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16% higher electrical bills

PG&E charges would soar with temperatures

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16% higher electrical bills

A new state plan would jack up electrical rates during the time on hot days when most Central Valley residents use their air conditioning.

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POSTED January 12, 2014 9:54 p.m.

Turn on your air conditioning in the heat of summer when temperatures often soar past 100 degrees and you may end up paying the price in PG&E bills that are 13 to 16 percent higher than what you’re paying now.

It’s part of a new “time-of-use” electricity pricing system that California utilities regulators are considering implementing starting in 2015. It would likely result in bigger bills for most ratepayers.

Ratepayers would still have the option of choosing a flat rate, which would rise for those using the least electricity and be reduced for the largest power users.

An average PG&E customer currently pays about $75 per month for the cost of actual electricity use on their bill and not other regulatory charges. Under the new “time-of-use” system that customer would see a 16-percent increase in rates, to about $87.

If that same customer chooses the flat rate option, it would be a 13-percent increase, or about $85.

The California Public Utilities Commission will study and vote on whether to change the standard price of electricity depending on the time of day it was used, rather than the current system based on the amount of power consumed.

Proponents say the new pricing scheme would encourage conservation during afternoons when demand is at its peak.

Consumer advocates say the pricing changes would likely raise bills significantly for people in hot areas such as the Northern San Joaquin Valley who rely on air conditioning.

The changes would apply only to customers of investor-owned utilities like Pacific Gas & Electric Co., not municipal utilities like those in Los Angeles and Sacramento. If the South San Joaquin Irrigation District succeeds in taking over retail power sales within its boundaries the new rate structure would not apply to customers in Manteca, Ripon, and Escalon. If  the SSJID fails, however rates will go up 13 to 16 percent.

The SSJID’s business plan and financial wherewithal would allow then to reduce rates at least 15 percent under whatever PG&E charges.

The new pricing system would benefit the largest electricity users, who would save 17 percent under the time of use system and 14 percent under the flat rate.

Some see the idea as unfair to people in the Central Valley and other areas where 100-degree weather is commonplace.

“When it’s 100 degrees out, I’m not sure it’s reasonable to ask anyone to do without their air conditioning,” Matthew Freedman, an attorney with The Utility Reform Network, said. “There’s a rude awakening that lies ahead if the PUC pushes ahead on time-of-use pricing. The potential for a customer backlash is real.”

But the system is meant to fix a pricing scheme that currently charges significantly more for heavy electricity users.

The commission says people in the lower pay tiers now do not pay enough to cover the costs of sending electricity to their homes, which led upper-tier customers to complain to state lawmakers.

After those complaints, the Legislature authorized the CPUC to overhaul the pricing system.

If approved the new system could start being implemented in 2015.

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