NEW YEAR, SAME HIGH RATES
Recently, the California Public Utilities Commission (CPUC) held an En Banc session on the issue of “affordability” of California’s electrical utility system. Needless to say, more than a few easily concluded the present system, and the future, does not reflect any “affordability.” In this newsletter, UCAN highlights our efforts – both with individual cases and in CPUC proceedings – to fight for affordability.
ADVOCATING FOR YOU – UCAN, WE CAN!
UCAN worked closely with Ms. A, an elderly woman, in a desperate conflict with a 3rd-party management company. Ms. A refused to pay utility charges because she was refused an explanation regarding her bill. Instead, after complaining, she was issued a “Notice of Eviction.” She contacted UCAN and our Consumer Advocate, Dan Whitworth, immediately got to work. Ms. A reported that she received verbal threats, bullying and even harassment of her daughter when she visited. With UCAN’s help and support, Ms. A worked with Legal Aid to file a countersuit and, ultimately, resolve her billing dispute. Ms. A specifically thanked UCAN not only for the final resolution but for just having someone to be on her side and supporting her through the entire ordeal – having felt alone, desperate and hopeless prior to reaching out to us.
On another matter, Dan helped Ms. B as she moved into a retirement community unit. There was an outstanding SDG&E balance from the previous tenant and the overdue amount was being charged to Ms. B. On her behalf, UCAN documented that she had not resided the unit when the billing charge was levied. SDG&E reversed the $175 charge. As a senior on fixed income with health problems she was also concerned about a large monthly energy charge. Working with SDG&E, Dan alerted them that she had not been receiving her CARE discount; SDG&E agreed to add that to her account and credited her retroactively. Finally, SDGE & extended her low-tier baseline charges as part of a Medical Baseline benefit. This allows her to use her air conditioning during hot weather and maintain a comfortable living environment.
UCAN is proud to offer 1:1 consumer assistance on issues like resolving billing disputes and avoiding service shut-offs. Each individual bill or service dispute receives dedicated staff attention from our Consumer Advocate; Dan and UCAN are just a phone call or email away (you may also submit an online request.
You need not go it alone – together UCAN, We Can!
REPRESENTING RATEPAYERS AT THE CPUC
At any given time, we’re active in a dozen or so cases, chipping away doggedly at proposed increases and defeating bloated or unfair proposals. SDG&E rates are already among the highest in America, so we understand every new proposal must be evaluated for affordability and reasonableness.
Ending the High Usage Charge (HUC) for SDG&E Customers (In A.19-09-014 the CPUC considered whether to eliminate SDG&E’s seasonal differential charge between summer and winter rates.) The CPUC previously enacted a High Usage Charge (HUC) that affected SDG&E customers during hot summer months. The HUC — a substantially higher price for electricity at 400% of normal usage — was established in 2017 to encourage energy conservation. But, subsequently, the special charge caused bills to spike for tens of thousands of SDG&E customers during heat waves when air-conditioning is essential. UCAN heard from members and customers complaining of their bill increases. UCAN joined the CPUC proceeding and, in this case, actually joined SDG&E in fighting to end the HUC. We argued to end the HUC to avoid future summer rate shocks and in favor of the positive bill impacts that would result from an elimination of the seasonal differential between summer and winter rates.
Initially, the CPUC did not support doing away with the charge. The Commission instituted the charge to send a price signal to residential customers to conserve electricity. But given California’s goal of developing green energy and reducing use of natural gas, UCAN contended it made little financial or environmental sense to continue to punish heavier users of electricity and the Commission finally eliminated the charge. More information can be found in this Times of San Diego story
Addressing Electricity Debt Accumulated During the COVID-19 Pandemic (In R.21-02-014, the Commission opened this rulemaking to consider whether to establish special relief programs for customers who could not pay their electricity bills during the COVID-19 pandemic.) Currently, the moratorium on service disconnections continues in California until June 30, 2021. The Commission is concerned about when this moratorium ends and the customers who will be faced with large outstanding electricity bills. UCAN does not want to see a wave of disconnections that would negatively impact these struggling households even more.
UCAN Senior Counsel, Jason Zeller, is taking the lead in this proceeding. Previously, in Decision 20-06-030, the CPUC required California’s major energy utilities to establish an Arrearage Management Plan (“AMP”) for customers whose unpaid bills exceed $500. In that matter, Jason was an active party in the proceeding. The proposed AMP would allow qualified customers (over $500 in arrears) to pay only what is due on their current and future utility bills. As long as a customer enrolled in an AMP remains current on their account, one-twelfth of the overdue balance would be forgiven each month, so the debt could be wiped out completely at the end of a year. We also urged that customers be informed about the availability of customer assistance programs, such as CARE, that provide discounts for low-to-moderate income customers. For an excellent recap and background, please read Rob Nikolewski’s article in the San Diego Union-Tribune.
