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PG&E seeks $374M more in power rate increases

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POSTED August 21, 2009 2:48 a.m.
PG&E is once again making a pitch to increase electrical bills.

This time the requested increase translates into $55.92 a year for customers that use 850 kilowatt hours per month.
The San Francisco-based for-profit utility is scheduled to spend several days starting Monday making its case before the California Public Utilities Commission to allow it to charge another $374 million on top of almost $1 billion in rate hikes already approved for the next three years.

In PG&E’s application, the company argues the $374 million is needed to bring its reliability performance closer to that of other companies in California and the rest of the nation.

Toward Utility Rate Normalization – TURN – has filed a motion to dismiss the application.

In a release explaining why they made the filing, TURN noted “as is often the case, PG&E claims the rate hike will make electricity more reliable. But PG&E also justified the last round of rate hikes with the claim of improving reliability.”

The most reliable thing about PG&E is their greed,” said TURN executive director Mark Toney. “Despite all the extra money PG&E has already collected, it claims consumers in Northern California must pay even more if they are tired of substandard service.”

TURN said PG&E has not provided any evidence that the $2.4 billion it now says it needs for improvements will deliver billions in direct benefits to customers. TURN also noted in a press release “what’s worse is that PG&E’s response to storm-related outages, one of the most onerous problems from a customer perspective, would not be improved under the scheme.”

PG&E plans to use the $374 million to:

•increase the available capacity and inter connectivity of its distribution system in urban and suburban areas, so as to enable reconfiguration of its system in response to failure of critical system elements and variance in forecasts.

•substantially expand distribution automation in urban and suburban areas to reduce the frequency, extent and duration of outages.

•increase mainline protection to reduce the frequency and extent of its outages in rural areas.

PG&E is allowed a protected return on its equity of 11.45 percent by the CPUC. It is allowed to ask for ratepayers to pay for improvements to its systems to protect the return or profit under CPUC rules.

PG&E is also bankrolling an effort to qualify an initiative for the statewide ballot in June 2010 that would require a two-thirds vote before a government agency can go into the retail power business in their territory.

South San Joaquin Irrigation District is conducting a hearing on Sept. 3 as the next step in its bid to go into the retail power business in Manteca, Ripon, and Escalon.

The SSJID’s goal is to reduce power costs across the board 15 percent compared to PG&E rates as well as upgrading the distribution system in the South County area it serves.

The SSJID hearing on its application to the San Joaquin County Local Agency Formation Commission takes place on Thursday, Sept. 3, at the district office, 11011 E. Highway 120.
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