Public Utilities Commission Rate Increase for SC Edison

Public Utilities Commission Rate Increase for PG&E

• On May 15, the PUC announced a $5.9 billion annual rate increase for the 24 million people served by Edison and PG&E.  Before, Edison residents paid 7.2 cents/kwh for electricity and 5.3 cents/kwh for distribution, totaling 12.5 cents/kwh.  PG&E residents paid 6.5 cents/kwh plus 4.0 cent/kwh for distribution, totaling 10.5 cents/kwh.
• The rate increases start on March 27, 2001, and will show up on bills starting June 1.
• The overall increase is $3.0 billion for SC Edison to $12.4 billion, on 84 billion kWh in 2001.  The new average rate is 14.8 cents/kWh or $148 per megawatt-hour.
• The overall increase is $2.9 billion for PG&E to $11.4 billion, for 82 billion kWh.  The new average rate is 13.9 cents/kWh or $139 per megawatt-hour.
• These average to 3.5-3.6 cents/kWh, not the 3 cents/kWh of the original proposal.
• For Edison and PG&E totalled, the new cost of power is 14.3 cents/kWh or $143 per megawatt hour.
• Blackouts may cost businesses $22 billion in lost productivity.
• Exempted are low-income customers (CARE) who already have discounted rates, and make up 12% of residential users.
• The baseline usage (B) in kwh is required to be 50-60% of the average usage, with seasonal adjustments.  But it is also described as a "minimum" necessary usage.  (My baseline usage was B = 267 kwh in January.)
• By state law AB1X, the rates up to 130% of B cannot be raised, so the first and second tier rates remain the same.
• The SC Edison rates are below:
• First Tier:  (0 to 100% of B) Rate of 13.01 cents/kwh.
• Second Tier:  (100-130% of B) Rate of 15.16 cents/kwh. (Before, the second Tier and this rate covered all usage over the baseline.)
• New Third Tier:  (130-200% of B) Rate of 19.66 cents/kwh.
• New Fourth Tier:  (200-300% of B) Rate of 23.66 cent/kwh.
• New Fifth Tier: (Over 300% of B) Rate of 25.94 cents/kwh.
• For fifth tier users, if usage is U kwh, the total increase in cents/kwh is I = 10.78 x (U-3B) + 8.50 x B + 4.50 x0.7xB.
• This simplifies to I = 10.78 x (U - 3 B) + 11.65 x B cents/kwh.
• As an example, if one's rate is at the start of Tier 5 or U = 3 B, with B = 267 kwh, then I = 11.65 x 267 = $31.11 increase.
• If one's rate is at 400% B, so U = 4 B, with B = 267 kwh, then I = 22.43 B = 22.43 x 267 = $59.89 increase.
• If one is the average user at 200% B, the above formula can't be used, and the increase is 4.50 x 0.7 x B = 3.15 x B.  Using B = 267 kwh, the increase is $8.41.
• The total bills at the following levels are: 100%B -> 13.01 x B; 130%B -> 17.56 x B; 200%B -> 31.32 x B; 300%B -> 54.98 x B; 400%B -> 80.92 x B.
• At B = 267 kwh, the total bills are:  100%B -> $34.98; 130%B -> $46.89; 200%B -> $83.62; 300%B -> $146.80; 400%B -> $216.06.
• As an example, if an air conditioner, hot tub, or pool runs 2,000 kwh in a year in Tier 5, the cost increase is 10.78 x 2000 = $216 over a year.
• The new Tier 5 rate is almost double the baseline rate.
• Comparing the Tier 5 rate to the Second Tier rate (which previously covered all excess over 100% B), the increase is (25.94 - 15.16)/15.16 = 0.71 or the maximum 71% rate increase.
• My baseline over the past year has changed from 267 kwh to 304 kwh.  It is not peaked in summer, and mainly depends on the number of days in the month.
• The new rates will reduce the gap between residential customers and the lower rates paid by commercial and industrial customers.

New Southern California Edison Rates

 

Rate Group	2001 Sales Percentage	Revenue Increase Percent	New Rate - cents/kWh
Residential	29.7%	17.1%	16.19
Small and Med. Commercial	36.3%	35.5%	15.63
Large Power	29.7%	49.2%	12.88
Agriculture and Pumping	3.7%	17.4%	11.87
Street and Area Lighting	0.6%	20.7%	17.83
Total	100%	31.2%	14.86

Comments

• The percent increases tend to bring the rates closer to the same for all categories.
• Within Commercial, the time of usage (TOU) rates range from 30.14 cents/kWh on peak summer, to 8.37 cent/kWh off peak summer or winter.
• Within Large Power, (TOU-8-Pri) the TOU rates range from 19.67 cents/kWh on peak summer, to 8.62 cents/kWh off peak summer.
• The total SC Edison revenue increase is $2.96 billion, leading to a new total revenue for 2001 of $12.45 billion.
• Average residential rates will rise by 47% for Edison users over 130%B, and 55% for similar PG&E users (LA Times, May 16).
• The top tier rate increases 71% for Edison, and 80% for PG&E.
• The average industrial user rate is 12.9 cents/kWh for Edison, and 12.3 cents/kWh for PG&E.
• The Foundation for Taxpayer and Consumer Rights estimates the average monthly increase will be $36 for Edison customers and $39 for PG&E customers.
• The distribution of residential users for both Edison and PG&E is:  up to 130%B, 4.06 million, 51%; 130-200%B, 1.96 million, 24%; 200-300%B, 1.25 million, 16%; and more than 300%, 0.75 million, 9%.
• In the non-CARE residential bins, the percentage distribution of the total kWh used for this category is:  0-100%B, 53.0%; (100-130%B, 10.7%; 130-200%B, 16.2%); or 100-200%B, 26.9%; 200-300%B, 26.9%; and over 300%B, 9.4%.
• The Foundation for Taxpayer and Consumer Rights estimated the average monthly bill will increase $36 for Edison and $39 for PG&E.
• The $5.7 billion rate increase has to be considered within the state's $1 trillion economy, the sixth largest in the world.
• Businesses will pay about $4.6 billion of the increase, and households will pay $1.1 billion.
• The new utility bills will consume 25 to 30% of a large manufacturer's budget, compared to 15% before the increase.
• In June, the baseline rate in Palm Springs is 42.7 kwh per day, or 1281 kwh monthly, compared to Mission Viejo at 9.1 kwh per day, or 273 kwh monthly.