SDG&E Proposes Rate Changes, City Of SD And UCAN Protest
Friday, August 20, 2010
The Utility Consumer Action Network and the City of San Diego have each submitted protests to SDG&E proposed rate changes. We'll discuss details of the plan and what's in it for consumers.
GLORIA PENNER (Host): San Diego Gas & Electric has another idea for encouraging customers to use energy more efficiently and, most likely, boosting its bottom line. The latest proposal is to charge customers a rate based on what time of day they use the electricity. But the company’s getting some push back from both the Utility Consumers Action Network, that’s UCAN, and the City of San Diego. So, David King, first of all, let’s understand how the proposed rate structure would differ from the current rate structure.
DAVID KING (Founder/Editor, sandiegonewsroom.com): Okay, the rate structure, it would be different in terms of charging different rates during higher use hours and different rates on particular days of the year like during the summer when there’s just more demand for energy, and notifying users ahead of time that these are dates when it’s going to be a particularly high tariff we impose upon you for using during the hours of 11:00 a.m. and 6:00 p.m. Don’t run your dryer during these hours, don’t run any energy that you can avoid using. And this is a step to the future. This is a step towards our George Jetson world that we will live in in the future because it’s an absolute necessity. The change that’s on the table is…
PENNER: I’m sorry, what’s an absolute necessity?
KING: It’s an absolute necessity to change people based on the availability and the demand for energy. The only way people will change their behavior is to hit them in the pocketbook. And this is a necessary change because of just our environmental limitations, the constraints of reality here, that we demand more energy than we have energy. We don’t have good storage capacity so the energy, it’s use it or lose it. And you do have to encourage people not to use more energy than they need during these peak hours and peak demand.
PENNER: Okay, well, let me see if I understand this then. Let me go to you on this, Alisa. So we’re talking about if you charge people more during peak hours, it should reduce demand during those high demand hours. How would this be financially beneficial to the utility company?
ALISA JOYCE BARBA (Western Bureau Chief, NPR News): How would this be financially – I don’t know the answer to this question.
JW AUGUST (Managing Editor, KGTV 10News): Well, the plan, one thing…
PENNER: JW August.
AUGUST: You know, the ISO can plan up in Sacramento if they know that if they start seeing the curve go down for maximum use and they can plan how they’re going to – when they send the extra power into the system. It allows them to plan and make – It’s more efficient, is what it is.
KING: It’s an efficiency issue. And, initially, here, this will be mandatory that – The change that’s on the table – one thing that’s already been imposed for big energy users to this…
PENNER: Big business now.
KING: Big businesses, 20 kilowatts a month or something like that, already have this. 2008, it went into effect. It will become mandatory in 2013. It’s going to be scaled in for smaller commercial accounts, which is one of the reasons why the City is the one who’s – what they’ve done is basically request a hearing to break this open and do closer analysis of it, which is absolutely necessary. And – But for homeowners, residential users, this would only be voluntary at this point. So you and I, we go home, our rates would basically remain the same. They may go up because of – Rates change automatically anyway. That happens on a regular basis with the California Public Utilities Commission, you know, mandating new rate changes. But the change in the whole structure of the rates, if residential users want to go with this, it would be a voluntary change.
PENNER: It would be voluntary and the only reason to go for it would be if you really felt as though it would bring down your bill.
KING: If it’s – Yeah.
BARBA: That’s what I was going to say. I was going to say that the rates are going to go up. Everybody’s going to face higher electricity rates in both that mandated change but also SDG&E wants to raise it even more. And I think that a lot of homeowners could look at this plan as a way of saving some money. If they studied it and they figured out how to bring their own energy use down, they could look at ways of keeping their rates down as well.
PENNER: All right, let me take this to the listeners then. So you’ve heard about it. There is talk now and it’s going through the regulatory process that there would be a change in the way that your rates are structured. You would pay more during high demand time and less during low demand time. And I’d like to get your impression of what this is all about. By the way, big businesses are doing that right now. This would be voluntary for residences but it would be imposed on small business. Am I correct, David?
KING: Correct, beginning in 2013 it’ll be mandatory. The first year that it’s in effect, there’s a guarantee that it won’t cause rates to go up. It’s a process. It’s a big implementation and that’s why this will take a while. It’s a major change in people’s behavior, small business behavior.
PENNER: Our number is 1-888-895-5727, 895-KPBS. And let’s go to the phones and see what our listeners have to say. We’ll start with Pan in Normal Heights. Oh, I’m sorry. It’s Allison in Tierrasanta. Allison, you’re on with the editors.
