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PG&E wants $20.59 more a month; SSJID says not so fast

POWER

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POSTED January 31, 2010 2:25 a.m.
If you’re a typical PG&E customer using 850 kilowatts hours per month brace yourself for a possible $17.44 jump in your monthly power bill on Jan. 1, 2011.

And, if you use 40 therms of natural gas each month, the rate hike proposal will add $3.15 a month or 5.7 percent more to your natural gas bill. That means if PG&E is granted everything they want, you will be sending PG&E and additional $20.59 more a month in 2011 on top of what you’re paying now.

But that’s not all. You could still see more rate increases before 2011 as the request only covers the cost of delivering electricity to customers and the cost of operating PG&E power plants. It does not include the cost of electricity that PG&E purchases to resell to customers as such costs are recovered in separate rate proceedings.

It is part of an overall $1.10 billion rate increase request the largest in PG&E’s history – that was filed with the California Public Utilities Commission. Of that increase under state law that PG&E and other utilities lobbied to obtain, $127 million will go to PG&E’s shareholders and other “profit” related items such as multi-million dollar bonuses for its top executives at the same time the company continues to shed front-line employees and close PG&E service offices in communities.

By statute, PG&E is allowed to take 11.45 percent of their revenue and pocket it in some form whether it is dividends or bonuses. The “profit” doesn’t go to capital outlay as rate increases granted by the CPUC take care of that as well as help cover costs such as when PG&E losses wrongful death claims such as a year ago Christmas Eve when they were found negligent in the natural gas explosion that killed a Rancho Cardona man and severely injured two of his family members.

The South San Joaquin Irrigation District board, though, doesn’t think PG&E should be getting a 10.6 percent rate increase on top of three rate increases that have gone into place in the last 14 months.

SSJID formally
intervening
to question PG&E rate proposal

That is why the board has decided to file documents needed to intervene on the behalf of ratepayers to challenge portions of the PG&E rate hike request.

There are several reasons why SSJID is stepping up the plate to invest resources into taking on PG&E’s rate hike request along with organizations such as The Utility Reform Network (TURN) and the Ag Energy Consumers Association.

•SSJID is a large PG&E customer using 3 million kilowatt hours per year to operate 38 pumps that are part of the irrigation distribution system. that delivers water to 60,000 acres being farmed in the Manteca, Ripon, and Escalon areas. SSJID also uses PG&E retail power at their Manteca office.

•The rate hikes impact each and every resident, business, and government agency in the Manteca, Ripon, and Escalon “almond triangle” served by SSJID unless they do not use natural gas and/or secure electricity from Modesto Irrigation District as some do in specific parts of Ripon.

•If PG&E ends up asking to pay less for solar power it procures it could have a negative impact on costs at the Nick DeGroot Surface Water Treatment Plant that provides treated water to Manteca, Lathrop, and Tracy,

•Farmers – who need their own pumps to draft water from irrigation lines – will be hit across the board.

This isn’t the first time SSJID has officially intervened on a PG&E rate case.

At one point several years ago, PG&E cut-off power to a SSJID pump just as irrigation was about to start for “non-payment” of the bill for the pump. SSJID checked their records and discovered PG&E hadn’t sent a bill in five years. PG&E countered they were billed regularly. A further challenge by SSJID led to the finding that SSJID had only received one bill in three years.

It came up as PG&E was fighting a rate rebate case involving fees associated with turning off – and back on – electricity from customers who contended they had never received bills from PG&E.

PG&E was trying to keep the rebate to $12 million. Based on key testimony and documentation provided by SSJID, that amount was increased to $35 million by the CPUC.

The bulk of the rate increase PG&E is requesting is to increase reliability. Yet SSJIUD General Manager Jeff Shields noted previous increases were supposed to address improving the reliability of the PG&E system that has roughly twice the outages of other California utilities.

PG&E twice as unreliable
as other utilities in state

During a rate hearing on July 26, 2009 CPUC President Michael Peevey told PG&E representatives, “You cannot continue to have a system that, where apparently despite differences in weather and the physicality of the system, still has outages that by the data we collect are approximately double those of other utilities in the State of California.”

PG&E has repeatedly hammered away that reliability would slip if SSJID succeeds in acquiring the retail portion of the PG&E system that serves Manteca, Ripon, and Escalon in its drive to lower rates at least 15 percent across the board.

SSJID contends it has conducted exhaustive studies – with the help of private sector energy experts as well as in-house expertise that comes from either working for PG&E or for public agencies that substantially undersold PG&E elsewhere in California – that shows SSJID can reduce rates and increase reliability.

They will do that using the strength of the Tri-Dam Project “benefits” that have allowed them to squirrel away almost $80 million so far after splitting the return from wholesale power sales with Oakdale Irrigation District and over all Tri-Dam expenses and capital outlay needs.

The fate of the SSJID application to enter the retail power business is expected to be decided this spring by the San Joaquin County Local Agency Formation Commission.

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