planet4ever said:
Huh? Can you explain how that could be true? It seems to me the change would raise bills for all customers unless their usage is below the new baseline.
The trick is that the CPUC doesn't change the
total amount of money that PG&E will collect from residential ratepayers, nor does it change the Tiers (100%, 130%, 200%, etc.). The state legislature capped Tier 1-2 rates back in the Energy Crisis (the one that led to Gray Davis' recall, the Governator, etc). So all the cost increases for the past decade have been sloshed onto the Tier 3-4-5 rates, which together comprise only about 40% of total residential kWh sales.
If the amount of electricity 'given' away at Tier 1 rates is reduced (say, Tier 1 would cover 300 kWh/month instead of 350 kWh/month), then the amount of power billed at giveaway rates is reduced, which allows PG&E to reduce Tier 3-4-5 rates (relative to where they'd have to set them if 60% of all the residential energy went out the door at Tier 1 rates). If you are a Tier 1-2 customer today, this is modestly bad news, as you would hit Tier 3 and pay higher rates for a small portion of your usage. But if you are a Tier 4-5 customer today, the discount on that higher-tiered consumption more than offsets your slightly smaller baseline allocation.
IMHO, the California residential rates are whacko... basically the more you use, the more you pay (as in: 14 cents for the first kWh and 40 cents for the last one), with little or no fixed monthly customer charge. It's viewed by the policy wonks in San Francisco as a "conservation incentive", but the magnitude of fixed costs (wires, plants, transmission, metering, billing) isn't reflected in the rate structures. It results in a significant subsidy of coastal apartment dwellers by inland homeowners who use A/C. It also makes rooftop solar look artificially attractive, because a homeowner can better rationalize an expensive capital installation when s/he's facing a whopping Tier 4 or 5 electricity rate.
In reality, there are few commodities where using more drives the marginal price
up. Smart metering may help solve this, as the policy wonks can use TOU pricing to drive down on-peak consumption, which does drive overall utility costs, and let off-peak usage go where true "market" rates make sense. Night-time energy is cheap in California, as all the plants built for summer afternoons have nothing to do but recharge EV batteries :lol: