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CA to See Shocking Electricity Rates This Summer
May 16, 2013 By Wayne Lusvardi
There have been many forecasts of possible rolling blackouts in California this summer due to a shortage of power from the shutdown of the San Onofre nuclear power plant and the instability of a green power grid due to hourly weather fluctuations.
But the most likely scenario for California for the summer of 2013 is electricity price shock, especially for those moderate-income households that run air conditioners during the hot days in the Central Valley of California.
May 16, 2013 By Wayne Lusvardi
There have been many forecasts of possible rolling blackouts in California this summer due to a shortage of power from the shutdown of the San Onofre nuclear power plant and the instability of a green power grid due to hourly weather fluctuations.
But the most likely scenario for California for the summer of 2013 is electricity price shock, especially for those moderate-income households that run air conditioners during the hot days in the Central Valley of California.
There isn’t much that policy makers are doing to lessen rate shock for the most affected. Installing older technology like evaporative “swamp” coolers in older homes could reduce peak month power bills by 80 to 90 percent. At least with a rooftop swamp cooler a homeowner gets both clean, fresh air and low C02 emissions.
But California public policy more promotes contrived solar jobs programs and energy cost shifting onto renters and older homeowners, than helping them to reduce rate shock. And renters in older apartment buildings will mostly be left to bake for the summer of 2013 unless they can install cheaper window air conditioners and isolate themselves in one room.
But California public policy more promotes contrived solar jobs programs and energy cost shifting onto renters and older homeowners, than helping them to reduce rate shock. And renters in older apartment buildings will mostly be left to bake for the summer of 2013 unless they can install cheaper window air conditioners and isolate themselves in one room.
How energy pricing and usage system works in California
Electricity usage rates are approved every three years in California for customers living in areas served by regulated electric utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. Each regulated utility has tiered rates depending on how much power is used in order to conserve power.
But customers in cooler climate zones have lower usage base baselines while those in hotter climate zones have higher usage baselines. By allowing more use of electricity in hotter areas at relatively lower rates, those most affected by hot weather can afford to run their air conditioners more hours each month.
The way the tiered usage system works can be seen in the table below. PG&E customers living in hot Merced in the summer months are allowed to use twice as much power at the same rate as those who live in cooler San Francisco.
How California Sets Rates for Customers of Regulated Electric Power Companies
Tier 1 Baseline Tier 2 Tier 3 Tier 4 Tier 5
Up to baseline 101-130% 131-200% 201-300% 300%>
Rate per kilowatt hour 13 cents 15 cents 30 cents 34 cents 34 cents
San Francisco (cooler) 0 to 225 kilowatt hours 226 to 293 kilowatt hours 294 to 450 kilowatt hours 451 to 675 kilowatt hours 676+ kilowatt hours
Merced (warmer) 0 to 513 kilowatt hours 514 to 667 kilowatt hours 668-1026 kilowatt hours 1027 to 1539 kilowatt hours 1540+ kilowatt hours
Source: Little Hoover Commission, Rewiring California, 2012, p. 40.
Electricity usage rates are approved every three years in California for customers living in areas served by regulated electric utilities, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric. Each regulated utility has tiered rates depending on how much power is used in order to conserve power.
But customers in cooler climate zones have lower usage base baselines while those in hotter climate zones have higher usage baselines. By allowing more use of electricity in hotter areas at relatively lower rates, those most affected by hot weather can afford to run their air conditioners more hours each month.
The way the tiered usage system works can be seen in the table below. PG&E customers living in hot Merced in the summer months are allowed to use twice as much power at the same rate as those who live in cooler San Francisco.
How California Sets Rates for Customers of Regulated Electric Power Companies
Tier 1 Baseline Tier 2 Tier 3 Tier 4 Tier 5
Up to baseline 101-130% 131-200% 201-300% 300%>
Rate per kilowatt hour 13 cents 15 cents 30 cents 34 cents 34 cents
San Francisco (cooler) 0 to 225 kilowatt hours 226 to 293 kilowatt hours 294 to 450 kilowatt hours 451 to 675 kilowatt hours 676+ kilowatt hours
Merced (warmer) 0 to 513 kilowatt hours 514 to 667 kilowatt hours 668-1026 kilowatt hours 1027 to 1539 kilowatt hours 1540+ kilowatt hours
Source: Little Hoover Commission, Rewiring California, 2012, p. 40.
No taxes here.
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