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As tiers go by Will PG&E’s ‘flat’ rate structure flatten energy conservation? by Pe t e r S e i d m a n
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uantum mechanics may be more abstruse than energy procurement policies and electricity rate regulations— but not much. Last year, Pacific Gas and Electric Company asked the California Public Utilities Commission (CPUC) to consider changing the way the utility charges its customers for electricity. The proposed changes presented a serious challenge to Marin Clean Energy (MCE). Currently, PG&E has tiered rates for the cost of generating electricity. The idea is simple: The more power a customer uses, the higher the tier and an escalating rate. Use less power and pay lower rates. Use more power and move up the tier structure. It’s a conservation incentive. MCE also rates based on tiers. Embedded in this structure for residential power generation is a conservation incentive adjustment that the state designed to promote... conservation. PG&E went to the CPUC and argued that the tier structure failed to accurately reflect the true cost of service. The tiers are based on things like climate zones that establish a baseline rate. The rate structure, the utility said, created an inequitable situation in which customers in the highest tiers pay rates well above average and customers in the lower tiers pay well below
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the average. Spurred by complaints from users in high-use climate zones like the Central Valley, PG&E asked the CPUC to grant it permission to even out the rate structures. Really even out—the utility has proposed a flat rate for electricity generation and an added surcharge to encourage conservation. That surcharge would go on the part of customer bills that tally costs for transmission and distribution rather than the actual generation of the electricity. Marin Clean Energy has no control over the transmission and distribution side of the bill and passes those costs through to customers. Critics of the investor-owned utility said the request to adjust the rate structure was aimed at putting a roadblock in front of public-power agencies like MCE. In a submission to the CPUC, attorneys for the city and county of San Francisco argued that the PG&E plan to flatten its generation rate and move the conservation incentive to the transmission and distribution side of the bill would have little effect on PG&E customers, or PG&E, because the change would be revenue neutral. But, according to the attorneys, “PG&E’s apparent motivation for seeking the proposed rate changes is to make it more difficult for [public-power agencies] to compete against PG&E.” The strategy of continually chang- 10 >
›› NEWSGRAMS Huffman OK with not getting paid While many state legislators are grumbling over state Controller John Chiang’s decision to withhold their paychecks under Prop. 25’s no-budget-no-pay guidelines, Marin’s 6th District Assemblyman Jared Huffman is withholding criticism of the move. Chiang announced June 21 that pay would not be issued, despite the Legislature’s passage of a budget last week—one that was vetoed as insufficient by Gov. Brown. Chiang said that the“voters’demand”in passing Prop. 25 was that state lawmakers pass a balanced budget in order to receive their paychecks. “Presenting the governor with a balanced budget by the constitutional deadline is the most important, if not most difficult, job of the California Legislature,”Chiang said in a statement.“In passing Proposition 25 last November, voters clearly stated they expect their representatives to make the difficult decisions needed to resolve any budget shortfalls by the mandatory deadline, or be penalized.” Huffman says he supports Prop. 25, which he says means“no budget, no pay. “Let me emphasize that my objective is to pass the best budget possible for California, and it has nothing to do with getting paid,”Huffman said in a statement following Gov. Brown’s veto. “If taking more time and working with the governor can leverage a better budget plan, I’m all for it—whether I get paid or not.” Not all lawmakers are as understanding as Huffman. State Sen. Noreen Evans, for instance, described Chiang’s“inserting himself into the legislative process”akin to“precipitat[ing] a constitutional crisis.” “Must future legislatures submit their budget proposals to the state controller to obtain his approval before passage?”asks Evans, whose 2nd District represents Sonoma, Napa, Solano, Mendocino and Humboldt.“Additionally, there is no certainty regarding the limits on the controller’s powers—for example, when must he make his determination? Controller Chiang delayed a week before deciding the budget did not meet with his approval. By inserting himself into the budgeting process and substituting his judgment for the Legislature’s, the state controller has set a dangerous legal precedent.” Huffman, meanwhile, says he’s remaining focused on resolving next year’s $9.6 billion budget deficit but says that without any Republican support for including tax extensions in the budget, “our options are limited.”Still, he says he’s hopeful the Legislature can send to the governor a “responsible balanced budget by the start of the fiscal year July 1.” Until then, one Marinite is rallying in fully facetious support of the now paycheck-less state assemblyman—San Rafael activist Jonathan Frieman announced plans to begin delivering groceries to the Huffman household. “You all know he has no income,”says Frieman.“I think we should all chip in and help him out, and I am starting the service today. I do hope others will follow suit.”—Jason Walsh 10 >