Edison Says It Will Raise Power Rates

Electricity rates for more than two-thirds of Southern California Edison’s customers will rise as much as 18% in the new year, the company said Tuesday.

With winter starting today, the utility’s 4.6 million residential and commercial customers can expect three increases in coming months. The company, a unit of Edison International in Rosemead, said soaring prices for natural gas, which fuels most of the state’s power plants, were the main culprit.

“I’m sure the customers don’t like the rate increases, and neither do we,” said Akbar Jazayeri, director of revenue and tariffs for Edison. “We are talking to our customers about the reasons for this. People are aware of the increase in gas prices.”

The utility said the first increase, to take effect Jan. 1, would stem in part from higher natural gas prices incurred through state power contracts. In addition, the California Public Utilities Commission ruled that the company should have paid a higher share of state power contract costs this year and in 2004, an expense it is being allowed to pass to customers.

The average increase in monthly bills will be 9%, but the actual amount for individual groups will vary. Agricultural users, for example, will see an 11.7% increase in their rates at the beginning of the year.

For residential customers, the average increase amounts to 8.6%, Edison said. The monthly bill for a typical residential customer using about 550 kilowatt-hours of electricity would rise $4.36, or 5.8%, to $79.71.

About 40% of the utility company’s residential base, about 1.5 million customers, won’t be affected by any of the planned increases because their electricity usage is below certain benchmarks set by regulators.

A second increase of about 5.5% to 6% will take effect in February, the company said. It covers higher natural gas expenses incurred by Edison through its own power purchases and the cost of fueling its Mountainview plant in Redlands.

The company, in addition, will have to pay more to meet new state rules requiring utilities to keep higher levels of power capacity in reserve.

Edison did not provide more detailed cost estimates for the second increase because the level will be set by regulators in January.

In any case, customers will get a third increase in their bills, possibly in March, to pay for power plant upgrades and higher maintenance expenses. The size of the increase will be determined by regulators.

Natural gas prices, the key force behind two of the three Edison rate increases, are expected to push up electricity and heating bills across the state.

Southern California Gas Co., a unit of Sempra Energy that serves 5.5 million customers, said it expected customer bills to be 45% to 55% higher this winter because of rising natural gas costs. A typical monthly residential gas bill will jump to $115 to $120 this year, compared with an average of $79 last year, spokeswoman Denise King said.

Customers of San Diego Gas & Electric Co., another Sempra subsidiary, will see increases as well, King said. Pacific Gas & Electric Co., the state’s largest utility, has estimated that monthly bills will rise 40%.

The Los Angeles Department of Water and Power, which serves the city of Los Angeles, has not instituted any increases since 1997 and has no plans for one yet, spokeswoman Carol Tucker said. “We are monitoring the prices of natural gas, and our board has directed us to evaluate the need for some kind of pass-through charge,” she said. “However, at this time, there is no proposal on the table.”

Natural gas prices more than doubled this year, reaching an all-time high Dec. 13 of $15.38 per million British thermal units. In trading Tuesday in New York, gas futures rose 4 cents to $14.08.

DWP and other state utilities have tried to hedge the effects of high natural gas prices by entering favorable long-term contracts and even buying gas fields outright.

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Douglass reported from San Diego, Lifsher from Sacramento.