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Elias: Nope, PUC move won’t lower electric bills

California’s benighted Public Utilities Commission claims its latest move to please the privately owned power companies it regulates will actually lower electric prices for some folks, especially the wealthiest and largest users.

But wait: As with most PUC rulings and claims of the last half century, this one has some factual problems.

Here’s what’s happened: The PUC dictated only days ago that starting late next year, all customers of the Southern California Edison Co., Pacific Gas & Electric Co. and San Diego Gas & Electric Co. will pay a fixed monthly charge in addition to usage costs. 

The fixed charge will be $24.15 for most ratepayers, and either $6 or $12 per month for low-income folks enrolled in discount programs.

The money supposedly will fund installation and maintenance of electrical equipment needed to bring power to homes. 

To compensate for the new charge, prices for actual power use will drop between 5 cents and 7 cents per kilowatt hour. One kwh is about the amount of juice needed to run a coffee maker for an hour.

This change will mostly benefit the wealthy, as those who use the most power will save the most. So much for years of campaigns that actually got many Californians to cut their electricity usage. This change makes electric car ownership and use of air conditioning more attractive.

But any lowered bills will not last long. In fact, because of the time lag in the new fixed rates’ effective date, the great likelihood is that no one’s net monthly bill will drop at all.

For this, there are two big reasons: 1) By the time it takes effect, at least one or two of the Big Three utilities will likely have filed for and won a separate general rate increase, and 2) Even more certainly, a charge for reviving and partially renovating the Diablo Canyon Nuclear Power Plant will take hold.

That’s partly because the utilities get increases regularly on a rotating basis. PG&E ratepayers started paying on one last winter, and customers of Edison and SDG&E won’t be far behind.

Everyone buying from one of these private utilities will also pay a per-kilowatt hour rate increase for the initial five-year extension in the life of Diablo Canyon, on the coastline north of San Luis Obispo. 

Gov. Gavin Newsom and his five PUC appointees agreed last year that Diablo must live on at least five years beyond the 2025 date previously set for its closure.

Keeping it open, they say, is essential because renewable energy from wind and solar sources has not increased enough to replace Diablo’s power, about 9% of all California electricity.

Meanwhile, the advocacy Environmental Working Group said last year keeping the plant open will cost customers between $20 billion and $45 billion, to be assessed as additional charges on power used. 

Others, including PG&E, say the cost will be less. 

But the average customer will likely pay in the neighborhood of $5 per month for this, and there go the savings for slightly lower per-kilowatt hour rates in the vaunted new pricing formula.

If PG&E, which owns Diablo Canyon, gets the additional 15 years of operation it has also requested, that sum will grow. 

Customers may not realize they are paying this new charge, because the PUC will have the companies include the charge in a bill category called “public purpose programs.”

But bet on this: The utilities get between 10% and 14% profit on every dollar they spend on capital investment in things like transmission lines. Expect PG&E to profit at least that much for whatever it spends to keep Diablo Canyon open.

So far, PG&E has only asked for these charges to be paid in 2024 and 2025. But the longer life Diablo eventually wins, the higher the cost will go, and the greater leap most California electric bills will take.

“This is by far the largest financial commitment to any single project the PUC has been asked to endorse,” said David Weisman, executive director of the Alliance for Nuclear Responsibility.

So much for the PUC’s claim to be making electricity  cheaper.

Email Thomas Elias at [email protected]. 

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