CA Electric Rates Should Keep Rewarding Conservation

TURN said today a proposal by California Public Utilities Commissioner Mike Florio to continue conservation rates, and reject fixed charges, was far better for consumers than a previous CPUC proposal to redesign electric rates.

  The current system of tiered rates is intended to reward conservation and keep rates affordable for low to moderate-usage customers in all climates. Flattening rates and adding fixed charges would primarily benefit higher usage customers. Under the proposed decision offered by the ALJs and CPUC President Picker, rates would be squeezed from 4 to 2 tiers with only a small differential. This would mean higher bills for about 75% of customers in the coming years.   The vast majority of rate reductions would go to the top 5% of users in each climate zone. These “super users” tend to have significantly higher incomes and far more discretionary usage.

Florio’s alternate decision would create a 3-tier structure with larger differentials than under the Picker/ALJ proposal. The impacts on the 75% of customers with low-to-moderate usage would be much less onerous and extreme high usage customers would receive far fewer benefits. The Florio alternate retains strong conservation incentives and, unlike the Picker/ALJ proposal, rejects the future imposition of fixed charges that would mean higher bills for most customers and reduce the value of conservation and energy efficiency.

“Changing the rate structure to devalue conservation flies in the face of our state’s commitment to renewable energy, efficiency and reduced emissions,” said Mark Toney, executive director of TURN. “The approach recommended in the Florio alternate takes sensible steps to redesign rates without throwing small and moderate users under the bus,” said Toney. “A redesign that provides huge windfalls to a few wealthy energy hogs while raising bills for everyone else is unacceptable to TURN, and should be unacceptable to everyone at the CPUC as well.”