Edison Electric Bills for Homes Will Rise 9.3% : Energy: The utility firm was granted a 6.8% increase by the PUC but raised residential rates more than those for industry to balance past inequities.

Fuel-price increases, inflation and the continuing drought were blamed for utility rate increases announced Wednesday that will push the electric bills of Southern California Edison customers up 9.3% next month, the largest hike in three years.

A residential customer who currently pays the typical bill of $55.37 monthly will be charged $4.97 more a month under the hikes approved by the California Public Utilities Commission.

Overall, Edison was granted a 6.8% increase by the PUC, worth $458.7 million annually to the Rosemead-based utility.

Pacific Gas & Electric Co., with customers in Northern and Central California, received an even heftier increase. Its average residential customer will pay $8.11 more a month next year.

San Diego Gas & Electric Co. was granted a smaller rate hike. Los Angeles city residents are served by the Department of Water and Power, whose rates are not controlled by the PUC.

“What a Christmas present,” said an unhappy Joel Singer, a staff attorney with Toward Utility Rate Normalization, a consumer advocacy group in San Francisco. “The customers who use the least will pay the greatest increase,” said Singer, “and all residential customers will pay substantially more than the total increase.”

The PUC and the utilities said that raising residential rates more than those for industry reflected a need to balance inequities from past years, when large industrial users complained that they were in effect subsidizing residential power use.

Edison spokesman Lew Phelps said Wednesday that in the late 1980s, several big customers threatened to pull out of the utility’s system and generate their own electrical power.

“If we had lost these large industrial customers, all the fixed costs of the system would have been dumped on residential customers,” Phelps said.

PUC officials described the latest round of rate increases as “significant but not record-setting.” It attributed the hikes to the costs of power bought from small producers, to rises in natural gas and oil prices, and to an expected reduction in natural gas availability in the winter, forcing Edison to buy more higher-priced oil.

Consumer groups have challenged the prices Edison pays for power to companies it controls.

The utility was recently penalized by the PUC for paying too much for power it bought from its own company, Mission Energy Co., in Kern County. The utility was charged $48.3 million as a result. Another challenge is pending that could force the utility to reimburse $51 million to its customers because of allegedly excessive payments to two co-generation power plants.

Edison executives laid most of the blame for the latest rate hikes on increases in fuel costs, primarily from its third-party suppliers. The company, which burns more natural gas than oil, expects to pay 25% more next year for gas for its own facilities. Its suppliers will pay 22% more.

The increase announced Wednesday is much smaller than those that came with the shock of the first oil crisis, in 1974. Then, overall rates jumped 30%, with residential rates climbing 18%. The second oil crunch, in 1980, brought two separate increases in just three months, totaling 29% for residents and 30% overall--the biggest one-year hike ever.

Rate adjustments in recent years have varied.

In 1988, Edison’s residential rates went up 17.4%, while overall the utility was granted an 8.9% increase. In 1989, residential rates rose 7.4%, again more than the overall rise of 5.3%. And last year, residential rates rose 4%, in an overall hike of 3.2%.

The low 4% rate increase approved for San Diego Gas & Electric further increased the disparity between Edison and its would-be merger partner. That hike will increase the average monthly SDG&E; gas and electric bill for residential customers by $2.25, to $63.33.

Based upon Wednesday’s action, Edison’s system-wide cost of electricity, when measured per kilowatt-hour, rose to 10.3 cents. SDG&E;’s systemwide cost per kilowatt-hour rose to 9.7 cents.

The rate hikes granted Wednesday show that Edison customers are still paying for the co-generation power sources that Edison aggressively pursued during the late 1980s, according to Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group.

Times staff writers Greg Johnson in San Diego and Patrick Lee in Los Angeles contributed to this story.