Regulators backed a three-year, 21 percent base rate revenue hike for Southern California Edison. The approval came after supporters spun the increase as a labor-economic stimulus package for the state’s ailing economy. After delaying its vote over the last couple of months, the California Public Utilities Commission passed the hike 4-1 on March 12. “It’s a tough and unpopular decision,” noted commissioner John Bohn. Under the commission’s action, a base revenue increase is set for 11.43 percent this year over last year, which will bring the company’s base revenue up to $4.829 billion. Subsequent increases of 4.25 percent are slated for next year and another 4.3 percent for 2011, according to the Division of Ratepayer Advocates, at which time authorized base revenues will reach $5.254 billion a year. In approving the hike, the commission trimmed Edison’s initial request for $5.205 billion of base revenue this year. Commission president Mike Peevey said that the hike would cost about $85 a year for the average ratepayer. The Utility Reform Network estimated it would total $100 a year. Only a portion of the total charges on a utility bill goes toward the base revenue requirement, which covers the cost of the utility’s capital equipment and facilities and their staffing overhead. Through their monthly bills, utilities collect not only the money they need for that base revenue requirement, but numerous other charges they simply pass through for the purchase of power and fuel, public goods programs, local and state taxes, and other regulatory purposes. Commissioners approved the increase, they said, because of the planned up front investment in Edison infrastructure and associated jobs. “It’s pay now or pay later,” said Peevey. TURN criticized the commission and utility because the base rate revenue boost comes amid tough economic times. Also, it marks almost a 29 percent increase in the 2009 base revenue allowance for Edison since 2006, almost triple the corresponding 10 percent inflation rate over the same period. “You would think that Edison would tighten its belt just like the rest of us,” said Mark Toney, TURN executive director. “Instead they’ve done just the opposite.” Regulators had two proposed decisions in front of them. The decision that passed (proposed by Peevey) allowed for a 28.8 percent increase in base revenues over 2006, the time of its last general rate case review. The second proposal by an administrative law judge, which was rejected, would have allowed a 23.9 percent increase in revenues from the 2006 level. General rate cases for investor-owned utilities are sent through regulatory hearings every three years. Their heavily litigated details set the rates and revenues for utilities for the next three years. Peevey called the rate increase “just and reasonable.” He added that if the rate increase did not go through hundreds of jobs would be lost. Others claimed 1,000 jobs would disappear if the rate increase was declined. Dozens of labor and faith-based witnesses from Southern California advised commissioners that the smaller rate increase would harm communities. Commissioner Dian Grueneich dissented, questioning Edison’s statistics. Consumer groups said that the new rates would harm, rather than help, consumers and workers. In other commission news, regulators approved a plan to expand Pacific Gas & Electric’s “smart meter” project at a cost of $466 million. This plan puts electronic devices on consumers’ lines to monitor electricity and gas use. The total cost of PG&E’s “smart meter” program is now expected to be $2.2 billion, according to the utility. According to commissioners, the utility already has installed about 200,000 meters in the Bakersfield area. With the economic feedback from those meters, about 10,000 customers reduced electricity use by 17 percent on “critical peak days.” “The cost is significant but the decision balances technologies,” said commissioner Tim Simon. Regulators approved $1.74 billion in 2006 to install smart meters for all of PG&E’s customers, according to Jana Corey, PG&E director of energy information network. There continues to be a question about smart meters from one utility communicating with other utilities in California. However, Corey said the meters don’t have to “talk” to other utilities’ meters. At the moment, PG&E is attempting to get its meters to “talk” to an in-home device--one that the customer would have to purchase--in order to monitor energy consumption. The grid operator for most of the state--the California Independent System Operator--disagrees. “We need standards and communications protocols,” said spokesperson Stephanie McCorkle. PG&E was the first to adapt smart meters. According to commissioner Bohn, the decision by PG&E to adapt technology that is proprietary for its meters is being vested on ratepayers. “We seem to take for granted that when a utility makes a mistake, it’s the ratepayers’ concern,” Bohn said.
