Californians’ Utility Bills to Increase Slightly for 1986

The new year will bring slightly higher utility bills for California consumers, reflecting the companies’ higher costs of doing business, the Public Utilities Commission decided Wednesday.

Among the rate increases granted was a $53.8-million increase for Pacific Gas & Electric Co. customers to cover costs of operating the controversial Diablo Canyon nuclear power plant next year, the first such rate hike granted the utility. That part of PG&E;’s increase will add an estimated 37 cents to the average customer’s monthly bill.

Effective Jan. 1, customers of Southern California Edison Co. will pay an average of $1.16 a month more for electricity. That will generate $146.3 million in revenue for the Rosemead-based utility, a 2.9% increase. Edison had sought $170.7 million.

Southern California Gas Co. was granted a $90.7-million rate increase, a 1.9% boost, which will raise the average monthly residential bill by 67 cents. The gas company asked for $95.7 million. Pending commission decisions on reduced costs of producing energy, postponed until Friday, could reduce or eliminate these increases, however.

Finally, General Telephone Co. of California will increase the two surcharges already added to its customers’ bills by enough to raise $55.3 million in additional revenue next year. That represents an increase of just less than 3.5%.

General Telephone, which this year moved its headquarters from Santa Monica to Thousand Oaks, had requested a $68.9-million increase.

Increase in the North

Northern California customers of Pacific Gas & Electric will pay an average of $1.01 more for electricity and 50 cents a month more for gas, a 2.8% increase that will generate $148 million for the San Francisco-based utility next year. PG&E; had requested $198.4 million. Its service area reaches south to San Luis Obispo.

A general revision of San Diego Gas & Electric rates was delayed until Friday.

In all cases, the increases were approved to recover modest increases in the cost of doing business in the two to three years since the utilities’ entire rate structures were overhauled by the commission.

In the cases of Edison and Southern California Gas, however, the rate increase remains subject to possible refunds after the PUC takes a closer look at the need for such cost-of-living adjustments. That study is to be completed by July.

“It is quite apparent that today’s economic circumstances are dramatically different from the circumstances which existed when attrition (cost-of-living) mechanisms were originally developed,” said Commissioner Victor Calvo.

‘A Manageable Cost’

Calvo said those circumstances, which opened the way for utilities to file for general rate increases every other year, included double-digit rates of inflation and rapidly rising interest rates.

“Times have changed,” Calvo said. The utilities’ earnings are improved, interest rates continue to decline, inflation has become “a manageable cost of doing business” and demand has picked up. “Under these conditions, I question the need for attrition allowances in the future,” he said.

Commission President Don Vial said the commission may have to return to annual reviews of the utilities it regulates to ensure that the rate structure is not generating more than the authorized profit because of increased productivity and falling debt costs.