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PG&E baseline going up
Low-income getting hit on Jan. 1, 2010
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Struggling households are about to find their PG&E bills going up even higher on Jan. 1, 2010 after PG&E and their investor owned counterparts successfully secured legislation authorizing them to increase baseline rates.

Governor Arnold Schwarzenegger this 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 - gives PG&E the opportunity to file for an immediate increase in the Tier 1 and Tier 2 prices dubbed baseline rates for those customers that have worked hard to reduce energy use and conserve power while keeping their monthly bills low.

PG&E has already filed an advice letter with the California Public Utilities Commission seeking to increase Tier 1 and Tier 2 rates effective Jan. 1. Based on language in the bill, this will most likely be a perfunctory act by the CPUC at their meeting next month resulting in much higher winter electric bills for thousands of South County residents.

That means baseline and California Alternate Rates for Energy (CARE) rates will go up as well as charges for regular residential and commercial customers on Jan. 1. PG&E secured a $312 million rate hike Jan. 1, 2010 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.

That is all in addition to another $374 million rate increase request PG&E made before the CPUC in mid-August. That rate increase translates into $55.92 a year for customers that use 850 kilowatt hours per month.

Making matters worse for low-income households and seniors on limited income is the timing of the increased baseline rates.

PG&E’s disconnection rate of households who simply can no longer afford power bills is up 69 percent in the past 12 months compared to the previous 12-month period according to a study done by the CPUC Division of Ratepayer Advocates. PG&E’s low-income disconnect rate even higher approaching 1 percent of all of their low-income customers each month.

According to the CPUC study, “This increase for low-income customers is not only out of line with PG&E’s historical rates, but is now higher than that of other California utilities.”

PG&E’s disconnection rate for all customers is also higher than the national rate.

Based on 2007 information before the economic downturn picked up speed, PG&E’s disconnection rate was 4.19 percent compared to a national average of 3.80 percent.

By contrast both low-income and non-low-income SoCalGas customers experienced the lowest disconnect rates in years dropping 14 percent.

The state commission estimates it costs a customer between $270 and $681 to disconnect and reconnect including PG&E fees ($10 to $71 to reconnect), credit deposits (two times the monthly bill), as well as spoiled food, damaged equipment and lost wages. it costs PG&E $133 - $66.60 to disconnect and $66.650 to reconnect – every time it has to cut power off.

The new law essentially deletes the prohibition that the CPUC 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. The bill authorizes 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.