Utility Watchdog in San Diego
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Energy

Filing Date: 

 Friday, November 14, 2014

 Background: 

General Rate Case (GRC) proceedings currently take place every three years. The GRC will set the amount of money that utilities such as SDG&E can collect through rates. These revenues recover the utility's operation and maintenance expenses, depreciation, and taxes and provide a ‘reasonable’ profit to the utility.

UCAN’s Policy Position:

Working closely with technical and financial experts, UCAN thoroughly examines SDG&E’s application and identifies wasteful spending of ratepayer dollars and isolating expenses that should be shouldered by SDG&E’s shareholders instead of ratepayers. Some of the issues we have identified include:

        -unrealistic customer sales and forecasts

        -unnecessary funding of new projects

        -unusual accounting changes that warrant further investigation

 During the last SDG&E GRC (2012) the efforts of intervenors such as UCAN reduced the amount of money that SDG&E was allowed to collect by $115 Million.

UPDATE: September 11, 2015, SETTLEMENT AGREEMENT

 UCAN, SDG&E, and most of the other parties involved in SDG&E’s GRC have agreed to a settlement which is currently being considered by the CPUC. If accepted the settlement will

Reduce the amount of money that SDG&E is allowed to collect by nearly $100 Million

Keep open SDG&E branch offices in Oceanside, National City, and Downtown which SDG&E wanted to close

Set a fair “Service Establishment Fee” of $5.85 for new customers (SDG&E wanted to charge some customers $25)

Capped spending on unforeseen costs for certain gas programs including SDG&E’s Transmission Integrity Management Program (TIMP) and Distribution Integrity Management Program (DIMP). If SDG&E exceeds certain limits on this spending, they will have to justify any further expenses through a new proceeding. Previously, SDG&E was allowed to do the work and seek funding approval after the money was spent, leading to a lower level of scrutiny and potentially more wasteful spending by SDG&E.

UCAN Filings:

November 17, 2014, SDG&E Files Application – SDG&E seeks approval for $1.911 Billion in revenue.

December 22, 2014, UCAN Files Protest – UCAN cites numerous issues in need of further evaluation including the reasonableness of SDG&E’s costs, proposed spending on capital improvements, proposed accounting changes, and SDG&E’s shifting of financial risk from shareholders to ratepayers.

January 6, 2015, UCAN and TURN File Joint Prehearing Conference Statement – UCAN and The Utility Reform Network (TURN), a San Francisco based consumer advocacy group, filed a statement attempting to prevent SDG&E’s efforts to limit the time allowed for consumer groups to investigate and challenge this spending increase.

January 8, 2015, Prehearing Conference – UCAN is represented by Executive Director Don Kelly.

February 5, 2015, CPUC Issues Scoping Memo – CPUC more closely agrees with timeline proposed by UCAN and TURN than by SDG&E. A timeline for the various stages of the proceeding is established with a final decision expected in January 2016

 February 9, 2015, UCAN Files Notice of Intent – UCAN affirms its opposition to SDG&E’s application, focuses challenge on rate making, SDG&E’s forecasting of customers and sales, customer service, regulatory accounts, electric generation, and other issues.

 April 1, 2015, CPUC Notice of Reassignment – CPUC reassigns case from Commissioner Carla Peterman to President Michael Picker.

 June 1-10 2015 Public Participation Hearings in San Diego, Escondido, Oceanside, and El Cajon.

June 22- July 15, 2015, UCAN Executive Director Don Kelly participates in Evidentiary Hearings in San Francisco, presenting testimony and cross-examining SDG&E expert witnesses

September 11, 2015, UCAN joins Joint Motion for Adoption of Settlement Agreements for SDG&E and SoCal Gas

July 1, 2016, DECISION ADDRESSING THE GENERAL RATE CASES OF SAN DIEGO GAS & ELECTRIC COMPANY AND SOUTHERN CALIFORNIA GAS COMPANY AND THE PROPOSED SETTLEMENTS

Docket Number: 

A.14-11-003

Why is the CPUC looking at changing how we pay for electricity?

In 2013 the California State Legislature passed AB 327 which was signed into law by Governor Brown. This law directed the California Public Utilities Commission to examine the way customers pay for electricity, to determine if California’s utilities should move all their residential customers to Time-of-Use pricing and to examine the pricing structure for utility tiered rates to more accurately reflect the cost of providing service.

What might change?

