Last-minute drama over major Calif. electricity rate changes

Two days before a major vote that could raise electricity rates for millions of Californians, ratepayer advocates were scrambling to understand last-minute changes to a plan several years in the making.

The California Public Utilities Commission is set to vote Friday on dueling proposals that would revamp electricity rates for customers of Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric. Both plans would raise rates for those who use the least energy and for those who use the most, but one would do so much more dramatically.

Edison and the other utility companies have supported the more dramatic changes, proposed by commission President Michael Picker. Ratepayer advocates have thrown their support to an alternate plan written by commissioner Mike Florio, arguing that Picker's proposal would discourage energy conservation and benefit the wealthy at the expense of low-income families.

But on Wednesday afternoon, Picker threw a wrench into the works, releasing a revised version of his proposal. As they hurried to review the 372-page document Wednesday evening, ratepayer advocates and environmental groups slammed Picker for the 11th-hour changes.

"We've been at this for three years," said Evan Gillespie, western region deputy director of the Sierra Club's Beyond Coal Campaign. "And now, 36 hours before the vote, we get this pretty substantial editing ... it just feels like they're doing everything they can to remove public input from the process. There's not time for us to comment on the changes. There's no public review."

The utilities commission had been scheduled to vote on the dueling proposals last Thursday, at a regularly scheduled meeting in Sacramento. But at the last minute, officials moved the vote to a special meeting the morning of Friday, July 3 — for many, the first day of a holiday weekend.

"This is a commission that has been repeatedly under criticism for doing its work behind closed doors," said Mindy Spatt, a spokesperson for The Utility Reform Network, a San Francisco-based ratepayer advocacy group. "Opening the doors on the Friday of a holiday weekend — with very little advanced notice — is not going to solve that problem."

A call to the utilities commission seeking a response to those criticisms was not returned Wednesday evening.

372-PAGE PLAN

At first glance, Picker's new plan appeared to bear a strong resemblance to his original proposal.

Residential customers currently pay for electricity in four tiers, with rates rising as energy users cross the threshold into each tier. The first block of energy doesn't cost very much, per unit of energy; the second block is more expensive. The third block costs even more, and the fourth block costs the most.

Under Edison's current rates, energy use in the fourth tier costs more than twice as much as energy use in the first tier. Consumer advocates say that stark difference incentivizes conservation and rooftop solar, because ratepayers want to avoid the high charges in the higher tiers.

Under Picker's original proposal, the number of tiers would have been reduced from four to two, with a price difference of just 20% between the two tiers. In his new proposal, the number of tiers would still be reduced from four to two, with a 25% difference between the tiers.

Picker's new proposal would also create a "surcharge" for excessive electricity use, apparently in an effort to address critics of his original plan. But that higher price — more than double the Tier 1 rate — would only apply to the top 10% of Edison customers, and only then to the top 4% of actual electricity use.

"That's still not nearly enough, in terms of a meaningful price signal to customers to conserve," Gillespie said.

Utility officials, who have been pushing a two-tier system for years, say it's fundamentally unfair that high-usage customers currently pay so much more than low-usage customers. In that respect, Picker's original proposal gave them exactly what they wanted.

Southern California Edison said in a statement late Wednesday that it is "reviewing in detail the revised proposed decision."

CONSUMER PROPOSAL

Florio's proposal would reduce the number of tiers from four to three. Electricity use in the third tier would ultimately cost about 77% more than electricity use in the first tier.

Ratepayer advocates and environmental groups have supported that proposal, saying it reduces the burden on high-usage customers while still encouraging conservation, efficiency and rooftop solar.

"We certainly still prefer the proposal that rewards conservation, and makes energy hogs pay their fair sure," Spatt said.

Picker's new proposal also would delay — or perhaps eliminate — controversial fixed charges backed by Edison and other utility companies.

Critics say fixed charges would hit low-income customers the hardest, and solar advocates see them as a thinly veiled attempt to bring in some money from solar customers. Utility officials have argued fixed charges are needed to ensure that all customers, including solar customers, are paying their fair share to keep the electric grid running.

Under Picker's original plan, fixed charges of $10 per month — or $5 for some low-income customers — would be phased in over the next few years. Florio's proposal, meanwhile, rejects fixed charges entirely, instead proposing minimum bills of the same amounts.

Picker's new plan seems to move in the direction of Florio's, endorsing fixed charges in principle but acknowledging concerns and postponing a decision to a later date. But based on his initial reading of the document, Gillespie said, it won't be difficult for utility companies to revive the proposal.

"You really have to go out on a limb and take a leap of faith to believe that we're not going to see fixed charges," he said.

Florio didn't respond to a phone call seeking comment Wednesday evening, so it's not clear whether he supports Picker's new proposal. Florio told The Desert Sun last month that he or Picker might have to modify their proposals to win support from the other three commissioners.

"It takes three votes. I've said how I would do it if I were king, but I'm not," Florio said at the time. "I think there will be other options floated, and it'll take some time to sort this out."

The California Public Utilities Commission will meet at 10 a.m. Friday in San Francisco to consider the electricity rate proposals. The meeting will not be televised online, although a live audio feed will be available at http://cpuc.granicus.com/ViewPublisher.php?view_id=2 .

Sammy Roth writes about energy and water for The Desert Sun. He can be reached at sammy.roth@desertsun.com, (760) 778-4622 and @Sammy_Roth.