NewEnergyNews: Do California’s Big Three Utilities Need So Much Ratepayer Money? Requests for higher rates are “out of line,” according to the ratepayers’ advocate.

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on climate change makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

The challenge now: To make every day Earth Day.

YESTERDAY

  • ORIGINAL REPORTING: How California Is Easing Off NatGas With New Energy
  • ORIGINAL REPORTING: Illinois cloud computing debate could open utility rate reform
  • THE DAY BEFORE

  • TODAY’S STUDY: The Value Of Transportation Elecrification
  • QUICK NEWS, December 12: The “Fight-Climate-Change” Diet; Market For Advanced EV Batteries To Quadruple By 2026; The Low Lifecycle Costs In New Energy
  • THE DAY BEFORE THE DAY BEFORE

  • TODAY’S STUDY: How The New Energy Marketplace Is Growing And Shifting
  • QUICK NEWS, December 11: N.C. Millennial Women Unite For Climate Fight; The White House Threat To New Energy; What’s Bad News In The Tax Bill For New Energy
  • THE DAY BEFORE THAT

  • Weekend Video: Tesla Adds World’s Biggest Battery To Aussie Wind
  • Weekend Video: Solar And The Next Utilities
  • Weekend Video: Wind Builders On Wind
  • THE LAST DAY UP HERE

  • FRIDAY WORLD HEADLINE-The Climate Change Gourmet
  • FRIDAY WORLD HEADLINE-UK Study Says Yes To Solar-Powered Electric Trains
  • FRIDAY WORLD HEADLINE-First Aussie Ocean Wind Project Gets $8BIL Funding
  • FRIDAY WORLD HEADLINE-EU Solar Goes Digital To Open New Services
  • --------------------------

    --------------------------

    Founding Editor Herman K. Trabish

    --------------------------

    --------------------------

    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

    -------------------

    -------------------

      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

    -------------------

    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • TODAY AT NewEnergyNews, December 13:

  • ORIGINAL REPORTING: How California Is Easing Off NatGas With New Energy
  • ORIGINAL REPORTING: Illinois cloud computing debate could open utility rate reform

    Monday, January 28, 2013

    Do California’s Big Three Utilities Need So Much Ratepayer Money? Requests for higher rates are “out of line,” according to the ratepayers’ advocate.

    Do California’s Big Three Utilities Need So Much Ratepayer Money? Requests for higher rates are “out of line,” according to the ratepayers’ advocate.

    Herman K. Trabish, August 14, 2012 (Greentech Media)

    Californians are being asked by their investor-owned utilities (IOUs) to keep paying pre-recession level bills. The ratepayers' advocate says the utilities should be returning more to their customers.

    The Pacific Gas and Electric (PG&E) request for an 11.0 percent Return on Equity (ROE), the Southern California Edison (SCE) request for an 11.1 percent ROE, and the San Diego Gas and Electric (SDG&E) request for an 11.0 percent ROE “far exceed the companies’ revenue needs and market standards,” according to Acting Director of the state’s Division of Ratepayer Advocates (DRA) Joe Como.

    Como brought evidence before the California Public Utilities Commission (CPUC), within which DRA is an independent consumer advocate, to validate his contention. The PG&E ROE and the SCE ROE should be 8.75 percent and the SDG&E ROE should be 8.50 percent, Como argued at the CPUC’s recent Cost of Capital proceeding. Interest rates and other capital costs are much lower than they were in 2007, when the Commission set the PG&E ROE at 11.35 percent, the SCE ROE at 11.50 percent and the SDG&E ROE at 11.1 percent.

    DRA “does not object,” Como argued, to the “proposed capital structure or forecasted cost of long-term debt.” But, he said, “the utilities want to charge customers Rates of Return for their investors that are out of line with the current market conditions.”

    IOU filings with the CPUC argue they have a big need for capital but the risk their investors must bear is higher than that of alternative investments. They must, therefore, pay a higher-than-average return to shareholders in order to go on building the kind of electricity generating and delivery infrastructure the state requires of them.

    The DRA conclusions are based on three financial models used to compute ROE. The financial models incorporate current interest rates, risk premium, and reasonable growth forecasts. A market analysis that compared requested ROEs to 34 investor-owned electric utilities across the U.S., the DRA reported, showed that the IOUs' requested 11.0 percent and 11.1 percent ROEs are significantly higher than the median ROE of 9.9 percent.

    According to DRA regulatory analyst Jerry Oh, the differences between the requested ROEs and those the DRA found adequate were $377 million for PG&E, $211 million for SCE, and $50 million for SDG&E. The IOUs, Como added, “should be passing those tens of millions of dollars in savings on to their customers.”

    The SCE proposal, reported SCE spokesperson Lauren Bartlett, "would lower requested customer rates by more than $120 million."

    "Taken as a whole, our request would reduce our annual revenues by about $100 million," added PG&E External Communications Chief Jonathan Marshall.

    Following a extensive set of evidentiary hearings and comments beginning in September, the CPUC will issue final Cost of Capital decisions by the end of 2012 that will determine the ROEs that IOUs can earn going forward.

    GTM will detail the utilities' positions on this issue in a follow-up piece.

    0 Comments:

    Post a Comment

    << Home