Electric-Bill Surge Jolts Small Firms : Expenses: A Southern California Edison rate change has doubled what some business customers are paying.

Ade Eitner got quite a shock from his small manufacturing company’s June electric bill, which took a 55% jump from the previous month and has stayed in the same lofty neighborhood.

Village Covenant Church in Azusa saw a doubling of its electric bills. “Our bills have never, ever been this high,” said Gene Palmer, a member of Village Covenant’s church council. “It’s very difficult.”

These two are among 17,000 small businesses, churches and schools served by Southern California Edison that have been paying a new “demand charge” since June. The result has been sharply higher electric bills as well as a flood of complaints to Edison and the Public Utilities Commission.

The PUC is now taking a second look at the charge, which Edison has proposed phasing in over three years to allow customers to get used to it.

Under a little-noticed provision in Southern California Edison’s last rate case, which the PUC approved in 1988, an estimated 17,000 commercial customers were moved to a new rate category June 7. They are required to pay a charge based on their peak demand in any given month. The customers all have a peak demand of more than 20 kilowatts and were in business before 1988.

Previously, these customers were exempted from the so-called demand charge. They paid only for the electricity actually used, part of a conservation movement from the early 1980s.

But by the late 1980s, the PUC and utilities began moving toward requiring customers to pay rates that more closely reflect the cost of supplying energy to them, said James Hendry, a PUC regulatory analyst.

Big businesses already pay such demand charges, which, in theory, reflect the cost of maintaining enough equipment to meet a firm’s peak electricity demands, Hendry said. Unfortunately in this case, PUC staff did not consider the hardships that small business might face from sudden large increases in their bills, so the new charge for these 17,000 customers was not phased in, Hendry said.

The average annual hike was about 20%, but the initial increases were particularly big for some customers because the changeover occurred at the start of summer, a time when more electricity usually is consumed, he said.

The PUC decided to reopen the case Sept. 2. Edison responded a week later with a proposal to limit the maximum amount charged these customers until 1996 and to introduce a temporary level pay plan similar to one for residential customers, which averages out annual energy costs.

Edison also said that it will work with customers to get below the 20-kilowatt limit, which triggers the demand charge.

The PUC probably will vote on the proposal at its Oct. 21 meeting, Hendry said.

Steve Hansen, a spokesman for Southern California Edison, said the demand charge doesn’t bring more revenue to the Rosemead-based utility. It simply spreads the costs more evenly among customers, he said. About 376,000 of Edison’s 4 million customers are commercial users.

Palmer of Village Covenant called Edison’s proposal “totally inadequate.” Even with the limits, the church’s peak bills next year will be around $2,000, compared to $1,000 before the demand charge was instituted.

“The practical impact is we have to cut back on programs because we have a limited budget,” he said. “We have a lot of people out of work in the congregation, and people are accepting jobs at one-half to one-third of what their former salaries were, so our giving is down.”

Palmer said the church has been forced to ask its four staff members to refrain from cashing their paychecks until the Sunday offerings are collected to make sure there is enough money to cover the checks.

Eitner’s Huntington Beach company, L. J. Engineering, needs to run testing equipment for its product, a vacuum regulator for dairy industry milking machines. The 50% to 65% increases Eitner has been seeing hurt, “but I’ve talked to several entities that were hit even harder.”

After cost increases from utilities, health insurance, workers’ compensation and payroll insurance, “you see why there are so many business failures and so many companies leaving the state,” Eitner said.