Utilities want to cut business rate for funding social programs
by David R. Baker, San Francisco Chronicle
Whether you know it or not, you help pay the utility bills for poor
Californians who have trouble affording electric and gas service on
their own. The money comes straight from your utility bill each month.
Now, the state’s utilities want to change the way that program and
others like it are funded. And your monthly bills could go up –
slightly – as a result.
Pacific Gas and Electric Co. and two other utility companies have
petitioned state regulators to let them shift the financial burden for
several social programs that are funded by utility bills. The proposed
changes would mean that large businesses would pay a little less to
support those programs while homeowners and small business would pay a
The changes would affect the amount you pay for natural gas, not
electricity. If the changes are approved by the California Public
Utilities Commission, residential customers would pay about 1 percent
more for natural gas in three years, while large businesses would pay
3.5 percent less than they do now. For a typical residential customer,
that would mean spending 23 cents more per month.
Two consumer advocacy groups – the Consumer Federation of California and The Utility Reform Network – filed a challenge to the proposal Tuesday with the utilities commission.
"Corporations that are reaping billions in profits from our state
should not be allowed to shirk their responsibilities for urgent
programs that assist low-income Californians," said Mark Toney,
director of The Utility Reform Network, in a news release.
The money not only helps provide power to poor households. Some of it
pays to weatherize their homes, install energy-efficient appliances or
fund research on new natural gas technology.
The funding system now in effect works like a flat rate on gas bills.
Homeowners, shopkeepers and major manufacturers all pay the same amount
into the social programs for each unit of gas they use. As a result,
people who use very little gas probably don’t notice it. Companies that
burn a lot of natural gas do.
So PG&E, San Diego Gas and Electric Co. and Southern California
Gas Co. want to alter the funding formula, essentially doing away with
the flat rate. Instead, they would divide the costs of the social
programs by customer class. For example, if one type of customer
accounts for 20 percent of a utility’s natural gas revenue, that
customer class would pay 20 percent of the cost for the social
"We think this is a better way for people to pay their fair share,"
said PG&E spokesman David Eisenhauer. Some large businesses, he
said, now spend more than half of their gas bill paying for social
"We think it results in a negative impact on the business environment," he said.