The California Public Utilities Commission claims that its recent move to appease the privately owned energy companies it regulates will actually lower electricity prices for some people, especially the wealthiest and largest users.
But wait: As with most PUC rulings and claims in the past half-century, this decision has some factual problems.
Here’s what happened: The PUC just days ago mandated that starting late next year, all Southern California Edison Co. customers would pay. and Pacific Gas & Electric Co. and San Diego Gas & Electric Co. Fixed monthly fee plus usage. Costs. The flat fee will be $24.15 for most taxpayers, and either $6 or $12 per month for low-income people enrolled in rebate programs.
The money will supposedly fund the installation and maintenance of electrical equipment needed to deliver power to homes. To compensate for the new fees, actual energy usage prices will fall between 5 cents and 7 cents per kilowatt hour. One kilowatt-hour is equivalent to the amount of juice needed to run the coffee maker for an hour.
This change will mostly benefit the wealthy, as those who wield the most power will save the most. This has been the case for many years of campaigning that has prompted many Californians to reduce their electricity use. This change makes electric vehicle ownership and air conditioning more attractive.
But any reduced bills won’t last long. In fact, because of the time lag in the effective date of the new fixed interest rates, it is more likely that no one’s net monthly bill will decrease at all.
For this reason, there are two main reasons: 1) by the time it goes into effect, at least one or two of the big three utilities will likely have applied for and won a separate public rate increase, and 2) there will almost certainly be fees To partially revive and renovate the Diablo Canyon Nuclear Power Plant.
This is partly because utilities get regular raises on a periodic basis. PG&E ratepayers started paying on one last winter, and Edison and SDG&E customers won’t be far behind.
Everyone who purchases from one of these private facilities will also pay an increased kilowatt-hour rate for the initial five-year extension at Hyatt Diablo Canyon, on the coast north of San Luis Obispo. Gov. Gavin Newsom and his five PUC appointees agreed last year that Diablo should survive at least five years beyond the previously scheduled 2025 date for its closure.
They say keeping it open is essential because renewable energy from wind and solar sources has not increased enough to replace Diablo’s power, which accounts for about 9 percent of California’s total electricity.
Meanwhile, the advocacy group Environmental Action Group said last year that keeping the plant open would cost customers between $20 billion and $45 billion, which would be assessed as surcharges on the energy used. Others, including PG&E, say the cost will be lower. But the average customer will likely pay roughly $5 a month for it, a savings versus slightly lower per-kilowatt-hour prices in the vaunted new pricing formula.
If PG&E, which owns Diablo Canyon, gets the additional 15 years of operation it has requested as well, that amount will grow. Customers may not realize they are paying these new fees, because the PUC will require businesses to include the fees in a billing category called “general purpose programs.”
But bet this: Utilities get between 10% and 14% in profits on every dollar they spend on capital investment in things like transmission lines. Expect PG&E to at least make a profit on whatever it spends to keep Diablo Canyon open.
So far, PG&E has only required these fees to be paid in 2024 and 2025. But the longer the Diablo eventually lives, the higher the cost, and the higher the cost for most California electric bills.
“This is by far the largest financial commitment for any single project the PUC has been asked to approve,” said David Weissman, executive director of the Alliance for Nuclear Responsibility.
Many of the PUC’s claims are that it makes electricity cheaper.
Email Thomas Elias at tdelias@aol.com.