  • One major change the CPUC is examining concerns the current rate structures for California’s utilities. For example, SDG&E has a 4 tiered rate, where the cost per kilowatt hour for Tier 4 is more than double Tier 1 rates. How many tiers SDG&E should have, and how much the price differential should be between those tiers is under consideration.
  • A second significant change being considered is the electric utilities (such as SDG&E) requests seeking CPUC approval to add a monthly service fee to customers’ electric bills. Revenue generated by this fee would be used to reduce the tiered electricity prices. This fee, if authorized, would cover the cost of connecting each user to the electric grid and to provide billing services. Customer service costs are currently being recovered through tiered electric rates. 
  • A third major change is that AB 327 allows the CPUC to consider adopting default Time-of-Use (TOU) pricing as early as 2018. Californians have historically paid for electricity through tiered rates where the higher tier users, the customers using the most electricity, are charged more per kilowatt hour than those who use less electricity.

With default TOU pricing the customer is charged more if energy used during “peak” times, generally during the afternoons, than if the electricity is used at off-peak times. Customers who can shift their use to non-peak times could save money (more on this below).

Should the CPUC authorize Time-of-Use pricing, AB 327 put in place a number of consumer protections to ease the transition, including customer bill protection and an opt-out tiered rate option:

  1. “Bill Protection” means that for the first year customers who are moved to TOU rates will not be charged more than what they would have been charged had they stayed on the tiered rate. This gives customers a year to change their electric usage habits to see if they would be able to save money with TOU pricing.
  1. People who would be charged more with TOU pricing or would prefer to be on tiered rates for any reason would have the ability to opt-out back into a tiered rate with no additional charge.

How could TOU pricing affect my energy bill?

TOU pricing will affect consumers’ energy bills differently depending on when they use electricity and how much flexibility they have to change when they use that energy. While TOU pricing has higher rates during “on peak” times, the cost to produce the electricity is lower during the rest of the day. Customers who can shift their use of major appliances such as washers, dryers, and dishwashers to the “off peak” period may be able to save themselves money.

For example, there are currently a number of TOU pricing options which are presently available to SDG&E customers. One such option is SDG&E’s EV TOU 2 which is designed for customers who have electric vehicles.  According to SDG&E's website the prices for this rate are:

(prices per kWh):

Time

Nov.-Apr (Winter)

May-October (Summer)

12 am - 5 am     (Super Off Peak)

$0.17

$0.16

5 am - 12 noon (Off Peak)

$0.19

$0.22

12 noon - 6 pm (On Peak)

$0.20

$0.49

6 pm - 12 am     (Off Peak)

$0.19

$0.22

For comparison SDG&E’s current summer tiered rates are listed below (prices per kWh rounded to the nearest .001):

Tier 1

Tier 2

Tier 3

Tier 4

$0.165

$0.189

$0.369

$0.389

If a consumer were able to conserve energy during the 12:00-6:00pm period they would have the opportunity to save money.

UCAN is supportive of the concept of TOU pricing but there are several things about SDG&E’s proposal we are concerned about. Most importantly we feel that SDG&E is not ready for full scale utility wide rollout of default TOU pricing and should complete a pilot of default TOU to better understand how customers will respond.

What happens next?

Over the last year UCAN has been actively participating in this proceeding. For over three weeks this November the CPUC held hearings on these issues, and UCAN’s executive Director Don Kelly presented UCAN’s expert testimony, and cross-examined experts from the other parties including SDG&E. In January UCAN and SDG&E (as well as other parties) will submit briefs on in this case, which will then be posted on our website.

The CPUC is expected to issue its ruling on these issues before summer 2015.

 

Transporting, treating and storing water takes a lot of energy.

In California approximately 20% of the electricity we generate is used to transport, treat, and store water. The more water we use to water our plants, clean our clothing, or wash our dishes, the more energy needs to be used to transport, treat, and store that water. By reducing through conservation programs the amount of water used California will use less energy on water. By reducing energy costs water agencies save money which reduces water costs and potentially customer water bills. Using less electricity for water also has the potential to lessen the burning of fossil fuels and could help reduce greenhouse emissions, and lower overall power system load.

What is being done about this?

UCAN is currently participating in a California Public Utilities Commission [CPUC] action which aims to reduce the amount of energy needed by funding conservation programs that save energy by saving water. Through this process the Commission is looking at ways to value the embedded energy in water. Based on this valuation, they can develop a tool to evaluate how much energy a given water conservation program would save. By conserving water, less energy would be needed to transport, treat and store water which results in saving both water and electricity. Through this process, the CPUC will establish a framework by which water and electric utilities will jointly fund water/energy efficiency programs.

UCAN was one of the original supporters of this rulemaking.

To read the original filing and subsequent comments click on the included links. To keep up to date on future developments and other UCAN projects sign up for our free newsletter.

