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Editorial: With tweaks, bill to update electric rate structure should be approved

Published: Sunday, Sep. 1, 2013 - 12:00 am

In 2013, no one truly is off the grid.

Californians are interconnected, no matter whether they leave their air conditioners running on all day and rack up $600 bills, or have become so energy efficient that their Smart Meters run backward.

Legislation by Assemblyman Henry T. Perea, D-Fresno, recognizes that reality. His Assembly Bill 327 seeks to tackle the complex issue of electricity rates, and offers some reasonable suggestions. The Senate Appropriations Committee approved the measure on Friday. It will make another stop this week in the Senate energy committee and then likely to the Senate floor. Senators ought to approve it, but not before making some key changes.

The measure would alter aspects of the pricing structure put in place during the energy crisis of 2000 and 2001, and shift greater authority to the California Public Utilities Commission, the state entity with the greatest expertise in the area of rate-setting.

No doubt, some customers of PG&E, Southern California Edison and San Diego Gas & Electric would pay more if the bill becomes law. But The Utility Reform Network, the leading consumer group focused on electricity issues, supports the measure, as do the utilities that TURN battles in the Capitol and at the Public Utilities Commission.

If the measure were to become law, the Public Utilities Commission would be empowered to impose a flat fee of as much as $10 a month on each private utility customer to cover the cost of the grid.

But commissioners also would be expected to use their judgment to impose a lesser amount or find alternative ways of funding maintenance and improvement of the electricity distribution system. Consumers should be wary about the PUC turning the $10-a-month cap into the surcharge

The provision is intended to make sure that rooftop solar customers who have cut their bills dramatically pay something to cover the cost of the grid, which benefits all Californians. The state should encourage the continued expansion of solar energy. But the state also has an interest in making sure all customers pay their fair share.

According to legislative aides who analyzed the bill, rooftop solar generates 1,173 megawatts in the territory controlled by PG&E, Edison and San Diego Gas & Electric. The cost to non-solar customers is roughly $60 million a year.

The Legislature has justified the subsidy because it stimulated the once-nascent solar industry, and helped reduce reliance on traditional sources of electricity, which benefits the entire state.

However, solar energy clearly has gained a hold in California and will continue to expand. Customers who for whatever reason do not install panels on their roofs should not be expected to pay for part of their neighbor’s bills in perpetuity.

The California Solar Energy Industries Association, which represents solar manufacturers, distributors, contractors and others, opposes the bill, homing in on a provision that would authorize the Public Utilities Commission to alter solar customers’ contracts. Some large agricultural users also are opposing this provision.

The trade group and others say solar users could end up paying more than they anticipated, and lenders’ investments could be jeopardized. A deal ought to be a deal. The Legislature and commission should address the industry’s concern and provide stability.

AB 327 makes clear California will continue to encourage alternative fuels, stating that the already bold ambition of having a third of the state’s electricity come from renewable sources by 2020 is a floor, not the ceiling.

The bill would authorize the Public Utilities Commission to raise that standard, a provision opposed by manufacturers who already pay high rates, compared to manufacturers in other Western states.

Energy conservation must be rewarded. But patterns of use are changing. The state must try to keep up, for the sake of every Californian.

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