A Decision in this proceeding is expected soon.
Providing Reliable, Fast and Affordable Internet Access for All Californians (In R.20-09-001, the CPUC opened a rulemaking to address the “digital divide” that became more apparent with the COVID-19 pandemic.) Current times demonstrated, as schools and business closed, that individuals and families need access to reliable and affordable internet service. Per the Public Utility Code (Sec. 281), the Commission must “encourage deployment of high-quality advanced communication services to all Californians that will promote economic growth, job creation, and the substantial social benefits of advanced information and communications technologies.” This matter will help set the strategic direction and changes necessary to expeditiously deploy reliable, fast, and affordable broadband internet access services that connect all Californians.
In this proceeding, UCAN supports this directive and believes that reliable and affordable internet access is important for a fair and equitable society. We’re encouraging and supporting practical solutions to close the digital divide, UCAN advocates that “Digital Inclusion” must involve all segments of society including community-based organizations as partners to help offer training and IT support. And, like with energy, UCAN clearly recognizes, argues and advocates for affordability. In the case of broadband services, we understand that affordability drives access. (In fact, at the federal level, the Federal Communications Commission just finalized a $3.2 billion program that will provide a monthly discount to millions of cash-starved Americans struggling to pay their Internet bills – the country’s most ambitious effort yet to close the digital divide amid the coronavirus pandemic. Please see here for more information.
A decision in this proceeding is scheduled for May 2021.
EDUCATING CONSUMERS AFFORDABILITY & CITY OF SD FRANCHISE
Affordability – Can We Afford the Future?
In February, the CPUC held an En Banc hearing, in which a diverse panel of experts from academia, industry, environmental justice, and consumer advocacy, spotlighted issues affecting the affordability of California utility rates for the next ten years. The Commission developed utility rate projections that show bills are expected to outpace inflation over the coming decade. Even expecting household incomes to generally increase at the rate of inflation, energy bills will become less affordable over time. Since 2013, rates have increased by 37% for PG&E, 6% for SCE, and 48% for SDG&E.
A 10-year baseline forecast shows steady growth in customer rates between 2020 and 2030 for the three IOUs:
- PG&E: $0.240 to $0.329, or about an annual average increase of 3.7 percent;
- SCE: $0.217 to $0.293, or about an annual average increase of 3.5 percent;
- SDG&E: $0.302 to $0.443, or about an annual average increase of 4.7 percent.
By 2030, bundled residential rates are forecasted to be approximately 12%, 10%, and 20% higher, respectively, than they would have been if 2020 actual rates for each IOU had grown at the rate of inflation. A CPUC-authored White Paper on the topic, along with panel presentations, may be found on the CPUC web page.
City of San Diego Franchise Agreement – Update
In our last newsletter, UCAN reviewed the status of the City of San Diego’s 50-year franchise fee agreement with SDG&E. It came due for renegotiation in January, 2021. The City had solicited competitive bids for the franchise but only one entity – SDG&E – responded. The new Mayor, Todd Gloria, then announced a new timeline to review and negotiate a new franchise agreement including establishing a new round of bidding to attract utilities to compete to win the deal.
Recently, Mayor Gloria released the terms of a new invitation to bid on the right to deliver gas and electric services within the city of San Diego. The invitation proposes an agreement lasting 10 years, with an automatic 10-year renewal if the city deems the energy partner has complied with terms and conditions. A minimum bid of $80 million — $70 million for the electric franchise agreement and $10 million for the gas franchise agreement, is required. Moreover, the winning bidder must support the city’s new $5 million-per-year Climate Equity Fund that will build parks, plant trees and improve public transit in lower income areas of San Diego. And an explicit reference to state law that gives the city the ability to create its own municipal utility is to be included in the Franchise Agreement. Unlike last time, though, once the bids are unsealed, the city will continue negotiating with the energy company that turns in the highest bid.
As a consumer advocate, UCAN welcomes more options for utility customers. But there are “unknowns” regarding any future franchise and franchise models that accompany the various scenarios. UCAN’s experience tells us that consumer protections must be explicit, with definitive accountability for any enterprise delivering energy. Our concerns range from the duration of the new agreement to specific mechanisms that address reasonable rates and ensure safe and green energy outcomes. Considerations of “municipalization” are not without risk; the City already fails to meet adequate customer service standards in operating its Water Department, so UCAN would be skeptical about the City running a new power department!
THANK YOU TO OUR INCREDIBLE SUPPORTERS!
Over the past 35 years, UCAN has been blessed with thousands of supporters and donors. Your contributions, large or small, have made a difference in our work to educate, represent, and advocate for the consumer. If you like what you’ve seen and read, please go to UCAN’s website and contribute any amount you can. And please tell a friend about us!
UCAN, We Can!