Sparks fly over rate plan

The more than 16% rate hike requested by Southern California Edison for next year has triggered plenty of opposition from, among others, sign-toting Los Angeles customers who crowded into a room to tell the utility that they can’t afford it.

With gasoline and food costing more, few want to spend extra for electricity even if the money would help prevent blackouts.

Some of the rate hike is earmarked for transmission and other projects that would help bring power to customers of the Edison International subsidiary.

But ratepayers complained about other costs, including executive bonuses and stock options. Then there are things like office furniture for its headquarters. And fresh urinals for a utility-owned campground.

“We are against this rate hike. We cannot afford it,” Compton resident Alma Jackson told a packed meeting room Monday night at Compton City Hall. “It’s just ridiculous the amount of money these people are giving away while we’re struggling to survive.”

Delinquencies are already on the rise at Edison. In the first five months of 2008, the utility disconnected 145,000 customers for failing to pay past-due balances, up 14% from the same period last year.

The Rosemead-based utility proposed collecting $5.2 billion in 2009, an increase of $726 million, or more than 16% compared with current rates. The utility, which serves 4.8 million residential and business customers in Central and Southern California, has proposed increases of $216 million in 2010 and $287 million in 2011.

If approved by the California Public Utilities Commission without changes, next year’s rate increase would add more than $7 to the average residential monthly bill.

One of the most unusual provisions in the proposed increase calls for ratepayers to fork over $1.6 million to remodel Camp Edison, a public camping ground owned by the utility at Shaver Lake in the Sierra Nevada northeast of Fresno. Camp Edison boasts 252 campsites, wireless Internet service and laundry facilities. The utility plans an expansion and overhaul, which would include new bathrooms and an administrative building.

In April, the utilities commission’s consumer advocacy arm said less than one-fifth of Edison’s rate hike request was justified. The Division of Ratepayer Advocates recommended a $156-million increase for 2009, or about 50 cents a month for the average home.

Al Fohrer, chief executive of the utility, called the recommendation “pretty much divorced from the realities of the demands on the [electrical] system.”

Customers who use low amounts of electricity would be spared whatever increase gets approved because a state law established a cap on rates for the first two usage tiers. However, Edison and other utilities are pushing regulators to remove that cap.

Edison has defended its rate request in public meetings and trial-like evidentiary hearings at the state utilities commission. An administrative law judge is expected to issue a proposed decision in November, with a final ruling by the commission in December.

Separate from the proposed increase, Edison bills will go up because of the soaring cost of natural gas, which runs most of California’s power plants.

At Monday night’s meeting, a contingent from the Los Angeles Metropolitan Churches coalition made it clear that, coming on top of other economic woes, higher Edison bills would be a financial hardship.

Edison and other utilities provide discounted electricity rates for low-income customers who qualify. But several speakers said the suffering extends to those who wouldn’t qualify for that program.

“I am going through a struggle, being behind on my rent, behind on my utilities, food -- my freezer is currently empty,” Compton resident Charles Edward Paylor said. “I’ve been homeless twice. . . . I’m not sure I can be homeless a third time. I cannot deal with this increase.”

His comments were greeted with applause from the crowd of more than 150.

Russell Worden, Edison’s director for regulatory affairs, told the gathering that spending less than what Edison requested could cause layoffs and affect its performance.

“What that means is that the quality of electric service you’re going to receive is not going to be what you’re used to,” Worden said. “That means we’re not going to have as many Edison employees to answer the call when you move or you want to get your service changed, and we’re not going to be able to answer and restore power as quickly as we normally do after fires and so forth.”

Andrew Ulmer, who helped craft the ratepayer advocates’ proposal, rejected that contention. He pointed to the request for $170 million in bonuses, incentives and stock options, plus money for supplemental pensions. “It’s those types of issues where we can clearly say, ‘This has nothing to do with the integrity of Edison’s system.’ ”

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