Electricity rate structure unfair to valley residents?

FRESNO -- California's electricity rate structure is badly flawed, saddling valley residents with unfairly high costs, speakers said Friday at a legislative hearing in Fresno.

Assembly members Kristin Olsen, a Modesto Republican, and Henry T. Perea, a Fresno Democrat, held a bipartisan briefing at Fresno City College to hear from utility company officials, consumer advocates and community members about the problem and ways to solve it.

The current system clearly penalizes valley residents, Perea said. "Oftentimes, residents from the valley end up subsidizing people that live on the coast," he said. "We are going to start bringing awareness to the issue and come up with a legislative solution."

Although utility company officials acknowledge the current residential rate structure is flawed, they say legal restrictions prevent the problem from being solved.

Laws passed by the Legislature during the energy crisis in the early 2000s to protect ratepayers are causing an unfair distribution in rates.

"If policies allow one group of ratepayers to avoid paying the cost of services they receive, those costs are ultimately paid by the remaining customers," said Lee Schavrien, senior vice president of finance, regulatory and legislative affairs for Sempra Energy Utilities, a Southern California utility company.

Advocacy groups have demanded a change to energy rates. And they say the system should be simpler so people can understand their bills.

"A region's hotter climate may require a customer to use more energy, but that higher usage does not merit charging customer rates that exceed costs by 200 percent," said Michael Turnipseed, executive director of the Kern County Taxpayers Association.

Impact on people, businesses

The 80 people gathered at the hearing agreed on one thing: High energy rates cause a hardship for many valley residents. One speaker suggested providing "energy stamps" to low-income people, similar to food stamps.

Ilse Gallardo, who works for the Fresno nonprofit Centro La Familia Advocacy Services Inc., said one of her elderly clients sleeps without a heater at night because she can't afford the bill at the end of the month.

The valley's high rates are not only a drain on the wallets of residents, but drive away potential companies — and potential jobs, Olsen said.

"We have got to come together to find a solution to eliminate so many of the inequities in the electricity rate system across California," said Olsen, chairwoman of the Legislative Rural Caucus. "It's key to making sure that our electricity rates remain predictable and affordable."