As is typical during a rate restructuring process, the initial recommendations have been further refined. On June 16, SMUD released an addendum to the original rate restructuring proposal.
Because SMUD is not seeking increased revenue and wants this rate restructuring to be revenue neutral, the modified recommendations have been designed to have little to no impact on customers' monthly electric bills. Any increases in infrastructure charges will be offset by decreases in electricity rates, resulting in no new revenues to SMUD. While the full details are available on smud.org, the following are the most important highlights:
-For 2012, the original proposal recommended raising the residential system infrastructure fixed charges from $7.20 to $10 per month. The addendum calls for, beginning in 2013, incremental increases of $2 per month each year for five years. In 2017, the residential system infrastructure fixed charge would be $20 per month. The increase is needed to better align and balance the true cost of maintaining the electric grid. To offset the electric system infrastructure charges, corresponding decreases will be made to electricity rates.
-Residential customers who qualify for the low-income Energy Assistance Program Rate will see similar changes. Beginning in 2013, these customers will see incremental increases of $1 per month each year for five years. By 2017, residential system infrastructure fixed charges for low-income customers will be $8.50 per month. Once again, we will offset the increases to the electric system infrastructure charges with corresponding decreases in the electricity rates so the annualized bill impacts are minimal.
-Very small commercial customers (less than 21kW) would also see incremental changes to the system infrastructure fixed charge of $2 per month each year for four years, beginning in 2014. When combined with the proposed $3.75 increase in 2012, the system infrastructure fixed charge for these customers would be $20 by 2017. Similar to residential customers, the increase is needed to better align and balance the true cost of maintaining the grid and would be offset by corresponding decreases to electric rates for very small commercial customers.
-To minimize impact to customers' monthly electric bills, SMUD will also decrease electric rates and reduce the number of summer months for residential customers, commercial customers and low-income customers on the Energy Assistance Program Rate. The bottom line is that for most residential, low-income and very small commercial customers, the proposed rate restructuring has balanced the increases in the system infrastructure fixed charge with decreases in electric rates so there will be little or no impact on annualized bills.
The above changes describe the majority of the rate restructuring proposals that appear in the June 16 addendum. We invite you to visit www.smud.org to read the complete addendum.
SMUD will hold two public forums where you can learn more about the rate restructuring proposals and give your comments. The forums are open to the public and are a great place to make your voice heard:
-Public Workshop, Thursday, June 30 at 6 p.m. at SMUD Headquarters (6201 S Street, Sacramento)
-Public Hearing, Thursday, July 21 at 9 a.m. at SMUD headquarters (6201 S Street, Sacramento)
Source: SBCC-Sacramento Black Chamber of Commerce e-Biz Newsletter July 2011 No. 1