If you get your power from Southern California Edison, San Diego Gas and Electric or Pacific Gas and Electric, get ready to fork over more money to cover your electricity bills — that is, unless you use a lot of energy already.
Friday, the California Public Utilities Commission voted to raise rates for most people who get their power from so-called investor-owned utilities. At the same time, the board lowered rates for the biggest energy users. They also did it on a day when most people weren’t looking due to the Fourth of July holiday weekend.
"Today, they took the first step in revising electric rates for residential customers," Michael Campbell from the state of California's Office of Ratepayer Advocates. "They had been frozen following the energy crisis — the rates for the lowest users, users that use less than 130 percent of baseline."
Last year, legislation went into effect that is allowing utilities to raise their rates, Campbell says.
"The problem with having the rates be frozen for so long is, as utility costs increased, as the commission continued to approve rate increases for the utilities, those increased revenues had to come from only the customers that used more thatn 130 percent of baseline. So those rates started to diverge quite a bit over the last decade plus."
Now, lower-usage rates can go up and higher-usage rates can go down, according to Campbell.
"The challenge for us as the Office of Ratepayer Advocates, is wanting to make sure that what we call the bill impacts, the amount the customers wind up having to pay and how that affects their pocketbooks on a monthly basis, that that's not too severe. So we wanted to make sure that that change was moderate. The decision was a little less moderate than what we had hoped."
An alternate decision that was more moderate wasn't voted on, Campbell says.
"But one of the big wins for us was that we avoided having what are called 'fixed charges.' These are costs that customers wouldn't have any ability to avoid, regardless of how much energy they used."
Now, fixed charges aren't allowed until 2019, Campbell says. He says it'll avoid punishing those who don't use as much energy.
What does all this mean? According to Campbell, the majority of customers in California will likely see their bills go up.
"We're thinking that probably in the neighborhood of 80 percent of customers are going to see increases greater than 10 percent, and in the range of $10 or more [per month]."
The utilities argued that the increased rates were an issue of fairness, with those using more energy paying higher rates to make up for the lower rates being paid by customers using a baseline amount of power or less, Campbell says.
"But there's also the issue of fairness that the customers didn't ask to be put in this place where their bills are what they are. And you have to take into account that you can't just undo in one year a rate design that's taken over a decade to get where we are. So hitting customers with significant bill increases all of the sudden, we thought that was inappropriate. We just didn't see eye-to-eye with the utilities on that."
The commission is aiming to move from four tiers of pricing down to two tiers over the next several summers, Campbell says. The actual rates themselves are yet to be set.