So Cal Edison Rate Hikes—Wrong Time, Wrong Reasons

Southern California Edison customers would face a trio of rate increases over the next three years, generating $1.49 billion.

Southern California Edison customers would face a trio of rate increases over the next three years, generating $1.49 billion under a proposal the utility giant says is critical to upgrading its aging power system.

Edison says the proposed rate hikes — 7.22 percent in 2012, 1.3 percent in 2013 and 4.35 percent in 2014 — can be made while keeping monthly residential bills at about the national average. To postpone the upgrades would only be more costly to ratepayers in the long run, the company claims.

Critics contend the increases would come when unemployment is still sky high and many families cannot afford them. They also argue the money would pay for needlessly expensive improvements and unpopular perks, such as $1 billion for new software and about $26 million for executive bonuses and stock options — claims that Edison disputes.

Edison will participate in state public hearings at 2 and 7 p.m. Wednesday at Oxnard City Hall to solicit public feedback and answer questions. Anyone can speak at either hearing, among several planned by the California Public Utilities Commission this month in Edison’s vast territory of 50,000 square miles that stretches roughly from Santa Barbara to Bishop to Orange County, with 5 million customers. The only sizable exception is Los Angeles, where power is provided by the Los Angeles Department of Water and Power.

Last week, public hearings were held in San Bernardino and Garden Grove.

Edison says most residential customers would see a monthly increase of less than $5 in the first year, although high p

ower users would pay more. Low-income customers enrolled in the utility’s CARE program would see an average increase of $2.70 per month.

Overall, Edison estimates average residential bills would remain slightly less, $90.37 a month, than the national average of $99.70, despite California having a higher price per kilowatt.

Administrative Law Judge Melanie Darling is attending all the hearings to weigh public and Edison input and develop an independent recommendation for the California Public Utilities Commission, which has final say on the three-year request. If approved, the new rates are expected to take effect in early 2012.

A court reporter also will be present to record all testimony and provide a transcript to commissioners.

Darling’s recommendation, expected later this year, could call for increases lower than what Edison has requested. Consumer groups have urged residents to speak against the size and timing of the increases with personal stories.

"Consumers should come out in full force," said Mark Toney, director of the consumer group TURN, or The Utility Reform Network.

"There is power in numbers, and the more people who show up to speak out about people out of work and the current economic hardships faced by businesses and residents, the more impact we will have," according to a TURN flier distributed to Edison customers.

Russell Worden, Edison’s director of rate cases, said rate hikes are never popular, but the $1.49 billion anticipated over the three years is needed for upgrades and repairs to a massive electrical generating and distribution network with equipment and power lines dating to World War II.

Worden, in response to allegations that Edison has padded its proposal with unneeded expenses, said every element of the rate request must be supported by detailed, factual evidence that is reviewed by the commission’s Division of Ratepayer Advocates staff and other public interest groups, who can put together their own evidence and case. Edison also faces a top-to-bottom audit.

"The reality is if we push it (the improvements) off or neglect to make investments in the system, it will be more expensive in the coming years," Worden said.

The modernization work also would create about 10,000 jobs, albeit temporary, and have a positive impact on the state’s economy, according to two independent economic assessments by Global Insight and Beacon Economics.

Among the proposed enhancements likely to generate opposition among Ventura County residents is Edison’s continued pursuit to construct a 45-megawatt, 80-foot-tall peaker power plant near Mandalay Beach in Oxnard. The plant, designed to meet peak demand on the electrical grid, would be financed with funds from the requested increase, Worden said.

Oxnard officials and residents have argued the plant is unnecessary with the economic downturn and other peaker plants already on line. City officials also contend it would be inconsistent with current zoning, and that Oxnard already has two large coastal power plants.