DRA Declares Proposed Residential Customer Charges on Electric Bills Are Illegal


SAN FRANCISCO, May 3, 2011 –  The Division of Ratepayer Advocates (DRA), an independent consumer advocacy division of the California Public Utilities Commission (CPUC), urges the CPUC to reject Pacific Gas and Electric Company’s (PG&E’s) proposed introduction of a special charge for residential customers.

At its May 26 business meeting, the CPUC plans to vote on implementing one of two potential rate design proposals for PG&E customers. Both proposals include changes to tiered rates for all customers, including those who receive energy bill discounts through the low-income assistance program, California Alternative Rates for Energy (CARE).  The difference between the two options is that the alternate proposed decision includes a new $3 monthly customer charge for residential customers and a new $2.40 monthly customer charge for CARE customers, which must be paid by the customer regardless of how little electricity they use.

In its written response to the proposed customer charges, DRA illustrated that these new customer charges would cause total energy rate increases that would exceed those allowed under Senate Bill (SB) 695.  SB 695, which became law in October 2009, put a limit on how fast baseline electric rates could rise, to protect residential customers from bill increases.  Accordingly, any new customer charge would contravene the Legislature’s authority and would be illegal.   

“The Legislature established a ceiling for energy rates, and these new PG&E customer charges would circumvent the intent of the Legislature and exceed those limits,” said DRA acting director Joe Como. “Low-income customers, in particular, will suffer if these customer charges are approved.” 

A Commission vote on the two proposed decisions could occur as soon as May 26.  

You can see DRA’s full filings, SB 695 text, and more information on the proposals at DRA’s Rate Design webpage.