Gino DiCaro

CPUC allows rate discounts for distressed companies

By Gino DiCaro, VP, Communications

Capitol Update, Sept. 9, 2005 Share this on FacebookTweet thisEmail this to a friend

On Thursday, September 8, the California Public Utilities Commission (CPUC) agreed that utilities should be allowed to offer economic development rates to companies that would otherwise move operations out of the region.  

The economic development rate agreements will provide participating customers a discount from the customer's otherwise applicable tariff beginning at 25 percent, and declining by 5 percent each year over a five-year term. These options will be available to customers whose demands exceed 200 kilowatts (kW), provided the customer can demonstrate that "but-for" the incentive provided by the economic development rate agreement, the customer would not retain its load in PG&E's or Edison's service territory, or would not otherwise locate or expand its load in California. These options will be available to eligible customers until Dec. 31, 2009.

The Commission determined that the implementation of successful economic development rates would spur new business and investment in the state. That, in turn, would benefit ratepayers directly by increasing the revenues available to contribute to the utilities' fixed costs of doing business, thus lowering rates to other customers. In addition to direct benefits to other ratepayers, economic attraction and retention activities also provide indirect benefits to ratepayers in the form of increased employment opportunities and improved overall local and economic vitality.

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