FRESNO — A Jan. 1 electricity rate increase by Pacific Gas & Electric Co. may not feel like much now. But when valley temperatures climb into the 90s and air conditioners start to hum in earnest, the utility company may feel the heat as customers lose their cool over electric bills.
As PG&E prepares to make its case for yet another rate increase next year, growing frustration over high bills and mounting skepticism about the utility's new SmartMeters are prompting greater scrutiny of the company's prices.
Customers already grumble about getting higher bills for electricity than people elsewhere. A look at rates in other hot-weather communities in the southwest United States suggests that they are right.
Compared to other utilities, PG&E's high-energy-use households bear a greater burden to subsidize lower rates for customers who use less electricity.
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To encourage energy conservation in California, the prices charged for electricity by privately owned utilities slide upward as a household's consumption goes up. So the more power you use, the higher your rate.
For PG&E customers, including those in Stanislaus County not served by the Modesto or Turlock irrigation districts, it stands to be much higher.
Since 2001, PG&E's residential rates have undergone dozens of adjustments that have boosted its average residential electricity rate by 53 percent.
Contributing to the uproar are concerns over newfangled meters that measure a home's power use. The arrival of SmartMeters in the valley last summer and fall coincided with sticker shock as many customers saw their utility bills jump. Some residents reported bills that were nearly four times higher than the previous year -- and that was in the fall.
PG&E customers were joined by state legislators in challenging the accuracy of the devices.
In response, the California Public Utilities Commission, the agency that regulates private utility companies and their rates, ordered an independent audit of PG&E's SmartMeter program.
PUC spokesman Andrew Kotch said the state expects to choose a consultant soon for the review, which is likely to take about six months.
PG&E said it field-tested more than 1,700 installed meters last fall and found no faults. Officials say they support the PUC's audit and are confident it will confirm the accuracy of the meters.
The MID, which serves much of Stanislaus County and some smaller areas, also has faced complaints from customers about rate hikes and the new meters. MID officials last week said testing did not find problems with accuracy.
Electric consumption is measured in kilowatt-hours. Ten 100-watt light bulbs burning for one hour use 1 kWh of electricity.
A typical refrigerator uses about 1,100 to 1,200 kWh in a year. Air conditioning in an average home may use 2,000 kWh in a year.
PG&E, which serves much of the San Joaquin Valley and Northern California, charges for electricity based on five tiers. Each household gets a certain baseline allowance of electricity that is charged at the utility's lowest rate, 11.88 cents per kWh.
PG&E's baselines vary from region to region — a higher allowance in hot-weather areas, lower in milder areas.
If a household's power use rises above that allowance, a higher rate applies for every kWh over the threshold. Prices rise incrementally as the amount of power used crosses into each additional tier.
Customers with larger homes to cool, or swimming pool pumps to run, can easily find themselves reaching into PG&E's three higher-rate tiers.
"Tiered rates are designed to reward conservation," said Mindy Spatt, a spokeswoman for The Utility Reform Network, a consumer advocacy group.
But because the baseline and lower tiers are protected from dramatic rate increases, "when you look at how much higher PG&E's tiers are, all of the rate hikes have gone to the top tiers," Spatt said.
At its highest residential tier, PG&E charges 47.39 cents per kilowatt-hour.
That's more than Southern California Edison, whose top rate is 34.25 cents; San Diego Gas & Electric, 20.2 cents; or the Sacramento Municipal Utility District, 17.02 cents.
The differences are even more striking when compared to the highest rates charged in other Southwestern states: 15.21 cents in Albuquerque, N.M., 12.1 cents in Las Vegas, or 11.47 cents in Austin, Texas.
When it makes its case to the PUC for approval of its rates, the PG&E is entitled to recover its costs of doing business: fuel to generate the electricity, sending it over transmission lines, maintaining wires and poles and a "fair return" for its shareholders.