ALLISON (Caller, Tierrasanta): Hi. I just wanted to say when we lived in Georgia they did the same thing for the time of year, so from May to September it was 9 cents a kilowatt hour, and then from October to April it was 4. And I actually liked it as a consumer because it forced us to want to conserve in the summer months when we really wanted to just blast our air-conditioner to make our home much cooler. And then we were able to get the even billing so that our bill never changed over the months, even if the rates were higher because we were able to even our bill out, you know, divide it by twelve.
PENNER: So, Allison…
ALLISON: And we always had a balance at the end that was a credit to us because we conserved.
PENNER: So, Allison, you’re talking about time of year rather than time of day.
ALLISON: …which is one of the options, right, that they’re thinking about doing?
KING: That’s part of the new…
PENNER: Well, David…
KING: …plan. Yeah, it’ll be part of the new plan, that there’ll be certain high demand portions of the year that the winter’s treated differently than the summer, that people run their air-conditioner and that’s astronomically more energy than the heat used during the winter. But during certain days of the year when the temperatures are excessively high, they will give notice ahead of time and people will be imposed with a huge tariff if they use during the hours of 11:00 to…
PENNER: Allison, thank you very much for your phone call. Before I take Fred in North Park, I just want to ask you, JW, suppose that you are, let’s say, a senior citizen…
PENNER: …on a fixed income and we start having really hot weather in San Diego…
AUGUST: And you’re homebound?
PENNER: And you’re homebound.
AUGUST: Yeah, that’s something the new rate structure has to take into account. We just can’t – It has to resign to protect against punishing the customers who simply can’t change their consumption patterns because of their particular lifestyle. And that’s got to be part of the – Whatever they come up with, that’s got to be part of it. And, as Allison just said, why does SDG&E need $118 million more from ratepayers to sell this campaign? All they need is Allison, formerly from Georgia, to explain it just as she did. Part of the problem is, the pricing structure, I read the thing. I can’t figure it out. They gotta say it in English so we can all understand it. How can we make an intelligent choice when the way it’s proposed, you gotta be a brain surgeon.
PENNER: Well, my understanding is that the utility wants $118 million dollars…
PENNER: …for the education program.
AUGUST: Yeah, get Allison in. Give her a cup of coffee and put her on the bus, bring her to SDG&E and tell everybody how to do it.
PENNER: Okay. And, Allison, you see, we really are – thank you. Let’s turn to Fred now, Fred in North Park. Go ahead, Fred, please.
FRED (Caller, North Park): Yeah, it’s amazing how widespread and how changes like this affect so many aspects of life. I’m a service provider for manufacturing businesses and because the business is already on this thing, a lot of companies have shifted their production to third shift only. And so when I have to go service them, that throws my scheduling all out of whack and I can’t work a regular day. I have to work spots here and spots there compared on what my customers are scheduled because they chose to work during the cheap electric time.
PENNER: Interesting. Thank you for that, Fred. Alisa.
BARBA: I think his point is, is that this will have a lot of ramifications that we aren’t even thinking about and I think it will affect industry, it will affect business, and it is fascinating to hear that he’s already having an impact on his life.
PENNER: Yes, it…
BARBA: I don’t know if it’s a negative impact. He wasn’t very clear about that. But I think that, you know, you have to see the overall goals of using less electricity or using it in the off-hours is probably a pretty good thing to be shifting that way.
PENNER: Well, I’m gathering from just the tone of his voice, it sounded like a negative impact to me.
BARBA: Right, right.
PENNER: But I don’t want to second guess Fred. Fred, thanks for your call. Terry in Vista is with us now. Terry, you’re on with the editors.
TERRY (Caller, Vista): Hi. I guess my interest in all this is, is that I’ve already been conserving power. I live in a 4,000 square foot house and my average summer bills run about $300.00. But my concern is, is that I’m already in a tiered, you know, amount where I pay more anyway when I use it during peak hours because the baseline is so low. And what’s unfortunate about that is when you have a lot of family members living with you, it’s going to actually increase, you know, how much you end up paying. And, you know, and I appreciate the fact that, you know, SDG&E wants us to conserve but the real motive is profit. They’re a for-profit company, they made one of the largest profits probably of any company in San Diego County last year and they don’t maintain the facilities in a way that, you know, they – the fires were started because they weren’t maintaining their facility. So I think their interest in earnings is that they’re just looking for a way to manipulate the system to increase their profits. I think a lot of us are conserving and a lot of us, you know, don’t want to spend any more for power than we have to but some people live at home during the day. They have kids. They home school. I mean, this is going to have, you know, a large effect on people who can’t afford to change their behavior, you know, from working during the daytime, from working daytime at home, to, you know, doing all these things at nighttime.
PENNER: Okay, I think we get your point, Terry. But, on the other hand, David, I mean, it’s true. They are for-profit. They’re investor owned. They need to look at what returns they’re paying to the shareholders, and so can you blame a company for wanting to turn a profit?
