I just voted to hike electricity rates in San Jose. Many other mayors and public officials sitting on boards of municipal and community-choice utilities — serving tens of millions of Californians — have done the same in recent weeks.
So why increase rates? The California Public Utilities Commission doesn’t give us much choice. Over the last decade, state regulators have consistently rubber-stamped requests by large investor-owned utilities for higher fee revenues for the Power Charge Indifference Adjustment (PCIA), a fee on ratepayers to cover the cost of those companies’ older, less efficient energy plants and supply contracts. Although PCIA fees are paid by ratepayers living in one of the 200 cities and towns now served by a publicly owned “community choice” utility to procure greener, cheaper electricity, the fee revenues still flow to the coffers of Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.
In PG&E’s service area, the annual PCIA fee has skyrocketed 900% since 2013. Across California, it amounts to a $3.8 billion annual transfer of wealth from ratepayers’ pockets to those of PG&E, SDG&E and Edison.
Indeed, San Jose ratepayers pay more, even though San Jose Clean Energy procures electricity that is 30% cheaper than investor-owned PG&E’s — and 90% of SJCEs power comes from zero-greenhouse-gas power sources. Like other local community-choice utilities, SJCE doesn’t have to pay PG&E’s hefty executive salaries, shareholder dividends or excessive debt service. If the PCIA fee were calculated equitably, these advantages would enable SJCE ratepayers to consistently enjoy lower rates. But this year, many won’t — because of the hefty PCIA fee.