Public Interest Low at SMUD Rate Hearing

By Published On: May 13, 2011

There was one thing missing from the “public” hearing the Sacramento Municipal Utility District recently held on its proposed utility rate restructuring--members of the public. The hearing, conducted as part of SMUD’s May 5 board of directors meeting, was the first of a series of opportunities for the public to give input on the utility’s proposed restructuring that general manager John DiStasio released April 7. When the May 6 workshop was opened for members of the public to comment, none did. DiStasio said the reason no members of the public appeared was that since the proposal’s release, there have been public outreach and information programs to explain the potential rate changes. “It’s been about 20 meetings we’ve done,” DiStasio said. Many of those have been focused on civic groups, neighborhood groups, chambers (of commerce).” The head of one of those groups, Steve Gandola, president and CEO of the Sacramento Hispanic Chamber of Commerce, said his organization has yet to take a position of the proposal. “At this point, we have not. As things solidify, we could,” he said, alluding to the fact that the plan is still in the formative stages and has more hurdles to overcome before the SMUD board considers a final proposal. Scott Martin, the muni’s resources, prices and planning manager, said the rate tweaking is “revenue neutral” and wouldn’t result in monthly bill increases for most customers. “For any rate element that is going up, there’s a corresponding reduction in other rate elements or components,” Martin said. Martin said that although SMUD’s infrastructure maintenance flat fee would increase monthly by $2.80 for residential customers and $3.75 for small business customers, this would be balanced out by decreases in the per kW charges during off-peak hours “Our objective here is to have little to no [financial] impact to customers in the end,” he said. The customers who mainly stand to lose out would be those who don’t pay their bills on time and low-income residential customers who use a lot of energy. SMUD doesn’t currently charge any late fees, but DiStasio’s proposal includes a fee of 1.5 percent/month interest on outstanding customer balances. SMUD said that would generate an estimated $3.6 million annually. Also, customers participating in the muni’s discounted rate plan for residential customers would have a cap placed on the amount of electricity usage they use each month that qualifies for a discount. The suggested threshold is 600 kWh above the base usage allowance. “We estimate 90 percent of customers have usage below this capped amount,” Martin said. As far as the other 10 percent, SMUD estimates about half would see the cost of their energy usage rise up to three dollars or more. The board is expected to consider adoption of a formal plan on July 21. If adopted, the changes would affect the utility’s 595,000 customers beginning in January 2012, Martin said.

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