SACRAMENTO — Almost 5 million Southern California Edison Co. customers in hundreds of cities and communities across the southern, central and coastal parts of the state will be hit with higher electric bills early next year and bigger hikes in each of the following two years.
The decision, which Edison says will add an average of $7 a month to residential bills for the first year, covers Edison’s costs to provide service, which amounts to about half a ratepayer’s bill. Other costs for buying fuel and contracting for power deliveries fluctuate and are passed directly to consumers.
The California Public Utilities Commission unanimously approved new rates, retroactive to the beginning of this year, on Thursday as part of an every-three-years process of reviewing finances at the heavily regulated utility.
The 5% increase for 2012 — providing the Rosemead company with $5.7 billion in revenue — is less than the 16.6% the company had sought. Rates, however, are estimated to rise an additional 6.3% for 2013 and 5.9% in 2014 under the PUC order.
“This decision ensures that SCE is able to invest in smart energy systems, renewables and safety and reliability, while its ratepayers are protected,” PUC Commissioner Timothy Alan Simon said.
Edison provides electricity to 13 million people, including most of Los Angeles and Orange counties as well as much of Central California and the Inland Empire. Not included are residents of Los Angeles who get their power from the municipally owned Department of Water and Power.
Edison, the decision notes, has faced “two significant challenges to operations” in the last year: a December 2011 wind storm that damaged the grid, and the extended shutdown of two nuclear power reactors at the San Onofre Nuclear Generating Station in San Diego County.
Edison in a statement called the commission’s action “constructive” because the decision helps it finance needed upgrades in its system.
Consumer groups said they were pleased that commissioners granted Edison, a unit of Edison International, less than what the company sought from the PUC.
“We definitely got a substantial amount shaved off, but it’s still more than we think Edison really needs,” said Mindy Spatt, a spokeswoman for the Utility Reform Network, which advocates for ratepayers at the state’s three big investor-owned electric companies.
Business groups also complained that the jump in Edison’s already steep electric rates could make it harder for them to keep operating profitably.
“California manufacturers already pay 50% higher electricity rates than the national average,” said Gino Di Caro, a spokesman for the California Manufacturers & Technology Assn. “Obviously, energy costs are one of the primary budgetary items for any manufacturing operation, and this is all the more reason for California to find ways to offset these costs.”