Your electric bill may change next year if the California Public Utilities Commission approves a rate increase requested by Southern California Edison. But the increase may be off set in 2014 by bill credits averaging $46 a month if the same state agency allows Edison to return revenue generated by the sale of greenhouse gas emissions.
According to an Edison press release, your monthly bill would increase by an average of $11 a month. The bill increase and the bill credit has to be approved by the Utilities Commission.
In other words, a government agency will decide if your bill goes up or down or remains essentially the same.
If it sounds technical, well, it is.
First, a look at the electric bill increase:
“Under the commission’s rules, SCE’s costs to buy power are passed through to customers directly at cost,” according to an Edison press release issued at the start of August. “SCE does not earn a profit for purchasing power on behalf of customers.”
Every year, Edison files an update with the state to recover fuel and power costs from customers. “Prices for power delivered to Southern California are about 12 percent higher than they were in 2012,” the document said. “Among the reasons for higher power prices are increased customer demand, higher natural gas prices (natural gas produces the bulk of California’s power), and the higher priced renewable power and greenhouse gas emissions costs.”
The fact that the San Onofre nuclear plant closed in June removed one source of power from the system. “SCE purchased 20 percent of its power from renewable resources last year and expects the amount to increase this year,” the document said. “Renewable power, such as wind and solar, costs more than traditional energy resources like natural gas, contributing to higher power costs.”
According to Edison, the company is required to buy 40 percent of its power in the Los Angeles basin, which reportedly also contributes to the cost of buying power.
The request to recover the cost of buying power should not be confused with a general rate case. Edison will be filing a general rate case for electricity users at the end of the year, requesting that the Public Utilities Commission be allowed to increase electricity rates by less than $2 a month in 2015.
Then there’s the request to return greenhouse gas emission revenues to Edison customers.
According to Edison, the California Air Resources Board places a specific limit on the amount of greenhouse gases a business can put into the air. Starting this year, the Air Resources Board will allow utility companies to sell their emission allowances. The plan is to pass the revenue along in the form of a credit on your electric bill.
According to Edison’s application to the Public Utilities Commission, starting this year, power companies may file applications to forecast the cost of greenhouse gas emissions for the following year. In this particular case, Edison wants to reimburse costumers in the form of a credit on their electricity bills. The credit would be $46 a month.
“In total, SCE requests to return $682.178 million in allowance revenue to eligible customers in 2014,” said Edison’s application to the PUC. The application is a 30-page document that was filed with the state agency at the start of the month. However, residents who are not eligible may still see their electric bills reduced. According to Edison’s application, Edison’s 2013 Energy Resource Recovery Account is expected to bring in $271 million in revenue.
Edison is proposing to amortize the $271 million over the next two years.
“Rate impacts to customers who are not eligible to receive a return of allowance revenue will therefore be lower than they otherwise would be if SCE were to include two full years of GHG (greenhouse gas) costs in its 2014 rates,” the Edison application said.
For more information about the application, visit www.sce.com/applications.
