If PG&E is really troubled by high electric bills, why does it keep raising rates?
How touching to see the recent Viewpoints commentary by a Pacific Gas & Electric executive seeking to protect his customers from the pain of the company’s own high electric rates (“California’s electric rate system is broken and needs to be fixed,” Feb. 22.)
Unfortunately, the alternative supported by PG&E Vice President Tom Bottorff, Assembly Bill 327, makes the problem worse by eliminating existing consumer protections that benefit lower-income families and moderate energy users. Eliminating the tiered rates that Botorff complains about would only shift costs from wealthy coastal communities to lower-income inland customers who can least afford them.
Tiered rates encourage conservation by charging higher rates for higher usage. Customers receive a “baseline” amount of electricity at the lowest rate, based on average usage in that customer’s climate zone. Above baseline usage costs more. The beauty of the way our baseline system works is that customers in the hot Central Valley get more than twice the summer allowance Bay Area residents do, and at 1000 kilowatt hours pay roughly a third less per kilowatt hour for their electricity.
In fact, average rates are highest in wealthy Bay Area communities where customers have large homes and lowest in California’s poorest communities. The 15 communities with the highest rates have a median household income of $160,121 a year, and the lowest rates are in communities with average incomes of just $42,102. Households with the highest usage within their climate zone, typically wealthier customers, pay the highest rates.
In lower-income Central Valley communities, a far greater number of customers receive low-income CARE assistance (which provides much lower rates). If PG&E and Assemblyman Henry Perea of Fresno have their way:
- Discounts for low-income families would be drastically reduced, and their monthly bills could skyrocket.
- Bills for customers who use the least electricity would increase.
- PG&E would be allowed to propose large monthly fixed charges regardless of usage.
- Customers could be forced into punishing, time-based pricing, further exacerbating high summer bills in the hottest areas.
These kinds of “solutions” will do nothing to help struggling families in Fresno and other parts of the state to purchase the essential electricity they need.
Bottorff is right that “steep electric rates … (are) a man-made problem.” Bottorff should know; it is the executives at PG&E who keep raising rates. The solution isn’t to shift high rates from one group of customers to another; the solution is to lower rates, which PG&E’s leadership can certainly do if it wants to.