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PG&E files for $312M electric rate increase

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POSTED September 13, 2009 1:53 a.m.
Modesto Irrigation District opted to forgo a planned 16 percent rate increase on Sept. 1 for its retail power customers.

The public-owned irrigation district cited drops in the cost of generating electricity as making the rate increase unnecessary.

At the same time seventy-five miles away in San Francisco, PG&E filed papers with the California Public Utilities Commission a $312 million rate hike Jan. 1, 2010 to “true up” expenses incurred in generating and procuring electricity.

That is on top of another $374 million rate increase they made a case for before the CPUC in mid-August. That rate increase translates into $55.92 a year for customers that use 850 kilowatt hours per month. No break down has yet been provided for the rate increase filing on Sept. 1.

The San Francisco-based for-profit utility is seeking the two rate increases on top of almost $1 billion in rate hikes already approved for the next three years.

The Manteca City Council meets Tuesday at 7 p.m. at the Civic Center, 1001 W. Center St., to vote on a resolution backing South San Joaquin Irrigation District’s bid to enter into the retail power business in Manteca, Ripon, and Escalon when it goes before the San Joaquin County Local Agency Formation Commission. The SSJID’s goal is to reduce retail power costs across the board by 15 percent and improve system reliability.

PG&E argued in mid-August 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 – 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.”

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.
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