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Edison Bid to Hike Rate Would Add $5.10 to Bills

February 10, 1988|NANCY YOSHIHARA | Times Staff Writer

If the state approves a request by Southern California Edison Co. to raise its electricity rates $628 million, or 11.6%, the average residential customer's monthly bill will increase $5.10 to $50 or more.

The average bill now ranges between $44.68 to $49.80 a month, an Edison spokesman said. Edison serves a large part of Southern California, excluding the city of Los Angeles.

Although Edison asked the California Public Utilities Commission for a June 1 effective date for the higher rate, the state review process could delay any rate action until mid-summer or later.

Increased Costs Cited

Edison said the rate hike--the first double-digit percentage increase since 1982--is necessary to offset big increases in the cost of purchased power and natural gas. Howard P. Allen, chairman and chief executive of the Rosemead utility, said, "Under CPUC rules, this large rate increase will not add a penny to Southern California Edison's profits."

Consumer activists were not convinced on Tuesday. "I think it is unfair. We are certainly going to take every number apart and sock it to them," said Sylvia M. Siegel, executive director of Toward Utility Rate Normalization, a San Francisco consumer group. "I think it is appalling. They (Edison) just got some rate adjustment."

In December, the PUC granted Edison a 4.9% general rate increase for residential users, effective Jan. 1. That added $1.83 to the average monthly bill.

Edison's latest request for energy cost adjustments will be subject to a thorough review and analysis by the PUC staff. "Then we will do a staff report which, in the past, has always come up with an amount that has been less than what the company has requested," said Bill Y. Lee, program and project supervisor at the PUC.

Edison estimated its fuel and other power costs for 1988 at $2.3 billion. It said the costs represent about 39% of the delivered cost of electricity. Edison attributed the increase to rising costs for both natural gas and alternative energy sources.

Part of the rising costs stem from contracts signed between 1982 and 1985 under which Edison agreed to buy alternative sources of energy, rather than gas, oil and nuclear power. The contracts were part of federal and state requirements to develop co-generation plants and solar, geothermal and wind energy sources.

Costly Contract Purchases

Allen said the cost of buying these alternative sources--many of which are just coming on line--is "higher than our current cost of producing power." Purchases under these contracts account for "slightly more than half" of the $628-million rate increase request, he said.

In addition, he said, Edison is required to pay a higher price for natural gas under state regulatory gas price policies. Gas purchases include a fixed charge that must be paid by Edison to Southern California Gas Co. regardless of the amount of gas purchased. As a result, Edison estimates that it will pay an average of 32% more for natural gas to generate electricity than the price of gas that was used to set its current electric rates.

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