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SCE wins approval for 9% residential rate increase

covered conductor

This is a covered conductor. Rosemead-based utility Southern California Edison has won state approval to outfit its system with this sort of safety measure in order to better protect against the threat of wildfires.

Residential customers of Southern California Edison will soon be paying about 9 percent more for electric service — $12.41 per month on average — under a rate increase approved Thursday by the California Public Utilities Commission.

Most of the increase goes to pay for stepped-up efforts to keep the utility's electrical system from sparking wildfires. It does that mainly by installing 4,500 circuit miles of covered conductors.

Rosemead-based SCE originally asked for an annual revenue increase of $1.1 billion. It ended up getting less than half that amount, or $454 million.

The commission's decision reflects the difficult balance California is trying to achieve while it hardens the state's power grid against worsening wildfires while at the same time limiting the financial burden carried by ratepayers whose costs have continued to escalate.

The consumer advocacy arm of the CPUC opposed SCE's original rate increase proposal. But even the counter-proposal by the advocacy office would have given the utility $38 million more than what SCE ended up getting.

SCE's top executive said in a statement he was pleased with the decision, which takes effect Oct. 1. Specifically, President and CEO Kevin Payne heralded the commission's approval of the company's plan to install covered conductors, which he called "the most cost-effective way to quickly and effectively reduce the risk of ignition and help reduce the frequency, extend and duration of public safety power shutoffs."

While the company has worked hard to ensure customer affordability, he added, "our customers in high fire threat areas and beyond cannot afford more wildfires."

Besides covered conductors, the utility also expects to trim back vegetation in order to limit wildfire risks. But it has no plans to bury power lines, as San Francisco-based utility Pacific Gas and Electric Co. has proposed as part of its strategy for reducing its system's potential for sparking wildfires.

SCE's rate increase covers a variety of system improvements, including distribution and transmission upgrades, energy storage, replacement of electric poles and more general grid modernization.

It excludes more than $131 million in executive compensation and employee bonuses SCE had originally proposed as part of the rate adjustment process it and the state's other investor-owned utilities go through every three years.

The approved increase authorizes SCE to buy up to $1 billion in liability insurance coverage for wildfire-related claims. That alone is expected to cost about $460 million over three years.

CPUC Commissioner Genevieve Shiroma, who was assigned to SCE's rate proceeding, said in a news release last week's approval allowed the agency to make strategic decisions on a number of priorities including addressing climate-change risks such as wildfires.

"Our decision keeps our communities safe and employed and also keeps Southern California Edison's wildfire mitigation strategy agile," she stated.

A spokesman for SCE said the utility has suspended disconnections for residential and small-business customers through Sept. 30. After that time, he added, any customer who falls more than 60 days behind in making payments automatically goes onto a payment plan.

Kern County is home to about 1.6 percent of SCE's accounts. Of its 81,922 accounts in the county, 87 percent are residential.