SCE Customer Rates Could Drop Sooner Than Expected

April 25, 2003

April 25, 2003

ROSEMEAD, Calif., April 25, 2003—A number of California consumer and business groups, as well as the California Public Utilities Commission (CPUC) Office of Ratepayer Advocates, have reached an agreement with Southern California Edison (SCE) on a plan that, if approved by the CPUC, could expedite rate reductions for retail electricity once the utility completes the recovery of uncollected procurement costs incurred on behalf of customers during the California energy crisis.  The plan was submitted to the commission on Wednesday.

“Rate reductions could arrive in time to lower customer costs during the hottest summer months, assuming remaining challenges are overcome,” said SCE CEO Alan Fohrer.

SCE filed a rate reduction plan on January 17 anticipating a mid-year completion of its energy crisis cost recovery.  That plan envisioned the possibility of rate reductions in early fall.  The new agreement relies on forecasted rather than after-the-fact verification of cost recovery and would make possible a drop in rates somewhat sooner. 

Other modifications made by the utility, consumer and business representatives participating in regulatory settlement discussions include changes in the way Direct Access and other costs are applied to rates.  As a result, proposed rate reductions for residential customers have increased when compared to SCE’s original proposal, while some nonresidential rate reductions have decreased. 

The proposal calls for participants in the state’s low-income California Alternate Rates for Energy (CARE) program to continue to receive rate protection and retain their 20% discount. 

Said participant Bill Booth, the counsel for the California Large Energy Consumers Association:  “Our heavy industrial member companies were hard hit by the very large rate increases in 2001 and they welcome the prospect of these rate reductions even though they will not return rates to the levels in effect in 2000.  This is a good start in the process of returning rates to competitive levels.”
 

As the following chart explains, SCE and the customer groups participating in the agreement are asking the CPUC to apply rate reductions in a manner that benefits all customer types – residential, small, medium-size, and larger businesses as well as agricultural and street lighting customers.  Proposed average rate reductions for businesses are larger than for residential customers because businesses paid higher energy crisis rate surcharges.

Customer
Group
Current
Avg. Rate
(Per kWh*)
Proposed
Avg. Rate
(Per kWh) 
Proposed
Reduction
Residential (non-CARE) $.146 $.135 8%
Small Business $.174 $.143 18%
Medium Business $.153 $.133 13%
Large Business $.129 $.105 19%
Agriculture $.113 $.096 15%
Street Lighting $.172 $.145 16%

* kWh = Kilowatt-hour

“These rate reductions should help all our customers, particularly businesses, during these tough economic times,” said Fohrer.  “We will continue to fight for refunds and other measures that lower customer costs and assure reliable power supplies.”

SCE has been recovering costs associated with California’s energy crisis under the terms of a settlement agreement reached with the CPUC in October 2001. 

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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 12 million via 4.5 million customer accounts in a 50,000-square-mile service area within central, coastal and Southern California.