SAN DIEGO, Sept. 16, 2014 /PRNewswire/ -- Starting
today, San Diego Gas & Electric (SDG&E) customers will have
the chance to speak out about proposed changes in electric rates in
the first of 16 public participation hearings on the issue
scheduled throughout California
over the next several weeks. Representatives of the California
Public Utilities Commission (CPUC) are hosting the hearings and
will consider all of the public input as part of the ongoing
regulatory process before making a decision.
SDG&E, and the state's other investor-owned electric
utilities, filed rate reform proposals earlier this year to
implement the goals of Assembly Bill 327, the Ratepayer Equity Act,
which became law in January. The measure allows the CPUC to make
changes to the current outdated rate structure, including lifting
restrictions on rates for lower-use customers, which is a leftover
from the energy crisis.
"Many of our customers are being negatively impacted because
they use more energy based on the geographic area in which they
live in or the size of their families," said Caroline Winn, SDG&E's vice president –
customer services. "Our goal is to 'level the playing field' and to
move rates for all customers closer to what it actually costs the
utility to provide electric service."
The CPUC has given the utilities a road map for rate design
changes that is guided by core principles, including spreading
costs fairly across all customers, making rates easier to
understand while also continuing to encourage conservation. Earlier
this summer, regulators took an important first step to narrow the
gap between the highest and lowest rates paid by California's utility customers.
Longer-term rate reform will help to ensure that all customers
share more equally in supporting ongoing enhancements to the power
network that everyone uses and depends on to meet their energy
needs.
SDG&E's long-term rate reform proposal includes the
following key elements:
- Introduction of a monthly service fee: All our customers
are connected to the electric grid whether they generate the power
they use or get their power from SDG&E or some other provider.
This fee covers the cost to be connected to the electric grid, such
as the electric meter, the wire from your house to the utility pole
that allows you to receive electricity from SDG&E's system, and
the people and technology that figure out your bill every month.
The fee, as mandated by AB 327, would be phased in gradually,
starting at $5 next year and
increasing to the approved cap of $10
by 2018. (For low-income customers, the fee would be half of those
proposed amounts.)
- Important to note: This is not an add-on or incremental
charge. The cost-per-kilowatt-hour of electricity in the upper tier
would be reduced to offset the fee. SDG&E's revenues and profit
will not change.
- Reduction in the number of rate tiers: Today,
residential electric rates have four tiers, with the cost
increasing as a customer uses more electricity. Because rates for
lower-use customers were essentially frozen for more than a decade,
the difference in the cost-per-kilowatt-hour between the lowest and
highest tiers has skyrocketed. SDG&E's proposal would reduce
the number of tiers to two and shrink the current difference
between the tiers from 136 percent today to 20 percent by 2018,
while continuing to encourage conservation.
- Compliance with the legislative low-income discount cap:
The proposal would continue to protect the most vulnerable
customers, but proposes a gradual reduction in the California
Alternative Rates for Energy (CARE) discount to the legislatively
mandated range of 30-35 percent by 2018.
State legislation essentially froze rates for lower-use
customers during the energy crisis to protect them in an unstable
energy market; however, their rates stayed the same for a decade
with only slight increases in just the last couple of years.
As a result, hundreds of thousands of customers today are paying
approximately $350 million more a
year than they should be for the significant growth in technology
and infrastructure over the past decade including improvements to
the power network, more renewable energy, and compliance with
environmental mandates.
"Unfortunately, below-cost rates have undermined the incentive
to conserve, while punishing others who use more electricity with
rates that are significantly higher than the cost to serve them,"
said Winn.
If the CPUC approves SDG&E's proposal, lower-tier rates are
expected to see a moderate increase of 8 percent on average, while
higher-use rates are expected to get immediate relief with a
decrease of as much as 30 percent.
SDG&E is a regulated public utility that provides safe and
reliable energy service to 3.4 million consumers through 1.4
million electric meters and 861,000 natural gas meters in
San Diego and southern
Orange counties. The utility's
area spans 4,100 square miles. SDG&E is committed to
creating ways to help customers save energy and money every
day. SDG&E is a subsidiary of Sempra Energy (NYSE: SRE), a
Fortune 500 energy services holding company based in San Diego. Connect with SDG&E's Customer
Contact Center at 800-411-7343, on Twitter (@SDGE) and
Facebook.
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SOURCE San Diego Gas & Electric (SDG&E)