Rate Relief on Horizon for Edison Customers

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Jan. 24, 2003 Share this on FacebookTweet thisEmail this to a friend

Bundled service customers of Southern California Edison will receive a sizable rate decrease this fall, if the California Public Utilities Commission approves a recent Edison filing.

By June or July of this year, Edison will have fully collected from ratepayers its procurement-related undercollection, the PROACT account. Under Edison's proposal, rates would go down an average of 13.4 percent, but significantly more for commercial and industrial customers, who on average would receive a 26 percent decrease.

The lower rates would provide much needed rate relief for large users, who were disproportionately impacted by the record rate increases approved by the CPUC in the spring of 2001. Many commercial and industrial customers saw their rates double, while half of residential users saw no rate increase whatsoever.

This massive cost shift from residential to large customers, in place since 2001, has cost California's economy in jobs and lost opportunities. California's electricity costs are nearly double the national average.

The proposed rate decrease may be offset by a third or more however, if the CPUC decides to saddle bundled commercial and industrial customers with most of the financing costs for the recently-imposed direct access exit fee cap. Last November, in Decision 02-11-022, the CPUC established a Cost Responsibility Surcharge, or exit fee, to recover Department of Water Resources power costs from DA customers, capped at 2.7 cents per kWh. The CPUC decision requires that "any financing of the [exit fee] cap shall be retained within the same customer class that benefits from the cap." Since the overwhelming majority of DA customers are commercial and industrial customers, keeping the financing requirement within each customer class would disproportionately impact large users. The language in the decision will be a hot topic at the CPUC in the coming months, as the Commission deliberates on this and other exit fee implementation issues.

Meanwhile, it could be another year or longer before bundled customers in the Pacific Gas and Electric service territory see any rate decreases. PG&E filed for bankruptcy protection in the fall of 2001, in a proceeding that is still underway. Last year, the CPUC opted not to reduce rates for PG&E customers, despite the fact that the utility is collecting far more than it needs to cover costs. It is no coincidence that keeping the rates artificially high significantly increases the viability of the Commission's proposed reorganization plan for PG&E. There is no indication at this juncture as to when rates might come down for PG&E customers.

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