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Crying Foul Over Energy Baselines

Los Angeles Times

Down by the sea in Santa Monica, a month of electricity can cost a mere $2.32 with a bit of determination, a tiny home and energy-efficient appliances.

In landlocked Compton, a somewhat bigger house with a pool also generates an electricity bill with triple digits–but without the decimal point.

The two homes could not be more different, except in the eyes of state utility regulators, who are applying the same power-use yardstick to determine how much their electricity bills will rise this summer because of the largest rate hike in state history.

Despite their different climates, housing quality and income levels, Santa Monica and Compton share the same “baseline” allotment, the amount of electricity that supposedly meets the minimum needs of an average household in a particular region.

Before California’s energy crisis, consumers had little reason to care about their baseline allowance. But now, under terms of the rate hike, the further above baseline a customer gets, the more that customer will pay.

Although residential customers of Southern California Edison and Pacific Gas & Electric Co. won’t get a full taste of the new rates until this month’s bills, which will reflect an entire month of the increase, some are already complaining that the conservation-inducing setup of the new rate structure is unfair.

The critics say the baseline regions are too large, creating such improbable electricity twins as Santa Monica and Compton, and Newport Beach and Orange. And because baselines are based on simple averages of consumption within a region, the system takes no account of a home’s size or number of occupants.

The baseline allowance “does not address the real needs of consumers,” said Douglas Heller, consumer advocate with the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based activist group. “We’ve said, somewhat tongue in cheek, that this baseline plan is a subsidy of single guys by families.”

State regulators and legislators are considering overhauling the baseline allowances, but the changes wouldn’t come in time for this summer.

When they rip open their latest power bills, nearly 8 million California customers will find themselves sorted into a new caste system of consumption tied to their baseline, set by the state Public Utilities Commission, that is meant to represent 50% to 60% of an average household’s electricity use in a region.

The PUC boosted electricity rates by a record 3 cents a kilowatt-hour on March 27, and decreed that residential customers will absorb their share of rate shock according to how much electricity they use. The aim is to raise more cash to cover stubbornly high wholesale electricity prices while encouraging customers to use less power.

Residents of Los Angeles and other cities served by municipal utilities are not affected by the rate increase.

Half of Customers Deemed ‘Higher Use’

Under the previous, two-tier system of figuring bills, customers paid less for electricity used up to baseline levels and more for electricity use above baseline. That was replaced by a five-step system in which residential customers pay the old rates in two tiers up to 130% of baseline but fork over progressively more across three tiers of usage above 130% of baseline.

Those higher-use customers, pegged at 50% of households by the PUC, will see their monthly bills jump depending on how much electricity they consume over their baseline allowance.

Average residential bills will go up between $4 and $85 a month. Low-income customers and those with special medical equipment will see no rate increase. Business customers, whose rates also are rising, are not billed by baseline use.

The PUC established the baseline allotments in 1982, using average residential consumption as a way to encompass differences in home size and numbers of residents per household.

Critics of the baseline system say the allotments are determined across regions that are too large and don’t accurately account for differences in climate, household size and income. The baselines were last adjusted in the early 1990s and have not kept pace with the electricity use of modern homes, they say.

Edison‘s 50,000-square-mile territory is divided into six baseline zones. PG&E has 10 for its 70,000 square miles. San Diego Gas & Electric, which has not increased rates, has three zones.

Santa Monica and Compton share a baseline zone that skims across such coastal communities as Malibu, Long Beach and Newport Beach but also stretches inland to Norwalk, Cerritos, Santa Ana and Orange. For them, known at Edison as Baseline Zone 10, the cheapest power is meted out at a pace of 9.1 kilowatt-hours a day in summer or 276 kilowatt-hours over 30 days.

Although staying close to baseline is somewhat easier near the coast, Miamon Miller and Martha Adams are an extreme example of power parsimony. The Santa Monica couple needs only a little pocket change to pay their latest monthly Edison bill of $2.32.

“It sounds strange to complain that your bill is too low,” Miller said, noting that the couple usually pays less than $10 a month and their electricity use is often one-third or less of their baseline allowance.

