CPUC Approves $15 Million PG&E Gas Increase

The California Public Utilities Commission voted June 16 to increase Pacific Gas & Electric?s residential gas bills while reducing natural gas charges for large customers beginning July 1, 2005. The move boosts PG&E revenues by $14.8 million. The CPUC also approved PG&E?s and Southern California Edison?s proposed rate discount for farmers to motivate them to electrify their irrigation pumps. The CPUC approved the changes to gas bills this week by unanimously adopting commissioner Geoffrey Brown?s proposal that incorporates settlements on natural gas rates, making way for PG&E to increase residential gas rates by about 2 percent per therm beginning in July. Small businesses? gas bills will decrease slightly, and larger commercial core rates will drop by 5.5 percent. In addition, second homes that have no or low power consumption will be charged a minimum monthly fee of $3.00. The commission also approved PG&E?s gas throughput forecast, on which the rates are based. The decision tackles unresolved issues, including the allocation of costs of the low-income assistance program and the Self-Generation Incentive Program (SGIP). The SGIP costs are to be divvied up among all ratepayers on an equal cents-per-therm basis. The $21 million California Alternate Rates for Energy (CARE) tab will continue to be spread among all ratepayers. Commissioner Susan Kennedy took issue with the CARE cost allocation, claiming that up to 50 percent of bills for some commercial customers who have direct access arise from CARE charges. She said the decision missed the opportunity to develop an allocation methodology, and thus the charges for individual companies will have to be addressed on a ?piecemeal basis.? Brown responded, ?We had to move this thing forward.? Also this week, Edison and PG&E got the green light to offer a rate discount to agricultural customers over the next two years to wean them off polluting diesel pumps to both reduce air pollution and increase the utilities? customer bases. PG&E will offer farmers a 20 percent rate discount and hookup subsidies. Agricultural customers in Edison territory who agree to connect to the grid would reap a 12.5 percent rate discount along with line connection subsidies. Agricultural rates would rise 1.5 percent a year over a ten-year period ( Circuit , Nov. 12, 2004). Off-grid farmers consume the equivalent of about 400 MW?but how many will switch their energy usage is not known. Even if the utilities? agricultural discount programs achieve ?a relatively modest level of participation, the engine conversion program set forth in the settlement should result in significant improvements in the air quality of Sacramento and San Joaquin Valleys, which have some of the worst air quality in the nation,? the decision states. All nitrogen oxide reductions would be banked by the California Air Resources Board. The utilities would own the CO2 emission reduction credits. At the outset, consumer advocates questioned the reasonableness of the discounts and the potential for new load to strain the grid. The Office of Ratepayer Advocates also wanted to know whether PG&E had considered installing wind turbines and solar power systems to offset the rise in demand if farmers electrify their pumps. To address the concerns of ORA and The Utility Reform Network, the adopted decision caps the capital investment in new lines to farms at $27.5 million for PG&E and $9.17 million for Edison. It also ties the amount of the power line subsidy to the size of the engine, with larger pumps getting bigger subsidies.

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CPUC Approves $15 Million PG&E Gas Increase

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