September 8, 2006
Utility recommends assistance for hard-hit customers and further postponing rate changes.
ROSEMEAD, Calif., Sept. 8, 2006 – To help customers deal with high summer electricity bills, Southern California Edison (SCE) has recommended that regulators further postpone the utility’s previously approved 6% residential rate increase.
The increase, originally scheduled to take effect Aug. 1, 2006, would instead occur Jan. 1, 2007. SCE previously proposed, and the California Public Utilities Commission (CPUC) approved, delaying the rate change until November. The new rates were approved earlier this year by the CPUC to fund stepped-up replacement and expansion of the region’s electricity infrastructure.
The utility estimates the postponements will benefit residential customers as follows:
Estimated Total Savings
Tiered Rate Structure
|Lower-use||$0 to $5||Tier 1 Baseline allotment*||
|Tier 2 1%-30% more than baseline||13.7¢||13.7¢||13.7¢|
|Mid-use||About $60||Tier 3 31%-100%||16.6¢||22.3¢||22.8¢|
|Higher-use||About $400||Tier 4 101%-200%||19.8¢||31.2¢||35.2¢|
|Tier 5** More than 200% over baseline||19.8¢||31.2¢||47.5¢|
*The baseline kilowatt-hour allotment is set by the CPUC and varies by climate zone.
**Authorized but postponed.
“We have been very concerned about the impact of this summer’s heat and high electricity usage on customer bills,” said Lynda Ziegler, SCE senior vice president of customer service. “The steps we are taking are modest but provide some measure of relief for customers.”
Lower natural gas costs and higher electricity sales made possible the proposed rate relief. Unlike other businesses, regulators predetermine utility revenues. Rates are set in advance based on forecast costs and customer usage. Through July, utility costs have been lower than forecast and customer usage higher. Normally, such fluctuations would benefit customers when rates are reset at the beginning of the following year by reducing the costs that would otherwise be reflected in rates. This year, because of the struggle many face paying summer bills, SCE proposes immediately using a portion of this benefit to postpone an approved residential rate increase.
To further assist customers, SCE today will propose to regulators that $10 million, approximately 8% of above-forecast collections, be used to help those most in need of financial assistance to pay high summer bills. SCE will recommend one-time bill payments of up to $150 to qualifying customers. With CPUC approval, the utility would begin dispersing funds through its Energy Assistance Fund (EAF) to those with household incomes within 400% of federal poverty guidelines. For more information, customers can go to www.sce.com/eaf or call 800-205-8596.
“To help customers manage their energy use and costs, SCE is offering a wide variety of cash rebates on energy-efficient devices for homes and businesses,” said Ziegler. “We encourage customers to check out rebate details as well as the practical tips on energy conservation available at www.sce.com.”
- By law, baseline and tier 2 rates are currently frozen. Utility cost increases must be added to the other tiers.
- SCE rates rose approximately 15% overall at the beginning of 2006 due to higher costs for natural gas, the fuel used to generate more than half of California’s electricity.
- SCE submitted to the CPUC on Aug. 1, 2006, its 2007 fuel and purchased-power cost projections. The utility forecasts lower costs next year. The projection will be updated in November, and then regulators will reset rates for the New Year.
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An Edison International (NYSE:EIX) company, Southern California Edison is one of the nation’s largest electric utilities, serving a population of more than 13 million via 4.7 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.