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PUC Gives Utility Customers a Break

Energy: Companies ordered to raise the allotment of electricity and gas that is billed at the lowest rates.


Most residential customers of Southern California Edison and Southern California Gas Co. can look forward to slightly lower bills because regulators ordered the state's investor-owned utilities to boost their "baseline," the allotment of electricity and natural gas each month that is billed at the lowest rates.

SCE on Wednesday was still calculating new baselines for the six regions in its 50,000-square-mile territory and could give only a rough estimate of potential average savings of about $1.50 on an average monthly bill of $70.50.

For Southern California Gas, the savings are considerably smaller, averaging 36cents a month in winter and 9cents a month in summer for most customers.

The ruling Tuesday by the California Public Utilities Commission also applies to Pacific Gas & Electric Co. and San Diego Gas & Electric, but not to the Los Angeles Department of Water & Power, whose rates are not controlled by the PUC.

Baseline is the amount of electricity or natural gas that supposedly meets the minimum needs of a typical household in each region.

Consumers complain that the many baselines in each utility's territory were calculated using old data that didn't account for the energy use of modern homes.

In addition, critics say the baseline regions are too large, with each containing communities in which electric usage varies greatly. For example, Santa Monica and Compton are in the same baseline region.

Baseline pricing, an arcane bit of utility rate-making, became a hot issue during California's energy crisis as the price of electricity and natural gas soared.

Last year, the PUC instituted California's largest electricity rate hike ever and designed the new rates in five tiers tied to baseline. Customers who used up to 130% of baseline saw no rate increase. (Natural gas rates are partly deregulated, and gas utilities are allowed to pass along changes in the fluctuating commodity price of natural gas.)

The five-member PUC, in a unanimous vote, ordered the utilities to increase the different baseline allotments by varying amounts, depending on the baseline region.

All-electric households were not affected by the decision because their baseline was already set by law.

Utilities initially will lose money while consumers save. Utility customers should not celebrate too quickly, however, because the PUC intends the changes to be "revenue-neutral" to utilities, meaning any revenue lost because of higher baselines must be made up somewhere else. How that will balance out will be determined later.

"We are looking only at how the pie is sliced, not the size of the pie," the PUC said in its order.

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