility companies have also said that all customers, including solar customers, need to pay more to keep the electric grid running — hence the need for higher fixed charges.

Consumer advocates agree that some changes are needed to make rates more fair. But they criticized the plan passed Friday as a sign that the public utilities commission isn’t looking out for the best interests of the public.

“This is a lose-lose for customers, but business as usual for the CPUC, which has once again done PG&E, Edison and SDG&E’s bidding,” Mark Toney, executive director of The Utility Reform Network, a San Francisco-based ratepayer advocacy group, said in a statement.

Under the changes approved Friday, the difference between what high-usage customers and low-usage customers pay will shrink. By 2019, the number of tiers will be reduced from four to two, with a price difference of just 25% between them.

In explaining their votes at Friday’s meeting, several commissioners said the link between income and electricity use isn’t as well-established as critics believe. Many high-usage customers, they said, are simply large families living in small homes, or low-income desert residents who need constant air conditioning to stay cool during the summer.

There will also be a “surcharge” for the highest-usage customers, a last-minute addition by commission President Michael Picker to mollify Commissioner Mike Florio and other critics of his original, utility-backed proposal. Under that surcharge, the most excessive electricity use will be billed at more than twice the rate of low-end electricity use.

Critics, though, weren’t convinced that the surcharge would make much difference, since it would only apply to electricity use more than 400% above baseline. The public utilities commission estimated that it would only apply to 10% of Edison customers, and only then to the top 4% of actual electricity use.

The plan passed Friday would also delay new fixed charges sought until at least 2020. But it lays the groundwork for utility companies to make a new case for those charges.

Additionally it switches all Edison, PG&E and SDG&E residential customers to “time-of-use” electricity rates starting in 2019. Under those rates, the cost of electricity will depend on the time of day — and time of year — that you use it.

Consumer advocates, though, weren’t convinced that the commission would follow through on those promises.

“It’s hard not to look at the commission’s track record and look at the repeated attempts to fast-track power plants in lieu of clean energy,” said Evan Gillespie, western region deputy director of the Sierra Club’s Beyond Coal Campaign.

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