PUC recommends 3.6% rate increase for Edison

Southern California Edison deserves a 3.6% rate increase in 2009 instead of the 20% hike that the utility has requested, according to the consumer advocacy arm of the state Public Utilities Commission.

In the rate recommendation it filed Tuesday, the commission’s Division of Ratepayer Advocates slashed Edison’s requested rate increase to $156 million above 2008 levels -- an increase of less then 50 cents a month for the average residential customer. The electric utility proposed collecting $5.199 billion from ratepayers in 2009 to pay for big-ticket transmission and other projects -- an increase of $858 million, which would boost the average monthly residential bill by $7.70, the agency said.

“Less than a fifth of the rate increase SCE asked for is justified,” said Dana Appling, director of the independent ratepayer division.

Her group, which has 20 experts poring over Edison’s cost estimates, cut out $170 million earmarked for employee and executive incentives “which really benefit shareholders,” Appling said. The division also came up with sharply lower expense projections for transmission and distribution, operations and maintenance, and pension and benefits.

Public hearings on the rate increase will be held in Long Beach on April 28, Santa Ana on April 29 and San Bernardino on April 30. The PUC could rule on the rate increase by the end of the year.

Rosemead-based Edison, a subsidiary of Edison International, provides power to 13 million people in central and Southern California. The company’s rate request, filed in November, covers the cost of power generation, transmission and distribution -- expenses that make up about 40% of the charges on customer bills.

The other 60% of residential bills is made up of charges such as the cost of natural gas and buying power from others, costs from California’s 2000-01 energy crisis, taxes and funding for state programs such as the recently approved California Institute for Climate Studies. That 10-year, $600-million program, being paid for by ratepayers of five California electric and gas utilities, is expected to add 12 cents a month to the average residential bill at Edison, the firm said last week.

Southern California Edison Chief Executive Al Fohrer sharply disagreed with the ratepayer group’s recommendation.

Their assessment “is pretty much divorced from the realities of the demands on the system that we see and that the commission sees,” Fohrer said, adding that the utility’s aging infrastructure needs a wide range of upgrades. “I would be extremely concerned if the commission adopts anything close to what DRA is recommending.”

Utility executives “take a hard look at and are concerned about customer rates,” he said. “We try to balance the cost to our customers with providing safe and reliable service.”

Edison this month lowered electricity rates by 1.5%, or about $1 a month, because natural gas and other expenses were lower than forecast for 2007. In March, Edison estimated that 2009 bills could jump 12%, or about $9 a month, largely reflecting expected higher natural gas prices and the utility’s proposed rate increase.

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elizabeth.douglass@latimes.com