HomeMy WebLinkAboutAgenda Report - April 7, 1999 G-04AGENDA TITLE: Notice From Pacific Gas & Electric Company Regarding Application To Reduce PG&E's
Electric Rates At the End Of The Electric Rate Freeze
MEETING DATE: April 7, 1999
PREPARED BY: City Clerk
RECOMMENDED ACTION: Information only, no action required.
BACKGROUND INFORMATION: The City Clerk's Office has received a notice from Pacific Gas & Electric
Company regarding application to reduce PG&E's electric rates at the end of
the electric rate freeze (Exhibit A). This is information only, no Council action
is required.
FUNDING: None
/A r6
Alice M. Rei the
City Clerk
APPROVED:
H. D' on Flynn -- City Manager
Pacific Gas and Electric Company
March 15, 1999
77 Beale Street
San Francisco, CA
415/973-6583
Telecooier 415/543-7813
Telecopier 415/973-9271
MmluniJdrru
P.O. Box 7442
San Francisco. CA 94120
TO STATE, COUNTY AND CITY OFFICIALS
EXHIBIT A
Gail L. Slocum
Attorney at Law
NOTICE OF APPLICATION TO DECREASE
ELECTRIC RATES
AT THE END OF THE RATE FREEZE
Pacific Gas and Electric Company (PG&E) filed Application 99-03-014 on March 5,
1999, at the California Public Utilities Commission (CPUC) to reduce PG&E's electric
rates at the end of the electric rate freeze. PG&E is not requesting any revenue
requirement changes in this application. But we are seeking CPUC authority for some
rate design changes that, if approved after hearings, would mostly happen at the same
time as the rate reductions you will see when the electric rate freeze ends. By state law,
electric rates have been frozen until March 31, 2002, or the date when certain CPUC -
approved transition costs are fully recovered, whichever occurs first.
WHAT WE ARE REQUESTING
We are asking that, at the end of the electric rate freeze, we be allowed to decrease
current electric rates. The actual amount of the rate decreases will depend on the outcome
of several proceedings before the CPUC and the Federal Energy Regulatory Commission
(FERC), that will be decided before the end of the rate freeze. The amount will also
depend on the prevailing price of energy at the time these rates go into effect. Although
we are not proposing any revenue changes in this application, PG&E is proposing
simplifications to, its existing electric rates.
We are also asking that a wires bypass charge and certain flexible pricing rate options be
approved that would take effect immediately after CPUC approval. If approved as
proposed by PG&E, these new rates will ensure continued lower rates for all of PG&E's
customers.
WHY WE ARE ASKING FOR A RATE DECREASE
On January 1, 1998, PG&E's residential and small commercial customers received a 10
percent electric rate decrease. PG&E is now asking for an additional rate decrease for all
customer classes. This rate decrease would occur at the end of the rate freeze when
STATE, COUNTY AND CITY OFFICIALS
March 15, 1999
Page 2
PG&E will no longer be collecting the CPUC -authorized transition costs related to the
restructuring of the electric industry to a competitive generation supply market. Also,
PG&E wants to simplify and consolidate its rates to make them easier for customers to
understand. Finally, PG&E's proposed rates better reflect the costs to serve different
customer classes.
THE EFFECT ON RESIDENTIAL CUSTOMERS
Residential electric customers received an overall 10 percent electric rate decrease on
January 1, 1998. PG&E proposes a further rate decrease for residential electric customers
in this application. As mentioned above, the actual decrease will depend on several
factors. But PG&E estimates that for an average customer who uses 500 kilowatt-hours
per month, the average bill would decrease $6.42 per month, from $54.64 to $48.22.
PG&E is also proposing a $5 -per -month electric residential customer charge, called a
Basic Charge, that would replace PG&E's current $5 minimum bill. If the CPUC adopts a
Basic Charge, there will be an offsetting reduction in energy charges. However,
customers with very low monthly use could see a slight increase in their bill as a result of
the Basic Charge.
