Tier-able Rate Hike

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New power bills based on a tier system are hitting PG&E and Southern California Edison customers.

The Fresno Bee

The latest bad news about the electricity crisis is coming to your mailbox soon. It’s the rate increase passed by the California Public Utilities Commission, and some critics think you may need to be clairvoyant to understand it.

The familiar Pacific Gas & Electric Co. and Southern California Edison bills will be laced with extra rate tiers, which critics believe will make it tough for customers to decipher and double check their charges. Some think the bills will inject more arguments about fairness and effectiveness into an already rancorous debate about the electricity crisis.

“The billing process can be used to confuse people into simply accepting whatever price is on the bill,” said consumer advocate Doug Heller of the Foundation for Taxpayer and Consumer Rights.

But the billing structure is correct, utility officials said.

“Mathematicians have looked at this and agree that it is right,” said PG&E spokeswoman Christy Dennis. “It’s not easy to understand. Remember, we’re just the bill collector. This is the state’s rate hike.”

The bill this month will be even more complicated because the new rates took effect June 1.

That means the current billing cycle will include the new five-tiered rate system just for June while mixing in the month of May at the previous two-tiered system.

And, one more thing: The rate increase is retroactive to March 27. To collect it, officials must lump together those extra costs for each customer from March 27 to June 1 and divide the customer’s debt evenly over the next 12 months of bills.

Aside from the complexity, consumer advocates say it’s not going to be effective as a way to encourage conservation in a state where people already use less energy than most in the country.

Federal energy records show California is the fifth-most efficient state in the nation for electricity use. The state’s households use less electricity than any Western state except New Mexico.

But, a week ago, state officials said Californians had trimmed electricity use by 11% in May. Saying there is still room to save, state officials defend the new five-tiered rate increase and other measures as emergency efforts aimed at getting “energy hogs” to conserve.

“Folks who are already saving electricity are the real heroes,” said Roger Salazar, spokesman for Gov. Davis. “But we’re in an emergency situation here, so we’re trying to get the people who use the most energy to cut back.”

The rate increase, designed to raise about $5 billion to help the state pay for electricity, shouldn’t hit hard for those already conserving, officials said. Salazar said nobody wants to penalize people who are saving electricity.

Rates don’t increase until customers have used a third more electricity than their baseline allowance, which is a bare-minimum amount of electricity based on location, climate and season.

Once the 130% threshold has been crossed, customers pay progressively higher surcharges as they consume more electricity.

The highest rate is more than double the baseline rate.

For perspective, PG&E figures show average monthly electricity use in the Fresno area is 689 kilowatt hours. Fresno customers must use no more than 608 kilowatt hours in a month — which is 130% of the baseline for this area — to avoid extra charges. The average Fresno customer would have to cut back about 80 kilowatt hours.

A 100-watt bulb uses 0.10 of a kilowatt hour in one hour. If the bulb were left on eight hours a day for 30 days, it would consume 24 kilowatt hours.

People who have already reduced their usage will find it hard to meet the 130% goal, said energy consultant Lon House.

He also said it will be difficult for many people to reach the 20% reduction needed to qualify for a 20% rebate in the state’s so-called “20/20 Rebate Program,” which is another means of coaxing people to save energy.

“I predict this will not be very effective,” House said. “It’s just asking too much.”

To determine who gets the rebate, a customer’s usage from the months of June through September last year will be compared with usage this year. PG&E customers can find out how much they used last year by calling (800) PGE-5000. For those who have just moved into a new home or apartment, state officials say usage and possible reductions will be calculated based on averages for a similar-sized dwelling.

If only 10% of Californians achieve the goal, it would greatly reduce the chances of rolling blackouts, state officials said. They said the 20% reduction is realistic for people who use a lot of electricity.

Heller of the Foundation for Taxpayer and Consumer Rights said the average customer won’t have a chance at the 20% rebate.

“You’ll never get to the 20% — that’s a huge number,” Heller said.

“We should be aggressively going after the people who have overcharged us. It’s economically irrational for us to continue to allow these energy-producing companies to bilk us.”

Consumer Watchdog
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