CalWatch may want to investigate the ongoing financial scandal in the state government controlled “retail” electricity marketplace. On March 1, 2010, CPUC approved and SCE implemented an extreme “Conservation Incentive Adjustment” (CIA) charge on it millions of residential customers with no substantial advance notice of price impacts and an opportunity to object to what has become a 100% retail price increase for the middle-class and larger residential power use. Why would the CPUC approve retail residential electricity prices for SCE (and PG&E, SDG&E, etc ) customers increasing prices amounting to billions in billing overcharges for several million residential “D-1 Domestic customers?

Background:
The best proxy for actual costs-to-serve the residential customer class (i.e., void of political tomfoolery and guilt taxes) is the CPUC approved small business electric rate. In SCE’s territory, the GS-1 small business tariff (customer charge + delivery price + energy price; less than 20 kW, non-demand metered) = $0.78/day +($0.06867 + 0.13918) = $25 + $0.20785/kWh; while in winter months, the GS-1 tariff = $0.78/day + ($0.06867 + $0.07377) = $25 + $0.14244/kWh, due to a 47.0% reduction in the retail energy price component(-$0.06541/kWh).

SCE’s GS-1 small business rate is “flat”(e.g., the price of the first kWh of energy purchased in a month is the same as the price of the 30,000th kWh purchased in that month). Expensive, of course, but a simple sales price design (not unlike purchasing retail gasoline), easy to understand and probably based on the best cost data that CPUC staff can wrestle out of the fourth floor at Rosemead.

On the other hand, SCE’s Schedule “D” Domestic tariff takes very similar forecasted cost-of-service and revenue requirement data and added a wide swinging CIA not based on cost to serve that customer but on the ability to directly penalize mid-range, and higher, volume customers, to “motivate” or force them to spend $20,000 +/- on solar voltaic systems when SCE’s (internal & independent) low cost natural gas generating resources are either not being used or not being reflected in retail rates.

SCE’s domestic residential and small business electric customers have similar cost causation patterns on the electric systems due to similar electric load patterns (e.g., lighting & HVAC) and T.O.U. patterns. Tossing out common sense and fairness, SCE and CPUC rate staff has
sliced and diced retail rates (tariffs) to please the many special interest groups spewing forth a perplexing domestic tariff format that wildly redistributes wealth from those with larger home electric demand to those who have ‘bought’ the current solar panel fad. This violates the fairness principle of “cost-of-service” based rates penalizing hard working Californians to an unbelievable degree.

Compare the simplicity and fairness per se of SCE’s GS-1 Small Business Electricity Rate of $0.78/day + ($0.14244/kWh (winter) or $0.20785/kWh (summer)) to the CPUC’s insanely outrageous Schedule D Domestic Tariff paid by millions of residences! Cost-to-serve the two classes are very similar but the tariffs are essentially an administratively (non-voted) tax on the perceived luxury of using CPUC regulated electricity.

Have the majority of California’s municipal and special district run electric utilities bought into this Sierra Club and NRDC hogwash? I think not.

To get your blood boiling, see: http://www.cpuc.ca.gov/PUC/energy/Electric+Rates/