The $24.15 fixed charge is being justified as being in line with SMUD’s fixed charge. What’s not mentioned is that SMUD’s energy charge is much lower than the energy charges of the three investor-owned utilities (IOUs) in California.
Why just tell half the story? Because the other half of the story will reveal why the proposed fixed charge has no credibility at all.
Look at the chart which compares customer bills for using the same amount of electricity per month across municipal and investor-owned utlities in California. It’s on the SMUD wesbite.
High electric rates are the biggest barrier to electricification and merely shifting energy charges into fixed charges will not do anything to enhance affordability.
Look at the map of the US, which shows how average electric rates vary across states. California’s rates, dominated by those charged by the investor-owned utilities, are twice as high as the national average.
Furthermore, there is no guarantee that either the fixed charge or the energy charge will remain “fixed.” My off-peak rate on EV2-A has doubled in just 5 years.
Finally, there is an important detail not shown in the CPUC’s PD. The national median across 173 investor-owned utilities for fixed charges is less than $12, half of what the CPUC has proposed.
It took SMUD took many years to get to its current fixed charge, following the time-honored principal of gradualism in rate design. Two of the three IOUs have a zero dollar fixed charge today, the third has a fixed charges of just over 90 cents per month. Going from a median value of $0.00 to $24.15 is a gross violation of gradualism. Why risk a customer backlash?
SMUD based its fixed charge on a cost-of-service study, while it’s not clear that the PD’s charge is based on a cost-of-service study. If it was, why would it have the same exact value across the three IOUs, which have very different energy charges?
