Rates Rewarding Energy Hogs?

Palmdale resident Kathleen Franze, who said she and her husband are paying a $150 monthly lease for solar panels on their home and likely would lose money if the proposal is adopted, charged that the rates are being redesigned to make it less likely homeowners will install solar panels to cover their electrical use.

“It’s to bribe them not to go solar,” Franze told California Public Utilities Commission Administrative Law Judge Julie Halligan. “We’re providing the grid with clean energy, and we are being penalized.”

Retired electrician Steve Chisolm said he and his family have taken steps in recent years to conserve energy, but the electric rates they pay would go up under the proposed changes.

“I feel like me and my family have got ‘stupid’ written across our foreheads,” Chisolm said. “I think that this is unfair to me and my family for being as energy-conscious as we have been.”

But an Antelope Valley Board of Trade representative said the restructured residential rates would benefit the Antelope Valley, because so much electricity is used here in the summer for air conditioning, driving usage into the highest-price categories regardless of household income.

“It’s hot here. We use our air conditioners a lot here in the summer,” Antelope Valley Board of Trade executive director Vicki Medina told the judge. “The Antelope Valley, we’re bearing the load. High usage is not necessarily the rich and low usage is not necessarily the poor.”

Mary Maddox of Palmdale said her family has reduced its electricity use and doesn’t even have a garbage disposal, but its usage still rises into the most costly category, and a recent bill topped $600.

She suggested raising rates for swimming pool owners or those whose homes exceed 3,000 or 4,000 square feet in floor space.

“There’s so many houses bigger than ours that would make you so much money you would not have to penalize me,” Maddox said.

Resident Becky Mansfield said the proposal reminded her of the 1970s, when people were urged to conserve, then found their rates increased: “We’ve done all these energy-efficient things and now you’re going to raise our rates. Where does it stop?”

Johnathon Ervin of the Antelope Valley Community Alliance said outside the hearing the restructured rates reward “energy hogs.” He also criticized a proposed monthly fee, intended to pay for fixed costs that are the same for every Edison customer regardless of electricity usage. The fee is proposed to go from 93 cents a month to $10 a month, or $5 for lower-income customers.

He also said proposed “time-of-use” charges, which would add a surcharge to electricity used in late afternoons and early evenings, would hit Valley residents just as they get home from commutes.

“We don’t want to live our lives around when we can use electricity,” he said. “What we don’t need is a rate design where it’s going to punish people who are conserving.”

The judge, who with Administrative Law Judge Jeanne M. McKinney will make a recommendation to the five-member California Public Utilities Commission, told the 120 people at the afternoon hearing in Palmdale City Council Chambers: “We have a lot to consider as we look at this case.”

At issue is a decision, expected to come in time for new rates next summer, on a rate restructuring proposal that is described as the most far-reaching in years and which would undo many of the changes put in place after California’s 2000-01 “energy crisis.”

At present, Antelope Valley residents pay for electricity usage in “tiered rates,” in which prices increase as electrical usage increases. The lower tier rates were frozen in 2001 and began going up only in 2010, California Public Utilities Commission officials say.

The proposed rate-structure changes are described as “revenue neutral” – meaning they won’t increase the profits of Edison or California’s other investor-owned utilities, though they will mean low-using customers will pay more while high-using customers pay less.

As of January, before a recent price increase, Southern California Edison’s top rate for residential electricity charges was 30.4 cents per kilowatt-hour, while the bottom or baseline rate was 13.2 cents, with two intermediate rates, or tiers, between them at 16.5 cents and 27.4 cents.

One proposal submitted to the Public Utilities Commission would lower the top charge to 19.5 cents and raise the bottom charge to 16.2 cents by 2018, with no intermediate tiers.

In addition, a monthly charge that is now 94 cents, regardless of usage, would increase to $10 by 2017.

Under a state program that gives discounts to lower-income households, the top rate as of January was 20 cents a kilowatt-hour and the baseline rate 8.8 cents. One proposal is to lower the top low-income rate to 13.6 cents and raise the baseline rate to 11.4 cents, with a $5 monthly charge.

No statistics are available on how many Antelope Valley households’ electricity usage rises into the top tier.

However, Edison officials say a sizeable proportion of Palmdale and Lancaster households are part of the California Alternate Rates for Energy, or CARE, program for lower-income households.

While about 32% of Edison customers are part of the CARE program, about 45% of Palmdale households are on the program, and 42% in Lancaster.

The CARE program, which will be retained under the proposed new rate structure, gives a 30% to 35% discount for households whose incomes are less than twice the federal poverty level, based on a sliding scale according to family size. The low-income threshold is $47,700 a year for a family of four.

Public Utilities Commission officials said Assembly Bill 327, passed by state lawmakers in 2013, lifted a cap on lower-tier rates, permits the commission to implement “time-of-use” rates and allows the monthly fixed charge of up to $10.

Because of the restrictions imposed in 2001, Edison officials said, about one-quarter of their customers have been paying for most of the investments made to improve reliability and transition to cleaner sources of energy.