SMUD’s Creative Rate Increase Lingo
January 23, 2012
Katy Grimes: The Sacramento Municipal Utility District is changing some of its rate terminology in order to charge higher rates. The utility company claims that it really is “an effort to better define for customers what they are paying for and why, to introduce customers to some new concepts, and to prepare for the future.”
Ahhh. SMUD wants to prepare rate payers for the future. I know that I feel better about my $370 electric bill.
This is the garbage bureaucrats think will pass muster with rate payers. Last year at this time, my electric bill was about $100 less. The same has happened with my PG&E bill – both are inexplicably higher, and during a much warmer, dryer winter.
For your reading pleasure, I’ve copied the entire “2012 Rate Restructuring: frequently asked questions.” I’ve added a few of my own thoughts and comments (in red), where the SMUD creative writing surpassed even Harlequin Romance novel standards.
Reader Warning: Be careful – you may need a barf bag before you finish. I hope SMUD didn’t pay a PR firm to write this drivel.
“Rate Restructuring,” in the words of SMUD:
Why is SMUD proposing to restructure its rates?
For small commercial customers, a key part of the proposed restructuring is to have rates better reflect the cost of electricity when it is used. This would encourage customers to reduce usage during the summertime hours of peak demand, when electricity is most expensive. Read the general manager’s report on rates and services.
The small commercial customer will take the biggest hit – as usual. They don’t have high-paid lobbyists or big unions to fight back. And don’t forget the rate payers in higher socioeconomic zip code areas.
Given all of the subsidies, discount programs and free government stuff to low-income households, the middle class neighborhoods are probably bringing home a great deal less – especially since we are taxed on our earned income.
Is SMUD doing this to increase its revenues?
“Revenue neutral” is secret code language for we are hiding the increase elsewhere, but rest assured, we will eventually collect.
What are the most significant elements of SMUD’s proposal to restructure rates?
To offset the increase in the fixed service charge and minimize impacts on residential customers, SMUD would slightly reduce its kilowatt-hour prices for electricity usage. In addition, SMUD would shorten the summer billing season from six months to four months (June through September). Rates per kWh will continue to be higher in the summer billing season than the rest of the year, reflecting market costs. Only a utility bureaucracy can “shorten the summer billing season.” Even Mother Nature can’t do that.
For all small commercial customers, SMUD is proposing “time-of-use” rates. Customers would be charged more for power between the peak usage hours of 3 and 6 p.m. on weekdays in summer, when electricity is most expensive. SMUD would shorten the summer billing season and reduce the kWh price of electricity on all “off peak” hours.
How would rate restructuring affect customers’ bills? Duh – the bills are going up, and some by as much as 50 percent. Just ask those small commercial customers…
SMUD projects that in 2012 the average bill impact for approximately 90 percent of all residential customers will be less than $2 a month. Some residential customers would save money on an annual basis. Eighty-seven percent of residential customers who have electric heat would see bill changes averaging less than $2 a month. Who will save money? Low-income rate payers? Solar customers? Government offices?
Seventy-five percent of small commercial customers (drawing 21 to 299 kilowatts) and 7.5 percent of very small commercial customers (drawing less than 21 kW) would save money in 2012 under the proposed changes. For 95 percent of the very small commercial customers, bill impacts would be less than $10 a month on an annual basis. My husband owns several small commercial warehouses – his SMUD rate just went up this billing cycle by 50 percent, and one-half of the buildings are empty.
For information on projected bill impacts beyond 2012, see Addendum 2 to theGeneral Manager’s Report and Recommendation on Rates and Services.
What types of customers are apt to have higher electric bills under the proposal?
Residential customers who have gas heat and use very little electricity may pay slightly higher bills because of a proposed increase in the fixed monthly charge, which is designed to recover more of the fixed costs of the infrastructure for the power delivery system. For these customers, the maximum impact in 2012 would be $2.80 a month. Brilliant! Penalize customers who use less electricity.
Eighty-seven percent of residential customers who have electric heat would see bill changes averaging less than $2 a month.
To encourage energy efficiency, customers on the Energy Assistance Program Rate (a discount rate for qualifying low-income residents) will pay the standard rate for electricity use that exceeds their “base usage” plus 600 kilwatt-hours a month. (Base usage is 700 kWh in the summer billing season and 620 kWh the rest of the year for customers with gas heat.)
How would low-income customers on the Energy Assistance Program Rate be affected by the proposal? blah blah blah blah blah
Customers on the low-income rate would continue to get a 35 percent discount on base electricity usage and a 30 percent discount on up to 600 kWh of additional (“base-plus”) electricity usage in any given month. Hey! I am a member of the historically low-paid media… what about a discount for us? For electricity usage in excess of that, customers would pay the standard residential rate. This proposal was designed to encourage energy efficiency. (Base usage is 700 kWh in the summer billing season and 620 kWh the rest of the year for customers with gas heat.) These customers would see no change in their fixed monthly service charge of $3.50 in 2012.
Beginning in 2013, the fixed monthly charge would increase $1 each year, topping out at $8.50 in 2017, and there would be a corresponding decrease in kwh charges for electricity use. For information on projected bill impacts beyond 2012, see Addendum 2 to the General Manager’s Report and Recommendation on Rates and Services.
Skip this section – this will only make you crazy.
Overall, proposed changes in Energy Assistance Program Rates would be “revenue neutral” for SMUD, meaning the changes would neither increase nor reduce the revenue SMUD collects from this group of customers.
Will SMUD do anything to help customers who might have higher bills as a result of rate restructuring?
For commercial customers, SMUD offers energy audits, product rebates, energy tracking services and help with retrofit projects, among other things. For more information, click here. And you can finance the upgrade and energy retrofit costs – for a small fee, of course…
SMUD Loan terms (link here)…
How is SMUD letting customers know about the proposed rate restructuring?
The campaign includes approximately 100 presentations for business associations, civic organizations and neighborhood groups. (To request a presentation, contact Rosanna Herber at SMUD, 916-732-5850 firstname.lastname@example.org.) Media outreach, print ads and bill inserts are part of the effort. Contact Rosanna Herber? The bumptious, browbeating, Sacramento activist Rosanna Herber? I’ve been a party to a few of Herber’s presentations … I don’t see the soft-sell approach here. (local knowledge disclaimer)
How can customers comment on the proposal or get answers to their questions about rate restructuring?
Customers who have questions or would like to request a hard copy of the General Manager’s Report and Recommendation on Rates and Services may call the rates hotline, (916) 732-6222, or e-mail email@example.com.
When will the SMUD Board of Directors decide on restructuring, and when will changes take effect?
Why is SMUD proposing to increase the monthly service charge?
Okay – I am not going to subject you to the rest. If you are a glutton for punishment and have no life, here is the link to the rest of the drivel.
However, I could not resist the final question:
Why is SMUD changing some of its terminology for rates?
However, the downtown Sacramento Sierra Curtis Neighborhood Association (home-away-from-home to many legislators) has information. And, this is the same neighborhood association which Rosanna Herber served as President for several years, and she is currently a member of the Curtis Park Energy Stars Steering Committee. Hmmm.
JAN. 23, 2012
Tags: AB 32, budget deficit, California budget, California Legislature, Democrats, global warming, government, Katy Grimes, Public Employee Unions, regulations, Republicans, SMUD, tax increases, Taxes, utilities, waste