Edison Revises Its Rate-Cutting Plan

More residential customers of Southern California Edison would get a rate reduction and the lower rates would arrive sooner under a new proposal unveiled Thursday by the Rosemead utility.

Edison’s new proposal, a product of weeks of negotiations with consumer advocates and industry lobbyists, would reduce overall rates by an average of 12.9% and would give a larger rate cut to residential and small-business customers than the old plan would have, said Akbar Jazayeri, director of revenue and tariffs for Edison.

The latest proposal would cut average residential rates by 8%. Residential customers who stayed below 130% of a “baseline” allotment did not pay higher rates and therefore would see no reduction under the new rate design, Jazayeri said.

Heavier residential electricity users would see their monthly bills decline by $6 to $140, depending on consumption and which zone they live in, according to Edison.

Small-business customers would see an average 15% reduction under the new proposal, which was filed late Wednesday with the California Public Utilities Commission.

The new rates would go into effect about two months earlier than under the previous proposal, perhaps as early as this summer, Edison said.

The rates would remain in place for at least 12 months until the PUC rules on Edison’s 2003 general rate case, which asked for $286 million more in annual revenue by instituting a 3% rate increase.

A previous rate-reduction plan submitted to utility regulators by the Edison International subsidiary in January proposed cutting electricity rates by an average 13.4% but would have given most of the rate break to businesses. Only the largest residential users were to be charged lower prices, with the typical residential customer seeing no decrease.

Edison executives noted at the time that businesses bore the brunt of record rate increases in 2001 and such heavy power users should see the biggest rate declines. But consumer advocates bitterly criticized the plan because it left out most residential users.

Under the new proposal, medium and large businesses would receive a smaller cut in electricity prices than in the original rate-reduction proposal but still get bigger cuts than would smaller users.

Medium business users would get a 13% average rate reduction under the new proposal compared with 20% under the previous proposal. Large business customers would receive a 21% reduction instead of 26%.

The Utility Reform Network said the settlement is a much better deal for consumers.

“Edison initially wanted no reductions for most residential customers,” TURN Executive Director Nettie Hoge said.

The agreement was a compromise among many customer groups, said Keith McCrea, an attorney for the California Manufacturers and Technology Assn.

“This is just really badly needed,” McCrea said. “A lot of large business customers received rate increases in excess of 100%.”