Utilities' surcharge proposal arrives at wrong time

Southern California Gas Co., San Diego Gas & Electric Co. and Pacific Gas & Electric Co. -- which collectively serve about 10 million natural gas customers -- want to shift $90 million in fees paid each year by business customers onto residential customers. The fees primarily go toward helping low-income people heat their homes.

The utilities contend that these fees, which are now shared almost equally by business and residential customers, make California too pricey for companies. If some relief isn't offered, the utilities say, those companies will pack up and move elsewhere.

Last week, an administrative law judge at the California Public Utilities Commission issued a draft decision rejecting the utilities' request. But the matter is scheduled to go before the full commission next month, and regulators could still decide to heed the utilities' wishes.

"The average working family is having a very tough time right now," said Richard Holober, executive director of the Consumer Federation of California. "The utilities want them to pay more so that profitable companies can pay less. That's just wrong."

At issue are so-called public-purpose programs. The most prominent is California Alternate Rates for Energy, or CARE, which provides a 20% discount on energy bills for about 2.5 million low-income households. The programs are funded by a surcharge on monthly natural gas bills.

According to the judge's draft decision, SoCalGas residential customers currently cover about 51% of program costs in the utility's service area. Business customers pay about 44% of the cost, with the remainder covered by energy industry sources.

Similar ratios apply to the two other utilities.

Under the utilities' proposal, SoCalGas residential customers would shoulder slightly more than 78% of the programs' cost, and businesses would cover about 21%.

In SDG&E's case, the burden for residential customers would jump to nearly 84%, while the hit to businesses would drop to almost 16%. PG&E residential customers would see their percentage rise to about 68%, while businesses would cover about 32%.

When the higher fees are completely phased in after three years, SoCalGas residential customers would see their annual surcharges jump to about $41.50 from $27. SDG&E customers would pay almost $36, up from just under $25. Surcharges for PG&E customers would rise to $36 from about $28.