JUICE: Favo-Rate Things

By Published On: June 5, 2009

When I am feeling bad, I think of raindrops on roses, white winters that melt into spring, and the paycheck that helps keep me afloat. Particularly after voicing my protests when health care premiums or other bills rise sharply. The frustration from the bureaucratic stonewalling and my lack of recourse requires that I think of a few of my favorite things. The sound of public frustration is alive in the halls near and far, including at the California Public Utilities Commission. During meetings, I watch in sympathy as the protests of ratepayers--the few who know the commission is the venue for voicing complaints about utility rates and services--are largely met with silence. That’s not counting commission president Mike Peevey’s admonitions about the two-minute limit for public pleas, urgings, and rants. There is often a long line of people waiting to plead with the commissioners, some of whom are articulate and others overcome by nerves. I suspect those ratepayers who trek to the commission and briefly speak out also may subsequently struggle to remember their favorite things. It is essential for the state regulators to fairly and clearly address ratepayers’ concerns about their utility bills. The hit on customer pocketbooks, which goes beyond the push to bring on more alternative energy to reduce our carbon footprint, must be given the same deference as private utilities’ latest capital outlay tune--be it for millions of “smart” meters, upgraded distribution, new high voltage lines, nuclear decommissioning, or increased shareholder incentives for energy savings. Otherwise, we end up with smart meters, smart transmission but dumb--as in mute or soundless--ratepayers. (In fairness, commissioner Dian Grueneich balks about ratepayer inequities. Commissioner Tim Simon has on occasion come to ratepayers’ defense when Peevey gripes at them for taking up his time. Simon also recently called for better informing the public about hearings on issues that impact them.) When it comes to rates, public and private utilities are about as different as The Sound of Music’s Maria and Captain Von Trapp. The CPUC should take a lesson from its shareholder-free brethren. Muni rates generally are more transparent, comprehensible, and accessible. (According to the “unofficial creation myth,” the commission was established to protect private utilities from municipalized utility competition.) Public power agencies’ rate increases are actually discussed during public meetings. Citizens directly confront those whom they elect and decide on their rates. In contrast, the CPUC, and its gubernatorial-appointed members, currently acts as a shield between investor-owned utilities and ratepayers. In addition, there are a multitude of dockets at the CPUC that handle and parse complex rate-related issues. They include how much money the utilities get--their “revenue requirements”-- and the decision of who pays how much--known as the “rate design.” The regulators dockets include myriad cost issues covering power procurement, infrastructure plans, the cost of bonds and other borrowing, natural gas hedging deals, and payments to qualifying facilities. There are others dealing with various aspects of renewable energy including the Million Solar Roofs program and utility investments in non-fossil power projects that are separate from the secret, bilateral deals with independent renewable developers. In the latter, there are ongoing proceedings that settle on the renewable price benchmark against which green power contracts between investor-owned utilities and renewable developers are measured. There are various facets of the energy efficiency program--the big bold plan, the triennial plans that are supposed to fit into that program, the setting of the energy efficiency goals, and formulas for awarding incentives to Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric for energy savings. There are also the not-so-public advice letters where utilities request rate increases that skirt the formal public hearing process. If members of the public manage to show up at a CPUC meeting on a workday they may be thwarted by current commission procedures. Items scheduled for vote routinely get pulled off a CPUC business meeting agenda on short notice. This “hold list” doesn’t get publicly released until late in the afternoon the day before the business meeting is held. That impacts ratepayers who’ve likely taken the day off from work and/or had to travel a good distance to attend the regulators’ meeting At a recent meeting, commissioner Rachelle Chong called for giving the public more advance notice of rescheduled items given the inconvenience to ratepayers of the short notice. Her proposal was met with silence. Returning to the many CPUC dockets and alphabet soup of rate issues; these largely get rolled up into unwieldy general rate cases. These are massive proposals and decisions that only the select few can get through. Layperson’s synopses are not available. The most recently approved one, for example, was Edison’s. It won a 21 percent base rate revenue hike on a 4-1 vote, with Grueneich dissenting (Circuit, March 13, 2009). Compare that, for example, with a recent rate hike proposed by the Sacramento Municipal Utilities Commission. A summary of the key reasons for the 13 percent increase was fairly straightforward and pronounceable. They include a drop in customer demand in the wobbly economy, decrease in hydro deliveries from the federal government, higher renewable energy costs than projected, and higher costs for natural gas contracts. That is not to say that SMUD, other muni board members, or city council members, don’t ignore public protests. But, the elected officials are more accountable because of they have to face their constituents, the discussions are usually more comprehensible, and the consumers are able to vote against a board or council member. If all the CPUC members put themselves in the shoes of the melodic and not so harmonious ratepayers, their halls would be alive with more than the sound of the entrenched interests’ song about their favoRate things.

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