Miller and Adams manage this feat seemingly without breaking a sweat–although they do have a lighthearted running dispute over whether the front porch lamp needs to be on. Their secret weapons are size and location.

Miller and Adams live in a tiny home–about 800 square feet–only half a mile from the ocean, without an air conditioner, Miller said. “We live in Santa Monica; we open the doors when we want air-conditioning.”

The couple owns the usual assortment of appliances, but they are small and relatively energy efficient. Their water heater and dryer use gas, and their lighting is low-wattage.

“A lot of it is the climate,” Adams said. “It doesn’t get too hot or too cold here.”

Over in Compton, where summer days average 10 to 15 degrees hotter than in Santa Monica, Marjorie Shipp has expended considerable energy trying to use less electricity in her 1,800-square-foot home.

Lights Out, Cold Pool, and Bill Still Doubles

The retired teacher has extinguished her driveway lights (“They’re pretty and I miss them.”), sharply reduced the number of hours the pool pump runs (“Now I’m getting algae.”) and has unplugged appliances when not in use to minimize the toll from so-called standby electricity consumption. Most lights in the home are energy-sipping fluorescents.

Still, electricity usage in her two-adult household was nearly double the baseline last month, although down more than 40% from recent bills. The tab was nearly $180.

“I guess I’m going to have to start paying even more attention to it,” Shipp said with a sigh. “I don’t know what else I can do.”

The five members of the PUC acknowledged that inequities may exist when they agreed in late May to begin a review of the baseline system that probably will last until the fall. In fact, PG&E says only 35% of its customers have been able to keep their electricity consumption at 130% or less of baseline in the last year. At Edison, about half of customers have done it.

“There are real questions over whether these baselines are fair,” Commissioner Carl Wood said. “This is not going to be without controversy. This is not a giveaway program. It’s not a matter of jacking up everyone’s baselines to reduce rates.”

Chana Perelmuter, a Long Beach mother of six, said baselines are unfair to families.

“I have never been close to baseline in all my years of having children,” said Perelmuter, whose offspring range in age from 10 to 20.

“I only run the dishwasher when it is full, but I have six children so it’s full every night,” she said. “I do laundry only when I have a full load, but I have six children so that’s at least one load a night.”

Bills have been proposed in the Legislature to require adding household size to the formula that determines baselines and to increase the allowance in the steamy Coachella Valley.

But fiddling with baselines is sure to make someone unhappy. That’s because the utilities must collect a certain amount of revenue through rates. If one person’s rate goes down, someone else’s must go up.

At the Utility Reform Network, a San Francisco consumer activist group that bitterly fought the rate increase, staffers have mixed feelings about adjusting baselines.

“We have been hearing a lot from consumers who are concerned about the way baseline affects them,” spokeswoman Mindy Spatt said.

“We are very sympathetic to people who think it isn’t a fair system,” she said. “On the other hand, they’ve raised the rates by X dollars, and someone is going to have to pay that.”

The whole system makes no sense to Dorothy and Walter Harris, retirees who live in a sliver of the West Los Angeles-area community of Ladera Heights that is not served by the Los Angeles Department of Water and Power.

For the entire month of March, the couple unplugged nearly every appliance, put their refrigerator’s thermostat on the vacation setting and headed out on a trip in their recreational vehicle. When they returned, the Harrises found their electricity use had indeed dropped below baseline, but just barely.

“I’ve been ranting for months to family and friends about the baselessness of the baseline,” Dorothy Harris said.

Valerie Rodriguez and family have gained entry to the 130% club in recent weeks through dogged conservation that has cut their electricity use in half. The Westlake Village family of four has been taking the usual steps around their 2,000-square-foot home as well as idling a hot tub.

“I’m here to say that conservation works,” Rodriguez said.

But with the start of air-conditioner-hugging season, Rodriguez frets that her rates inevitably will rise with the temperature.

“We’re doomed,” she said. “Nobody at my house is going to suffer through those intense heat days.”

Consumer Watchdog
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