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California

Edison to Propose Cuts in Rates for Businesses

January 17, 2003|Nancy Rivera Brooks | Times Staff Writer

Southern California Edison Co. will propose electricity rate cuts averaging 13.4%, but businesses -- not the bulk of residential users -- will get most of the rate break, the Rosemead utility said Thursday.

In fact, the typical residential customer won't see any savings under a proposal that Edison intends to file today with the California Public Utilities Commission, company officials said.

Consumer advocates criticized the newest rate proposal. But the utility's president, Robert G. Foster, said business and other heavy users have borne the brunt of past rate increases and should be first in line for rate relief. The PUC adopted record rate increases in 2001 to pay for skyrocketing wholesale electricity costs.

If approved, the rate cut probably would go into effect after this summer. The proposal, Foster said, should provide "much-needed reductions for small business and commercial customers, particularly in this economic climate."

The average monthly residential bill of about $66 for 500 kilowatt-hours of electricity use would not change under the proposal, although heavy residential users would see an average decrease of about 8%, according to Akbar Jazayeri, director of revenue and tariffs for Edison.

For small businesses, the average monthly bill of $144 for 820 kilowatt-hours of electricity use would fall to $126 under the proposal. Large commercial customers would see their average bill sink from $62,000 for 475,000 kilowatt-hours to $46,000.

In all, the Edison International subsidiary would lose $1.3 billion to $1.4 billion of annual revenue if the PUC approves the rate plan, Foster said.

Edison expects to be able to absorb rate cuts later this year because by then it will have paid off $3.6 billion in power debt left over from the energy crisis of 2000-01.

The PUC socked the 9 million customers of Edison and PG&E Corp.'s Pacific Gas & Electric Co. with two rate increases in 2001. But residential customers who kept below 130% of a "baseline" allotment did not pay higher rates, nor did low-income customers.

Businesses, meanwhile, saw their rates soar 40% to 65% or more as the PUC sought to persuade customers to use less electricity. Edison's latest proposal calls for business rate decreases of 12% to 29%.

Mike Florio, a lawyer with the Utility Reform Network in San Francisco, said residential customers are getting short shrift from Edison.

"I understand that the business folks ... deserve a larger cut of the decrease. But consumers deserve a proportional share," said Florio, who also is on the board of the state's electricity-grid operator.

Last year, Southern California Edison asked the PUC for a 3% average rate increase for 2003, which would bring in $286 million more in revenue. The PUC has yet to rule on that request. If both rate requests are approved, the net rate cut would be slightly more than 10% for all customers.

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