3. Applicants' Proposal
The utilities each propose to implement a 5% increase effective January 1, 2010, in Tiers 1 and 2 rates (excluding the residential CARE program). The utilities propose to concurrently offset the resulting increase in revenues by decreasing Tiers 3, 4, and 5 rates pursuant to the provisions of § 739.9.5 These rate changes are proposed pursuant to the provisions of SB 695, and are designed to begin to rectify the disparities that have accumulated between rates charged in Tiers 1 and 2 versus rates charged in Tiers 3, 4, and 5. The result of these offsetting rate impacts are revenue-neutral as to the overall residential customer class, and are designed to keep overall utility revenues unchanged.
For the residential CARE program, pursuant to § 739.1 the Commission may increase rates (but not to exceed 3% per year) for electricity usage up to 130% of baseline quantities subject to conditions.6 The increase is to correspond to the annual increase in benefits provided under the CalWORK's program for the fiscal year in which the rate increase would take effect. The benefits under the CalWORK's program are subject to an annual COLA, effective July 1st of each year, as provided under the Welare and Institutions (W&I) Code Section 11453 (a). Since the COLA for the CalWORK's program has been suspended for the 2009-2010 fiscal year, however, the utilities do not propose any increase to CARE Tiers 1 and 2 rates.
The utilities provided illustrative calculations of the potential impact of the rate proposals on customers' retail bills, assuming varying usage levels. Some customers will see an increase in their bill, while other customers will see a decrease, depending on the customer's usage level. Overall the utilities' proposals are revenue neutral with increased revenues collected from customers with relatively low usage being offset by decreased revenues from customers with higher usage.
PG&E estimates that a typical residential customer using 550 kWh would see a monthly PG&E bill change from $74.13 to $76.63, an increase of $2.50, or 3.4%. A residential customer using 850 kWh per month (i.e., about twice the baseline allowance) would see a monthly PG&E bill change from $164.15 to $163.46, a decrease of $0.69 per month, or a 0.4% decrease. A residential customer using 1500 kWh per month would see a monthly PG&E bill change from $434.98 to $419.66, a decrease of $15.32, or 3.5%.
SCE provided an illustrative example of the residential customer bill impacts of its rate change proposal.7 Based on the assumptions in its illustrative examples, a customer with consumption roughly equal to the baseline allowance of 300 kWh would see a bill increase of 4.9% (or $1.77 per month). A typical customer using 600 kWh (or about two times the baseline allowance) would see virtually no change in the monthly bill. A higher-usage residential customer (using 1500 kWh, or five times the baseline allowance) would see about a 2.8% bill decrease (or $10 per month).
SCE's proposed rate decrease for non-CARE Tier 3 will result in a lower Tier 3 rate for CARE customers, due to the relationship between CARE and non-CARE Tier 3 rates.8
SDG&E also provided illustrative bill impacts of its proposed rate changes for its Schedule DR for specific kWh usage levels, based on rates in effect as of October 1, 2009, as set forth in Attachment of its sponsored testimony. A typical SDG&E customer using 500 kWh would see a 3.7% increase in its summer monthly bill and a 3.2% increase in its winter monthly bill. A typical SDG&E customer using 1,000 kWh would see a 1.7% decrease in its summer monthly bill and a 2% decrease in its winter monthly bill. A typical SDG&E customer using 1500 kWh would see a 2.7% decrease in the summer monthly bill and a 3% decrease in the winter bill.
5 In the case of SDG&E, there are only four tiers. References to Tier 5 throughout this decision thus apply only to the PG&E and SCE proposals.
6 Section 739.1(b)(4) requires that CARE rates for Tiers 1, 2, and 3 shall not exceed 80% of the corresponding non-CARE rates for those tiers excluding DWR bond charges, the CARE surcharge portion of the public goods charge, any charge imposed pursuant to the CA Solar Initiative, and any charge imposed to fund any other program that exempts CARE participants from paying that charge.
7 See Table III-2 of SCE Testimony of Russell Garwacki.
8 SCE's current CARE Tier 3 rate is based on a 20% discount from the non-CARE Tier 3 rate less the DWR Bond Charge and CARE program charges and any CSI-related charges not suspended in 2009 by D. 08-12-004.
