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PG&E hiking baseline power rates 3%

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POSTED December 20, 2009 3:37 a.m.
Those who use the least electricity will see their PG&E bills go up in January while those who use the most will see a slight drop in their bills.

The California Public Utilities Commission last week approved PG&E’s request to raise the rates for residential customers who use the least amount of power by upping Tier 1 and Tier 2 rates by three percent. PG&E had requested a five percent jump. Power rates were cut slightly for those who use more power.

Governor Arnold Schwarzenegger last month signed Senate Bill 695 into law. The bill – proposed by PG&E and other investor owned utilities and carried by Sen. Christine Kehoe, D-San Diego – gave PG&E the opportunity to file for an immediate increase in the Tier 1 sand Tier 2 prices dubbed baseline rates for those customers that have worked hard to reduce energy use and conserve power while keeping their monthly bill slow.

The new law essentially deleted the prohibition that the CPUC could not increase the electricity charges in effect on February 1, 2001 for residential customers for existing baseline quantities or usage by those customers of up to 130 percent of the existing baseline quantities. That basically covered the first two tiers of power use. There are five tiers altogether for residential customers.

The bill authorized the commission to increase the rates charged residential customers for electricity usage up to 130 percent of the baseline quantities by the annual percentage change in the Consumer Price Index from the prior year plus 1 percent, but not less than 3 percent and not more than 5 percent per year.

PG&E has pointed out those eight years of flat-lining the bottom tiers meant more of the rate increases for power since 2001 fell on the shoulders of the larger residential users. The rate adjustment on Jan. 1 will start chipping away at that gap.

The CPUC decision will not impact qualified low-income households that are participating in PG&E California Alternate Rates for Energy (CARE) program that’s aimed at keeping their power bills as low as possible.

The slight decrease for higher tier rates will be offset by PG&E’s $312 million rate hike going into effect Jan. 1 to “true up” expenses incurred in generating and procuring electricity. That’s on top of almost $1 billion in rate hikes previously approved for the next three years.
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