CPUC to Evaluate Strategies to Mitigate Energy Rate Increases

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By Justin Dalton

On September 15, 2021, the California Public Utilities Commission (CPUC) issued an Amended Scoping Memo and Ruling on an “Order Instituting Rulemaking to Establish a Framework and Processes for Assessing the Affordability of Utility Service.” These “scoping” procedures define the substantive issues to be considered in the proceeding.  Those here under consideration pertain to energy costs, with both costs and attendant rate increases a growing problem.

On July 12, 2018, the CPUC “instituted this [initial] rulemaking to develop a common understanding and methods and processes to assess, consistent with [CPUC] jurisdiction, the impacts on affordability of individual [CPUC] proceedings and utility rate requests.” [24:1 CRLR 138–140; 24:2 CRLR 190–191; 25:1 CRLR 222–223; 25:1 CRLR 167; 26:1 CRLR 176–178; 26:2 CRLR 219–220] On February 24, 2021, the CPUC held an en banc meeting to discuss the CPUC’s draft report on electric and gas cost and rate trends pursuant to Public Utilities Code section 913.1 (2021 SB 695 Report). The 2021 SB 695 Report warned of long-term increases in electric costs and their implications for equity and affordability under current trends. On April 29, 2021, the CPUC produced the first annual affordability report, which led to this decision to move on to the third phase of the initial plan to examine “strategies to mitigate future energy rate increases.”

For this third phase of rulemaking R.18-07-006 to mitigate energy rate increases, the CPUC set a preliminary scope of what actions should be taken. That preliminary scope for the third phase includes two questions: (1) What action, if any, should the CPUC take to mitigate future increases in energy costs, rates, and bills? and (2) What actions, if any, should the CPUC recommend other entities take to mitigate such future increases?

While the 2021 SB 695 Report is focused on the rising costs and rates of electricity, stakeholders also raised issues pertaining to the rising cost of natural gas as well. As such, another focus of this current rulemaking is to ensure that as demand for natural gas declines, gas utilities continue to maintain safe and reliable gas systems at just and reasonable rates. Interested parties are invited to respond to the question of how phase three should mitigate future increases in natural gas costs and bills.

As an opportunity for the public to comment on these issues, a prehearing conference to review and receive feedback will be held remotely via WebEx, Friday, October 22, 2021, at 2:30 p.m., and is open to all stakeholders. Interested parties should designate a speaking representative who is prepared with video and audio access and notify Marianne Divina (Marianne.Divina@cpuc.ca.gov) by October 18, 2021. To access the hearing click here.

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