By Elizabeth Douglass
Times Staff Writer
July 21, 2006
The combined wallop of the state's hot summer, high natural gas costs and
rising electricity rates has left many Southern California Edison customers
shocked at the size of their most recent energy bills.
And there is another hit to come:
Starting Aug. 1, the utility will raise rates by 2% to 55% for medium and
heavy energy users. It's the third rate increase this year for the
Rosemead-based company. The next round, given final clearance Thursday by the
California Public Utilities Commission, will bring the system wide average
increase to 17% for the year.
"Oh my God, there's another one?" Ann Willens, administrative director at the
Palos Verdes Art Center, asked after hearing about Edison's upcoming price
increase. "The last bill we got was $1,000 more than the previous bill. I was
sure there was a mistake."
It was no mistake. Willens was merely seeing the cumulative effect of two big
rate increases and running the air conditioner at the nonprofit center.
Next month's rate increase, retroactive to mid-January, first won PUC approval
in May. The regulators said they approved the higher prices to fund
infrastructure improvements at Edison.
The utility, a subsidiary of Edison International, serves more than 13 million
people in a 50,000-square-mile area that includes portions of central, coastal
and Southern California (but not the city of Los Angeles, which is served by
its Department of Water and Power). About 800,000 of Edison's 4.6 million
customers are businesses and institutions such as the Palos Verdes Art Center.
"The increases we're seeing — they're off the charts," said Bob Finkelstein,
executive director of the Utility Reform Network, a consumer advocacy group in
San Francisco.
"We haven't seen any jumps like this since the failure of deregulation in 2001
and the bailouts that followed."
Edison estimated that the three rate increases this year combined would add
about $10 to $37 to the monthly electric bill for a typical household using
550 to 750 kilowatt hours-hours of power. The 2006 increases for residential
customers using 2,000 kilowatt hours-hours would total $370 a month, Edison said.
Although about half of Edison's residential customers won't be affected
because of their low power usage, the utility acknowledged that 400,000
high-use households "have been exceptionally hard hit by this year's rate
increases."
The size of the increases resulted from changes in how Edison allocated the
hikes. Businesses, which used to pay disproportionately higher rates, are
going to see some rates fall as some costs are shifted to residential
customers.
To help ease the burden for mid-level residential users, Edison agreed to add
a pricing tier at the high end of the scale — a move that shifts more costs to
the largest residential users.
Lynda L. Ziegler, Edison's senior vice president of customer service, said the
company would notify hardest-hit ratepayers by mail.
"We don't want customers to be surprised," she said. "Because of the heat that
we've already had, and some of the earlier increases, high-use customers are
already seeing higher bills."
Edison is fielding more than the usual number of billing inquiries, Ziegler
said. The company, she said, is "really pushing customers to do everything
they can on the conservation and energy efficiency front."
In January, the utility raised rates 9% on average, citing in part higher
costs for the natural gas used to generate most of its electricity. Those
costs are passed on to customers under terms of state power contracts.
In February, Edison raised rates an additional 5.5%, which the company said
would cover rising natural gas expenses from other electricity contracts.
"Edison's not making any money on the increase in natural gas prices,"
Finkelstein of the Utility Reform Network said. "But all this stuff about
infrastructure — that's just Edison trying to collect more money from
customers. Only one small part of it is justified."
Because natural gas prices have not been as high as expected, Edison said, it
may end up rolling back some of the earlier rate increases next year.
But under a rate plan approved in May, the utility will be allowed to raise
overall rates by 1.9% in 2007 and 2.5% in 2008.