Posted July 08, 2015 by Gabriel Posternak

California approves electricity rates increase that threatens energy conservation

In a baffling and controversial decision made last Friday by the California Public Utilities Commission, electric bills are to be increased over the next few years for practically every Californian. The rate overhaul – the first statewide measure since the 2000-01 energy crisis – is to hit modest and moderate consumers the most, although details are still scarce.

Users will start to notice major changes in 2016 but that will be just the start, as the increase is to be phased over through 2020. The proposal was voted unanimously by the Commission members and implies the adoption of a plan for two price tiers for residential customers.

Thus, there will be a 25% price increase for households that use more power and a new “super-user electricity surcharge” to penalize high energy consumption. Additionally, a minimum bill charge of $10 a month (or $5 for subsidized customers) was also authorized which will be paid even if the electricity use is equal to zero.

Of course, concerned parties didn’t take long to raise their voices. The Sierra Club, for instance, said that under this new plan “"Customers using twice as much electricity as average can expect their bills to go down, while bills will be raised on everyone else." For his part, Michael Powers, co-owner of San Diego-based solar provider Stellar Solar, said that the solar energy industry could also suffer if regulators decide to include a new solar tariff that ends up reducing incentives.

In fact, Powers went as far as to state that “it's really hard to reconcile the state of California and the governor and the Legislature saying that we want clean energy to be an engine of economic development” while “you have the utilities and the Public Utilities Commission making solar less and less affordable.”

Russ Garwacki, director of pricing design and research at Southern California Edison, defended the plan and said that “it’s a matter of fairness” as it would come to solve long-term complaints about the tiered system. Basically, they are saying that high-end users have subsidized low-use households that aren’t even paying the supply cost.

This line of thought, however, misses the purpose of the tier structure entirely. The idea of charging more to those that use more energy has a simple logic behind it – to promote energy conservation. Getting rid of it might seem like a fair move but for the millions of Californians that will start paying insane prices next year, it certainly feels as if the high-end users are being benefitted. As Evan Gillespie, a campaign director for Sierra Club California, put it “this is really the utilities versus everybody else”.

Via LA Times

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