Beyond the blackout blues
This energy situation has gotten surreal with: (1) a governor who seems to lack the ability to solve the problem, (2) a president who has come out touting a dinosaur-like “relief” plan that features energy production at the expense of environmental protection, and (3) a business community up in arms about carrying the burden of the PUC’s new energy rate hike, despite the fact that this same group was first in line, a few years back, in its support for the GOP-spurred deregulation plan.
Meanwhile, the North American Electric Reliability Council has predicted that the state will suffer five times as many rolling blackouts this summer as previously forecast.
Ugh. What’s a ratepayer to do?
Well, if you’re lucky enough to live in Sacramento, here’s one thing you can do: fall down on your knees and thank the energy gods for the Sacramento Municipal Utility District. The worse the state’s energy picture gets, the more elated we can feel about having our own well-managed, consumer-oriented public utility on the job.
Plenty of locals complained loudly when the SMUD board voted this month to go back on its “no rate hike in 2001” promise. But given the current crisis, we at the SN&R feel that SMUD leaders showed wisdom and pro-active thinking in approving what they knew would be a controversial rate hike.
Basically, SMUD boosted rates for residential consumers by 19 percent, comprised of a permanent 13 percent increase and two temporary surcharges of approximately 3 percent. (SMUD wisely sets incentives for conservation so only customers who use power beyond the ‘baseline” will face increases.) One of those temporary surcharges will cover the cost of lower than average hydroelectric production this year, i.e. SMUD will be forced to buy more electricity on the wholesale market this summer. This hydro surcharge will last only one year. The second temporary surcharge will last for three years, and allow SMUD to rebuild savings that have been depleted by higher wholesale energy costs associated with the ongoing crisis.
Despite the hike, SMUD says it will still be charging 30 percent less for residential power (and 23 percent to 34 percent less for commercial customers) based on the PUC’s new rate increase proposal for PG&E customers.
We applaud SMUD leaders for having the political courage to ride out an unpopular decision and gather money in the coffers now to ride out the short-term high prices with the hope that energy will get cheaper in the coming years as new power plants come on-line. We’re also proud of the fact that SMUD sought lots of input from ratepayers before making this move. A community-based Rate Increase Advisory Committee conducted 20 public meetings and workshops to explore the subject before any decisions were made.
Consumer input. Pro-active planning. Gutsy leadership. Now if only the rest of the state would take its cue from SMUD .