People who use a lot of power could see their bills go down about 20 percent next year. Those who work hard to conserve energy? Not so lucky.
State regulators will probably allow PG&E to increase its electric rates and revamp the way customers are charged so high-volume residential users pay less and those who use less pay more.
The rate hike is being considered in two parts. The first part, which will be voted on today by the California Public Utilities Commission, will determine the total amount of money PG&E can charge its customers starting in mid-2011. The second part decides which customers will pay for those increases, and is likely to be voted on at the end of this month.
PG&E asked for a 28 percent rate hike over three years, but ratepayer advocates negotiated that down to 13 percent. The one sticking point is how much profit PG&E will be allowed to collect for its old meters, which are being replaced by electronic SmartMeters. PG&E has argued that because CPUC ordered them to employ the new meters, they shouldn’t have to give up the profit they were expecting on the old mechanical meters. Meanwhile, customer advocates argue PG&E shouldn’t be allowed to profit from meters they are no longer using.
“The big issue for us is whether or not PG&E should be allowed to profit off its garbage,” said Mindy Spatt, spokeswoman for consumer advocate The Utility Reform Network.
Once it’s decided how much PG&E will earn in the next round of rate hikes, it must be decided who will pay for it.
As it stands, customers who only use a small amount of electricity are charged less than it actually costs to deliver them that power, while people who use a lot of electricity are charged more than the service actually costs — a system initially created in order to give people incentive to save power.
But spokeswoman Christine Cordner said this has unfairly burdened those who use a lot of power. In order to “make it fair for everyone,” PG&E has advocated imposing a $3 “customer fee” across the board, while significantly lowering the rate the top users are charged for power, Cordner said.
This move has been loudly opposed by ratepayer and customer advocates, who say it effectively steals from the poor to give to the rich.
But Corder said not all customers who use a lot of power are rich people “with huge mansions in the Central Valley,” but rather people in “normal everyday situations” that require them to use more power.
Customers using less would pay more
In order to incentivize customers to conserve power, PG&E charges different rates depending on how many kilowatt-hours (kWh) they consume. Each tier’s energy “baseline” varies by geography and season, but the examples we use below are typical for San Francisco. These are the current and proposed rates for normal residential customers.
NEW CUSTOMER FEE
- Residential ratepayers currently pay no per-customer fee, but after hike, each would pay a $3 fee.
RATES FOR LOW CONSUMPTION
- Rates would be unchanged for customers who consume less than 383 kilowatt-hours.
RATES FOR HIGH CONSUMPTION
- Customers who use between 383 and 588 kilowatt-hours would see their rates drop from $0.29/kWh to $0.27/kWh.
- Customers who use more than 589 kilowatt-hours would see their rates drop from $0.40/kWh to $0.31/kWh.