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PG&E rates: Going down then up
Drop overshadowed by record rate hike request
PG&E needs another $1.101 billion rate hike on Jan. 1, 2011 to help improve its delivery system. - photo by HIME ROMERO/The Bulletin
PG&E rates for electricity may drop 2.5 percent on June 1.

The San Francisco-based utility - after dozens of power rate hikes since 2001 that have increased the typical residential power bill by 53 percent - has asked the California Public Utilities Commission to allow the 2.5 percent rate reduction from March 1 billing levels.

In order to reduce rates, PG&E proposes to accelerate refunds to customers for lower transmission and generation-related costs. PG&E also seeks permission to temporarily reduce the surplus collection of fees charged by the state to fund the California Solar Initiative.

The rate rollback in June will more than wipe out the rate increase  that went into effect March 1 to help PG&E improve the reliability of their high voltage electricity transmission system. The CPUC requires all rate hikes - and decreases when they do happen - to be detailed and focus on specific aspects of a utility’s operations. Therefore, a utility can’t simply forgo an approved rate increase for one aspect of its operations and simply apply excess revenue from another such as power procurement to avoid increasing and then decreasing rates.

The rate relief is a precursor to PG&E’s request for the largest rate increase in company history - $1.101 billion effective Jan., 1, 2011. That rate increase request before the CPUC will boost PG&E’s annual investment into infrastructure investments to $2.7 billion annually, according to company spokesperson Nicole Liebelt.

PG&E’s service territory covers 70,000 square miles including the 72,000 acres within the South San Joaquin irrigation District.

The SSJID is in the process of trying to gain authorization from the San Joaquin County Local Agency Formation Commission to enter the retail power business in its bid to reduce rates at least 15 percent across the board compared to what PG&E charges in Manteca, Ripon, and Escalon. The SSJID position has been that they can do reduce the rates at the same time as they upgrade system reliability

The SSJID along with the non-profit Toward Utility Rate Normalization (TURN) are challenging PG&E’s $1.101 billion rate increase targeted for Jan., 1, 2011. If you’re a typical PG&E customer using 850 kilowatts hours per month that means a $17.44 jump in your monthly power bill.

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. SSJID and PG&E are also squaring off over Proposition 16 on the June 8 ballot.

The measure authored and funded heavily by PG&E is designed to amend the California constitution to require a two thirds vote for public agencies that either want to aggregate power sales or enter into the retail distribution businesses to essentially cut into the territory of PG&E or any other privately owned utility in California. San Diego Gas & Electric as well as Southern California Edison have distanced themsleves from the ballot measure.