PG&E hopes to rebalance rates
| Thursday, Oct 22 2009 05:58 PM
Last Updated Thursday, Oct 22 2009 06:03 PM
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Electricity rates paid by people who use the most power would go down at the expense of people who use the least under a new proposal by Pacific Gas and Electric Co.
This rebalancing of who bears the cost of producing electricity, if approved later this year by the state Public Utilities Commission, would reverse a 9-year-old rate freeze on the most frugal users. That freeze was overturned last week when Gov. Arnold Schwarzenegger signed legislation -- The Ratepayer Protection Act (SB 695) -- supported by power utilities and consumer advocates.
Customers enrolled in PG&E's CARE discount program for low-income customers would not be affected.
PG&E spokesman David Eisenhauer said the idea is to relieve pressure on customers who have had to cover the cost of recent rate hikes. He said the proposed change is not considered a rate increase because it would not raise any extra money.
"It's a redistribution of how that revenue's collected," Eisenhauer said Thursday.
The proposal, expected to be voted on by the commission Dec. 17, would lower rates paid by the biggest electricity users by 5.7 percent. The rate reductions would taper off according to how little power a customer uses, and rates paid by the two lowest of PG&E's five-tiered program would see their per-kilowatt-hour rate increase by 5 percent.
"Our feeling is ... this provides a more balanced and equitable approach to achieving our long-term rates stabilization that we need," he said.
The proposal is supported by groups including The Utility Reform Network, a San Francisco-based organization that advocates on behalf of California's utility customers.
TURN spokeswoman Mindy Spatt described the group's support as a compromise. Utilities wanted to get rid of the tiered rate structure, which she said consumer advocates didn't want to see happen, and so they worked out an agreement that still rewards conservation but that relieves pressure on bigger users.
"Given all this pressure on us and the fact that the higher-end customers were really in trouble, we did sit down with the utilities and all of the other consumer groups and we hammered out an agreement," Spatt said.
