Edison Seeks to Postpone Rate Hike

Customers of Southern California Edison Co. were stunned with energy bills that tripled after the massive heat wave this summer.

Now the Rosemead utility says it wants to ease their pain. It is proposing to delay until January a 6% rate increase and to offer more customers a credit of as much as $150 to cover future energy bills. The utility made the proposal to state regulators Friday.

“The steps we are taking are modest but provide some measure of relief for customers,” said Lynda Ziegler, Edison’s senior vice president for customer service.

Mindy Spatt, spokeswoman for the Utility Reform Network, a watchdog group in San Francisco, scoffed at Edison’s portrayal of the plan as providing a break for its customers.

“Consumers should not be confused. This is not rate relief, it’s still a rate hike -- it’s just a delayed rate hike,” Spatt said. “Real rate relief would be no rate increase.”

Edison, a subsidiary of Edison International, is California’s second-largest power company, serving 4.4 million households and businesses in Southern California.

Its customers, along with those served by the state’s other utilities, suffered through an abnormally hot June and a scorching July heat wave that played a role in more than 100 deaths and forced inland residents to run their air conditioners nonstop.

Electricity use among Edison customers jumped 31%, and the effect on bills was magnified by 2006 rate increases totaling more than 15% for any household that consumed more than a modest baseline amount of electricity.

The company’s tiered rate structure also includes big increases in the price per kilowatt-hour when households use higher amounts of energy.

Rates vary across the utility, but an average Edison consumer pays 11.8 cents per kilowatt-hour for the first batch of power. The cost jumps as high as 31.2 cents per kilowatt-hour for the heaviest residential power users.

With consumption up sharply in households across the state this summer, many customers found themselves in pricey rate tiers that produced a multiplying effect they hadn’t expected.

“It’s not just the customer who would have expected a $100 bill and got a $125 bill. It’s that they expected a $100 bill and it was $300,” Edison spokesman Gil Alexander said. “It’s almost impossible to believe.... They used twice as much electricity but their bill is three times as much.”

Edison isn’t losing money under the plan. In fact, the utility’s proposal stems mostly from the fact that the higher bills have brought the utility more revenue than it projected for the year.

In addition, Edison’s current rates were set under the assumption that natural gas prices would be higher than they have been this year, leading the utility to over-collect for that portion of its costs.

Normally, Edison and the California Public Utilities Commission would wait until the end of the year to credit customers for that over-collection. The credit would be mixed in with new estimates for natural gas costs, rate increases for infrastructure improvements and other factors -- and in the end, it’s usually a net increase.

Edison initially postponed its final 2006 rate increase from August to November because of the shocking summertime bills. Now, Edison has asked to put the deferred 6% increase into the 2007 rate calculation.

“What we’re doing is saying ... let’s give customers relief now,” Edison’s Ziegler said. “We’ve seen lower gas prices and we’ve seen higher sales. So let’s not put this increase in.”

In addition to delaying the rate change, Edison has proposed using some of the over-collected natural gas funds to beef up its Energy Assistance Fund. The utility would set aside $10 million to expand its fund by 45%, providing 1.6 million qualified customers a one-time credit of as much as $150.

The current fund applies to households of four with maximum incomes of about $40,500 a year. Under Edison’s proposal, the credit would apply to annual incomes of $81,000 for households of four. Customers must apply for the credit.

Consumer groups and others will review the plan and provide comments, and the PUC is expected to make a decision before Nov. 1, Edison said.

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elizabeth.douglass@latimes.com