State regulators approve PG&E's new tiered prices

May 26, 2011 8:39:26 PM PDT
The biggest users of electricity are about to get a break from PG&E, but customers may end up paying more.

If some customers use just a little more electricity, than the average customer, this decision could push them over the line into a more expensive rate category -- that's the bad news. The surprising good news is fee a fee that PG&E wanted to tack onto your bill has now been taken off the table.

"We've all come here today to express our opposition to the $2.40 increase on low income clients," said one PG&E customer.

Dozens showed up at the California Public Utilities Commission meeting ready for battle. The enemy was a new flat fee or customer charge that PG&E asked to add onto every residential monthly bill -- $3 for most households, $2.40 for those with low income.

"I'm upset that they're constantly attacking ratepayers from every angle," said PG&E customer Denise D'Anne.

In fact, there was so much opposition to the concept of a customer charge -- not to mention so many legal questions -- that at the last minute, PUC president Michael Peevey surprised his fellow commissioners by withdrawing the idea even though he says it's a perfectly reasonable one.

"I am withdrawing my alternate," said Peevey.

Other commissioners were caught totally off guard.

"I was not aware of that when we wrote these comments," said Commissioner Timothy Alan Simon.

Ratepayer advocates, who were preparing to fight the fee in court, were pleased.

"We think this is actually a big win for customers today, especially low income customers and smaller usage customers," said Matthew Freedman, a ratepayer group attorney.

But for customers who use a lot of power, like those in hot climates who run the air conditioner all summer long, the news is mixed. A new rate structure means more people will fall into the so-called "third tier" -- a more expensive electric rate for those who use more energy than the local average. For the first time, low income families will not be exempt. PG&E says the change is to spread the burden around to give the heaviest users -- the fourth tier -- a break.

"I think with the prices as high as they were in tier 4, that that was unacceptable to everyone. And I think most people recognize that that was a punitive price," said PG&E spokesman Tom Bottorff.

PG&E plans to start billing under the new rate structure sometime in June -- that's right when people in the hottest parts of the state will start cranking up the air conditioning.

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