Electric rate changes, approved in July, will begin to appear on customer bills this month, Southern California Edison said in a notification last week.
On July 3, the California Public Utilities Commission unanimously adopted a new residential rate structure. The new structure is more closely aligned with the actual costs of providing electric service — more electric use will result in higher bills.
The current tier-based pricing structure was adopted in 2001 as a result of the energy crisis. Currently, about a quarter of SCE’s customers — often those with larger families or who live in areas with high summer temperatures — pay the majority of all rate increases.
The first step in the new rate structure is an increase in the monthly minimum delivery charge. For SCE customers enrolled in the California Alternate Rates for Energy, Family Electric Rate Assistance or the Medical Baseline programs, the monthly minimum charge will be $5, but only if the actual delivery charge total is less than $5.
For all other residential customers, the monthly minimum charge will be $10, only if the actual minimum delivery charge is less than $10.
Other changes, which will occur this year, include a new, fixed, monthly discount of 12 percent for customers participating in the FERA program. SCE also will reduce the variances in pricing between tiers within the standard residential rate plan.
Beginning in 2016, SCE will reduce the number of rate tiers from four to three. In 2017, SCE will reduce the three tiers to only two tiers.
Also in 2017, SCE will impose a super-user electric surcharge when a customer’s monthly usage exceeds twice the average amount of electricity (more than 400 percent of the baseline allowance).
By 2019, customers’ bills will be based on the time of usage, i.e., the price of electricity will depend on the time of day when it is used.
Since the energy crisis in 2001, the lower-tier rates have been frozen. Consequently, the rate structure departed increasingly from any cost basis and imposed greater inequities on large-family households that were pushed into higher tiers in hot climates, according to SCE.
Under the decision, low-usage customers will see an average $1.50 to $2 a month increase each year as the changes are phased in over four years. Medium-usage customers will see an average $2 a month bill increase during the same time period, while high-usage customers will see an average $1.50 to $2 a month decrease during the transitional time.
Changing the structure won’t result in a change in the overall amount SCE collects from all customers or the profit it makes, the press release said. It also builds a rate structure to allow adding more renewable energy generation to the grid, and to encourage customers to use energy when there is excess renewable energy and to cut back during peak usage periods.