THE EFFECT ON AGRICULTURAL CUSTOMERS
In this application, PG&E proposes to transfer small and medium agricultural customers
to small or medium commercial rate schedules. The commercial rate schedules generally
have lower average rates than our current agricultural rate schedules. Large agricultural
customers (with loads of more than 100 kilowatts of demand) will be served on a new
large agricultural schedule, AG -5.
HOW THE RATE DECREASE WILL BE APPORTIONED
According to established CPUC policies, the overall rate decrease is divided among
various customer classes as shown below. The different decreases for various classes
reflect the fact that the costs of serving some classes are higher than others. Although
average rates will decrease as shown, individual bill impacts may vary.
STATE, COUNTY AND CITY OFFICIALS
March 15, 1999
Page 3
Electric Department Projected Revenue Decreases*
Customer Class Total Revenue Decrease from Total Revenue Decrease
Change from
Current Rates
Change from
June 10, 1996
Current Rates
June 10, 1996
Rates
(thousands)
Rates
(thousands)
Residential
-327,949
-11
-647,165
-21
Small Light
-122,896
-13
-214,750
-21
and Power
Medium Light
-655,972
-37
-659,282
-37
and Power
Large
45,615
-32
45,615
-32
Agricultural
E-19 Class
-159,340
41
-159,340
41
E-20 Class
E -20T
-74,561
-26
-74,561
-26
E -20P
-155,938
-36
-155,938
-36
E -20S
-142,797
43
-142,797
-43
Contracts
-15,135
-38
-15,135
-38
E-20 Total
:396,421
-34
-396,421
-34
Standby
-2,486
-12
-2,486
-12
Streetlighting
6,175
-14
-6,175
-14
Total Decrease
-1,708,866
-23
-2,132,245
-27
*Note: The actual amount of the rate decreases will depend on the outcome of several
proceedings before the CPUC and the FERC that will
be decided before
the end of the
rate freeze, as well as the prevailing price of energy at
the time these rates go into effect.
STATE, COUNTY AND CITY OFFICIALS
March 15, 1999
Page 4
PUBLIC PARTICIPATION
Before acting on this PG&E application, the CPUC will hold hearings at which PG&E, the
CPUC's Office of Ratepayer Advocates, and other interested parties will present
testimony. These hearings will be open to the public. The hearings are expected to occur
in the fall of 1999.
Participants at these hearings may offer proposals that are different from those of PG&E.
After considering the various proposals, the CPUC will issue a decision. Rates adopted by
the CPUC may differ from those proposed by PG&E. In addition, actual rates will depend
on the outcome of several other proceedings to be decided before the end of the rate
freeze.
If you are interested in participating in this proceeding and need advice or more
information, including information on the hearings, or if you wish to obtain copies of the
Office of Ratepayers Advocate's proposals, when they are available, please write to:
The Public Advisor
California Public Utilities Commission
505 Van Ness Avenue, Room 5303
San Francisco, California 94102
or via electronic mail to:
pubfic.advisor@cpuc.ca.gov
Mention that you are writing about Phase 2 of PG&E's 1999 General Rate Case,
Application No. 99-03-014. Please indicate if you would like a written response to your
inquiry; otherwise no reply will be sent. Your letter will be sent to the Commissioners and
become part of the formal correspondence file for this application.
FOR FURTHER INFORMATION
You may review a copy of our application and related exhibits at PG&E's corporate
headquarters (77 Beale Street, Room 3120, San Francisco, CA 94105), at any of our
division offices, or at the San Francisco office of the CPUC.
The State, counties, and municipal corporations, and any other parties interested in the
above-mentioned filing can obtain a copy of Application No. 99-03-014 and related
exhibits upon request to Gail L. Slocum, Pacific Gas and Electric Company, P.O. Box
7442, San Francisco, CA 94120.
STATE, COUNTY AND CITY OFFICIALS
March 15, 1999
Page 5
This notice is given in accordance with the requirements of Rule 24 of the CPUC's Rules
of Practice and Procedure.
PACIFIC GAS AND ELECTRIC COMPANY
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