 

Each of California’s three major regulated-monopoly electric companies has a proposal for fueling Electric Vehicles, or “EVs.” UCAN is actively involved in SDG&E’s application before the California Public Utilities Commission (CPUC) as it will directly affect San Diego County. UCAN opposes SDG&E’s planned “pilot program” for our area because it is Too Big, Too Long, and Too Expensive.

Before we dive into the details, one of the main things to know is that all three of California’s major ratepayer advocacy groups oppose SDG&E’s current plan: In addition to UCAN, our colleagues at TURN (The Utility Reform Network) and ORA (The Office of Ratepayer Advocates at the CPUC) also say no.

Click here to ready a summary of UCAN’s objections.

We need you to make your voice heard at the CPUC by contacting their Public Advisor with a message opposing the proposed Joint Settlement to Application 14-04-014 currently before the Commission. The Public Advisor can be reached at:

 

Telephone: 866-849-8390 or 415-703-2074
Email:
This email address is being protected from spambots. You need JavaScript enabled to view it.
Postal Service: CPUC Public Advisor, 505 Van Ness Avenue, Room 2103, San Francisco, CA 94102

What is SDG&E’s Proposal?

Last year SDG&E submitted an application to the CPUC for “Authority to Implement a Pilot Program for Electric Vehicle-Grid Integration.” Following rounds of testimony and negotiations, there is now a proposed settlement agreement to which many groups have signed on. UCAN did not sign on to SDG&E’s proposed settlement and we believe the signatories are missing some BIG issues.

California has ambitious goals to increase the number of EVs on our roads to 1 million by 2020 and 1.5 million by 2025. SDG&E is claiming that this pilot will help encourage more electric vehicles to be adopted. They also want to test a pricing scheme which changes by day and hour to see if this will encourage EV drivers to charge at off peak times. To test this, SDG&E wants to charge ratepayers almost $103 Million to build and operate 5,500 charging stations at 550 locations in their service territory (mostly San Diego County). These would be installed at workplaces, condos, and apartments.

So what’s the problem?

Dive into the details and it’s clear that this “pilot” is not really a pilot: it’s Too Big, Too Long, and Too Expensive. Additionally, as UCAN’s expert pointed out in testimony the settlement relies on misleading cost effectiveness calculations, is anti-competitive, and may not even test what SDG&E says that it wants to test. What it does do is permit SDG&E to build EV charging equipment and pay for it by increasing the rates you pay for electricity. Based on testimony from the Office of Ratepayer Advocates, if SDG&E had 5,500 chargers in place today it would represent 88% of the charging market. (SDG&E claims that this will have no impact on competition because by 2025 their test program will represent “only” a 20% market share.)

Electric companies in California are regulated “monopolies”.  By law these utilities are allowed to make a “fair” rate of return but, prior to raising electric rates, the utilities need approval from the California Public Utilities Commission. In this case, SDG&E says that in order to run their pilot they must own 5,500 chargers at 550 sites, the charging equipment, and everything that goes with it down to the plug an EV owner inserts into their car to “fuel up.”

UCAN disagrees. SDG&E can conduct a much smaller and less expensive pilot and does not need to own 5,500 chargers. In the private market there are several operators for such charging stations who, unlike SDG&E, would pay for these stations through the fees they charge users rather than SDG&E’s plan to raise your electric rates to pay for charging stations you won’t be able to use unless you own an EV. UCAN believes that we should encourage the private market to develop.

Want to learn more? Follow this link for UCAN’s compete list of objections to this scheme. [URL] While we at UCAN oppose SDG&E’s proposed “pilot” program, we do support a far more limited pilot, which was included in our comments to the Proposed Settlement [URL], filed in early July.

What can you do?

Your personal input matters! Send your comments to the Commissioners’ attention via the Public Advisor, at:

Telephone: 866-849-8390 or 415-703-2074
Email:
This email address is being protected from spambots. You need JavaScript enabled to view it.
Postal Service: CPUC Public Advisor, 505 Van Ness Avenue, Room 2103, San Francisco, CA 94102

This email address is being protected from spambots. You need JavaScript enabled to view it. with any questions, comments or concerns about UCAN’s position and our role in the process. You can also call us at (619) 696-6966.

To read UCAN's protest, click here.

Read San Diego County Supervisor Dianne Jacob’s letter in opposition to SDG&E’s proposal.

About UCAN

UCAN has represented the interests of San Diego County utility customers since 1983. UCAN focuses its efforts on the rates and services of San Diego Gas and Electric Company, telecommunications utilities and the City of San Diego Water Department.

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