KING: No, we can’t. And in America we can’t say that we want things to be done in the private sector and then decry the fact that private businesses are motivated to earn profits. We can’t in California say that we want to impose environmental regulations to protect the environment and not have it trickle down on all of us and change our behavior. We will have to modify our behavior. We will have to accommodate changes. Changes are inconvenient but there will be more changes to come as we move into the future. We have taxed our capacity here. People don’t want new power plants. People don’t like the inconvenience but they want all the benefits.
AUGUST: I think the devil is in the details in this deal. That’s exactly what’s going – This does have a great potential to provide a solution to many of our problems, the transmission lines, the lack of transmission lines, the lack of storage capacity.
PENNER: What about building new plants? You know, these peaker plants that take are of the excess load during the peak hours.
AUGUST: But still, this is a relatively inexpensive solution to some of these problems but the devil’s in the details. It depends on what SDG&E going to come up with and how they negotiate and what we end up with. Offering people a couple bucks savings a month is not going to do it. You – It’s got to be some realistic savings for people who do cut back. And consider all the other factors that we’ve been talking about.
PENNER: Okay, well there are a lot of other factors that we need to talk about and we will when we return from our break. This is the Editors Roundtable. We’ll be taking your calls at 1-888-895-5727. I’m Gloria Penner.
PENNER: This is the Editors Roundtable. I’m Gloria Penner. I’m at the roundtable today with JW August from 10News, and from – where are – NPR News, of course, it’s Alisa Joyce Barba. And then David King from sandiegonewsroom.com. Got it, okay. And we are looking at the phone lines and they are just backed up here because apparently everybody has something to say about changing the rate structure for SDG&E. I guess it affects everyone, even though it will be voluntary for residences. Remember that. I want to be clear on that. So let’s hear from our listeners and we’ll start with Mike in North County. Mike, you’re on with the editors. I’m going to ask everybody to make their comments brief so we can get to as many of them as possible. Mike, go ahead.
MIKE (Caller, North County): Good morning. $118 million for education, $500 million for a 200-mile-long extension cord, Sunrise Powerlink. Hmm, a lot of money here. So far, nobody’s talked about the sunshine, which is the time you’d be punished for using electricities (sic) during the day when it’s shining. How come we’re not spending a lot of money to put solar panels up?
PENNER: Okay, Mike. I think we get your point. We’re going to hang onto that point and we’re going to hear from Holly in Clairemont. Holly, you’re on with the editors.
HOLLY (Caller, Clairemont): Good morning.
HOLLY: Thank you for taking my call.
HOLLY: I want to go back to the issue of the businesses that are already on this program because I had the most bizarre experience I’ve had in my shopping career, and I’m 62 years old. I went to my local Vons store during that time period in that heat wave we had a few weeks back. People were coming out empty-handed, and I thought that was odd. And then some of them were saying, don’t go in there, it’s not safe. I went in. It was so dark in the store at 12 noon, during these 11:00 to 6:00 p.m. hours, you needed a flashlight to buy your groceries. The scary part was that I’m very sensitive to—and JW talked about this—is the senior citizens. Well, there were plenty of senior citizens in there. It was Thursday. We all know the seniors still go shopping on Thursday. And they were with their home healthworkers and these people were trying to help them see.
HOLLY: Even in the frozen food section and where the cheeses were, the chillers were on but the lights were out.
PENNER: Okay, well, thank you very much, Holly. So, obviously, you know, there’s a concern factor about the safety of trying to cut back on power during these high peak times. Alisa?
BARBA: Well, maybe there’s a little fine-tuning that Vons needs to do with its lighting. You know, there’s like low electricity use light bulbs that…
BARBA: …they can put in. I mean, you obviously don’t want it dark in a store in the middle of the day. I think that they have to recalibrate all those.
PENNER: Okay, and we still haven’t commented on an earlier call we got about how much all of this – the Powerlink costs, how much the education campaign costs, and the fact of solar panels. David, do you want to talk about that?
KING: Well, it’s actually one of the city’s concerns and this does, by making a complete transformation of the structure here of rates, at the same time that we’ve got all these other programs going on trying to incentivize people to install solar powers, then what – how do all those numbers play out? And as JW says, the devil’s in the details. The numbers need to be broken over and this needs a good long scrub. And that’s what the City’s doing.
PENNER: Yes, and actually by filing protests with the California PUC, Public Utilities Commssion, the consumer groups and the City of San Diego are really sort of getting involved in this whole regulatory process. And with that, I’m going to urge all our listeners who are still on the line and weren’t able to get through to us because we’re going to change topics now, please go ahead to KPBS.org/editors. Just go over there right now, KPBS.org/editors. Register your comment because we really are interested. It’ll be read by a lot of people and probably responded to by a lot of people. And we look forward to reading them. Okay, on to another topic.